Amid the devastating Los Angeles wildfires, spurred on by a windstorm last week, one analyst picked a real estate stock to watch.

The Real Estate Analyst: Piper Sandler analyst Alexander Goldfarb released a note on Sunday, pegging office REIT Douglas Emmett Inc DEI as a possible long-term beneficiary of rebuilding efforts. The analyst upgraded Douglas Emmett to an Overweight rating, maintaining its price target of $20.

Main Takeaways: Goldfarb acknowledged the “the devastation to the lives of Angelenos” and called Douglas Emmett as a “near pure-play on the West Side of LA.” The largest fire is concentrated in Pacific Palisades, Malibu and Santa Monica.

The Palisades fire has burned over 23,000 acres as of Monday, according to the Los Angeles Times. Firefighters contained 14% of the fire. Meanwhile, the Eaton fire near Altadena has burned over 14,000 acres. Economic damage is estimated at over $50 billion.

The analyst noted that office space could be seen as an unusual pick, but noted the excess of working professionals in Los Angeles in need of office space.

“While office doesn’t immediately come to mind, we believe the rebuilding effort will boost demand from those involved plus replacement for space damaged,” Goldfarb said. “Given LA’s notorious expensive real estate market, the needs from lawyers, insurance companies, banks, architects and other rebuilding related fields, etc., likely exceed the space these entities already occupy.”

Goldfarb says that apartment real estate could be subject to “regulatory fallout” with government-imposed rent fees.

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