Morgan Stanley Overweight on American Assets Trust

Morgan Stanley is out with a research report on American Assets Trust AAT and it has an Overweight rating and a $23 price target on shares. In a note to clients, Morgan Stanley writes, "AAT has ~210ksf of redevelopments plus >1,000 new units in the apartment portfolio. We expect AAT to clarify the scale of the opportunity as development starts become imminent. At a minimum, we believe total buildout exceeds $200m (at $350/ft and $125k/unit, respectively). Near-term projects likely amount to ~$65m at Torrey Reserve and Sorrento Pointe (with the latter subject to increased visibility on new tenants). These projects could add $2.50 to NAV (10%) over time given the targeted >11% ROC. AAT has $350m of investment capacity via cash and the credit facility." Shares of AAT closed at $20.36 yesterday.