Wells Fargo Downgrades BioMed Realty (BMR) to Market Perform; Shares Now Fall Within Valuation Range

Wells Fargo downgraded BioMed Realty (NYSE: BMR) from Outperformto Market Perform.

Wells analyst said, "BMR’s implied cash cap rate is ~6.9%, which is inline with the Office group average and we believe shares are fairly valued at current levels. The company has shown solid leasing success and is on pace to increase its leased rate by ~600 bps by YE’11 from Q4’10 -- well ahead of its initial target of +450 bps. While lab-space fundamentals have been steady and the company’s portfolio remains under-leased at ~81%, most of the occupancy upside potential resides at its PRC property where rents have been low. Overall, we sense underlying fundamentals should continue to outpace conventional office demand. However, we believe BMR’s current valuation is appropriate for the growth potential within its portfolio. The company now trades within our valuation range of $20-22/sh. We’d like to see the potential for increased rent growth or increased lease-up at PRC and other long-term lease-up assets before increasing our valuation range."

For more ratings news on BioMed Realty click here and for the rating history of BioMed Realty click here.

Shares of BioMed Realty closed at $20.19 yesterday.

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