Gaming and Leisure Properties, Inc. Stock

Greetings, and welcome to the Gaming and Leisure Properties Second Quarter 2026 Earnings Conference Call and Webcast. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Joe Jaffoni. Thank you. Please go ahead. .

Thank you, Carrie, and good morning, everyone. Thank you for joining Gaming and Leisure Properties' Second Quarter 2026 Earnings Call and Webcast. The press release distributed yesterday afternoon is available in the Investor Relations section on our website at glpropinc.com. In addition to the second quarter press release, GLPI also posted supplemental earnings presentation, which highlights the events of the quarter, recent developments and future considerations that can also be accessed at www.glpropinc.com.

On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today. Forward-looking statements include those related to revenue, operating income and financial guidance as well as non-GAAP financial measures such as FFO and AFFO.

As a reminder, forward-looking statements represent management's current estimates, and the company assumes no obligation to update any forward-looking statements in the future. We encourage listeners to review the more detailed discussions related to risk factors and forward-looking statements contained in the company's filings with the SEC including its 10-Q and in the earnings release as well as the definitions and reconciliations of non-GAAP financial measures contained in the company's earnings release.

On this morning's call, we are joined by Peter Carlino, Chairman and Chief Executive Officer of Gaming and Leisure Properties. Also joining today's call are Brandon Moore, President and Chief Operating Officer; Desiree Burke, Chief Financial Officer and Treasurer; Steve Ladany, Senior Vice President and Chief Development Officer; and Carlo Santarelli, Senior Vice President, Corporate Strategy and Investor Relations.

With that, it's now my pleasure to turn the call over to Peter Carlino. Peter, please go ahead.

Well, thank you, Joe, and good morning, everyone, and thank you for joining us this morning. So we're happy to announce another strong quarter that sees our ASFO expanding 10% year-over-year. And we anticipate healthy growth in the near and medium term as that pipeline, which you all can see pretty clearly provides a lot of visibility into the pace of our growth, which continues to remain strong. So we believe the environment for continued transaction activity remains healthy, and we're optimistic that this trend will continue through the balance of this year and beyond.

Of importance, and I think critical importance during the second quarter is that the regional gaming market remains strong. I hear a lot of [indiscernible] been in action of teeth that suggests that somehow the gaming regional gaming business is weak, it is absolutely none. In fact, there's some lovely numbers being produced by some of our tenants with properties existing and new and expanded. So the operating environment in the region of the world is still very, very strong.

Our tenants are benefiting from good same-store growth and return on investment where they have opened new properties or expansion of properties. So it's very strong. I have said for many, many years, and I'll stand by it today despite all the rexine in the marketplace, the gaming revenues are bulletproof. And you can write that one down. They're bullet proof and gaming companies just are a stable and investment that exists on the planet.

So I would also note that, by the way, this quarter, our dividend was increased by 5% to $0.82 per share bringing our 3-year dividend growth compounded to 4.4%. So our balance sheet remains strong, providing flexibility for ongoing projects. We can finance everything that we've got announced with what we have available today. We have no need to go to the market and we don't feel like it. Given our progress to date, we feel good, by the way, about the second half of 2026, first half has been very, very strong.

So with that, we're happy and believe that the company remains well positioned to continue on the path that we've set and that gives me the great opportunity to turn the microphone over to Desiree who can't wait to get to you.

Thanks, Peter, and good morning. For the second quarter of 2026, our total income from real estate exceeded the second quarter of $25 million by over $35 million. The growth was driven by approximately $43 million in increases in cash income resulting from acquisitions and escalations. For Bally's, the acquisition of the Lincoln Real Estate increased our cash income by $14 million. The Chicago lease increased cash income by $9 million and the Belly's development project increased our cash income by $2.4 million. For Penn, the Joliet Aurora and M Resort funding increased cash income by a collective $5.8 million. The Sunland Park strategic acquisition increased cash income by $3.8 million and the Dry Creek Ion and Cordish Virginia loans increased cash income by $4 million.

The recognition of escalators and percentage rent adjustments on our leases added approximately $4 million of cash income and then the combination of our noncash items from revenue gross-ups, investment and lease adjustments and straight-line rent adjustments resulted in a decrease of $7.2 million. Our operating expenses decreased by $54 million, mainly due to the noncash adjustments and the provision for credit losses. We also included in today's release guidance of between $1.219 billion and $1.225 billion or $4.10 to $4.12 per diluted share in OP unit.

The guidance does not include the impact of future transactions. However, it does include additional development funding of approximately $400 million to $450 million would be funded relatively evenly over the next 2 quarters bringing our total development spend to $750 million to $800 million, the same as what we projected last quarter.

From a balance sheet perspective, Peter mentioned that our leverage ratio is at 4.8x, slightly below our target level of 5x to 5.5x and we did settle our forward contract issuing 7.6 million shares and raised net proceeds of $351 million. I'll end with a reminder that our significant development projects pay us cash income upon funding and our rent coverage on our master leases range from $1.58 billion to $2.46 billion this quarter as of the prior quarter end. -- that is. With that, I'll turn it back to Peter.

Thanks, Ezra. Yes, look, I hope this highlights that we sell the company is in a terrific position, scarcely ever been better. So we're very positive here as we sit around this table with what we have in front of us. So with that, let's get to your questions. Carrie, please go ahead. .

[Operator Instructions] And our first question will come from Ronald Kamdem with Morgan Stanley. .

Great. Just 2 quick ones. Obviously, there's been a lot of news about some of the operators potentially going private and so forth in the industry. Would just love to hear some thoughts just from your perspective, sort of how you're thinking about the impact of GLPI? How do you think about this trend overall for the industry? Any color there would be helpful. .

Ron, this is Carlos. So look, I mean, obviously, 2 larger operators that have announced would be effectively take private transactions. We have no relationship with MGM, Caesars, we do have a relatively small portfolio that's about 7% of our cash rent I think the biggest thing that it shows is something we believed all along, which is that the business -- the gaming business and the operator business in the public markets has been undervalued. So I think from our perspective, that's been pleasant to see that others kind of view similarly. I'll turn it over to Steve to kind of talk about what he thinks it could mean for us from an opportunistic standpoint.

Yes, that's fine. I don't think that there's -- I don't think there's any reasonable -- there's not a reason to believe that there will be definitive M&A that will fall out of those transactions. In other words, I don't think there are set divestitures that will be required to occur or meaningful divestitures that either of the buyer -- potential buyers will require to occur.

So I think from our perspective, we are -- we have a phone. We're happy to answer it whenever someone calls we have dialogue with our tenant there, and we would be receptive to any discussions if there were certain avenues they were pursuing or things they were interested in discussing, but I think as a base case, we are not assuming that there's a derivative M&A that comes out of this.

Great. Helpful. And then if I can ask just the second one, just one more specific on the guidance to $400 million to $450 million. Is that -- obviously, it sounds like a big piece of that is going to be Bally's, but is some of that the Live Virginia project as well? Just any color there. And if I could take a step back and just ask a broader question on your pipeline and how that's changed given what we've seen with the 10-year movement.

I'll start with the beginning of your question, Yes, the $400 million to $450 million includes Chicago, I own Dry Creek and Virginia projects. So all 4 are included in our guidance and they are all moving forward and expect to have -- we expect to put money out during 2026. As for the second part of your project, I will turn it over to Steve.

With respect to the 10-year treasury, that's what you're asking about?

Yes. And how that's potentially impacting sort of the pipeline and conversations.

Yes, no problem. So with respect to the existing pipeline, obviously, there's no real impact. We're committed to provide that capital and we will provide it. With respect to future potential transactions and things we're talking to folks about. I think it's a double-edged sword in that obviously, it impacts our cost of debt in our borrowing costs. So that is a factor that weighs into where we could price potential transactions. .

I think the opposite end of that pendulum is that it does -- because borrowing costs are going up, not only for us, but also for operators, I think it does create another level of discussion and a little more interest as far as people seeking out alternative financing routes as they move forward with their capitalization.

Our next question will come from Greg McGinniss with Scotiabank.

I was hoping you could just touch on the Rockford loan extension and how -- what the option for the building improvements would look like in terms of how you would execute on that option, what the amount might be? .

Yes, Greg, I don't think we're going to get too much into the details on the option piece. But look, I mean that was $150 million loan. It's good yield for us. The property is ramping nicely. You could all see the GGR results. Obviously, that property has been very well received. The city of Rockford has announced plans to put a hotel around the site, which should only further kind of help that property ramp.

So I think just in talking with the partner and Steve could perhaps opine more on this. It just felt like a good move for us to kind of let that money roll forward while also kind of cementing that option on the building down the road.

Yes. I think, look, obviously, the partner is -- would prefer to not sell the building improvements to us down the line. So obviously, that's an item that we'll see where we land as we get further into this -- into the loan term. But I think the reality is they're excited about the property. The GGR continues to perform. We're comfortable with the loan, and therefore, it just made sense for us to roll it at that rate. .

Okay. And then on the financing side, potential acquisitions, leverage is low relative to range you guys typically target cost of equity is a little expensive versus where I'm sure you'd like it to be. Should we expect that any potential acquisitions or investments will be just be funded with leverage at this point?

I really think it depends on what the opportunity is. Obviously, we will be pricing in our cost of capital to any opportunity that we decide to -- anything we decide to acquire I wouldn't just assume we're always going to use debt for now. I think we'd have to price in our cost of equity if it was a larger transaction.

Yes. Look, our business, of course, is a spread to our cost. And some of the yields that we're able to attain, because of the skills and capabilities that we bring to the table, the development ability and understanding construction willingness to do some things, maybe some others are less well equipped to do. We can command a price that gives us the margin that we need. So it's deal by deal. I think these answered it perfectly well. We're not going to do -- and I underscore again, we won't be -- you won't we've seen this do anything crazy. .

We'll go next to Brad Heffern with RBC. .

There's obviously been the site over VGTs in Chicago. Can you talk about if you expect that to have a meaningful impact on the Bally's Chicago project 1 way or another? And if it would have affected your underwriting?

Yes. Thanks, Brad. So the VGTs, quite frankly, were in our underwriting. It's Chicago, it's Illinois. It's been -- it's a very long, obviously, relationship that we will have with that asset. So clearly, you can imagine everything in anything would have been in our underwriting. The thing I will point out is I read something recently, I believe there's about 7,000 sweepstakes machines already in that market. So to believe that this type of gaming wasn't already taking place, I think, would be naive.

Clearly, Bally's is going through some things right now with the city as it relates to how this impacts some of the agreements that they've previously come to. But in our view, this -- the VGT concept was included in our underwriting. And another thing that was included in our underwriting also was Hawthorne, which seems to not be coming to fruition. So I would say the puts and takes there are pretty benign overall.

Okay. And then on the Las Vegas Stadium site, can you give an update there if and when you expect your remaining committed capital to be used? And then if you have any more thoughts about participating in a larger project or sometime down the line.

Yes, I can take that one. I think the timing of the $125 million is somewhat uncertain still. The stadium is proceeding quite nicely. I think you would hear from the age at the stadiums ahead of schedule. And we've had the opportunity to visit that stadium at least Peter and I this year. And I think it will be a spectacular event venue, and that will drive a lot of value to the site. So we're keeping an eye on it. as is coming close, I think, to a more concrete plan for some of the critical infrastructure that needs to support the stadium.

And by that, I mean excess wave, the podium, utility, conduits, things like that. there may be an opportunity for us to invest more in that property and some of that key critical infrastructure. And we'll take a look at that when that time comes. But I don't think we're prepared at the present time. to commit to anything over the $125 million, and we'll continue to work with Bally's and see if that makes sense.

And we'll go next to Barry Jonas with Truist Securities.

Churchill Downs formally announced they're exploring the sale of most of their gaming assets, and I believe they said they're looking to execute in the coming months. Just curious if that's something you're looking at in conjunction with or without specific tenants at this time?

Yes, it's something that we're aware of. I think any process, broader process that's run will definitely be involved, and we'll definitely take a look. I would assume that most of the processes you're not supposed to be working with anyone in particular per your NDA. So I can't speak to any discussions that may or may not be happening on those fronts. But I can tell you that we're definitely aware of the assets, we've spoken with various folks that are involved in that process, and we will see how it proceeds.

There are some assets there that are they are quality assets. There are other assets that are maybe a little more challenging, but at the same time, depending on whether it's an existing tenant that we have a relationship with that finds value in certain assets or more importantly or equally as important, potential new tenant relationships that might find interest in certain assets, whether it's because of ability to cross manage when garner synergies or the like, we're willing to have discussions with anybody and see if there's paths forward on various levels.

That's really helpful. And then just as a follow-up, I think this week, a large casino operator, the kind of voice increasing optimism for gaming legislation to pass this year. They stated Virginia, Maryland in Indiana. You guys have been certainly vocal with your views on iGaming, but just curious if you share that view on those states or just in general, gaming legalization in the near term?

So with respect to the 3 states you mentioned, I agree that there is legislation moving in those states, and there does seem to be some momentum. But whether or not that will get across the finish line is unclear. I think from a broader level, predictive market, sports betting, it's all coming under some level of attack in a lot of states, both when it comes to predictive markets, certainly the federal level and even sports betting on the state level, where people have started to take a closer look at some of the social ills that are occurring in certain demographics, online gaming and sports betting.

And I think that's garnering a lot of attention in a lot of states. And I think in the 3 states you mentioned, that's still a hot topic of conversation as to what impact allowing mobile and social type gaming, what impact that's having on certain segments of the population. And so I know, depending on who you talk to, people are either overly optimistic that they can expand iGaming or overly optimistic that they can put in into gaming. I think in both arguments have some momentum in different areas. And the 3 states you mentioned, I would agree some momentum toward iGaming. But on balance, I think you'll see most states are proceeding very, very cautiously with increased online gaming.

Our next question will come from Smedes Rose with Citi. .

You provided an update on the Las Vegas opportunity. And I was just wondering if there are any updates you can provide on the New York opportunity with Bally's at this juncture.

From our perspective, not much has changed on Bally's New York. We remain optimistic that's going to be a positive and accretive project for the Bally's team. I don't think it makes a lot of sense for us to be involved with our cost of capital at the front end of that project. And I think that's something Bally's knows and we know we remain close to them, and there could be opportunity needs for us as that continues. We do have a ROFR in New York on certain aspects. But I think it's way too early in that process and they're pulling together their financing and construction financing cost of capital and those things. .

Cost to really know what kind of role will play, but we'll stay close to it. I think we remain interested in being a part of New York, if it's the right part, and it's something we can do at an accretive level.

Okay. Okay. And then I just wanted to ask you, last quarter, you had mentioned a few challenges at the Tropicana in Atlantic City, and it looks like the coverage there ticked down just a tiny bit. I mean it's still realize it's still strong. But any sort of issues or updates you can provide on that property?

No. I mean I think you did have that 1 challenging quarter, which would have been the calendar 4Q '25 coming in at that point. What I saw when you look at it sequentially is stability as you move through the first quarter. Looking at the results from the likes of Caesars and Boyd and even Churchill from the regional properties in the second quarter.

And remember, we're reporting those coverages 1 quarter in arrears. So we won't see that until we report 3Q. But we're going to have 2Q trends and the performance of each of those tenants that I just mentioned. I think there should be a nice tailwind in their operations and certainly, things have strengthened for those operators in the regional markets. So I think broadly speaking, that's a pretty good leading indicator for us as we look ahead.

We will go next to David Katz form Jefferies.

So to that very same comment you just made Carlo. We are seeing some real strength out of regional gaming. And I'm curious to get your collective perspective on whether that is economically driven macroeconomically driven, whether that's a function of some of the smarter operators having put forth some capital into their properties and improve their value proposition, which we've seen pretty broadly, including the 1 company, Peter, you founded, right? What is the driver of that? And what gives you that confidence that a year from now, we're still going to be having that same conversation?

My sense is the consumer market generally is still pretty strong despite all the negativity you see sometimes in the press. The economy is strong. some -- there are areas, of course, of weakness. But by and large, I think people are in the marketplace. You've heard me say many times, David, that people don't give up their entertainment, food, shelter and gambling are the priorities in people's lives. So across the board, we're sensing because we get numbers when you get them, that demand is extremely strong, extremely strong.

And I have talked broadly with some of the folks at Penn, their new projects and their investment in capital in hotels and so forth has been apparently off the charts. I mean, we'll all wait and get the final result quarter-to-quarter. But just a terrific result. So I mean, we visually feel just a lot of enthusiasm out in the marketplace right now. And I think it's just a broad look at the economy generally.

David, and I'll just I think going all the way back to kind of Boyd spend at Treasure test, what you've seen is really healthy returns on incremental capital dollars put in place, including, as Peter just mentioned, Joel yet, the early results out of the temporary at Live Virginia have been incredibly positive for a temporary facility. So I think dollars being put to work, you're seeing very healthy returns on them. I think that bodes well.

But we said new project. You got a new hotel in Columbus, you've got -- which I understand is going well. You've got the hotel in NM, the expansion there that has also been apparently very strong. So this is still a good stuff for us. .

Moving on to Daniel Gulino with Capital One Securities. .

Questions. This is shaping up to be an interesting year across gaming with mergers, asset sales and development. but so much happening. Can you just remind us what you all look for in deals to make sure that they align with the long-term sustainable growth focus?

Yes. I think, look, I think when we go through our underwriting process, and anybody can add on at the end here, but I think we go through our underwriting process on really any transaction regardless of how big or small it may be. We're going to look for the things you would expect. So stability, long-term performance, competitive -- the competitive threats or opportunities, the credit quality of the tenant, do we have master lease? Is there a way to diversify not only geographically, but just based across the portfolio and the asset base.

So we're going to take a lot of factors into account. I think we would do that, whether it was this year or last year or 10 years ago. So I don't think our underwriting process has changed. There's obviously with the expansion of gaming into new jurisdictions over the last few years, I think that definitely changes the way we look at things. And I think it continues to mold the way we think about potential new jurisdictions and whether they will come to fruition and where would the asset that we're looking at be located on a geographic map as it relates to potential future competition. So those are all things we think about. I don't know if anybody else has any that...

I mean I think it's important to double back on something Carlos said in the beginning, which is some of the M&A activity in the regional markets, whether it be Bally's MGM or Caesars it is probably being driven by dislocation between the perceived value of these operations and assets and the actual value of these operations and assets. And I think what you're finding is people get the stock prices get to the point where people say this has gotten to the point where we're just going to act on this and take it private and realize the value that the market is not seeing.

And unfortunately, for GLPI, I think the same dislocation feeds into our stock. We have very strong tenants that operate in markets that are doing quite well. And despite what some of the reports written, we see a lot of strength in our tenants' operations in the regions. And I think you're seeing that drive M&A and I think you're seeing that I think you're seeing that in some of the M&A activity out there. So as long as those dislocations persist, I think you'll continue to see activity there.

Look, the gaming broad-based gaming world has been around for more than 30 years. And I commend anyone go back and just take a look at the track record of properties and performance over the long, long term. This is an incredibly stable industry, incredibly stable. We love these assets, getting the market to appreciate the value of what we've got has been really a challenge.

Yes. I think whether our coverage is [indiscernible] these assets are all performing quite well. These are all portfolios and leases that our operators will want to continue to own and pay rent on. So while we remain frustrated at times with the equity cost of capital here, we're still very happy with the performance of our overall portfolio.

That's great. I really appreciate all that color and inflow. A quick follow-up one of your tenant partners did decide to forgo funding on a smaller project this year. So thinking further out, what do you all think of as GLPI's main value proposition for current and future operator tenants where it makes it worth it for them to fund development through you all versus raising capital themselves.

I think -- I'll jump in and then Desiree maybe can add something. I think the -- the reality is there are some benefits that the operator gets with respect to depreciation and the initial onset decision is going to be somewhat dictated by their cost of capital. I think as we move forward, the only other aspect I think they consider is the ramp they can get from the capital, whether they're return on the EBITDA side, is great enough that they could then sell the improvements to us later for a value that's larger than the cost to build.

So I think those are the 3 things that the operator is probably considering when they make that decision. And I don't think it's a matter of will they sell the improvements to as ever. I think it's a matter of when will they sell them to us. Because at the end of the day, when it's -- the improvement is constructed, adjacent to a building we own on land we own, it's probably a foregone conclusion that we'll end up owning it at some point in time.

I agree with all that. And I also think you have to look at it, I think, as across between debt and equity, right? So we're giving 35-year funding, which is more akin to equity than it is to debt. And most of the gaming operators typically barely get to a 10-year bond, much less 35 years. So our cost of funding vis-a-vis their cost of equity is definitely a plus. .

Our next question will come from Chad Beynon with Macquarie.

I wanted to go back to the funding guide, the $400 million to $450 million in your slide deck, you display what's left to fund I think Chicago is still expected to open in the first quarter of '27 obviously, live in Petersburg is deeper into '27. So I'd assume most of that $400 million to $450 million between these 2 larger loans is going to come from Chicago. But can you maybe just put a little bit of finer point on that $400 million to $450 million where the range is coming from? Is that really just kind of a timing thing, probably more on Chicago, kind of when they're finishing up given that Virginia would probably be pretty straightforward, at least at this point in their construction cycle.

I mean it's really just our best estimate of the timing of their funding. I mean, look, somebody could pull money in January instead of December, and that's why we have $400 million to $450 million and we are funding all 4 of those projects during 2026 and will continue. They will continue into 2027. So the range is just simply -- it could -- it's just timing as to when they're pulling the funding.

Okay. That's right. And then moving on to Boyd announced that they're going to be doing another barge to land project, Carlo, I think you talked about the success in Treasure Chest. Do you think there's more opportunities or any other markets where there could be some of these Generation One river boats kind of moving to land? Or are there any other proposals or availability either in Louisiana or in other markets that you could see in the future? .

And I can tell you that we have a list of those boats. What I would also say is I think that the success that we with these transitions over the last several years, bodes very well for others willingness to make that leap and go forward. To the extent I can identify anything specific at this point that operators have talked about, no, perhaps maybe Steve could. But I tend to think we have an eye on it. I think the history here has lent itself to promoting more such activity as we look out in the future.

Yes. I don't know if any -- there are things that we've had private discussions on. I don't think that there are many things public at this point. But look, I think if you think about Penn's capital improvements, Bally's has made capital improvements and landside moves. And then Boyd, the proofs in the pudding, like they've each put the capital forward they've seen the returns, and you could safely assume that they will continue to look for other ways to deploy that type of capital and achieve those types of returns.

So I think that they've proved it for themselves, and I think they'll continue to look for opportunities, and we've had discussions, and we'll continue to be open to having more discussions.

Results have been -- as you've seen, results have been stunning -- nothing short of stunning. So it's really transformed the opportunity market. .

And moving on to John Tucci with CBRE .

I know we've talked about the 2 big take privates out in the market. But big picture, Peter and you've worked with both public and private companies in terms of getting transactions done, development, M&A, sell lease back. But curious if you could speak to any differences in working with public private companies on transactions, any advantages or disadvantages that would be worth talking about?

I don't see any material difference just so it's the quality of the people and the nature of the deal. I mean we like visibility, public company visibility is nice to be able to see what's going on as do you. We have a little less, obviously, with the private group. But no, I don't see anything materially different, Steve.

I agree. And the public company, nice to have disclosure can go away the next day when they decide to go private. So we've all seen that happen a couple of times.

Our leases do require them to report to us on a monthly basis, balance sheet, income statements information that we request. So we will have -- we do have information on our private tenants just like we do on the public tenants. So from an information perspective, I'm not concerned at all. And quite frankly, kind of understand why the operators are doing what they're doing, right? They're not being rewarded in the market today. And if they can find a cheaper cost of capital, they should do that.

Yes. I think our bigger problem is not the information we get. The bigger problem is we are unable to convey it to you folks. That's the bigger problem that we have. So we'll have continued transparency into what's going on at these properties unfortunately puts us in a tighter box to be able to discuss those things publicly. .

Got it. And maybe a quick follow-up on that. If you touched on it a little bit earlier, but on the same topic, the valuation, the public markets have been striving to your tenants and casino companies. With the private companies, do you see going forward better opportunity to transact with those companies as they're not maybe beholden to kind of public market valuations. Do they, at the moment, have more flexibility? So I guess, looking ahead, would you expect to see more activity as more companies are private, more operators are private new. We've certainly seen even some of your tenants, the growth M&A development coming from private companies. So are they less encumbered, better cost of capital? Or what have you expect them to be more active than public companies going forward?

Yes. That's -- it's a little difficult to answer, John, just because I think there's a wide swath of what it means to be a private gaming operator. There are some family-owned businesses that are kind of small and their access to capital is probably somewhat limited. And then we're talking about some of the largest gaming companies in the country becoming private. So if I kind of think about this on the smaller side of the spectrum, I'd say most of those folks I'd say their ability to be active in the market is somewhat predicated on their access to capital.

I think obviously, the Illage family just completed the transaction. They have plenty of access to capital. But as far as the size of their corporate structure and their team, I think it's going to take some time for them to digest that and then be able to look for the next thing to hunt. So I think there are different nuance realities that come with each of these private companies that you have to be thoughtful about when you're trying to transact with them.

But I think, look, at the end of the day, things like greenfield are significantly easier for the private companies to do. They're not out there publicly reporting their cash flow metrics and their EBITDA impacts when they have none coming from the projects in which they're building. And I think that's why we've seen in some states, companies like Rush Street be able to do so many greenfield development projects and be so aggressive in expansion because they haven't had the same analysis and scrutiny from the public markets. So I think it will be a trend that will continue, and we'll see it probably more widely spread if we see some other jurisdictions, legalized gaming.

Our next question will come from Mitch Germain with Citizens Bank. .

You guys were previously pretty optimistic about some additional tribal financing transactions. Curious about your enthusiasm about possibly getting some more over the finish line?

I'll start, and then you can probably jump in. Look, I think, Mitch, we remain enthusiastic about the opportunity and the opportunities that are out there in the tribal gaming and financing world. As we indicated early on in this process, things move very, very slowly in tribal gaming and in tribal financing. And we are having -- we have had and continue to have a lot of very productive conversations both on developments, refinancing and other potential uses of capital on tribal land held in trust. But they are not to handicap whether or not some of those things will come to fruition in 2026 is hard to do.

It would be speculative for us to do it. But it's certainly possible. We have a number of things we're discussing at the moment with various drives and I think whether it's 2026 or 2027, I do think you'll see some future activity out of us with respect to those tribes if we can get over a few homes.

It's been a continual education process and I think there's been growing receptivity, which we're now trying to cultivate and convert into growing adoption. And as we do that, I think we're also looking to try to prove out that there are additional use cases beyond just tribal greenfield. So we're working on all those fronts, and I agree with everything Brandon said, I don't think timing is known, but efforts are real.

And I think, Matt, just to give you a little more comfort in how we look at this. We continue to look at high levels of coverage and a margin of safety around these tribal transactions. And everything we're looking at currently we are side-by-side with some other traditional banking and financing sources. So we're not a full solution for anybody at the moment, but trying to fill gaps and create a long-term piece of capital or a long-term piece of debt to complement what these tribes otherwise have with their traditional financing sources. .

We'll go next to Robin Farley with UBS. .

I just wanted to ask a little bit about what the competitive landscape looks like not for the operators in regional markets, but for you in terms of other sources of financing, whether it's private equity or -- and Churchill Downs that competitive environment may be different than some of the interest in Vegas assets in the past, but just would love to get your take on that.

Yes. I think with respect to the Churchill Downs, I guess, a competitive process, I would expect, obviously, our main publicly traded competitor to be involved in that process, and they said that yesterday on their call. I also think that there are some different funds that have been, I would think you would call more private credit, like Blue -- as I expect that they would be active participants in this process.

But beyond the 3 of us, I'm not sure that it goes much, much further, much deeper. As you pointed out, for strip assets, premier Strip assets. I think that has brought others to the table like Blackstone in the past. I think if a premier strip asset were to come to market, I think the same thing would happen yet again. But for a regional portfolio of a number of assets across a number of states, I think it's probably a pretty limited scope, most likely those 3 parties.

And I don't think it changes a lot, Robin. The way we look at this is we have a cost of capital, we have an underwriting of these facilities, what we think they'll do, what we think they can do the competitive threat that they might be under. And we come up with a number that we think we're comfortable paying and a construct we're willing to do in a lease. And if we're out bidding that, fine, that's okay. Like I don't think you'll see us chase any transactions just because there's competition.

We'll have the same underwriting price process and an auction process that we do privately. So it may reduce the likelihood of success on our part, but it won't change the way we approach the underwriting.

Yes. You've heard me say for many years. There's no deal we have to do. It is not what drives us here. So we're perfectly willing to walk away. .

And moving on to Todd Thomas with KeyBanc Capital Markets. .

I just wanted to ask, Peter, you talked about a couple of important things on this call. You talked about the dividend that's yielding over 7%, you seem very encouraged by the regional gaming landscape. The stock is trading at north of a 9% AFFO yield at the midpoint of your guidance and nearly 8% implied cap rate on current NOI. I'm just curious where stock buybacks fit into the equation?

I know there are some potential investment opportunities on the horizon, and you have other commitments and uses of capital, but you've been opportunistic and it seems like you're a little frustrated with where the stock is trading. I'm just curious if you could talk about how you're thinking about buybacks and how that might fit into the equation?

Well, look, I mean, that's always the last choice. I mean that's where you're throwing the towel and the game is kind of over. At some level, sure, I think you'd have to responsibly look at that possibility. But we're not there yet by any means. We honestly think there's opportunity to be had as we -- as I said earlier, and we have capabilities that others don't. I wouldn't sell short the development capability that we've already demonstrated that we'll step up and take a project from ground up. That is most unusual, but we have the skill to do it, and that's where we can add value and get returns that are a little bit different.

I've said many, many times that I'm not sure I ever want to be the winner at an auction. I mean it's just -- I sometimes said the win and loses. So and we -- there are certainly some examples of that where there have been auctions that have, let's say, not quite worked out the way the winner had hoped. So we'd like to find an opportunity where we can add value, and that's unique and different. So we have -- we're not really competing with others. That's kind of our goal, and that's what we've been doing largely.

Well go next to Michael Harry with Green Street Capital.

You guys offered some thoughts on online gaming and the likelihood that there would be legalization in various states. Just wondering, how does that impact the -- how you underwrite incremental capital deployment or new casino sale leasebacks relative to states without any sightline to iGaming?

I think overall, not much because the reality is -- and states where iGaming has been prevalent for 5 or 6 years, it hasn't had an impact on the viability of our rent. In other words, in pencils state like Pennsylvania, what we've seen is slower growth in bricks and mortar. Lot of deterioration in that business and certainly not something that has gone on to the level of impacting our tenant's ability and desire to pay rent. So we keep a close eye on iGaming and the proliferation of iGaming and what it might mean.

But I don't think it plays a significant role in how we would underwrite the acquisition of an asset. Now that being said, if iGaming came in into Steve states in a way that would be detrimental to the bricks and mortar in other words, tax rates and things like that, that could effectively cause an operator to or disincentivize an operator to invest in their bricks-and-mortar property, we have to take that into consideration and certainly would.

So I don't think we see it as the end game to gaming. I think as Peter said many times, we feel like people do enjoy the entertainment, they enjoy going out to do it. It has resulted in a supplemental source of revenue for some of our tenants in states that have it, which has been a benefit to us when we have things like parent guarantees because it's just created additional revenue to pay our rent. But I'd say we're cautious about it, but I don't think it has a tremendous impact on anything at the moment.

Yes. Let me note that Pennsylvania is the poster state for excess stated at one time had been circumspect about expansive gaming has sort of limited nothing. And yet in spite of that, the bricks-and-mortar facilities continue to do let me say, acceptably well. They've impacted but not disastrously. .

Michael, I'll just add to that. I mean when you think about our underwriting and you look at our coverages and you look at the longevity how healthy these coverages have been over a decade plus. When we underwrite things, we're underwriting 30-, 40-, 50-year leases anything in everything is kind of included in the what could go wrong category, and that's how you kind of keep rent coverages where they are and healthy. So when we do think about stuff like that, obviously, iGaming is certainly a consideration in those bar and base cases.

I appreciate all the thoughts. And maybe just going back to the encouraging regional gaming trends that have been discussed. How does that -- has that impacted how you've been looking at structuring rent coverage? And then on a similar note, is that -- do you have any sight line to your operators underwriting new redevelopments or CapEx into those properties?

I think on the rent coverage piece, it's more validated our model for rent coverage, right? We've always been somewhat cautious around 2x rent coverage from the time we spun out in 2013. And as you've seen those rent coverages bounce around a little bit. They're still very healthy. Here we are 13 years later. And I think what you're seeing in these gaming markets is they ebb and flow, and there are different economic cycles that impact gaming just as it impacts other things. But gaming has been very resilient in the regional markets hasn't been on the strip, quite frankly.

It may have more volatility, but it's still there and people are still investing. So I think from my perspective, it sort of validates where we were in our rent coverage thought process initially, and that's why it continues to be healthy today. That's for the other pieces.

What was the other question again, I'm sorry? .

I was just considering the strong trends and the success that you've seen from some of the properties that have received additional capital do you have much sight line to new investments.

Yes, sorry. On the CapEx front, if, in fact, one of our tenants was going to pursue a larger capital improvement, there's a notification process. They would come to us. And if they're interested in discussing with us potentially us funding the capital, they would obviously provide us with additional information. So at the times in which they are pursuing those things, yes, we are receiving information but just generally -- more generally speaking, nothing we can share with you.

And we have seen increased CapEx. I mean Penn in particular, in the last 2 years is a renewed emphasis on putting capital back into the bricks and mortar. So -- and you've seen that in some other tenants as well. I think you'll continue to see that as the regional performance supports that CapEx spend.

Yes. Look, balance is a great illustration in Baton Rouge taking those to there, I say, nondescript almost 1 case pretty dreadful properties and converting it into a real asset has been just phenomenal. And in a very, very stable and established market has actually grown the market, which we would have thought would be a long shot, but it actually created more demand, amazing.

And this now concludes our question-and-answer session. I would like to turn the floor back over to Peter Carlino for closing comments.

Well, not much to add that we haven't shared already. We appreciate you dialing in today. We look forward to seeing you again down the road next quarter. So see you then. Thank you. Operator, thank you very much. Joe, thanks. .

Thank you. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.

Greetings. Welcome to Gaming and Leisure Properties, Inc. First Quarter 2026 Earnings Conference Call and Webcast. [Operator Instructions] Please note, this conference is being recorded.

At this time, I'll now turn the conference over to Joe Jaffoni with Investor Relations. Thank you, Joe. You may begin.

Thank you, Rob, and good morning, everyone, and thank you for joining Gaming and Leisure Properties first quarter 2026 earnings call and webcast. The press release distributed yesterday afternoon is available on the Investor Relations section on our website at www.glpropinc.com. In addition to the press release, GLPI also posted a supplemental earnings presentation, which highlights the events of the quarter. Recent developments, future considerations can be accessed at glpropinc.com.

On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today. Forward-looking statements may include those related to revenue, operating income and financial guidance as well as non-GAAP financial measures such as FFO and AFFO. As a reminder, forward-looking statements represent management's current estimates and the company assumes no obligation to update any forward-looking statements in the future. We encourage listeners to review the more detailed discussions related to risk factors and forward-looking statements contained in the company's filings with the SEC including Form 10-Q and in the earnings release as well as definitions and reconciliations of non-GAAP financial measures contained in the company's earnings release.

On this morning's call, we are joined by Peter Carlino, Chairman and Chief Executive Officer of Gaming and Leisure Properties. Also on today's call are Brandon Moore, President and Chief Operating Officer; Desiree Burke, Chief Financial Officer and Treasurer; Steve Ladany, Senior Vice President and Chief Development Officer; and Carlos Cantrell, Senior Vice President, Corporate Strategy and Investor Relations. Thank you for your patience with that.

It's now my pleasure to turn the call over to Peter Carlino. Peter, please go ahead.

Well, thank you, Joe. Happy to be here this morning and always a lot more fun to make these calls when things are looking good, and we've had a terrific quarter. Our AFFO and AFFO per share both growing in mid- to high single digits through this first quarter. And as we did -- as we entered 2026, we sit in a very enviable position with a clear and well-documented line of sight toward a very healthy multiyear AFO growth both in our acquisition and development pipelines. With the acquisition of Bally's Lincoln in February as well as progress on several of our development projects. Our future capital commitments stand at roughly $1.8 billion, nearly all of which we expect to deploy by year-end 2027. And despite what was a relatively challenging year in the regional gaming markets, 2026, as you've been seeing the earnings reports and off to a very, very solid start and our rent coverage remained strong with the vast majority of our leases covered at 1.8x or higher.

We feel pretty good about the opportunity that exists in the market today. We remain pretty active and feel pretty well about our balance sheet, their ability to transact in an accretive manner. As I've offered many times over the years, I would remind you that there is no transaction that we have to do, we are never pressured just to do something new. I used to say over at PENN National Event our customers may be in the gambling business, but we are not. So our focus remains on thoughtful transaction underwriting, careful capital deployment. Looking always at the health of our balance sheet and continuing to position the company for multiyear AFFO and dividend growth.

So with that, I'll turn this over to Des.

Thanks, Peter. For the first quarter of '26, our total income from real estate exceeded the first quarter of '25 by over $24 million. This growth was driven by approximately $33 million in cash rent increases resulting from acquisitions and transformation. For Bally's, the acquisition of Bally's Real estate increased rent by [ 7.5. ] The Chicago lease increased cash income by $5.5 million and in the Bally's Baton Rouge development increased cash rent by $2.6 million. For the PENN, [indiscernible] funding increased cash income by $5.4 million, the [indiscernible] cash income by $3.8 million. The Dry Creek, Ione and Cordish Virginia loan cash income by $3.5 million. And then the recognition of escalators and percentage rent adjustments on our leases added approximately $4.6 million.

In addition, the combination of our noncash revenue growth steps, investment in lease adjustments and straight-line rent adjustments partially offset these increases, resulting in a collective year-over-year decrease of $8 million for the noncash items. Our operating expenses decreased by $49.8 million, mainly due to the noncash adjustments in the provision for credit losses. Included in today's release is our full year 2026 AFFO guidance of between $1.212 billion and $1.223 billion or $4.08 to $4.12 per diluted share in OP units.

The guidance does not include the impact of future transactions. However, we did include additional development funding of approximately $590 million to $640 million, which will be funded relatively even by quarter throughout the remainder of '26, bringing our total development spend between $750 million to $800 million for 2026 full year. The acquisition of PENN's Aurora facility for $225 million is also included in our guidance, and we expect that late in the second quarter. And the anticipated settlement of $363 million of our forward equity is also still expected on June 1st.

From a balance sheet perspective, our leverage ratio was at 5x at the low end of our target level. We are still under the impression that given our balance sheet position, our 7-year runway to fund our development projects and our annual free cash flow over that time frame, we have optionality to fund our accretive commitments. As a reminder, our significant development projects do pay us cash rent upon funding.

And with that, I'll turn it back to Peter.

And with that, I'll ask the operator, would you open the call to questions.

[Operator Instructions] And our first question is from the line of Anthony Paolone with JPMorgan.

Maybe can you start with talking a bit more about what your investment pipeline does look like how does it feel in terms of what you're seeing out there, yields, all those various dynamics.

Well, the pipeline that is outlined that has been disclosed, obviously, I think you're not talking about that. So assuming you're talking about what we're seeing behind the scenes that we've not yet announced I'd say we're having a very active dialogue on a number of fronts. The marketplace continues to be very productive I'd say it ranges from anything the large-scale divestiture portfolios coming out of, whether it be strategic decisions or M&A type of processes all the way to tougher the trial discussions we continue to have. So there are a number of fronts. They're very active dialogue. But I think as far as where we're at in the process, we're obviously not in a position to be able to announce anything at this time. I will say from a cap rate perspective since you brought that up, I think the market is normalizing, and normalizing in an area that's accretive to us. I don't think the 7.5% cap rates that have been previously printed in the not-so-distant past are indicative of what you will see going forward. I think the market has normalized some. I think credit markets continue to be somewhat turbulent for the gaming operators. And therefore, I think the realization of where cap rates probably play out for our benefit is more indicative of the [ 8% ] area that you saw Lincoln done and some of the other transactions we've announced more recently.

Okay. And then just my second one, as we look to '26, is there a sense or can you give us a sense as to which of the leases may not see bumps in 2026 because coverage falls below maybe the 18%. I don't know if maybe if things are still rolling down before they turn the corner. I'm just trying to get a sense as to where we should assume a bump share.

The only lease that we currently do not expect escalation on would be the Pinnacle lease. We do have percentage rent adjustments that are coming in on the Pinnacle leases as well as a few other leases, and that should be a small decrease for 2026. I think we talked about that last quarter, it's below $4 million for a full year, but we would only see about half of that this year. And that is baked into our guidance, and that is just an estimate at this point.

Our next question is from the line of Ronald Kamdem with Morgan Stanley.

This is Jenny on for Ron. The first on development funding. You raised your 2026 guidance to $750 million to $800 million. Can you walk us through like what drives that increase? And what projects may be moving faster than expected?

Sure. So from a project perspective, we did raise the guidance right by $150 million on the high end for the full year. That's mainly due to our Chicago project where we have greater visibility and a clear spend cadence as the project has progressed and the podium has topped off. It does not mean that we're changing timing of when we think the properties may open. It's just the timing of our spend is coming in quicker than what we had originally anticipated.

Perfect. I think...

Jenny, the only thing I'll add there is that in Chicago, they will be topping out both the podium and the tower next week. So pretty pleased with the progress there and still on track for first half '27 opening.

We're always talking about that putting money out that gets current interest is a happy experience. So we're -- that's a very positive event for us.

That's exciting. I think the second question maybe on Life Virginia. I think you bought the land in the first quarter. Maybe talk a little bit more on the expect -- like when do you expect the remaining funding to be started in the second half '26. And just more details on that, the timing of funding and the first construction drawn will be great.

Yes. So I mean, that is included in our guidance, and that is included in the $590 million to $640 million for the remainder of the year. We haven't provided specific guidance on month-by-month by projects. So I'm not exactly certain what else I can add to answer that question.

And Jenny, just as a reminder, the structure that we have for the Cordish deal is a little bit different than we had for the Chicago transaction and our other development projects where the quarters equity dollars are all being spent first. So I think we'll get better visibility into this as the Cordish money goes in and the development gets underway.

The next question is from the line of Steven Pizzella with Deutsche Bank.

First, obviously, there's a lot in the pipeline that you covered. But can you share your insights into some of the performance of the recent development openings?

Yes. Sure, Steve. Look, obviously, it's been pretty productive here over the last 6 to 12 months, you go all the way back to Hollywood Joliet. As you heard from PENN yesterday, I think they're very pleased with the early returns there, clearly been incredibly additive relative to the prior facility. Live Petersburg, the Cordish Development in Virginia opened on January 22nd. That has been incredibly strong, doing a little bit over $15 million a month in each of the two months that that's been opened. So I think from an indication standpoint, clearly, shaping up to be a very good market for that permanent development. The other project that we opened from a development standpoint in December of '25 was Bally's Baton Rouge. I think the story there is very much the same. When you look at kind of the progress relative to the old boat, I think the key there is what we're seeing is market expand fairly nicely in Baton Rouge, just driven by that new supply and some of that incremental investment. So I think those things, in general, those data points give us a lot of comfort for some of the things that we're doing on a go-forward basis here.

Okay. Very helpful. And then -- go ahead.

Yes. And then as Peter just mentioned, obviously, if you listened to PENN's call yesterday, I know you did. The hotel expansion at M has been very well received. Obviously, they're outperforming in that market and appear to be taking some share due to that expansion in capital investment.

Yes. I'll also add, we opened in February, our first tribal investment with Ione, which had a very strong opening. And that appears to have grown that market. So I think we're very positively inclined with the first set of development projects that have come online and the general performance out of those facilities.

Okay. Great. Very helpful. And then just a bigger picture question, if I may. How do you value protections and the long-term relevance of the site versus a potential free cash flow of an asset or the free cash flow conversion?

Sorry, Steve, I think you might have cut out for a little bit there. Could you just repeat that.

Just asking about you value the location of the real estate compared to like your protections and the long-term relevance of the study versus the potential free cash flow of an asset or the free cash flow conversion?

We really do value it on a free cash flow basis. We look at the competition in that location drive times, whatnot, how we think that location will perform over the long run and what kind of risk there are in the future. and then we drive what we think the fair coverage would be on a property, and it's all cash flow generated rather than value of land and building. I don't know if that exactly answers your question, but...

I think the location helps you get better visibility into the cash flow, right? So as Desiree said, we're valuing off of cash flow. The location can because these things are licensed and fairly sticky, the location isn't like a CVS where you can move across the street. So we do focus on the location, but as Desiree said, really focused on valuing the cash flow.

Our next question is from the line of John Kilichowski with Wells Fargo.

And I'd like to start, Peter, I hope you're -- or it's good to have you back up your back is feeling better. My first question is on the Caesars Master Lease to had a pretty sizable move down in coverage this quarter. I was wondering if you can give us any color on what's going on with those assets? And maybe if you're seeing any green shoots there that might show a bottoming in coverage for the rest of the year?

Yes, John, this is Carlo. I think you might have conflated two things. The Caesars Master Lease or Bally's Master Lease, too. I think if you're asking about Bally's, we pointed out at the time of the the Twin River Lincoln acquisition, the pro forma coverage for that lease was going to be a very robust 2.2x after the addition of Lincoln. With respect to yes, the Master Lease with Caesars coverage went to 1.59% in the quarter, still a very fine solid coverage in our view. We've long had a very strong relationship with Caesars Management. There were certainly some items in the fourth quarter that I think did negatively impact results, some hold in at Link City, also West Tower room renovations at a property there as well for them. So I think we feel pretty good that we have our hands around that situation. And as I said, at almost 1.6x, it's a pretty solid coverage.

I was complaining too, so I appreciate you breaking those out for me. And then my second one is just on the city of Chicago is talking about moving ahead with video gambling and Bally's as mentioned an impact to the business. I'm curious on your thoughts on how that may impact Bally's Chicago around rent or coverage?

So we did underwrite the VLT possibility in Chicago. So it does definitely impact rent coverage, but it was underwritten in us determining the $940 million that we were willing to provide two Bally's for that project. Can't give you exact numbers as to what -- how it will impact. But certainly, that the VLT legislation shouldn't have an impact if it does go through. They are hearing different things about sweepstakes, Brandon. I don't know if you wanted to add anything on that, but...

Yes. All the sweepstake stuff is it definitely impacts on. I mean, I think the point in Swiss takes is there's a pretty robust sweepstakes market going on in Cook County today. So the question of whether or not VGTs are going to have a significant impact on bricks-and-mortar gaming is somewhat open. We know we'll have some impact. And as already said, we underwrote this is that VGTs were in Cook County. And we also, for that matter, underwriters, if Hawthorne had a full gaming facility. So our underwriting in Chicago is fairly conservative. And while we would prefer VGTs not to be in Cook County, we don't view that as being overly adverse to our underwriting with that project if it should come.

Our next question is from the line of Greg McGinniss with Scotiabank.

Just given some of the challenges that we've seen across gaming this year, firstly, how do you see operators responding? What are your thoughts on rent coverage in 2026? And secondly, does it change the nature of the conversations that you're having with casino owners in terms of types of deals that they're looking for?

Greg, thanks for the question. I mean, I think we could start with we've been incredibly encouraged with what we've seen in the first 4 months across the regional gaming footprint this year. I think you saw yesterday very solid earnings from PENN, very solid earnings from Boyd in the Midwest and South region, Churchill earlier in the week also solid. So I think what we're seeing from a regional perspective has been encouraging after I think, a malaise over 2025 as the industry more or less digested very strong, both margin and top line comparisons, and we certainly saw that period more or less current rent coverage is a little bit. So I think our rent coverages are still in incredibly solid place, and we do believe what we've seen early in this year is incredibly encouraging in terms of the progress regional gaming is making. I'm sorry, I think there was a second part to your question.

Yes. Curious on how -- if that's had any influence on the types of conversations that you're having with casino owners, developers folks looking to make investments that kind of thing. How you change...

Yes. Look, I think the one thing that's at least been more appearing to us is that the operators, developers, et cetera, who would be paying the rent have been significantly more focused on ensuring that they have a level of cushion and a higher rent coverage starting out of the gate. So I think whereby the market in the past may have been a little more nonchalant with respect to their starting point on a rent coverage basis. I think, due to some of the struggles that have taken place in things like maverick. You've seen that portfolios and pieces of portfolios that have been leased that had extra cushion on the rent coverage side have retained value for the owners, whereby whereas the assets that have significantly lower coverage have struggled to redeem the same type of credit recovery. So I think folks are focused on starting with higher rent coverage out of the box.

Our next question is from the line of Brad Heffern with RBC Capital Markets.

There's been a lot of investor concern about the rise reduction markets and the impact on gaming. How do you guys view that? And is that something that you think about when you're underwriting new projects?

I think predicts in markets underwriting, we lump in with iGaming, I would say. We view it similarly. I think obviously, iGaming has got a more specific path and traction through the state regulation than the predictive market, which at a federal level, on the state level or completely unregulated at a federal level, I will say, lightly regulated at best. I think that there are a lot of challenges to the prediction markets right now. And while I won't tell you we're not concerned about the prediction markets, I don't think we're overly concerned about the prediction markets at the moment, given the challenges. And the fact that, look, there were there was gaming legislation, I think, in 9 different states, maybe a couple more that we were sort of actively monitoring this in and it really doesn't look like any of them are going to pass, including Illinois and New York they're still alive, but they don't look promising. Colorado may being the one that is a little bit more open. But the point being, I don't think the proliferation of iGaming is going to accelerate this session, which I think is good for us overall. And I think the predictive markets, we'll have to wait and see. We're keeping a close eye on it, but I wouldn't say we're really concerned at the moment.

Okay. Got it. And then on Rockford, obviously, that loan is coming up for the initial maturity date soon. Do you expect that to be extended? And then what do you think happens ultimately ratio there? Do you think it just gets paid off or may be converted into ownership of the improvements.

So Rockford, we've obviously begun discussions with those, but we haven't made a final determination as to what we're going to do with that one at this point.

Our next question is from the line of Smedes Rose with Citi.

I wanted to ask you, there's been a lot of, obviously, discussion in the media about Caesars potentially growing private and then that's led to various discussions around changes that might happen at the corporate level with that company. And I'm just wondering, just in terms of your leases, could you just maybe talk about how I guess, sort of durable they are in terms of do they attach going forward? Or are they easy to -- well, not easy, but could they sort of be gotten out of, if you will, if someone wanted to do that?

Or that are legal.

Yes. Good morning, Smedes. I think it depends on the structure of the transaction. So overall, generally speaking, our leases do have a concept in the of the discretionary or qualified brands for [indiscernible]. If you looked at our -- the leases that we have publicly available, but most of our leases all have the same concept, and in which case, it's possible that a transaction could be structured where GLPI would not have a consent right to it. That being said, there are a number of different things that have to be true for that to be the case. And I don't think we have enough visibility into the potential structure of that transaction to ultimately determine whether or not a consent will be required for GLPI. Clearly, if it is, we'll do what's in the best interest of our shareholders and evaluating that. But at the moment, we don't have enough information. I think our conversations with Caesars on this topic have been relatively few, but we have a close relationship with that management team. And if that transaction does go through, and that management team survives. I think, overall, we view that as a neutral transaction to us. It could be positive if there are things to fall out of it, but I don't think we're overly concerned about it. But the impact on our lead is, I would say, is TBD at the moment.

Okay, okay. Fair enough. I just wanted to ask you bigger picture. So just in general, you started out the call talking about your in as dialogue across a number of different opportunities. Do you feel like owners you're speaking with have other sources of capital that are readily available to them? Or do you think that's become more scarce like over the last several quarters in terms of either direct competitors to you or maybe just more traditional regional bank lending and things like that?

No. Look, I think there's the haves and have nots, right? To be totally honest and candid, there are certain parties that I think would probably struggle to find inexpensive capital that would be easily accessible based on their circumstances, whether it be their leverage or their operational profile or maybe even just the fact that they're very small or only have 1 or 2 assets. It's harder to get larger banks to finance those types of endeavors. Some of the transactions, though, to be totally candid, the larger operators, even the private ones that are larger family owned, et cetera, they have plenty of access to capital. It really comes down to broader decision-making and whether it's a strategic fit to do a sale leaseback versus to do a traditional bank loan or bond or what have you. So the dialogue depends on the counterparty and some of the counterparties have definitely have access to capital and others do not.

Our next question is from from the line of Barry Jonas with Truist Securities.

Peter, great to have you back. Hope your back is better. One store...

[indiscernible] Barry, but we're back. I don't recommend back surgery to anybody, by the way.

We'll follow that. I want to start with Bally's. They appear to be looking to do a bit more M&A, including the large deals internationally still -- so maybe more as it relates to the corporate area that influence how you think about future deals and underwriting with them?

I don't think -- I think our answer is unchanged in the sense that we have always underwritten deals at the property level and the Bally's had a great transaction for our property level asset that we thought was accretive to us and our shareholders. I don't think we'd let Valleys work in international work to say is from that. That being said, clearly, that's another capital allocation decision that they've made with the various projects they have in place. And I guess our focus is more on what is [indiscernible] that we have with Bally's and their ability to execute on those. And at the moment, we're not concerned with the Bally's ability to fund and complete Chicago, for example. But I think it's more impactful in that way than it is on the overall risk as we look at sort of more property level performance.

Understood. And then just for a follow-up. I appreciate the general comments on the pipeline. But any updated thoughts in terms of international or non-gaming opportunities and where that ranks in terms of the opportunity set?

Well, I'll take international and somebody on gaming. So on the international front, we have had conversations around international properties as recently as this last quarter. But as we've said many quarters in the past on these calls, there's always a -- there's a tax implication aspect of it. There's a repatriation implication aspect of it. And there's just the legal and customs aspect that we have to get comfortable with, depending on the jurisdiction that we're looking at the domiciled business in. So we continue to look there. I would love to tell you that we could get comfortable and get something done in international capacity non-Canada just because that seems to be where others have gone. And so I'd like to do some new cutting-edge things somewhere else, but I'm not willing to tell you that I think that's coming anytime soon. So we're going to keep working. We'll keep trying to do our diligence and try to look for opportunities that would equate to an accretive transaction for us here in the United States when we bring all the money back and pay all the taxes.

By the way, that answer is a perfect response to the non-gaming as well. We look at a lot of stuff, as I like to say, we kiss a lot of frogs, but we're still looking for a princess in that category.

Our next question is from the line of Todd Tom with KeyBanc Capital Markets.

Brandon, can you just talk a little bit more about the normalizing cap rates that you discussed what's driving that specifically? And in your comments, it sounded like it was about 50 basis points. I mean, is that sort of the right range to kind of quantify the change that you're seeing in cap rate expansion?

Well, I'll let Steve -- Steve, I believe, answered that the first time. I will say, I think what's led to the normalizing of cap rates, what Steve is referencing is, obviously, we have a lot of data points behind the scenes, things that are coming to fruition, has happened all the time where things bubble up to the surface where people are interested in understanding the valuation of what they have. And I think Steve's pointed and he can hit it again, but was just that the rates we're seeing are beginning to tighten in a range, and we think we have a pretty good feel of where the right cap rate is for transactions. And I'd say that at least the cap rate that we'd be willing to execute on transactions, but Steve...

Yes, yes. I'm sorry. I wasn't trying to peg a 50 basis point number out there. I don't think it's as precise as that, to be honest with you, each transactions and negotiation, you're sitting across from a counterparty and you're trying to figure out what makes sense for you, and what makes sense for them, and what's their need and what's your desire and it all has to kind of go into the blender. My point was, I think if you were to say what do I think the average market clearing, regional gaming assets sale leaseback on a regular way down the middle of the fairway transactions going to go for right now. I think it's going to have an 8 in front of it. It's not going to have a 7 in front of it. I'm not trying to be more specific than that as far as 50 basis points or 62.5, but I think the reality is that's just kind of where the markets trended at the moment. It doesn't mean that it can't pivot on a dime 6 months from now. We're telling you the markets moved again. But we would obviously anticipate and hope that our cap rate where we trade, our implied cap rate would grind tighter as well as the market being grinding tighter at that point. So where we're at today. I think from a cost of capital spread it where we're at, I think we're comfortable that the market is probably yielding any dates.

Okay. That's helpful clarification. And then, Desiree, I had a question about the guidance adjustment. The nominal AFFO has increased about $30 million at the midpoint, I think, mostly at the low end, but it looked like it was a little more than it would seem to be due to the higher capital deployment on its own. And you talked about Chicago, but I was just curious if there was -- if there were some other changes around either earlier cadence of funding that had an impact or something else altogether. Can you just talk about some of the changes there around the guidance specifically?

Sure. So really, it is mainly due to the funding changes because that's going to increase obvious their income. That's going to have an offsetting impact in our interest income. On the high end, we did see some increase in sulfur rates, obviously, this quarter, so that some of the benefit gets eaten up by the soft assumptions in the high end of our guidance that were not -- that we had already had a little bit of additional interest expense put into the low end of our guidance. So that's why you're not seeing an even change. I will also tell you there's some rounding involved because the stronger the round is coming into the guidance, it takes a lot less AFFO to increase that per share amount.

Okay. That's helpful. Did anything change there in terms of G&A and the stock-based comp component? Did anything change there with regard to the mix as far as reconciliation there.

Not at all.

Our next question is from the line of Haendel St. Juste with Mizuho Securities.

Desiree, can you talk a bit more about the positioning of the balance sheet in the current macro, lots of, obviously, volatility. You've got $1.8 billion of capital deployment you've outlined over the next 18 months. Leverage today is at the low end of your target range. It looked like it would be at the high end on a pro forma basis. So are you willing to that market tick up? How are you thinking about balance sheet management over the next 18 months and perhaps the need for new equity?

Sure. So we sit here today with $275 million of cash that has not been deployed into that run rate of 5x, right? So as that become income earning, the leverage ratio will not increase for that portion or for the $363 million of forward equity that we have outstanding. We also have free cash flow into the tune of $230 million per year. So we have the majority of that still coming for this year and then the rest, as we said, we can do either debt or equity depending on what we expect to do. But I still expect us to be at the end of this when all of our transactions are completed the remaining $1.8 billion is funded. We get full credit for the AFFO that those transactions derived will still be at the low end of our 5 to 5.5x guidance or leverage, sorry.

Got it, got it. I appreciate that. And then more broadly, the growth for this year is mid-single digit. I think next year is kind of the same. Is this something you think is sustainable beyond the next months? I'm curious how you're thinking about the sustainability of the long-term cash flow growth from the portfolio here in the next 2 years or more of an aberration or something you feel you can sustain over the longer term?

Yes. So look, I can clearly see through '27 and see the growth there just as you can at '28 and beyond depends on which transactions that we come up with over the next year or two. We certainly will have growth related to escalation on our transactions, but outside of that, until we do an accretive transaction, I can't really predict 2028 and beyond.

The next question is from the line of Rich Hightower with Barclays.

So I want to go back to Smedes' question on the potential Caesars deal and how it might affect GLPI. There's obviously a parent guarantee in place on your Master Lease. And I appreciate the idea that it's really 4-wall coverage, that's the primary focus in any scenario. But what's your legal understanding of the ability of the parent guarantee to travel with the lease under a variety of potential deal structures? And how should we think about that from the outside?

I think if you should think of it as the parent guarantee being one of the requirements that has to be in place for us to be forced to take a new tenant. In other words, in order to meet the definition of a qualified or discretionary transfer. There have to be -- certain things have to be true with respect to the transfer, but also with the transaction, including the pro forma leverage and the existence of a replacement parent guarantee. So again, I don't think we know enough about the anticipated structure of that transaction in order to determine whether or not, for example, the parent guarantee is at an entity level that would be -- would meet our lease requirements and be acceptable to us. We just don't know yet. But you should assume that, that does, in fact, travel with the next tenant.

Okay. That's really helpful. I guess more broadly and maybe it relates to the cap rate comment as well. But are you seeing -- and I'll use the Bally's in New York project as an example here, but are you seeing other sort of previously competitive capital providers, and I'm really thinking of sort of the private credit universe that appears to be having its own issues in various ways. Are you seeing those potential competitors pull back from the market. Does that imply anything about GLPI's ability to step in as a cattle provider to a project like that or any other development going on? And does that affect market pricing for the capital as well?

Sure. I'll give it a shot. To date, we haven't seen the credit type of folks pulling away. Now I can't speak to their ability to show up at the finish line, but I can just tell you on the -- at the early onset they seem to be just as much engaged in participating as anybody else. So I don't think there's a huge seismic shift in the competitive landscape. They are not new folks seemingly pouring in. So it's the same handful of people are looking at transactions. I think it all kind of goes back to relationships at the end of the day. and underwriting. And so they're kind of both critically important and they work together. You can obviously have successful underwriting and maybe not the greatest relationship, but that just means you did a transaction. And conversely, you have a great relationship in poor underwriting and then you have a friend that is not doing so great in either us. So I think we continue to try to operate in a position where we hope to be everyone's first call if there's something they're looking to do or something they're trying to be creative around. and then we look to try to make sure we overlay our underwriting success with that. And so, so far, it's worked out well for us. I think it will continue to have -- at least have a seat at every table, whether we -- whether it plays out the way we want it to or not is yet to be seen.

Well, I think in New York, you kind of picked out the 1 unique animal in the bunch, which is -- that is a unique market that has a lot of interest of people that want to have a piece of that. So I think Valleys is an enviable position in New York where they're having a lot of different capital sources to discuss and talk to -- whether or not, we have an opportunity there for a piece of that. will be relationship-driven more than economically driven, I suspect. But I don't think we're doing it at a cap rate that's any lower than what Steve has indicated because, quite frankly, that wouldn't be accretive to us and not a smart use of our capital. So we'll see how New York feed out. I think that's somewhat unique.

May be several layers of opportunity there. to say the least. And we expect at least to be at the table as Steve and Brandon have outlined.

[indiscernible] should follow our way we hope.

Got it. I also appreciate the hat-trick in terms of management's responses from all three of you, thanks.

Next question is from the line of Chris Darling with Green Street.

So with Acorn Ridge now open, I'm wondering if you've had any discussion around the conversion of loan into a formal lease structure. And then separately, whether it's Acorn Ridge or any other tribal investment, can you talk about your level of visibility into the underlying financial performance of those properties and sort of regular cadence of any updates you might get?

It has a term, right? So the Acorn bridge loan has a 5-year term with I think it's 2-, 6-month extension. So we're not in discussions about converting it to ultimately to a lease at this point. As far as performance goes, we do get quarterly certifications, which will include coverage ratios at least as far as how it's going to cover the rent. In this case, it's interest. So we're really just going to be looking at the AFFO vis-a-vis what interest payments we have as far as the stability of the operations of the project, but we will get information on a quarterly basis.

And I think that with respect to Acorn Bridge, we have dialogue with the chairwoman there. And she's very very level-headed with respect to this and said like, look, get 6 months of operations under our belt. And then as a tribe, we'll start to kind of reevaluate what we want to do as far as future capital spend or financing markets, et cetera. So we're cheering on and anxiously awaiting future dialogue.

Okay. That's helpful. And then maybe taking a step back more broadly, as you think about underwriting new investments in the tribal space, are there any jurisdictions that are more or less attractive to you? Curious how you think about that.

I think different jurisdictions lead to different opportunities. And by that, I mean, in a jurisdiction like California, you have a very large number of tribes and the opportunity for expansion, what you're seeing in California is despite the fact that there are a lot of tribal casinos, the tribal can is opening appear to be growing the markets that they're in. So there's a lot of opportunity in California just given the sheer size. Other -- in California doesn't have with their compact, a very stringent taxing regime. So even when the tribes enter into compact, they're not paying a lot of tax. In other states, they're paying more tax and have different different compacts. And so I think just sheer numbers, California, New York has some tribes, the Midwest has several tribes, Oklahoma. I'd say it's more relationship driven at this point. And we're looking at travel needs and trying to figure out which transactions that suit our underwriting. I will say there are a lot of opportunities. We're getting a lot of inbounds. We're getting a lot of questions around what we can offer. And so we'll have a lot -- we have a lot to digest. We'll continue to get a lot to digest, I think, this year and try to figure out how much capital we want to allocate to this form of financing and where. But I don't think it's necessarily driven by state line per se. It's just more the number of tribes in different areas is obviously a lot different in California than, for example, Alabama, which has one drive.

The next questions are from the line of Daniel Guglielmo with Capital One Securities.

Just one for me. Do you all have a minimum dollar size for redevelopment projects that you'd be willing to fund it feels like operator CapEx budgets are down for '26 versus '25, but improving properties has been working. So we're curious if smaller, less invasive projects at more properties are coming.

Daniel, just to clarify, do you mean that this is a capital improvement project at an asset we already own?

Yes, yes.

I don't think there's any number. We would fund down to whatever the tenant needs, assuming that it's a project that they think will be accretive to them, and we'll generate pro forma business for them that surpasses the cost of our capital. So I think we would look to be supportive of the tenant in any of these opportunities.

The next question is from the line of Chad Beynon with Macquarie.

You guys have clearly differentiated yourself with more of a drive to regional focus versus destination. And we've talked about it a couple of times on the call how strong the regional market has been year-to-date. Some operators actually improving margins, which we haven't seen for a few years. So does this indication or validation in your thesis maybe dissuade you into leaning in kind of back into Las Vegas beyond the top side and really just kind of doubling down in your current thesis and drive-to and regionals?

I don't think we ever were leaning into Las Vegas, I mean and as has been well said, we look at these projects one at a time, almost location, not critical, but we have no special focus on Las Vegas at all. Look, I've been an enthusiast for the regional market for 20 years and trying to make the case that it's the better place to be safest place to put capital by far. I think we've demonstrated that in some -- a lot of events in the recent events in Las Vegas highlight that -- where we put our capital makes a lot more sense, but...

Chad, I think it's -- go ahead, Desiree.

No. You go ahead.

Chad, I think it's -- I think -- as always, it's the strength of the cash flows. It's not the building, it's not necessarily the geography. It's the strength and safety of the cash flows. And I think if you look over time, acknowledging we don't share an upside any more than just the escalators we receive for a well-covered lease, the regional business has provided a lot of stability. And -- if you look back over the last few years, you've come off of very solid peaks. And as you mentioned, first quarter has been a very nice indicator that things are strengthening here again.

And I would add, we've been saying this for a long time, but even back at PENN and our pending in 2008 of financial crisis, our properties held up the regional much better than what happened in Las Vegas. You saw that coming out of COVID as a regional properties [indiscernible] that much better than those in Vegas. That trend is continuing. So I agree with a few of the thesis. I think everybody should see it on their own at this point in time.

Great. And maybe just to hit on one market to keep it on here. Peter, I know 20 years or so ago, you were looking at Atlantic City. We just returned from the East Coast Gaming, Congress, and it sounds like a lot of the operators down there are pretty scared in terms of what could happen with New York. Is that a market that you think could recover with capital? And would you be interested in helping out some of those operators either on the developmental did or pivoting our strategies?

A pretty risky looking at what's on the horizon. New York is going to have a big impact. And I've long said that sooner related, New Jersey is going to have to break down and put something up in North Jersey. If they, let's say, want to lose all that business to the New York properties. That's just my view about it. So it's not a happy time to be in Atlantic City today. So look, there are always going to be some winners there without a doubt, but it's not a market that's looking for more investment.

Next question is from the line of David Katz with Jefferies.

Covered a lot of details already. But look, when we look at the the market for regional properties today. If we can be sort of upfront about it, there's yourselves and one other who's closest like you? And then obviously, other capital sources that may be available, right?

Dave, you could say the name.

I can, I can. I just usually don't as a policy and same with [indiscernible] Look, the nature of the question is, are you seeing a change in that competitive landscape, specifically for regional properties. We're in a moment where our collective expectation is that there's things coming to market. What does the competitiveness look like for you today versus where it was 6 to 12 months ago?

To be honest, I think there's less competitors right now. And I think there's just been -- there have been a couple of gyrations in the market. There have been a couple of people that have dipped their toes in and either decided it wasn't for them or it got burned. And so we've seen the -- some funds, I guess we won't name names either. But we've seen some funds that have bought some some properties, which later than divested of those pieces or currently going through the Maverick bankruptcy and trying to figure that piece out. So I think that as -- I think as the market evolves, there's always going to be someone who's going to take a look. We love this business, right? There's a reason why we're in this business, and we think we're undervalued. So if it only makes sense that others will probably see that light and we'll decide they want to get involved as well. I think the complexity has been in the regional markets is there's a lot of diversity. You have to understand who the operators are. You have to understand the assets, and it's multiple assets with different competitive landscapes and market dynamics that go into a portfolio. And that's -- that's where it gets complex for someone sitting in an office and you name the big city to decide that like I can just roll this thing up at a certain percent, and this is going to make me a wizard. I think it becomes more difficult than that. And I think the reality is because of that, there'll constantly be people that will come in and then out of the space. So right now, I think there's 3 to 4 or 5 people that are probably looking at any larger portfolio that comes to market. And at the end of the day, it's probably the same 3-ish people that we'll put in some kind of indication.

Next question is from the line of Robin Farley with UBS.

Speaking of not leaning into Las Vegas, I wonder if you could just update us on potential timing or what your latest thoughts are on opportunity for you at that site.

I'd love to tell you our answers change. But as we sit here today, I think that the stadium is progressing quite nicely. And if you've looked at the cameras sitting on top of MGM Grand, you'll see that the stadium, the concourse level is up, and they're probably going to be putting on the first roof cuts here in the next 6 weeks. Integrated resort was always behind and not in the sense of being behind a bad way, but it just -- it was going to follow the construction of the concourse. And so I think we're getting to the point where Bally's will have some decisions to make about how much they want to do, and how they're going to do it. We have $125 million commitment remaining. Whether or not we expand that commitment is to be determined as we see the leasing of the site in the RED space start to fill out, and we get at a better picture of the revenue that will be generated on that side. We and Bally's will be discussing what level of investment above and beyond the $125 million, if any, will be appropriate from GLPI. But unfortunately, I don't think we have much different answer right now, but I do think in the next 6 months, that will change. I think the integrated resort will come into clarity in the next 6 months or so.

Our final question is from the line of John DeCree with CBRE.

I think we covered mostly everything. So I apologize if this is a touch redundant. I think you'd already answered investment sizing question as it relates to development. But with the Caesars buyout talk, we've got questions about portfolio transactions. So from your perspective, an investment sizing question, large portfolio of assets. Do you think there's a market there for real estate today? I think much of what we've seen so far is a single asset and from GLPI would -- is there an investment size that would be too small or too large, rather would you kind of consider anything that might come to market even if it's chunky.

It might depend on whether or not it's going into another Master Lease with another tenant or how it's being done. I mean are there assets that are too small for us to look at there may be if they're accretive, and they're generating good capital, and we can put them into a lease with an existing tenant. I don't think there's anything we necessarily would not look at. If you're talking about the Caesars portfolio specifically, it's not clear to us which of any assets may fall out of that portfolio as a result of the impending or proposed transaction. We just have to take a look at it when the time comes.

Brandon, maybe more broadly, if there was a multibillion-dollar transaction, unrelated to Caesars if there was a seller of a package of assets, is that something that would be in your wheelhouse, or is there a dollar amount where you say that we don't want to deploy that much capital or the market might not be there for that?

I think as long as it's accretive, we do it. I mean, look, we did the Pinnacle transaction a few years out of the gate, which was roughly $4 billion. I don't think that there's any number that's necessarily too high of all of the portfolio assets we see right now. We just have to underwrite it. And if it's accretive based on our cost of capital at the time, I think we would look at it and do it. So no, I don't think there's anything too big or too small at the moment that we wouldn't look at.

Yes, I've always felt there's never a shortage of opportunity for funding for a good deal. So I think Brandon answered it pretty well. As the small client, we [indiscernible] say, we'll hit some singles and even every now and then take a month if the spread is worth it. So nothing we won't look at.

At this time, I'll turn the floor back to Peter Carlino for closing comments.

Okay. Well, with that, I think the morning has been productive from our point of view. And we thank you for tuning in today. See you next quarter. Thanks very much.

This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Greetings, and welcome to the Gaming and Leisure Properties Fourth Quarter 2025 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Joe Jaffoni, Investor Relations. Please go ahead.

Thank you, Paul. Good morning, everyone, and thank you for joining Gaming and Leisure Properties Fourth Quarter 2025 Earnings Call Webcast. The press release distributed yesterday afternoon is available in the Investor Relations section on our website at www.glpropinc.com. In addition to the fourth quarter press release, GLPI also posted a supplemental earnings presentation, which highlights the events of the quarter, recent developments and future considerations that can also be accessed at www.glpropinc.com.

On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today. Forward-looking statements may include those related to revenue, operating income and financial guidance, as well as non-GAAP financial measures such as FFO and AFFO.

As a reminder, forward-looking statements represent management's current estimates, and the company assumes no obligation to update any forward-looking statements in the future. We encourage listeners to review the more detailed discussions related to risk factors and forward-looking statements contained in the company's filings with the SEC including its 10-Q and in the earnings release, as well as the definitions and reconciliations of non-GAAP financial measures contained in the company's earnings release.

On this morning's call, we are joined by Brandon Moore, President and Chief Operating Officer; Desiree Burke, Chief Financial Officer and Treasurer; Steve Ladany, Senior Vice President and Chief Development Officer; and Carlo Santarelli, Senior Vice President, Corporate Strategy and Investor Relations.

With that, it's my pleasure to turn the call over to Brandon Moore. Brandon, please go ahead.

Thanks, Joe. Good morning, everyone. We appreciate you being on the call today. And before we dive into the quarter, I'll address the obvious absence of Peter on our call this morning. For those of you that have been dialing in to these calls at GLPI and prior to that pen for the last three decades. Peter's voice is the one you'd expect to hear. But unfortunately, he's unable to join us this morning due to some lingering back issues. He's been having and he's having a procedure this morning ahead of some upcoming travel to get him back on his feet. So we'll miss him this morning, but he asked us to share some prepared remarks, which I will do and then turn over to Desiree, and then we'll move to your questions.

So moving on to Peter's remarks. We enter 2026 in an enviable position with what I would consider to be the most visible line of sight towards healthy multiyear AFFO growth that I can recall. Our pipeline entering 2026 is deep with $2.6 billion of future capital commitments poised for deployment over the next 24 months, our balance sheet is well positioned to support our growth without the need for incremental capital, and our tenants is evidenced by our robust rent coverage metrics remain healthy.

We recently completed the acquisition of Bally’s Lincoln, an asset we have long coveted for $700 million at an accretive 8% cap rate, while also closing on the real estate related to Cordish Live Virginia project to which we have committed an incremental $440 million towards the development. In addition, funding remains ongoing in Bally’s Chicago with roughly $740 million left to spend towards the development as of 12/31.

The project remains on schedule for the first half of 2027 opening with the hotel tower surpassing the 20th floor. On the tribal front, we eagerly anticipate the grand opening of the Ione bands, Acorn Ridge Casino next week, while development activity at Caesars Republic Sonoma remains ongoing. Overall, we believe the strength of our tenants, the strength of our leases, the depth of our pipeline and the condition of our balance sheet position us well to continue to execute and grow the business in 2026 and beyond.

With that, I'll turn it over to Desiree, and then we'll move to questions.

Thanks, Brandon. Good morning. For the fourth quarter of '25, our total income from real estate exceeded the fourth quarter of '24 by over $17 million. This growth was driven by cash rent increases of over $23 million resulting from acquisitions and escalations.

For Bally’s, the acquisition of Bally’s Kansas City and [ Shreveport ] Real Estate increased our cash rent $6.6 million, the Chicago leased increased cash income by $2.6 million and the [ Bell ] development increased cash rent by $1.9 million. For Penn, the Joliet funding and M Resort funding increased cash income by $4.4 million. The Sunland Park and strategic acquisition increased cash income by $3.2 million and then the recognition of escalators and percentage rent adjustments on all of our leases added approximately $4.3 million of cash income.

A combination of noncash revenue gross-ups, investment in lease adjustments and straight-line rent adjustments partially offset these increases resulting in a collective year-over-year decrease of $6.2 million. Our operating expenses decreased by $37.8 million, mainly due to a noncash adjustment in the provision for credit loss.

Included in today's release is our guidance for 2026 AFFO between [ $1.27 billion and $1.22 ] billion or between $46 and $4.11 and per diluted share in OP units. The guidance does not include the impact of future transactions. However, it does include our anticipated development fundings of approximately $575 million to $650 million were related to current development projects such as Chicago, Ione, Marquette, Dry Creek and Virginia. These will be funded relatively evenly by quarter throughout 2026.

And in addition, the acquisition of [ Panzara ] facility for $225 million is expected late in the second quarter of '26 and the completion of the $700 million Lincoln acquisition, which is now complete, was also anticipated in our guidance. Lastly, the anticipated settlement of $363 million of our forward equity is expected on June 1, 2026 in our guidance. From a balance sheet perspective, our leverage ratio was at 4.6x, well below our targeted and historic levels.

Given our current balance sheet position, the several year runway to fund our development projects and our annual free cash flow over that time frame, we have optionality to fund our future accretive commitments. As a reminder, our significant development projects pay us cash run upon funding and our rent coverage ratios on our master leases are now ranging from 1.69x covered to 2.6x covered as of the prior quarter end.

With that, operator, please open up the line for questions.

[Operator Instructions] Our first question is from Ronald Kamdem with Morgan Stanley.

Great. Just two quick ones. If you could just start on Bally’s Chicago, that development project and so forth. If you could just give an update on sort of the milestones, how that's sort of going? I saw the -- you funded some of that in 4Q with some left to go.

There was a report actually, I think I don't know which publication put out this morning about the crane movement over the weekend. But the project is going well. We would estimate that that's over 20% complete at this point. There's over 300 employees or average daily crew on the site hotel structure, as was mentioned in the opening remarks, we're currently on Level 21 of what will be 34 floors total.

The curtain wall glass has started on the sixth floor. It's currently on the eighth floor on the hotel. And on the casino podium, we're nearing completion of the Phase II structural steel in the decking. So the project is moving along nicely. I think that you've probably noticed, they put out a request to extend length on the temporary facility. We expect that the project should conclude and open sometime in the first half of 2027. And so I think from that perspective, I don't know if anyone else has anything to add.

The only thing I would add to that, Ron, is the development time line that we have contemplated here internally at GLPI is consistent with the message that Steve just delivered. First half '27 opening. Our development financing has kind of stretched out that long. So despite the request that many of you saw a couple of weeks ago, there's been no change from our perspective.

Great. And then my second question was just on the pipeline. Obviously, Lincoln is through, and you got that done. Any -- sort of any comments on I remember there was sort of a lender consent and [ to ] go through and so forth, how that sort of progressed along. And then any broader comments on the pipeline in general between tribal and nontribal would be helpful.

I'll talk a little bit about the first part. I think with the [ Ares ] refinancing that they announced that the lender consent was solved. So that was the impediment on Lincoln. They solved that with the refinancing that opened up Lincoln for us to acquire. So that one's pretty easy. I'll address a bit of the pipeline. I think, obviously, there's a lot of stuff we can't talk about here internally at the company.

On the tribal side, we continue to have -- gain traction with various tribes with different uses, potential uses for our capital structure. We obviously announced Dry Creek recently. I wouldn't say anything is imminent there, but there are a lot of really productive conversations going on with [ Drive ] that would involve our new financing structure. So we'll see. Anybody, I don't know if you guys have anything to add on the pipeline?

Yes. No, I think the supplemental has a great on Page 8 with the pipeline, right? So we have the $2.6 billion, which $700 million has now been completed. So we're down to $1.9 million and all of the projects are listed there. And as I said, the guidance does include between $575 million and $650 million of the development funding. So those projects that I mentioned that are development, and then in addition, we have the Aurora project for $225 million left to occur.

Our next question is from John Kilichowski with Wells Fargo.

The first one for me is just both on Vegas and New York. I don't know if you can give us updates on either of those projects, whether there's an idea of what commitments will look like? I know that we have a number on Vegas, but there's room for expansion in that New York we start to talk about sizing of opportunity there.

Yes, I'll take the first part of it with Vegas, and then I'll turn it over to Steve to talk a little bit about New York. In Las Vegas, what I can tell you is, Peter and I were out there together last month to visit with the A team and to walk the site and their experience center.

The stadium is progressing at a pretty rapid rate. I think they're actually a little bit ahead of schedule on the stadium now. And all I can say is I think they're building a spectacular product. I think the site will see a first-class stadium product that's not just a baseball stadium, but also an entertainment venue, which I think is really important for this site. They bring fans very close to the field with this new stadium, and it opens itself up quite nicely for 25,000 to 30,000 seat entertainment venue.

So I think both we and folks and Vegas are very excited about the potential that, that attraction brings to the site. With respect to the integrated resort, we're really looking to valleys to finalize their plans. They released a lot of rendering and some preliminary permit applications for the site. They've indicated that they intend to phase the site, which is not any surprise to us.

And at the present time, we're sitting on our remaining commitment of $125 million. We'll consider investing more in the property as the details of the property become more available. I think -- the key for us is to ensure that whatever investment we have in the property that the revenues that will be generated there can support our rent, we've been hyper focused on coverage since the day we spun out, we'll continue to do that, and Vegas is no exception. So I think it's a great opportunity. It's a great amenity that the [ -- ] as are bringing to that site, and we'll see how Bally's looks to take advantage of that.

I can speak to New York. I mean, with respect to New York, we continue to view Bally’s development as an attractive opportunity in New York, and we would certainly like to be a participant. That said, we recognize that there's likely no shortage of capital providers for that project, and there's continued interest that we continue to hear about. So we remain in constant discussion with them. We're monitoring the process. I'm not sure that they'll need our capital.

So I guess to put it frank, I think to dispel any notions that may exist. We view it very unlikely that we would end up providing the majority of the capital for a $4 billion project there. We're going to continue to evaluate the process and the project, and we'll look to try to be as strategic as possible with respect to any involvement.

Got it. That's helpful. And then for my second question, maybe could you provide a time on the Virginia Live project?

They opened the temporary in January, and they're beginning the preparation and groundwork on the permanent side. I don't think we have a time line from quarter to definitive time line from Cordish [ 4 ] opening at this point in time. You may recall from our previous discussion, their capital goes in first. So our funding on that will be after the equity portion of the Cordish Group's capital is in. So we don't expect to be funding that until the latter half of 2026 into 2027. I don't really have any other updates on.

I think for your purposes, the lion's share of our spend related to the remaining $440 million will occur in 2027. There's likely to be some spend modest relative to the $575 million to $650 million that we guided in development. Some modest element of that will likely relate to Virginia later in the year.

Our next question is from Mitchell Germain with Citizens Bank.

Yes. Sorry about that. When did the economics of the Lincoln transaction change? I mean, obviously, I know the cap rate was the same, but I think I have seen [ 73 ]5 as a purchase price.

Yes. I think, Mitch, it -- when we came time [ or ] to exercise that option, we had done some new underwriting on the project. There was a little bit of competitive pressure from the tribe and some other things. And in working with Bally’s and focusing on the rent coverage, we decided to lower the rent a little bit, which lowered the purchase price.

So I would look at it as finding the right level of rent to put into master lease to that would come out with a pro forma coverage we were comfortable with, and the rent just yielded that purchase price. So we didn't change the cap rate. We just changed the rent.

Got you. And then with the Live project, is it just a traditional lease or will you guys also have a percentage rent option on any of the food and beverage options?

Traditional lease.

Our next question is from Barry Jonas with Truist Securities.

First off, I hope Peter gets better soon. Discussions around iGaming and skill-based games in Virginia are back again this legislative session. How do you guys handicap these things actually getting passed? And how could that impact the Cordish project in your underwriting?

So look, the skill-based stuff is a little bit harder to answer. I think with respect to the iGaming, obviously, there's been a lot of headlines recently some of the, I think, thinking maybe a little bit ahead, some of the stuff that's getting passed is more of a passage for the purposes of being able to continue discussion. There's still some reconciliation between the two bills that need to occur.

I think with respect to the Cordish project, what's important to remember, and you could kind of evidence this from looking at the leases in Pennsylvania and Maryland. The underwriting of these leases has always been strong. They're written to be strong. They've done nothing, but produce great resorts that cover our rent very thoroughly. I don't see there being any reason to believe this project will be any different than the others out there.

Obviously, iGaming will be interesting and how it ultimately gets done if it gets done a couple of years down the road, could benefit some of the land-based operators in this instance.

Great. Just as a follow-up on Acorn Ridge. Has all the funding been completed as of today? Or is there any bleed over into future quarters? I know it's opening in 4 days. And then is the expectation still that the tribe decides in 5 years, whether to convert this to a sale leaseback? Or could something happen sooner?

So all of the funding has not been completed. If we had expected to be completed over the next few months, there is always a lag between doing the construction and us actually making sure the construction is complete and is thorough before we will fund. So there is a lag. And on the second part of your question...

It's certainly possible that they could convert that to a long-term lease at the end of the 5 years, but we don't have any indication at the present time that they've made a decision to do that in 5 years, let alone to do that sooner. But if they came to us and wanted to convert the loan sooner, I think we'd be amenable to that.

Our next question is from Smedes Rose with Citi.

I just wanted to add to you just a little bit about sort of the pipeline and willingness to continue to commit capital. You mentioned $2.6 billion over the next 24 months, a very robust pipeline now. But given sort of, I think, somewhat challenged cost of equity capital, and you've already talked about having to move leverage up a little bit, I realized well within your -- the comfort ranges that -- how are you thinking about adding new projects at this point? And then I guess, in general, what's sort of the tenor of sort of conversations like with folks who might be interested in coming to you for capital?

So I'll start on the leverage piece and then turn it over to Steve to talk to you about our expectations for projects, new projects. So we are at 4.6x levered. And if you layer in what we just did with Lincoln, that would get us to just below 4. We do have the $363 million forward equity outstanding towards the projects.

We also have quite a bit of free cash flow in 2026 towards the projects. We certainly don't have to hit the debt or equity markets at any near term for these projects, and we do believe we have them all funded theoretically on our balance sheet, we know where the money is coming from for the projects.

Yes. With respect to the pipeline, look, I think we continue to be active. We're not turning away accretive transactions underwritten based on our current equity cost of capital associated with our -- and then our cost of capital with the debt respect. We're ongoing discussions because of where we sit from a leverage profile, it gives us some flexibility.

The development transactions that we might discuss with any parties, there obviously, there's a timing component. So I think that we have -- give ourselves an added amount of time to raise the capital and decide what form it's going to come in. I think with respect to regular waste sale leasebacks, we would obviously look to fund those at the time in which they were completed. And I think those -- we would welcome those discussions and have welcomed those discussions. And so I think we continue to be as thoughtful as possible but I don't see any interest here to turn away business just because there's a bunch of business already underwritten and signed up.

You have quite a bit of availability on our ETM program as well. So within the future, we want to raise equity. It's still there. And so we've got many of optionality for future commitments.

Our next question is from Brad Heffern with RBC Capital Markets.

Best wish is to Peter. I hope the procedure goes well. GLP obviously has one of the highest growth profiles in that lease, great visibility over the next few years. Bally seems to have gotten better. At the same time, the stock continues to trade at a discount. Why do you think that is? And is there anything that you guys can do about it?

Brad, it's Carlos. Yes, everything you said is accurate. Obviously, you guys could do the math and see what the growth trajectory looks like. The balance sheet is in really good position to fund it. and the stock does trade where it trades. I think in our conversations, certainly, there's a lot of things people can point to.

Obviously, the stock performance amongst our tenants is one -- there are certainly some issues within the industry as it relates to lease coverages and things of that nature that I think have unnerved some folks. We feel very good about where our leases stand from a coverage perspective. But there's certainly some bigger picture items out there. The equity trading of our tenants certainly being one that does come up quite frequently. And I think those things have harnessed our valuation to a certain extent.

Okay. Got it. And then on the funding for Twin River, I know you have a revolver balance that's there for tax reasons related to prior valleys acquisitions. Is there something similar for Twin River and how much of the revolver might that represent?

Yes. So we did use the revolver for that. As we've told you, we would have to get the Bally's tax benefits, and we did borrow on the revolver for that transaction.

Okay. Is it all of it? Or is that a subset of the total?

It's the majority of it, $679 million of it, and there were some units also associated with that transaction.

Our next question is from Chad Beynon with Macquarie.

You guys have made a lot of progress and really broken the mold just in terms of activity with tribes the recent debate or new input is around prediction markets in markets where tribes might have a little bit more exclusivity on the land-based side. So given the CFTC's view or maybe even support of this new potential competitor, how are you seeing that in your conversations or maybe future pipeline with tribes in these markets, do you think that will affect your activity?

I guess the long and short of it is, I don't think that will have an impact on our activity with the tribe. So I can tell you that the tribes in California, for example, are very focused on being able to offer sports betting exclusively and the prediction markets obviously threaten that.

So they're very active on the legislative front, but I don't see that impacting any of the things we're working on in tribal Country. At least not today. If predictive markets become a genuine threat to the EBITDA at [ these ], it's obviously an underwriting concern and things we'll have to take a look at. But as we sit here today, it's currently not something that I think will impact our tribal investments at the present time.

Based on the conversations we've had with tribes and the underwriting we've done with respect to the properties that we're we've currently entered into agreements with and others we've even diligence. No one is making the predominance of cash flow from sports betting. So I think from that aspect, there are many different areas that they are producing adequate cash to support any type of long-term financing structure but it hasn't been a predominance from a sports betting angle.

It could certainly be an upside to some of these properties and add revenue, which would be good to it's a downside on the predictive markets or iGaming side, we're underwriting these deals with such a wide level of coverage that I think that the incremental downside [ threat ] to those currently is not something that would impact the durability of our cash flow coming off these. But certainly cognizant of it, and we keep an eye on it. And if things change, then our underwriting will change.

Great. And then just in terms of interest in the Las Vegas locals market, the S4 was out on one of the deals that was announced, I think, between now and the last time you guys reported. So we have a little bit more insight into that. that market continues to do really well just in terms of people from California moving there and just the overall wealth effect and retirement effect. Is that still a market that you're interested in?

And do you think there could be additional opportunities, maybe even at a, unfortunately, a slightly higher cap rate than what you're used to doing -- or I'm sorry, lower cap rate.

Yes, I think the short answer is, yes, of course, we're interested in Las Vegas Locals market. We're very pleased with the performance at the M Resort, which we own. And we get inbound calls around that asset with interest. So I think we continue to have interest. Obviously, [ Boyd ] and Red Rock have large presence there, but there are many smaller operators that own individual or a handful of assets. And we've looked at those in the past, and we look. So we definitely have an interest. It's a good market. You're about the demographic shift and some of the movement from California, and we'll continue to try to be active there where it fits.

Our next question is from Anthony Paolone with JPMorgan.

Great. With regards to the pipeline beyond what's teed up right now, can you talk about how much of it is perhaps development transactions versus straight-up acquisitions. How much might be more just straight up gaming versus something more adjacent? Just a little bit more color as to what that pipeline looks like and maybe what the impediments have been to get anything else done there.

I'll give it a shot and then anybody can add what other thoughts they may have. So I think that the reality is there's probably, I'd say, half of the pipeline and things we're looking at, it probably would fall in the development part, but it's not because they're greenfield.

I would tell you, I think that large gaming operators today are spending plenty of time looking at their own assets and their own portfolios that they currently hold and figuring out where can they make strategic capital investments to better their performance and increase their cash flow. So many of the things that I would put in that 50% bucket are existing assets that people are reinvesting in, whether it's things like Boyd did a treasure chest or is Penn's done at their Columbus property and resort in a few of their Illinois properties. So we've seen a number of instances of people redeveloping properties, adding the properties, expanding properties, and I think that will continue.

I think with respect to some of the smaller or private gaming operators, some of those are new jurisdiction, new opportunity things where, of course, those would fall in the development pipeline. But I think stepping away from that, there are plenty of discussions that we're having around what I would consider to be more traditional sale leaseback. The reality is though most of those are portfolio type of projects, and therefore, M&A is not a quick discussion, right? So these things take months to talk about work through details and effectuate.

So I think the pipeline, honestly, if I'm being frank, is probably 50-50. And in the 50 in the development, it's not all greenfield. I'd say a large portion of it, 2/3 of that even is probably existing properties looking to reinvest in their own assets.

With respect to non-gaming, I wouldn't consider anything to be in our pipeline on that front. I think there are plenty of discussions we have and plenty of things we look at, but I wouldn't consider anything to be so close to being effectuated soon that we would consider it to be actually actionable in the pipeline.

And then just my follow-up relates to the spending guidance for 2026. And as I look across the pipeline and what you have teed up. I mean, where are the -- I mean, I guess Chicago is the obvious one, but where do you think the big swing factors are that can get you either at the low or high end or above range there? Because it seems like there's enough teed up where money could get spent maybe perhaps above the range, but I'd love to hear from you all what you think.

I mean, the range was developed by looking at our development projects, and it's all of them, but the largest one clearly is Chicago with the most spend in 2026. But there could be movement in timing of minutes funded or what gets [ completed ] and when it is completed, that is outside of GLPI's control. So that's the reason for the spread between $5.75 and [ 65 ]0.

And to be honest with you, it's not a very large spread I agree with you. It could be higher, it could be lower, right? It depends on how the construction is progressing at all of those projects, and there are five development projects currently going on. So it could we really had our best estimate of what we think will happen in 2026.

And then Anthony, just to add to that, two of the projects, including Live Virginia and the Caesars Republic project. Our capital doesn't turn on until other capital is spent. So you're looking at kind of the time in which that capital is deployed prior to us going in. So there is some ambiguity to when we'll eventually get started there.

Our next question is from Jay Kornreich with Cantor Fitzgerald.

I just wanted to ask on the -- just the overall gaming transaction marketplace. As interest rates have come down a bit to start the year, is that opening up new conversations where holdco owners are coming to the table and starting to more seriously think about selling the real estate? Or is it maybe too soon to have a read on that?

I don't think too soon is the right answer, but I don't think that the -- a lot of these conversations don't pivot on the treasury rate, right? So it's not like someone wakes up one morning and decides that 10 basis points change their lives and now they're interested in the sale leaseback. So most of these conversations are long lived. I think that comps that happen in the marketplace dictate more how people feel.

So when people see a deal get cut at 7.5% cap rate, all of a sudden, sellers decide that, oh, maybe I'm more like a 7.5% cap rate. And then if they see things like the Lincoln transaction we did at 8%, hopefully, they're paying more attention to that and decide that the marketplace is more at 8%. But I say in jest.

But I think the reality is that those conversations don't just -- it's not spur at the moment. It's not totally driven by debt. I think that the if the credit markets were to gap higher, not really lower but higher, I think that's when people maybe start to look at alternative financing sources as a sale leasebacks possibly that solution. But just because rates get a little better, I don't know that it really changes a lot of the dynamic in the marketplace.

Our next question is from Greg McGinniss with Scotiabank.

Could you -- just looking at the kind of the rent resets to the percent rent resets on a couple of the leases on the amended [ Pico ] and Boyd Master. Are you giving any sort of guidance on that front?

No, we're not. I mean we are not including the Pinnacle escalation in our guidance. I can tell you that. But the amount of the percentage rent adjustment since it's going to happen in the middle of the year is fairly insignificant for the year. So we have not provided detailed guidance on that.

Okay. And a follow-up with this intensifying relationship with Bally’s if we do kind of some back of map and math, it does seem like that the -- on the casino business, at least, given the debt structure, even with the new term loan in place, which is all massively kind of improved the company. casinos are still generating negative cash flow. I mean do you guys view that differently? Or do you think that it's kind of once Chicago delivers a Vegas opportunity in New York, they just kind of have to get through this next couple of years and then everything is clean again.

Yes. I mean look, I'm not going to bless the math. But what I would say is, I mean, Bally’s is in a -- right now, a development period where there in the process of three large-scale casino developments. And it's been a long time. But when you look at a lot of the companies in the gaming space today, I mean, a lot of them went through these areas where there was a lot of development and not a lot of in-place EBITDA to support it. I think Bally’s continues down this path. It's clearly Chicago, New York and Las Vegas, and it's a lot of incremental EBITDA associated with that stuff and a lot of spend to get there. But I don't think your math is necessarily wrong, but it's temporary.

Our next question is from Dan Guglielmo with Capital One Securities.

On your call a few quarters ago, I asked if investors are too focused on what could go wrong kind of versus what could go right? And it feels like the '26 guide is a testament to what is going right. So are you all starting to feel more supported on the equity side of things? Or is there still kind of a ways to go?

I think there's still probably a ways to go on the equity side. I will say, we've been steadfast in our messaging on this. We have not been confused about what 2026 and 2027 would deliver. I think there are a number of different factors that Carlo highlighted near the beginning of the call that could be weighing on the stock. But if the question is, are we happy with a $46, $47 stock price?

The answer is clearly no. we did our equity forward around the $48 price. We'll give you a better indication of where we think equity might be actionable. But no, I think we have some room to run in the stock, and I agree that the what we're showing you for '26 and into '27 is exactly what we anticipated, and we believe it should be reflected in the price.

Daniel, I'll add to that. Brandon mentioned the $48 level we used the ATM previously. A lot has gone right since then. Numbers have moved in the right direction. You look at the stock, we're trading at kind of a two-turn discount. Our dividend yield is close to 7%. Our balance sheet is levered at a much more conservative rate than most of our peers and our AFFO growth over the next 2 years is at a premium to most of our peers. So you put all that together, and I wouldn't say that the stock where it is today is something that makes us incredibly happy.

Think [indiscernible] has definitely crept up, and that's not where we want to be.

Great. I appreciate all that color. And then kind of a follow-up on the price. We generally think that the property portfolio should trade at a premium to kind of single property, but it doesn't seem like you guys are getting that benefit. Am I wrong in thinking that the portfolio premium just doesn't seem to be there right now?

I wouldn't say that's wrong. I think whether that's the reason or not, I don't know, but -- and I would agree with your premise that obviously, the portfolio provides a level of safety that the single asset doesn't necessarily provide and hence, a premium should be associated with that. But I think that could be one of several things that maybe our valuation right now is not fully incorporating.

I definitely think the cross collateralization in our leases is a very important value point. And I certainly hope it's not at not getting a premium, right, because it does give quite a bit of credibility to our leases.

Our next question is from John DeCree with CBRE.

I think you guys kind of highlighted our note just how valuable your stock is right now. So I appreciate all that Carlo. Maybe one question back on New York, maybe a nuanced one. But are you guys exclusive to Bally’s, Steve? I think you said, shouldn't expect you to be kind of the majority of the financing structure for Bally’s. But if there were opportunities to partner or invest in the other projects, is that something you could or would look at?

Yes. We are not exclusive to Bally’s. We would look -- I think said this on the prior quarterly calls when we -- when they hadn't yet won the licensing. I mean, we were open for business and happy to discuss other projects. I think the one thing that is worth noting though with respect to us being involved or having discussions, like we do value ownership of real estate.

And therefore, we've yet to do a loan that didn't have a linkage to either a future right to acquire real estate or some type of real estate ownership accompanying with it from the start. So -- so I would think that any discussions we have with any of the other parties involved would be under the same type of guys that we have to have a path to owning real estate or a piece of ownership of real estate to start with. So that would be the premise. But yes, no, we're not exclusive, and we're happy to have conversations. Please give me a call.

One more on Canada. So there's some discussion of possibly expanding in Niagara to the Vegas of the North, I think, was the comment made. Have you guys spent much time study in Canada? Is that a market that GLPI would look to invest in or own real estate and if the right opportunity were to come up? And kind of what are your considerations there?

Yes. We've spent a lot of time looking at various projects in Canada. I think if you're familiar with Canada, you recognize that it's different province to province. So the economic drivers in each one are a little different. But if we can find the right project in Canada, we certainly be interested in that. And part of the problem is there is some tax leakage and getting the dollars from Canada back to the U.S. So that weighed on the underwriting, but we've looked at a lot of different projects there and just haven't found the one that was accretive enough for us to take the dive.

Our next question is from Rich Hightower with Barclays.

Most of my questions have been answered, but I'll go back to, I guess, I guess, a little bit of the background on how the Lincoln purchase price was revised based on sort of shifting coverages. And for me, it brings up a larger question if 2x coverage with kind of the gold standard previously. I think given all of the different factors affecting land-based gaming as we see them before us in the context of 30-plus year leases. I mean, is the higher going in coverage, maybe the superior way to underwrite these projects going forward? How do you feel about that?

Well, I'll start and then others can weigh in. I mean, I think a 2x coverage is still a nice standard to look at to start. I think each market and property is different. So you got to look at what the factors weighing on the different markets in the property in order to -- and the credit level of the parent company, whether we have master leases or other properties that we can look to. There are a lot of different factors that go into the coverage. But I think as a starting point, looking at 2x is still probably the right place to start. But I'll -- Steve or Carlo might have a view on that as well.

I mean, to state the obvious, we would love every lease to be struck at 3x coverage, but there's obviously a market dynamic, and there's a negotiation that will take place. But I agree with everything Brandon said. I just think the reality is, of course, if all of our leases were covered the way the Cordish leases were recovered and we were entering into each new lease at 3x. I think we'd be totally comfortable with that, and we'd be very happy with that.

I think each of these transactions, we're entering into partnerships for the most point. And there's a necessity for the tenant and the landlord to succeed in these. And so the tenant also has an incentive to balance getting the most dollars versus protection and coverage and flexibility in the lease moving forward. So these are all active discussions and negotiations. And would a seller take a coverage level lower than we would pay? Absolutely.

Would a seller want a coverage level higher? And would that may knock us out of the box? It could be. But I think it's a dynamic conversation you have with sellers, between sellers and buyers right now in the market. And Rich, just to level set on that specific transaction. As we pointed out, the 4-wall coverage was north of 1.9x, and that was put into a lease that was robustly covered and obviously, could have taken on more rent, and that master lease now is north of 2.2x.

So I think that one there is not necessarily entirely indicative of kind of a single asset stand-alone given where it was going. I think you've heard from us in the past, we very much value 4-wall coverage. And so when we look at these leases, we're not depending on corporate credit to support the leases. So we're looking at 4-wall coverage, Corporate credit is nice to have. parent guarantees are nice to have. They're valuable but we're underwriting these to stand on their own. And so I think what you saw with Lincoln and our discussions with Bally’s was taking a little bit less rent upfront creates a little bit stronger coverage in that lease, and we were happy with that.

Our next question is from Todd Thomas with KeyBanc Capital Markets.

Just sticking with Lincoln, I guess, Brandon, was the competitive pressure that you cited, was that specifically at Lincoln? Or was it around some of the other assets in that Bally’s master lease? And then do you see those competitive pressures abating in the near term? Or do you think that some of those headwinds persist for a period of time?

So my comment was unique to Lincoln. The [ Mashpee ] tribe at First Light has expanded their facility but I think it's stabilized. So I don't think it's getting better. I don't think it's getting worse. I think we're comfortable where that is. A lot of their funding is coming from Genting. And Genting obviously has a very large project in New York now that they need to fund. And so we're less concerned about future expansion of that project. That being said, planning for the future and underwriting a little bit more rent coverage there seemed to be the prudent path and that's what we did.

Okay. Helpful. And then desire, the use of the revolver to fund the majority of the $700 million acquisition. So that capacity or I guess, amendment was completed back in December of '24. I think specifically for Lincoln and post closing, can you just remind us now how that works, the bridge component of that credit facility, whether you're considering any interest rate hedges and also when that can be sort of permanently financed. I guess what are the mechanisms around that now in that funding with the revolver?

Yes. So we definitely did plan for this in '24. It wasn't just for the Lincoln transaction, we could actually use that bridge revolver for any transaction that we had that had a guarantee. We knew Lincoln was on the horizon at the time. So that was the one. We've also used it for the other transaction that we did earlier in the year last year for Bally’s. So we don't -- like we have $2 billion, so that takes $1 billion off. That leaves us with over $1 billion of a line of credit still. So we will consider what to do in the markets when the time is right.

Okay. But that's all floating today on the revolver. Are there any -- any plans to hedge some of that? And then how long does that need to be outstanding on the revolver specifically?

I think, Todd, we are actively looking at managing our balance sheet, and we understand the Lincoln transaction just came in. So I think you can assume we're cognizant of the fact that, that debt is in there and it's variable rate debt, and we're taking a look at that. And I think unfortunately, that's all we can say at the present time.

Our next question is from David Katz with Jefferies.

I know that this has been discussed from a few different angles. But with respect to Bally, who is, as Carlos pointed out, in a very high development mode with a little bit -- with EBITDA coming later on. Particularly with Las Vegas and then New York behind it, do you think about sort of putting any limitations or boundaries around exposure to a singular tenant during that kind of a ramp up? Or is that something you're comfortable just compensating for with cap rates and terms and coverage? Or is there an amount with any singular tenant that you would sort of put some boundaries around?

I mean, as you know, Penn, we have a very large exposure to Penn. Bally’s exposure has been growing. So it's not that we have a limit on the exposure to a tenant. We really look at the opportunity that we're funding and the 4-wall coverage at that property and making sure that it's a good investment option for GLPI. I wouldn't see that we're going to put a limit on some tenants how much of our balance sheet they are.

The reality is, though, we did limit on them from the start in Las Vegas, right? So we said $175 million total exposure.

That's a limit on the project.

Correct. Correct. That's -- yes. So that's what I'm saying. Your question is about New York and Las Vegas or -- we're going to look at each project and make a determination based on our underwriting in the project, the situation, what other capital is coming in to the project. So I would say there's no hard and fast rule as Desiree was pointing out. But I think that you can rest assured we're also not diving head first into every opportunity just because of the name on the building.

Understood. And so you haven't said this, but it's fair of us to infer that come New York, there may be some limitations around that, too. Depending -- again, depending on what the circumstances are and how it evolves?

I think New York is somewhat unique in this sense. We would have to look at the total project, which we haven't seen. We don't fully understand and think about how much exposure we would want. And the tenant may lean it -- may influence how much exposure we'd be willing to take in a project like New York.

But I think overall, at GLPI, we have to sit and look about how much exposure we want in any project. And that's effectively what we did in Chicago. We took a look at the Chicago underwriting in the project and decided that we wanted to cap our exposure at roughly $1.1 billion. And that's what we did. And I think we take a similar approach to New York. And Bally’s, as our tenant may or may not weigh into how much exposure we'd be willing to take based on where they are when that project funding is needed if it's needed. I know that's kind of a nonanswer, but the reality is, I think this depends on the project and the tenant and a lot of the factors going into it.

David, I think in New York, as you're probably aware, there's going to be no shortage of funding for them. And if there's an opportunity for us to play a role, as Steve said earlier, great, we welcome it. But I do believe that project, in particular, has quite a few suitors.

We have time for one further question. Our last question is from Robin Farley with UBS.

Great. Just going back to the -- you mentioned that there's a lot of interest in financing it. But you've also -- previously, I think on the last earnings call, you talked about how you would want to see something, I forget your exact word, but it was significantly more than 2x rent coverage kind of suggesting that maybe it wasn't as attractive to GLPI to fund it.

So I guess if you could -- I don't know if you could shed any light on that. And given what you're describing as interest in funding that project would you say the likelihood is that GLPI is not participating in that given that your -- and maybe your feelings have changed since last quarter, but just your thought about the risk factor there.

I'll have to go back and look at the comment on significantly more than 2x covered. I suspect that it had to do with our indication that we would like to own the land. And if we were to only own the land in that project, we'd be significantly more than 2x covered. Would we do something down to 2x covered?

I only say no because I think to get to 2x covered, you're going to have to invest in a majority of the build in the project. And I think what you've heard from us is we're unlikely to be a majority of all of the hard costs in the project. Therefore, our interest in a piece of that project is probably such that the coverage will end up being much higher than [ 2:1 ] on our piece. So we may have not been clear on that.

But I think the point is our appetite for a piece of New York is probably small enough to where the coverage will be quite high if we do it. That being said, we do have a significant appetite to participate in the projects in New York. We think there'll be good projects. And I think there's a lot of detail that deem to be flushed out for us to really make any kind of true investment decision.

And as Carlo and others have alluded to, I think the ability to raise capital unique to the New York project will result in a very competitive field of suitors for capital, and we won't do anything lutive. So what I think you won't see us do is compete down to a cap rate that's not accretive to GLPI, that won't be of interest to us.

Thank you. At this time, I would like to turn the floor back over to Brandon Moore for any closing remarks.

Thank you. Hopefully, you've heard today, we are very bullish for '26 and '27. I think we worked hard to create a pipeline that many of you have asked for over the course of our evolution here at the company. And we're actively looking to add to and extend that pipeline as we move forward. So we're excited about the days ahead, and we appreciate all of you dialing in.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Greetings, and welcome to the Gaming and Leisure Properties, Inc. Third Quarter 2025 Earnings Conference Call and Webcast.

[Operator Instructions]

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host today, Joe Jaffoni, Investor Relations. Please proceed.

Thank you, Latonya, and good morning, everyone, and thank you for joining Gaming and Leisure Properties Third Quarter 2025 Earnings Call and Webcast. The press release distributed yesterday afternoon is available on the Investor Relations section on our website at www.glpropinc.com. In addition to the third quarter press release, GLPI also posted a supplemental earnings presentation which highlights the events of the quarter of recent developments and future considerations that can also be accessed at www.glpropinc.com.

On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today. Forward-looking statements may include those related to revenue, operating income and financial guidance as well as non-GAAP financial measures such as FFO and AFFO. As a reminder, forward-looking statements represent management's current estimates, and the company assumes no obligation to update any forward-looking statements in the future.

We encourage listeners to review the more detailed discussions related to the risk factors and forward-looking statements contained in the company's filings with the SEC, including its 10-Q and in the earnings release as well as the definitions and reconciliations of non-GAAP financial measures contained in the company's earnings release. On this morning's call, we are joined by Peter Carlino, Chairman and Chief Executive Officer at Gaming and Leisure Properties. Also joining today's call are Brandon Moore, President and Chief Operating Officer; Desiree Burke, Chief Financial Officer and Treasurer; Steve Ladany, Senior Vice President and Chief Development Officer; and Carlo Santarelli, Senior Vice President, Corporate Strategy and Investor Relations.

With that, it's my pleasure to turn the call over to Peter Carlino. Peter, please go ahead.

Well, thank you, Joe, and good morning, everyone. We are particularly pleased to announce a really terrific quarter in which I think a lot of really good things have come together. As always, these have been thoroughly detailed in our earnings release. Nonetheless, there are 3 items that I think are worthy of spending just a little bit of time this morning. that represent important elements of the GLPI story today. The first topic I'd like to highlight is our pipeline and our recent transactions. Very simply, in the last 60 days, we have announced 3 transactions. And while the market has given us a little credit for these deals, each of these has been -- is accretive and allowed us to deploy $875 million of capital at a blended cap rate of 9.3%.

When completed, these transactions will add over 5% to our current annualized cash rent while also expanding partnerships with 2 existing tenants and furthering our initiatives in the area of tribal gaming. The second item is funding, which is something we get lots of questions about. We currently have over $3 billion of announced transaction activity in our pipeline. As you saw in our third quarter results announcement, we executed on $363 million of forward equity in this period at an average price of $48. Despite the size of our current funding commitments, given our current leverage profile, it is worth pointing out that we can fund the entirety of our future commitments solely with debt financing and still remain at approximately 5.1 times leverage, the low end of our 5% to 5.5% range. So given the current valuation of our equity, the this path appears to be most appealing as it unlikely we'll be tapping the equity market in this current pathetic range.

Number three, the third item is Bally's. We get lots of questions about that. And I'd like to talk a little bit about our relationship with them. We have 2 very strong well-covered leases with Bally's, the development in Chicago, a ground lease on a soon-to-be-developed prime parcel of Las Vegas real estate and which you would know is the new home of the Las Vegas. Since we last spoke, a lot has transpired with Bally's, all of which has been very positive from our perspective, Bally's successfully completed its international iGaming transaction with Intralot, positioning the company very well from a liquidity perspective. Additionally, as we last spoke, Valleys have become 1 of 3 remaining bidders for 3 potential licenses, very lucrative licenses in New York which whether we participate or not is a very good thing for them. And lastly, of core importance to us, significant progress has been made in Chicago and the development of that project. And we extended our first tranche of capital for the development earlier this month. So we step back and look at the Bally's relationship, we like the assets that we have coverage on our existing leases is very good. And the Chicago development has a very, very strong ROI framework.

We see tremendous potential and opportunity in Land in Las Vegas, and we see New York as a as I said earlier, potentially material value-enhancing opportunity for us or for valleys with or without us. So these have been very positive developments. I would like to point out that the progress in Chicago is significant, and the pace of construction has picked up dramatically. To that end, we publish photographs that give any interest among you an idea of just how things are looking. We've gone vertical, and we're going to keep that -- those that those photographs and the storyline updated, so you know at any moment where we are in Chicago. In Las Vegas, you Bally's has published a site plan that encompasses what may be possible at the site. We are very pleased with what they have discovered or what they have laid out. And we may or may not participate as opportunities. It's unlikely that we will finance the entire project, but there are elements of that profit-making elements that I think we could participate in. So I'd stay tuned in Las Vegas as well. It's in a very good place at the moment. So with that, I'm going to turn it over to Desiree to give you things that really matter.

Thanks, Peter. Good morning. For the third quarter of 2025, our total income from real estate exceeded the third quarter of 2024 by over $12 million. The growth was primarily driven by increases in our cash rent of $20 million. And those are related to our acquisition of Bally's, Kansas City and Shreveport, which increased cash rent by $8 million. The Chicago land lease increased cash income by $3.9 million Bally's Tropicana funding increased it by $600,000, and the Bell development increased cash rent by $1.6 million. The Ion loan increased cash income by $900,000, the Joliet funding increased our cash income by $1.7 million and the recognition of our escalators and percentage rent adjustments increased cash income by about $4.2 million.

The combination of our noncash revenue gross-ups, investment in lease adjustments and straight-line rent adjustments partially offset those increases driving a collective year-over-year decrease of $8.4 million. Our operating expenses decreased $53.5 million, mainly resulting from noncash adjustments in the provision for credit losses due to a less pessimistic forward-looking economic forecast as compared to the prior quarter, as well as the fact that 2024 the provision included a charge for the establishment of the Tropicana reserve. For the company, just a reminder that we capitalized interest and deferral rent during the development period for financial reporting purposes. However, we add that run back and deduct the capital interest in deriving our AFFO. Included in today's release is an increase in GLPI's full year 2025 AFFO guidance ranging from $3.86 to $3.88 per diluted share in OP units. Please note that this guidance does not include the impact of future transactions.

However, it does include our anticipated funding of $150 million for the M Resort tower expected to occur next month and approximately $280 million of funding for development projects expected to occur during the fourth quarter, of which $125 million was funded for Chicago in October. From a balance sheet perspective, and this is probably the most important part of my comments, during the quarter, we sold 7.6 million shares under a forward sale agreement to raise $363.3 million or $477 per share. Additionally, we issued $1.3 billion in new bonds and redeemed our sole 2026 maturity of $975 million, thereby raising in excess of $680 million of capital for our development and acquisition pipeline. Our leverage ratio is at 4.4x, well below our target and historical levels.

Given our current balance sheet position, the several year runway to fund our development projects and our annual free cash flow over that time frame, we have optionality to fund our future accretive commitments. As a reminder, our significant development projects pay us cash rent upon funding. In October, we extended the company's option and call rate to acquire the real property assets of Bally's Twin River Lincoln by 2 years from 2028 to 2028 from 2026. Our rent coverage ratios on our master leases are ranging from 1.69 to 2.78 as of the end of the prior quarter end. With that, I will turn it back to Peter.

Well, thanks, Desiree. And with that, operator, can we open the call to questions.

[Operator Instructions]

The first question comes from Haendel St. Juste with Mizuho.

Desiree, I wanted to follow up on your comments on the balance sheet. Looks like you're well covered in terms of sources through your uses for now. But I guess would we -- how comfortable are you -- looks like leverage is going to tick up over the near term as you deploy capital. So I guess, how comfortable are you with your current liquidity profile? And how much would you be comfortable with letting leverage tick up here in the near term?

So look, if I funded everything I have out there in the pipeline with debt, which obviously that's not exactly what we intend to do. But however, if our equity remains where it is, we may just do that. We only get to 5.1x levered, right, once everything is annualized in. So I'd be very comfortable at that range. I mean, you can see in our supplemental, historically, we've been over that, right, up to 5.5x is our maximum range of leverage. So I am very comfortable with our current liquidity position and the funding of the transactions that we've announced to date.

Got it. Appreciate that. And then I guess, just more broadly, curious on the regional gaming trends during the quarter, foot traffic, revenue in light of the slowing macro, and I guess some broader commentary on how do you expect regional gaming to perform in this environment?

Well, any number of us could take that question. I mean, look, generally, regional gaming has held up very well, and our coverages remain pretty protected and see no threat to the industry whatsoever. I mean, look, given time, who knows what will evolve. But right now, the regional business is very, very strong. So Carlo, do you want to add something to that?

Sure. It's Carlo. I think when you look across our tenants who've reported to date and some who haven't, but when you look across those who have reported to date, you had a good regional report from obviously MGM, a good regional report from Caesars. I think when you look at the state level data, it all appears very solid and very steady. I know there were some concerns around promotional activity in those markets, but certainly not showing up in EBITDAR and has not showed up in coverage for those who've reported thus far.

And foot traffic?

Yes. I think foot traffic remains fairly steady as well in regionals. I think there's a broader malaise around the space that's created by numerous other things. But I think in regional markets, there hasn't been a dramatic change in demand as far as we can see.

Next question comes from Rich Hightower with Barclays.

So my first question just has to do with some of the puts and takes in expected fourth quarter development funding. I think there were some questions last night as to kind of what changed versus what the expectation was 90 days ago or even more recently. So just help us understand what changed, including obviously the impact of Chicago within that mix?

Right. So really, the biggest take, I would say, is that we've reduced our Chicago development funding by about $25 million and push that into 2026. So it's really just a timing adjustment. So my $338 million is now $280 million Obviously, we funded about $35 million for the quarter. And so that has declined $25 million, that's it. But it's really just timing of coming out of '25 and going into '26.

Look, I think it's safe to add that some delay in the actual first payment or advance had to do with just papering the transaction. I'm looking at Brandon sitting across the table, who spent a lot of time working on the details to make sure it was all right and perfect given the scale of what's happening and so forth. But now that they're underway, the advances have begun, I think you can expect a regular flow of capital investment going forward.

Okay. Great. And then obviously, we all noticed the extension of the purchase option at Lincoln. So just tell us your latest thoughts, if you don't mind on that asset and maybe some of the pressures that asset might be facing over the next couple of years and how it factors into the timing and even the purchase price itself, if you don't mind.

Well, I'll take part of it and we'll spread around the second half. Look, I think the -- you know perfectly well, as I think well publicized that getting approval from their lenders to get released on that property has been challenging. And look, though, we had a call right, we're not about to put our tenants -- our partner, if you will, under pressure and demand something that is simply is not in their best interest. We're perfectly happy to wait and it's fine to assist in that manner. So it was nothing more than just simply taking pressure off that story and moving it down the road in some comfortable time frame.

Yes, Rich, I mean, I think on the second half, the Lincoln asset has had some stress because of road closures, bridge closures and the competing first light project, which is being expanded somewhat we understand. I think that this is mutually beneficial to the 2 companies. For us, we'll push Lincoln out. We'll get a better look at that market and what's going on. We've got plenty of growth in place for '26 and '27, and pushing this out doesn't hurt us at all. We have our hands full for the next year, 18 months. And so as Peter said, for the reasons it was beneficial for Bally's, it certainly isn't detrimental to GLPI. And so I think this was a win-win accommodation to push it out to '28.

Yes, it's kind of a nice in the hole that we've got it, and we'll get it when the time is right. We feel good about that.

The next question comes from Jay Kornreich with Cantor Fitzgerald.

I guess just first off, there's been a number of announced deals lately from you in the past 2 months, as you mentioned. And I'm curious if there's been anything that's really been driving that for you? Or is it kind of just more coincidence that many transactions you've been working on just all got done around the same 2-month time?

Okay. Yes, I'm happy to address that. I think that's easy. I think it's the latter. A lot of hard work came together at about the same time. And so all those deals will very different were things we have been working on for a very long time and just came together in the quarter. So as you know, from our business, it can be a little lumpy from time to time, and this was a quarter where we just had a lot of things come in at the same time.

Okay. And then if I could just follow up on the funding for the Chicago Bally development. Are you able to comment on how much funding you expect in 2026? And what portion may spill into 2027?

Yes. No, I mean, I'm not prepared to comment on that. I would tell you that it will spend into 2027, the funding, and we have said that. And when we come out with fourth quarter -- when we come out with 2026 guidance in February of next year, we will give you as much information on the timing of the funding for that project as possible.

Yes. Every day that goes by, it gives us a better focus on kind of where the project is. We stay very close to that contracting process, have people -- our people in place, keeping an eye on how things are going. It's going well, but it's a large project. And as I say, further we get down the road, the better we'll understand kind of what the final day will be. I know they're focused on getting the casino open as early as possible.

Next question comes from Barry Jonas with Truist.

You've now announced 2 tribal deals. How would you characterize the pipeline for travel deals from here? Curious how the education process has been resonating?

Do you want to take that, Steve?

Sure. Look, I think from a tribal perspective, the education process is ongoing. I will say we're getting many more inbounds, and we're still placing outbounds. But I think that the cadence of those discussions is somewhat starting to turn. Part of that is just the ongoing reality that other folks and advisers in that marketplace are starting to see transactions occur and access to capital being afforded to their clients, so they're starting to call us more frequently. I think we'll continue to pursue transactions in that space.

I think one thing we are focused on availing the marketplace to the reality that our structure and our capital can be utilized in more than just greenfield since in the tribal landscape. So I think that's something we are focused on trying to find uses that are either mature assets and people are looking to diversify into other areas of business, other lines of business or looking to refinance maybe debt that they have in place as opposed to just simply funding a greenfield project.

So not saying we won't continue to look at greenfield projects, but we will -- we are continuing to try to find other uses for the capital that can be demonstrated to that marketplace to continue to further the education process.

Great. And then just as a follow-up, we just talked a little bit about the regional markets, but curious to get your wider views the strip today, given the recent softness we've been seeing, you commented on Bally's project there, but would you be open to meaningfully increasing your Vegas exposure if the right opportunity came along?

Well, yes, I mean, simple answer is yes. You said it right, the right opportunity, whatever that might be. We're not looking for anything there. We have a wonderful project in hand that offers us an opportunity to participate at some level and should we choose. But look, we're always in the market for the next thing.

And Barry, this is Carlo. Look, I mean, you've covered the space for a long time. You've seen the Las Vegas Strip go through many cycles, and this feels like just another one of those cycles. So when you're thinking long term like we are, I don't think a couple choppy quarters in a row coming off of a very strong period like we saw coming out of COVID really changes the thinking much around investment into that market.

Next question comes from John Tolkowsky with Wells Fargo.

My first question is just on the New York City -- how is your appetite to participate in those casinos change given the developments that we've seen in the quarter? There's been some news file recently. And I don't know if there's been any more progressive conversations being had or are we in the same place that we were a quarter ago?

Well, I think we're in a little bit different place than we were a quarter ago given that there are now 3 less standing and 3 licenses to provide, no telling whether New York will actually issue the 3 licenses or whether they'll be issued to the folks that are still standing or some other change in process might occur that we saw back when resorts eventually came out in Queens. But I think that the appetite for New York is strong in the sense that these are really strong projects that promise a lot of EBITDA coming out of that market.

And if we can participate in a prudent way in those projects, we'll certainly seek to do that as most of you probably know, we do have a ROFR associated with the Bally's project. So we'll see how that plays out. I think it's a little early in the game for us to tell you if and at what level we might commit capital to that market. but it obviously remains a very attractive expansion market to not only GLPI, I'm sure everybody that's looking at investing in gaming.

And we probably should underline that there's no shortage of money chasing that opportunity. And I can't speak for Bally's, but I can well surmise that they're getting calls from all over the place. People wanting to a piece of that opportunity. So it's a big deal. Good for them. We could take a part if the right opportunity appears, but we're certainly not going to be the sole source of what they're going to require there.

Very helpful. And then my second one is back on the Tribal deal. Could you just talk more about the return hurdles that you're looking for, for a tribal deal where there's less protection maybe involved versus the construction that you're working on or the fee-simple acquisitions that you've been targeting?

Yes. I think from an underwriting standpoint, each of them are going to be a little bit unique because each one will present a different credit profile, just as in commercial gaming, we face that -- and I think at the end of the day, the difference between the risk on the trial and the commercial may not be as wide as some folks believe, I think when you dig into it, you can see that there are some challenges to tribal gaming, but they may not be as steep as you think, and there are some very well-capitalized tribes.

So clearly, we're looking at a wider spread to the cost of capital than what we do with commercial gaming whether it's 50 basis points or 100 basis points or 150 basis points, it's going to depend on the credit quality of the tribe and the opportunity. And I think we're also looking for increased coverage on those assets. Because of the nature of that investment, we want to make sure that the coverage is even stronger than what we have in our commercial deals. And as I think most of you know, we've always focused on coverage. We've done that since day 1 here. We've known that creating a healthy tenant landlord relationship for the term of the lease is very important. And so while we look at 2:1 coverage generally on commercial assets, if not better, you can assume with tribal we're looking to be much higher. So that's kind of where we are in the underwriting process on tribal as we sit here today. And I think each deal will be a little bit different.

With Dry Creek, we went into a project that had some cash flow with an existing facility. It has some history to it. It has a very strong partner in Caesars, branding at their top brand, Caesars Republic and a strong market in California. And you see what kind of rates we got for that transaction and what kind of coverage we wanted for that transaction. And I think it's demonstrative of how we'll view tribal gaming as we continue to roll this out.

Next question comes from Greg McGinniss with Scotiabank.

So I guess just quickly speaking on coverage. Is the expected rent coverage at Live Virginia in that 2:1 range? And how did you go about underwriting that project to determine the expectations?

So as we always do, we go through a rigorous process to due diligence on what we think the market can do and what the demographics of the market are, the drive times around the property. And we do expect in the line of 2:1 rent coverage on that property as it opens.

Yes. Let me add. We're talking about the Cordish organization. These guys are highly capable, highly successful the kind of folks you'd want to sign up for every deal imaginable given the opportunity. So it doesn't get any -- there's no better opportunity to partner with any entity in the planet than the Cordish organization. So we're delighted to be part of that project. No worries whatsoever.

Yes. I think in that market, we also did a lot of work on the legislative side, on the regulatory side to understand what the potential for expansion is going to be in that market. And we're pretty comfortable that, that Richmond market is pretty well protected at the moment. As Peter said, the Cordish have demonstrated ability to deliver projects on time and on budget. And so that's a project that's easy for us to get behind in that market with that kind of partner.

And I would just add at 2:1. I think it's more of a downside base case scenario. If you ask the Cordish folks, I think they tell you that they think coverage is going to be much higher at that facility. But we don't underwrite on the hope certificate. We underwrite on the conservative side. And so at 2:1, we think we're going to be very well protected in that market.

Yes, I guess, given where the other leases are, that makes sense. That's right. And then just a follow-up on, I guess, a point of clarification on the Lincoln deal. If Bally's were to receive approval from the term loan lenders, the few remaining that they need it from, do you expect they elect to do that deal earlier? Or do they prefer not to have to pay off the $500 million of debt that would require?

I think that asks us to grow into the minds of valleys, which we obviously can't do, but I will acknowledge that you're correct in the way that the option works if they solve the lender consent issue, Lincoln can come in well before 2028. There's been no change in the terms of how the option works only the date. So if Valleys can solve that, and they think it's prudent to bring that capital in they'll likely come to us and ask for that. I can tell you that we've done a lot of work in the market. We have our own views on how the market is going to perform and what's happening in that market. And if we're called upon to exercise Lincoln earlier than 2028, we'll be prepared to make that decision and have that discussion.

The next question comes from Ronald Kamden with Morgan Stanley.

Just 2 quick ones. Going back to the Chicago project and I think you guys are providing a lot more transparency. I believe some of the upcoming activities were you talked about going vertical construction of the hotel, vertical construction on the casino and then sort of the cranes being delivered, Cranes #2 and 3. Just any sort of update on that piece of any of those progress?

Yes. There are 3 cranes now working on the projects, Steel's getting erected. The hotel, I think, is there's 4 or 5 levels of concrete that have been poured. So it's approaching the first floor guestroom height. So there's definitely a lot of ongoing construction taking place on the property. And if you pull up the camera to take a peak or if you happen to be in Chicago, you can swing by. There are plenty of people, and there's plenty of action taking place every day there.

Great. Helpful. And then my second one was just a cost of financing, if you can remind us where you think you can issue 10-year and how is that impacting or is that even impacting your sort of underwriting return hurdles for new deals in the pipeline? Just how is that shifting?

Sure. So obviously, as you know, the 10-year treasury is moving quite a bit lately. So the last I looked, it was around 4.1%, which means we would be issuing somewhere around 5.6% to 5.6% range. I think it bumped up over the last few minutes, hours to keep changing on me, but that's about where we would fund. And it is pretty consistent. We've been somewhere around the treasury of right around 4%, and our spreads to that haven't changed significantly. So our funding and our spreads that we're expecting to our cost of capital are really only changing on the equity side more so not necessarily the debt side.

We're very hopeful that the market will realize that 160 or 165 basis point spread between the equity dividend yield and the 10-year issuance costs will be recognized by investors and correct.

Well said, Steve.

The next question comes from Chad Beynon with Macquarie.

Congrats on the recent activity. On the gaming calls this quarter and last quarter, there's been a lot of focus on the overall benefit from the one big beautiful bill on the construction side and the CapEx side, obviously, accelerated depreciation. So I wanted to ask if -- how important is this, I guess, in your conversations with current or potential counterparties, just kind of the urgency and the benefit of spending money, I guess, in the next year or 2? And could that lead to more funding or lease deals in the near term?

So it doesn't really come up in our conversations. Obviously, there is a tax benefit to our tenants to do that under the one big beautiful bill. But a tax benefit. It's not a free cash flow issue for them. So it's not part of our discussions as to them wanting to do it.

I don't think it's what's driving capital investment decisions at the gaming operators primarily. It may be something that if it's on the margin or on the edge, they might tip it over. But I think they're making those decisions based on the return of capital, not on tax depreciation. But as Desiree said, I don't think we've seen any of that. Steve?

Most of our transactions, as you're aware, we're funding the hard cost and we're owning hard costs. So the tenants are not in position where they own that physical property to be able to take the accelerated depreciation. So I think what you're hearing is the tenants in our discussions have been more focused on cost of capital and the rate at which they can access capital from us versus a lender and therefore, making the decision based on the cost of capital afforded them not necessarily on a tax deduction they can get.

Great. Appreciate that. And then on the strategic deal that was done, maybe just a broader one in terms of assets country that maybe generate less than $50 million or less than $40 million of EBITDA in finding homes for these operators. Do you think there's going to be additional M&A or kind of changing of properties that could help some of these smaller regional gaming operators that you either work with or could work with in the near term?

So this is Steve. Two things. One, and you might not have been going there. But if you were, I did see one note overnight talking about the $40 million a $40 million EBITDA ROFR with strategic. That was an aggregate number, so they've exceeded that through this deal. So if that was part of where you were going, I just want to clarify it for you. Separately, with respect to smaller assets and smaller operators, I do think we will see an acceleration of opportunities for them.

The opportunity will be in sellers' willingness to get rid of what used to be called 4, 5 years ago by everybody noncore divestitures. I think that will become in vogue again. So the larger regional folks will look to sell off some of the smaller ones. I think one of the things that will be complicated for the smaller possible buyer will be access to capital. So I do think, given the right partner and the right relationship, if we have a number of smaller operators that we're comfortable working with, I do think there will be opportunities for those businesses to grow. But as you see, looking across the space right now, capital is constrained from some parties and I don't think they'll be able to take advantage of the noncore divestitures in those cases.

The next question comes from Daniel Guglielmo with Capital One.

At REIT World last fall, there was a lot of discussion around the new administration and potential for gaming M&A. It didn't materialize in the first half, but it has picked up some in the second half. From your seat, what conditions do you think have led to that pick up? And do you expect them to carry through to next year?

I think most of the transactions you're seeing have been worked on for a number of months. They are not things that just happened in the second half of this year. So I don't think there's a perfect read-through for you on that front. The other thing I would tell you is most of the transactions that have been announced either by us or others in the space are more bespoke and they're one-off transactions. I think what you will see maybe now going forward, is more broadly marketed competitive bidding type process transactions, which historically aren't the ones that we typically are passionately winning. But I do think you'll start to see maybe some more broadly marketed type transactions that will feed off of the REIT world assumptions, I guess.

Great. I appreciate that. And then the second one, you mentioned that lease coverages have held up well. But for leases where coverage ratios are coming down, when you dig into those properties and talk with the operator, can you just give us a sense of if it's revenue is lagging, labor coming in hot, both anything you have there would be helpful.

So our rent coverage is really -- when we say tick down, I think they were like 1 to 2 basis points. It wasn't like -- we haven't seen any large changes. What we did see earlier this year was a decrease on the Pinnacle lease that we have with Penn. And that was more due to competition than really what was happening in any regional market.

Yes. Look, our coverages are strong. It's a long way to the bottom. So there's nothing that we're -- that gives us any pause at all quite candidly.

Next question comes from John DeCree with CBRE.

I think we talked quite a bit about deal terms, coverage, et cetera, underwriting, but maybe some of the less exciting ones like initial lease term and master lease or single assets. So the Cordish transaction in Virginia, can you talk a little bit about the negotiation or thoughts on keeping that as a single asset lease versus combining it with the other leases. And then the initial term, 39 years is what you've done with Cordish of the half, but it's quite a bit higher than some of the other leases we've seen in gaming. So curious your thoughts there if that's a significant negotiating point or not?

Thanks, John. I mean I think to your latter point, the longer lease term is mutually beneficial. I think it shows that Cordish is investing in these deals for the long term, and it's a generational investment rather than quick in and out. And so they're looking for long-term certainty in the lease, and we are as well. So I think that's a mutually beneficial lease term to have is the longer leases. Your initial question on negotiation with the Cordish -- I'm sorry, John, what was the question there?

The decision or negotiate point to keep it a single asset versus combining it with Maryland and Pennsylvania.

Yes. That's more just structural. The Cordish have a different partnership in Virginia with the Bruce Smith Enterprise. And so there's not an overlap -- a perfect overlap of the partners in those deals, and therefore, Cordish can't combine those deals and have one risk to the other because there's not the same ownership structure. So that's just not a possibility for those trends.

And applied even in Maryland versus Pennsylvania and previously as well.

That's correct -- partnership group. That's correct. So Pennsylvania master lease, the Maryland lease and the Virginia lease will all be separate single-tenant leases. Pennsylvania, obviously, has Westmoreland in Philadelphia and those cross-collateralize each other. But the ownership groups in Maryland and Virginia are different.

The next question comes from Chris Darling with Green Street.

I'd love to get your thoughts on regional casino values and how they might have evolved over the course of the last year. As I think back through the several commercial sale-leaseback deals you've done, they've all kind of been in roughly that 8.25% cap rate range. And I wonder if that really reflects just competitive market dynamics or it's more a reflection of GLPI being one of maybe the only bidder in some of these cases?

I think it's going to be deal specific. But I think in many cases, I think that pricing pressure that you would get, whether you were the only bidder or a competitive bid is only probably slightly different from our perspective. We're going to be a disciplined buyer either way. The market is not unintelligent that everyone's banked by someone who knows where all the comps have been and where everything else is traded. So whether someone brings us a deal and says, "Hey, you're our favorite guy, we'd love you to buy this. Before we go shop it, they're still not going to then give us a 200 basis point spread because we're nice". So the market is going to dictate where pricing goes. We all recognize where that should be, and we're always going to look to get a spread to our cost of capital. So that's just kind of how things will evolve.

Look, I think you've heard us say before, we don't like auctions. I like to think the winner loses often. And so it's never our goal to be the high bidder on anything. So there's a range of things that we would consider and that we would offer that make us desirable, but not -- but the absolute lowest or highest price, if you will, is never our goal.

All right. Fair enough. And then maybe just a quick point of clarification on something mentioned earlier. You discussed a view around your share price, your equity cost of capital today. Does that impact your willingness to pursue incremental new deals from this point going forward? Or does it really just influence how you would finance any future deals?

I think it really just influences how we would finance future deals or what the spread we would be looking for to our cost of capital.

The next question comes from David Katz with Jefferies.

Everybody covered a lot already, but I wanted to go back to New York, if I may, the concession there is or the license is 15 years, I believe, instead of 30, right? And I'd love just your perspective on what that does to the parameters of your participation. And I think, Peter, you mentioned earlier there's any number of sources of capital that might be available to them right? They have a partner in that bid, who I assume is a funding partner, too. How does that sort of change your opportunity set also, please?

I'll comment on the first part, David, on the licensing. I haven't dug into that in tremendous detail, but I will point out that licenses in many jurisdictions renew every 3 years, every 5 years, every 10 years. So the fact that you have a 15-year initial license period, I guess I'm not reading too much into that. In other words, if you put $4 billion, $8 billion into the ground, the thought that you'd lose a license in 15 years, and they relocate that or do something with that license seems outlandish even in a smaller market where you might invest $400 million. And it's inconsistent with how any other state regulator has approached a renewal of a gaming license.

So we're going to take a closer look at that given that that's been highlighted as a rationale for why MGM might not want to do Yonkers or didn't want to do Yonkers. But on its face, I think that we're less concerned with that than we are of getting the spend right, getting the facility right, understanding what the market is and the EBITDA that's coming out of what the competition is going to be. I think all those things may be more important than that 15-year term. That being said, we are going to dig into that and take a closer look to make sure it's not something more than what we think it is.

The next question comes from Smedes Rose with Citi.

Covered a lot of territory, but I just had a couple of just quick ones here. I noticed that the balls added a corporate guarantee for the Chicago casino. And I was just wondering, was there something in particular that triggered that? Or is that something you were pushing for? Or kind of was -- I mean I think it's positive for you, right, but just kind of curious of what caused that.

Contractually triggered Smedes. That was a negotiated term that when Chicago came into the restricted group, which is what they did following the Intralot iGamesys merger, we were to get a corporate guarantee on that. So that was already prenegotiated.

And then I just wanted to go back, you talked about funding at the beginning of the call and how you use all debt, but presumably, you want to have an equity mix in there. I guess, I just in can you just remind us how you guys think about issuing equity. Some companies are kind of -- they have an internal estimate of NAV and they don't want to issue below that. Others are -- it might be below NAV, but it's still accretive. And just how do you think about equity issuance.

Yes. So we do look at it very opportunistically, right? So we do look at the cap rate of where we're trading and what that spread would yield to whatever we are attempting to finance I wouldn't say that we put a floor on it per se, but certainly, I can tell you at these levels, we have 0 interest in funding with equity.

I'll add to that. You saw, obviously, we executed on the forward closer to $48 since that, subsequent to that, we've announced a couple of transactions that are AFFO accretive. So you could kind of think about that floor as potentially moving higher in the absence of an immediate need for equity, which we don't have, as Desiree outlined earlier.

The next question comes from David Harris with Barclays.

I apologize if this is really a simple question, but you guys have given us a range of rent coverage. And I'm just wondering if that's calculated based on reported EBITDA or some adjusted EBITDA? Are you just using cash rent? Are you making adjustments to these numbers? How do you -- what's the comp?

Okay. So those -- they're contractually, they must be reported to us by our tenants, and they are based off of their actual EBITDAR as defined in each of the lease and the actual total rent that's being paid. There's a small adjustment in the Pinnacle lease because there's an asset that is not included in their coverage ratio, but very minor adjustment on that lease, but all the other leases are all of the properties, all of their EBITDAR and divided by the total rent that's being paid.

But is this just the property-level EBITDAR? Or are you looking at it on a consolidated basis.

It's the properties that are in that lease. So if it's a master lease, it's all of the properties that are in that lease. It is not at a corporate level.

So for example, with Valleys, it wouldn't have been factoring in any contribution from Games or anything like that?

That's correct.

The next question from Robin Farley with UBS.

I just wanted to circle back to the New York I know you mentioned you're sort of evaluating how to weigh a 15-year term. And I know other operators that pulled out of bidding cited the risk of New York legalizing iGaming. I guess just given some of those factors, you -- how would you think about the rent coverage ratio that you would need in New York compared to maybe a typical 2x?

We're looking around the table to say you want to take that one?

I can tell you, I don't envision us doing anything upfront in New York that would be based on anything close to 2x. I think our -- we all know that there are a lot of things that are at play here. There's construction schedules, there's construction budgets, the number of years it could take to build in New York. So I think if we were asked by anyone to do something in a very accretive way upfront, it would be massively more coverage than 2x. We would never consider doing something at that level.

I think beyond that, once you get out, I think when we're all sitting here on the call 4 years from now, I think we'll have a much better vantage point into whether iGaming has transpired, has not transpired what the profitability is of those businesses. and I would still venture to say, based on what we've seen in Las Vegas as far as the need to refresh these massive mega resort casino resort properties, I think we would look at New York to be a pretty similar experience with these massive mega casino resort properties. So I think we would continue to have a level of cushion that we would build into our rent coverage underwriting.

Yes. I also think a lot projects that you've seen fall by the wayside in New York failed the Community Action Committee hurdle. So I think that ended up being a much bigger hurdle than maybe even New York could realize it would be. And therefore, a lot of those folks, I think, would still be interested despite iGaming and unknown tax rates and things like that, had they passed that hurdle. And that was the last and final for many of these applicants.

Thank you. At this time, I would like to turn the call back to Mr. Peter Carlino for closing comments.

Well, thank you all who have dialed in this morning. I think and hope you get the idea that we're quite happy with the way things have been going here at GLPI and we were ankle to tell our story, and we'll see how it plays out. But stay tuned. I think there's good things ahead. With that, operator, and all, thank you very much. Have a great day.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.