If the REIT to private gap closes, which side moves, and does my sizing depend on the answer?

I've been carrying the convergence thesis around for a few months and I realized I've never actually specified how it resolves. There are at least three paths and they are not the same trade.

Path one, listed prices re-rate up toward private marks. That's the version everyone means when they say REITs are cheap. My sleeve appreciates, the yield on new money falls, and every month I wait costs me.

Path two, private marks come down toward the listed price. Appraisal-based valuations grind lower, funds report weaker numbers, and the gap closes without my shares doing much of anything. I'd still collect the dividend, which is most of the return in that scenario, and my entry price stops looking like a bargain in hindsight because it was fair all along.

Path three, they meet somewhere in between over three or four years, with rate expectations shoving both around in the meantime.

My sizing question is this. If I think path two is meaningfully likely, the sleeve should be sized as an income position with modest appreciation and I should care most about payout coverage and debt maturities. If I think path one, the sleeve is a re-rating bet and I should be tilting hard into the sectors with the tightest supply picture and accepting the volatility that comes with concentration. Those are different portfolios built from the same thesis.

I notice most write-ups skip straight to path one without arguing for it.