UPDATE: Wunderlich Securities Initiates Coverage On City Office REIT On Attractive Niche

In a report published Friday, Wunderlich Securities analyst Craig Kucera initiated coverage on City Office REIT (NYSE: CIO) with a Buy rating and $16.00 price target.

In the report, Wunderlich Securities noted, “We are initiating coverage of City Office REIT, Inc. (CIO) with a Buy rating and a $16 price target. CIO is an externally managed office REIT with a focus on non-Gateway markets that are underinvested by much of the institutional investment community and where market cap rates remain attractive. The external advisor (Second City) has a track record of successfully acquiring significantly undervalued assets and creating value via selective capex investment and improvements to operations, leading to occupancy gains.

"While the distressed point of the cycle may have passed, CIO's value creation strategy and market focus has significant room for expansion: current office valuations are attractive at 73% off their peak in our estimation and fundamentals are improving.”

City Office REIT closed on Thursday at $12.50.