Highwoods Properties Upgraded To Overweight At Morgan Stanley

In a report published Tuesday, analysts at Morgan Stanley upgraded Highwoods Properties Inc HIW to Overweight. The price target is set to $50. The analysts believe that the company's exposure to the attractive Raleigh and Nashville markets and value-add acquisitions would drive growth for Highwoods. "HIW is supplementing the pricing and occupancy gains across the Southeast with significant development and value-add acquisitions, with cash rent commencements ramping as a result," the analysts said. Morgan Stanley expects Highwoods' NOI to grow 6 percent in 2015, as compared to the average growth across the its peer office REITS of 2 percent. The company's presence in the favorable Southeast markets offer robust mark-to-market and lease-up opportunities, as well as opportunities for accretive acquisitions and high-yield development. According to the analysts, "We expect the trading discount to narrow versus the larger, coastal gateway market office REITs given the growth opportunities and the increased money flows to HIW's smaller markets as the search for yield continues."