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A year-end reflection from the principals on what we did, what we did not do, and why patience is the only discipline worth keeping.
A year-end reflection from the principals on what we did, what we did not do, and why patience is the only discipline worth keeping.
The year now closing was the kind that rewards inactivity. We acquired two assets, declined eleven, refinanced one, and otherwise spent the calendar reading, walking buildings, and sitting in our seats. None of that reads well in a letter. All of it, in retrospect, was the work.
The eleven transactions we walked away from share a common shape. Each was priced to a residual that required either a continuation of the cycle we were already in, or a reversion to a cycle we have not seen in fifteen years. Neither is a thesis we are willing to underwrite at scale. Saying so quietly, eleven times, is a form of work that does not announce itself.
What a long-horizon practice asks of you is not access, and it is not analysis. It is the willingness to hold a building through a period in which the market refuses to read it the way you do — to keep maintaining it, leasing it, restoring it, on the schedule the building requires rather than the schedule the market would prefer. We have lived through three of those periods now. None of them felt edifying at the time. In each case, by the end, the buildings had reached the standard we had set for them when we bought them.
We expect 2026 to be a year in which dispersion widens, in which the most-marketed transactions clear at prices we do not understand, and in which patient operators will continue to find work. We will write again at the half-year.
With our regards, The principals.