Brixmor Property's (BRX) acquisition of Slate Grocery REIT is a "rock-solid" investment case, UBS Securities said.

Brixmor considers Slate a portfolio of quality shopping centers anchored by grocery stores that are fundamentally under-managed, highlighting multiple avenues for growth, according to the note Monday.

The company directly acquired 23 assets across Florida, Georgia, and the Carolinas that best fit its investment criteria, which include "strong grocer anchors, attractive Sunbelt markets, redevelopment opportunities, and rent-growth potential," UBS analysts said.

Avenues for growth include boosting the assets' small-shop occupancy from the current 88% level and improving the contractual rent escalators. Since in-place rents are below Brixmor's existing portfolio average by over 30%, the company can also capture mark-to-market rent opportunities, the analysts added.

Brixmor can implement the asset-repositioning playbook it has used over the past 10 years, and the analysts are confident that the company can generate long-term net operating income growth of at least 4% from the portfolio, consistent with its long-term growth expectations.

UBS has a buy rating on the company's stock, with a price target of $37.

Shares of Brixmor were down 1.3% in Tuesday afternoon trading.

Price: 27.63, Change: -0.38, Percent Change: -1.34