2015 Headwinds Turn Into 2016 Tailwinds; Deutsche Bank Upgrades Retail Properties Of America

Deutsche Bank issued a company note on Retail Properties of America Inc Real Estate Trust Class A RPAI after expectations of sustainable internal growth and redevelopment plans for its highly sought after properties. Deutsche Bank upgraded Retail Properties of America to Buy and increased their price target from $17 to $18.

Analysts Vin Chao and Greg Schweitzer wrote, "From a guidance perspective, we think management has made a significant effort to ensure that the miscommunication that occurred last year is not repeated...With a more positive outlook, heavily discounted valuation, and several catalysts to close the discount, we are upgrading RPAI to Buy from Hold."

One of the biggest catalysts for Retail Properties of America that Chao and Schweitzer noted was that increasing rents and rent spreads may lead to more sustainable and visible internal growth. Analysts point to Retail Properties of America's push into top markets, such as New York and Los Angeles, and improvements in its shopping centers to increase its rent contracts to be in line or greater than its competitors.

Furthermore, the company has improved the quality of its portfolio of properties as it pushes improvements to appeal with demographics with higher incomes, consumption and purchases.

Shares of Retail Properties of America recently traded at $14.68, up 1.94 percent.