Compass Point Reiterates on Gramercy Property Trust, Raises PT
In a report published Tuesday, Compass Point analyst Ryan Gilbert reiterated a Buy on Gramercy Property Trust (NYSE: GPT), raising its price target from $6.50 to $7.50.
According to the report, On Dec. 20 GPT announced it extended its asset management agreement with KBS to Dec. 31, 2016 with a one-year extension option, from Dec. 31, 2015.
“GPT also recognized the full incentive fee, $12M, from the prior asset management agreement in conjunction with the renewal,” the report said. “While we had expected GPT and KBS to eventually renew the asset management agreement, asset management fees are an important source of revenue for GPT and the earlier than expected renewal takes the risk of losing that income stream off the table.”
Some highlights from the report included:
-”We are decreasing our 2013 AFFO estimate to $0.05 from $0.07 and increasing our 2014 and 2015 AFFO estimates to $0.36 and $0.48 from $0.25 and $0.47, respectively.” -Three near-term catalysts including 1Q14 dividend, 2014 guidance could come and potential capital raise.
GPT closed Monday at $5.76.
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