Hello Friends and Investors,

Over the past few years, CF Capital’s growth has been far more moderate than our early expectations. At times, that’s been humbling. In hindsight, we’re genuinely proud of it.

What’s surprised us most isn’t the market — it’s how operational this business has truly become. Everything ultimately comes back to execution: people, systems, culture, and process. We’ve had to become far more patient than we ever imagined. But that patience has allowed us to protect capital, avoid bad deals, and build a much stronger foundation than if we’d chased scale for its own sake.

After a slower and disciplined few years, we’re starting 2026 with a real sense of momentum — not because the market suddenly got easy, but because our platform is stronger, our standards are higher, and we’re increasingly seeing the kinds of opportunities on which we’re built to capitalize.

2025 in Review: Discipline Over Activity

We did not acquire a new asset in 2025 — and that was very intentional. It was a year defined by:

• Underwriting discipline and IC rigor
• Capital preservation and risk management
• Operational upgrades across the platform

In an environment where many sponsors stretched, forced growth, or inherited fragile capital stacks, we chose restraint. Better to do no deal than a bad deal — especially in distorted markets. Instead, we focused on strengthening the engine:

• Continued deepening of our EOS operating system (now over six years running)
• A major level-up in Asset Management and Investor Relations
• The addition of Alex Terauds as Acquisitions Principal
• Consolidation of property management with a single group in which we hold a minority partnership
• Successful refinancings and loan extensions across the portfolio

We didn’t grow units in 2025. We grew capability.

Market Overview: Midwest & Upper Southeast

Across our core markets — Kentucky, Indiana, Ohio, and Tennessee — fundamentals continue to look more resilient than national averages.

While national rent growth was largely flat in 2025 and vacancy rose due to the heavy 2023–2024 supply wave, most Midwest and Upper Southeast markets experienced far less new construction, helping keep occupancy relatively stable and rent growth modestly positive. Cities like Louisville, Indianapolis, Cincinnati, and Columbus benefit from:

• Relative affordability
• Diversified employment bases
• Lower development pipelines

These markets aren’t necessarily producing headline-grabbing growth — but they’re avoiding the sharper corrections seen in overbuilt Sunbelt metros. From a capital perspective, lenders and equity remain selective nationwide, but we’re seeing stronger appetite for secondary markets with stable cash flow and realistic pricing. In many of our target markets, valuations have already adjusted meaningfully, which is helping narrow the bid-ask gap and improve transaction feasibility.

Our view:
The national story is mixed. Our regional footprint continues to offer the most attractive long-term setup — lower supply risk, steady demand, and pricing that actually reflects today’s capital environment.

NMHC 2026: Our Takeaways

After spending time with operators, lenders, equity partners, and brokers at this year's NMHC, three themes stood out:

After spending time with operators, lenders, equity partners, and brokers at this year's NMHC, three themes stood out:

1. Pricing denial is still widespread
   Many owners are still anchored to yesterday’s valuations.
2. Distress exists — but it’s uneven
   It’s not a tidal wave. It’s situational, sponsor-specific, and often tied to capital structure.
3. Capital is available — for the right sponsors
   Strong operators with disciplined underwriting and real execution capacity still have access.

This combination is exactly where we believe the next cycle’s best opportunities will emerge.

Our Contrarian Lens for 2026

We will not follow the herd. The opportunities we’re most focused on don’t look flashy. They look like:

1. “Boring Rescues”
   Well-located assets with tired sponsors, broken capital stacks, deferred maintenance, and operational complexity most buyers avoid.
2. Operator Succession Partnerships
   Smaller owners who don’t necessarily want to exit — but don’t want to keep doing it alone.

In many cases, the real opportunity isn’t bad real estate. It’s good assets trapped in the wrong structure.

Looking Ahead

We’re early — and ready to take advantage.

We believe:

• We could see actionable opportunities in the next 60 days
• We feel high conviction by Q2 2026 that meaningful deal flow will materialize

We’re approaching it with:

• Stronger infrastructure
• Deeper operational bench
• Higher underwriting standards
• More institutional capital relationships

Patience is turning into optionality.

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Quote of the Month

 “The best investors aren’t those who avoid mistakes — they’re those who refuse to make big ones.” 
 — Seth Klarman

Closing Thoughts

The last cycle rewarded speed.
The next cycle will reward judgement.

We believe CF Capital is entering this phase better positioned than ever — not because we grew the fastest, but because we built the strongest foundation.

We appreciate the trust you place in us and look forward to sharing the next chapter together.

In Partnership,

Tyler & Bryan