12-Aug-09 09:09 ET BDN Brandywine Realty target raised to $12 at RBC as firm sees development in move-ins combined with an improved capital position .........
RBC raises their BDN tgt to $12 from $8 as they believe that move-ins over the next 12-15 months related to BDN's development pre-leasing could provide a solid cash flow offset to any incremental pressure that could stem from continued challenges in the leasing market more broadly. They note BDN has done well during 1H09 to improve its balance sheet and liquidity position from a combination of asset sales, discounted debt repurchases, equity issuance and forward capital commitments. They expect further improvements during 2H09. At a 10.5% implied cap rate on forward NOI, BDN trades at a substantial discount to our assigned cap rate of 9%. Against the backdrop of modestly improved leasing activity and reduced risk in both its development pipeline and balance sheet, they think the heavy discount is unwarranted.