UPDATE: Stifel Nicolaus Downgrades MPG Office Trust to Hold on Asset Sale
Stifel Nicolaus reduced its rating on MPG Office Trust (NYSE: MPG) from Buy to Hold and removed its price target, previously at $4 a share.
Stifel Nicolaus said, "While we think potential investors will stretch on cap rate because of the discount to replacement cost for this institutional quality portfolio, we are becoming more concerned that full company bidding may be light and the company may be liquidated via individual asset sales. … Concerns include 1) an abundance of capital is looking for opportunistic investments, but less are looking for core returns, 2)the quarterly cash burn rate of ~$15mm, 3) the Morrison Foerster 138K SF expected move-out in 3Q13 and 4) the Wells Fargo Bank 302K SF lease maturity in 3Q13. We believe Wells Fargo Bank is a plausible buyer of the Wells Fargo Tower."
MPG Office Trust closed at $3.80 on Tuesday.
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Tags: Stifel Nicolaus