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A New York-based analyst says strong office market fundamentals are forcing him to increase his projections for Brookfield Properties Corp.’s (NYSE: BPO) share price by 11%.

Ian Weissman of Merrill Lynch says Brookfield shares will climb to US$49 in the coming months. He had previously forecast US$45.

“We are increasing our price objective for Brookfield Properties to reflect the continued strength in NYC office fundamentals,” he said in a note to clients.

Merrill did a fourth quarter survey of the top 35 markets in the United States and found Brookfield has the second best office portfolio.

Mr. Weissman noted vacancy rates in New York are 10.3%, a 112 basis point drop from a year ago. Rents are rising 30% year-over-year in New York, making it the top market in the country in this category.

The New York market will give Brookfields’ funds from operations a 5% boost for its existing properties, said the analyst.

Mr. Weissman also noted that property values continue to rise for office buildings. He increased his net asset value for the Brookfield portfolio to US$44.06 per share, up from US$40.22.

“Recent property tours to Canada and Boston in addition to heightened demand by both private and public investors for class-A office real estate across the top markets in the US precipitated these changes,” he said.

Source: Brookfield: Strong NYC Office Market Results In Valuation Hike