Good morning and welcome to the MGM Growth Properties Fourth Quarter and Full-year 2019 Earnings Conference Call. Joining the calls from the Company today are James Stewart, Chief Executive Officer and Andy Chien, Chief Financial Officer. Participants are in listen only mode. [Operator Instructions] Please note this event is being recorded. Now, I would like to turn the call over to Mr. Andy Chien.

Thank you. Good morning. Welcome to MGM Growth Properties fourth quarter and full-year 2019 earnings call. This call is being broadcast live on the internet at mgmgrowthproperties.com and we have published our press release and Form 8-K to the SEC this morning. On this call we will make Forward-Looking Statements under the Safe Harbor provisions of 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 differ from these forward-looking statement made in our today's press release and our periodic filings with the SEC. During the call, we will also discuss non-GAAP financial measure and talking about our performance. You can find the reconciliation to get financial measures in the press release, which is also available on our website. Finally, please note that this presentation is being recorded. I will now turn over to James.

Thank you, Andy. I would like to welcome everyone to MGP's is fourth quarter and full-year 2019 conference call. As I'm sure you are all aware, our the Chairman and CEO of MGM Resorts, Jim Murren announced that he would step down from his positions at MGM Resort's prior to the expiration of his contract. I would like to say on a personal level, I have known Jim for over 20-years and have the utmost respect for the man and what he has accomplished in his career. When he arrived to MGM in 1998 the company had one and a half properties, and an market cap of $800 million. Think about that, compared to today, MGM consisted of the MGM Grand and 50% of New York, New York. Since then, Jim is definitely guided the company through the gaming expansion in Las Vegas and across the country, the acquisition of Mirage Resorts and the acquisition of Mandalay Resort Group. He then successfully weathered the great financial crisis to bring the company to its current state as a world renowned gaming, entertainment and hospitality juggernaut. It has been a remarkable business story and throughout his career, Jim has always been a man of the highest integrity, intelligence, compassion and resolve. Jim is both a great friend and a great leader MGM, MGP in the industry and he will be missed. However, sure he will not be a stranger as he moves on to the next phase of his legacy. Now, turning to the potential impact of this development on MGP. As discussed on MGM's earning skull, their goal is to de-consolidate MGP, which we see as an opportunity and meaningful valuation catalyst for our current and future shareholders. We have entered into an agreement with MGM to deliver cash for up to billion four of MGM’s units, which if exercised will reduce their ownership to around 55%. We are always exploring initiatives to further MGP's evolution to become the premier REIT in the triple net space. Now I will turn it to a brief recap of 2019, which was a year of significant growth for MGM Growth properties. We added $160 million of annual rental revenues or master lease with MGM through the acquisition of the real estate of Empire City Casino, the sale of MGM Northfield Park's operation, and the monetization of the Park MGM improvements. These transactions led to three dividend increases resulting in an annualized dividend rate of a $1.88, which represents $0.9 increase per share year-over-year. We remain disciplined in our investment strategy to pursue a creative acquisitions with strategic significant. Northfield Park and Empire City are great examples of our ability to successfully identify and execute on accretive transactions with third-party sellers and we will continue to pursue these kinds of transactions in the future. 2020 is off to a tremendous start as well as. We just announced, we have closed and completed the venture with Blackstone to acquire a majority ownership of the MGM Grand, Las Vegas and we couldn't be more excited about this innovative transaction. The joint venture, which also has acquired the real estate assets of Mandalay Bay, entered into a long-term triple net lease with MGM Resorts, fighting for an initial rent of $292 million with fixed annual escalators, robust minimum CapEx requirements. The joint venture acquired the properties for aggregate consideration representing a multiple of 15.75x times rent or a cap rate of 6.35%. In addition, Blackstone invested $150 million directly into MGP common stock, highlighting their confidence and the value of our shares and our gross story. This transaction further illustrates the strong institutional demand for gaming real estate and is another example of the attractiveness and value inherent in MGP's assets. We believe that this combination of transactions will lead to meaningful cap rate compression for MGP and ultimately the entire gaming net leasing space. As the owner of the largest portfolio of premiere-integrated casino resort assets across the United States, we will be the biggest beneficiary of this natural evolution of our real estate vertical. MGM Resorts has also reaffirmed its domestic debt financial leverage target approximately one times. This underscores their commitment to our fortress balance sheet which only strengthens the value of our master lease guarantee. We also could not be prouder of the performance that MGM recorded at a number of MGP owned properties, specifically Northfield Park in New York both had record quarters and Gold Strike had a record quarter and a record year. We believe we have the best assets with the best leases from the best operator that will have one of the best balance sheets in the entire leisure industry. All of the elements that generate premium valuations for net lease REIT. We continue to actively explore transaction opportunities and have had many conversations with potential sellers and third-party operators in and out of gaming. We remain committed to our growth strategy and a disciplined allocation of resources and capital. Our priority remains identifying and executing accretive transactions that will enhance our ability to return shareholder value, increase our AFFO and dividends over the long-term. I will now turn it over to Andy to discuss our financial results.

Thank you, James. 2019 was a great year of MGP's balance sheet with a number of well-executed capital markets transactions including two follow-on equity offerings resulting in gross proceeds of approximately 1.5 billion and $750 million senior unsecured notes offering. With the closing of the joint venture transaction, we finalized on a highly-attractive CMBS financing, Blackstone's equity investment in the JV and their direct investment in MGP for the purchase of 150 million Class A shares. This is a testament to the confidence and quality of our assets, the joint venture structure, MGP's growth prospects and strategy. I will now provide some highlights for a few items in our fourth quarter financial results. We recognized $219.8 million of rental revenue on GAAP basis or $236.5 million on a cash basis. Net income was $72.9 million, AFFO was $177.5 million or $0.58 cents per diluted operating partnership units. Adjusted EBITDA was $233 million, G&A expenses for the quarter were $4.2 million. For the fourth quarter, our dividend was $0.47 per share, which represents a $1.88 on an annualized basis. Our net leverage at year-end was 4.5 times, the subsequent to your-end with the settling of our forward equity contracts this week and the just announced closing of a joint venture, our term loan A and B had been fully repaid. In addition, we have an additional $200 million of cash on balance sheet with the closing of the joint venture in Blackstone's MGP investment. With that, I would like to turn it back over to James.

Thank you, Andy. We would like to thank all of our investors for their continued support. And operator, now we would like to turn it over to you for questions.

Thank you. [Operator Instructions]. Today's first question comes from Joseph Greff of JP Morgan.

Hey guys, this is actually [Dan Paul] (Ph) joining for Joe. Good afternoon and thank you for taking my questions. So first given Jim’s recent news that he is stepping down MGM, presumably he will at MGP question. Question is this, do you think this accelerates the increased independence of MGP as it relates to MGM’s influence there? And I guess how do you see this playing out with respect to the Board composition and MGM’s stake in MGP? Thanks.

Yes. All of this is very new to us, obviously. And where things go from here is just something we are not prepared to comment on at this time. Other than what has already been out there from the MGM Resorts side. So we will see.

Okay and I guess this relates to this, still might be a similar answer. But I guess how quickly do you think about redeeming the 1.4 billion of MGP OP units that MGM owns. And is it resumable that this will be soon given MGM's capital markets activities?

Well, you are going to unfortunately get kind of a similar answer. As part of the agreement, they have two years basically to make that request for up to 1.4 billion. So I would just have to say, we will just have to wait and see when that occur.

I think in other MGM releases, they have talk about it in the early part of that window.

Yes.

Alright okay and this is the last one changing gears a little bit. Do you think you need some time to digest the recent transactions before you could reasonably do another one?

No, I don't think so. We have our balance sheets in a great spot. We are always out looking for things that will enhance shareholder value. And I don't think that will come into things at all.

Alright. Thanks so much guys. I appreciate it.

Thanks Dan.

And our next question today comes from Spenser Allaway of Green Street Advisors. Please go ahead.

Hi thank you. Can you guys just talk about the decision to use debt as appose to equity as it relates to the forthcoming OP unit redemption?

Sure. In terms of the capital markets activity for the upcoming redemptions. Having the debt capacity to do so provide us the flexibility to do so when the request comes in. we do have a certain amount of time to deliver the cash upon request, but this gives us balance sheet flexibility, the ability to do it quickly and efficiently.

The other thing I would add to that Spencer is this really lets us control how this gets done to a much greater degree, because as you know debt in today's world is very inexpensive and permits us to basically eliminate any kind of market risk to ourselves out of such a transaction. So we have very significant capacity compared to where our targets are for leverage. So all those things we just thought made it most sense to do it.

Okay. And then as it relates to MGM’s commentary to eventually deconsolidate MGP. Can you walk us through how the mechanics of retiring the B shares would work? Do you suspect that MGM would simply forgo these shares, are they going to expect to be economically compensated for them?

Well, that is certainly an unknown at this time. They have stated the goal was to deconsolidate and the B share, there is no physical share. It is just a contractual arrangements between the two companies. So.

Contractually speaking once their ownership represents 30% or less, it would go away.

Automatically falls away. So, we look forward to working with them on these such decisions. Again, not to repeat the last answer, but time will tell.

Okay. Thank you.

Thanks Spencer.

And our next question comes from Carlo Santarelli with Deutsche Bank. Please go ahead.

Hey guys, good afternoon. Good morning. Thank you. Andy, just in terms of the contribution of the debt to the joint venture, could you talk a little bit about what the joint venture debt looks like as of today? And maybe provide a little bit of color on kind of the CMBS financing and kind of what the rate is on that?

So in terms of the capital structure, it is just a three billion of the CMBS debt. The term loans that we contributed were paid off with the closing of the transaction literally a couple of minutes ago. And in terms of the details of the loan, we will have to get into that in later stage when some of those things to come to public, but just the three billion of debt as a joint venture. That is it.

Okay. And then in terms of obviously staying active and coming out of this process and kind of with a fresh slate. Obviously, your funding position and your liquidity position is strong at present. Is there I guess knowing that you have kind of the billion four potential OP unit redemption kind of sitting out there. Is it possible that you would do you know, potentially a smaller deal kind of in the near-term that doesn't require any kind of financing and you can kind of go with what you currently have while still leaving the dry powder for the unit redemptions.

I think, what we showed in the presentation upon the announcement and it gives a guide posts in terms of where we are, in terms of leverage and our capacity to do a transaction between now and the redemption and there is capacity. And so, we are comfortable continuing to chase down some of the transactions we are looking at, knowing that we can fund it between now before or after or during the redemption.

Yes. And I would say also, it is certainly not limited to small deals because of this at all. We are an excellent balance sheet position, even pro forma for the redemption debt rate. So we are in a very good spot and I wouldn't even limit to that. We are on the hunt as always for things that we think will be long-term beneficial for our shareholders.

Understood. And then just one last housekeeping one in terms of venture. I'm assuming you have, but in terms of the accounting and kind of reporting of the joint venture, equity method kind of - do you have any clarity as to how you will account for it going forward?

The preliminary view is it is likely equity method. I think MGM posted something in their presentation on that. But obviously we will continue to work with our auditors to finalize that when we port it in Q1.

Great. Thank you guys.

Thanks Carlo.

And our next question today comes from Daniel Adam from Nomura | Instinet. Please go ahead.

Hey guys, thanks for taking my questions and for the second year in a row, Happy Valentine's Day.

Thank you.

So, my first question is I know you guys still have plenty of cushion, but does MGM withdrawing its 2020 EBITDA guidance in the near-term cash burn at MGM China? Does it concern you at all from a coverage standpoint?

No. The MGM China is as I'm sure you all know, a completely separate entity with its own capital structure and public stock that trades on the Hong Kong exchange. So I’m convinced they will get the other incredibly great liquidity positions there. And I'm convinced they get through this and end up very strong. But for us, it is not really one we don't own any assets there. Two, separate public company that does contribute dividends now and then to MGM. But really doesn't impact our coverage and safety of our own cash flows.

Okay got it, that makes sense. My second question is, going forward, what do you see as the primary acquisition vehicle for MGP? Is it MGP standalone or the Blackstone joint venture or both? And are there any meaningful differences between your cost of capital, MGP’s cost of capital and that of the JV? Thanks.

One of the hallmarks of our Company is the ability to be creative and thoughtful around all the different sources of capital that are available to us. We are able to bring the grand into the fold with a fantastic partner through what I think is a pretty innovative structure that demonstrate the ability to get capital at some very attractive cap rate fundings and in size. It is hard to predict with any kind of reliability, exactly what structure we will use in the future, what capital sources we will tap. Because, again, our guiding path or guiding star is to increase sustainably the dividend and increase sustainably our share price. And so how one accomplishes that and what capital pools we think are most efficient to sort of bringing acid into the fold that we want. We will do whatever we need that accomplishes those two goals ultimately. Andy.

I would agree with that and I think what this transaction shows is that our access to capital to expanded beyond just public equity, public debt, banks debt, et cetera. But there is JV equity, CMBS debt, direct equity placements into the MGP. So the pool of capital, the different pockets of capital with proven out additional pass and creates opportunities to go forward. We can evaluate each funding source as - come.

Great. That is very helpful. Thank you.

And our next question today comes from Nick Yulico, Scotiabank. Please go ahead.

Thanks Just going back to CMBS financing. I know you haven't given all the details of it, but presumably it is going to be a very attractive rates similar to what already came out with Blackstone doing Bellagio. So I guess what I'm wondering is based on your term loan, you and existing capital structure, are you able to put more CMBS debt on your balance sheet assets as a way to fund acquisitions, let's say if they were outside of Vegas, which seems like that is one of the more little bit more difficult to get CMBS financing?

Look in terms of go forward funding of transactions, as well as our own balance sheet, I think we will evaluate all possible avenues right and we can find the most efficient financing as we go forward. We don't have any big maturities coming up. The nearest bond is still five, six years away. But as we look at transactions, and if that is the most attractive funding source, we can evaluate it. You are right, in terms of regional asset in that structure has been proven out, but certainly the Las Vegas assets have proven they can tap their market.

Yes. And I would say one thing that I think it is fair to say with that market is that they are Most attracted to very high quality, high fit and finish types of properties. And as I look across our portfolio, basically every one of them would fit that category. Look, it gives us some nice flexibility.

Okay. And then just one other question on the relationship with Blackstone. They now own the stock. And I guess I'm wondering, I mean, how did the conversation go with the ultimate amount of stock they ended up purchasing? Were they wanting to do more? Did you guys want to place a certain limit on that? How did those conversations go?

Well, all I will say, Nick is we couldn't be happier to have them both as a partner in the JV and an investor in our equity. And I will leave it at that.

Okay, but there was no like size constraints that you were putting on from your end saying, “hey, we can't do more than this.”

Rather than just REIT limitation, et cetera. That certainly is a upper limit. But I stick by my prior, we will leave it at that.

Okay. Alright. Fair point. I guess just want one last question is on the pipeline of acquisitions that you are looking at outside of traditional gaining. I mean can you just give us a feel what that is looking like and as we are thinking about cap rates, right, where cap rates seem like is they have now compressed in Vegas and maybe in other aspects of gaming. Would these be higher? Would you be pursuing higher cap rate deals, if you are going outside of gaming and what are some potentials there?

Each class has - obviously its own general sort of range of cap rate at which deals transact. And I think to a degree, you are kind of you know you get what you paid for. So one of the things that we have been very, very focused on and I think, ultimately will - to the great benefit of all our shareholders is a high quality portfolio of assets will always garner people who want to be part of that system. And so we look at all sorts of different deals, some of which you know have different levels of attractiveness and different risk reward tradeoffs. But always want to maintain a lens of again very high quality of whatever we do. So we are certainly not going to chase a little bit of extra returns for something that we think could hamper that components of our company or ultimately hamper the ability to have it contribute its fair share to dividend, we will stick with high quality assets in any field that we pursue.

Alright, thanks guys.

Thanks Scott.

And our next question today comes from Robin Farley at UBS. Please go ahead.

Hi, thank you. This is actually Arpine for UBS. We heard MGM talk about a real estate transaction by year end. Should we assume you aren't interested in Springfield at these levels of run rate EBITDA. And if so, how would a potential City Center transaction work? Thank you.

I would not assume the former. It is an asset on which we have a right of first offer, and still it is in ramping up stage and we will see ultimately where it goes. Obviously a beautiful facility and I think longer-term it will start to demonstrate its power within the market, but that will take some ramping up time. It is still in that zone. And, City Center is I think you know is a joint venture between MGM Resorts and Dubai World. It is very, very attractive asset. I guess one of the most beautiful assets in certainly I would say all of Las Vegas, all of the United States, and I would argue one of the best integrated resorts in the entire world. And there is nothing that I can really say regarding any potential deal there other than it would obviously be something that would certainly fit our quality lens, and I think it is just the fantastic and gorgeous asset.

Okay. And could you comment on how that transaction could potentially work and whether the partner has shown any interest down the road or at this moment it is not that easy for you to comment on it?

I'm not going to comment on any hypotheticals.

Okay. Fair enough. Thank you.

Thanks.

And our next question today is from Barry Jonas with SunTrust. Please go ahead.

Hey, guys. Just for starters, MGM talking about lowering their percentage, are you fairly agnostic as to how low that could go or is there a floor that you would prefer?

From our perspective, I would say it is the former. I think they are as you know, they are the best gaming company in the world. They have the best array of assets. They have the best tenant. We love them as an investor. We love the balance sheet strength that the company has. And it is not really up to us, right. It is an MGM decision and whatever percent that they own, we love to have them. And, it isn't up to us. We love all our investors and we love MGM. And it downtime state Barry. So, message of love.

Fair enough. Okay. And then, look, there is clearly checks in place now for conflicts with the Board, but I'm curious to get any perspective from you, what had change in the Board composition, potentially starting with more management representation, what that might mean for the company and potentially its strategy?

Well, at this point, I don't think there is anything really to comment on. But, I will leave it to say, we will work it out in the future, and one of the things that we as a company I think would be valuable is continuing to have the best-in-class governance, given that we have a very large shareholder - very meaningful stake for a minority shareholders until those minority shareholders ultimately become majority shareholders. And our goal is to have the absolute best governance for all scenarios to help the minority or ultimately majority shareholders.

Great. Thanks so much guys.

Thanks Barry.

[Operator Instructions]. Today's next question comes from John DeCree, Union Gaming. Please go ahead.

Hi James, hi Andy, thanks for all the colors so far. I think you have answered most of my questions about the quarter and the transaction. So maybe just a conceptual question for you guys. We have talked in the past about your discussions would be sellers of assets and we get feedback from a lot of the casino operators that have kind of indicated us, they would look to REIT as a financing tool for additional M&A. But curious what your thoughts are, if anything has changed, given the cap rate compressions we have seen. I mean are sellers looking for exits and more willing to do an outright sale to you and to REITs or is it still kind of a focus on looking at the REIT as financing tools as a growth engines? Curious if there has been any shift given where valuation has gone?

It is been a very interesting market over the past year and a half. And I think a combination of a continued decline in interest rates, which I think the general view of fund is that they don't see that reversing anytime soon. Along with some gyrations in the valuation of various operator stocks. And our own ability to raise money at lower and lower cost of capital have fueled an extremely attractive environment for us and for people looking to monetize assets. And the cap rate compression is an expression of that. I think there is a long, long, long way to go in terms of where those cap rates will ultimately end up. Because although we have got compression from historical rate, the attractiveness of this asset class is only in inning one of where I think ultimately, institutional investors will see the safety and security of not just the cash flows but at the fundamental facility itself. So all of those things have contributed to a very, very attractive environment on all of the fronts that you mentioned. And I think it will only continue to move in that direction, as bigger and bigger pockets of capital understand how safe and how secure the investment into these assets especially the highest quality ones that whether ups and downs through thick and thin, really are.

And I would just add to that John. Look in terms of the rationale for transacting with a REIT, financing for M&A, that is one thing that you talked about. But also just positioning company's balance sheets. And I think one thing that people are seeing and seeing MGM do is getting that financial leverage down to a point that is very safe and something that is attractive for some of these companies. In addition, just to get leverage down to a level where they can distribute dividends to their own shareholders is something that is attractive to them. So doing a sale leaseback is an attractive mechanism not only for M&A, but also just positioning balance sheet for whatever corporate reasons that those companies might have.

That is helpful. And a follow-up to that to circle back some of your comments change, when we look at some of the interesting capital like the Blackstone behind the Las Vegas trip, and then we look at some of the assets in the regional markets in particular some of your assets like in National Harbor that is of very high caliber. Where have you seen - have you seen the market has additional kind of pools of capital started to look at some of the regional markets and regional assets in a similar capacities as they get Las Vegas. I mean it is quite obviously, levels interest on the Las Vegas strip and given just the scarcity there of how many buildings? But just curious to get your thoughts on whether you have seen the same level of interest or are seeing the same level of interest for those more regional assets.

Well, as you can imagine, we have many, many conversations with all sorts of different potential partners investors and so on just as a regular course of our business. And I think that beyond sort of a regional or Las Vegas split. The most attractive thing that seems to be the magnet or that attracts this type of capital is fit and finish and the proven ability to earn free cash sort of through thick and thin. And different people get their different ways, but high value, big properties in metropolitan areas really seem to get seem to be the sort of magnet that attracts people. And so I don't view it so much along a regional Vegas split as a initial build cost fit and finish, ability to draw customers that is the best for whatever customer you are targeting, whether it would be a midlevel person, the high level spender, et cetera. When you have that kind of building, it is very, very attractive to many different funds, who are willing to pay for the fit and finish and the cash flows that come out of those. So that is really how it is split down. It is very much my own view, quality versus lesser quality lens. Even though when it gets to - I think one of the questions maybe Nick had asked, even though you can get better values for lesser quality properties, you just don't find - people aren't chasing the last little bit of yield so much as wanting something that is safe. Draws lots of different customer types, draws lots of different activities, has lots of activities in it. And sits in a good area.

And I would add to that. Just you knows these are mature real estate markets, right that provides this financing. And if you look at just pure real estate value, and it is figure measure whether it is gross book value, replacement value. But you look at our assets, you look at our balance sheet with the gross book value of our assets. It is about equal to the market value of the company. When you look at any other portfolio, and there is public markets putting premium or paying more for the gross booking value assets, because of the net lease aspects, right. And so, I think in our company, there is significant upside and that you are getting the book value of the real estate. But the premium value for the quality of the tenant, the quality of the credits, the quality of the one-times financial leverage entity being your tenants that is value over and above the real estate, that is not being reflected in the market today.

I agree. Andy guys. That is a true helpful insight guys. Thanks again and congratulations on another successful year.

Thanks John.

And our next question today comes from of Jay Kornreich of SMBC. Please go ahead.

Hey, guys. Thanks a lot for taking the question. As you are looking at the JV lease with Blackstone, there are some new features in there with a 50-year lease with the expansions and lost in annual rent growth. Is this kind of the new form that we should expect these things to take with new acquisitions?

Look every transaction is unique, right, and buyers, sellers have different goals and prospects for the next 10, 20, 30, 50 years, right. And so, I think it reflects, what those goals are. Those prospects are for those companies to accept various types of lease escalators and market continues to evolve since our IPO days till now. There has been different forms of what leases look like and each transaction is unique. But we certainly, like what we have structured with Blackstone here on just joint venture lease and I think it is attractive for all our shareholders.

Got it. Thanks for that. And then just one follow-up, as you look towards the diversification and the external growth just beyond MGM and given the gaming industry, are there any opportunities for you to purchase real estate directly from Blackstone, from any of their ongoing projects or investments?

I think, when you have developed a partnership like this, which I think is very positive set of feelings on all sides, my own experience is say that frequently just other opportunities come from that. Whether it is buying things together, looking at things together you know whatever it is, getting through all of the negotiations and finalizing documents and all of that stuff generates an understanding of the closeness between parties. So, we will see where it all goes.

Okay. Thanks so much. That is all for me.

Thank you.

And the next question for today comes from Shaun Kelley, Bank of America. Please go ahead.

Hi. Good morning everyone. So, just wanted to go back and you may or may not really be able to answer, but just to figure it out, I will try anyways on the deconsolidation point, we just wanted to go back to, wondering - I mean I think the question was asked around sort of the B shares and how that would work. But my question is a little bit more specific. Would anything else have to take place other than, I guess changing the structure of the B shares or eliminating them in order to move the ownership or the deconsolidation threshold from a 30% up close to a more of an accounting driven, 49% or 50%.

Well, the structure of the B share again is just an agreement between MGP and MGM, which was constructed prior to the IPO. And all of it is subject amongst agreements of the parties for amendments or change or whatever. So, to the extent the two parties get together, which obviously we have a very good relationship with MGM and we talk all the time. We can talk with them, propose anything, they could propose anything to us. But it is really just coming to agreement amongst the two parties to the extent that something wanted to be changed or whatever. Yes.

There is no other I guess gating factor that wouldn't be subject to negotiation or discussion as it relate to those agreements. Am I understand that right?

Correct.

Great. Thanks for that James. And then the other question I have is just specifically on Springfield to go back to that one. I think obviously, we do know the assets performance has been not kind of quite up to what was anticipated. But overall, you mentioned the quality of the property, and I think some of us have been there and seen it you know, know the asset to be a very good one. So the question for that one is a little bit more. Can you just help us think about how you think about that versus the kind of broader master lease and let's call it the broader corporate coverage? Could you contemplate doing something there that might be add a coverage ratio that might be kind of on the ramp up or on a different trajectory than perhaps normal, but with the confidence of knowing that the turn it in the master lease kind of sit there just how would you balance those two pieces?

To the extent that a transaction was completed went into the master lease. The one thing that I think sometimes gets lost is there is no individual lease against any property within the master lease. So if one comes in and just knocks the cover off the ball and another one is in and it doesn't do as well. Rent payment is a rent payment, and you have to pay either all of it or you lose all those assets. So really the cross collateralization of all the assets in the master lease, means you never are looking to one properties necessarily perform and pay it rent share, it just a pool of properties. So to the extent that and asset comes into the master lease that is not contributing, it is allocated fair share whatever you think. I don't want to say it doesn't matter, because obviously I want all the assets to be very well. But the cash flow that is coming from the other assets in the master lease, which is tapped to shore up their part of the rent. And above and beyond that the assets that are not least to us, all as a result of the corporate guarantee also have to come up with, would have to come up with the ability to pay the rent. So, it is an asset that is upside that I think certainly at this point in the company with just a tick under a billion dollars of revenue. It is a gorgeous asset with a best operator, it is taking a long time to ramp, lot longer than people thought. But we are not restricted by the sole performance of that asset, because to the extent it comes into the master lease. Because there is no - there never is a lease against any one property in the master lease. That is the whole point there.

Got it. I think that is very helpful. Thank you very much.

Thanks Shaun.

And our next question today comes from Smedes Rose of Citi. Please go ahead.

Hi. You have answered most of our questions are unable to answer some of them. But I wanted to follow-up on something you said about, you feel that there is sort of an under appreciation in the stock relative to the quality of MGM is your core tenancy. I mean, is it your view that maybe that they will be more appreciation as MGM ownership declines? Or what do you think kind of creates more appreciation and better value in the stock as you see it.

When we went public, many of the investors who we met with were not in the mode of needing or particularly wanting to understand the performance of the various operators cash flows that underlay their rent. Coverage number and who they were, et cetera. If you are having and I'm comparing it to a retail triple net. If you have 3000 tenants that each contributes one 3000, your revenue line you are making $800 million of revenue. The ability to analyze that is zero. And any one tenants contribution is so small after you are done with that one it is like thin Golden Gate Bridge, you get to one and you have to restart at the beginning just immediately again. And so there was just a view that like no one did it. And their way of looking at things of risk was how much leverage was on the REIT and things like this. As we came around, which was a pretty different model for them to analyze, understanding the underlying performance of the tenant is a key components of understanding how safe the cash flows were that came to us. So it takes time for people to get over the hump that they have to understand a big entertainment integrated resort company and figure out whether or not they like those assets, et cetera, versus just relying on theory that we have thousands of tenants let’s just hope they all do well without really having any knowledge of anything that they are doing. But as time has progressed and people understand that having a $15 billion market cap, multifaceted entertainment company with assets all over the country in the world that generate massive amounts of EBITDA. As they have gotten comfortable with how to analyze that and think about it. Think about the different balance sheets and buildings and so on. It has really generated the change of view. So much as anything, it is just the time and the sort of acceptance that one has to kind of do that work in order to understand the company at least to some degree. But we don't want to do it by getting Ks and Qs because for us MGM is a public filer. There is probably 40 research reports out at any one time in the company in debt research and so on. So it is there for people to analyze. It is not the hardest thing to see if you think the credit safe or not. We just have very different path for investors and one that took some time and still is taking people time to really get their head around, which is one of the reasons why I think as time goes on the analyze it, there is no question that we take the spot in the market are the much tighter cp rates than they currently are.

Well, let me just ask do you think that we are sitting here and leaving and probably some upcoming changes to your own board. I mean it seems like this might be an opportunity to really sit down with MGM and talk about an accelerated path to lower ownership. Because I know you are getting to 65%. But it just seems like the non-MGM holders want to see that number go down more, and it seems like MGM continues to want to raise cash. I mean, wouldn't this be kind of an opportunity now to kind of set forth that plan? Or how do you think about that?

Well, it is only been a day. So you know -.

Well I'm not asking you to give me the ABCs. I'm just saying generally .Like big picture is this an opportunity for you to step out of the MGM mother ship, I guess. And I don't know, I mean this is all sort of inline with questions you sort of get every quarter, but I'm just sort of wondering your views on it.

Sure. So, we hear frequently from our investors and from analysts and so on about what their views are as to pass that we could take and so on. And some of the commentary that you have made is certainly not lost on us and it is also not lost on MGM’s own investors, right. So, I think both parties are very incentive to do whatever we can to try to increase and enhance the share value of MGP and how one accomplishes that and what you know works may fall by the wayside is something we will both have to kind of figure out. But, the biggest economic stakeholder we have with MGM Resorts, they are sitting on number of $6 billion stake, even more, $7 billion stake. So, nobody is more incentive than them to want to see an increase in this value. And so, I would say that, again, it is something we talk with about plenty with them and are both very much on the same page as we have always have been about trying to maximize that value.

Okay. Thank you for commentary.

Thanks Smedes.

And the next question today comes from John Massocca from Ladenburg Thalmann. Please go ahead.

Good morning. So, as we think maybe a longer-term with regards to the CMBS debt, does that impacts your ability at all to become an investment grade issuer or just having that in the JV and somewhat remote mitigate any impact that might have fatality rating dates and these might look at you guys?

I don't think that is an impediment John. Obviously, on the other side of the capital structure, as I talked about in the prepared remarks we only have our unsecured bonds in our revolver with the term loans paid down. And so, those are things that agencies will look at as well as just what the leverage is, the raw leverage on the traditional capital structure side. So, all of those things factor into their analysis and I don't believe preclude us from having that sort of outcome at some point in the future. And that is something that we continue to look and see if there anything that we can do to help with that outcome as well.

Okay. And then as kind of maybe, potential acquisitions outside of gaming become more important as you move through the MGM on balance sheet real estate here. How do you structure those kinds of transactions that are outside of gaming in a way that kind of makes, I guess your investment thesis differentiated just given how many guys there are in the REIT space investing kind of more traditional net lease assets? How do you kind of I guess maybe lay concerns investors might potentially have? You are buying potentially assets that you don't have an expertise in, that theoretically at least, another net lease investor passed on for some reason.

Okay. you know James I we weren't just pure gaming bankers in our careers, we are gaming, lodging, leisure bankers. I was covering REITs since the early 2000. From office, industrial, health care, net lease. We worked on deals for all those types of companies. And so, gaming while we have been investing in gaming real estate assets for the last four years. But we also continue to keep the relationships in the lodging, leisure industries, keep those relationships very close to our vest and continue to talk through transactions on those fronts as well. With potential investments for those types of companies, we study those companies and are very familiar and comfortable investing in this industries broadly.

You know you look at what is going on inside the National Harbor, Borgata, MGM Grand Detroit, Overbarge, Luxor, the MGM Grand, et cetera. There is a casino floor. There is a day club. There is a nightclub. There is a restaurant company within each building that will put among the largest restaurant companies in the world. There is a ticket service that would be amongst the largest ticket providers in the world. There is a show that goes on and off. Every one of those buildings where you'd be one of the biggest purveyors of live entertainment. There are sports arenas. There are retail malls, which have garnered incredibly high cap rate - incredibly probably low cap rates in sales. So we are not running a box in a city that is hundred thousand people outside of a cornfield, with slot machines in it, it is a global entertainment company with lots of things that go on inside the buildings. And so I would say the idea - I wouldn't look at it with such a narrow lens in terms of both experience and sort of knowledge of these basis. I mean, it is a knowledge level both within our own firm and within our partners at MGM is extraordinarily deep and extraordinarily broad.

Would it be fair to maybe you assume that is non-gaming acquisitions with a focus on these kind of categories that potentially incur occur inside the casino, but maybe, you have those kind of entertainment type of facilities outside of a casino would be kind of your primary targets into that. And are there other kind of potential real estate categories that just aren't being addressed by your traditional net lease investors that maybe you think are attractive?

Every transaction we look at individually irrespective of sort of categories. And it stands on its own or it doesn't. And if we think that it is accretive without raising our leverage above our targets will pay the rent for the life of lease without keeping anybody up. That is the deal we want to look at. If it fails on any one of those metrics probably a deal we don't want to look at. And the other components of looking at that metric is yes, it has to be the high enough quality and fit and finish such that we are not concerned about paying the rent or diminishing the overall value of the portfolio. And each one has to stand on its own. With irrespective of the space, we don't look at it like.

Okay, that makes sense. That is it for me. Thank you very much.

And our next question comes from Felicia Hendrix of Barclays. Please go ahead. Ms. Hendrix your line is open.

This concludes our question-and-answer session. I would like to turn the conference over to Mr. Stewart for any closing remarks.

Thank you all for listening today's conference call. I would like to end with the following. We continue to execute our long-term business strategy, focus on creating a stable and growing income stream that we can enhance with disciplined acquisitions of quality assets. Our rent continues to be protected by our superior assets, master lease structure, parent level guarantee. We believe our portfolio of properties is the highest quality collection of integrated resources ever assembled. And in addition to quality of our assets, we also have the highest net coverage in the industry. I believe there are significant upside to our relative trading levels and the underlying value of our real estate which overtime I'm confident will continue to be reflected in our stocks. Thank you very much. Talk to you all next quarter.

Thank you, sir. This concludes today's conference call. We thank you all for attending. You may now disconnect your lines. And have a wonderful day.