BMO upgrades Empire State, downgrades Douglas Emmett

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BMO Capital Markets analyst John Kim upgraded Empire State Realty Trust Inc. to "outperform."

When deciding on the upgrade, the analyst considered the company's "manageable 6.1% and 7.2% of leases" expiring in 2023 and 2024, compared with the office sector average of 9.7% and 12.0%, respectively. Kim also noted the company only has 4.2% of its total debt expiring in 2024.

Downgrades

BMO Capital Markets downgraded Douglas Emmett Inc. to "underperform" and reduced the price target to $13 from $21.

Kim said leasing volumes remain elevated "but offer no support to leased percent or occupancy where growth remains elusive. Adding to the troubles, interest rates remain a headwind and [the company] will feel a stronger force with an additional $437.4M of swaps expiring in 2023 following the $400M that expired in January."

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Kim also downgraded Vornado Realty Trust to "underperform" and lowered the price target to $18 from $26.

The analyst noted the company's lease expirations for 2023 and 2024 are around 16.1%, higher than its competitors.

Reiterations

B. Riley Securities analyst Bryan Maher reiterated a "buy" rating on Service Properties Trust and raised the price target to $15 from $11. The ratings action considers the company's "strong" fourth-quarter results.

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Maher also reiterated a "buy" rating on Diversified Healthcare Trust and increased the price target to $5 from $4.5. The analyst noted the company's recent results show its senior housing segment is experiencing an accelerating recovery from pandemic lows.

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Jefferies analysts David Katz and Cassandra Lee reiterated a "hold" rating on Xenia Hotels & Resorts Inc. and raised the price target to $15 from $14.

The analyst team noted "the quarter and commentary support our view of the positive elements of the story and [management] execution, offset by challenging comps, near-term disruption, and mixed geographies."