• Bull Case: Asset sales, refinancing of high cost debt, and an office sector recovery could provide a 3X return in 4 years.

• Bear Case: Weak asset quality, high cost debt, and an economic downturn lead to another liquidity crunch within 4 years.

“OPI is a national REIT focused on owning and leasing office properties to high credit quality tenants in markets throughout the United States. As of March 31, 2026, approximately 60% of OPI's revenues were from investment grade rated tenants.”

Topics:

• Company Profile

• Capital Structure & Basic Valuation

• Governance (Trustees and Share Ownership)

• Management Agreement

• Portfolio Insights ($)

• Valuation Perspectives ($)

• CBL Precedent ($)

Company Profile:

• 122 Office Properties, 17.1mm square feet

• 30 states (including DC) - percentages of 2025 rents:

  

• Mediocre portfolio

  • Mostly Class A/B Properties with single or majority tenant

  • 78% leased at 3/31/26

  • 26% of revenue from government tenants

  • WALT 6.4 years

OPI’s portfolio is mostly suburban buildings with low density (under 10 stories) and outdoor parking. It has almost no exposure to new highly amenitized buildings with excellent transit access in top markets.

Capital Structure & Basic Valuation

Bankruptcy eliminated $714mm of pre-petition debt, but all of the $1.7Bn of post-emergence debt bears higher interest rates and leaves minimal free cash flow.

Governance & Ownership

Major Shareholders:

Other significant noteholders who had the option to convert to equity included Exodus Point Capital and Cetus Capital. High yield fund managers with positions included Nuveen, and Mackenzie - they may be sellers of the new OPI equity if it no longer fits their mandates.

Trustees:

• Jonathan Heller (Helix Partners)

• Jonathan Kotlatch (retired from Redwood Capital)

• Irvin Schlussel (family office)

• William Lamkin (formerly Ackrell capital)

• Adam Portnoy (RMR)

Helix Partners is entitled to appoint up to 3 trustees (out of a maximum of 7) as long as it owns at least 15% of the voting stock. Redwood Capital is entitled to appoint up to 2 trustees as long as it owns at least 10% of the voting stock. These two investors are ultimately in control.

Management Agreement

• The notorious RMR Group was retained as the external Business Manager for a fixed annual fee of $14mm for 2 years with subsequent fees subject to negotiation.

• RMR entities have delivered poor long-term shareholder returns

• RMR received 2% of the new OPI equity and will be able to receive an incentive fee of up to an additional 8% if OPI achieves unspecified objectives (“satisfaction of certain financial criteria to be established by the Board”).

• The new OPI management agreement can be terminated after 2 years (in 2028) without any termination fee, not nearly as restrictive as standard RMR agreements (20-year rolling terms and severe termination penalties)

  

  For comparison the prior agreement (filed in 2015) had a rolling 20-year term and severe termination penalties.

  

RMR is heavily incentivized to generate value for OPI shareholders and will be terminated if it doesn’t.

Read more

Sector Overview:

The yield premium of real estate cap rates over 10-year bond yields is near the middle of its historical range. Broker reports show little change in cap rates for 2Q26 (CBRE and Colliers) but the market tone has improved with buyer demand for multifamily properties despite weak renter demand and broadening of the GTA Class A Office leasing recovery to secondary locations.

Yields for government bonds and real estate issuers have risen 15-20bp since quarter-end. Canadian bond yields are over 100bp lower than in the US at every maturity. For real estate investors, Canadian property offers a positive return over financing cost, but US property buyers may get little or even negative return on leverage.

Insiders at 20 of 35 REIT/REOCs were buyers since 1/1/26 and 7 had net insider sales. REIT/REOCs have repurchased $449mm of equity since 1/1 (reported to 7/27) with the largest buybacks at Boardwalk (5.2% of market cap), Clarke (3.5%), Dream Industrial (2.3% of market cap), Killam (1.7%), and CAPREIT (1.1%).

Topics:

• CMHC Mid-Year Outlook

• Valuation Comparison ($)

• Quick Takes ($) Brief comments on Choice, Morguard REIT, Morguard Corporation, Dream Unlimited, Granite, Plaza, and GO Residential

• Previously Previewed New Idea ($) Full article coming this week

• New New Idea Preview ($) A real estate liquidation

CMHC Outlook

The recently issued Summer Update: 2026 Housing Market Outlook forecasts gradual housing market improvement in 2027 and 2028. It incorporates last month’s 2026 Mid-Year Rental Market Update which predicted growth in renter household formation despite the slowdown in population growth. Improved affordability and return-to-office trends will encourage young people to move out of family and shared lodgings.

These tables show data for the 6 major Canadian markets, with Halifax added for relevance to Killam, and Regina+Saskatoon added for relevance to Dream Unlimited. Home prices are expected to be relatively strong in the affordable markets:

Apartment rents will continue growing nationwide with individual markets reflecting a mixture of affordability plus economic opportunity.

This forecast implies that the weakness in asking rents (e.g. Rentals.ca monthly rent report) reflects temporary factors and that Canadian multifamily REITs are attractively valued with a gradually improving outlook.

Read more

Rithm Pooperty (RPT) shares are -18% since announcing a heavily dilutive $300mm equity offering and -62% since announcing in 2024 that Rithm Capital (RITM) would become its external manager.

Key aspects of the financing (prospectus):

• Approximately 48% dilutive to Book Value per share

• Rithm Capital will invest up to $200mm through a combination of common shares (up to the maximum 20% of voting power permitted under NYSE regs) and non-voting convertible preferred that are substantially equivalent to common shares.

• Existing holders other than Rithm Capital will suffer a loss of $96mm from dilution of their current interest in RPT’s book value. A holder could mitigate the impact by purchasing shares in the offering. If RITM purchases $200mm of new equity then it could gain $55mm in attributable book value.

• Proceeds will be used to acquire a $1Bn portfolio of multifamily transition loans (construction, bridge, and renovation) from Rithm Capital’s Genesis division. The portfolio has an estimated levered yield of 13.4%.

The Genesis portfolio might be attractive, however it could never deliver enough gains to offset the huge upfront loss in value from the offering. On the other hand, the deal looks extremely attractive for Rithm Capital which will grow the fee paying AUM of RPT, have a captive vehicle to hold its Genesis loan production, and profit from the dilution of public RPT holders. Unfortunately, there will be reputational damage as I expect for many years investors will point to this offering as an instance where RITM put its own interests ahead of those of its clients (the shareholders of RPT)

Shame on the purportedly independent directors of RPT for approving this equity issuance. Rithm Capital has delivered an excellent long-term return to its own shareholders, but this is a bad deal for RPT. It should be abandoned, but that probably will not happen.

Meet The Bagmakers

RPT’s three independent directors are bagmakers, not bagholders. The recent annual meeting signaled a high level of opposition, however the 4 nominees receiving the most votes serve on the board regardless of the number of votes against them.

The directors receive generous annual cash compensation:

They hold little or no RPT stock and all reported shares were received as compensation rather than purchased in the market.

Share price performance during their terms of service has been terrible:

• Paul Friedman joined the Board of RPT predecessor Great Ajax in July 2016 with the share price at $83.28 (pre-consolidation). RPT claims that he brings an “extensive amount of operational and risk management experience to the Board, as well as a deep knowledge of the financial services industry.” He is also on the board of Oppenheimer Holdings.

  

• Mary Haggerty joined the Board of RPT predecessor Great Ajax in March 2021 with the share price at $70.80 (pre-consolidation). RPT claims that her “background in investment banking paired with her experience in various director roles provide her with the expertise to serve as a director.”

  

• Daniel Hoffman joined the RPT board in June 2024 with the share price at $19.68. RPT claims that his “over 25 years of experience in the mortgage securities market and his broad-based investment banking experience qualify him to serve as a director.” He also serves as CEO of The Monday Group family office (“Compounding intelligence - Amplifying curiosity”).

  

In my opinion, the offering demonstrates that Paul Friedman, Mary Haggerty , and Daniel Hoffman cannot be trusted as financial fiduciaries. Either they don’t understand the cost of the transaction to RPT shareholders, or they don’t care.

Disclosures & Notes

At the time of publication the author held shares of Rithm Capital and Rithm Property Trust. This disclosure should not be interpreted as a recommendation to purchase either security. These holdings vary in size and may change at any time. Investors are encouraged to check all of the key facts cited here from SEC filings, company disclosures, and other sources prior to making any investment decisions. The author believes all information in the article is accurate as of the date of publication.

This article is published free in its entirety because it may be of public interest.

• Transformation into a platform for third party capital investments through blue chip partnerships (Silverlake, CPP, and Oaktree)

• Strong market share in core residential mortgage products (Jumbo residential mortgages, Alt-A, and Business Purpose Lending)

• BVPS $7.12 as of 3/31/26 (est $6.98 for 2Q26)

• 2026 Analyst Consensus Earnings Available for Distribution $1.03/share

Topics:

• Index Deletion - the near-term opportunity

• Segments - background on RWT’s business

• Partnerships

• Balance Sheet Risk - high headline leverage

• Distributions - tax advantaged 16% yield

• Governance

Breaking: RWT estimated a 1-3% decline in 2Q26 BVPS (LINK). This does not change the thesis of this article.

Index Deletion

S&P announced on July 2 that RWT would be removed from the S&P600 on July 8. Approximately $135Bn is directly indexed to the S&P600 and at a 0.03% weighting, that means approximately 8mm shares of RWT. Volume in the past week has probably been sufficient to clear this.

No peer has the same business mix as RWT, but share prices of every company that competes with part of RWT’s business are flat or up in the past month.

RWT’s exchange traded bonds and preferred shares are all up slightly over the past month, showing no sign of company specific problems.

Segments

Redwood purchases loans from banks and other originators then securitizes them or sells in bulk. In 1Q26 it saw record production volume of $8.5Bn and issued 11 securitizations despite relatively weak housing market conditions. Financial performance is detailed in the quarterly supplement.

Sequoia - Prime Jumbo Loans. RWT has been in this business for 30 years, has approximately a 7% market share, and estimates that it works with loan sellers and banks responsible for 45% of all originations. Loans underlying $21Bn of Sequoia securitizations have an average FICO of 772 and 0.2% 90+ delinquency. At 3/31/26 RWT had $230mm of capital invested in Sequoia retained interests and $500mm of working capital invested in current loan production.

Corevest - Investor Loans. RWT formed this segment in 2019 with the acquisition of Colony American Finance. It makes Residential Transition Loans and DSCR-based loans for stabilized properties. Loans underlying $1.9Bn of Corevest securitizations have an average 9.8% 90+ delinquency. At 3/31/26 RWT had $92mm of capital invested in Corevest retained interests and $174mm of working capital invested in current loan production.

Aspire - Non QM loans (Alt-A). In 2025 RWT began leveraging its Sequoia seller relationships to develop an “expanded-prime” platform supporting loans based on wealth or self-employment income. Loans have an average FICO of 754 and 70% LTV. At 3/31/26 RWT had $200mm invested in working capital to support Aspire current loan production.

Investments - Retained Interests. RWT retains equity interests in securitizations. It also holds third-party originated MSRs. Results from this segment include fair value changes that are the primary difference between RWT’s GAAP income and non-GAAP “Earnings Available for Distribution”.

Legacy. In 2025 RWT began segregating assets not aligned with its high volume core business. These included multifamily, home equity, and re-performing loans. Low turnover, higher credit losses, and negative carry made these a drag on earnings. At 3/31/26 RWT had $242mm of capital invested in legacy assets (-54% yoy). As these are wound down, the funds are being re-allocated to the higher ROE core businesses.

The high ROE from the mortgage banking business (60% for Sequoia in 1Q26 😲), strong market presence including relationships with loan sellers and securities investors, and blue-chip capital partnerships make RWT fundamentally different from a traditional mortgage REIT that simply owns a highly leveraged investment portfolio. Focus on its core business lines and successful reallocation of capital from legacy assets could justify a valuation at a premium to book value ($7.12/share)

Partnerships

RWT has transformed its business in recent years through creation of joint ventures to invest in the assets created under the Redwood platform. These partnerships enable RWT to increase volume-based earnings by expanding the scale of its business while also earning management and incentive fees (terms are not disclosed)

• 2023 Oaktree - In June 2023 RWT formed a $1Bn venture with Oaktree for investment in Corevest business purpose loans (LINK)

• 2024 Canada Pension Plan - In March 2024 RWT formed a $4Bn venture to invest in Corevest loans. CPP contributed $400mm of equity and a $250mm secured credit line. (LINK)

• 2026 Castlelake - In April 2026 RWT formed an $8Bn venture to invest in Sequoia prime jumbo loans. (LINK)

It’s very likely that RWT will introduce a capital partner for the Aspire (non-QM) business.

Balance Sheet Risk

RWT’s balance sheet is complex with $890mm of common equity supporting $26,816mm of total assets. However $22,076mm of the assets are in consolidated securitization trusts with permanent non-recourse financing. A majority of the remaining assets are current loan production financed with warehouse lines until securitization. RWT also has $777mm of unsecured long-term corporate debt (including several exchange traded bond issues).

RWT has transformed its liability structure since 2020 when it faced severe pressure from excessive reliance on margin debt. At 12/31/19 RWT had $1,177mm of repo financing for its retained securities. Deleveraging and mark-to-market changes resulted in a $582mm ($5.12/share) loss for 2020. At 3/31/26 RWT had only $104mm of marginable financing for its retained securities so it will be more resilient if a crisis emerges.

Distributions

RWT is a Mortgage REIT with a current quarterly dividend of $0.18/share that is covered by non-GAAP Earnings Available for Distribution ($0.21/share in 1Q26). The current yield of 16% suggests a high risk level, but is largely due to the share price discount. The distribution is about 10% of book value, well below the ROE of each core segment. The payout ratio is declining due to a favorable earnings trend from strong mortgage banking volume, capital from new partnerships, and recycling of capital from legacy assets. There is no risk of a distribution cut in the near-term and the dividend returns a portion of the full NAV that we can currently buy in the market at a large discount.

The 2020 losses created loss carryforwards that have shielded a portion of the tax liability on current distributions. 59% of 2025 dividends and 50% of 2024 dividends were non-taxable return of capital.

Governance

• RWT has over a 30-year history as a public company

• Insider ownership is low and over 50% in the form of incentive Deferred Stock Units rather than common shares.

  

• Institutional Ownership is dominated by passive and traditional value/income investors

  

• Blue chip partnerships are a validation of the quality of management and internal controls

Disclosures and Notes:

At the time of publication the author held shares of Redwood Trust. This disclosure should not be interpreted as a recommendation to purchase this security and this holding may change at any time. Investors are encouraged to check all of the key facts cited here from SEC filings, company disclosures, and other sources prior to making any investment decisions. The author believes all information in the article is accurate as of the date of publication.

This article is published free in its entirety because it does not contain a lot of original work.

Sector Overview:

The yield premium of real estate cap rates over 10-year bond yields is near the middle of its historical range.

Canadian bond yields are over 100bp lower than in the US at every maturity.

Insiders at 21 of 36 REIT/REOCs were buyers since 1/1/26 and 7 had net insider sales. REIT/REOCs have repurchased $375mm of equity since 1/1 (reported to 6/30) with the largest buybacks at Boardwalk (3.9% of market cap), Clarke (3.7%), Dream Industrial (2.4% of market cap), and Dream Unlimited (1.0%).

Topics:

• Valuation Comparison ($)

• Quick Takes ($)

• New Idea Preview ($)

Read more

Since Armoyan became CEO of Clarke Inc in April 2003, investors have enjoyed an IRR of approximately 15% assuming reinvestment of dividends (Clarke calculates an IRR of 11.7% excluding reinvestment). Shareholders’ Equity is +320% and shares outstanding are -51%. The return would be even higher if credit were given for appreciation of Terravest shares since they were distributed to CKI holders in March 2020. Armoyan’s stake has risen from 26% in 2003 to 73% as a result of open market purchases, plus reduction of the public float through NCIB and SIBs.

Armoyan’s willingness to issue CKI shares for the first time in 23 years suggests he must believe strongly in the value that will be realized over time through the Ravelin acquisition.

Topics:

• Armoyan’s involvement with Ravelin

• Clarke’s History of Value Creation

• Armco and G2S2

• Ravelin’s History of Value Destruction

• Pro-Forma Financials

• Summary Of Investment Opinion ($)

• Clarke Business Profile Post-Merger ($)

• Clarke Valuation ($)

Armoyan’s Involvement With Ravelin

Armoyan first reported ownership of 10.1% of Ravelin (f/k/a Slate Office) in May 2022. Based on market prices at that time over $4.50, the position must have cost over $36mm. Subsequently:

• Over the next year he purchased an additional 6.5mm units at a cost of approximately $20mm. He liquidated his entire holding in December 2025 for less than $5mm.

• In February 2023 a settlement agreement added Armoyan and a chosen nominee to the Slate Office board.

• In November 2024 Armoyan became board Chairman and the management agreement with Slate was terminated. The REIT was renamed Ravelin Properties.

• In 2025 Armoyan, through G2S2, acquired C$724mm of defaulted Ravelin debt and provided a brief period of forbearance during which the REIT could develop a restructuring plan.

• In March 2026 Ravelin announced an agreement to be acquired by Clarke and the transaction closed in May. Each Ravelin common unit was exchanged for 0.000582 shares of CKI (value about C$0.015/unit) and Ravelin convertible debentures were exchanged for Clarke shares worth approximately 36% of principal.

The discounted exchange value of $158mm of debentures is responsible for the estimated $94mm bargain purchase gain that Clarke will record from the merger.

Clarke’s History Of Value Creation

Milestones:

• 1921 Clarke Steamship Company founded. By 2000 it was a “transportation and logistics solutions company”.

• 2002 Armoyan (through Geosam) acquired a stake of 20% in Clarke Inc and took over as CEO in February 2003.

• By 2006 CKI described itself as an “activist catalyst investor”. Significant transactions:

  • 2003 Concord Transportation sold to ATS and equity was monetized in 2005

  • 2004 Logistics division sold to PBB Global

  • 2004 Acquired 50% interest in 8 warehouses

  • 2006 Financial statements began to include an “Investment” segment. The segment reported gains in 2006 and 2007 and then a very large loss in 2008. Fortunately, it had no long-term debt due until 2012. BVPS did not recover to its 2007 peak until 2013. Individual investments mentioned over time include Versacold, Advanced Fiber Technologies, “Energy Basket”, Avenex, Bonnett’s Energy, Royal Host, Supremex, Vitran, Highkelly Energy, Imvescor Restaurant, Sherritt, Keck Seng, and Trican.

  • 2008 acquired Home Heating Business

  • 2014 Sold remaining Transportation business

  • 2014 Acquired 35% of Holloway Lodging

  • 2016 Raised stake in Terravest to 31%. The shares were distributed to CKI shareholders in March 2020 when their value during COVID stress was $58mm

  • 2019 Acquired remaining shares of Holloway in September 2019 - unfortunate timing just before COVID

  • 2019 Acquired 3 vacant Houston office buildings far below their replacement cost. They were sold in 2023-24 farther below their replacement cost.

  • 2021 Began building a residential tower in Ottawa.

• 2023 CKI began describing itself as an “Investment and Real Estate Company”.

• 2025 CKI described itself as a “Real Estate Company with holdings across real estate sectors – primarily residential, furnished suites and hospitality”. The latest:

  

The broad investment themes were distressed income trusts in the 2000s, distressed energy in the 2010s, and perhaps distressed real estate in the 2020s.

Armco and G2S2

George Armoyan has a history of additional real estate investments through his private entities:

• Armco Capital became the largest residential land development company in Halifax in the 1980-90s through countercyclical acquisitions of landbank followed by entitlement, servicing, and sale to builders (similar to the Western Canada land businesses of Melcor and Dream). In the past few years it has made large acquisitions of Calgary office properties (First Canadian Centre, Bow Valley Square and others).

• G2S2 primarily makes public equity investments. It acquired over 10% of Cominar REIT in 2020 and sold at a $100mm profit to the Artis consortium in 2022. Armoyan was lucky because Artis overpaid and ultimately lost its entire investment in the buyout. G2S2 has invested over $100mm in Morguard Corporation and $50mm in Morguard REIT. And G2S2 spent over $50mm acquiring 18% of Ravelin/Slate Office - nearly all lost. Outside of real estate, G2S2 has held stakes in Calfrac, Western Energy Services, Tourmaline Oil, Nixon Energy, and Knight Therapeutics.

Ravelin’s History of Value Destruction

Ravelin operated until 2024 as Slate Office REIT (SOT.UN) under external control by Slate Asset Management. The REIT focused on “workplace real estate” in suburban and secondary markets. Higher-yielding non-prime properties, high leverage, and high payout ratio supported a high distribution rate that attracted investors to 4 secondary offerings, ATM issuance, and 2 convertible bond sales. Proceeds financed growth in assets from $271mm at 12/31/14 to $1,869mm at 12/31/22. External asset management fees grew from $0.7mm in 2013 to $5.8mm in 2022.. Armoyan estimated that including fees for property management and transactions, Slate Asset Management earned over $132mm from Slate Office. Book Value per unit dropped from $11.05 at 12/31/13 to ($0.36) at 03/31/26.

The Slate legacy is a portfolio with no great assets. Armoyan’s business grew out of Atlantic Canada so he undoubtedly knows the region well, but even there, Slate focused on smaller markets of Fredericton, Moncton, and St Johns. In 2021 Slate acquired an Irish REIT (Yew Grove) at an valuation of C$255mm, calling it a "transformational jumping-off point" for further expansion in Europe. Armoyan strongly criticized the acquisition as dilutive to Slate’s reported NAV of $8.71. George seems to have put too much faith in the baggy “NAV discount” thesis.

Clarke Pro-Forma Financials

Ravelin’s circular for its acquisition by Clarke included pro-forma financial statements as of 12/31/25. Key points:

• The combined entity is very highly leveraged (debt/assets = 69%). Approximately $724mm of debt acquired through Ravelin is owed to G2S2.

• Cash Flow (net income + depreciation + planning and transaction costs) would have been $39mm for the combined entities.

Read more

Sector Overview

The yield premium of real estate cap rates over 10-year bond yields is near the middle of its historical range.

Most of the Canadian yield curve has moved 15-20bp lower in recent weeks. Rates are over 100bp lower than in the US at every maturity.

Insiders at 20 of 36 REIT/REOCs were buyers since 1/1/26 and 7 had net insider sales. REIT/REOCs have repurchased $361mm of equity since 1/1 (reported to 6/12) with the largest buybacks at Boardwalk (3.9% of market cap), Dream Industrial (2.4% of market cap), Dream Unlimited (1.0%), CAPREIT (0.9%), and Killam (0.8%).

Topics:

• Valuation Comparison ($)

• Quick Takes ($) H&R deal speculation, Canadian multifamily, Canadian Retail, and Dream group annual meetings

Read more

• Hot sector experiencing rapid growth

• Blue chip customer relationships

• CEO’s privatization offer is fully funded with strong financial and strategic partner backing

Complexities:

• Limited liquidity - turnover of $20k/day

• Pink Sheets listing not tradeable through some brokers

• Company is losing money

• High downside (possibly >75%) if the deal fails to close

Due to the limited liquidity and high downside risk I am not putting the issuer name in the preview. I don’t think anybody should buy this without being comfortable with the full story.

Read more

Real estate fundamentals have been favorable with strong demand, limited supply, and improved credit availability in most segments. But it’s hard to assess valuation with an uncertain macro outlook:

• Iran conflict is severely impacting global supplies of critical commodities (oil, LNG, refined products, fertilizer, aluminum, helium, sulphur and more). Resolution of the conflict is extremely important and also extremely difficult to predict.

• Trade tension may return to the headlines in coming months. Conflict and drama are essential aspects of Trump’s personality and politics. This summer’s mandatory review of the USMCA trade agreement will not pass without bluster and confrontation.

• Interest rates in Canada, the US, and globally have risen due to the inflationary implications of Iran war disruptions. Interest sensitive assets such as real estate suffer.

As an exporter of energy and food, Canada benefits in some ways from high prices resulting from Strait of Hormuz closure. The war has also made the US more dependent on imports of Canadian aluminum in spite of tariffs.

Topics

• Sector Overview

• Valuation Comparison ($)

• Office ($) Comments on Allied, Dream Office, and True North.

• Industrial ($) Comparison of 1Q26 SPNOI growth among North American REITs. Comments on Dream Industrial and Nexus.

• Residential ($) Comparison of 1Q26 SPNOI growth among North American REITs. Comments on Morguard Residential, CAPREIT, Killam, and Mainstreet.

• Retail ($) Comments on Primaris and Smartcentres.

• Diversified ($) Comments and H&R and Morguard REIT.

• REOCs ($) Comments on Dream Unlimited.

• Other ($) Comments on Dream Impact and RFA.

Sector Overview

The yield premium of real estate cap rates over 10-year bond yields is near the middle of its historical range.

The Canadian yield curve has moved higher in recent weeks, but rates are over 100bp lower than in the US at every maturity.

Canadian yields have been less impacted by the Iran war:

Insiders at 21 of 36 REIT/REOCs were buyers since 1/1/26 and 7 had net insider sales. REIT/REOCs have repurchased $309mm of equity since 1/1 (reported to 5/22) with the largest buybacks at Boardwalk (3.0% of market cap), Dream Industrial (2.4% of market cap), Dream Unlimited (1.0%), Riocan (0.7%), and CAPREIT (0.7%).

Read more

Cresud’s financial reporting reflects variable weather conditions, commodity prices, and land sales that can obscure the company’s multi-year value creation. If the share price responds negatively to comments about the near-term outlook in the 5/7 earnings release and 5/8 conference call then it would be a great opportunity for long-term investors.

Topics:

• Iran War impacts - fertilizer prices soaring and inventories critically low

• Argentina Economy and Milei Impact - strong rebound

• Argentina’s Economic And Political Cycles

• Cresud Corporate Structure and Governance - Insiders own 42.5% of Cresud and Cresud owns 51.6% of IRSA

• Cresud Dividends - substantial, but variable payments

• Cresud Farm Business ($) Value creation through cyclical landbanking, land upgrading, land sales, and farm operations

• Cresud Commercial Real Estate ($) Value creation through ownership and development

• Cresud Valuation ($) +90% increase in NAV per share over the past 5 years

• Cresud Risks & Catalysts ($)

The Iran War

Argentina is a exporter of many commodities (metals, energy, grains, lithium and more) so it could be a long-term beneficiary of Middle East insecurity, but the near-term impact is mostly negative.

Development of the Vaca Muerta shale oil field over the past 5 year has made Argentina a significant oil exporter. In contrast to past cycles, the country is now self-sufficient in oil, natural gas, refined products (diesel, gasoline, jet fuel). Significant hard currency export revenues support the balance of payments and international reserve position.

However other sectors are dependent on imports affected by the Strait of Homuz closure:

• Argentina imports 65% of its fertilizer, and nitrogen is sourced primarily from the Middle East. Urea prices jumped 54% in March and retail prices in some areas rose even more. Inventories are critically low right ahead of the Southern Hemisphere summer planting season. Farmers are responding by shifting acreage from corn to soybeans and sunflower (less nitrogen intensive), and limiting fertilizer to their most productive land. While corn and soybean prices are higher, increased shipping costs have pressured ex-farm prices. Producers like Cresud may report increased top line revenues, but margins will be the smallest in years. Agriculture and related services account for about 23% of the national economy.

• Fuel prices may add 1% to annual inflation even though state-controlled YPF has cushioned part of the retail impact.

• The ARS exchange rate has a controlled depreciation based on the inflation rate - higher inflation will result in currency depreciation.

Argentina Economy and Milei Impact

Shock therapy has been incredibly successful.

Stabilization of the exchange rate and protections for foreign investments (RIGI) that guarantee 30-year tax and legal stability have resulted in a surge of foreign investment in mining and infrastructure (pipelines, ports, and data centers). The RIGI was structured with layers of protection that could not quickly be unwound by a new government (“Acquired Rights” after 40% of capital has been committed, international arbitration, international treaty commitment, and provincial commitments mirroring RIGI). Annual foreign capital investment in Argentina has increased from about $11Bn in 2020-2022 to about $30Bn forecast for 2026.

The farm sector environment has significantly improved:

• Export taxes have been reduced by about 1/3

  

• Export sales revenues converted at the official exchange rate now receive close to fair value in pesos.

Milei opponents argue that the standard of living for ordinary people has suffered as reduced pensions and removal of subsidies for energy and utilities has squeezed affordability of food, housing etc.. The next national election is not until October 2027, but Milei’s reforms will be more sustainable if they are codified through legislation passed this year.

Argentina’s Economic And Political Cycles

Cresud’s 2024 Roadshow nicely documented Argentina’s cyclical history. The country enjoyed strong growth, stable currency, and a primary fiscal surplus during the 1990s and then during the 2003-2007 commodity boom.

Cresud’s share price has shown similar volatility.

Ironically, the sharp share price decline from 2017-2019 resulted from failed attempts to diversify the business outside of Latin America.

• IRSA suffered cumulative losses of over US$850mm on investments in highly leveraged Israeli conglomerates IDB Development and Discount Investment Corporation. They ultimately went bankrupt in 2000 under COVID stress.

• IRSA lost over US$40mm on its investment through a consortium that purchased the “Lipstick Building” in Manhattan in 2008 and then surrendered it to the ground lessor in 2020.

• IRSA lost approximately US$19mm through an investment in Condor Hospitality (originally Super-tel) that began in 2012 and ended when Condor was acquired by Blackstone in 2021.

If Cresud and IRSA had limited themselves to their core business in Argentina then they would have recorded impressive value creation despite the difficult macro environment from 2012-2022.

Corporate Structure and Governance

Cresud is Argentina’s leading real estate company with the largest farm acreage, largest commercial property GLA, and stakes in complimentary service companies.

Eduardo Elzstain has held a controlling stake and been Cresud Chairman since 1994. His brother Alejandro is CEO. The Board of Directors includes Eduardo Elsztain’s wife, cousin, and two sons. Outside influence is limited.

Alejandro Elsztain recently purchased 17,833 ADS. It only increased his holding by 1.5% so perhaps he wanted to send a signal of confidence in the company amid market uncertainty.

Eduardo Elsztain has investments outside of Cresud/IRSA, including several in Argentina’s mining sector (Austral Gold and Argenta Silver), but I am not aware of any that compete with Cresud or create any potential conflict of interest.

In my opinion, Cresud has treated public shareholders conscientiously. Shareholder communications are excellent with quarterly earnings calls, informative presentations, and occasional investor roadshows. I enjoyed a helpful conversation with Alejandro Elsztain in New York in 2024.

Most importantly, Cresud pays meaningful dividends that deliver a portion of the value it creates each year.

Dividend History

Due to capital controls, Cresud has been paying dividends to ADS holders using a mixture of cash and IRSA ADS.

The irregular timing and mixed consideration results in some information services not correctly recognizing them. Full details are on the Cresud news page.

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Real estate fundamentals have been favorable with strong demand, limited supply, and improved credit availability in most segments. But it’s hard to assess valuation and outlook with an uncertain macro outlook:

• Iran conflict is severely impacting global supplies of critical commodities (oil, LNG, refined products, fertilizer, aluminum, helium, sulphur and more). Arjun Murti says extended closure of the Strait of Hormuz could have an economic impact worse than the 2008 financial crisis and a humanitarian impact worse than COVID. Bad! I think it’s politically impossible for Trump to resume an aggressive bombing campaign or to seize Iranian territory with ground forces, but the diplomatic path to peace is unclear.

• Trade conflict may return to the headlines in coming months. Most Canadian exports to the US are not subject to tariffs as a result of the CUSMA agreement signed with the Trump administration in 2020. Each party has an option to decline renewal of the agreement in July 2026, however that only leads to a mandatory annual review process to try to resolve differences. Even in the absence of resolution, the agreement would not end until 2036. Each party also has the option to withdraw completely from the agreement with six month’s notice. The Canadian government is approaching this summer’s deadline as a “checkpoint, not a cliff”. Trump is unlikely to reciprocate in that orderly approach and may try to create a crisis.

As an exporter of energy and food, Canada benefits in some ways from high prices resulting from Strait of Hormuz closure. The war has also made the US more dependent on imports of Canadian aluminum in spite of tariffs.

Topics

• Sector Overview

• Valuation Comparison ($)

• M&A Perspective ($) Thoughts following the First Capital takeover.

• Office ($) Strong leasing and weak unit/share prices. Comments on Allied and Dream Office.

• Industrial ($) Comments on Dream Industrial and Nexus

• Residential ($) Is this the bottom for Toronto multifamily? Comparison of 2025 SPNOI growth among North American REITs. Comments on Morguard Residential and GO.

• Retail ($) Comparison of 2025 SPNOI growth among Canadian REITs. Comments on Primaris.

• Diversified ($) Comments and H&R and Morguard REIT.

• REOCs ($) Comments on Dream Unlimited and Melcor Developments.

• Other ($) Comments on Dream Impact and Ravelin.

• Trade Ideas Notes ($)

Sector Overview

The yield premium of real estate cap rates over 10-year bond yields is near the middle of its historical range. Rates are close to unchanged since 3/31, but credit spreads for REIT debentures have narrowed a bit.

Most of the Canadian yield curve has moved higher over the past year due to expectations for improved growth and higher inflation. That environment would benefit more economically sensitive properties such as Industrial and Retail. Higher rates are a challenge for low yielding Multifamily assets.

Insiders at 20 of 38 REIT/REOCs were buyers since 1/1/26 and 7 had net insider sales. REIT/REOCs have repurchased $264mm of equity since 1/1 (reported to 4/24) with the largest buybacks at Dream Industrial (2.4% of market cap), Boardwalk (1.9%), Dream Unlimited (0.9%), and Riocan (0.8%).

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My February commentary on Dream Unlimited (TSX:DRM) examined its corporate structure, governance, and history of value creation.

This article will examine its most valuable segment, the Western Canada land development business which provides a strong foundation of asset value and cash flow:

• Dream estimates that its Western Canada Development segment has an asset value of $856mm ($21.14/share). My DCF analysis arrives at a significantly higher intrinsic value.

• Management estimates these lands will generate an average annual cash flow of $75mm ($1.85/share) for the next 10+ years. Review of home prices, lot prices, and servicing costs in each market provides confidence that number is reasonable and may be exceeded.

Volatility of short-term development earnings may create a misleading impression of Dream’s risk. Land is not a perishable asset. A 30+ year inventory will be held through multiple real estate cycles. Lots and acres with zoning approval and servicing plans that are not sold during a weak period such as 2015-2020 will end up selling at higher prices in the next upcycle, like now.

Topics

• Regina:

  • Population is expected to grow 1.5% per year

  • Coopertown is expected to accommodate a majority of this growth for the next 20 years

  • Real Estate Market is healthy. Housing is affordable, inventory is low, and rents are rising.

• Saskatoon:

  • Population is expected to grow 1.8% per year

  • Brighton is a highly successful development nearing completion

  • Holmwood is expected to accommodate about 50% of greenfield housing construction in the next 20+ years. Its multiple phases include large valuable commercial and mixed use areas.

  • Real Estate Market is healthy. Housing is affordable, inventory is low, and rents are rising.

• Calgary:

  • Population is expect to grow at least 1.4% per year

  • Alpine Park (part of the large Providence Area Plan) has strong appeal due to its location

  • Real Estate Market is digesting a surge of population and housing supply in recent years

• Landbank Valuation and Cash Flow

In a later article I will examine Dream’s GTA and National Capital Region developments that share many characteristics with its Western Canada planned communities. Their large scale enables Dream to create desirable mixed-use neighborhoods with distinctive design, parks, civic facilities, and curated retail.

All of the value documented in this article was also in place a year ago and DRM shares had a 2025 total return of -10%. DRM shares are suitable for investors with patience to hold for a multi-year horizon over which they will benefit from the land development cash flow through increased NAV, dividends, and share repurchases.

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Investors should be prepared psychologically and financially for the possibility that equities could fall much further if exports through the Strait of Hormuz remain blocked. Hopefully diplomacy will avert a worst-case outcome. The greatest risks in the real estate sector are for companies with weaker balance sheets and those where investors are expecting a beneficial corporate action like major asset sales or M&A. Deals will slow sharply until the macro uncertainty is resolved.

This article updates valuations using 3/27 prices and updates financials for issuers that filed in the past week. There’s no change to trade ideas mentioned a week ago and there have been no major changes at those companies.

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Brandywine’s February call commented on the performance of its Philadelphia assets:

No other office REITs own any Philadelphia buildings so the market may not be well understood by equity investors. The city is at the center of the country’s 9th largest MSA and 20% of the US population lives within 300 miles. Frequent intercity rail service connects to New York City in 70 minutes, Baltimore in 75 minutes, and DC in 110 minutes. Medical research benefits from the regional concentration of 80 degree granting institutions. Children’s Hospital of Philadelphia (CHOP) is the second most highly ranked medical institution in America (US News) and two University of Pennsylvania researchers received a Nobel Prize in Medicine in 2023.

Yardi Matrix compiled data showing that Philadelphia was one of the strongest US markets in 2025 for growth in “Office-Using Employment”:

Seeing Brandywine’s properties gave me confidence that they are well-positioned to continue outperforming within this market and that the REIT deserves a higher market valuation once its balance sheet risk has been addressed.

Topics:

• Financial Profile - Updating my prior analysis for year-end results and commentary

• CBD West Properties

• University City Properties

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Risks related to the Iran War remain high. Equities have not fallen nearly enough to reflect the impact of the oil supply and price shock that would result from extended closure of the Strait of Hormuz. As an example of indicator that would signal extreme panic, investors almost always enjoy a positive 1-year return when buying the S&P500 at 20% or more below its 200dma. On 3/20 the index closed only 1.7% below its 200dma. Investors should be prepared psychologically and financially for the possibility that equities could fall much further.

Hopefully diplomacy will avert a worst-case outcome. The greatest risks in the real estate sector are for companies with weaker balance sheets and those where investors are expecting a beneficial corporate action like major asset sales or M&A. Deals will slow sharply until the macro uncertainty is resolved.

This article updates valuations using 3/20 prices and updates financials for issuers that filed in the past week. Then a brief review of all previously mentioned trade ideas in the context of current market risks.

Topics

• Valuation Comparison ($)

• Canadian Real Estate Trade Ideas ($) D.UN, DIR.UN, DRM, HR.UN, KMP.UN

• Other Trade Ideas ($) AAV, BDN. CSIQ, CSI (497), ELME, NOAH, PFX, STHO

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Markets are hopeful that an extended closure of the Strait of Hormuz will be avoided, but I have not seen any theory how that will be achieved. If it remains closed then oil prices could pass $200/barrel and cause severe economic consequences. Oil prices are inelastic because most refined products are used in transportation where vehicles/planes/ships cannot use any other fuel - if supply drops then the price needs to rise a lot to reduce demand. Equity prices have not fallen nearly enough to reflect the impact of an oil supply and price shock if it happens. Hopefully diplomacy can avert a worst-case outcome. The greatest risks in the Canadian real estate sector are for companies with weaker balance sheets and those where investors are expecting a beneficial corporate action like major asset sales or M&A. Deals will slow sharply until the macro uncertainty is resolved.

Topics

• Sector Overview

• Valuation Comparison ($)

• Quick Takes ($) DIR.UN, DRM, KMP.UN, MRD, MRG.UN, RFA

Sector Overview

The yield premium of cap rates over 10-year bond yields is near the middle of its historical range. Rates have risen about 30bp in the 3 weeks since my last sector commentary and credit spreads for REIT debentures have widened by 10-20bp. Not great …

Most of the Canadian yield curve has moved higher due to higher expectations for growth and inflation. That environment would benefit more economically sensitive properties such as Industrial and Retail. Higher rates are a challenge for low yielding Multifamily assets.

Insiders at 26 of 38 REIT/REOCs were buyers since 10/1/25 and 4 had net insider sales. REIT/REOCs have repurchased $325mm of equity since 10/1 (reported to 3/13) with the largest buybacks at CAPREIT, Boardwalk, Dream Industrial, Riocan, and Dream Unlimited.

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• Entities controlled by GO CEO Josh Gotlib acquired its 5 properties for $2,050mm in 2022. The appraisal value disclosed in GO’s 2025 IPO prospectus was $2,739mm. Is this appreciation realistic?

• GO CEO Josh Gotlib faces two lawsuits accusing him of fraud and breach of fiduciary duties.

This article does not make any recommendation regarding investment in GO Residential and the author has no position in any securities of GO Residential.

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Canadian Real Estate has begun 2026 with a +5.3% total return (XRE a/o 2/20). US REITs are +7.1% and the CAD has appreciated by 0.3%.

Topics

• Sector Overview

• Valuation Comparison ($)

• Quick Takes ($) AP.UN, MPCT.UN, DIR.UN, D.UN, DRM, HR.UN, MI.UN, MRC, MRT.UN, MRG.UN, RFA

Sector Overview

• The yield premium of cap rates over 10-year bond yields is near the middle of its historical range. Lower benchmark rates, lower credit spreads, and solid property fundamentals should lead to lower cap rates in 2026 and an upturn in NAVs.

  

• Canadian interest rates have fallen at all maturities over the past year (CORRA -75bp, GOC 2-year -28bp GOC 5yr -6bp). A steep yield curve signals higher future growth expectations that would be more beneficial to economically sensitive Industrial and Retail Assets. Yields on 2-3 year maturities for high quality REIT issuers have dropped under 3.25%.

  

• Insiders at 26 of 38 REIT/REOCs were buyers since 10/1/25 and 3 had net insider sales. REIT/REOCs have repurchased $278mm of equity since 10/1 (reported to 2/20) with the largest buybacks at CAPREIT, Riocan, Boardwalk, Dream Industrial, and Dream Unlimited.

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Dream Unlimited (DRM) was created in 2003 with $22mm of equity from Dundee Corporation and Michael Cooper. An additional $43mm was invested in 2006. It has paid $438mm in dividends, spent $355mm on share repurchase, and equity has grown to $1,434mm. The rate of value creation has remained one of best among public Canadian real estate companies following spinout from Dundee in May 2013.

Yet as a public company DRM has generated a negative total stockholder return. The share price is still below its split-adjusted $27.30 close on its first day of trading (5/30/13).

Topics

• History of Dream Unlimited - Milestones from 1994-2025

• Ownership and Governance - Founder Michael Cooper owns 43% of the shares and controls 87% of the voting rights. Dream does not have a corporate culture of investment by other executives and directors.

• Corporate Structure - 4 public companies and 6 private funds

• Asset Value - Choose your own adventure. Pick a number from “Standalone Book Value” of $26.72/share to “Illustrative NAV” of $51.68.

• Underappreciated Growth - continued expansion of Asset Management and stabilized Investment Properties have been temporarily obscured by losses on Toronto assets.

• Investment Narrative - Dream has tried too hard to pitch a simple story

• Dream Industrial - the leading Canadian industrial REIT with multiple drivers of continued value creation

• Dream Office - a concentrated portfolio of high quality Downtown Toronto offices benefiting from a strong market rebound. It should consider privatization or seek a new growth strategy.

• Dream Impact - a distressed holder of some high quality assets. Some positive changes are underway. DRM is protecting its exposure by moving up in the capital stack.

• Dream Global - revisiting the hugely successful launch, growth, and sale of an international REIT

The article attempts to cover a lot of ground, but the TLDR is simply the initial table. At its current valuation, DRM’s superior long-term growth provides the best opportunity in the Canadian real estate sector for investors willing to accept the complex scope of the business and volatile reported earnings.

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Star is not going to complete its liquidation by the original goal of March 2027, however progress over the past year makes a 2030 completion realistic. STHO repurchased 0.4mm of shares in 3Q25 and the opportunity for more capital returns should improve as assets are monetized.

See my prior profile for background on the company history and liquidation plan.

Key risks remain opaque governance/incentives and macro (interest rates and housing demand).

Asbury Park

Development is advancing on multiple parcels. Each successful project increases the appeal of the following ones. Compared to expectations from a decade ago, developments have lower density and higher price points. STHO is carrying its Asbury Park assets at $131mm. The hotel assets represent $67mm (undepreciated cost of $91mm).

Changes since my prior article:

The Views at North Shore was acquired by Hovnanian for $12.7mm in November 2025. This might include payment for The Delta parcel since I can’t find a separate sales record for it.

The Delta (formerly Delta Townhouse) is now controlled by Hovnanian which plans to launch presales soon. The marketing website indicates prices begin at $1.1mm.

Surfhouse rental apartments opened to residents last summer. Current availability looks like 20 units out of 226 and the property is offering a 1 month concession on new 13 month leases and 2 months on 18. The project is owned by a Crowdstreet joint venture, but STHO extended a $10mm mezz loan and a guarantee for a $80mm construction loan. The development appears successful so I expect to see a refinancing in 2026 that would repay the STHO loan and relieve the guarantee obligation.

Block 4004 townhouse development proposal was submitted in partnership with Toll Brothers in late 2024. There’s been no subsequent activity. STHO is still the property owner.

Block 3904 proposal was submitted in late 2024 for a development that would have 54 residential units and a parking garage with 333 spaces. There’s been no subsequent activity.

Block 3801 proposal was just submitted in January 2026. The design and density are completely consistent with neighboring blocks.

Block 3803 proposal was just submitted in January 2026. The design and density are completely consistent with nearby blocks (including 3801 proposed)

Remaining (4307, Beach Club, 3902, 4503) show no new activity.

Magnolia Green

Lots within the primary residential development have been nearly all sold. The latest satellite images show remaining red sections have been cleared for building, except for a couple of northern sections waiting for municipal road improvements.

Regional development near Magnolia Green will increase the community’s appeal. HCA is building a 60 bed hospital and medical center. Cloverhill Church is building a large school, church, and sports facility. A third party applied for approval to build 677 townhomes and apartments at Taylor Ridge. Another adjacent 131 acre property on Hull Street Road is reportedly under contract for sale.

STHO is carrying its Magnolia Green assets at $28mm which is certainly below the fair market value of the remaining residential lots, plus 99 acres designated for an Active Adult community and 96 acres Commercial.

Active Adult Community - STHO previously planned a senior community on this parcel, but was unable to partner with an operator in that sector so it received zoning approval in 2025 for a change to an “Active Adult (Age Restricted 55+) Community” of 900 units. The site seems to be available for sale in its entirety rather than through lots or portions.

Commercial - STHO received zoning approval in 2025 to remove restrictions on the building sizes and to allow a portion to used for residential development. A 14 acre parcel is reportedly now under contract for a 240 unit luxury apartment project. Prospects for the Retail and Office portions of STHO’s commercial sites should be improving as all the green spaces above are filled in.

Bagholders

The roster of my fellow shareholders has not changed much and includes several activists.

Disclosures & Notes

At the time of publication I held shares of Star Holdings. This article and disclosure should not be interpreted as a recommendation to purchase any securities and this holding could change at any time. Investors are encouraged to check all of the key facts cited here from SEC filings and other sources prior to making any investment decisions. The author believes all information in the article is accurate as of the date of publication. Any factual errors in the article will be corrected as promptly as possible.