Market Commentary | December 23, 2025

A Time for Continued Patience when Impatience Steps to the Fore

On December 17th, the Fed delivered its third rate cut of 2025. Frustratingly, the 10Y Treasury yield remains stuck above 4%, so the long-awaited macroeconomic relief that real estate investors feel they need has yet to arrive. We’ve been so patient, too.

Fortunately, December also presented evidence that other important investors are becoming more impatient. These investors, mostly institutional, sit on piles of cash they want to productively employ in the acquisition of valuable, growth assets. In 2025, opportunists have become progressively restive and are choosing different paths of action.

Stock buybacks – management teams believe the markets are undervaluing their shares and determined that buying their own stock is the best investment they can make – see, for example, NXRT, KRG, APLE, and CTO.

Asset sales/liquidation – many REITs perceive that their share prices describe a significant discount to their property portfolio’s market value, so they have opted to sell select assets or the entire portfolio – see, ELME, BSRTF, AIV, and CSR.

M&A – Looking from the outside in, private equity investors have been willing to acquire entire companies at big premiums to market price, but discounts to NAV – see, PLYM, TWO, and ALEX.

Activism – Certain activist investors have become impatient and prodded managements to make operational changes they anticipate will enhance shareholder value – see, COLD, SHO, and CCI.

Value

The one common thread in all these investment activities is the pursuit of value. 2MC finds and buys value and growth. While we own/owned a number of the issues mentioned above, we have interests that trade at even bigger discounts to Net Asset Value and earnings. Our positions in residential, industrial, healthcare, and retail represent the best value in their sectors. It’s merely a matter of time before the opportunists arrive at our door.

Your Patience is Much Appreciated

While the investment world this year largely ignored real estate, a number of our positions delivered big gains through mergers and asset sales. We expect this trend to continue in 2026.

Thank you for your continued participation.  Happy Holidays!

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.

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