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Monday, North American real estate edition


BMO Capital Markets analyst John Kim on Oct. 9 launched coverage of Sun Communities Inc. at "outperform" and Equity LifeStyle Properties Inc. at "market perform," with per-share price targets on the companies' stocks of $96 and $92, respectively.

Kim said Sun Communities has been generating greater same-store growth than other residential real estate investment trusts and higher margins than fellow manufactured home REIT Equity Lifestyle, thanks to high occupancy, low tenant turnover and efficiencies derived from recent acquisitions. Favorable demographics in the manufactured home and recreational vehicle space should bolster the company's expansion activity and organic growth, Kim said.

For Equity Lifestyle, Kim said in a separate note that the company's low-turnover and low-CapEx business have helped the company produce an attractive return on investment of 14.1%, while its high-quality manufactured home portfolio and balance sheet have supported its strong total return performance.


A team of Evercore ISI analysts downgraded SL Green Realty Corp. to "in line" from "outperform," as after strong recent performance, the company's share price has less room to grow.

The analysts said in an Oct. 9 note that SL Green shares rose 9.6% in the past 30 days, compared with a 3.6% gain for the broader office REIT universe. The team said they are moving to the sidelines until SL Green's stock pulls back, or catalysts such as leasing at the company's One Vanderbilt Avenue development in Manhattan, N.Y., solidify.

The analysts lowered their price target on the company's stock to $105 from $106, citing more conservative views on the retail portfolio and the assumption that the stock will potentially not trade at or near par with the net asset value.


Mizuho Securities USA LLC's Richard Anderson reiterated Boston Properties Inc. at "neutral" and maintained his price target on the company's stock at $122 per share.

Anderson, who reached out to investors following Boston Properties' Investor Day, found that few question the quality of the organization. "The question is when is it the right time to get in, given the massive amount of activity currently underway," he wrote in an Oct. 9 note.

The analyst recommends remaining patient on the stock for now, given the company's lack of 2018 earnings guidance and a possible delay in achieving its net operating income bridge.