The Globe and Mail reports in its Wednesday edition that after GO Residential REIT completed Canada's largest REIT initial public offering at $410-million (U.S.) in July, RBC's Jimmy Shan expressed uncertainty about whether the market will reward the small-cap REIT with a better cost of equity. The Globe's David Leeder writes that Mr. Shan says its leverage structure limits its acquisition potential and its valuation. Seeing its valuation as "attractive relative to private market but largely in line with established listed peers," Mr. Shan set a unit target of $14.50 (U.S.). Analysts on average target the units at $20.20 (U.S.). Mr. Shan says in a note: "Average Canadian REIT IPO size in last 15 years is $100-million (Canadian). Moreover, it was done when most listed residential REITs were/are trading at meaningful discounts to NAV and fund flows in the sector were generally weak. GO now finds itself with a suboptimal post-IPO capital structure -- its relatively higher leverage and a high cost of equity make it difficult to prove out its acquisition thesis and gain scale, both essential for a newly-listed small cap REIT to outperform. At the same time, GO has the key elements we like in a REIT."