GLPI - Casino REITs: Gambling On Inflation

• Casino REITs have been among the best-performing property sectors this year as the positive tailwinds from the leisure demand recovery have offset inflation headwinds and economic growth concerns.
• Despite their ultra-long-term triple net lease structures, casino REITs are better protected from inflation than many would presume, making heavy use of CPI-linked escalators and tenant revenue share agreements.
• Casino REITs- which emerged in the late 2010s- have benefited from an upward "re-rating" from investors as the sector has matured and as the business model has become better understood.
• The M&A environment remains fertile. VICI Properties closed on its $17.2 billion acquisition of MGM Properties, giving the company a dominant share of the Las Vegas strip while Realty Income entered the sector with a nearly $2B acquisition.
• While no longer under the radar, Casino REITs remain one of our favorite yield-oriented property sectors, providing strong value with 5-6% dividend yields and growth potential through continued consolidation.

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