GLPI 2026年第三季法說會：AFFO 成長，財測指引與 Bally’s 芝加哥最新動態

Gaming and Leisure Properties (NASDAQ: GLPI) 在收購、租金調升條款及開發資金支持下，再次公布 AFFO（調整後營運現金流）實現雙位數成長的季度表現。管理層亦強調資產負債表的承載能力、穩定區域博弈需求以及 Bally’s Chicago 項目的持續推進，同時也承認了 Bally’s 的流動性風險與較高的資金成本。

重點摘要

• 管理層表示，2026 年第三季 AFFO 成長率超過 10%，而房地產總收入同比增加近 3,800 萬美元。
• GLPI 維持 2026 全年財務展望，房地產總收入預計落在 12.20 億至 12.25 億美元之間，或每股稀釋盈餘及 OP 單元 (OP unit) 收益落在 4.11 至 4.12 美元。該展望未納入未來潛在交易。
• 槓桿比率為 4.8 倍，低於 GLPI 5.0 倍至 5.5 倍的目標區間。管理層預計在資助截至 2027 年及 2028 年的現有承諾後，槓桿比率將保持在該區間的低端附近。
• Bally’s Chicago 仍按計劃預計於 2027 年上半年開業。GLPI 表示，儘管部分飯店及附屬設施組件有所延誤，但其資金撥付時程與即時收入認列並未改變。
• GLPI 主租約的租金覆蓋率介於 1.61 倍至 2.46 倍之間。13 處物業中有 9 處的租金覆蓋率持平或高於上一季度。
• 管理層將交易管道描述為積極活絡，目前多數討論涉及傳統售後租回模式。GLPI 優先考慮具增值效益的交易結構，而非在當前估值下增發股權。

核心財務數據

現金收入增加 4,700 萬美元，其中包括來自 Bally’s Lincoln 房地產的約 1,400 萬美元、來自芝加哥租約的 1,200 萬美元，以及來自 Belle 開發項目的 100 萬美元。Penn Entertainment 開發資助增加了 800 萬美元，Sunland Park 貢獻了 380 萬美元，Dry Creek 與 Virginia 貸款增加了 400 萬美元。租金調升條款與抽成租金調整則另外貢獻了 380 萬美元。

業務與營運績效

Bally’s Chicago 進度符合預期

GLPI 表示，Bally’s Chicago 永久賭場仍按計畫將於 2027 年上半年開業。整體工程進度約已完成三分之二，每天有超過 1,000 名工人在現場施工。管理層預計賭場與飯店主體建築將在 12 月前達成防水防風封頂標竿。

部分飯店客房及其他附屬設施完工延誤，不會改變 GLPI 的資金撥付時程。管理層表示，GLPI 隨資金撥付即開始賺取收益，從而限制了工程延誤帶來的直接財務影響。然而，延誤可能會推遲 Bally’s 產生現金流的能力，並加劇其流動性壓力。

GLPI 的承銷假設並未改變。管理層表示，若附屬設施開業時間晚於最初預期，項目要實現完整投資報酬率可能需要更長時間。

開發項目儲備助力成長

GLPI 在第一季收購相關土地後，於第三季開始為 Live! Casino & Hotel Virginia 開發項目提供資金。該公司預計為該項目提供 4.67 億美元資金。管理層表示，臨時設施的營運表現符合其原始承銷假設。

儘管 GLPI 也在評估精選的新建 (greenfield) 與再開發機會，但目前管道討論仍集中於傳統售後租回模式。管理層表示，區域性資產出售活動可能會增加，並指出私下交易流程已與公開知悉的交易同步展開。

與安博 (Prologis) 合資變現無收益土地

GLPI 將前 Hollywood Casino Joliet 舊址土地注入與安博 (Prologis) 的合資企業中。該公司憑藉該土地獲得了 6,100 萬美元的資本帳戶額度，初始持有 20% 權益，並有權根據項目和租戶結構將投資比例提升至最高 30%。

管理層將此合資項目視為將無收益資產轉化為能夠產生長期報酬項目的一種方式。該公司預計開發與租戶承諾將在未來數年內逐步展開。GLPI 表示，該交易主要應被視為特定地點的個別機會，而非向工業房地產領域的大舉轉型。

區域博弈需求保持穩定

管理層表示，2026 年第三季區域博弈收入成長略高於 2%。運營商報告的區域物業 EBITDAR 成長率普遍落在個位數低段至中段區間。

GLPI 將就業視為區域博弈的主要需求驅動力。管理層表示，汽油價格上漲及更廣泛的成本壓力在本季度並未對報告的博弈業績產生重大影響。

管理層指引

GLPI 維持 2026 全年指引，房地產總收入落在 12.20 億至 12.25 億美元，相當於每股稀釋盈餘及 OP 單元收益落在 4.11 至 4.12 美元。

該展望包括約 2.65 億美元的額外開發資金，使預計的 2026 年開發支出達到 8 億美元。該展望排除未來的任何交易影響。

管理層預計在資助截至 2027 年及 2028 年的現有開發與交易承諾後，槓桿比率將保持在其 5.0 倍至 5.5 倍目標區間的低端附近。該公司表示，這為收購留出了額外的債務空間，且不會超出其槓桿上限。

風險與關注領域

• Bally’s 流動性：Bally’s 在其申報文件中增加了與持續經營疑慮相關的說明。GLPI 表示該揭露未改變其整體信用評估，但管理層承認這並非積極進展。
• 芝加哥項目執行風險：賭場仍按計劃推進，但飯店客房與附屬設施的延誤可能會推遲 Bally’s 的現金流產生以及項目的完整報酬時程。
• 租戶信用保護條款：GLPI 的租約包含租金覆蓋率要求，且在許多情況下包含與重大債務掛鉤的交叉違約條款。管理層表示，目前 Bally’s 的資產覆蓋率仍遠高於租約違約門檻。
• 資金成本上升：管理層表示，近幾個月來債務與股權成本均有所惡化。由於 GLPI 認為其股價缺乏吸引力，因此主要利用自由現金流和債務來資助其開發項目。
• 資本市場波動：資本化率 (Cap rates) 的上升速度不如 GLPI 的資金成本快。管理層估計，在當前市場下，與先前公布的 Golden 交易類似的交易，其定價收益率可能會上升約 75 個基點。
• 浮動租金：GLPI 預計 2027 全年抽成租金將減少 330 萬美元。

分析師問答亮點

為何 GLPI 未將股票回購列為優先事項

管理層表示會定期將股票回購與投資機會進行評估比較。董事長兼執行長 Peter Carlino 將回購形容為最後手段，並指出 GLPI 仍擁有活絡的潛在增值交易管道。當預期報酬高於資金成本時，公司計劃優先進行新投資。

額外收購的承載能力

GLPI 預計現有承諾將使槓桿比率保持在目標區間低端附近。管理層表示，這為增量交易提供了「相當充裕」的可用資金 (dry powder)，不過公司無意讓槓桿比率超過 5.5 倍。

若股權市場持續低迷，公司可能會利用合資企業作為額外的資金來源，但目前認為其核心投資組合無需採取此類結構。

Bally’s 的下行保護機制

Bally’s 的兩份主要租約每年產生達九位數的租金收入，覆蓋率分別為 1.98 倍與 2.13 倍。GLPI 表示對標的房地產仍充滿信心，並相信如有必要可對這些資產進行重新定位。管理層亦表示，若 Bally’s 無法或不願繼續推進，數個陣營可能會對芝加哥項目感興趣。

GLPI 另外說明，涉及澳洲 The Star Entertainment Group 的罰款為 The Star 的獨立事件，不會直接影響 Bally’s 在美國的營運或 GLPI 的資金撥付安排。

併購紀律保持不變

管理層對向現有所有者收購博弈房地產仍感興趣，但表示將獨立重新評估可持續租金水準，而非直接採用賣方的原始承銷架構。GLPI 正專注於租戶品質、地理多元化、競爭定位以及物業層面的特徵。

該公司亦持續與原住民部落營運商 (tribal operators) 進行討論。管理層表示相關合作關係正向前推進，儘管此類交易需要大量的溝通教育，且進度通常較慢。

對非博弈領域擴展的意願有限

GLPI 繼續評估休閒及其他非博弈領域的機會，但管理層表示博弈仍是其主要重心。任何博弈領域之外的擴展都必須具備增值效益，並需要有經驗豐富的營運或開發夥伴參與，類似與安博 (Prologis) 的合資模式。

法說會逐字稿全文

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完整財報電話會議逐字稿

管理層陳述

Operator

Greetings, and welcome to the Gaming and Leisure Properties Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded.

It is now my pleasure to introduce your host, Joe Jaffoni, Investor Relations. Thank you, sir. You may begin.

Joseph Jaffoni

Thank you, Christine, and good morning, everyone, and thank you for joining Gaming and Leisure Properties Third Quarter 2026 Earnings Call and Webcast. The press release distributed yesterday afternoon is available on the Investor Relations section on our website at www.glpropinc.com.

In addition to the third quarter press release, GLPI also posted a supplemental earnings presentation, which highlights the events of the quarter, recent developments and future considerations that can also be accessed at www.glpropinc.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today. Forward-looking statements may include those related to revenue, operating income and financial guidance as well as non-GAAP financial measures such as FFO and AFFO. As a reminder, forward-looking statements represent management's current estimates, and the company assumes no obligation to update any forward-looking statements in the future. We encourage listeners to review the more detailed discussions related to risk factors and forward-looking statements contained in the company's filings with the SEC including its 10-Q and in the earnings release as well as the definitions and reconciliations of non-GAAP financial measures contained in the company's earnings release.

On this morning's call, we are joined by Peter Carlino, Chairman and Chief Executive Officer of Gaming and Leisure Properties. Also joining today's call are Brandon Moore, President and Chief Operating Officer; Desiree Burke, Chief Financial Officer and Treasurer; Steven Ladany, Senior Vice President and Chief Development Officer; and Carlo Santarelli, Senior Vice President, Corporate Strategy and Investor Relations.

With that, it's my pleasure to turn the call over to Peter Carlino. Peter, please go ahead.

Peter Carlino

Well, thank you, Joe, and good morning, everyone. Happy once again to report another strong quarter here at GLPI. And I would note that despite volatility in both the debt and equity capital markets, our tenant operations and our businesses remained stable as evidenced by our AFF growth again exceeding 10% in the third quarter. Importantly, 19 of the 13 leases reportedly remain stable or expanded in coverage for the period ending June 30. And with healthy growth exhibited across the regional gaming environment again in the third quarter. So the gaming world is very, very strong. Our growth was again driven by a combination of transaction activity and ongoing development capital funding. Notably, our funding for Bally's Chicago casino remains on schedule with the casino remaining on track for first half of 2027 opening. .

With respect to the Live! Casion & Hotel Virginia project, we acquired the land associated with the facility in the first quarter and began funding the project and the entire project in the third quarter. To date, the performance of the temporary facility bodes very well for our underwriting of this development towards which we will fund $467 million. I should also note that we continue to see a healthy runway of growth from our development pipeline. And despite the current capital markets and the climate that we're facing right now, transaction activity remains healthy. as we evaluate a range of potential transactions.

Our balance sheet remains nicely positioned, providing us with flexibility in an environment like the present which triple net REIT equity valuations have been, to say the least, disappointing. Importantly, despite our leverage capacity providing flexibility, our underwriting principles remain unchanged. We continue to prioritize healthy long-term leases and an accretive spread to our cost of capital. Nothing remarkable in that. It's all good stuff. With that, I turn it over to Desiree.

Desiree Burke

Just one clarification. It's 9 of 13 of our properties have rent coverage that either exceeds the prior quarter or equal to the prior quarter. And then I just will start out and talk to you about our income results.

So for the third quarter of $26 million. Our total income from real estate exceeded the third quarter of $25 million by almost $38 million. This growth was driven primarily by $47 million and increases in cash income resulting from acquisitions and escalations. For Bally's, the acquisition of Bally's Lincoln real estate increased our cash income by $14 million. The Chicago lease increased our cash income by $12 million. The Belle development increased cash income by $1 million. For Penn, the Joliet funding, Aurora funding and M Resort funding increased cash income by $8 million. The Sunland Park strategic acquisition increased cash income by $3.8 million. The Dry Creek I own and Virginia loans increased cash income by $4 million. and the recognition of escalators and percentage rent adjustments on our leases added approximately $3.8 million of cash income. A combination of noncash income items from revenue gross ups, investment in lease adjustments and straight-line rent adjustments results in a collective year-over-year decrease of $9.1 million.

Our operating expenses increased by $65 million, mainly due to noncash adjustments in the provision for credit losses. Included in our release is our full year 2026 guidance of between $1.22 billion and $1.225 billion or $4.11 to $4.12 per diluted share in OP unit. The guidance does not include the impact of future transactions. However, it does include additional development funding of approximately $265 million, bringing our total development spend for 2026 to $800 million. From a balance sheet perspective, our leverage ratio is at 4.8x, slightly below our target level of 5 to 5.5x and our rent coverage ratios on our master leases range from 1.61 to 2.46 as of the end of the prior quarter.

With that, I'll turn it back to Peter to open up for questions.

Peter Carlino

Yes. I think we're ready for your questions. So Christine, please open the floor. .

Operator

[Operator Instructions] Our first question comes from the line of Greg McGinniss with Scotiabank.

分析師問答

Greg McGinniss

Just wanted to touch on Bally Chicago, where the company talked about kind of scaling back their investment in that property, obviously, still making the vast majority of it. But how does that how does that make you guys feel about the underwriting you did there? What your expectations were going in relative to the property that you'll end up with?

Brandon Moore

This is Brandon. I'll start with that. I think the underwriting hasn't changed. So what they're doing in Chicago to slow down the development of the hotel for political reasons or otherwise, it doesn't change how we view the market or how we ultimately think that property will perform. I think it's somewhat unfortunate that the city took the position it did and put valleys in the position to have competition potentially that I didn't think it would add I think it's unfortunate for us that they slowed down the construction of that they may delay the opening of the full complement of rooms. But ultimately, when that property fully ramps, I don't think we have a different view here as to how it will perform.

Unknown Executive

Again, I'll just add to that. From GLPI's perspective, our capital funding is going out on the same schedule it was that casino operation is still on schedule to open in the first half of the incremental amenities, obviously are included in our original underwriting, and we believe all of those will be developed as previously expected, just over perhaps a little bit longer time than we previously contemplated.

Desiree Burke

Yes. And lastly, I'll just add that we did underwrite the chance of Bally in Chicago. So we still feel good about our under the rent coverage that we expect.

Greg McGinniss

Okay. And then just switching gears to the Prologis joint venture. Is there any way for you guys at this point? I mean, I guess, it's free cash flow funding in terms of if you were to do additional investment there. how to fund that accretively to increase your ownership?

Brandon Moore

Well, we should point out that the Prologis deal is on the property of the former Hollywood Joliet site. So that's property we already had on our balance sheet. We were utilizing that in a transaction rather than selling it to potentially generate a lot of excess income out of that from what we would have achieved if we just sold it on the market in fee simple. If the question is, are there opportunities to expand on that relationship, I would say perhaps. We've developed a good relationship with the Prologis team. I think we're all excited about the potential project in Joliet. We obviously have excess land on our -- in several of our properties, but that's mostly leased to our tenants. And so I won't tell you that there's a huge supply of potential sites on our balance sheet, but I wouldn't say that there is none. So we'll continue to see how that relationship expands as we develop it, but we're excited about the opportunity in Joliet.

Desiree Burke

And I think your question was about our investment level. And I think our agreement allows us, as we've disclosed up to 30%. We can't tell you exactly what that will be because it depends on the opportunity and what is developed at the site, whether it's -- whether it's just on prefab and we don't know who the tenant is or it's done specifically for a specific tenant. -- but we would have the right to invest up to 30%.

Peter Carlino

Yes, let me note that this is a terrific piece of property and we are fortunate to align with a terrific partner experienced partner. And this is going to unfold over a period of years, but it's going to create a great deal of value. We have a high degree of confidence in that. So this is kind of a free be. This is one of those lucky things we're able to do, move quickly to take advantage of the ground when we got it back. And I've looked at the layout of what is anticipated. So I -- we couldn't be happy and has been said, we will look for other opportunities in our portfolio. .

Operator

Our next question comes from the line of Jamie Feldman with Wells Fargo.

James Feldman

Great. I guess just sticking with Prologis, I mean first venture into industrial, just with interest rates moving, the transaction markets getting shaker and just listening to conference calls across all of REITs. There's some property types more than others that maybe people need capital. Does this open you up, anything we can read into doing this deal? It sounds like it's not a site you had, but does it -- are you considering doing more outside of your core wheelhouse?

Unknown Executive

Yes. I think simplistically, this was a unique situation where we had a very attractive land parcel. I think it was a monetizable asset that was otherwise going to likely generate very little value for us. We found a great partner to go forward and do it, as Brandon and Peter alluded to earlier. -- there might be some other opportunities within the portfolio for us to do similar things. But I think from your perspective, it's probably better to think about this as more of a one-off and taking advantage of an opportunity that presented itself for us.

Peter Carlino

We don't see a downside here at all. It's only good news.

James Feldman

Okay. And then just in terms of a JV structure, that's new also. How do you think -- I mean you made the comment before about disappointing REIT equity prices, how do you just think about JVs going forward and ways to grow the balance sheet of the business?

Brandon Moore

I think generally, we've seen JVs employed in the net lease area. I think we've taken a look at that. We haven't seen anything compelling in that for our portfolio. But look, I think it's one of the multiple things we have at our disposal that we could potentially utilize if we have a need for capital, and we don't feel like we're being supported by the equity market. So at the present time, I would view that as something we all collectively gotten a lot smarter on in the last 3 or 4 months. And I think we understand it well.

And if it's something that we can utilize to our advantage in the future. You may see us do that. But I wouldn't read through the JV of Prologis to be the same. I think that JV was a situation where it was the best structure. It's what Prologis preferred to get into that structure. And I think the read-through you should have there is if we're going to step outside of gaming, we're going to seek to do it with folks that know what they're doing. And clearly, Prologis is at the tip of the spear when it comes to developing these industrial sites.

Operator

Our next question comes from the line of Smedes Rose with Citi.

Bennett Rose

I wanted to ask just a little bit about, I guess, your kind of cost of capital, which like a lot of names in the space is a little more challenged now. And with the shares trading at a high dividend yield and a 20% discount to at least consensus NAV. Any thoughts on putting in a share repurchase program, do you think you -- I mean, I think one of the overhangs is probably concerns around values and the going concern language. Any kind of comments you can provide around your confidence in value at this juncture? And maybe just other ways that you might be able to attack the steep discount that you share trading at.

Unknown Executive

There are 2 different questions. Very different. I think we'll talk about maybe the Bally stuff first. I think the way that we think about the relationship with Bally's is in parts. There are 2 leases that are each 9 figures of annual rental stream. Both leases, as you can see, are covered at 1.98 and 2.13x. We feel very good about that. Chicago, as we discussed earlier on this call is nicely towards the first half opening. We feel good about that. Obviously, there's some other smaller pieces of business that we have with them, but all of which we feel relatively good about. As it relates to the buyback and obviously acknowledging why you're asking, and it's clearly topical right now. You're right, our cost of both equity and debt capital have gotten have deteriorated over the last several months.

I think it's something that we think about, we talk about internally, we measure it against other opportunities with the pipeline that we have in place today that's already been established. I don't necessarily think it's something we're running to do, but I think it's something we do discuss routinely, and we'll continue to do so.

Peter Carlino

Yes. My quick reaction is that a buyback is always the last resort. It's when you run out of all of the hope and you decide to [indiscernible] . So we've got a nice pipeline that the team, Steve and Brandon are working on it and feel pretty confident that there's opportunity out there. The current pricing won't last forever. There is some debate around the table, but how long it might last. But so long as we can do accretive transactions and put them on the books, we're going to do that.

Operator

Our next question comes from the line of Brad Heffern with RBC.

Brad Heffern

Peter, just following on your comment there. Are there accretive transactions that you're looking at now that would work on this current cost of equity?

Peter Carlino

I think we're saying yes. I mean -- or we don't do them. It's that simple.

Unknown Executive

Steve, why don't you -- go ahead.

Desiree Burke

Are we just don't use equity, right? As we've said and looking at our development pipeline, we're funding it with free cash flow and with debt for the most part, because we don't like the price of our equity to be honest, and it is way too low. So accretive to our cost of equity is one question accretive in general, that we could put up a good deal for our shareholders is another one, which I definitely think we can do by using the strength of our balance sheet.

Steven Ladany

Yes, I'd agree. I mean I think it's pretty apparent that the -- our cost of capital has increased a unproportional rate to the cap rate, you could probably push through on a transaction with a counterparty. The reality is, as Desiree said, there are a number of ways that we can structure a deal to still make sure we're achieving accretion on an economic basis. I would say, I think the benefit we have right now in the marketplace is this opportunity allows us to focus in a little more on qualitative features of transactions and be a little more discerning on that side.

So I think whether that's whether that's looking at new tenant relationships, which bring about additional value to us demographics or location, geographic diversification that maybe we don't have today or that would benefit us and even property attributes, the opportunity to target a category killer or a property that doesn't have a competitive set nearby, Things like that, that are credit-enhancing are now effectively at a discount because the market is -- the price of everything has backed up. Cap rates are higher. And the question is, can you get now a better asset for a price you would have paid for a lesser asset previously? And I think the answer is possibly.

Brandon Moore

We're still open for business.

Brad Heffern

Okay. Great. I appreciate the clarification there. And then on Bally's, I talked a decent about it already, but just I'm wondering they had the going concern language added to the 10-Q, but then they've also recently gotten additional capital or have an agreement in place for that. Can you talk about how those events have changed your view of the credit risk level there, if it has at all?

Brandon Moore

Brad, this is Brandon. I don't think our overall view of their credit risk has changed. In other words, we weren't totally surprised to see that in the 10-Q because we understand where Bally sits. We remain optimistic with Bally's as a tenant in the going concern aspect because they have a lot of assets on the balance sheet that we feel will likely be monetized if they need to in order to proceed with their projects across the country.

Those are very good projects. Chicago and New York will be very lucrative for them. Las Vegas. It's sort of a wait and see for them, I believe, but we believe that they have tools at their discretion to get to cash flow in Chicago, which I think is their first priority. It's not something that we're excited about. It wasn't a disclosure that we were excited to see, but I don't think it's changed our view of them on the whole at the present time.

Peter Carlino

Yes. On balance, we have other Bally's properties, as you well know, and they're all doing fine. So that the underlying credit, I guess, from our point of view, gets the shove, is positive from our point of view. We hope it doesn't get there. But .

Unknown Executive

That value is there.

Brandon Moore

Yes. I think if we look at the downside scenario, if we had to reposition these properties based on the coverages that Carlo has outlined earlier on the call, feel very confident that we would be able to reposition those assets. And quite frankly, Chicago is so far along. There would be several or the -- I should say, there are several parties who would be interested in Chicago at Bally has decided that it could not, would not or cannot proceed with that project. So we feel good about the Valley's assets we have, regardless of the fact that they filed this going concern 10-Q.

Operator

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

Ravi Vaidya

This is Ravi Vaidya for Haendel. I had another follow-up on Bally's. There's a lot of articles that came out there talking about the fines imposed on Si Entertainment Group in Australia. It's about a $260 million fine. Given Bally's relationship with Star, is Bally responsible for paying this? And in your view, how does this impact liquidity, credit and maybe their funding sources for their for a few other projects that are ongoing right now?

Unknown Executive

Yes. So Ravi, thanks for the question. Just to back up here, when obviously, the Valley's team made the investment in the Star was eyes wide open that there was a significant overhang of a fine. I actually think that the end result is more than fine. Bally's Corp is completely unrelated to this investment. So I think what you're looking at is a situation at STAR that is isolated to STAR. And for the most part, that business has started to certainly improve since new management has taken over. There is cash there on the balance sheet to go towards this fine. I believe they have up to 19 months to pay the fine, and I believe the business has started to produce some elements of cash flow to handle it. So as far as we are concerned, the Star investment has no bearing on anything that necessarily relates to us in terms of Bally's core funding and ValuCorp's U.S. operations.

Ravi Vaidya

Got it. I appreciate the clarification there. And you mentioned earlier about cap rates moving up and that there seems to be a greater appetite for acquisitions and more deals. How much would you say if cap rates have moved up, say, versus a year ago in the regional markets that you're targeting?

Steven Ladany

Honestly, if you look at the last large-scale transaction that was announced was not a year ago, and it was the Golden transaction at a 7.5% cap rate. I think if you brought that market -- if you brought that transaction or a similar transaction in the market today, there's no way it's I don't think there's any way possible it is. And I would -- it would be -- I'd be hard-pressed to kind of guess what it would be. But based on that, I'd say you're probably in the neighborhood of 75 basis points wider. That's not a year.

Operator

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

Barry Jonas

I appreciate the color on the pipeline. But as you think about it. I'm wondering if you see opportunities to acquire maybe already leased gaming real estate from other property owners looking to recycle capital rather than just originating new sale leasebacks with operators.

Steven Ladany

Yes, Barry, it's Steve. We -- by all means, we definitely have an interest in acquiring real estate. At the same time, I would say our underwriting might not be aligned with prior underwriting. So I think that's to say, yes, by all means, I'd love to buy some other real estate. I might decide when the team looks at it, we might decide that an asset that currently pays and I'm making something up $25 million of rent really should only be paying $15 million of rent because circumstances may have changed. Maybe there's competitive threats that have come in and impacted it, maybe escalation has been too high. we're not really sure.

But by all means, we would definitely take a look at this. I just don't think it's as easy as plug and play because our underwriting standards are not necessarily aligned with some of our competitors.

Barry Jonas

Great. And then just a follow-up. Any updates on tribal discussions? And I know you guys have built out relationships over the past few years. So wondering if discussions would extend to maybe outside of just tribal lands on to looking at commercial deals.

Steven Ladany

[indiscernible] I missed the first part. Could you say it again?

Barry Jonas

Just looking for an update on your trial discussions and wondering if those relationships could extend beyond for deals outside of tribal land?

Steven Ladany

Yes. By all means, the relationships we're building with the tribes have definitely been progressing. It's just not -- it's not a rapid transaction there's just not a lot of velocity. There's a lot of educational aspects and teaching aspects that go into it to getting -- and building the relationship to get someone comfortable I think, though, the dialogue is definitely expanding. I think we've tried to do spend time explaining that there's a way to monetize the asset possibly on tribal land and utilize the proceeds to expand beyond that.

And I think that has resonated with some drives, especially the ones that are more well capitalized and some of which have maybe already made investments off of off of the travel location to start with. So I think there's a continued opportunity. I think we just need to kind of get some momentum and build it as we go.

Operator

Our next question comes from the line of Robin Farley with UBS.

Robin Farley

I know you've covered a lot of this already, but just going back to Bally's Chicago for a moment. If there -- and I think you've been very involved in sort of directly overseeing the construction there. But if there were to raise in the opening, can you kind of remind us in that scenario where there's delay what the impact would be to GLPI and how that would play out?

Brandon Moore

Robin, this is Brandon. I think from a high level, virtually no impact to GLPI in the sense that when our dollars are funded, we're getting paid for those dollars real time. So what it will do, if it's delayed further, will delay the point in time where Bally starts to realize some cash flow from the asset -- and that ultimately plays into this going concern and liquidity concerns.

So I think directly to GLPI won't change our income off the project it will potentially change the time at which Valley starts to receive income of its own, and that will put further pressure on our financial situation. So I think that is more of an indirect impact, but certainly one that we're focused on.

Operator

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

David Katz

Listening to all of the gaming conversations with management teams and just looking at where the industry is, it feels as though we could be on the front end of a pretty meaningful period of regional asset trading. We may be in the midst of it now, but in the early stages of it. Do you feel that, that's the case? Are you seeing more deal flow in its very earliest stages. And is that a fair assessment on your part? And obviously, how does that -- how are you positioning yourself to participate?

Steven Ladany

Well, David, obviously, Churchill is out publicly with their process. So that's obviously one that you're aware of. I think separate from that, I think there are some private processes that are currently brewing that we're aware of. And I think there's like been a logical transition if you go back a number of years, a lot of the large-scale regional gaming operators, we're going down a path of divestiture programs. Then I think the world changed and the focus became online iGaming, sports betting and like. And I think this is just kind of a natural progression back to where we were.

So I do think you're right that we will see some regional properties changing hands. I think from our perspective, it's twofold. One, we're trying to make sure we maintain all of our relationships with the folks who might be the divesting parties. At the same time, we're trying to build and cultivate relationships with some new smaller private type gaming operators who are interested in expanding and growing. And so I think it's just the life cycle that we're continuing to work through. And I think it's -- you got to -- you have to have relationships on both sides to get to get as many looks as possible.

Carlo Santarelli

David, this is Carl. I'll just add to Steve's comments. Obviously, I think if you look year-to-date, especially from operators who've already reported in the third quarter and operators, obviously, who reported second quarter, you're seeing very solid EBITDA performance from regional portfolios. And you look across the valuations of a lot of these regional operators, they aren't great. And I think to Steve's point, that does beget some people may be thinking to shuffle things or see where they could find incremental value.

Operator

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

Todd Thomas

Peter or maybe Desiree, if equity is off the table at the current valuation here. When you work through remaining fundings and commitments through 27 primarily. How much incremental investment capacity do you have using free cash flow on the balance sheet? And should we still assume that 5 to 5.5 is the right leverage target? Or has anything changed around your tolerance for leverage?

Desiree Burke

No, nothing's changed. When we fund all of the transactions that we have out there through '27 and '28, we'll still be at the low end of our 5 to 5.5x leverage. So no change there.

Brandon Moore

Well in the second part of it, I think, Todd, there is -- because of that, -- and where we fall into that historical range, there is some dry powder in there for us to do deals using leverage above and beyond the current pipeline we had. So I don't think we have any intention at all of even going -- even considering going above 5.5x, but we have quite a bit of dry powder in there to get there.

So as Steve said earlier, if we find good accretive transactions that are assets that we believe long term are assets that we'll benefit from in our portfolio, we do have some dry powder there with which to work.

Unknown Executive

Yes, Todd, you could run the Matt as said, low end of that range. So even if you wanted to take some fraction of the half a turn and look at the capacity that, that creates that some fictitious cap rate type of transaction. you'll recognize there's considerable dry power for incremental.

Todd Thomas

Okay. Sounds good. And then I wanted to just go back to the Prologis joint venture. Can you help us sort of frame up or think about the value creation on that opportunity? GLPI is receiving a $61 million capital account credit for the land at 20%. What could that 20% interest ultimately represent once the project is fully developed or stabilized?

Desiree Burke

We can't disclose that information yet. We don't even know who our ultimate tenant will be of the JV, right? So -- but what I will tell you is the way to look at it is we took a nonearning asset that was sitting on our balance sheet, which was land and Juliet, and we now put it into a structure that will ultimately earn a very healthy return. So I would just look at it as a net-net positive. There is no negative to this. This was a non-earning asset.

Unknown Executive

Yes, Todd. And for modeling purposes, as we said, I mean, Prologis is in the early stages of this. They are going to run this process. The development, the agreements and partnerships and whatnot. We will learn more along the way and presumably at some point in the future, as their negotiations and their tenanting and stuff gets further along the line, we'll presumably be in a place to be able to help you a little bit more from a modeling perspective.

Peter Carlino

Yes, we could have sold the ground out right for -- I could tell you, but I won't. But for a generous price, obviously, we made the conclusion that over time, this is going to be a whole lot more valuable particularly tied to a partner who is as strong as they are. So this is something that's kind of mentally put it aside cultivated and let it grow over the next 5 years.

Operator

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

Caitlin Burrows

A couple of questions ago, you guys were talking about that you do have some dry powder capacity for incremental deals. So I guess just as you think of that forward pipeline, wondering if you could give any comment on whether you would put those discussions into the category of sale-leaseback, development, redevelopment. Just trying to think of what could be next.

Steven Ladany

I'd put -- this is Steve. I put the majority of that discussion in the sale-leaseback bucket. We do have some conversations with folks about whether it be greenfield or redevelopment. I would not say that's the lion's share of the discussions that are ongoing at this time. I think the majority of people have the projects that were floating around out in the universe have been funded, many of which have been opened. So states like Louisiana, Illinois, I think a lot of those projects are well on their way. So those opportunities are fewer and far between. But we are having some conversation on that front, but the lion's share of conversations have been straight traditional sale leaseback.

Caitlin Burrows

Got it. Okay. And then on the lease coverage side of things, I know you guys talked about it earlier in the call, and I'm sure [indiscernible] feel better and you talked about some incremental moves higher recently. But I guess if you look year-over-year Bally's, but also Caesars and Quad's, those came down. So wondering if you could give any commentary on whether it's at what point lower coverage concerns you or even just the direction of them and how you consider that, whether it's over a quarter year basis?

Unknown Executive

Yes. So I mean, look, I think the direction of travel and the easier way to look at this, since it's all LTM, the EBITD and LTM rent is sequentially because, for example, you'll have some leases that maybe had a tough fourth quarter, and we're kind of cycling through that right now. I do think if you look across the entirety of the coverage portfolio, Caesars was one that clearly got a lot of attention. we did see a nice bump as of the end of the 2Q in coverage there as that continues to stabilize. I think we talked about it earlier this year that, that portfolio specifically had a tough fourth quarter at 1 specific asset.

On a whole, I think the coverage story is strong, and it's kind of improving of late. What I would also note is you look across the earnings of those who've reported Caesars being on Churchill Downs being another Boyd being another, not all tenants but all showing a low- to mid-single-digit regional EBITDAR growth cadence in the third quarter, which generally bodes well since we're reporting to you on a one quarter lag.

Desiree Burke

Furthermore, I would add, our rent coverages are really strong. They're not what you see in other areas, like we're sitting here talking about a low coverage of $161 million that is still a strong coverage where a tenant would be happy with the return that they're getting. And on the high end, we have 3s out there. So I am not at all concerned with that rent coverage. And I will tell you, if you look back a year or even pre-COVID, we're not far off of where we were at that point in time. So I feel very confident in our rent coverage right now.

Brandon Moore

Our [ demand ] has been much overexaggerated here. I think our leases are in very good shape. .

Operator

Our next question comes from the line of Ronald Kamdem with Morgan Stanley.

Ronald Kamdem

Great. I just -- sorry to go back to Bally. Just a 2-parter. One is with the going concern language is there sort of any ripple effects on the leases, right? Whether it's minimums or anything like that? Like does that change anything on the lease front? And then two, just on Bally, Chicago, obviously, there's been a lot of headlines and so forth. But what do you guys -- like what are the data points we should be looking at about the reception of the project and how it's going to ramp?

Desiree Burke

So from a lease perspective, obviously, we have rent coverage ratios that they can't go below that are all disclosed in our release, right, as far as the default goes. And as we just said, at , they're nowhere near anything that would default their leases because our investments in Bally's. We're not really investing in the corporate entity. We're investing in specific assets that are performing very well. That's the first half.

Brandon Moore

Yes, I'll just add, we do have in our leases, defaults related to their material indebtedness. So should they default on their debt at GLPI, we would have some legal rights under the leases to take action, and I'm not saying we would or would not depending on the circumstances. But just to be clear, we do have that right built into many of our leases -- sorry I don't know what was the second part of your question?

Ronald Kamdem

Just trying to get some tea leaves on the Chicago opening. What is the data point saying about the reception of the assets? What are you guys tracking what are you looking at?

Unknown Executive

Yes. So I mean, I think, Ronald, there's a lot of, obviously, media articles written about this project. I saw them the other day that talked about the site being slow. We know there to be close to 1,000 workers and everything is moving at full speed on that project. I think that as it continues to kind of progress, we've gotten more and more comfortable with that first half '27 opening. I don't think a lot has changed in terms of how we think about the underwriting.

As already mentioned earlier on this call, VLTs were always part of our underwriting case. I don't know that there's been anything necessarily incremental that would change the way we think about the ultimate returns, barring the delay on the full completion of the amenities associated with the project and maybe that pushing that full ROI that we originally contemplated, which again, as Brandon mentioned earlier, has no impact on when revenue rent income is coming to.

Steven Ladany

Just -- this is Steve. Just to give you a little context on the construction progress because that could be helpful maybe as well. The overall project is roughly 2/3 complete. That's the overall project. That's inclusive of everything, even the parts you've heard that are delayed. So the projects complete, and there are over 1,000 daily workers on site. Importantly, the hotel structure that, that's the part that what everyone knows was delayed. But that entire structure as well as the casino are expected to be weather tight by December. So there is still work going on the hotel to make sure it's weather tight. And so that's all expected to happen by December. And if that does happen according to plan as we're expecting, that will make all of the progress throughout the winter months in Chicago that much easier for everyone working indoors. So those are kind of some of the things we're looking at on the construction side, and we're eager to be able to report to you that the weather tight has occurred.

Ronald Kamdem

Great. That's helpful. I guess my last one and maybe it's a quick one. Just can you remind us the variable rate reset for what they ended up being for this year and what we should look for, for next year?

Desiree Burke

So we do not have any rent resets in 2028. So you don't need to look at anything for next year. and the percentage rent decline for 2027 is $3.3 million, of which will happened in '26, but a full year will be the 3.3 in '27.

Operator

Our next question comes from the line of Chad Beynon with Macquarie.

Chad Beynon

I wanted to get your take on your appetite on the strip, given some of the results we've seen this summer, which may just be a return to seasonality. I think we've all been spoiled the past couple of years, some of the seasonal patterns have changed, but it certainly highlights the negative operating leverage that we see in Vegas and destination markets versus the regional markets. But yes, I would just love to hear your thoughts.

Peter Carlino

Let me share just my general philosophy about Las Vegas. It's great when it's great, and it's really crummy when it's crummy. None of that rubs off on the regional markets. I've been saying for many, many years, as you all know, that the revenues coming out of regional markets are essentially bulletproof. The only one thing in my many years of experience looking at these markets that affects performance, and that is employment. If there's a significant run of unemployment, that will impact a local property. But by and large, the revenues are botproof, and I stand by that. I think time and the decades of proving me right. So we're not worried about the regional market.

As I say, Vegas, it's great, and it's great. I'll say that again. And that's so cool when it goes the other way. But it's a different world from what we mostly deal with. And we don't compare ourselves with what goes on there. It's a shame that impacts in Vegas affect people's perceptions about what goes on in the retail market but they aren't the same.

Chad Beynon

Okay. And then with the midterms next week, it doesn't look like there's a lot of potential bills that would impact you guys directly, a number of sports betting, bills and some small things around the edges that would obviously change to blue or red and that could have a derivative impact. But anything else that you guys are keeping an eye on for next week that would kind of cycle into your business?

Unknown Executive

Yes, Chad, I mean I think there's a couple of things that we'll pay attention to. I think your overall synopsis is broadly accurate, some governors races that might change the tone of how certain states are viewing certain things. You have the mutual stuff in Virginia, obviously, the Cortech Live project that we have would be something to pay attention to, both of those counties are 2-plus hour drives away. So we don't really think that has any impact on what we have going there. and then you have the ballot initiatives in Northeast Indiana. Again, if you look at the map, there's not a lot of competition within an 80 90-mile radius of where those 3 counties are located. So I think overall, pretty quiet and like you said, a little bit more relevance for some of the OSB stuff and things of that along those lines.

Operator

Our next question comes from the line of Jason Wayne with Barclays.

Unknown Analyst

Just a quick one. Is there any update on the A Stadium project? So how far along are those discussions? And do you have any better picture of what GLPI's role could look like there?

Brandon Moore

Yes, this is Brandon. The stadium itself, I think, is progressing nicely. I think they're on track to open that stadium with -- assuming there's a first pitch in baseball in 2028, I think they're on track to do that. We're getting to the point in that project where certain infrastructure improvements for the integrated resort are being permitted. GLPI has not been asked at the present time or I should say we haven't committed to anything in addition to the $125 million we have remaining.

And so we're really waiting to see how that best can be deployed on the site. We haven't ruled out some additional funding but I think there's a lot that we need to see and answers that we need to have in order to understand the overall project before we're willing to commit more capital to it. So I think we continue to be in a position where we're ready to fund when that's needed, and we're just waiting to understand how that integrated resort is going to unfold.

Operator

Our next question comes from the line of David Harris with Barclays.

Unknown Analyst

I'm wondering if you have any position on historical racing machines at Random Park in Massachusetts, whether those are permissible or not?

Steven Ladany

Well, I don't think we have an opinion on it at this point in time. We're aware of the efforts to try to get the legislation done. We know that it would -- there would be some ancillary impact to Plainridge that would be positive, but that's the extent of our involvement.

Unknown Analyst

Got it. And then we've been beating this Bally, Chicago thing to, but I'm just wondering if there's any room count that -- do you know how many rooms they'll have when they open up?

Brandon Moore

We don't at the present time. I mean we just look to their HCA. I mean, we've heard that Bally's comment publicly that they intend to comply with the HCA, the HCA has a minimum number of rooms in it. So we would expect it to open the dose, but we haven't gotten into the details on opening day.

Operator

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

Daniel Guglielmo

Just one for me. I think heading into the back half of this year, there was nervousness around discretionary spending with gas prices high but it doesn't feel like it is fully materialized. So can you just talk a little bit more about what you're hearing from the regional operators on the ground? And what gives you all and then the confidence to continue deploying capital for growth.

Carlo Santarelli

Yes. Thanks, Daniel. It's Carlo. So I think, look, obviously, it's a valid concern. Peter and the team and I were just discussing earlier, employment really is the biggest driver of regional gaming. If you look at the cadence of 2026. Again, in the third quarter, you're going to see gaming revenue up a little bit over 2%. It was up a little bit over 2%.

In the first quarter, it was up closer to 3% in the second quarter. If you look at kind of the third quarter property EBITDAR. I think Caesars reported up 4%. Boyd's same-store was up close to 3%. And Monarch up to Churchill Downs up 4%. So I think there's a lot of concerns around there. Obviously, gas prices, cost of everything is up for people, but you're just not seeing it manifest in gaming results.

Operator

Our next question comes from the line of Colin Mansfield with CBRE.

Colin Mansfield

Just one question for me. Maybe a pivot outside gaming, I would love to get your updated thoughts on how you're thinking about potential opportunities let's say, in the leisure space. If you look in that environment right now, there's, I think, several operators where your cost of capital is much more attractive than what their cost of debt or equity might be. There might be some that are facing some eosyncratic issues or hiring restructuring advisers. So I'm just kind of curious the attractiveness of anything outside of gaming right now. Is anything in your view changed? Or are you seeing more opportunities where you might be opportunistically able to provide your cost of capital to some of these real estate heavy names that might be facing a little stress right now? I'll jump in.

Carlo Santarelli

It's Carlos. I appreciate the question. I think nothing has changed in our approach to nongaming venturing into non-gaming. It's going to have to be something that we find both accretive and we have were able to acquire the expertise to grow it. And so I do think there are some opportunities out there. We continue to look at those. But if you see us venture outside of gaming, as we've done with Prologis we'll seek to do it with folks that know what they're doing and can help us grow in that whatever business we enter into. So I think you're right, there are some probably some more opportunities out there but our philosophy and approach hasn't changed.

Peter Carlino

Yes. Let me add, too. We haven't run out of gaming opportunities yet. I think Brandon said earlier, thoughts about our demise have been greatly exaggerated. And so as long as we can stick to our knitting, we're going to do that. We never give up looking at other things. It's part of what we're challenged to do, but we're blessed to be able to continue with what we know best. .

Operator

We have no further questions at this time. Mr. Carlino, I'd like to turn the floor back over to you for closing comments.

Peter Carlino

Thank you very much, Christine. And thank you all for dialing in, and we will look forward to seeing you next quarter. Bye-bye.

Operator

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.