The math doesn't really support keeping my property, and being a landlord is honestly stressing me out. Am I just holding on because of emotional attachment and "what if" scenarios? Would it be smarter to sell, free up that capital, and move into simpler, liquid investments that don't keep me up at night?

If you prioritize reliable long-term appreciation in a blue-chip location, then a 4.2% cap rate makes sense.
But if maximum cash flow with potentially more aggressive value-add plays is your focus, then a 5.5% cap rate in the neighboring area could be more appealing.
A prime location offers stability and value retention, but a higher cap rate area gives you better cash flow, but the risk factor is high.