A Stifel Nicolaus analyst upgraded shares of MPG Office Trust Inc., an office real estate investment trust, citing a better office market.
Analyst John Guinee raised the stock rating to "Hold" from "Sell," saying property sales continue to improve and the value of the company's portfolio looks better. Guinee also said there's a possibility of a stock issuance or rights offering.
Los Angeles-based MPG Office Trust focuses on the Southern California market.
Guinee also expects the company's cash on hand to decrease to between $32 million and $45 million by the end of the year due to debt maturities and leasing costs.
Tight credit has stymied commercial property sales, pushing prices down, while a weak economy has hurt rents and occupancy.
But a recent $103 million purchase of an office in Orange County, Calif., by another REIT is encouraging, Guinee said, especially since there were six bids above $100 million. The analyst said he will focus on MPG's potential property sales.
In morning trading, shares of MPG rose 15 cents, or 6.2 percent, to $2.58. The stock has rallied 61 percent in the year to date and has more than doubled over the past 52 weeks.
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