Real Estate Portfolio (Tables)

12 Months Ended

Dec. 31, 2023

The following is a summary of the balances of our real estate portfolio as of December 31, 2023 and 2022:


(In thousands)	December 31, 2023		December 31, 2022






Investments in leases - sales-type, net (1)	$	23,015,931	$	17,172,325

Investments in leases - financing receivables, net (1)	18,211,102		16,740,770
Total investments in leases, net	41,227,033		33,913,095
Investments in loans and securities, net	1,144,177		685,793
Investment in unconsolidated affiliate (2)	—		1,460,775
Land	150,727		153,560
Total real estate portfolio	$	42,521,937	$	36,213,223

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(1) At lease inception (or upon modification), we determine the estimated residual values of the leased property (not guaranteed) under the respective lease agreements, which has a material impact on the determination of the rate implicit in the lease and the lease classification. As of December 31, 2023 and 2022, the estimated residual values of the leased properties under our lease agreements were $15.9 billion and $11.5 billion, respectively.

(2) Represents our 50.1% investment in the MGM Grand/Mandalay Bay JV prior to the MGM Grand/Mandalay Bay JV Interest Acquisition on January 9, 2023, which was accounted for as an equity method investment.

Schedule of Components of Direct Financing and Operating Leases


	Year Ended December 31,
(In thousands)	2023		2022		2021
Income from sales-type leases - fixed rent	$	1,892,534	$	1,436,945	$	1,161,655
Income from sales-type leases - contingent rent (1)	87,644		27,300		6,317

Income from lease financing receivables - fixed rent	1,430,246		995,383		243,008
Income from lease financing receivables - contingent rent (1)	10,509		1,673		—
Total lease revenue	3,420,933		2,461,301		1,410,980
Non-cash adjustment (2)	(515,556)		(337,631)		(119,790)
Total contractual lease revenue	$	2,905,377	$	2,123,670	$	1,291,190

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(1) At lease inception (or upon modification), we determine the minimum lease payments under ASC 842, which exclude amounts determined to be contingent rent. Contingent rent is generally amounts in excess of specified floors or the variable rent portion of our leases. The minimum lease payments are recognized on an effective interest basis at a constant rate of return over the life of the lease and the contingent rent portion of the lease payments are recognized as earned, both in accordance with ASC 842.

(2) Amounts represent the non-cash adjustment to the minimum lease payments from sales-type leases and lease financing receivables in order to recognize income on an effective interest basis at a constant rate of return over the term of the leases.

Schedule of Future Minimum Lease Payments for Operating and Capital Leases

At December 31, 2023, minimum lease payments owed to us for each of the five succeeding years and thereafter under sales-type leases and our leases accounted for as financing receivables, are as follows:


	Minimum Lease Payments (1) (2)
	Investments in Leases
(In thousands)	Sales-Type		Financing Receivables		Total
2024	$	1,682,826	$	1,233,178	$	2,916,004
2025	1,712,651		1,255,549		2,968,200
2026	1,738,942		1,278,819		3,017,761
2027	1,766,012		1,302,657		3,068,669
2028	1,794,287		1,327,211		3,121,498
Thereafter	77,503,679		89,787,503		167,291,182
Total	$	86,198,397	$	96,184,917	$	182,383,314

Weighted Average Lease Term (2)	38.5 years		48.8 years		43.0 years

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(1) Minimum lease payments do not include contingent rent, as discussed below, that may be received under our lease agreements.

(2) The minimum lease payments and weighted average remaining lease term includes the non-cancelable lease term and any tenant renewal options that we determined were reasonably assured, consistent with our conclusions under ASC 842 and ASC 310.

Schedule of Lease Agreements

The following is a summary of the material lease provisions of our leases with Caesars and MGM, our two most significant tenants:

($ In thousands)

MGM Master Lease

Caesars Regional Master Lease and Joliet Lease

Caesars Las Vegas
Master Lease

MGM Grand/Mandalay Bay Lease

Lease Provision

Initial term

25 years

18 years

30 years

Initial term maturity

4/30/2047

7/31/2035

2/28/2050

Renewal terms

Three, 10-year terms

Four, 5-year terms

Two, 10-year terms

Current lease year

5/1/23-4/30/24 (Lease Year 2)

11/1/23 - 10/31/24 (Lease Year 7)

3/1/23 - 2/29/24 (Lease Year 4)

Current annual rent

$744,600

$728,407 (1)

$469,219

$309,873

Annual escalator (2)

Lease years 2-10 - 2%

Lease years 11-end of term - >2% / change in CPI (capped at 3%)

Lease years 2-5 - 1.5%

Lease years 6-end of term - >2.0% / change in CPI

> 2% / change in CPI

Lease years 2-15 - 2%

Lease years 16-end of term - >2% / change in CPI (capped at 3%)

Variable rent adjustment (3)

None

Year 8: 70% base rent / 30% variable rent

Years 11 & 16: 80% base rent / 20% variable rent

Years 8, 11 & 16: 80% base rent / 20% variable rent

None

Variable rent adjustment calculation

None

4% of revenue increase/decrease:

Year 8: Avg. of years 5-7 less avg. of years 0-2

Year 11: Avg. of years 8-10 less avg. of years 5-7

Year 16: Avg. of years 13-15 less avg. of years 8-10

4% of revenue increase/decrease:

Year 8: Avg. of years 5-7 less avg. of years 0-2

Year 11: Avg. of years 8-10 less avg. of years 5-7

Year 16: Avg. of years 13-15 less avg. of years 8-10

None

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(1) Current annual rent with respect to the Joliet Lease is presented prior to accounting for the non-controlling interest, or rent payable, to the 20% third-party ownership of Harrah’s Joliet LandCo LLC. After adjusting for the 20% non-controlling interest, combined current annual rent under the Caesars Regional Master Lease and Joliet Lease is $719.0 million.

(2) Any amounts representing rents in excess of the CPI floors specified above are considered contingent rent in accordance with GAAP.

(3) Variable rent is not subject to the escalator.

Schedule Of Capital Expenditure Requirements Under Lease Agreements

summarizes the capital expenditure requirements of our gaming tenants under their respective lease agreements:

Provision

Caesars Regional Master Lease and Joliet Lease

Caesars Las Vegas Master Lease

MGM Grand/Mandalay Bay Lease

Venetian Lease

All Other Gaming Leases (1)

Yearly minimum expenditure

1% of net revenues (2)

3.5% of net revenues based on 5-year rolling test, 1.5% monthly reserves

2% of net revenues based on rolling three-year basis

1% of net revenues

Rolling three-year minimum (3)

$286 million

$84 million

N/A

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(1) Represents the tenants under our other gaming lease agreements not specifically outlined in the table, as specified in their respective lease agreements.

(2) The leases with Caesars require a $107.5 million floor on annual capital expenditures for Caesars Palace Las Vegas, Joliet and the Caesars Regional Master Lease properties in the aggregate. Additionally, annual building & improvement capital improvements must be equal to or greater than 1% of prior year net revenues.

(3) Certain tenants under our leases with Caesars, as applicable, are required to spend $380.3 million on capital expenditures (excluding gaming equipment) over a rolling three-year period, with $286.0 million allocated to the regional assets, $84.0 million allocated to Caesars Palace Las Vegas and the remaining balance of $10.3 million to facilities (other than the Harrah’s Las Vegas Facility) covered by any Caesars Lease in such proportion as such tenants may elect. Additionally, the tenants under the Caesars Regional Master Lease and Joliet Lease are required to expend a minimum of $531.9 million on capital expenditures (including gaming equipment) across certain of its affiliates and other assets, together with the $380.3 million requirement.

Summary of Investments In Loans

The following is a summary of our investments in loans and securities as of December 31, 2023 and 2022:


($ In thousands)	December 31, 2023
Investment	Principal Balance		Carrying Value (1)		Future Funding Commitments (2)		Weighted Average Interest Rate (3)		Weighted Average Term (4)
Senior Secured Notes (5)	$	85,000	$	73,818	$	—	11.00	%	7.3 years
Senior Secured Loans (6)	392,250		386,274		476,395		7.3	%	5.4 years
Mezzanine Loans and Preferred Equity	698,861		684,085		278,848		9.8	%	4.6 years



Total	$	1,176,111	$	1,144,177	$	755,243	9.0	%	5.1 years


($ In thousands)	December 31, 2022
Investment	Principal Balance		Carrying Value (1)		Future Funding Commitments (2)		Weighted Average Interest Rate		Weighted Average Term (3)
Senior Secured Loans	$	495,901	$	492,895	$	584,049	7.8	%	3.2 years
Mezzanine Loans	196,597		192,898		514,882		9.1	%	4.3 years



Total	$	692,498	$	685,793	$	1,098,931	8.2	%	3.5 years

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(1) Carrying value includes unamortized loan origination costs and are net of allowance for credit losses.

(2) Our future funding commitments are subject to our borrowers' compliance with the financial covenants and other applicable provisions of each respective loan agreement.

(3) The weighted average interest rate is based on current outstanding principal balance and SOFR, as applicable for floating rate loans, as of December 31, 2023.

(4) Assumes all extension options are exercised; however, our loans may be repaid, subject to certain conditions, prior to such date.

(5) Represents our investment in the Hard Rock Ottawa Notes, which are accounted for as held-to-maturity securities.

(6) On May 1, 2023, the Caesars Forum Convention Center mortgage loan, representing $400.0 million in principal balance of our senior secured loans, was repaid in full.