CapLease, Inc. (LSE) is making progress with controlling its leverage within the triple-net REIT space, and the stock is valued up to 13 times FFO for 2013, says Daniel Altscher, Research Analyst and Vice President at FBR Capital Markets & Co.
“My favorite name within the triple-net space is CapLease (LSE). This company had some issues before with being excessively levered, but I think you’re seeing the company make a lot of progress with controlling leverage, and making some new investments in the second quarter at pretty attractive cap rates,” Altscher said.
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Altscher has LSE valued more favorably than other triple-nets in his coverage, with LSE standing at 13 times FFO for 2013, and with the stock being relatively small cap, it is drawing interest from other REITs, Altscher adds.
“The stock being relatively small cap, roughly $570 million give or take, they’re basically one of the smallest public companies out there in the space, and there’s been a lot of interest from other REITs that are involved in the space to be acquisitive. I think a lot of investors think that this stock could be a takeout candidate, which I think is reasonable,” Altscher said.
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