Shares of several apartment real estate investment trusts rose Tuesday after an RBC analyst forecast they would rise as the REITs benefit from the economic recovery.
In a research note Tuesday, analyst Mike Salinsky said apartment REITs most able to raise rents and acquire properties needing renovation would do best as the U.S. emerges from recession.
Companies with more exposure to the Northeast and mid-Atlantic markets and to southern markets with strong manufacturing economies would be able to raise rents soonest, Salinsky said.
He raised his ratings and target prices on Apartment Investment and Management Co., Camden Property Trust, BRE Properties Inc. and UDR Inc.
Shares of Apartment Investment rose 74 cents, or 3.8 percent, to close Tuesday at $20.17; Camden Property Trust rose $1.57, or 3.6 percent, to close at $44.93; BRE Properties rose 76 cents, or 2.1 percent, to close at $37.89; and UDR added 56 cents, or 3.1 percent, to close at $18.79.
Salinksy also raised his target price on AvalonBay Communities Inc., Colonial Properties Trust, Equity Residential, Essex Property Trust Inc. and Post Properties Inc. -- although he maintained his "underperform" rating on Post Properties, saying it would take longer to recover than competitors.
AvalonBay rose $3.44, or 3.9 percent, to close at $92.42; Colonial Properties rose 57 cents, or 4.3 percent, to $13.83; Equity Residential added $1.33, or 3.1 percent, to close at $41.56; Essex Property rose $2.65, or 2.8 percent, to $96; and Post Properties rose 91 cents, or 4 percent, to $23.79.