Market Commentary | January 16, 2026

Looking Back to Gain a Better Look Forward

As a matter of housekeeping, every fall investors work to prudently minimize their tax liabilities by washing their current year realized gains by “harvesting” tax losses with the sale of assets that have declined in market value. Unfortunately, the stocks we see as having the most potential are often the best tax-loss sale candidates. To mitigate this conflict and stay fully invested, we need to identify issues that have a chance of producing similar upside as the issues we are selling.

With the S&P 500 logging a third straight year of outsized gains, 2025’s tax-loss selling season was more extreme than most, and that created outsized opportunities. 2MC prides itself in being fully informed about all issues in the REIT universe, whether we still own them or not, whether our experience with a particular company was good or bad. We attempt to remain unemotional and constantly remeasure a prospective investment on the merits of value and growth.

For example, like many investors, in prior years we got on the wrong side of long positions in Service Properties Trust (SVC) and Medical Properties Trust (MPW). Each company faced its own operational struggles, and the markets brutalized their share prices. Both SVC’s and MPW’s share prices remained depressed throughout 2025, and that made them ideal/extreme candidates for tax-loss selling. We continue to follow both companies and perceived an extreme discount to both value and normalized pricing. We swallowed our hurt feelings and put some of our own tax loss sale proceeds to purchase SVC and MPW.

On the side of fonder memories, VICI Properties (VICI), the huge Las Vegas hotel and casino landlord, was a company 2MC and other investors loved a few years ago. VICI structures triple-net leases for gaming operators that minimize VICI’s capital risk while growing revenues with rent escalators. We never stopped liking the issue, but interest rates were starting to rise, and the market had fully valued the shares. Three years later, like most other REITs, the shares have been beaten down to double-digit discounts to NAV and a lower P/FFO. We bought shares and intend to collect rising dividends until such time that the market fully values VICI again.

The Point

Experiences, both good and bad, shape our decision making. In acknowledging both the positive and negative, we create a broader vista of choice and opportunity. Experience has value that compounds over time.

Thanks again for participating.

Notes and Disclosure

Articles are provided for informational purposes only. They are not recommendations to buy or sell any security and are strictly the opinion of the writer. The information contained in these articles is impersonal and not tailored to the investment needs of any particular person. It does not constitute a recommendation that any particular security or strategy is suitable for a specific person.

Investing in publicly held securities is speculative and involves risk, including the possible loss of principal. The reader must determine whether any investment is suitable and accepts responsibility for their investment decisions.

Commentary may contain forward-looking statements that are by definition uncertain. Actual results may differ materially from our forecasts or estimations, and 2MCAC and its affiliates cannot be held liable for the use of and reliance upon the opinions, estimates, forecasts, and findings in this article.

Past performance does not guarantee future results. Investing in publicly held securities is speculative and involves risk, including the possible loss of principal. Historical returns should not be used as the primary basis for investment decisions. Although the statements of fact and data in this report have been obtained from sources believed to be reliable, 2MCAC does not guarantee their accuracy and assumes no liability or responsibility for any omissions/errors.

We routinely own and trade the same securities purchased or sold for advisory clients of 2MCAC. This circumstance is communicated to clients on an ongoing basis. As fiduciaries, we prioritize our clients’ interests above those of our corporate and personal accounts to avoid conflict and adverse selection in trading these commonly held interests.

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