Land & Buildings Investment Management, LLC (L&B) was busy with casino equities in the first quarter, adding new positions in Boyd Gaming (NYSE:BYD) and MGM Growth Properties (NYSE:MGP).
Jonathan Litt’s firm is considered an activist investor with a knack for focusing on real estate assets. Boyd and MGP are two of four stakes added by the money manager in the first three months of the year and the only two gaming names among that quartet. L&B liquidated a stake in Caesars Entertainment (NASDAQ:CZR) — one of three names it dropped in the January through March period.
L&B bought 341,787 shares of regional casino operator Boyd in the quarter, valued at $20.15 million at the end of March, according to a Form 13F filing with the Securities and Exchange Commission (SEC). The activist investor also purchased 344,771 shares of MGP, worth $11.24 million as of March 31.
Boyd is off 7.82 percent over the past month, but there’s an excellent chance L&B is in the green on that position as the shares are higher today than they were at any point in January, February and the first half of March.
The operator is mostly liked by analysts that view as it play on renewed consumer confidence, increasing levels of coronavirus vaccinations and strength in key demographics such as those 55 years old and up and Las Vegas locals.
What Litt Sees in Boyd, MGP
Boyd runs 28 gaming venues across 10 states, including 11 in Nevada. The company owns nearly all of the real estate on which its casinos reside.
It’s not immediately clear if L&B is planning to push Boyd to monetize its property assets. Such a declaration isn’t made in 13F filings. However, that is the type of scenario Litt is well-versed in. He took a stake in MGM Resorts International (NYSE:MGM) in 2015 — one L&B maintains a portion of to this day — and pushed the casino giant to spin-off of MGP. He was successful in that pursuit.
His plans for the casino real estate investment trust (REIT) aren’t public knowledge at this point, either. Last week, the company bought MGM Springfield from its former parent for $400 million.
By buying MGP shares in the first quarter, not only is Litt’s firm sitting on a noticeable gain, but it was in the stock before the MGM Springfield deal was announced and that’s a plus because the REIT said the transaction will add to adjusted funds from operations (AFFO) per share.
Speaking of Gaming REITs…
While L&B added MGP to its roster in the first quarter, it pared its position in another gaming REIT, taking its stake in VICI Properties (NYSE:VICI) to 776,537 shares from around 1.01 million.
Last year, Litt pushed Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) — the other publicly traded gaming REIT — to merge with VICI. That deal didn’t come to fruition and L&B ultimately liquidated its position in GLPI.
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