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Investing.com - RBC Capital initiated coverage on GO Residential REIT (TSX:GO-U) with a Sector Perform rating and a price target of C$14.50.
The investment firm cited GO’s high-quality portfolio and relatively strong Manhattan rental market as positive factors supporting its rating decision.
RBC Capital also highlighted the REIT’s well-aligned, specialized management team as a strength for the company.
Despite these positive attributes, RBC expressed uncertainty about whether the market would reward the small-cap REIT with a better cost of equity, noting that its leverage structure impedes its ability to demonstrate its acquisition thesis.
The firm also pointed out that GO’s valuation, while attractive compared to private market alternatives, is largely in line with established, larger listed peers on a leverage-neutral basis.
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