On Jan 2, Zacks Investment Research upgraded
PS Business Parks Inc.
) to a Zacks Rank #2 (Buy). The upgrade is based on the company's
recent acquisitions and improving market fundamentals.
Why the Upgrade?
In an effort to enhance its business in the California market,
PS Business Parks recently announced the acquisition of Bayshore
Corporate Center in San Mateo. The company shelled out $60.5
million for the purchase of this office park that spans 340,000
square foot and consists of 8 buildings. For the property, which
is currently 81.8% leased, PS Business Parks plans to make
cosmetic and amenity upgrades.
Apart from this, in November, PS Business Parks acquired 9
multi-tenant flex buildings in the Valwood submarket of Dallas,
Texas for $12.4 million. These properties span 245,000 square
feet of space and were leased 83.5% at that time. Further in
October, PS Business Parks bought 4 multi-tenant flex parks with
a 4-acre land parcel in Dallas, Texas. The assets, aggregating
559,000 square feet, were acquired for $27.9 million. The
acquisitions enhanced PS Business Parks' position as the
submarket's largest owner of flex space.
Going forward, we believe PS Business Parks is well positioned
given its solid portfolio in diversified markets. The company
aims to capitalize on opportunities present in both existing and
new high growth markets through accretive acquisitions. As such,
we believe that the recent acquisitions would help it to ride on
the growth trajectory.
This real estate investment trust (REIT) - PS Business Parks,
) possesses a notable common equity interest - reported decent
results in the third quarter. Its adjusted FFO (fund from
operations) per share came in at $1.21, beating the year-ago
quarter figure by 1.7%. An uptick in net operating income in Same
Park as well as Non-Same Park facilities drove the year-over-year
These bullish factors triggered an uptrend in the Zacks
Consensus Estimates, as analysts became more constructive on the
stock's future performance. While the Zacks Consensus Estimate
for 2013 remained unchanged at $4.82 per share, the same for 2014
moved north 0.4% to $5.15 per share over the last 30 days. This
reflects projected year-over-year growth of 13.6% for 2013 and
nearly 7.0% for 2014.
Other Stocks to Consider
Apart from PS Business Parks, the other stocks worth
considering in REIT industry include
Chatham Lodging Trust
). Both these stocks carry a Zacks Rank #2.
FFO, a widely used metric to gauge the performance of REITs,
are obtained after adding depreciation and amortization and other
non-cash expenses to net income.
CHATHAM LODGING (CLDT): Free Stock Analysis
CUBESMART (CUBE): Free Stock Analysis Report
PUBLIC STORAGE (PSA): Free Stock Analysis
PS BUSINESS PKS (PSB): Free Stock Analysis
To read this article on Zacks.com click here.