Gaming REITs specialize in owning and leasing properties specifically used for gaming and entertainment purposes, such as casinos and related venues. These REITs generate revenue primarily by leasing their properties to gaming operators under long-term lease agreements. The properties owned by gaming REITs include hotels, restaurants, and entertainment venues that complement the gaming experience. By focusing on this niche sector, gaming REITs provide a unique investment opportunity within the broader real estate market.
Investing in gaming REITs offers several potential benefits. The long-term leases typical in this sector provide stability and predictability in income as gaming operators are usually committed to maintaining their locations for extended periods, stability that can be appealing to investors seeking reliable income sources. In 2023, gaming REITs generated $3.5 billion in funds from operations and paid $2.5 billion in dividends.
Gaming REITs also offer growth potential through strategic acquisitions, and as the cost of debt has gotten more expensive in the past few years, gaming REITs have advantageously used sale-leaseback arrangements to acquire assets while providing gaming operators with working capital. From December 2020 through July 2024, sector market cap rose from $23 billion to $46 billion; and in June 2023, a standalone gaming sector was created in the FTSE Nareit U.S. Real Estate Index Series.
As the gaming industry continues to expand, especially with the legalization of gaming in more regions, gaming REITs have opportunities to acquire new properties and enter emerging markets. From 2021: Q1–2024: Q1, gaming REITs were net acquirers of properties, with approximately $14.7 billion in properties. See Nareit’s T-Tracker for further information.
Below is a list of Nareit member companies from the gaming sector, and to learn more, read “All In: REIT Sector Innovation and Gaming,” written by Nareit SVP of Research Edward Pierzak for PREA Quarterly.
Gaming REITs
FTSE Nareit Equity Gaming REITs
- Constituents: 2
- One-Year Return: 7.13%
- Three-Year Return: N/A
- Five-Year Return: N/A
- Dividend Yield: 5.52%
- Market Cap: $45.6 billion
- Dividends Paid: 2024 Q1): $655.0 million
- NOI (2024 Q1): $322.0 billion
Source: FTSE, Nareit T-Tracker®
As of July 31, 2024