Chad Beynon: Good morning. Thanks for taking my question. I wanted to focus on Vegas, I guess, Clark County in general. A few operators opened up in the fourth quarter, one in the Burbs and then one on the Strip. Can you just update us in terms of your appetite and conversations in and around Las Vegas? Thank you.
Peter Carlino: Well, I guess, you’re of course asking about the Trop project or the broad commentary on what’s going on in Las Vegas. I don’t know, Steve, why don’t you take that one, I’m just looking.
Steven Ladany: Yeah, I’m not sure if he was asking about the Trop count or not, but I’m sure that’ll be the Part B question. But Part A — from a Part A perspective, you’re alluding to Fountain Blue and Durango. Look, I think from a — from a casino property that’s currently constructed and operating mature assets, et cetera, new assets, I think we continue to have an interest in not only Las Vegas, but in downtown and in locals market. Obviously, we’re anxiously watching, the performance there. Obviously, Boyd reported last night and we’ll see Red Rocks information as Durango continues to mature. So we’re anxiously watching that. We’re interested in those markets. It’s an area where we don’t have as much exposure. We have the M Resort, but we continue to have an interest there and we’ll continue to be active if opportunities present themselves.
Chad Beynon: Thank you for that. And sorry for the confusing question. Separately, the past couple of years, the IPO markets have been pretty quiet. It looks like there’s been a couple in the past couple of weeks. Not sure if that continues and this is kind of the green shoot moment. But when markets are more — are busier, how does that impact conversations and kind of pricing that you have with public or private tenants? Thanks.
Steven Ladany: I personally don’t think, that the — I don’t think whether the IPO market is hot or cold or is all that relevant to our space as far as acquiring casino properties from operators. I think that may drive operators to consolidate or a private operator to pursue acquiring or reverse merging into a public, if, in fact, the IPO market is not there for them. But and there are a number of smaller gaming operators that exist. But we talk to all those — we talk to all those parties as potential tenants of ours, and we talk to private guys as well. So I think from a real estate acquisition perspective, I don’t see the equity markets availability or lack thereof to the tenant to be a driver of our market or our acquisition pipeline.
Chad Beynon: Great. Thank you very much. Appreciate it.
Steven Ladany: Thank you.
Operator: Thank you. Our next question is coming from Robin Farley with UBS. Please proceed with your question.
Robin Farley: Great. Thanks. Two questions. One is just I think that this has been a couple of quarters now that you’ve increased the provision for credit losses. So has it — has it pretty consistently been what you’re saying where it’s just sort of the formula that you use for that and nothing related to performance in the sort of, I think sort of small trend here? And then also I think you kind of addressed this question, but you talked about looking at a number of potential transactions small and large. Do you have the capacity or desire to do all of them or are you — are you weighing some versus others or could we see multiple — everything that you’re looking at potentially not precluding everything else, if that’s the way to ask it?
Steven Ladany: Yes, why don’t you take the first part?
Desiree Burke: Robin, I’ll start. On the provision for loan loss, actually, last quarter, we had a reduction of that provision for loan loss, believe it or not, based on the macroeconomic assumptions. So and again, I will reiterate, this is all macroeconomics. It is not specific to our individual lease properties. The rent coverage is still very similar to where it was last quarter, and it’s not driving the provision for loan loss. It’s completely macroeconomic and it moves in all different directions, which is why it’s a non-cash add-back to AFFO for us. If someone else, wants to.
Peter Carlino: To, the second question, would we limit what we do? We’ll never pass up if we can do it. Any good transaction, which means a proper spread to our cost of capital. Large, small, everything in between and we’re looking at properties at various scales now. So I think we find a way and to do anything, that we think is good for the company, good for shareholders. It hasn’t changed. And that’s one of the reasons why we’ve kept our balance sheet strong, so that we could act quickly if need be. So we have a lot of capacity. We are hungry as ever and no this — we would do anything that makes sense.
Robin Farley: Okay, great. Thank you.
Peter Carlino: Thank you.
Operator: Thank you. Our next question is coming from David Katz with Jefferies. Please proceed with your question.
David Katz: Hi, everyone. Thanks for working me in.
Peter Carlino: Good morning.
David Katz: I appreciate it. You covered a lot of ground already, but I want to go back to the — was it a duck reference? Because it does — it does seem as though the deal market has been relatively quiet or, at least, it looks that way to us. And I think you’re suggesting that it’s — that it may not be. But my question is what are the sort of key barriers to things getting done? Is it cost of capital, is it underwriting conviction or something else? And if it’s a combination of all the above, help us maybe a portion what the headwinds are to us seeing some more announcements and more things getting done, because it’s not just in gaming, it’s in all of hospitality? Thanks.
Peter Carlino: I don’t know that we feel. I’ll let others opine, but I don’t know that we feel any headwinds, really. It’s just the normal complexity of timing, when does the — our prospective partner want to affect the transaction, how it gets structured. When we — if it’s a development project, we may need a lot more information. These things take time and unfold overtime. So, no, I don’t think we feel any particular headwind. There’s a lot of stuff and I’ll stick by my path lean, fast illustration, because, we really are on a number of things, and some that we expect to unfold as the months proceed. So any — it’s kind of a — David anybody else around the table want to — I’ve got to get some heads shaking here. So that’s it. Well, go ahead.
David Katz: So look, what I wanted to follow up with is, we’ve had definitely a perspective change on the cost of capital, right? I think 90 days ago we would have expected a downward bias in interest rates and that may be a little less the case. Is that issue in isolation by more or less of a problem or are these just more circumstantial than anything else?
Steven Ladany: Well, it hasn’t been so far, but.
Desiree Burke: Right, you’re absolutely, right. I mean the expectations on the rates have obviously come in and they are not — we started the year with five rate reductions and then we went to three and now consensus is probably one and later on in the year in December possibly. But look we price each transaction with an accretion analysis and make sure that, we’re getting enough incremental benefit for our shareholders for the risk that we’re taking and we base that off of specific financings. And as we stated, we’ve gotten our balance sheet ready for some of these acquisitions and we’ve raised capital in better market than where our current price is trading today. So I think I guess to answer your question, we consider all of that we’re well aware of where the rates are going, and we still believe we can get accretive transactions completed.
Matthew Demchyk: So we take a multi-year approach to thinking about the balance sheet, David. So when we think about our leverage level, it took us a while to get where we are. And now we’ve got full optionality when we think about incremental funding. So we’ve worked hard to reduce friction for capital raising, reduce cost of capital raising. And to Robin’s question, if we have something of scale to do, we’re very confident we can raise the capital because we are so disciplined and people appreciate that in the way they step-up and we actually raise capital from folks.
David Katz: Got it. Thank you very much.
Peter Carlino: Thank you.
Operator: Thank you. Our next question is coming from Caitlin Burrows with Goldman Sachs. Please proceed with your question.
Caitlin Burrows: Hi, everyone. Good morning. Just a quick one, Peter. Back in the beginning, you mentioned the growth in the dividend. So I guess with the yield as high as it is now, I’m wondering if you or someone could talk about how you think of the dividend decisions to increase it and the outlook going forward like do you expect it to track AFFO growth or anything else we should keep in mind?
Peter Carlino: I’ll let Desiree take a word of that.
Desiree Burke: At this point, I do think it should track to AFFO growth. We do have a taxable income distribution requirement that we monitor. And as we do acquisitions, sometimes that affects the taxable income estimate that we have. Clearly, when we have partnerships and we do some of the unit transactions , that changes the trajectory of our taxable income that we’re estimating. But I do expect that for the most part should be driven off of the AFFO growth.
Caitlin Burrows: Got it. Okay. That’s all. Thank you.
Peter Carlino: Thank you.
Operator: Thank you. Our next question is coming from John Decree with CBRE. Please proceed with your question.
John DeCree: Good morning, everyone. Thanks for taking my question.
Peter Carlino: Good morning.
John DeCree: Thank you. Well, maybe I’ll try to ask one that you’ve answered a few times a little differently. I think in a recent question, Peter, you’ve mentioned that you don’t really see any headwinds to getting deals done. So maybe to ask that differently. Is there anything that you look to or look at, you could see as a potential catalyst to perhaps stimulate activity? I guess we all have kind of focused on interest rates, but is there anything else that you see out there that might get things moving a little bit more than we’ve seen so far?
Peter Carlino: Well, I’ll reiterate, I don’t — the cost of capital has not affected. I’m looking around the table. Nothing that we’ve looked at, done so far, don’t see that as an obstacle going forward, at least for the foreseeable future. Transactions that we’re grappling with are all unfolding in normal time. The challenge is, of course, none of these things move quickly. We thought you wouldn’t know this because we couldn’t announce it, but we thought we might accomplish Tioga in last year. But you know, it just takes time. It takes what time it takes, so that the nature of what we do is just complicated, but it’s the partners desire to get something done. I mean, for example, well, more than a year ago, we announced the opportunity with PENN around Columbus, around the M in Las Vegas or Henderson and Aurora and Joliet and all those things, but they’re just now starting to happen.
And it’s just the nature of the business that we’re in. These are big assets, complex transactions. But we feel pretty confident that we’ll get our fair share going forward and we’ll meet the kind of growth targets that you all are used to seeing.
John DeCree: Thanks, Peter. Maybe a quick follow up on a specific item that we’re paying attention to, probably most people, that is the casino industry and everyone has absorbed quite a bit of OpEx, cost inflation last 18 months. And interesting, Peter, given your history on the operations side as well, does higher costs motivate the industry or casino operators to maybe look at M&A as a way to scale and reduce costs? Could we see on the other side of this OpEx increase over the last two years as a possible motivator for more M&A among your partners?
