Bets & Beds (G&L Quarterly): Downside Priced Into Gaming... While Lodging Says Downside Who?

Research evidence excerpt

Bets & Beds (G&L Quarterly): Downside Priced Into Gaming... While Lodging Says Downside Who?

REITs

Lodging - Market Weight

Net Lease - Market Weight

Bets & Beds (G&L Quarterly): Downside Priced Into July 1, 2026

Gaming... While Lodging Says Downside Who?

The Wolfe Byte

The following is our third quarterly gaming and lodging report going into earnings. Key topics are (1) VICI CZR/

debt book risks (which we think are more than priced in, and make gaming look attractive on multiple to growth),

(2) deal flow, and (3) recent hotel trends.

Upcoming G&L Events (let us know if interested):

●August 11th-12th: San Francisco property tours with HST/PEB + others (itinerary below)

●September 17th: Annual Private Real Estate Conference (NYC) featuring Lodging (Eight Form) - Register here

for 1x1/group mtgs.

●October 1st: Bethesda Lodging HQ Field Trip with DRH/HST/PEB/RLJ

Gaming:

●Tenant takeout offers: Since our last report, CZR entered into an agreement to be acquired by Fertitta

Entertainment & MGM confirmed an offer from People Inc.

●Everything that can go wrong w/ VICI...The market has increasingly focused on downside risks tied to (1) the

CZR Regional Master Lease and (2) the VICI loan book (Exhibit 6). While requiring some assumptions, we estimate

bringing rent to market for (1) the CZR regional lease and (2) loan assets that are repaid and invested into sale-

lease backs. A range of dilution outcomes are shown in Exhibit 10. We don't completely agree with the premise

of the analysis given 9 yrs remain on the lease.

●... and resulting valuation (a rent cut won't be free). We show resulting post-dilution valuation in Exhibit 12. We

factor a value VICI receives for agreeing to a rent cut equal to the PV of the rent differential until the end of the

lease (Exhibit 11).