Six Flags Shareholder Pushes Real Estate Spinoff To Unlock Big Value After Stock Drop

Author: Benzinga Newsdesk | September 26, 2025 07:04am

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

Posted In: FUN VICI