Published on: November 18, 2025, 11:48h.
Updated on: November 18, 2025, 11:48h.
- VICI Properties downgraded due to Caesars regional casino lease
- Wells Fargo expresses concerns about Las Vegas and regional market trends
- Research notes a shortage of “fee simple” arrangements
On Tuesday, shares of VICI Properties (NYSE: VICI) experienced a decline after Wells Fargo downgraded the casino real estate investment trust (REIT), driven significantly by ongoing issues associated with Caesars Entertainment’s (NASDAQ: CZR) regional master lease.
In a communication to clients, analysts John Kilichowski and James Feldman adjusted their rating for VICI from “buy” to “hold” and reduced their price target from $36 to $32.
“The Caesars lease with VICI has been an ongoing concern. With research indicating a persistent weakness in regional brick-and-mortar gaming, coupled with VICI’s remarks about seeking near-term solutions with Caesars, we worry that rent stability may be at risk in the near future,” stated Wells Fargo analysts.
VICI acknowledges that factors including the Caesars lease have negatively impacted its stock performance. Year-to-date, shares of the REIT are up 0.92%, while the Dow Jones U.S. Real Estate Capped Index has risen nearly 3%.
VICI and Caesars Negotiating Lease Adjustments
The challenges faced by Caesars are particularly relevant for VICI because the casino operator represents one of the REIT’s largest tenants. VICI, which was established from Caesars in 2017, owns a vast portfolio of real estate associated with the casino operator, including properties in Las Vegas and various regional locations.
For investors in VICI, the significance of the Caesars regional master lease is notable, as it constitutes nearly 25% of the REIT’s net operating income. Recent discussions suggest that external commitments and sluggish performance on the Las Vegas Strip may be putting pressure on Caesars, prompting the need for possible alterations to the lease agreement. The nature of any changes remains uncertain, but both parties are believed to be actively pursuing a resolution.
“We will evaluate our portfolio alongside them to identify mutual interests, discuss potential continuations, and determine the various avenues we can explore to achieve a mutually beneficial outcome,” said VICI CEO Edward Pitoniak during the company’s third-quarter earnings call.
Aside from the Caesars regional lease dilemma, Wells Fargo pointed out concerns about weakness in the Las Vegas Strip and regional gaming markets, along with a lack of “fee simple” transactions in premium casino real estate as factors influencing the downgrade for VICI.
VICI Actively Seeking New Opportunities
Although the market for high-end casino real estate deals is sluggish, VICI is capitalizing on other avenues to broaden its tenant base. This includes the recent $1.16 billion purchase of Golden Entertainment’s (NASDAQ: GDEN) Nevada casino properties, part of the operator’s strategy to go private.
This acquisition not only diversifies VICI’s tenant roster but also lessens the REIT’s reliance on the Strip, where it holds significant property ownership.
Additionally, VICI is venturing into financing and non-gaming experiential real estate, adapting to the slow consolidation climate within the premium gaming sector.