Real estate has no shortage of data. It has leases, valuations, maintenance logs, and public records stretching back decades. But as companies rush to deploy artificial intelligence, they are discovering that the real obstacle is not computing power or algorithms. It is the messy, inconsistent, and fragmented information those systems depend on.

Unlike finance or e-commerce, where standardization has quietly built a foundation for machine learning, real estate remains a patchwork of incompatible formats and disconnected systems. A lease in one portfolio may bear little resemblance to one in another. Even basic terms like rent or occupancy can be defined differently. AI is exposing those inconsistencies and forcing the industry to confront how little its data truly aligns.

Now, that pressure is beginning to change long-held assumptions. Firms that once treated data as a closely guarded asset are realizing that AI works best when information is structured, shared, and interoperable. The push toward common standards may ultimately matter more than any single AI tool, reshaping how real estate collaborates, competes, and understands itself.

Bill Ackman’s Pershing Square is being sued by a group of Howard Hughes shareholders who say the deal Pershing struck last year unfairly tilted control of the company in its favor. The lawsuit, filed in Delaware Court, focuses on a roughly $900 million purchase of newly issued Howard Hughes shares that boosted Pershing’s stake to about 47 percent and gave it operational influence without paying a proper control premium to minority owners. Plaintiffs claim Ackman “pressured” directors into approving terms that disadvantaged smaller shareholders and saddled them with a deal done at a 48 percent premium to the pre-deal share price.

The background to this complaint shows how the relationship between activist investors and real estate companies can get complicated. Pershing’s investment in Howard Hughes dates back years, and Ackman has signaled ambitions to reshape the company into something akin to Berkshire Hathaway, using real estate and other operating businesses as a capital platform. That vision includes acquiring stakes in firms across sectors, financing a $2.1 billion acquisition of Vantage Group and tying fees and executive roles to the transaction. Opposing shareholders say those strategic moves enriched Pershing at their expense because they were approved under pressure and without a fair competitive process.

This lawsuit highlights investor sensitivity around take-private or control-oriented deals in the property space. Minority shareholders in REITs and real estate companies often have limited protections when a dominant investor pursues strategic control, and courts will now weigh whether directors upheld their duty to all shareholders rather than just the largest one. If the plaintiffs‘ claims gain traction, we could see more scrutiny of how activist or strategic capital partners structure governance rights, fee arrangements and control transfers in real-estate deals. That could make boards more cautious and minority holders more assertive in demanding fairer terms before agreeing to capital infusions and control shifts.

Bonds tied to the American Dream megamall plunged this week after bondholders learned that lenders and underwriters were hit with a lawsuit alleging they relied on inflated property valuations and misleading financial disclosures when pricing the debt. The complaint, filed in New Jersey state court, claims that documents provided to investors overstated future cash flows and underplayed downside risk, creating a situation where bondholders were effectively sold paper based on assumptions that never matched performance. Once the allegations became public, markets reacted swiftly, with American Dream-linked debt dropping as traders reassessed the risk of owning securities tied to a property now at the center of a legal fight over its economics.

The lawsuit goes beyond a typical disagreement over projections. It asserts that underwriters and issuers knowingly shared optimistic valuation models, rather than simply using traditional assumptions. This case reiterates that valuation inputs and occupancy forecasts could be judged in court with real financial consequences. Bonds that were already trading at a discount because of thin retail fundamentals now have another layer of legal risk baked into their prices.

The broader takeaway is less about one mall and more about the era it represents. Many large retail and mixed-use projects were financed when capital was abundant, and rates were low. Today, higher borrowing costs and stricter underwriting standards leave little room for aggressive assumptions. A lawsuit that questions valuation methodology does not just affect one borrower. It reminds bond buyers that appraisal risk is real and that projections can be contested in court. In a market where confidence underpins structured finance, even the perception of overstated value can be enough to reset pricing across similar deals.

Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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