UPDATE: MLV & Co Initiates Coverage on First Potomac Realty Trust with Buy Rating, $16 PT on Multiple Positive Factors

In a report published Tuesday, MLV & Co analyst Jonathan Petersen initiated coverage on

with a Buy rating and $16.00 price target. In the report, MLV & Co noted, “We expect FPO to continue to report positive net absorption in 2014 as the D.C. market recovers — occupancy increased 320 bps in 2013 to 88.1%; government spending is expected to grow again in 2014 and be above long-term averages in 2015, which should help the D.C. market to recover; we expect FPO's efforts to reduce leverage will allow the company to trade at a higher valuation level than it has in the past — over the past year, FPO has increase its fixed charge coverage to 2.0x, from 1.4x, and has reduced debt-to-enterprise value to 44%, from 53%; due to the full-year impact of 2013 dispositions, we expect 2014 FFO to decline by 3.1% but rebound to 8.2% growth in 2015; and FPO currently trades at a 14% discount to NAV — we expect that discount to be reduced as FPO's leverage declines and the D.C. market recovers.” First Potomac Realty Trust closed on Monday at $12.67.