Experiential real estate investment trust (REIT) VICI Properties released Wednesday its second quarter financial report posting growth in revenues year-over-year.
Revenue Growth, Net Income Decline
For the three months ended June 30, 2022, VICI Properties reported total revenues of $662.6 million to post an increase of 76% to the $376.4 million generated in the respective three-month period in 2021. Q2 2022 revenues comprised $86.4 million of non-cash leasing and financial adjustments and $15.6 million in other income.
“The second quarter of 2022 marked another transformational quarter at VICI,” commented Edward Pitoniak, VICI Properties’ chief executive officer, paying attention to the major developments during the quarter.
VICI Properties received investment grade ratings from S&P and Fitch in April and closed the strategic acquisition of MGM Growth Properties, the REIT spun off MGM Resorts, in a $17.2 billion deal initially announced in August 2021. In June, VICI Properties made history to become the fastest REIT to transition from IPO to S&P 500 listing.
Net income attributable to common stockholders declined to minus $57.7 million in Q2 2022 as compared to $300.7 million in Q2 2021 primarily due to the $551.9 increase in CECL allowance with approximately 80% of the allowance being attributed to the MGM Master Lease.
The increase in CECL allowance also impacted funds from operations attributable to common stockholders which came at minus $50.4 million, down from $300.7 million in Q2 2021, while adjusted funds from operations posted an increase of 67.9% to $430.1 million from the $256.1 million in the respective quarter of the prior year.
Investing in Golf Property Development
“Our improved access to capital enables us to opportunistically pursue transactions as we continue our growth journey,” added Pitoniak, pointing to the expansion of VICI’s growth funnel via the transaction with the owner and operator of golf resorts Cabot to fund the development of its Tamba Bay area-located Cabot Citrus Farms property.
“This transaction is our first investment in the unique ‘Pilgrimage Golf Experience’ sector and demonstrates our ability to source relationships with premier place-makers in a way that is beneficial for both VICI and its partners,” Pitoniak concluded.
The proceeds of the $120 million delayed draw term with Cabot agreed in June will help the operator of world-class destination golf resorts to transform its property in Brooksville, Florida, adding a new clubhouse, luxury lodging, health and wellness facilities, and a village center.
VICI Properties entered a purchase and sale agreement with Cabot to convert a portion of the loan into the ownership of assets under the Cabot Citrus Farm real estate and also signed a triple-net 25-year-long lease agreement with 5 options to renew for five years each.