UPDATE: Bank of America Initiates Coverage on Aviv REIT with Neutral Rating, $24 PT on Fair Valuation

In a report published Monday, Bank of America analyst Jana Galan initiated coverage on Aviv REIT

with a Neutral rating and $24.00 price target. In the report, Galan noted, “We are initiating coverage on Aviv REIT, Inc (AVIV) with a Neutral rating and $24 PO. AVIV owns 258 health care properties leased to 38 different third-party operators within 29 states; 87% of revenues are derived from skilled nursing facilities (SNFs), 10% from senior housing and 3% other. AVIV went public March 20, 2013 in a 15.18 million share offering ($20/share) and received net proceeds of $278.8M. AVIV plans to pay down debt and buy properties. In our view, SNFs are likely to see limited rent growth as the industry faces reimbursement cuts and consolidation. We prefer private pay assets (SNF tenants rely on public pay) and at this point in the cycle we expect senior housing operating leases to provide the best FFO growth. Our Neutral rating is based on valuation.” Aviv REIT closed on Friday at $24.42.