UPDATE: Goldman Sachs Initiates Coverage on Biomed Realty Trust with Neutral Rating, $20 PT

In a report published Friday, Goldman Sachs Group initiated coverage on Biomed Realty Trust BMR with a Neutral rating and $20.00 price target. Goldman Sachs noted, “BioMed owns a well-leased lab portfolio that currently generates strong cash flows. However, tenants representing 12% of rents have said that they will exit leases in the coming years; this helps to drive our well-below-average growth rate (projected 4.9% annual AFFO growth from 2013-2017 versus 8.3% for ARE). As with Alexandria, we assume a capex reserve in excess of the numbers that management reports. We estimate that BMR trades at 19.0X 2013E AFFO, a 12% discount to ARE and a 10% discount to the overall REIT sector, and at 15.7X 2017E AFFO, in line with ARE and at a 2% premium to the overall REIT sector.” Biomed Realty Trust closed on Thursday at $20.12.