Shares of real estate investment trusts were mixed Wednesday as an analyst delivered an outlook on the stocks saying investors can expect modest returns this year.

Goldman Sachs & Co. analyst Jonathan Habermann expects a return of 5 to 10 percent this year after last year's 29 percent total return for REIT stocks.

"At the same time, given the improving growth outlook for the U.S. economy combined with still low interest rates, we simply do not see significant downside for the shares," he wrote.

He maintained a "Neutral" view on the REIT industry. He said Goldman's equity analysts expect the S&P 500 to rise to 1500, a 21 percent increase, by the end of 2011. REITs however, are may grow more modestly by as much as 10 percent.

His top buy recommendations include Digital Realty Trust Inc., which rose 55 cents, or 1 percent, to $52.87 in morning trading. Brookfield Properties Corp. gained 20 cents to $17.56 and Alexandria Real Estate Equity Inc. rose 62 cents to $75.44. Shares have traded between $55.54 and $76.19.

Habermann upgraded AvalonBay Communities Inc., which rose $2.42, or 2.2 percent, to $111.58. He upgraded the stock to "Buy" from "Neutral" and raised the price target to $121 from $98.

Also upgraded to "Buy" from "Neutral" was Vornado Realty Trust, which is up $1.04 at $84.11. The price target was boosted to $92 from $89.

Duke Realty Corp. was upgraded to "Neutral" from "Sell" on an improved balance sheet and portfolio. Price target of $12 was retained. Shares rose 1.4 percent to $13.

Habermann downgraded CBL & Associates Properties Inc. to "Neutral" from "Buy" saying near-term growth is limited and its stock is fairly valued now. Shares rose 8 cents to $17.12.

Other downgrades from "Neutral" to "Buy" included Forest City Enterprises Inc. and HCP Inc. Shares for both fell about 1 percent.
Cousins Properties Inc. was downgraded to "Sell" from "Neutral" based on lagging growth expectations, Habermann said. Shares fell 10 cents to $8.51.