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LOS ANGELES-Shares of Southland-based REIT giant Kilroy Realty Corp. were trading higher in late-afternoon action on the New York Stock Exchange today, after an influential brokerage firm raised its recommendation on the stock to a “buy” from a “hold” and made some encouraging statements about Southern California’s commercial real estate market in general.

The bullish recommendation was made by New York-based Credit Suisse First Boston. El Segundo-based Kilroy owns or manages a portfolio of more than 12 million sf — most of it office space in various Southland suburbs.

“We are raising our rating on KRC to buy from hold to reflect the strength of the Southern California real estate market, positive leasing results, and an above-average discount to [net asset value],” the brokerage said. “We believe Southern California is incorrectly being painted with the same brush as Northern California despite more favorable supply/demand trends–thus creating an opportunity for investors.”

The CSFB report says the southern part of the state has weathered the dot-com fallout much better than the northern half, which gives Kilroy an edge over building owners with heavy exposure to the battered San Francisco and San Jose markets. The brokerage firm’s comments also helped to lift the shares of some other big real estate companies based in Southern California, including shares of LA-based Arden Realty Group — the REIT whose 18-million-sf office portfolio makes it the region’s largest commercial landlord.

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