| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 18.49% | - | - |
| 2025 | 2024 |
|---|---|
| -5.9% | -6.4% |
Clark Street Value posted a disappointing -5.93% return in 2025 versus +17.91% for the S&P 500, marking three underperforming years in the last four. Long-term annualized performance declined to 18.49%, below the 20% target. The portfolio maintains a value-oriented approach concentrated in special situations, particularly small-cap REITs and companies undergoing corporate actions. Key holdings include hotel REITs like Braemar Hotels and Sotherly Hotels in sales processes, office REITs Franklin Street Properties and Net Lease Office Properties pursuing liquidation strategies, and Golden Entertainment in a PropCo OpCo split transaction. The manager expects 2026 to see increased commercial real estate transaction activity as bid-ask spreads narrow. Due to an expanded day job role, the manager plans to scale back blog frequency and focus on higher conviction ideas while continuing to post selectively. Despite recent underperformance, the manager expresses optimism about 2026 prospects.
Value-oriented approach focused on special situations, particularly REITs and small-cap companies undergoing corporate actions, sales processes, or trading at significant discounts to intrinsic value.
Manager expresses optimism about 2026 despite poor 2025 performance. Plans to scale back blog frequency and focus on higher conviction ideas due to expanded day job responsibilities.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Dec 31 2025 | 2025 Q4 | BHR, BRSL, FI, FSP, FWRD, FWRD. GDEN, GLIBA, GRBK, IOR, JEF, LNW, MCHB, MLCI CN, MREO, NLOP, NSTS, SEG, SOHOO, TURN | Capitalreturns, catalysts, distressed, specialsituations, value |
BHR FWRD GDEN FI JEF LNW SOHOO TURN |
Clark Street Value underperformed significantly in 2025 with -5.93% returns versus S&P 500's +17.91%. Portfolio concentrated in small-cap value situations, particularly REITs undergoing sales processes and corporate actions. Manager scaling back due to day job expansion but remains optimistic about 2026, expecting commercial real estate transaction activity to increase. |
| Jun 30 2025 | 2025 Q2 | ACR, ATHA, CKX, CMCT, CRGX, EHAB, EPIX, GRBK, HLVX, HMST, IGT, IKNA, IOR, ME, MREO, MURA, NSTS, PARR, RPTX, SEG, SHCO, THRD | Banking, Biotechnology, REITs, small caps, special situations, value |
ATHA EPIX MURA RPTX THRD CKX IOR NSTS SHCO EHAB IGT |
Value manager struggling with -3.64% H1 2025 return versus S&P 500's 6.20% gain. Portfolio concentrated in broken biotechs trading below liquidation value, converted thrifts as acquisition targets, and distressed REITs. Expects strategic alternatives processes and bank acquisitions to drive returns despite current underperformance pushing long-term results below 20% CAGR target. |
| Dec 31 2024 | 2024 Q4 | ACR, ALVR, ATHA, AVTE, CKX, CMCT, EHAB, ENZ, EPIX, GRBK, HHH, HLVX, HMST, IKNA, INBX, LMNR, MREO, PARR, SEG | Biotechnology, Liquidations, M&A, real estate, special situations, spinoffs, value | - | Special situations fund targeting spinoffs, liquidations, and M&A arbitrage underperformed in 2024 but maintains 20% lifetime IRR. Portfolio concentrated in broken biotech liquidations, land bank M&A targets, and commercial real estate runoffs. Strategy requires patience as catalysts develop over extended timeframes in illiquid small-cap situations. |
| Dec 29 2023 | 2023 Q4 | ACI, AVRO, BANC, CKX, CYT, ELYM, ESPR, FHN, FIXX, GRPH, HMST, KNTE, MBI, MRC, MREO, PIRS, RPHM, SAVE, SIOX, THRX | Biotechnology, M&A, real estate, Regional Banks, small caps, special situations, value | - | Value-focused special situations fund delivered 38.54% returns in 2023 through concentrated positions in broken biotechs undergoing strategic alternatives, regional banks trading below book value, and commercial real estate opportunities. Portfolio benefits from ongoing biotech M&A activity and positioning for Fed rate cuts to benefit rate-sensitive holdings. |
| Dec 31 2022 | 2022 Q4 | 2248031D, ACR, ADES, ARGO CN, BBXIA, BLYQ, DBRG, DMS IN, GRBK, HHC IN, JXN, LMPX, MREO, NXDT, PARR, PFSW IN, RADI, RBCN, SNDA, TCI, TPFG LN, WMC IN | - | - | |
| Dec 31 2021 | 2021 Q4 | AAMCF, ACEL, ADES LN, BBXIA, CDOR, CPLG, ECTM, FBRT, HHC, HMG, INDT, JCS, JXN, LAUR, LBRDK, LGL, LRFC, LUB, LYLT, MPC, NTPIF, NXDT, ONL, PFSW IN, PFX, RHEP, RVI, SNDA, THNPY | - | - | |
| Dec 31 2020 | 2020 Q4 | ACEL, ATXI, CLNY, ECTM, FVE, GBRK, GLPI, HGV, HHC, MCHX, MMAC, PRSP, PSTH, RESI, STAY, WH | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Commercial Real EstateManager holds multiple office REITs in sales processes including Franklin Street Properties and Net Lease Office Properties. Expects 2026 to be the year when commercial real estate transaction activity returns as bid-ask spreads shrink with sellers accepting new reality. |
Office REITs Sales Process Cap Rates |
GamingSignificant exposure to casino operators including Golden Entertainment PropCo/OpCo split and Braemar Hotels luxury casino properties. Views luxury gaming properties as performing well in K-shaped economy despite external management conflicts. |
Casinos Gaming REITs Luxury Hotels | |
Private CreditHolds Mount Logan Capital, a subscale private credit asset manager. Acknowledges systemic risk fears are overblown but notes Mount Logan is not a long-term winner with odd management structure and past credit picking missteps. |
Asset Management Credit BDC | |
BiotechnologyClosed broken biotech basket after poor performance including Mereo BioPharma's 90% decline on failed Phase 3 trials. Acknowledges science-based biotech is generally against his rules when turning over rocks in the sector. |
Biotech Phase 3 Clinical Trials | |
BuybacksMultiple holdings implementing share repurchase programs including Brightstar Lottery's large buyback plan and Mount Logan's committed $10MM share repurchase program to support stock and provide liquidity. |
Share Repurchase Capital Return | |
| 2025 Q2 |
BiotechnologyManager holds extensive broken biotech basket including companies that have halted development and are pursuing strategic alternatives or liquidations. These biotechs trade at significant discounts to net cash with potential for Tang-style buyouts or liquidations. |
Strategic Alternatives Liquidation NCAV Cash Tang |
Community BanksFocus on converted thrifts and small community banks that have passed cooling-off periods and are potential acquisition targets. These banks are overcapitalized and trading at discounts to tangible book value. |
Thrift Conversion Acquisition Book Value Overcapitalized Regional | |
Commercial Real EstateExposure through CMCT, a troubled REIT that has stabilized its death spiral of preferred redemptions and is selling assets. Office properties showing signs of recovery with upcoming major events in LA providing economic stimulus. |
REIT Office Preferred Asset Sales Recovery | |
| 2024 Q4 |
SPACsMultiple SPAC-related investments including reverse merger situations where biotech companies are merging with private entities. These transactions often include special dividends, CVRs, and oversubscribed PIPEs that can create value for existing shareholders. |
Reverse Mergers Special Dividends CVRs PIPEs Liquidation |
BiotechnologySignificant exposure to broken biotech basket including companies that have failed clinical trials or abandoned programs. Strategy focuses on liquidation value and reverse merger opportunities rather than drug development prospects. |
Failed Trials Strategic Alternatives Liquidation Clinical Development Asset Sales | |
Commercial Real EstateHoldings in commercial real estate including mREITs and property companies facing challenges from higher interest rates. Portfolio includes companies in runoff mode and those working through foreclosures and asset monetization. |
mREITs Foreclosures Bridge Loans Asset Monetization CRE CLOs | |
| 2023 Q4 |
BiotechnologyManager holds a substantial broken biotech basket focused on companies undergoing strategic alternatives including reverse mergers, liquidations, and takeover offers. Multiple biotech positions are trading below net cash with potential value from IP assets and CVRs. |
Reverse Mergers Strategic Alternatives CVRs IP Assets Net Cash |
Biopharma M&ASeveral biotech holdings are subject to takeover offers or reverse merger transactions, with companies like Theseus and Reneo receiving cash offers plus CVRs for legacy assets from acquirers like Concentra Biosciences. |
Takeover Offers Cash Deals Legacy Assets Concentra Biosciences | |
Regional BanksPortfolio includes multiple regional bank positions including HomeStreet, First Horizon, and Banc of California, with thesis centered on interest rate sensitivity and potential M&A activity as rates decline. |
Interest Rates Deposit Costs M&A Activity Tangible Book Value | |
Commercial Real EstateHoldings include CRE-focused companies like Acres Commercial Realty Corp, Howard Hughes, and various REITs, with manager noting concerns about CRE lending pullback but seeing opportunities in distressed situations. |
Bridge Lending Multi-family Development Distressed | |
ValuePortfolio demonstrates classic value investing approach with focus on companies trading below book value, net cash situations, and special situations with clear catalysts for value realization. |
Book Value Net Cash Special Situations Catalysts |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2025 | Fund Letters | Pearu Põld | BHR | Braemar Hotels & Resorts Inc | Real Estate | Hotel & Resort REITs | Bull | New York Stock Exchange | Governance, Hotels, Liquidation, REITs, Special_Situations | Login |
| Dec 31, 2025 | Fund Letters | Pearu Põld | FWRD | Forward Air Corp | Industrials | Air Freight & Logistics | Bull | NASDAQ | leverage, Logistics, Mna, turnaround, valuation | Login |
| Dec 31, 2025 | Fund Letters | Pearu Põld | GDEN | Golden Entertainment Inc | Consumer Discretionary | Casinos & Gaming | Bear | NASDAQ | Activism, Casinos, Governance, Takeprivate, valuation | Login |
| Dec 31, 2025 | Fund Letters | Pearu Põld | SOHOO | Sotherly Hotels Inc | Real Estate | Hotel & Resort REITs | Bull | New York Stock Exchange | arbitrage, Eventdriven, mergers, Preferreds, REITs | Login |
| Dec 31, 2025 | Fund Letters | Pearu Põld | FI | Fiserv Inc | Financials | Data Processing & Outsourced Services | Bull | New York Stock Exchange | buybacks, Fintech, Payments, turnaround, valuation | Login |
| Dec 31, 2025 | Fund Letters | Pearu Põld | JEF | Jefferies Financial Group Inc | Financials | Investment Banking & Brokerage | Bull | New York Stock Exchange | Creditmarkets, Cycles, Investmentbanking, Mna, valuation | Login |
| Dec 31, 2025 | Fund Letters | Pearu Põld | TURN | 180 Degree Capital Corp | Financials | Asset Management | Bull | NASDAQ | Assetmanagement, Closedendfund, merger, Optionality, Tenderoffer | Login |
| Dec 31, 2025 | Fund Letters | Pearu Põld | LNW | Light & Wonder Inc | Consumer Discretionary | Gaming | Bull | NASDAQ | buybacks, Gaming, Listings, Multipleexpansion, valuation | Login |
| Jun 30, 2025 | Fund Letters | Pearu Põld | IOR | Income Opportunity Realty Investors, Inc. | Financials | Real Estate Operating Companies | Bull | NYSE | Book Value, Control, Real Estate, Squeeze-Out, Tender | Login |
| Jun 30, 2025 | Fund Letters | Pearu Põld | NSTS | NSTS Bancorp, Inc. | Financials | Thrifts & Mortgage Finance | Bull | NASDAQ | Banks, Illinois, M&A, tangible book, Thrift | Login |
| Jun 30, 2025 | Fund Letters | Pearu Põld | SHCO | Soho House & Co Inc. | Consumer Discretionary | Hotels, Resorts & Cruise Lines | Bull | NYSE | — | Login |
| Jun 30, 2025 | Fund Letters | Pearu Põld | ATHA | Athira Pharma, Inc. | Health Care | Biotechnology | Bull | NASDAQ | Activists, Als, Biotech, cash, Liquidation | Login |
| Jun 30, 2025 | Fund Letters | Pearu Põld | EPIX | ESSA Pharma Inc. | Health Care | Biotechnology | Bull | NASDAQ | Activists, Biotech, cash, Liquidation, Oncology | Login |
| Jun 30, 2025 | Fund Letters | Pearu Põld | MURA | Mural Oncology plc | Health Care | Biotechnology | Bull | NASDAQ | Biotech, cash, Liquidation, spin-off, takeover | Login |
| Jun 30, 2025 | Fund Letters | Pearu Põld | RPTX | Repare Therapeutics Inc. | Health Care | Biotechnology | Bull | NASDAQ | Biotech, Liquidation, Oncology, Partnerships, Strategic | Login |
| Jun 30, 2025 | Fund Letters | Pearu Põld | EHAB | Enhabit, Inc. | Health Care | Health Care Services | Bull | NYSE | deleveraging, Home-Health, Hospice, Reimbursement, spinoff | Login |
| Jun 30, 2025 | Fund Letters | Pearu Põld | THRD | Third Harmonic Bio, Inc. | Other | Biotechnology | Bull | NASDAQ | Biotech, Cash-Return, Governance, Liquidation, Special Situation | Login |
| Jun 30, 2025 | Fund Letters | Pearu Põld | IGT | International Game Technology PLC | Real Estate | Casinos & Gaming | Bull | NYSE | capital returns, Gaming, Lottery, restructuring, Transaction | Login |
| Jun 30, 2025 | Fund Letters | Pearu Põld | CKX | CKX Lands, Inc. | Energy | Real Estate Management & Development | Bull | NYSE | land, Louisiana, microcap, Real Estate, Strategic | Login |
| TICKER | COMMENTARY |
|---|---|
| BHR | Braemar Hotels (BHR) is an externally managed (Ashford Inc) lodging REIT focused on luxury hotels and resorts, back in August, BHR announced the initiation of a sales process. In keeping with the "K-shaped economy" theme, BHR's high end luxury resorts have performed well on an individual basis, but the REIT's abusive external management agreement and conflicts of interest have kept the stock from performing. Ashford is incentivized to sell BHR because they're due a 12x termination fee, but not necessarily incentivized to sell at an advantageous price for the equity (other than getting a reasonable enough deal to secure the vote). @somehotelguy posted on Twitter back at the end of October, "Braemar call for offers tomorrow. Any guesses?" and the CEO Richard Stockton wrote in his annual letter that "further announcements should be coming in 2026." I'm hoping for a good outcome in Q1. Interestingly, Ashford's other lodging REIT, Ashford Hospitality Trust (AHT), initiated a similar sales process in December, adding legitimacy to both, seems like Monty Bennett is serious about one last grift and leaving public markets. |
| BRSL | Brightstar Lottery (BRSL) is a pure play lottery operator following the sale of their IGT gaming terminal business to Apollo (APO). Brightstar trades cheap at just ~6x EBITDA for a fairly high quality business with clear revenue line of sight. Brightstar is returning cash to shareholders via a large buyback plan and an above average dividend yield. |
| FI | Fiserv (FI) ($35.4B market cap, $65.7B enterprise value) is a large legacy merchant acceptance business (the old First Data) paired with a decent but no-growth core account software provider to small and medium sized community banks. These types of legacy fintech businesses usually have poor reputations with their clients, the view is they've levered up and no longer invest in their product or innovate, rather they rest on their laurels knowing their products are sticky and generally not worth the risk of transitioning away to a new provider. Fiserv apparently pushed that narrative to the extreme and clients are fighting back on extra fees attached to their Clover product (point of sale device, plus a software platform for small businesses) bringing their previously issued guidance into question. New CEO, Mike Lyons (joined from PNC, former CEO Fran Bisignano left to join the Trump Administration running SSA and the IRS) pressed the reset button on the company's strategy, management team (hiring new co-presidents for each business segment and a new CFO) and guidance. Shares dropped roughly in half last week, quite shocking for an real business and S&P 500 component. Investor trust has been broken for now, but the reset seems to be the right strategy for the long term (?), this is still a non-discretionary product that should trade for more than ~7.5x adjusted earnings (much of the adjustment is non-cash amortization expense from the First Data merger). Fiserv has historically been a levered equity buyback story, hopefully they continue to buyback shares down here (they bought back $6.7B in the last twelves months at significantly higher prices) and avoid the trap of management teams hoarding cash just when the stock becomes cheap. |
| FSP | Franklin Street Properties (FSP) is an office REIT in the midst of a sales process, shares have traded down significantly since my original post. FSP's debt (combination of two term loans and senior notes) is likely the reason, their debt matures on 4/1/26, the company issued a press release on 11/21, "FSP is currently in active negotiations with a potential lender to refinance all of its existing indebtness." At a current price of $0.90/share, I have the implied cap rate at 14-15%. There's a lot of talk about 2026 being the year when commercial real estate transaction activity returns as bid-ask spreads shrink with sellers accepting the new reality; a sale of FSP should happen early in Q1. |
| FWRD | Forward Air (FWRD) is primarily an asset-lite less-than-truckload transportation services provider that historically had a nice niche in airport-to-airport routes. They're almost a year into a strategic review that has had a few twists and turns. There's a lot of debt here, but FWRD insists the process is ongoing, with potential proxy fight / director nominations around the corner, the company might end up taking the best offer on the table sooner than later. Forward Air (FWRD) ($730MM market cap, $2.4B enterprise value) is primarily an asset-lite (relies on independent contract drivers) less-than-truckload transportation services provider that historically had a nice niche in airport-to-airport routes. They diversified through acquisitions over the years to include truckload, intermodal drayage (between ports/railyards and other points in the supply chain) services and most recently with their ill-fated acquisition of Omni Logistics, a 3PL service provider. The Omni Logistics acquisition, announced in 2023 but closed in early 2024, was done at peak post-covid earnings and a peak multiple of 18x EBITDA (which was higher than FWRD's multiple at the time). The market hated the acquisition from the start, crashing the stock, Forward Air management tried to backout of the transaction but eventually closed it with a small price cut. In January, Forward Air announced it was conducting a strategic review, there have been reports of multiple (5-6 financial buyers) bidders being interested including Clearlake Capital Group which owns a 12.6% stake in the business. The strategic process is long in the tooth at this point, Axios recently reported the process is at an impasse due to a wide bid-ask spread. Shares have traded down as the market seems skeptical of a deal happening, but a turnaround effort is probably best conducted in private hands and activist shareholders will continue to pressure management to sell. I'm hoping a deal can still be reached as the company has yet to call off the sale process, despite the Axios report being a couple weeks old now. There's quite a bit of debt on FWRD, it's on the riskier side, but at $18.25/share, its trading at 7.7x consensus NTM EBITDA of $315MM. Tariffs and supply chain disruptions, plus a general shipping recession is a concern, but on more normalized earnings, this business is even cheaper and could be a home run for a PE buyer. |
| GDEN | Golden Entertainment (GDEN) is a regional casino owner operator focus on the Nevada market, they announced a transaction with VICI buying the real estate and Chairman/CEO Blake Sartini taking the operating company private. The implied multiple on the operating company is around 1x EBITDA leaving open the possibility for a bump to secure shareholder approval. I left the VICI side of the trade unhedged which appears to be a mistake, shares are currently trading below the merger consideration and depending on when the close happens, GDEN could get another $0.25 dividend or two that I didn't account for in the above. |
| GLIBA | GCI Liberty (GLIBA/K) is an Alaskan telecom that recently completed a $300MM rights offering backstopped by John Malone (the backstop wasn't needed). The rights offering worked out nicely for those who participated with equity being raised at $27.20/share compared to the current price of $36.09/share. Now we wait for Malone to put those funds to work with an acquisition to turn GLIBA into a "new Liberty Media". I hope we see a true arms length transaction and not something like GLIBA buying distressed Liberty Puerto Rico from Liberty Latin America (LILA). In the meantime, GCI Liberty remains reasonably cheap at just 5.7x LTM EBITDA, but competition from satellite providers like Starlink is a concern. |
| GRBK | Green Brick Partners (GRBK) is primarily a Texas homebuilder, mostly focused on Dallas, but they've recently branched out to the Austin and Houston markets. The company has performed exceptionally well, but in the back of my head I wonder what is really their competitive advantage? They would tell you land sourcing and development, they like to talk about infill communities, but its questionable. GRBK trades for 10x earnings and 1.5x book, both pretty reasonable for this business, I've coffee canned this position for the time being. |
| IOR | Income Opportunity Realty Investors (IOR) is a money-market like investment with almost all of its assets consisting of a cash sweep account receivable with its external manager that owns almost all of the shares. The play here is to wait until they squeeze out the remaining shares. The controlling family ownership group, via TCI, continues to buy whatever shares are available below $18 per share, book value is $30.72 per share. |
| JEF | Jefferies Financial Group (JEF) ($10.8B market cap) is the largest non-bank holdco investment bank in the U.S. which was recently ensnarled in the First Brands bankruptcy. For those outside of the leveraged finance space, First Brands is a privately held (and non-PE sponsor) rollup of auto parts products that recently went bankrupt after a refinancing of their term loan was paused due to a non-receipt of a quality of earnings report and subsequently the company stopped making payments on their factoring debt. There's some whiffs of fraud here, First Brands potentially pledged the same receivables multiple times and used a lot of off balance sheet financing that was only weakly disclosed to their term loan lenders (although if credit analysts looked at the cashflow statement, could see that something was off). Jefferies was First Brands' banker on the failed term loan refinancing and a fund managed by Jefferies was overly exposed to the factoring debt, causing into question the level of due diligence they performed prior to the engagement. In the wake of the news, people started comparing Jefferies to B. Riley (RILY) and other runs on financial institutions, but this situation seems pretty contained, Jefferies has limited actual exposure to First Brands and the market will likely forget about it in a quarter or two. Unlike the other two above, Jefferies isn't as absolutely cheap at 13.5x forward consensus earnings for a cyclical business, but with the continued tailwinds of increased M&A and open credit markets, hard to see this situation (unless you disagree that its a one-off) having a lasting impact. |
| LNW | I also closed out CKX Lands (CKX), Enhabit (EHAB), Soho House (SHCO), Creative Media & Community Trust (CMCT) and Light & Wonder (LNW) during the last six months. |
| MCHB | Mechanics Bancorp (MCHB) is a California based regional bank with branches up and down the west coast that swallowed up distressed HomeStreet (HMST) this past year. The bank is majority owned by Ford Financial Fund, their strategy is pretty simple, chip away at the expense ratio and pay out the vast majority of net income as a dividend. The team at Ford Financial has run this playbook a few times in the past before selling out, the same will likely happen here at some point. I plan on selling down my position sometime in 2026 as my original thesis with HMST has played out. |
| MLCI CN | Mount Logan Capital (MLCI) is a subscale, lower-quality private credit asset manager that recently completed a reverse merger with 180 Degree Capital (TURN), providing MLCI with a U.S. listing and some cash/securities on its balance sheet. A lot of digital ink is being spilled about the risks of private credit, I generally think the systemic risk fears are overblown and much of the "cockroaches" that have been uncovered are unrelated to private credit. But, I'm under no impression that Mount Logan is a long term winner in this space, the company has an odd management structure that doesn't scream alignment and the management team has some past missteps with credit picking in their prior seats. This week, MLCI formally launched their previously announced tender offer for approximately 12% of the shares outstanding at a price that reflects the merger date book value of $9.43 per share. The tender is set to close on February 2, 2026, doing a little work on what potential outcomes could look like I get the below: The math will end up a little better because I'm assuming 100% of shares tendered in the above, management has pledged not to tender and there will be some legacy shareholders asleep at the wheel or that just forget to tender. The IRR swings pretty wildly depending on what discount-to-book you believe the manager will trade at post merger. In the long run, the hope is that MLCI will decouple from being valued off of its balance sheet and rather be valued based off an earning stream, but that bridge is pretty shaky and confusing at the moment. |
| MREO | Mereo BioPharma Group (MREO) earlier this week announced their two phase 3 trials for Setrusumab with partner Ultragenyx (RARE) did not meet their primary endpoints. That news sent the stock down 90%. I had coffee canned this position for several years, fully aware that it was a science based biotech which is generally against my rules when turning over rocks in the sector. Taking this one on the chin stings quite a bit. |
| NLOP | Net Lease Office Properties (NLOP) is an office REIT with an explicit liquidation business plan, it was spun from W.P. Carey (WPC) with corporate level debt, but that's all been paid off and the REIT is now distributing asset sales proceeds to investors. NLOP is a pretty safe way of playing the return to office theme. |
| NSTS | NSTS Bancorp (NSTS) is a small thrift conversion located in the far northern suburbs of Chicago. The thesis is fairly simple but requires patience, NSTS passed its three year mark following the conversion making it eligible to be acquired by another bank or credit union. NSTS trades for 0.80x tangible book value, stopped repurchasing stock and is facing shareholder pressure to sell. Tim Melvin was on Value After Hours a few weeks back and gave a quick pitch for NSTS. |
| SEG | Seaport Entertainment (SEG) is an owner of real estate and entertainment assets in Lower Manhattan that was a spinoff of Howard Hughes (HHH) in 2024. I sold because don't want to be in the Ackman business anymore and losing their CEO was a blow to my thesis. Cash burning real estate plays relying on a low cap rates (the Seaport was originally built to a 4% cash yield) don't typically perform well in public markets. The current market price is currently valuing the equity at a fraction of replacement cost, but given the treatment of minority shareholders over at HHH, I'm skeptical SEG shareholders will enjoy the fruits of any eventual turnaround. The discount will be used against them when Ackman eventually acquires SEG back. |
| SOHOO | Sotherly Hotels (SOHOO) is a small lodging REIT that is being taken private by Kemmons Wilson Hospitality Partners and Ascendant Capital for $2.25/share. SOHO has a three classes of preferred stock, each of these classes features a conversion option to common in the case of a change of control, but the number of shares has a cap. Below is what I show as the spreads and IRR based on a 3/31 close for the common (the merger is targeted to close in Q1) and a 5/15 close for the preferred stock (the conversion happens post merger closing). The take-private transaction appears to be on track: the definitive proxy is out, shareholder vote is set for 1/22/26, insiders own 17.73% of the shares and have signed on to vote yes, Apollo (Marc Rowan has recently said the firm is in a defensive posture) is leading the financing of the transaction. Sotherly Hotels is my largest position heading into 2026. |
| TURN | Mount Logan Capital (MLCI) is a subscale, lower-quality private credit asset manager that recently completed a reverse merger with 180 Degree Capital (TURN), providing MLCI with a U.S. listing and some cash/securities on its balance sheet. |
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