Casino REITs Could Be ‘Attractive Partners’ for Six Flags Land, Says Investment Manager

Jonathan Litt’s Edwin Herbert Land & Buildings Investment Management, LLC (L&B) is pushing Six Flags Entertainment (NYSE: SIX) to monetise its prop holdings. It notes that gambling casino landlords are among the tangible estate investment trusts (REITs) that could live sensitive buyers of the land.

In a intro to investors published earlier this week, L&B revealed it has a roughly 3% bet inwards the amusement parkland operator, and that the society could “unlock real value” for shareholders by marketing its tangible acres assets. The activistic investor suggests that Six Flags pursue sale-leasebacks — a dealings typecast that’s common in the gaming industry.

It is the nonpareil clip to use up litigate to monetize Six Flags’ unambiguously valuable existent estate portfolio granted the high multiples similar assets are trading at inward the public and buck private markets,” said Litt inwards the presentation. “This strategy of separating the existent acres and manipulator is a complex body part we experience seen come through in maximizing note value of legion(p) hospitality and leisure time companies that we’ve invested in historically.”

Calling the forecasts “conservative,” L&B estimates that Six Flags could supply $11 to its percentage price today past marketing its prop holdings. That would thrust 50% upside for the stock up in 2023, and 100% o'er the next 18 months.

GLPI, VICI Mentioned on Six Flags Land

The L&B demonstration mentions casino landlords Gaming and Leisure Properties (NASDAQ: GLPI) and VICI Properties (NYSE: VICI) as among the potentially “attractive partners” for Six Flags inwards a sale-leaseback scenario. Those are the II in public traded gaming REITs.

VICI, the largest landlord on the Las Vegas Strip, owns to a greater extent than casino real estate. The REIT owns quaternity golf game courses and has provided funding to operators of other nongaming venues. GLPI owns the holding of 57 casinos and could looking at to broaden its manufacture and tenant exposure by considering deals with Six Flags.

L&B also mentioned Blackstone (NYSE: BX) and Realty Income (NYSE: O) as possible partners for Six Flags. The former owns Bellagio’s tangible estate, while the latter owns Encore Bean Town Harbor, which is operated by Wynn Resorts.

“There is usable liquidity and an attractive be of capital letter for several of these buyers to acquire Six Flags’ tangible demesne at a favourable valuation for the company’s shareholders,” added L&B.

L&B Experience Could Prove Material

Under Litt’s stewardship, L&B has been downward this route before. They have prodded operating companies with material tangible land holdings to disinvest those properties inward the figure of creating shareholder value.

Litt was the designer of the “Restore MGM Resorts” campaign, which pushed the gaming company to unlock time value for investors past merchandising its ground real demesne assets. That led to the spinoff of MGM Growth Properties inward 2016. That company was acquired past VICI earlier this year.

“MGP merged into VICI Properties to make a $50 1000000000000 existential meshwork letting REIT. This anatomical structure was innovated by Marriott (NYSE: MAR) in the 1990s, creating what is today called Host Hotels & Resorts (NYSE: HST), a $16 billion REIT, owning 78 properties, including the iconic Ritz-Carlton and Four Seasons hotels,” concluded L&B.