Got it. Thank you.

Thank you. And our next question comes from the line of Caitlin Burrows from Goldman Sachs. Your question, please.

Hi. Good morning, everyone. I guess just, we'll figure out how to phrase it, but just considering that your two largest tenants are in the news to potentially be bought, we'll see what happens with them. But I guess just considering the time period that we're in right now, I was wondering if you could comment on how your conversations with those tenants are Today differ from a year or two ago and kind of what's normal course versus what's maybe, I don't know, on hold because their own structure is changing or potentially changing.

you know they they are obviously in very intense operational businesses day by day hour by hour and we're always very respectful of that and making sure we don't waste their time but we we continue to have very positive conversations around opportunities that we see together whether with existing assets or incremental opportunities and I'll turn it over to John here because he can give you an example of an opportunity that we are discussing with a partner Despite the fact that that partner is also engaged in some very meaningful activities beyond us.

Yeah, it's good to talk to you this morning. Ed's referring to the opportunity in Las Vegas with the NBA. I think everyone has seen in the news that the NBA is looking to put another team into Las Vegas. There are many people bidding on that team. We own in conjunction with our partner Caesars and we're working with them 50 acres of land behind Paris, Horseshoe, Planet Hollywood and we are developing a plan with Caesars, Sean McBurney in particular who runs Las Vegas to house the arena that could be built for the new NBA team. So that's just an example of us working with one of our partners. The other thing I'll addresses, in my opening remarks, I talked about having our 14th, our 15th, and our 16th tenant. We're very different than other triple nets that have hundreds of tenants. We have, as you hear, 16, which then allows us to have deeper and more frequent conversations. So we're constantly talking to our partners about ways we can grow together, how our assets are performing, et cetera. So that's just another example of how we're a little bit different.

Got it. Okay. And then I think you probably touched upon it briefly in the prepared remarks, but wondering if you could talk about some of the trends you're seeing more recently in Las Vegas and maybe how they differ or vary between your specific assets and the market overall.

Well, we continue to be very excited about the market. As I hinted, it's a place that constantly reinvents itself and not only has ways to make money in gaming but you can hear it is becoming the number one entertainment epicenter and I'll describe in the world someone can argue with me about that but it is a place that continues to add different reasons to come and visit we obviously are well invested there we have numerous assets there they all continue to have specific reasons why the consumer segment comes to their property and we really like what the operators are doing, especially event driven and creating these unique events that only can be done in Las Vegas. So we continue to be really excited and we continue to like how our tenants are operating their businesses and being creative.

You know, I'll just build on what John is saying, Caitlin, by pointing out what MGM disclosed yesterday with this Q2 results and that was 93% occupancy for their strip assets in the second quarter, which is really an outstanding amount of occupancy given the amount of inventory that MGM has in the strip. And I think that embedded within that was the very meaningful, positive outcome they're getting on being promotional and offering all-inclusive packages that looks or an Excalibur. These are operators that respond to changing conditions and they respond, I think, as energetically and creatively is any hospitality and leisure operators I've ever known.

Thank you.

Thank you. And our next question comes from the line of Greg McGinnis from Scotiabank. Your question, please.

Hey, good morning. Hey, Greg. So I believe most of the free cash flow is spoken for this year with investments to make. But as you look ahead, are you considering share repurchases or do you think you can find more creative investments with this capital?

Yeah, Craig, it's a question we get asked a lot, and you have basically answered the question. I mean, when we're putting money out at SOFR plus 825, that's a much more attractive use of our capital, and that's just for the Lumberville Hills loan, and our loan book is close to 9.5% yield. We can find much more attractive uses of that free cash flow, and the ClubMed's a very attractive return. Everything we've closed this quarter is a very attractive return. and just, you know, the buyback for a REIT, especially a net lease REIT that is, you know, growth is dependent on deploying capital, just not something that makes a lot of sense, especially where we are now and within the investment prospects that we have in front of us.

Okay, thanks. We've seen the news that there's a lot of cities basically pouring billions of dollars of capital into convention facilities. And I'm curious what impact you might think this may have on Las Vegas and also whether this represents an investment opportunity for you.

Yeah, Greg, it's a good question. I do think that the competitive superiority of Las Vegas as a convention destination is so well established that I don't know that anybody's tremendously worried about new convention supply. in other American cities. And a large part of that has to do with the ecosystem that Las Vegas represents when it comes to appealing to and serving the needs, both convention needs and leisure and hospitality needs of convention goers. The entire ecosystem, including airlift, infrastructure, lodging quality and abundance, entertainment quality and abundance, F&B quality and abundance. There's really no city in America that can come close and I think that's probably has also a lot to do with, unfortunately, the somewhat beat up condition of full service lodging inventory across so many American city centers. So again, I really, I have very strong conviction around the competitive superiority of Las Vegas as convention center destination. As to the introduction of new supply in other cities, it could be something we would look at, but it would have to be a situation in which obviously We can invest in it accretively, and we would also have very high confidence that that destination can be competitive in what is a very competitive marketplace.

Great. Thank you.

Thank you. And our next question comes from the line of John Decree from CBRE. Your question, please. Hi. Good morning, everyone.

Thank you for taking my question. I wanted to ask a little bit about kind of the shift Thank you for joining us. Curious about the shift we're seeing to private markets, if that's changing the outlook for M&A and REIT financing in the casino space.

Yeah, I think it could, and I'll turn it over to John and David in just a moment. John, good to talk to you. It's somewhat understandable, given what I think a lot of operators have felt has been the somewhat lack of love that they've gotten in the public markets over the last few years, and I think a number of them that we talked to and John can give you more specifics here in a moment. Appreciate the fact that in the private markets, they truly can do what they believe are the right things to grow their business over the longer term. And an example of that is that once they go private, they tend to be not focused on what's gonna be the earnings in a given quarter and more focused on what, if we make any incremental investments, what's going to be the IRR on those investments and we have found, for example, that private operators are more responsive to the use of our capital through our property partner growth fund because from an IRR point of view, that capital is very, very attractive to them. And I'll turn it over to John now, but I think we can confidently say that recent privatizations have left the now private operators feeling quite good about where they are.

Yeah, I think from the operations side, you were talking about the financing side, but just from an operations side, being in a private setting I think is quite beneficial for this industry. These are very capital-intensive businesses, and there's times, and John, I think you know I'm a former or a recovering operator or a former operator, that there were times where I knew something needed to be refurbed but it was going to be detrimental to a quarter or two quarters and that's really not the way to think about it. To think about these businesses long term and when capital needs to be invested and although it may disrupt the business for 60 days, 90 days, 120 days, you need to do it for the long term. IT is changing dramatically in this space and the implementation of new systems and servers can be disruptive to an operation for 30, 60, 90 days, you need to do it. And in a private setting, you don't really worry about those 30, 60, 90 days, where in a public setting, you might. So I think we're enthusiastic about what we're seeing. We'll see how this all plays out over the coming months or years, but that's my take on how it's affecting the operator's view of their business.

Thanks, guys. I think you kind of covered my follow-up there as well, so I'll hop back in the queue. Appreciate it.

Thanks, John.

Thank you. And our next question comes in line of Chris Darling from Green Street. Your question, please.

Thanks. Good morning. Can you provide an update on the sports infrastructure opportunity? Any discussions you continue to have with universities? And then, you know, is there any anything structural or maybe related to pricing that's top of mind for these institutions? Just anything specific that may have possibly prevented deals from closing to date?

Yeah. Hey, Chris, it's John. And then I'll let any of my colleagues who want to jump jump in here. Yeah, we've been very active in this space and I would describe it as really educational. We opened my remarks by talking about being patient and relationship building. I would describe the university space as just that, in that we are explaining that we're long-term infrastructure investors and how we could help the university, particularly in sports, grow over the coming years. So I think that, I don't think it's a You ask if there's a pricing or a cost cap. I'd say that's not the reason why we have not announced anything yet. I'd say it's a little bit of us. We're at a point where we're trying to understand, is this the right place for us to be? And I think many universities are deciding, is Capital Light Beachies the right way to grow their sports business?

Yeah, Chris, it's Gabe here. And just to answer the second half of your question with any kind of structural consideration. So A lot of universities want to make sure that debt and other debt-like instruments aren't on their balance sheet and impacting their credit rating, so we've kind of made sure that they understand how flexible VG's capital can be and that we're a long-term partner to provide a capital solution that works for the university's needs and also works for VG's.

Okay, that's all helpful thoughts. That's it for me. Thank you.

Thank you. And our next question comes from the line of David Katz from Jefferies. Your question, please.

Hi, good morning, everyone. Thanks for taking my question. I wanted to talk about regional gaming in a broader sense because what we've seen is operators investing internally as they're finding some of those being their best opportunities and adjusting to some of the dynamics that have been going on across the United States. and frankly, what we're seeing, including from your largest regional tenant, some pretty good numbers. And my question is, is that a function of them just dialing in their strategies? Is it a function of internal investments? Or do you think that it's just an external demand moment that we're seeing show up in those numbers? and specifically as it relates to your tenants were our most interesting.

Well, David, I'm not sure there's been a person on the phone that's been around gaming longer than myself. I was going to say you, but you've been around a long time. A little less. So you've watched this. You've watched how resilient these local casinos, these regional casinos are. There's I tell people this is the people's country club and what I've noticed over the past couple years as the competition has come whether that's through iGaming or sports betting is watched these operators reinvigorate their offerings. I've also watched the manufacturers get even more creative with the products that they have to offer and I think those combinations are paying off This year, and I think they'll pay off in years to come, I think tougher times and more competition, the great operators step up and think differently about their business, how they reward, how they incent, how they improve their service. All of that plays into why we're seeing an uptick in what everyone would describe as the regional or locals market. I'm quite excited about what I'm hearing from our operators, and I'm quite excited from the technology standpoint what I'm seeing myself.

You know, I will just add on to what John says, David, by also pointing out the amount of live entertainment in America now that takes place in regional casinos, both commercial and tribal, and to an extent that certainly didn't exist 30 or 40 years ago. And I think it's part of the very powerful relevance that regional gaming operators really work hard to achieve in relation to their geographic and demographic markets. And then finally, I'll just say that maybe not on this call, but I'd actually love to hear your thoughts on this and what you think are the key drivers of what really appears to be fundamental foundational strength in regional gaming.

I'm going to ask my follow-up question and I'm going to just very quickly answer yours, which is I think that there is some dialing in of strategies on value propositions and recognizing where the competition is coming from and how to beat them. And to that end, we have been are all able to discuss on this call, in particular, CSER's regional lease. And I'm just wondering if there's any appropriate comment we can make today about whether some of this improvement that we've seen and the backdrop, given that so much else has changed, does that alleviate the need to sort of pursue that conversation in the near term?

I wouldn't say it alleviates or eliminates, but obviously that's a conversation that will take place at some point as, you know, Caesars continues to develop its new ownership structure in due course, but would remind everybody that we obviously collect every dollar of rent in the meantime. And again, I think that You know, we are very appreciative of the hard work that CSER's been putting into the regional assets and the kind of results we were able to produce in Q2. Thank you.

Thank you. And our next question comes from the line of Daniel Guglielmo from Capital One Securities. Your question, please.

Hi, everyone. Thank you for taking my question. As a follow up to John's question about public versus private gaming operators, I think there's an impression out there that maybe private gaming operators have kind of like a more like a black box for property owners around information, which I don't think is the case. So can you just take talk through some of the information that you all use outside of public earnings, SEC filings that keep you up to date on private operator tenant trends?

Yeah, Dan, you're spot on. There's more transparency to the gaming operators than there are across traditional net lease landscape because of the monthly reporting that goes on at the state level. Sometimes it's by region, but oftentimes it's by assets. And then a lot of these private operators have public debt and they report whether to the terminal market or to the high yield market and there's trading stats on from the fixed income side, and often a lot of your colleagues or other folks across research report on those private companies. So there is improved transparency, whether they are versus a broader trip on that lease space.

Yeah, and this is Samantha. I'll just add, we spend a lot of time with each of our private tenants making sure that we're getting the necessary reporting through our leases. And Gabe's sitting here to my right, and he can talk about it. We focus on it from an asset management perspective, so we're always meeting with asset management to ask, like, what do we need from a reporting perspective so that we are able to get the information that we need to monitor tenants in the same way we would with a public tenant?

Yeah, we get property-level financials from all of our borrowers and tenants, and then as a group, we sit every quarter and go through every single lease and loan investment in the portfolio, so have complete visibility into our tenant and borrower's financial performance, regardless of whether they are a publicly traded tenant, borrower, or private.

Great, that's really helpful. Thank you. And then, as you mentioned in the opening remarks, Club Med was a new tenant this quarter. The property is in the U.S. Virgin Islands, but they're well known as an international brand. As you continue to expand into experiential, have international properties, maybe outside of the U.S. and Canada, become more interesting to you all?

Yeah, this is Erin Ferrari. Dan, it's been a sector that we've, or a geography that we've looked at over the last five years, really spending a lot of time mapping and trying to understand the tax and legal structuring as well as the financing markets that could support investments outside of the U.S. and Canada. St. Croix is a bit of a cheat because it's a U.S. Virgin Island, so it still is a U.S. territory, but it is a geography that we continue to look at expanding.

Great. Thank you.

Thank you. Our next question comes from the line of Wesley Galladay from Baird. Your question, please.

Wesley, your line is open. You might have your phone on mute.

All right, our next question comes from the line of Ronald Camden from Morgan Stanley. Your question, please.

Hey, good morning. This is Jenny on for Ron. I just want to dig a little bit on the allowance of credit losses. It seems like on the 10Q note, saying a tenant issued a new senior secured debt at a lower credit rating. Maybe just talk a little bit more on that. Like, is it tenant-specific or macro-driven? Yeah, just provide some, like, I just want to have a better understanding on that. Thank you.

Yeah, it's Gabe here, and I can answer this one. So our CECL allowance, we look at the senior secured credit rating of our tenants and their parent guarantors. To the extent that that parent guarantor doesn't have senior secured debt, we use a proxy company. So for one of our private tenants, we had been using a proxy tenant proxy company historically to estimate the credit rating and their credit profile. Last quarter, they actually issued debt privately, and we used that updated policy. Credit Rating to Estimate the Cease Allowance. So that's why we saw the big change quarter over quarter. Properties performing well. Great insight into the property performance as we just spoke about. Get the monthly financials. And this was just a function of additional information that was out there that we could put into our model.

That makes sense. As a follow-up on the watch list, anyone else that is kind of on your watch list right now or you feel pretty good on the rest of your talent?

Sure. So we actually don't have a watch list. As we discussed, we go through every single lease and loan in our portfolio on a quarterly basis. So we have complete transparency into our borrowers and tenant performance. That's why it's really important that we get tenant and borrower level financials. So our ability to look at every single loan and lease in our portfolio is what we focus on and not individual investments.

Got it. Thanks so much.

Thank you. And our next question comes from the line of Todd Thomas from KeyBank Capital Markets. Your question, please.

Yeah, hi, thanks. I guess just following up on the credit profile or portfolio and the loans, I was wondering if you could provide some additional detail around the loan modification in the quarter. I think it was $90 million. And can you clarify whether this is separate from the golf course development loan that I think last quarter was placed on a non-accrual status?

Sure. So we have a $90 million senior secured loan collateralized by a leisure and hospitality asset. It's about 3% of our loan portfolio. During the quarter, we extended the maturity date and reduced the interest rate percent on that loan to right size the yield as the asset continues to ramp. The interest on the loan is being paid monthly in cash. In return, we received additional collateral and the borrower will be making amortization payments to reduce our loan balance. This is a great example of the active asset management approach that we take with our borrowers and tenants. If there's an issue, we work constructively with them to identify a solution that provides value to both parties. And then on the second half of your question, this is a separate loan and the loan we disclosed in Q4-25, which is on non-accrual status.

Okay. All right. That's helpful. And then I wanted to follow up on a prior question around on Caesars. And, you know, you've previously indicated that, you know, both parties would, you know, prefer a resolution to move forward rather than, you know, I think allowing it to remain a little bit of an ongoing distraction. And I realize gaming operations have improved somewhat, but with the annual rent escalator approaching and CPI still running above the – The contractual floor, does that create a greater sense of urgency around reaching a broader portfolio solution? Should we think about resolution occurring over the next several quarters rather than years? Any update around that?

Yeah, Todd, we wouldn't be able to give you any kind of precise timetable. I wouldn't say that's necessarily a major factor. I think the thing to keep in mind is that In the case of Caesars, they're obviously undergoing a very significant M&A transaction with many, many moving pieces and many stakeholders, including regulatory. So how any conversations will fit into that, which, again, is a fairly prolonged timescale, I believe. I believe Caesars recently, or it might have been Fertitta Entertainment, was indicating about a 12-month time frame. for completion of that transaction. So there's so many moving pieces, it would be very difficult for anybody to predict with precision a timetable for any conversations that we might have.

Okay, thank you.

Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Ed for any further remarks.

Well, again, we'll just thank everybody for their time today, both from the sell side and the buy side. We realize it's a very, very busy time of year. Wish you a good rest of the summer and we will see you again in late October.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.