Post by
Konaboy on Dec 03, 2021 9:05am
Coverage summary
December 2, 2021 Initiating Coverage
PRO REIT A Differentiated Proposition: Initiate At Outperformer
Our Conclusion
As of December 2, we initiate coverage of PRO REIT with an Outperformer rating and a $7.50 price target. We believe PRO REIT has attractive growth potential, as the secondary market focus allows for large spreads between acquisition cap rates and the cost of financing. As a mid-cap REIT, the relatively smaller size and large acquisition spreads position PRO REIT well for above-average per unit growth. With further expansion of the industrial footprint, we believe valuation can improve as exposure to office and retail declines, and the REIT assumes a pure-play profile. At a ~16% discount to NAV and an above-average ~7.1% yield, we regard valuation as attractive.