Wesley Golladay: Yes. I mean we currently model say, around 8% or so, but I don’t know if those are set at the time you mentioned the deal, at the time of the closing of the transaction, and there’s always a future opportunity. But I don’t know these rates are already locked in and when they can plan the project around a certain yield. Or do you get the scope of the project and then you set the terms?
David Kieske : Yes. The rates are not locked in, Wes, so it’s part of the negotiation. When we obviously announced Hard Rock’s acquisition of the Mirage, we said we’d be happy to commit up to $1.5 billion of our Partner Property Growth Fund or even more if they needed it, but that would all be subject to negotiation in terms of final terms, rate, structure, timing.
Edward Pitoniak : And related to that, Wes.
Wesley Golladay : For the consolidation of the joint venture
Edward Pitoniak : Go ahead. Go ahead, Wes.
Wesley Golladay : No, no. Go ahead, go ahead.
Edward Pitoniak : I was just going to say, needless to say, the pricing of capital right now is an exercise that is not easy to carry out. Obviously, having a forward view of the cost of capital in the future and then pricing our capital to a borrower or a partner. It’s not an easy exercise. And go ahead, Wes.
Wesley Golladay : My last follow-up would be the, for the consolidation of the joint venture for the Blackstone deal that you did earlier in the year, how are you going to handle the debt for that? Would it be a mark-to-market for just the JV portion or the whole portion and any sense of the magnitude?
Edward Pitoniak : Gabe?
Gabriel Wasserman : Yes. It’s Gabe here. So I think we have some flexibility where we can either inherit our partner’s existing basis on the debt or we can roll over that basis or we can choose to market to market. So still having that debate internally, and we’ll start focusing on that in the month ahead.
Operator: We’ll turn to John DeCree from CBRE Securities.
John DeCree : Maybe one big picture question, Ed, to push you on the spot a little bit. You gave a nice recap of VICI’s first 5 years quite successfully in your prepared remarks. Wondering if you’d kind of venture a prediction or a plan kind of for the next 5 years?
Edward Pitoniak : Yes. David just covered the ears of Samantha Gallagher, RGC. Yes, John. Well, we — okay, so to be really forthright, if 5 years ago, if you had said, okay, I want your prediction for the next 5 years ahead, I would not have predicted what we had done. We always had a conviction that we had a wonderful opportunity to institutionalize the real estate asset class that had not really yet been institutionalized. And we think so much of the story of this first 5 years, so much of our outperformance, 2x the S&P 500, 2x the NASDAQ. I probably should have mentioned that as well as hot as the NASDAQ was during much of that period, crazily hot at times. The NASDAQ performance over that 5 years was dead on the S&P 500 performance, and we beat them both by 2x, right?
So as we look ahead, we certainly cannot base our strategy on continuing that kind of outperformance because to base our strategy on that kind of outperformance might involve — would likely involve taking risk, so we’re not sure we should take in terms of creating and sustaining value for our investors. So what you’ll see us do over the next 5 years is continue to grow categorically, continue to grow geographically, do accretive deals be willing to over-equitize in the way David spoke of at the beginning and answering Tony’s question and just make sure that we never put the value we’ve created together with our investors at risk. One of the great benefits. Or I shouldn’t say one of the great benefits. One of the great drivers of our outperformance over the first 5 years is we never went backward for sustained periods.
We obviously had volatility as everybody else did over that 5 years. We never went backward and stayed there for a long time. And we don’t want to start doing that in the next 5 years. So I think you’ll see us be disciplined in how we allocate capital. And in order to do that, we’ll be disciplined in how we underwrite. And always look to learn from REITs who have succeeded in doing what we want to attempt to do. So whether it’s a Prologis in terms of how they’ve grown internationally, whether it’s great ideas and how you grow categorically. Like full marks to Sumit and the Realty Income team for the deal they announced this week on Plenty. Like that kind of deal making on the part of our peers really inspires us because it is evidence of how to think creatively and innovatively in developing into new categories.
So I think that’s what you can expect of us over the next 5 years, John.
John DeCree : Makes sense. It’s great insight on a curve ball there. Maybe a softer one as a follow-up. Last couple acquisitions you’ve made and maybe for John or kind of from maybe lesser known tenants, a little bit smaller companies. How do you think about kind of underwriting standards different from your large public tenants relative to smaller private companies? And then is that a trend you’ve kind of seen emerging more this year, a little bit more activity with smaller, maybe private companies? Or would you expect to see similar kind of deal flow from the larger public cos, realizing they probably have a bit more to do. But curious how you’re thinking about those kind of two different types of tenants?
John Payne : Yes, John, a very good question. But it’s not new to VICI, right? I mean part of what we’re proud of is that we’ve taken the time to go talk to all the operators inside the gaming industry and hopefully, over the next 5 years and most of the experiential companies whether you’re big, whether you’re small, whether you’re private, whether you’re public, we take the time to understand how they’re trying to grow their company. And is there a possibility for us in our form of capital to help them grow. And so that won’t change as Ed just went through the next 5 years and what won’t change. I think that’s this curiosity that we have as a business development team to get to know it may be a small company, and it may be a small deal, but we’re hoping that over the course of our time together with them, we take a small deal and we make it bigger, we help a small company become larger.
And you’re going to continue to see that. You’ve seen it since we started the company, and I think you’ll continue to see us do deals with smaller private companies. And I believe you’ll see us continue to do deals with large public companies, and that will allow us to continue to grow our business as we expect.
Operator: We’ll now turn to Ronald Kamdem from Morgan Stanley.
