Believes Monetizing Company's Real Estate While Driving Operational Turnaround in Parallel Could Result in Massive Upside to Current Share Price
Confident FUN Real Estate Could Attract Multiple Bidders and Sell for Up to $6 Billion; REIT Spin-Out is More Viable Than Ever Given Increased Scale Following Merger with Cedar Fair
Views Combination of Real Estate Monetization and Turnaround as Best Pathway to Company Beginning to Trade at Fair Value After Years of Underperformance
Today, Land & Buildings Investment Management, LLC (together with its affiliates, "Land & Buildings," "L&B," "us" or "we"), a substantial shareholder of Six Flags Entertainment Corporation (NYSE: FUN) ("Six Flags," "FUN" or the "Company"), issued a public letter to the Company's shareholders detailing how Six Flags could unlock substantial value by executing a strategy to monetize its real estate while driving an operational turnaround.
The full letter is below:
Dear Fellow FUN Shareholders,
Six Flags' stock has declined by over 50% year-to-date and trades at a trough EBITDA multiple of 7x on depressed earnings. A combination of merger pains and historically poor weather have led to incredibly negative sentiment and record short interest.
With the Board changes announced in March, a CEO succession process underway and a highly engaged and vocal shareholder base, we see a generational opportunity to buy FUN before it re-rates. Monetizing the Company's real estate provides a straightforward means of delivering substantial near-term shareholder gains while preserving the operational upside as EBITDA recovers and expands.
Land & Buildings' History of Engagement with Six Flags: Third Time's a Charm
In December 2022, Land & Buildings issued a presentation titled Six Flags Entertainment Corp. (NYSE: SIX): A Thrilling Real Estate Opportunity, highlighting how legacy Six Flags stock could see 50% immediate upside through an OpCo/PropCo separation, unlocking the trapped real estate value through a sale-leaseback or REIT spin-out. Shares subsequently rose 45% in short order. Our discussions with the Board and management were constructive, a new director was appointed to the Board, and an evaluation of a separation of the real estate/operating business was to be conducted in 2023 as Six Flags worked to recover its lost attendance.1
In August 2023, we again engaged with the Six Flags Board to monetize its real estate, outlining the conglomerate discount the Company had historically traded at. We specifically cited that the shares were trading at a 12.5% EBITDA yield while the real estate would likely trade at a 7.5-8% yield. A few months later Six Flags announced the merger with Cedar Fair, and while the shares traded up, we opposed the merger, stating that we did not believe the plan was the best way to maximize value for shareholders. Unfortunately, the performance post-merger has not only proven us right, it's been far worse than we even anticipated.
Today, with the Company's valuation near all-time lows, we see an even more compelling re-rating opportunity from separating the real estate, with over 75% immediate upside based on 2026 consensus estimates (Figure 1). Upside could be as much as 130% if 2026 EBITDA recovers to $1.1 billion (FUN's original 2025 guidance).
Figure 1: PropCo/OpCo Unlocks Substantial FUN Value
|
| Six Flags (FUN) Sum of the Parts |
|
| 2026 Consensus Adj. EBITDA |
$1,008,231
|
| Enterprise Value |
$7,199,700
|
| EV/EBITDA Multiple |
7.1x |
|
|
| Real Estate Value |
|
| % of REIT-able Real Estate |
90%
|
| EBITDAR Coverage |
2.0x |
| Lease Payment |
$453,704
|
| Cap Rate |
8.00%
|
| Real Estate Value |
$5,671,298
|
|
|
| Operator Value |
|
| Operator EBITDA |
$554,527
|
| Operator EBITDA Multiple |
6.0x |
| Operator Value |
$3,327,162
|
|
|
| Combined Opco/PropCo |
$8,998,460
|
| Net Debt |
($5,022,210)
|
| L&B Est. Net Asset Value |
$3,976,250
|
| Outstanding Shares |
101,279
|
| L&B Est. NAV/share |
$39.26
|
| Current Share Price |
$22.11
|
| Upside to Equity |
78%
|
Source: Land & Buildings, Company filings, Bloomberg
|
Note: All data as of 09/24/25 unless otherwise noted
|
The path to maximizing value for all shareholders is clear to us:
-
Announce the spin-off of a FUN REIT, allowing shareholders to crystallize the trapped value in the Company's real estate while also preserving the upside optionality in the recovery and growth of the operator's EBITDA. Publicly traded net lease REITs, including experiential REITs, continue to trade at material premiums to FUN and the multiple we have applied to FUN REIT, averaging approximately a 17x EV/EBITDA multiple and a 6.5% implied cap rate.
-
While preparing for the REIT conversion, evaluate the sale of the real estate. Multiple buyers, such as VICI Properties (NYSE: VICI), remain explicitly interested in acquiring real estate like theme parks in scale at valuations nearly double the current trading multiple.
-
FUN OpCo could remain independent or be acquired. Private equity remains quite interested in the asset class, but there are also numerous leisure and hospitality companies that could enjoy meaningful synergies with a theme park offering across entertainment brands and customer lists.
The issues causing the weakness in Six Flags' earnings and stock are mostly self-inflected (i.e., merger integration issues) and transitory (i.e., extreme weather anomalies), providing a clear path to improved performance next year as the theme park business remains highly resilient in our view. Spinning off a REIT would likely take several quarters to execute, allowing time for EBITDA to improve and pricing the real estate on 2027 earnings power.
L&B's conversations with management and the Board have been constructive, and we believe a broader monetization of real estate will be considered along with other strategies such as accelerated sales of non-core theme parks and land. The focus, as always, needs to be on enhancing park operations for all stakeholders (including guests). The current Board of Directors and new shareholder base are more willing than ever in our view to evaluate strategic changes in parallel to ensure value is maximized. Real estate monetization has proven in countless industries – from lodging, to gaming, to healthcare and many others – to unlock substantial value for real estate heavy operating business and there is no reason for further delays.
We look forward to continuing our dialogue with the Board, management, and fellow shareholders.
All the best,
Jon Litt
***
Disclaimer
The views expressed are those of Land & Buildings as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be a forecast of future events or a guarantee of future results. These views may not be relied upon as investment advice. The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable.
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