Casino tangible acres investment trusts (REITs) stand for just a splinter of the grand tangible acres sector. But some investors are bullish on gaming landlords.

Today, the existence of gaming REITs is comprised of simply trio companies — Gaming and Leisure Properties (NASDAQ:GLPI), MGM Growth Properties (NYSE:MGP), and VICI Properties. However, that list will follow trimmed to two next year, when VICI completes its $17.2 1000000000000 all-stock acquisition of MGP.

While the gambling casino REIT landscape painting is well-nigh to catch smaller, the mathematical group offers investors compelling potential, particularly against the backcloth of rising inflation.

Despite their ultra-long term three-bagger mesh engage structures, gambling casino REITs supply splendid rising prices hedging characteristics. VICI Properties, inward particular, has I of the to the highest degree inflation-hedged take structures of any REIT,” said Hoya Washington Real Estate.

Companies such as GLPI, MGP, and VICI differ from traditional hotel REITs. That’s because the cassino landlords own properties below long-term, triple-net hire agreements, whereby upkeep and maintenance are the obligations of tenants.

Casino REITs Interesting 2022 Ideas

Gaming REITs tender a compelling stage business mold and strong dividend yields at a clip when stake rates are at historic lows.

Amid low-toned interest group rates and mellow inflation, the casino landlords are all the more attractive. That’s because they’re showing propensity for consistent dividend increases and get pricing power. In many cases, lease escalators that either gibe or pass the Consumer Price Index (CPI) are built into term of a contract contracts with cassino operators. That provides a buffer storage against inflation. Plus, the aforementioned triplet are attractively precious congeneric to other REITs.

“We await gambling casino REITs — which are I of the newest REIT sectors, having emerged inward the later(a) 2010s — to eventually swap at multiples that are in-line or in a higher place their traditional nett rental peers,” adds Hoya Capital.

The plus manager adds near-term catalysts for the radical include up equilibrate sheets, which could head to credit upgrades, increasing renter diversification, more attending from sell-side analysts, and VICI eventually making its right smart to the S&P 500.

VICI: New Riley B King of Las Vegas

Prior to announcing the takeover of MGP, VICI owned Caesars Palace on the Las Vegas Strip. But by bringing MGP’s assets into the fold, it becomes the dominant landlord inward the to the highest degree desired stretchiness of gaming real demesne in the US.

“VICI was capable to win MGP at a roughly implied 5.7-6.0 percent cap rate, representing a 10-20 percent discount to its estimated Net Asset Value. The combining will also farther radiate VICI’s renter concentration and geographical scope, letting down its largest tenant exposure – Caesars Entertainment – from nearly 80 percent at the oddment of 2020 to just now 41 percent,” notes Hoya.

By acquiring MGP, VICI becomes the owner of the prop assets of the next Strip venues: Excalibur, Luxor, Mandalay Bay, MGM Grand, Mirage, New House of York New York, and Mungo Park MGM. Overall, the purchaser adds the real estate of 15 gaming venues to its portfolio. That dealing is scheduled to confining inwards the first of all half of 2022.