America's mall market is splitting fast. Class A properties pull in over $1,000 per square foot annually while Class C malls limp along below $400, per Green Street. The top 100 of roughly 900 U.S. malls now represent half the sector's total value; the bottom 350 account for just 10%. Delinquency rates on regional mall loans have hit 18%. Premier malls are thriving while lower-tier properties head for demolition.

U.S. industrial is entering 2026 with momentum. Q4 net absorption hit 54.5 million square feet (up 29% year-over-year), lifting full-year absorption to 176.8 msf, per Cushman & Wakefield. New supply dropped 35% to the lowest level since 2017, and vacancy stabilized at 7.1% for two straight quarters. The supply-demand imbalance is finally correcting.

The Fed's legal battle with the DOJ is reshaping rate expectations. JPMorgan now expects rates to hold steady throughout 2026 (markets had anticipated one to two cuts). The standoff makes it more likely Powell and other Biden-era appointees stay put, creating a board less inclined to cut. For CRE, higher-for-longer financing just got extended.

Chicago office closed 2025 with its strongest leasing year since 2019. Total volume hit 10.3 million square feet, with Q4 posting just 27K SF of negative absorption (down from Q3's 654K SF loss), per Savills. The quality split continues: Class-A vacancy at 20.0% versus 30.5% for Class-B. Distressed pricing is creating value-add opportunities for investors betting on office recovery.

Every week, I ask readers the same question: "What's your biggest challenge in CRE right now?" 

(It's how I fill my bucket of ideas for these Sunday letters)

Last week, one reader's response stopped me mid-scroll. It was just one word:

"Partners."

I almost brushed it off. Too simple. But then I sat with it.

Partnerships are the most catapulting force in commercial real estate when you find the right match. And they're weapons of mass destruction when they go off the rails.

I got confirmation of this from Sanjay, who runs Avestor (a platform for fund managers and capital raisers). 

I asked him: "When you see operators fail, what's the common denominator?"

His answer? Hands down, partnerships gone bad.

Then I remembered something from a mastermind I attended.

Gary Keller, the guy who built Keller Williams into a real estate empire, said, "it takes 5 minutes to get into a partnership and 10 years to get out."

That stuck with me. Early in my career, I said yes to everything. 

Every opportunity. Every handshake. Every "let's do a deal together." But only a few of those partnerships actually lasted.

Almost every partnership has a beginning and an end.

Very few last longer than you do, and there's nothing wrong with that!

In fact, when you accept that a partnership will eventually end, you start structuring deals differently. You think about the exit before you think about the entry. 

You ask: "If this ends, will it create more value than it takes?"

When you skip that step, one side inevitably feels short-changed on time, effort, or expectations. It makes the whole thing turn sour.

This framework also made me pickier on the front end. Now, when a shiny new opportunity comes my way, I run it through one more filter:

Can I see myself working with this person (and enjoying it) for the next 20+ years?

It doesn't have to last 20 years. But if I can't even imagine it on day one? That tells me everything.

A few years ago, a group approached me with serious capital. More than I'd ever worked with. The shiny object in my brain screamed "Let's go."

But when I ran it through the filter (could I see myself with these guys for 20 years?) the answer was crystal clear. 

There wasn't enough gold on the entire planet to make me want that relationship long-term!

So I gave them the polite slow-play: "Let's circle back later this year." 

(Which, in my vocabulary, means: “thanks, but no thanks.”)

Now, I didn't start here. I've had my fair share of pruning the garden - bad fits, misaligned expectations, partnerships I should've passed on. But that pain built this filter.

The 20-year test won't show up in a course or a YouTube video. It's not science — it's gut. Right-brain magic. And it's saved me more than once.

Now I want to hear from you: how do you evaluate partnerships? 

What's your filter? What's worked, what's backfired?

Hit reply and tell me. I read every email.