NEW YORK (TheStreet) -- Douglas Emmett (DEI - Get Report) stock was downgraded to "market perform" from "outperform" at BMO Capital Markets.

The lower rating is due to valuation as the Santa Monica, CA-based company has reached the firm's NAV estimate of $33.70.

"Despite its strong West L.A. market position at this point in the cycle, we see greater upside potential in other REITs, including Kilroy Realty (KRC) for West Coast office exposure," BMO wrote in a note to investors.

Douglas Emmett is a real estate investment trust and is the owner and operator of office and multi-family properties located in California and Hawaii.

"With occupancy at 90.4% and office net absorption trending above average over the past three quarters, DEI has been signing leases with 3.5-4.0% annual escalators. We believe this will likely continue to increase (potentially exceeding 4%) and organic growth will be strong as DEI nears peak occupancy," BMO wrote in a note.

But the firm believes this growth is priced into the stock given its premium valuation relative to the office sector.

BMO also raised its price target on the stock to $35 from $34.

Shares of Douglas Emmett are declining 0.09% to $33.70 on Thursday morning.

Separately, TheStreet Ratings Team has a "Hold" rating with a score of C+ on the stock.

The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins.

However, the team finds that the growth in the company's net income has been quite unimpressive.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: DEI