VICI Properties (VICI) 2026 年第三季法說會：調升 AFFO 財測指引，獲准實施 20 億美元庫藏股

重點摘要

• 第三季營收成長 5.8%，每股調整後營運現金流 (AFFO) 年增 4.3% 至 0.62 美元。
• VICI Properties 本季投入 2.21 億美元於先前提出的投資項目，旨在支援未來的收益成長。
• 管理層將 2026 年 AFFO 預測上調至 26.95 億至 27.05 億美元，即每股稀釋盈餘 2.47 至 2.48 美元。預測中位數代表每股 AFFO 年增長率為 4%。
• 公司授權實施首個高達 20 億美元的股票回購計劃，但強調該授權既非承諾，亦無特定時間表。
• 淨債務對年化第三季調整後 EBITDA 的比率約為 4.8 倍，低於 VICI 5.0 倍至 5.5 倍的目標區間。總流動資金約為 25 億美元。
• 管理層正在評估 Caesars Regional 租約的租務管理與投資組合管理選項，但未透露具體行動或時間表。

核心財務數據

業務與營運表現

VICI 持續推動租戶多元化。在 Highfield Investment Group 交易如期完成後，公司在 2026 年期間將增加四家租戶：Clairvest、Golden Entertainment、Club Med 及 Highfield。這些合作關係涵蓋區域博彩、拉斯維加斯在地市場、加勒比海飯店業以及加拿大博彩業。

擬議中的 Highfield 總租約初始年基本租金為 1070 萬加幣，由 Century 總租約相應的金額削減所抵銷。因此，VICI 預計從受影響物業收取的總租金不會改變。

管理層表示，其在博彩、飯店、娛樂、體育以及健康養生領域的投資管道保持活躍。然而，承銷標準正根據 VICI 的資金成本進行調整，重點放在具選擇性且具戰略增益效果的交易上。

VICI 提及市場內博彩需求持續增長。拉斯維加斯大道 (Las Vegas Strip) 7 月的博彩收益突破 7.76 億美元，年增 3.6%，第三季大道營收增長 1.8%，而拉斯維加斯在地業務增長 2.1%。根據管理層引用的數據，截至 7 月的美國商業賭場營收年增 6%。

管理層業績指引

VICI 將 2026 全年 AFFO 預測上調至 26.95 億至 27.05 億美元，相當於每股普通股稀釋盈餘 2.47 至 2.48 美元。每股預估範圍的下限調升 0.02 美元，上限調升 0.01 美元。

管理層將此調升歸因於與消費者物價指數 (CPI) 掛鉤的租金調整、貸款資金承諾的能見度提高、影響浮動利率貸款的 SOFR 收益率曲線上升，以及新項目開業加速了資本部署。

該展望不包含尚未確定交割日期的進行中收購案、未來可能的收購或處分案、相關資本市場活動，以及其他非經常性交易或項目。

風險與關鍵關注事項

管理層指出利率、投資人對長存續期資產的趨避、對非必要消費支出的擔憂、VICI 的資金成本以及 Caesars Regional 租約的不確定性，是影響投資人情緒的關鍵因素。

公司提列了 4.58 億美元的目前預期信用損失準備金（包含歸屬於 Caesars 的 3.13 億美元）。管理層表示，Caesars 的金額是受 GAAP 會計準則要求、租戶信用評級下調以及記錄至 2055 年的租期所推動，而非預設股東對該租約處置結果的預測。

目前大部分保留的自由現金流均已分配給現有貸款承諾，限制了近期可用於股票回購的資金。管理層亦指出，為 2 月到期的 15 億美元債務進行再融資可能會對 AFFO 造成阻力，因為現有債券的利率低於當前的融資條件。

在貸款投資組合中，有一項於 2025 年第四季列入停止計息 (nonaccrual) 的投資，仍取決於贊助商募集股權及對該項目進行資本重組的努力。Fontainebleau Las Vegas 即將於 2027 年 1 月迎來展延測試，並將於 2028 年完全到期；管理層預期該筆資金將被償還。

分析師問答亮點

股票回購與資本配置：管理層將 20 億美元的授權描述為一種可選的資本配置工具。潛在資金來源包括保留現金流、貸款償還款項和資產出售所得。僅在管理層認定回購相較於物業投資、債務投資及其他替代方案更能有效利用可用資金時，才會考慮進行回購。

Caesars Regional 租約：VICI 正在評估兩個領域的選項：租務管理與投資組合管理。替代方案可能包括保留、修改或出售全部或部分租約及相關物業。目前尚未做出決定或提供時間表。

資產出售與私募資金：管理層表示正評估合資企業、保險資金、定期貸款、可轉換債券及其他私募資金結構。當公開股權市場吸引力較低時，VICI 將私募投資人對長存續期分散收益的需求視為潛在的資金來源。

貸款投資組合流動性：VICI 表示貸款可以變現，並以按面值將 Hard Rock Ottawa 票據賣回給 Hard Rock 為例。然而，管理層將出售貸款視為一種選項而非首選方法，因為該投資組合的收益率依然具吸引力。

體育與複合式開發機會：公司繼續研究體育場、體育館及以體育為核心的園區。VICI 也正與 Caesars 合作，為其在拉斯維加斯擁有的土地規劃潛在的體育館方案，但尚未宣布任何投資承諾。

One Beverly Hills：管理層表示，創始人債券 (Founder Bonds) 從一開始就已納入該項目的承銷範圍，並不改變 VICI 對該交易風險狀況的評估。據公司稱，如果買家不參與，Cain 將提供額外的股權。

完整法說會逐字稿

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完整財報電話會議逐字稿

管理層陳述

Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the VICI Properties Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that this conference call is being recorded today, October 29, 2026. I will now turn the call over to Samantha Gallagher, General Counsel with VICI Properties.

Samantha Gallagher

Thank you, operator, and good morning. Everyone should have access to the company's third quarter 2026 earnings release and supplemental information. The release and supplemental information can be found in the Investors section of the VICI Properties website at www.viciproperties.com. Some of our comments today will be forward-looking statements within the meaning of the federal securities laws. Forward-looking statements, which are usually identified by the use of words such as will, believe, expect, should, guidance, intends, outlook, projects or other similar phrases are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect.

Therefore, you should exercise caution in interpreting and relying on them. I refer you to the company's SEC filings for a more detailed discussion of the risks that could impact future operating results and financial condition. During the call, we will discuss certain non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available on our website in our third quarter 2026 earnings release, our supplemental information and our filings with the SEC.

For additional information with respect to non-GAAP measures of certain tenants and/or counterparties discussed on this call, please refer to the respective company's public filings with the SEC. Hosting the call today, we have Ed Pitoniak, Chief Executive Officer; John Payne, President and Chief Operating Officer; David Kieske, Chief Financial Officer; Jeremy Waxman, Chief Accounting Officer; Gabe Wasserman, Managing Director of Business Development and V.E.C.S.; and Moira McCloskey, Senior Vice President of Capital Markets. Ed and team will provide some opening remarks, and then we will open the call to questions. With that, I'll turn the call over to Ed.

John W. Payne

Thanks, Sam. This is John Payne. Ed dropped from the call. So I'm going to start with...

Edward Pitoniak

John, sorry, I got back in, and thank you for that, John, and thank you, Samantha, and good morning, everyone. In a moment, you'll hear from John Payne on our investment outlook and activities and from David Kieske on our financial results and updated guidance. To start, I want to thank the VICI team for the work they did in Q3 to continue to grow VICI's investment portfolio and investment earnings. As David will discuss further, we grew our revenues 5.8% in Q3 and our AFFO per share by 4.3%. In addition, within Q3, we deployed $221 million of capital into previously announced investing activities, capital intended to produce income growth in future quarters.

While I'm very proud of the work the VICI team did during Q3 2026 to grow the quality and earnings production of our portfolio, as a fellow VICI stockholder, I'm disappointed with VICI share price performance during the quarter and year-to-date. I know many of you share that disappointment because I've heard of that disappointment firsthand from you. In our continuous dialogues with VICI stockholders, we generally hear them cite what they justifiably believe are 3 key factors impacting our equity performance.

I will order these 3 factors from general factors impacting all net lease REITs to factors specific to VICI. Factor one, general recent negativity around net lease REIT stocks given the current interest rate environment and aversion to duration, especially those net lease REIT stocks that have consumer exposure given the current general negativity around consumer discretionary spending. Factor two, VICI's ability to generate accretive growth in the future given our current capital market conditions and cost of capital. Factor three, uncertainties around our Caesars Regional lease.

For factor one, general negativity around net lease REITs. We can't do anything to change general credit market conditions and general views around how those conditions impact net lease REITs. What we have done since our beginning and will continue to do is manage our business to protect VICI's stakeholders from general market conditions as best we can. And those management actions center on maintaining our target leverage of approximately 5 to 5.5x adjusted EBITDA, a payout ratio of approximately 75%, which allows for significant retained free cash flow and a conservative approach to G&A with VICI achieving one of the lowest ratios of G&A spending among net lease REITs specifically and all REITs generally, whether measured as a percentage of revenue or percentage of assets under management.

For factor two, VICI's ability to generate accretive growth given current capital market conditions and VICI's specific cost of capital. We do not believe that we have lost access to capital that can grow shareholder value. We have 3 key capital sources that do not rely on access to public market equity. Capital source one, our retained cash flow after all obligations, G&A, interest expense and dividend distributions, which averages approximately $720 million on a trailing 12-month basis. Capital Source two, proceeds from future repayment of our outstanding loans as they are repaid over the coming years. Capital Source three, as with any REIT practicing proper portfolio management, there is the potential to recover and redeploy capital through asset sales.

Beyond these 3 sources, we are always exploring and evaluating alternative forms of capital, including the range of structures other REITs across the sector have recently developed. Whatever capital source we rely on at a given time, VICI's management team and VICI's Board of Directors will always take great care in making sure that, that capital is used for what we believe are the best economic and strategic purposes given the circumstances in consideration at a given time. Among those purposes could be potential VICI share repurchasing.

Accordingly, we have announced the establishment of VICI's first stock buyback authorization. If, and let me emphasize that if, at a given time in the future, we have uncommitted investable capital, whether because of uncommitted retained cash flow, repaid loans or asset sales, we will rigorously examine the potential uses of that capital. And if the best use of that capital is the repurchase of stock, we may potentially do so.

Finally, let me conclude with a few words about what I cited as factor three impacting our stock price performance, our Caesars Regional lease. First of all, amidst all the market chatter, we believe it's critically important to understand in relation to our Caesars Regional lease, what we own, and two, the essential ways of understanding and managing the value of what we own. When it comes to the Caesars Regional lease, in the simplest terms, what we own are real assets within which significant economic activity and output are produced and from those assets, we own an income stream in the form of rent. The VICI team is analyzing every dollar of our VICI income stream within our Caesars Regional lease properties through various valuation prisms.

In essence, we are asking in relation to this asset-based income stream, what income structuring model and potential related actions produce the greatest aggregate value for our stockholders. At this time, I cannot tell you what actions our analytical work on our Caesars Regional lease will lead to, but I can tell you that the work the VICI team is doing to value what we own is the means by which we will eventually make the decisions and take the actions we believe best serve the long-term strategic and economic interest of our stakeholders. Again, be assured that the VICI team and VICI Board are focused every day on determining and executing the strategies that will produce the best achievable long-term value creation for our stockholders. With that, I will turn the call over to John. John?

John W. Payne

Thanks, Ed, and good morning to everyone. Ed just spoke about our cost of capital and the care we take in deciding how and when to deploy it. I want to pick up there because that discipline is not an abstraction for our business development team. It shapes every conversation we have and every opportunity we underwrite. We have said for years that we aim to make VICI bigger when it makes VICI better. And in an environment like this one, that principal matters more, not less.

During the third quarter, VICI continued to further diversify our tenant roster, making VICI better. In September, in connection with Century Casinos' agreement to sell the operations of Century Mile and Century Downs in Alberta to Highfield Investment Group, we agreed to enter a new triple net lease master lease with Highfield, which will add our 17th tenant upon closing. The Highfield lease carries initial annual base rent of CAD 10.7 million with a corresponding reduction under our Caesars -- under our Century master lease.

So there is no change to the aggregate rent collected by VICI. The assets remain in steady hands in a Canadian market we know very well, and our rent stream gains another -- our rent stream gains another distinct experienced local operator behind it. That transaction continues what we delivered over the course of 2026, the diversification of our tenant roster. Upon the closing of the Highfield transaction, we will have added 4 new tenants this year: Clairvest, Golden Entertainment, Club Med and Highfield, spanning regional gaming, the Las Vegas locals market, non-gaming hospitality in the Caribbean and Canadian gaming. Every one of those tenants is led by a tenured experienced operating team and every one of them makes the income stream of our stockholders own more diverse and therefore, more durable.

On the investment outlook, we never go pencils down at VICI and our relationship development across our pipeline continues to be active. We are in continuous dialogue with operators across gaming, hospitality and really the broader experiential landscape. And those conversations do not stop when the capital markets become volatile. What changes is the bar. Our underwriting moves with our cost of capital, and we will be patient, selective and disciplined, only pursuing those opportunities that are portfolio enhancing and strategically additive on terms that reflect today's environment.

Finally, let me turn to what we are seeing inside the portfolio because while sentiment toward customer-facing net lease REITs has been negative, the consumer inside our buildings keeps showing up. In Las Vegas, the Nevada Gaming Control Board reported Strip gaming revenue of more than $776 million in July, up 3.6% year-over-year. The Strip's fifth monthly gain in 6 months over the trailing 12-month Strip's gaming revenue now totals nearly $9 billion. August brought more modest growth with Nevada statewide gaming win up 3% and the third quarter ended with Strip revenue up 1.8% and the Las Vegas Locals business increased 2.1%.

The picture is similar nationwide. According to the American Gaming Association through July, overall commercial casino revenue increased 6% year-over-year with brick-and-mortar, sports betting and iGaming revenue all up year-over-year. Consumers keep choosing these experiences. Most importantly, our operators keep investing in them, and that demand is the engine underneath the long duration escalating leases that define our portfolio. So while we share the frustration Ed described with where our stock has traded, the work of this company has not slowed, exemplified by a tenant roster that is deeper and more diverse than it was a year ago, a pipeline of relationships that continues to grow and a portfolio whose underlying demand continues to prove itself. That is the work we control, and we will keep doing it with discipline. Now I will turn the call over to David, who will discuss our financial results and guidance. David?

David Kieske

Thanks, John. Touching on the income statement, AFFO per share was $0.62 for the quarter, an increase of 4.3% compared to $0.60 for the quarter ended September 30, 2025. Just looking at the balance sheet, we had a very active quarter. In August, we fully refinanced our 2026 maturities by executing a $1.75 billion public bond offering comprised of $900 million, 5.4% senior unsecured notes due in 2031; and $850 million, 5.75% senior unsecured notes due in 2036. In connection with the offering, we settled $1.1 billion of forward starting interest rate swaps and treasury locks and received $20 million of proceeds, which reduced the all-in interest rate on the notes from approximately 5.57% to 5.42%, a savings of nearly 15 basis points.

Our total debt is $17.2 billion, and our net debt to annualized third quarter adjusted EBITDA is approximately 4.8x, below the low end of our target leverage range of 5 to 5.5x. We have a weighted average interest rate of 4.57% as adjusted to account for our hedge activity and a weighted average of 6.0 years to maturity. As of September 30, we have approximately $2.5 billion in total liquidity comprised of $270 million in cash and $2.2 billion of availability under our revolver. As Ed mentioned, we've implemented a share repurchase program for up to $2 billion. This authorization gives us flexibility. It is not a commitment to repurchase any specific amount or on any specific time line.

We view it as one of the many capital allocation tools we have, and we expect to use it opportunistically and to cite our friend Mitch Germain, only when it is the most vigilant approach in allocating capital. During the third quarter, we declared a dividend of $0.46 per share. The quarterly dividend equates to an annualized dividend of $1.84 per share and represents a 2.2% year-over-year increase, representing our ninth consecutive year of dividend growth. Our dividend is very well covered with an AFFO payout ratio of approximately 75% per share based on the midpoint of our 2026 AFFO guidance.

And turning to guidance. We are raising AFFO guidance for 2026 in both absolute dollars as well as on a per share basis. AFFO for the year ending December 31, 2026, is expected to be between $2.695 billion and $2.705 billion or between $2.47 and $2.48 per diluted common share. Compared to our prior AFFO per share guidance, the update represents an increase at the low end of the range by $0.02 and an increase at the high end by $0.01. Based on the midpoint of our raised 2026 guidance, VICI expects to deliver year-over-year AFFO per share growth of 4%. And just as a reminder, our guidance does not include the impact on operating results from any pending acquisitions without announced expected closing dates, possible future acquisitions or dispositions and related capital markets activity or other nonrecurring transactions or items. With that, operator, please open the line for questions.

Operator

[Operator Instructions] And our first question comes from the line of Anthony Paolone of JPMorgan.

分析師問答

Anthony Paolone

My first question is related to the buyback. And you talked about comparing other options for the capital before using it, and you have some existing commitments already. But can you talk about just maybe more specifically, if you've got capacity beyond the existing commitments where the buyback is going to compete with, say, your deal pipeline? Or do you think the existing capital commitments will probably use up like your free cash flow and capacity for now?

Edward Pitoniak

Yes. Tony, I'll start and then I'm going to hand it over to David. And I actually -- and David will talk you through the capital sources that could, again, potentially be a source of share buyback funding. But I actually want to address what came out in a couple of notes last night, which is that somehow it had been construed that we VICI had said, "Oh, we will never do share buybacks." And I can tell you, I don't think I ever used the word never. I moved to New York in 1979 when a lot of people said New York would never come back, and it came back and it's come back repeatedly over those 40-plus years. In the same way, anybody who says VICI can never come back from this is also making the wrong bet.

And accordingly, we have never, ever ruled out share buybacks. We have never said we would never do it. We will do it if it is the best choice among all the choices we have in front of us in terms of allocating capital. But with that, I'll turn it over to David, and David can talk about possible sources of potential share buyback funding given our current circumstances. David?

David Kieske

Yes. Thanks, Ed. Tony, good to talk to you. Thanks for joining us this morning. I mean, look, at the end of the day, we view it as good corporate hygiene. Ed went through some of the potential sources. And we get a lot of questions on what do you do with the loan proceeds. When those get repaid, that's one potential source. Obviously, free cash flow is a potential source. To answer your question directly, Tony, most of the free cash flow is allocated to loan commitments right now. And at the end of the day, our job is to grow the left side of the balance sheet with long-term durable real estate. And so we put the tool in place as simply that, a tool to potentially utilize excess cash flow when the opportunity may arise at a point in time, sometime in the future.

Anthony Paolone

Got it. And on the loan book, I mean, I think in prior periods, the question was always around reinvestment risk. But I guess maybe does that flip now at all? And do you have opportunity to sell loans? Or are any parts of the book liquid where you can actually monetize and repurchase shares?

Edward Pitoniak

David?

David Kieske

Yes, Tony, it's a great question. I mean, this past quarter, the Hard Rock Ottawa notes, we sold those back to Hard Rock at par. So yes, everything is liquid in there. For the most part, sometimes it comes at a price. It is not our first choice. Obviously, the yield on that loan book is very attractive, but it is an option that we have and a tool that we have in our toolkit.

Edward Pitoniak

And Tony, I will just add -- I'm glad you asked that question, Tony, because I will just add in that we've often had the question over the last few years, what if that money comes back to you and the redeployment of it is not as high yielding as the loan might have been? Well, given both the state of the credit markets, I think that risk is lower. But again, at our current stock price and current AFFO yield, share buybacks would potentially be just as productive as the outstanding loan might have been depending on its interest rate.

Operator

Our next question comes from the line of Barry Jonas of Truist.

Barry Jonas

Churchill Downs just said on its call right before this that their gaming M&A process is going well. I don't know if you want to talk specific processes, but at a broader level, maybe talk about the pipeline and if you think bid-ask spreads are in a reasonable place today.

John W. Payne

It's John. Nice to hear from you. Again, I'll go back to my opening remarks in the environment that we're in today. We continue to have a robust pipeline, a variety of -- you're talking about gaming, leisure, hospitality, entertainment, sports, health and wellness. But what's key at this time is really being patient selective and disciplined with our capital. And as we look at these opportunities, how they fit strategically with our portfolio. And as you mentioned, there is a process with the Churchill assets. There's other gaming assets in the market, but we take that same approach across not only gaming, but the other categories that I walked you through.

Barry Jonas

Great. Just as a follow-up, I appreciate the comments on the Caesars Regional lease, but what's the level of urgency from Caesars and their pending acquirer to resolve this to negotiate around the regional lease. They obviously have a lot going on now, but we do get the question around potential time lines where we could see some potential resolution.

Edward Pitoniak

Yes, I'll start, and then I'll turn it over to John, Barry. But we obviously can't speak for what Caesars sees as time lines and critical paths to all of the issues, obviously, that they're dealing with right now in terms of M&A. I will tell you that we're using the time very productively to make sure that we understand -- that we catalog and understand all of the potential choices available to us when it comes to the decisions and actions we might ever take with the Caesars regional lease. And along that line, whenever you're going to make good decisions, you have to understand the choices in front of you.

And we see our choices as arrayed along 2 fundamental axes, one of which would be lease management, and that is what do we do with the leases? Do we fix them? Do we potentially not fix them? And then the other axis of choice and decision-making is portfolio management. And that is do we keep the lease in its entirety and the properties that go with it? Do we sell the lease and the properties go with it? Or is there some gradation along that axis of choice and decision-making in the same way that there are gradations of choice and decision-making along the axis of lease management. John, did you want to add anything?

John W. Payne

No. I think you described it very well. I don't think we've historically talked enough about on these calls that we're always evaluating our portfolio. We're always talking -- you mentioned Caesars, Barry, but we're always talking to our tenants about opportunities. So Ed described it very well.

Operator

Our next question comes from the line of Jim Kammert of Evercore ISI.

James Kammert

Fully appreciate that the whole CECL allowance is convoluted, very subjective mathematics. But is there any information value that your consultant may have shared with you regarding the pro forma anticipated sort of cash flows and cap stack of Caesars as a private entity?

Edward Pitoniak

David and team?

David Kieske

Yes. Jim, good to hear from you. No, the CECL -- you're right. The CECL allowance is a very convoluted esoteric GAAP provision, and I encourage everybody to go read ASC 326 and talk about it at your upcoming Halloween parties because you'll really be the hit of those parties. I mean it's an internal accounting treatment that we go through, Jim, and based on credit ratings and inputs to the Moody's model that we use. And it is a noncash charge. I think everybody knows that. It is a GAAP accounting provision and we shouldn't let accounting provisions distort economic reality of what is actually going on in the business. I think the -- one of the reasons for the change this quarter as we've laid out in our disclosure is that the merger closed and that Moody's did downgrade, Caesars downgraded their credit rating. So there was some, again, some GAAP accounting that had to take place this quarter given some of the events at our tenant.

James Kammert

That's fair. So you don't really have any -- there's no incremental insight as to future cap stack, et cetera. So that's fine.

David Kieske

No, there's not, Jim. It's just what gets put out in some credit pieces or whatnot, but we don't have great insight to that.

James Kammert

That's helpful. And then if I could, I certainly appreciate Ed's comments regarding particularly just very -- a moment ago regarding portfolio management. I mean, would you be even open to if the valuation made sense to take an MGM lease here, a Caesars lease there, a Century and create sort of a joint venture or a package deal as a way to identify sources of capital?

Edward Pitoniak

It's a very fair question, Jim. And related to that question, Jim, and I think you see this in the work you do as well, we're in a rather strange time right now where the public market generally does not put a lot of value on distributed income and duration. On the other hand, there is in the private capital markets, a big focus and the insurance capital pools are obviously an example of this, a big focus on distributed income and duration. So as we array all of the -- sorry, as we assess all the choices in front of us and the opportunity to make the best decisions possible for our stakeholders, we're certainly mindful of the fact that the income produced by our assets is very appealing in terms of being very good quality distributed income of duration in a world where there are certain capital pools that still very much value that.

Operator

Our next question comes from the line of Caitlin Burrows of Goldman Sachs.

Caitlin Burrows

Maybe just considering where VICI's dividend yield is today and internal rent bumps, it seems like VICI can attain the 10% total return without external growth. So given that, I guess, could you go through VICI's priorities today? And does the urgency of external growth seem less than it's been in the past?

Edward Pitoniak

That is a very good question, Caitlin, and thank you for citing that total return math. We always appreciate that. As you know, we're very focused on the building blocks of total return. Your math is not incorrect. I would say, though, that, that dividend yield plus the sort of same-store growth that we do enjoy as a net lease REIT does get us there in your math. But we would -- to build on John's point of a moment ago around our business development activities, we would not, in this situation, choose to stop investigating the opportunities to acquire very good real estate that we believe will have very strong and growing long-term value.

Caitlin Burrows

Okay. Got it. And so I guess on that, and you guys mentioned earlier how you've added a number of new tenants, Clairvest, Club Med, Pure Highfield as examples. I guess where do you see the greatest growth from these opportunities -- these kind of partners, yes, between those new tenants?

Edward Pitoniak

John?

John W. Payne

Yes. Very good question as well. Part of why we did these initial deals with these groups is our ability to continue to grow with them. We like these deals individually, but we also like that they continue to look at new opportunities. I'll just take one of them, Club Med's one that we announced the deal this year, as we mentioned, and they continue to be a company that are looking for opportunities all over the world. And I think they have found us to be a good partner to continue to have those discussions. Now again, whether we announce another deal, do another deal is all going to depend on how selective and disciplined where our cost of capital is. But Caitlin, you've nailed it. We found some new partners that are looking to continue to grow their business, and we hope they grow up with our model.

Operator

Our next question comes from the line of John DeCree of CBRE.

John DeCree

Maybe to speak about a sector that was talked about in the past, and that's kind of sports stadiums or kind of sports anchored mixed-use districts. We're paying attention to a lot of the institutional capital and private equity finding its way to professional sports teams. And so Ed or John, David, how are you thinking about those potential opportunities for real estate as kind of the professional sports ecosystem evolves with institutional investors? Is it becoming more attractive? Are you seeing more opportunities? And is it still an area of interest for you?

Edward Pitoniak

John?

John W. Payne

It's nice to hear from you. It's a very exciting area. It seems to be in the news almost every day. So this sector is definitely worthy about the investment of time that we have been spending learning the ecosystem, meeting the players, understanding the developers. We're also watching how this sector is beginning to overlap even more and more with live entertainment, with multipurpose entertainment centers with the professional or collegiate sports team arena and stadium becoming the anchor for that development.

So that's a long way of saying we continue to be excited about the opportunity here. We've not made an investment as we continue to be selective and disciplined, but we do think over the coming years, there is opportunity. The only other opportunity I'll mention, John, while I have the mic is a little bit about Las Vegas and the excitement going on in that town. Obviously, the success of the Raiders, the Golden Knights, soon to be The A's has the NBA talking about bringing an expansion team. That would be just for us, super exciting that an expansion team ended up in Las Vegas to continue to drive customers there and another reason to visit Las Vegas.

At the same time, with our partners of Caesars, we are actively involved in the process of talking about Arena on the land that we own. We think I'm obviously a little bit biased here, but we think we have the best site for a new arena should the NBA decide to have a team there, and it's been a pleasure coming up with plans with our partners of Caesars.

John DeCree

That's helpful. Those comments. Yes, with every day, we're reading about more and more capital going towards the sports ecosystem. So very interesting. Maybe a housekeeping item as a follow-up. Ed, you kind of mentioned the payout ratio around 75%, which leaves retained free cash flow, which has been a core strategy for VICI and very effective. What are some circumstances or how do you think about maybe altering that payout ratio in the current environment going forward? What would cause you to go up or down other than kind of normal ebbs and flows and just timing?

Edward Pitoniak

Well, I'll start, John, and then I'll turn it over to David. But I would say that, that benchmark of in and around the 75% range is a benchmark that we believed in from day 1. And I don't think our belief in it has altered. We do believe that there's great value in having that amount of free cash flow in and around the 75% level. So the idea of taking it down further isn't necessarily that appealing and yet taking it up for the same reason is not that appealing. David, I don't know if you want to add to that.

David Kieske

Yes, John, good to hear from you. And I think Ed covered it well. I mean, as Ed alluded to, this was kind of a day 1 decision to, one, generate free cash flow; two, to make sure we're well distributed in terms of our REIT taxable income distribution requirements and then to have flexibility in the event that back when we set the payout ratio, we had no idea what the future would hold. We have no idea what the future will obviously hold today. But it gives us flexibility to go up in the event that needed for whether it be distribution requirements, payout requirements, but we like the free cash flow it generates, and we are continuing to watch it and maintain it.

Edward Pitoniak

And John, I will just add that sooner or later, I do believe we're going to be right in what we said on our Q2 2025 earnings call when we cited Savita Subramanian from BofA in proclaiming that the total return era has returned. We do believe -- we genuinely believe it will. And with that, there will be greater value placed on dividends than might be the case today.

Operator

Our next question comes from the line of Greg McGinniss of Scotiabank.

Greg McGinniss

Just wanted to return to buybacks. We appreciate the clarity you provided on your thinking there, going to be evaluated in the future versus other potential commitments, but this does seem like a near-term concern given current commitments in place implies excess free cash flow in 2027. So are you seeing opportunities today on the debt side that are as attractive as a 10% plus AFFO yield, excuse me, or maybe deals that improve the longer-term acquisition pipeline, so even if the debt investment return doesn't really match the potential accretion from a buyback, it still makes sense as a more viable option.

Edward Pitoniak

Yes. I actually really like the way you framed that, Greg, in terms of the range of choices available. So David, do you want to take that?

David Kieske

Yes, Greg, good question. We appreciate it. Just in terms of debt investments, we've talked a lot about the size of our loan book and feel good about the current size of our loan book. I think we do see debt investments that are north of our AFFO yield, and it becomes a strategic decision whether or not to grow the loan book, who's the partner, kind of the future opportunities. And then you rightly so, there may be a lower yield for assets to go on the left side of the balance sheet, but produce durable income, improve the quality diversification of our income stream and our tenant base, and those are all things that we take into consideration. And as I mentioned in my remarks, a share buyback is simply a tool. An ATM program is a tool and having as many tools in our toolbox is just good, again, good corporate hygiene.

Greg McGinniss

Great. And just kind of looking at some of the operator earnings that came out the last couple of days, you had Caesars with a decline in Vegas, but some improvement in the regional side, MGM with some improvement on Vegas, but a major decline on the regional. Is there anything specific asset-wise that's within your portfolio where you're seeing kind of changes from a customer perspective or anything where you expect near-term growth from investments that are being made?

Edward Pitoniak

John?

John W. Payne

Greg, it's a very good question. And if you sit in the seat long enough, which we've been here 9 years, we've had discussions over the time where Vegas is outperforming, the regionals are not. You just quoted this quarter, the regionals are performing and Vegas had a little bit of a slow summer impacted by some air travel with Spirit pulling out. So again, what's great about these is over the lifetime of our 9 years, this is a business that has continued to perform and generate a heck of a lot of cash flow. We continue to get the performance from our tenants. We continue to be, as we have from the start, active in conversations with our tenants, not only about future growth, but the current portfolio that we have.

So we -- again, I mentioned this earlier, we don't talk a ton about portfolio management on these calls. We talk more about what's going to be new. But the majority of time, that my team and the asset management team is studying our portfolio and talking to the operators. And you're going to see these ebbs and flows of these size of businesses. But over the course of time, they continue to show growth.

Operator

Our next question comes from the line of Wesley Golladay of Baird.

Wesley Golladay

Can you talk about what's driving the guidance higher? Was that visibility on your CPI-based leases in November?

Edward Pitoniak

David?

David Kieske

Good to hear from you. A little bit of the CPI, a little bit of more clarity around funding commitments on the loan book. And then the -- we got some variable rate loans in our loan book, so a little bit higher SOFR curve and a little bit quicker deployment of some of the capital. North Fork just opened 2 days ago, and there's a little bit of acceleration of some capital deployment as some of these projects come online and get open.

Wesley Golladay

Okay. And then maybe going back to the CECL charge related to the Caesar leases that you called out in the 10-Q. I get that some of that is the technical nature of the rating change by the agencies. But is there also, I guess, something about your best -- your best outcome for shareholders incorporated in that on how you're viewing the lease potential outcome in 2035, I believe.

Edward Pitoniak

David?

David Kieske

Yes, Wes, it's really driven by GAAP and the GAAP accounting principles around the duration of our lease. Under GAAP, we record the fully extended lease term, so it goes out to 2055. And it's not -- there's not an assumption or inputs in terms of what's the best outcome for shareholders. It's an accounting provision and accounting disclosures assumptions, provisions, just given the trigger around the downgrade in terms of the credit rating and then what may or may not happen at the first lease renewal.

Operator

Our next question comes from the line of Chris Darling of Green Street.

Chris Darling

Going back to the buyback authorization, just hoping you can elaborate on the role of asset sales in tandem with this tool. It sounded to me like free cash flow and/or loan repayments would be the more likely source of capital. But I just want to make sure I sort of understand that aspect, how you're thinking about it.

Edward Pitoniak

Yes, I'll start, Chris. And those are the more likely sources that you just cited, free cash flow and repayment. But I don't think we would be doing our jobs as portfolio managers and fiduciaries if we weren't constantly looking at our portfolio and asking the question, is a given asset worth more today than it might be worth in the future? And if so, is a sale of that asset one possible way of creating shareholder value and the liquidity that goes with it?

Chris Darling

Okay. Understood. And it probably dovetails a little bit with this conversation. But Ed, in the prepared remarks, you mentioned a range of creative financing structures that other REITs have pursued, I assume, as it relates to potential asset sales. Just hoping you can elaborate on what exactly you were talking about, what those structures might look like. I assume it also relates to some of the comments around insurance capital as well.

Edward Pitoniak

Yes. That's right, Chris. And I'll have David jump in here in a moment. But I just want to go back to what I said in relation to Jim Kammert's question a few moments ago, and that is the degree to which distributed income and duration are frankly more, in many cases, more appealing at this point to private capital pools than the common equity market. And so we will evaluate every opportunity in front of us if we believe that use of that potential capital can be additive for our stakeholders. And I will just comment on some writing that Green Street has done around this topic. And I will say that I was a little puzzled by Green Street saying that REITs returning to, for example, high-grade joint venture capital as a substitute for debt. But I would argue it's more likely at this point in the cycle, a substitute for equity using that instead of, say, the ATM. But I'll turn it over to David so he can add his thoughts.

David Kieske

Yes, Chris, good to hear from you. I mean any good stewards of the balance sheet and capital, we've got to look at all sorts of alternatives. We get a lot of credit to Realty Income, Jonathan and Sumit over there for diversifying their capital base in what is really a shrinking active REIT manager market, right? You had AEW shut their books earlier this year, unfortunately. So you just see a shrinking active manager. So where do we go for capital? Yes, the insurance world is one. You saw 2 of those high-grade JVs in the last, I guess, 10 days with Alexandria and UDR doing that recently, and you guys wrote on the UDR piece. But you've seen other REITs to help fund businesses.

We talked about asset sales. John talked about portfolio management. We are very active in our portfolio management. Are there other avenues of private capital? We had a net lease REIT do a convert this week. So we evaluate. There's active term loan market out there given where the tenure is going. So we are always looking at all forms of capital and what would be the right source of capital for the business for the long term and for ultimately generating shareholder return.

Chris Darling

Okay. I appreciate those thoughts. And Ed, I guess, to your point, like so many things in finance, right, it's probably case by case depends on the structure, but that's maybe a conversation we can have offline sometime.

Edward Pitoniak

I would look forward to that, Chris. Thank you.

Operator

Our next question comes from the line of Todd Thomas of KeyBanc Capital Markets.

Todd Thomas

I wanted to ask about One Beverly Hills. There have been reports that Cain is raising capital by issuing Founders Bonds on the residential. I think they're targeting about $1.6 billion or more from residential buyers. Can you just discuss how that financing affects the project's cap stack, if at all, and whether that changes the risk profile of the deal and your view on VICI's mezzanine investment and maybe provide an update there?

Edward Pitoniak

Yes. Todd, I'm going to turn it over to David, Erin and potentially Samantha in just a moment. I just want to comment on that Wall Street Journal article that made it sound as if founders bonds are this new thing that's just been invented by Cain when, in fact, they're endemic to the way certain projects in California get developed like One Beverly Hills. But David and team, do you want to more fully address Todd's question?

David Kieske

Yes. And it really comes down to that, Todd. It is not a new structure. It is an option for buyers to participate in. It is not a requirement. We -- this has just been part of the underwriting from day 1, and it's not something that's new or come to light post our transaction closing. It does not change the risk profile of the deal in the event that buyers don't sign up for Founder Bonds, it's a substitute for equity. So the buyers keep the founder bonds or don't invest in the Founder Bonds, and there's more equity that comes in from Cain. So net-net, you're in the same spot. So as Ed said, the Wall Street Journal article twisted things a little bit like an unnatural pretzel.

Todd Thomas

Okay. Got it. And then just wanted to go back to the Caesars, the CECL charge. David, your comments suggest that it was more about the duration of the lease term through 2055, including the options, perhaps not the rent level or potential rent at expiration or renewal. Is that right? And then also, sorry if I missed this, but what was the balance of the CECL charge related to, so about $145 million. What was that attributable to?

David Kieske

The first part of your question, Todd, yes, you're right, you're right. So the orders of magnitude, I think we had $458 million of total credit loss, $313 million was attributable to Caesars, and there was some changes on the loan side with the loan that we have -- that we have, excuse me, under nonaccrual and then a bit of an increase in One Beverly Hills made up the majority of the loan changes -- the CECL changes for the loan book, excuse me.

Operator

Our next question comes from the line of Nick Joseph with Citi.

Nicholas Joseph

I was hoping you could touch on the performance of the underlying assets in the loan book, maybe specifically Margaritaville Hotel, the golf loan or any other that are on nonaccrual or been modified?

Edward Pitoniak

David and Gabe, do you want to take that?

Gabriel Wasserman

Sure, Nick. It's Gabe Wasserman. I can handle that. So the loan on nonaccrual, which was placed on nonaccrual in Q4 '25, sponsorship is still looking to raise equity to recapitalize that project, and we are working with them closely to try to support them in those efforts and help them raise equity and make introductions. So continue to monitor that one closely. And then there was one other loan that was modified during the second quarter, which we disclosed in last quarter's 10-Q, working with sponsorship very closely. They put a lot of equity and continue to put equity into that asset to delever us quarterly. They put up additional collateral and personal guarantees. So we feel really good about that one and really appreciate their partnership and support and their commitment to the investment.

Nicholas Joseph

And then are there any other loans on your watch list? And maybe you can provide an update on the Fontainebleau in Las Vegas?

Gabriel Wasserman

Sure. So we actually don't have a watch list. We go through every single investment in our lease and loan portfolio on a quarterly basis as a management team, so don't have separate lists. And on the Fontainebleau, they're approaching an extension test in January of 2027. That one fully matures in 2028 and expect that money to come back to us. And as we spoke about, that would be a good opportunity to redeploy that into a myriad of option, whether it's other investment opportunities, other unfunded loan commitments, stock buybacks. That's a good example of capital that will come back to us, and we'll have some good options to redeploy it.

Operator

Our next question comes from the line of Jordan Bender of Citizens.

Jordan Bender

Over the years, we've seen casino greenfield projects come and go, including the proposal to get several integrated resorts up in Ontario over the last 24 to 48 hours. As you think through your uses of capital, curious to where greenfield projects that you develop, whether it's in the U.S. or internationally sit on your list of priorities.

Edward Pitoniak

Yes. I'm going to turn this over to John in just a moment, Jordan. But it's a good question to ask because it also gets to what can be the value as part of portfolio growth activity of build-to-suit projects, which can eventually be of considerable economic value and magnitude, but do not require writing one big check on day 1. It allows you to put capital out at a cadence, and so that can be appealing as not the sole investment activity, but as a component of investment activity. But John, I'll turn it over to you if you want to offer any thoughts on Canada or any other growth activities -- greenfield activities.

John W. Payne

You had a great answer, Ed. I mean it's definitely something we continue to look at. We're very careful of who the partner is, what is the market, how to size the market, what is the capital investment. We have seen over years, if you're as old as I am, 30-plus years in the space, where they're great markets and great operators, but they put too much capital into the business, and it's tough to maintain. So we are definitely involved in discussions, but we also are very careful in the underwriting and being selective and disciplined and patient and really take time to understand how the operator is thinking about the opportunity.

Operator

Our next question comes from the line of David Katz of Jefferies.

David Katz

I'm not sure, and I know we have in many past calls, discussed the sports facilities opportunities, which had been a kind of a growth avenue and one that was just developing and taking a long time. Perhaps this is for John. Is that still an avenue that's on some burner on the stove?

Edward Pitoniak

It absolutely is. I will turn it over to John in just a second here, David. But I think one of the things we've learned as we've gotten to know this landscape better is that there are certain players in this marketplace of sports investing that are really the key conduits to activity and that have pipelines already developed that give them access to multiple opportunities across multiple sports and multiple geographies. And I would say as well as getting to know individual team owners or universities, we are also very focused on figuring out who the fulcrum players are that force multiply John and the team's efforts. But John, I'll turn it over to you.

John W. Payne

Yes, David, we're -- to answer the question, we're definitely -- it's still worthy of our investment and our time, and Ed's described it well. As you know, we're a provider of capital and partnership, but we're not developers. We're not designers. And so what Ed described is what we've been spending our time is understanding who are the players, who's going to have access to these projects, how can we participate in the short term and the long term, what structures can we put in place, but it definitely is an area where we are smarter today than we were a year ago, and we continue to look at the right opportunities for our capital.

Operator

Our next question comes from the line of Dan Guglielmo of Capital One Securities.

Daniel Guglielmo

Just one for me, and it's a follow-up to Chris' question. But you mentioned the third access to capital right now as being proper portfolio management through potential asset sales. So if you did tap that third source of capital, what would be the ultimate goal there before declaring success and then moving on?

Edward Pitoniak

If I understand your question, Dan -- and by the way, Dan, ski season is coming, just in case you forgot. Our ultimate goal would be what it always is, which is to make sure that both the recovery and the reallocation of capital are value enhancing, that we end up with an investment, namely a property investment that we believe will grow in value over time that's occupied by a very good operator that we believe in and will continue to believe in for years to come.

Operator

Our next question comes from the line of Haendel St. Juste of Mizuho.

Haendel St. Juste

I got 2 quick ones here. I guess, first, Dave, for you. Can you share some early thoughts? I think you have $1 billion, $1.5 billion of debt maturities next February, 2 bonds average rate, I think, 4.75%. Curious if you're open to shorter-term debt, convertibles and where you think you could issue 10-year debt today?

Edward Pitoniak

David?

David Kieske

Haendel, great to hear from you. Yes, we have $1.5 billion due in February. We look to refinance that maybe later this year or early next year. We've got plenty of time. Credit markets continue to be conducive for VICI. They value the corporate guarantee that we have. Just going back to the August issuance, we raised $1.75 billion of paper and had $7.2 billion of orders in the book. So the fixed income markets continue to look at our cash flows as very stable. But we'll evaluate timing. We'll evaluate tenor as we have in the past, Moira leads those efforts and does a phenomenal job of ensuring that we are balancing the tension of demand in the market. And then we'll also look at -- as I mentioned, we evaluate term loans, we evaluate converts. Converts don't make a lot of sense for us today, but we continue to watch and see what others are doing.

So we'll address that. We will have obviously a little bit of AFFO headwinds given where the rates are on that paper. I think one of those is a legacy high-yield note when high yield was at 3.5%. Both can remember those days. But it's on our radar, and we will address it in due course and as efficiently as possible.

Haendel St. Juste

Got it. Helpful. And then just one follow-up. We saw your peer monetize some of their excess land by partnering with Prologis to form an industrial partnership. I'm curious if you guys have any land parcels you think that could fit an opportunity like this? Is it something you'd consider? Or are you only focused on experiential JVs? And then more broadly, Ed, I think I just want to get your kind of maybe updated perspective. Just curious if I'm interpreting correctly that you seem a bit more open today broadly to the idea of potential funds or JVs to expand your opportunity. Just curious on some thoughts there.

Edward Pitoniak

Yes. Well, Haendel, first of all, I'm so glad you asked that question. It gives me an opportunity to congratulate our friends at GLPI, Peter, Steve, Desiree, Carlo and others on what I think is a very good deal with Prologis. Obviously, the largest REIT in the world, blue chip. And what it demonstrates is something that I think people have been a little skeptical about, which is what is the residual value of gaming real estate as real estate. And I give full marks to GLPI for creating that partnership with Prologis on that land. And then to go to the second part of your question, we obviously -- we react to the facts as they exist on the ground. We're not in the business of denial. And if the world is going to continue to evolve in such a way that the relative merits of an option become more positive, more productive, we will certainly pay more attention to them.

Operator

This concludes the question-and-answer session. I'll now turn it back to Ed for closing remarks.

Edward Pitoniak

Well, thank you, Marvin, and moreover thanks to all of you on the call today. We really appreciate you being involved and invested in VICI, and we look forward to talking to you again in February.

Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.