Vici Properties Stock Soared in Q1 While the S&P 500 Struggled. Here's Why.

Here's a look astatine what drove the REIT's beardown first-quarter rally and what's up for the institution this year.

Vici Properties had a engaged archetypal quarter. The REIT reported its fourth-quarter and full-year results for 2024 successful mid-February. The institution reported a mid-single-digit emergence successful its adjusted funds from operations (FFO) per stock (3.6% for the 4th fourth and 5.1% for the afloat year). It benefited from inflation-indexed rental complaint increases successful its leases and caller investments.

The REIT committed to deploying implicit $1 cardinal successful superior past twelvemonth crossed respective deals. It's providing backing for an enlargement of The Venetian Resort Las Vegas, financing the operation of a Margaritaville edifice for Homefield, and making different indebtedness concern successful Great Wolf Resorts.

Vici Properties has continued to find caller concern opportunities this year. It formed a caller strategical narration with Cain International and Eldridge Industries successful the archetypal quarter. Its archetypal concern is simply a $300 cardinal mezzanine indebtedness to enactment the improvement of One Beverly Hills, a landmark luxury mixed-use development.

The REIT besides enhanced its quality to proceed investing successful the quarter. It announced a caller $2.5 cardinal recognition installation that extended the maturity to 2029. It besides priced $1.3 cardinal of elder unsecured notes precocious successful the archetypal 4th ($400 cardinal of 4.75% notes owed successful 2028 and $900 cardinal of 5.625% notes due successful 2035). It volition usage those funds to repay indebtedness maturing this twelvemonth ($500 cardinal of 4.375% notes and $800 cardinal of 4.625% notes).

While Vici Properties is paying a higher complaint connected the caller debt, it's a pretty debased complaint compared to caller years due to the fact that involvement rates person been falling. The output connected the U.S. 10-year Treasury has fallen from its highest of astir 5% to astir 4.25% by the extremity of the archetypal quarter.

The rate connected the 10-year Treasury has a big interaction connected the commercialized existent property sector. A falling output makes it cheaper for REITs similar Vici Properties to get wealth to refinance existing indebtedness and marque acquisitions. It besides typically boosts existent property values, which benefitted the REIT during the archetypal 4th arsenic its banal terms rose.