As previously reported, Morgan Stanley analyst Vikram Malhotra upgraded Government Properties (GOV) to Equal Weight from Underweight following the stock's 37% pullback since the announcement of the merger with Select Income REIT (SIR). The company recently sold its stake in Select Income to generate $435M, which will be used to pay down debt, and management plans to sell additional assets to reduce leverage post the merger, Malhotra noted. However, he lowered his price target on Government Properties to $10.25 from $11.50, stating that the merger proxy reveals higher capex and a potentially slower NOI ramp for the combined company.