MGM Growth Properties LLC (NYSE:MGP) Q3 2019 Earnings Conference Call Transcript

Nov 05, 2019 • 12:30 pm ET

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MGM Growth Properties LLC (NYSE:MGP) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning and welcome to the MGM Growth Properties' Third Quarter 2019 Earnings Conference Call. Joining the call from the Company today are James Stewart, Chief Executive Officer; Andy Chien, Chief Financial Officer. [Operator Instructions]. After the Company's remarks there will be a question-and-answer session. [Operator Instructions]. I would now like to turn the call over to Mr. Andy Chien.

Executive
Andy H. Chien

Thank you, operator. Good morning and welcome to the MGM Growth Properties' third quarter 2019 earnings call. This call is being broadcast live on the Internet at mgmgrowthproperties.com and we have furnished our press release on Form 8-K to the SEC this morning.

On this call we will make forward-looking statements under the Safe Harbor provisions of the federal securities laws. Actual results may differ materially from those projected in the forward-looking statements.

Additional information concerning factors that could cause actual results to materially differ from these forward-looking statements is contained in today's press release and in our periodic filings with the SEC. During the call, we will also discuss non-GAAP financial measures in talking about our performance. You can find the reconciliation to GAAP financial measures in the press release, which is also available on our website.

Finally, please note, this presentation is being recorded. I will now turn it over to James.

Executive
James Stewart

Thank you, Andy. I'd like to welcome everyone to MGP's third quarter 2019 conference call. First, we are happy to report that the third quarter reflected yet another opportunity for us to execute on our strategy of sustainably growing our dividend, to create long-term value for our shareholders.

This quarter, we increased our dividend for the ninth time representing a 32% increase since our IPO. We're proud to report that current total shareholder return since our IPO in April of 16 is 87%, which continues to exceed the return one would have earned in the Nasdaq 100, the S&P 500 or the RMZ over the same period.

Second, I'd like to comment on what we're seeing in the M&A markets. I believe there continues to be a significant amount of potential real estate transaction volume, residing in the gaming industry and the broader leisure entertainment and hospitality sectors. During the quarter, we've continued to actively explore transaction opportunities and have had a number of conversations with potential sellers and third-party operators.

We remain committed to our growth strategy and a disciplined allocation of resources and capital. Our priority remains, identifying and executing on accretive transactions that will enhance our ability to return value to our shareholders and increase our AFFO and dividend over the long term. I'd now like to discuss the recently announced sale and leaseback of the real property of Bellagio at Blackstone.

This transaction was announced at the lowest cap rate ever paid for an integrated gaming resort of 5.78%. Since we went public 3.5 years ago, our belief has been that our 13 well diversified integrated resorts and market leading regional assets would benefit from cap rate compression and draw interest from institutional