UPDATE: UBS Investment Research Downgrades BRE Properties to Neutral, Raises PT on Valuation

In a report published Friday, UBS Investment Research analyst Ross T. Nussbaum downgraded the rating on

from Buy to Neutral, but raised the price target from $53.00 to $55.00. In the report, UBS Investment Research noted, “We see a low probability (10%) of BRE being sold to the Land & Buildings (‘L&B') consortium as BRE seems focused on executing its current business plan. This is true in light of (A) ESS' failed efforts to acquire BRE in late 2012; (B) 2Q results that showed operational improvements (ie San Diego rent growth); and (C) lack of transparency on the members/funding of the L&B consortium. Our $57 NAV for BRE comprises current portfolio ($49 per share) plus the development pipeline ($8). BRE trades at a 7% discount to our NAV, compared with the 3% discount for the Multifamily REIT peers. As a going concern, we believe BRE should trade below NAV based on 1) high G&A as % of NOI, 2) below-par track record of management creating value, 3) risks inherent to its development pipeline.” BRE Properties closed on Thursday at $52.62.