Friday was a good day to be an investor in commercial real estate company Kilroy Realty (KRC 4.09%). On news of an analyst upgrade, accompanied by a price-target bump, Kilroy’s stock zoomed to close the trading session more than 4% higher. That handily beat the performance of the benchmark S&P 500 index, which rose by slightly over 1%.

A new bull says buy

Well before market open, JPMorgan Chase‘s Anthony Paolone shifted his recommendation on Kilroy’s shares to overweight (i.e., buy) from neutral. The pundit also added $4 per share to his price target for a new level of $49. This is 21% higher than the stock’s most recent closing price.

According to reports, Paolone wrote in his latest Kilroy research note that several of the company’s most crucial West Coast markets should rebound. The analyst acknowledged that it’s struggling with high vacancy rates. However, he’s bullish about the recent trend of tech businesses attempting to return their employees to in-person work at the office. California in particular is a center for this industry.

Paolone also feels that the company, which has hit all-time lows after the COVID-19 pandemic, is now cheap enough on valuations to warrant the new recommendation.

It’s inexpensive for good reason

Personally, I wouldn’t be so enthusiastic about the prospects of commercial real estate businesses. Yes, there’s some movement back to traditional employee-in-office regimes, but it doesn’t feel like a trend that has serious momentum. Work-from-home and hybrid arrangements are here to stay, and they will continue to impact the market and, as a result, the fundamentals of companies like Kilroy.