UPDATE: Stifel Nicolaus Downgrades Boston Properties to Hold on Valuation, Market Conditions

Stifel Nicolaus reduced its rating on Boston Properties BXP from Buy to Hold and removed its previous $120 price target. Stifel Nicolaus commented, "We are downgrading to Hold as we think 2013 leasing market conditions will not necessarily favor high end product. Accordingly, we are decreasing our assumptions for development returns by 100-200 bps and our rental rates at rollover from plus 5% to flat. … Concerns include: 1) net asset value creation has been light for 2011-2012 as the share price has been in the $99-104 range at a 5% cap for seven quarters, 2) leasing in the high price points (over $70/sf gross rents) in the Gateway Cities has been soft and this is expected to continue." Boston Properties closed at $104.88 on Tuesday.