Let me be clear right off the bat: the panic around VICI Properties’ latest earnings report is overblown, overstated, and frankly, overcooked. And yet, some market participants have responded as if VICI’s Las Vegas real estate portfolio suddenly turned into sand dunes and tumbleweeds. It hasn’t. What has happened is a classic case of the market misunderstanding accounting noise and mistaking it for a fundamental flaw. Spoiler alert: it’s not.
So, buckle up, because I’m about to walk you through why VICI Properties (NYSE: VICI) not only remains one of the best income-producing REITs in the game, but why its recent earnings “miss” is a nothingburger wrapped in a blanket of long-term opportunity.
First, Let’s Talk About Triple Net Leases (aka, Investor Catnip)
If you’re new to VICI, you’re in for a treat. VICI is not your run-of-the-mill shopping mall or suburban apartment REIT. No, no. VICI owns some of the most iconic properties on the Las Vegas Strip – think Caesars Palace, MGM Grand, Venetian, and a buffet of other assets that rake in revenue like blackjack dealers during March Madness.
But what truly sets VICI apart is its 100% triple net lease structure. Translation: the tenants – not VICI – are on the hook for property taxes, maintenance, insurance, and all the headaches that normally make owning real estate feel like babysitting a hydra.
For us as investors? That means rock-solid, highly predictable cash flow. You like dividends? I like dividends. You like inflation protection? Guess what – VICI’s got that too.
Las Vegas: VICI’s Biggest Risk? Or Its Secret Weapon?
One of the most common criticisms thrown VICI’s way is geographic concentration. “But it’s all Las Vegas! Isn’t that risky?” Oh, how cute.
Look – I get the instinct. Diversification is a pillar of investing. But let’s not pretend VICI’s Las Vegas exposure is some kind of flaw. Las Vegas is no longer just the gambling mecca your uncle visited in 1987. It’s now a full-blown entertainment empire, complete with the NFL’s Raiders, NHL’s Golden Knights, the Aces, Formula 1 events, and it just hosted the 2024 Super Bowl.
The Strip isn’t fading – it’s evolving. And VICI owns the real estate beneath this evolution. In a world where people increasingly value experiences over stuff, Las Vegas is experiencing a secular tailwind, not a headwind. And VICI is surfing that wave all the way to the dividend bank.
The 41-Year Lease Club: You’re Invited
Another overlooked feature of VICI’s portfolio is its absurdly long average lease term: 41 years. Yes, you read that right. Four. One.
To put this into perspective, if you buy VICI stock today and hold it until those leases expire, you will be legally required to show ID to prove you’re not a vampire. It’s that long-term. And that’s good.
In a volatile economic environment where most companies are afraid to commit to anything beyond next Tuesday, VICI’s lease structure is a fortress of financial stability. Rent escalators built into the leases mean cash flows rise with inflation, and the tenants – some of the strongest hospitality brands on Earth – are contractually locked in.
So when you hear someone say, “Yeah but what if Las Vegas tourism declines?” just smile and point to the 41-year lease. Then go collect your dividend.
Let’s Talk About That Earnings “Miss” (And Why It’s Misleading)
Here’s the real kicker. VICI’s most recent earnings report – the one that sent a few investors sprinting for the exits – contained a headline miss on Funds From Operations (FFO). Analysts expected $0.67; VICI reported $0.58.
Cue the CNBC hot takes and Twitter meltdown.
But if you actually read the earnings report (which you should do, unless you enjoy losing money due to knee-jerk reactions), you’ll find the culprit: an accounting adjustment related to the Current Expected Credit Loss (CECL) provision. This is basically Wall Street’s way of saying, “We’re going to pretend someone might default someday, so let’s record an expense just in case.”
Let’s be crystal clear: this wasn’t a cash flow issue. It was a non-cash, accounting fiction designed to make regulators happy. In fact, VICI’s Adjusted Funds From Operations (AFFO) actually increased year-over-year by 5.4%. AFFO per share? Up 3.6%.
It’s like a student getting an A+ in every subject but getting deducted points on a gym class attendance technicality – and then people saying they’re failing out of school.
Moody’s Upgrade: A Quiet Signal Amidst the Noise
While investors were overreacting to the “miss,” Moody’s quietly upgraded VICI’s credit rating from Ba1 to Baa3. That’s right – investment grade, baby.
This is a huge vote of confidence from the credit markets, and it comes with tangible benefits:
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Lower borrowing costs (which means more cash for dividends or reinvestment)
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Greater flexibility in capital markets
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Confirmation that VICI isn’t just stable – it’s elite
So while the market was hyperventilating about CECL, the people whose entire job is to assess financial stability were giving VICI a standing ovation. Tell me again who’s right?
Still Worried About Inflation? VICI Isn’t
Inflation has been the boogeyman of income investors for the last few years – and rightfully so. Rising prices erode purchasing power and wreak havoc on fixed-income portfolios.
But here’s the thing: VICI’s leases have built-in inflation escalators. As of 2025, 42% of rent is CPI-linked, and by 2035, that figure will reach 90%.
That means as inflation rises, so does VICI’s rental income. And since those tenants are locked into leases longer than your next three careers, VICI can pass on that pricing power like a hot potato wrapped in profit.
This is not just rare in the REIT world – it’s a cheat code. Many REITs get stuck eating inflation like it’s a moldy sandwich. VICI? VICI gets to hand the bill to the tenants and walk away with a dividend that keeps growing.
Speaking of Dividends… Let’s Crunch Some Numbers
VICI’s five-year dividend compound annual growth rate is 7.73%. That’s not just solid – that’s elite.
Most REITs are lucky to keep pace with inflation. VICI is beating it – and doing so with consistency. The dividend is covered by AFFO, supported by rising rents, and backstopped by some of the most dependable tenants in the industry.
This is why income investors (you know, the ones who like to sleep at night) love VICI. It’s not flashy, but it’s built like a tank with a dividend engine.
Valuation: Not Dirt Cheap, But Still a Deal
Let’s be honest: VICI isn’t trading at distressed prices anymore. It’s up nearly 8% in 2025 while the S&P 500 is down -4%. So no, it’s not the deep-value pick it was a year ago.
But is it still attractive? Absolutely.
A comparables valuation model pegs intrinsic value at $35.38, and shares are currently at $31.53. That’s a 12% discount, which is respectable in today’s market. But that model is kind of useless for VICI, because there’s literally no REIT like it.
Instead, let’s look at a dividend discount model, assuming a 3.75% dividend growth rate. That puts fair value at $37.40 per share – a nearly 19% upside from today’s price.
And remember: as interest rates fall (and they will, because the Fed is literally itching to cut), REITs like VICI become even more attractive. Money that’s sitting in short-term bonds is going to need a new home. VICI is that home – with a “Welcome” mat made of cash flow.
VNQ? LOL. Let’s Talk About Real REITs.
Look, I’ll say it: VNQ is for people who want exposure to real estate without doing the work. That’s fine – I get it. But it also means settling for mediocrity.
VICI is the opposite of that.
In fact, if you’re trying to build a dividend portfolio you can actually live off of, you don’t want VNQ. You want individual REITs with superior AFFO growth, reliable tenants, inflation protection, and long-term leases.
That list is short. VICI is on it.
Final Thoughts: Don’t Let the Market’s Shortsightedness Be Your Blind Spot
The market has a bad habit of reacting to earnings headlines like a cat reacting to a cucumber – sudden panic, total overreaction. That’s exactly what we saw with VICI’s recent report.
But if you scratch beneath the surface – just barely – the fundamentals are not just intact, they’re thriving:
✅ 100% rent collection
✅ Triple net leases across the board
✅ Iconic properties with long-term tenants
✅ CPI-linked escalators increasing to 90% by 2035
✅ AFFO growth despite the “miss”
✅ A dividend that grows faster than inflation
✅ A recent credit rating upgrade
✅ Still undervalued on a DDM basis
In short, VICI is what income investors dream of and what casual investors misunderstand. The real risk isn’t in owning VICI. The real risk is ignoring it because you read the earnings report wrong.
So if you’re in this for long-term income, inflation-resistant cash flow, and a portfolio built to last, VICI Properties is exactly where you want to be.
And the next time someone panics over a CECL adjustment? Just nod politely, smile, and back up the truck.
Disclosure: Long VICI. Long sanity. Short market overreactions.