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Shares of real estate investment trust

Douglas Emmett

(DEI) - Get Douglas Emmett, Inc Report

jumped 13% on their first day of trading, as investors flocked to the company's attractive portfolio of office and apartment buildings in Southern California.

In a sign of strong interest in the stock, the company boosted the size of its offering to 66 million shares from the planned 55 million. The IPO priced at $21 per share, at the high end of the projected range of $19 to $21. In first-day trading Tuesday, the stock rose to $23.71.

Douglas Emmett has "great properties in irreplaceable locations," says Dean Frankel, portfolio manager with Urdang Securities Management, which participated in the deal and toured the company's California properties last week. "They're in places where it is impossible to build." An example he cites is the company's high-rise apartment building steps from the beach in Santa Monica.

Frankel expects Douglas Emmett's rent growth to outpace any other REIT, with the exception of

SL Green

(SLG) - Get SL Green Realty Corp. Report

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, which posted solid quarterly earnings Monday.

SL Green, which is a pure-play on the vibrant midtown-Manhattan office market, said its rent rollovers averaged 25.8% growth on a cash basis. That growth number represents the spread between last-year actual rents and first-year new rents.

Frankel says that Douglas Emmett's stock price looks somewhat expensive based on in-place rents. However, he explains that the company's portfolio rents are 25% below market value. If you mark to market those rents, the stock no longer looks so pricey, Frankel says.

REIT stocks fell slightly Tuesday as money shifted into the $1.4 billion Douglas Emmett IPO. The MSCI U.S. REIT Index was down 0.5%.

The sector also saw disappointing

expense issues at luxury apartment owner


( ASN).

Archstone dropped 56 cents, or 1%, to $58.44. SL Green was down 1.57, or 1.3%, to $119.