David Kieske : Michael, it’s David. One of the things you should look at is the Venetian press release that they put out yesterday where they ahead of 25 anniversary of the asset this Saturday, actually, where they have laid out extensive value enhancement plans well in excess of $700 million actually. So it’s just a little bit of timing on their side as they work through the initial $400 million this year. They’ve got a lot of things in the hopper and things that they’ve already done. And then just a bit of as that all comes together, what their pace of potentially drawing that incremental $300 million where that falls in and how they use that capital going forward.
Ed Pitoniak : And Michael, just to add to that, I believe you’ll see the press release talks about a total of about $1.5 billion of total investment into the Venetian, of which we may end up being about half of that. But I want to stress the point that I don’t know of another REIT category where tenants put more capital into the REIT’s asset than ours. If you look across our portfolio, both our Las Vegas portfolio and our regional portfolio, any given year, our tenants are putting hundreds of millions of dollars, if not billions of dollars into our assets, making our assets more valuable. That obviously doesn’t get captured in the models per se, given that obviously, the transparency around the exact capital that our tenants put into each one of our assets is not necessarily there. But we can tell you based on what we know of their investment activities that no other REIT that we know enjoys greater benefit from tenant reinvestment into our properties.
Operator: The next question comes from Greg McGinniss from Scotiabank.
Greg McGinnis: So given that the Venetian deal originally had potential to be up to $1 billion, does that mean there remains another $300 million here down the line? Or does this exhaust that initial agreement? And in general, for the partner property growth fund, is there — could there potentially be more concrete agreements ahead of time like in the case of Venetian or for situations like you’re talking about in terms of the south side of the strip in MGM where there might be something? Is it more likely to just have an actual investment be announced as opposed to, again, the potential for one?
Ed Pitoniak : Yes. David or John?
David Kieske : Greg, I can start, and John may chime in. Yes, potentially, there could be more than $700 million that comes out of our agreement here. The original billion announcement back in 2022, we modified that as the team worked through and got in under the hood, so to speak, of the asset and realize what they wanted to do or what they want toundertake. So there’s some tweaks to the original agreement on our side. And as Ed just laid out, the announcement that Venetian put out yesterday has up to $1.5 billion or their plans to invest $1.5 billion into the assets. So there could be incremental capital. But what we’ve documented and announced with our great partners at Apollo and Patrick and team and Rob into Venetian is this incremental $700 million investment today. And the second part of your question, there could be incremental dollars that we put in across the portfolio was because of the uniqueness of our assets versus any other REIT out there.
John Payne : Yes, Greg, I think you should hear that we like these opportunities. And as Ed just pointed out a few minutes ago, there aren’t many REITs that have this unique lever to pull to grow. I mean there aren’t many REITs that are going to say,hey, we’re going to put $700 million into an asset. There are some REITs that can’t even say I want to put $700 million into my whole portfolio. We’re talking one of our 93 assets. So we like this opportunity to help our partners grow, and that’s one of the uniqueness that VICI has that we had the — and we were talking earlier, we can go to M&A. We can help buy other assets, but we also have this lever that we’ve been talking about for years that is coming to life today with the Venetian.
Greg McGinniss : And David, just on the maintained guidance real quick. Was there no additional drawdown on loans without final draw structure in Q1? Or is it just at an immaterial level to have no impact on the full year guide?
David Kieske : No — sorry, the first part around the draw schedules Greg? I mean we still feel really good about our guidance — sorry, go ahead.
Greg McGinniss : Yes. So I understand that for loans without draw schedules that’s not included in future guidance. And I’m not exactly sure what was drawn, if anything — assumption be if there was…
David Kieske : Yes, it’s immaterial if there were an so we feel really good about our guidance range where we sit here today.
Operator: Our next question is from Ronald Kamdem from Morgan Stanley.
Ronald Kamdem : Just two quick ones. Just first, just looking for some qualitative comments, starting with the annual letter about sort of higher rates and the impact of activity just as you’ve seen sort of this recent spate of movements on the rate front, just quality of comments on what that’s doing to the pipeline, where the decisions are taking longer and so on and so forth, or anything falling out?
Ed Pitoniak : Yes, it’s a timely question, Ron. I mean, it’s definitely having a fairly chilling effect on trading activity really across most all asset classes. And that’s why we really value having levers to pull or tools in our toolbox where we can generate growth during periods when it would otherwise be difficult to do through conventional asset trading activity. Those obviously include things like our property partner growth fund, the Venetian being an example through our credit book, [Audio Gap] Is difficult, frankly.
Ronald Kamdem : And then just the second question, just staying on the pipeline, is there sort of more activity on the gaming side, non-gaming side, all of the above? Just any sort of color there would be helpful.
John Payne : We continue to spend time.
Ed Pitoniak : John?
John Payne : Yes, we continue to spend time and a lot of different sectors on the non-gaming side, whether that’s wellness indoor water parks, Pilgrim golf, You Sports, you’ve heard us make an investment. But at the same time, let’s remember, as I said in my opening remarks, we get 98% of our rent from our gaming assets, and we continue to spend time with our current partners and others to grow. So for us, I know we get asked a fair amount about our non-gaming, but it shouldn’t be forgotten that we’re also spending a lot of time in gaming. So the answer is both spending time in both.
Operator: Okay. We have no further questions on the call. So I’ll hand the floor back to Ed for the final closing remarks.
Ed Pitoniak: All right. So I want to close out the call by just reiterating how much value we believe we’re creating with the announcement we made yesterday afternoon of our investment in the Venetian with our partner, Apollo. And I’m going to actually read from somebody’s note because, frankly, this note expresses it better than I ever could. And in this note, the author says, we view the Venetian cap rate spread as attractive, especially considering how tight spreads are elsewhere in net lease. Bigger picture, we view this as VICI capitalizing on its relationships to double down on a winning hand. In parenthesis, the Venetian may be VICI’s best acquisition to date, close parenthesis. Despite higher interest rates, there’s just nowhere else in today’s triple net lease market where you can put that amount of money, $700 million up to, to work into that kind of irreplaceable real estate at a 7.25% cap rate then in parenthesis, delusional sellers are still looking for sub-seven cap rates on their poorly located Red Lobsters.
I could not have said it better myself. And again, we just want to thank you for your time today and reemphasize that as noisy as it is out there and confusing at times in the marketplace, the VICI team is a team that continues to get good things done. Again, thanks for your time today, and we’ll see you again in the next quarter.
Operator: This concludes today’s conference call. Thank you all very much for joining.
