The Globe and Mail reports in its Wednesday edition that National Bank analyst Matt Kornack has lowered his recommendation for True North Commercial REIT to "underperform" from "sector perform." The Globe's David Leeder writes that Mr. Kornack slashed his unit target back by a loonie to $1.25. Analysts on average target the units at $2.55. The Globe says Mr. Kornack cites the "challenged operating/financial backdrop" for issuing his downgrade. He says office REIT valuations have been deteriorating. Mr. Kornack says in a note: "Underlying this is a belief that there should be a risk premium to owning non-core and suburban properties that doesn't currently exist relative to peers. We believe True North's occupancy is elevated relative to the broader suburban office market and the REIT's current leverage levels present an earnings and refinancing challenge as lenders are pulling back on office financing availability and LTVs. True North reported Q2 occupancy of 89 per cent (which has continued to trend lower) with sales of vacant buildings propping up headline figures. Having said this, market reports show the national vacancy of suburban office in the low-80-per-cent range; thus, further deterioration is possible."