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VICI Prefers Loans Over Buybacks for Higher Returns
20 Sep
Summary
- VICI's CFO highlighted loans yielding near 9.5% as superior to buybacks.
- The company favors new deals like Club Med for attractive returns.
- VICI aims to grow AFFO and fund its dividend through capital deployment.
VICI Properties' Chief Financial Officer, David Kieske, has indicated a strategic shift away from share buybacks, prioritizing investments that yield higher returns. As of the second quarter of 2026, Kieske noted that deploying capital into loans, which offer yields around 9.5%, significantly outperforms repurchasing shares.
He specifically cited the One Beverly Hills loan at SOFR plus 8.25% and the new Club Med deal as examples of attractive investment opportunities. Kieske articulated that for a net lease REIT reliant on capital deployment for growth, share buybacks are not a logical strategy.
Kieske reported adjusted funds from operations (AFFO) of $0.62 per share for the quarter, a slight increase from the previous year. The company has also revised its full-year 2026 AFFO guidance upwards to a range of $2.45 to $2.47 per diluted share, projecting a 3% year-over-year growth. This financial outlook is supported by a strong balance sheet, with net debt at approximately 4.9 times annualized adjusted EBITDA and $2.5 billion in total liquidity.
