Goldman Sachs Downgrades BRE Properties to “Sell” (BRE)

Real estate investment trust BRE Properties Inc (BRE) was downgraded by analysts at Goldman Sachs on Tuesday due to a number of risks.

The analysts downgraded BRE from “Neutral” to “Sell” and now see shares reaching $44, down from $50. This new price target suggests a 13% downside to the stock’s Monday closing price of $50.72.

Goldman Sachs cited two factors for the downgrade. For one, there is development funding risk due to the development size. Also, the analysts downgraded the stock due to its current valuation.

“BRE has one of the largest development pipelines under our apartment coverage at 23% of market cap, where 7.5% of market cap remains to be funded,” the analyst notes. “These funding needs would increase if the company commences construction on Pleasanton in 2014, as management noted on the company's 2Q13 earnings call.”

BRE Properties shares were inactive during pre-market trading on Tuesday. The stock is down a fraction year-to-date.