UPDATE: MLV & Co Initiates Coverage on Highwoods Properties on Stretched Valuation

In a report published Tuesday, MLV & Co analyst Jonathan Petersen initiated coverage on Highwoods Properties (NYSE: HIW) with a Hold rating and $38.00 price target.

In the report, MLV & Co noted, “HIW trades at an implied cap rate of 6.9%, which we view as a small premium to fair valuation; we like HIW's exposure to the Southeast markets, which have positive demographic trends relative to the rest of the country; HIW has located itself in the best submarkets within each market, which should help the company continue to report high occupancy, tenant retention, and rent growth; and over the long term, we would expect HIW to outperform its Office REIT peers, but we would wait for a pullback in the stock before investing.”

Highwoods Properties closed on Monday at $38.03.