VICI Properties (VICI) has impressive gaming assets, though low coverage on the Caesars Regional lease and potentially reduced visibility from its largest tenants remain key concerns, RBC Capital Markets said in a note Thursday.

The analysts said they remain positive on gaming real estate investment trusts and believe investors underappreciate the stability of casino cash flows.

VICI also stands out for its exposure to uncapped CPI-linked rent escalators, which are relatively rare in the net lease sector and become more valuable during periods of higher inflation.

However, uncertainty surrounding the Caesars Regional lease, the possibility that VICI's two largest tenants could go private, a growing focus on experiential and debt-like investments, and CPI escalators tied to a tenant with whom investors remain uncomfortable "are all muddying the waters," the analysts said.

The analysts added that in recent years, the company has shifted its focus away from traditional gaming acquisitions toward non-gaming experiential assets and debt-like investments.

While diversification makes sense, "we also think experiential and debt-like investing are quality dilutive in their own ways."

RBC initiated coverage of VICI with a sector perform rating and a $29 price target.

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