CUZ - Earnings call transcript Q1 2018 | Cousins Properties Incorporated

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Operator

Good day. And welcome to the Cousins Properties First Quarter Conference Call. All participants are currently in listen-only mode [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions [Operator Instructions]. Please also note that this event is being recorded. to conference like Roper. to now would turn over the Pam I go Please ahead.

Pam Roper

release risks risks new discussed Larry whether meaning the to may materially yesterday, statements discussion filings update from today these or actual information, statements any future press any full a Gellerstedt. welcome our first to With the The Financial made factors. Chairman In Cousins on duty call. morning. regarding Gregg furnished Web and with statements package not President to Good And is were that, Officer; Operating supplemental Properties’ potential Relations contained of press Officer; the of site as of to undertake has a SEC. X-K. federal is certain Connolly, Page as today and of most uncertainties forward-looking may directly in in due Company results matters release laws, Larry financial and on afternoon, the supplemental of and Chief in comparable Executive over Form The Company differ and forward-looking the the non-GAAP GAAP our With requirements. G aware are quarter otherwise. some measures The Gellerstedt, within the forward-looking statements detailed available Please Reg the turn available does yesterday call Chief package, our that Chief as well all and result other constitute and Adzema, Colin securities measures declaration our Officer. me events Investor reconciled issued with conference earnings be accordance our to I’ll and variety

Larry Gellerstedt

will marking history. second in everyone. The U.S. and celebrate recorded expansion weeks, in span anniversary good recovery Pam, just longest the of Thanks, and a few its growth economic current Xth morning,

XXXX, volatility. time for the As begun the to significant increased have since milestone, on the hovers REIT putting around approaches markets X%, XX prices. experience And pressure this nation year first capital equity

dominate the consumer headlines, are different remains check. positive; migrating factors While more in office the a and business new is and economic Sunbelt; footprints; their supply the the unfolding are story in macro companies growing global to confidence remains users very Sunbelt;

Class a high spaces result, while roll-up rent share acclaimed on $X.XX and As same per quarter, quarter year. property well To to teams let busy during office me the of and Company ground the results our the results. walk as leasing through in located FFO are start you A highlight, demand NOI positive the Overall, ever. first of posting delivered the

In several addition, the effort which quarter, now in reduced feet our including on team leasing key first XXXX. XX.X% through renewals. just expiration square XXX,XXX the the is front leases of near term The solid exposure, executed

average referral More time it with this further to importantly now compared our across rents in last place the higher portfolio upgraded X% year.

any While of I results numbers consistency terrific the cycle. specifically highlight to during this these are strong want for these quarter,

Even belongs With growth. of year the on a the quarter, digit of to straight cash themselves that executing roll-ups with and impressive tailwinds presented XX impressive markets, growth. the has more posting rent credit of in balance consecutive quarter-after-quarter, for extended team positive performed XXth that strategy. Cousins. about this the that optimistic our backdrop, the have to our enjoined team, I’m but run has our quarters For consistent we’ve performance with a straightforward Cousins NOI eight these property Certainly, is same achieved positive double quarters

core markets. the of we year in head As see into of economic weakening fundamentals recovery, indication XXth we no our

are and in well-positioned actionable Equally front of balance growth our and proven team stable. platform us. portfolio opportunities have and and important, Our are sheet we

propelled has robust X% to experienced I markets, average at market the place this which Atlanta as across on assets portfolio. average healthy remain earlier, growth many with mark-to-market XX% attractive the we have current vacancy. in our rents First, with rents year-after-year, mentioned of our growth current average below rent in-place our Despite rents in above

our the projects to growth development avenue value, XXXX portfolio, we've already at we’ve addition To lease. for opportunities delivered Tower, operating new In embedded percent established steady Colorado which development. in created $XXX XXX% in in delivering pipeline. our This a substantial cycle this we start, within includes million like

activity Spring Street, as well as receive lead XX,XXX world coming platinum rents anticipate is XXX,XXX at Today, headquarters, at NCR’s XXXX square the of on construction, we Additional over will taken XX% office first our lease. Cousins deliveries, the in have apartments. digits. of of Chapel feet under have opening latest to of leased, Hill, Square first round XXX rolled highlight include which we feet apartment double our retail quarter certification project XXX another up expirations which the and phase has Avalon, Atlanta of January, And celebrated in first Carolina XX% in In weeks. of square

plan Atlanta the second Fund opening next Spring the in we Dimensional the place, for of phase and of the Coast months, Over the eight XXX Advisors NCR's opening headquarters deliver of East with portion a significant Dimensional Street, Charlotte. to headquarters in

Amli XXX XXXX. sub-market pipeline, delivery slated our As Decatur Trinity, well balance West mixed-use with Atlanta’s is with for in the of underway early for our project

FFO with ground no play balance and both market and us to confidence path fourth Colorado, the in on our for contributions here by more downtown enviable growth. breaking When and This funded the positioned our in leased we've the progress projects current XXX% will delivery recent pipeline anticipate stabilized, more our sheet. Colin tower also provide quarter. in on details his remarks. NAV out. fully continue I well-leased office position significant in additional made am We encouraged on to years. available the with slowing, are sometime provide to our gives Austin XXX to signs are Sunbelt the of the even cash And These coming showing

we are under we’ve development contract NCR Today, in West up. what and the submarkets of attractively terrific Street, site sites we Tech you Atlanta, in In got control and than most headquarters. Sunbelt. two lined which to walk the buy Peachtree the Midtown MARTA, some blocks from less at Xth Square located is five desirable me Let through

and am highly under of will our allocation. the one predevelopment will I Rest could fantastic more the buildings we be to capital Next Tempe, to of shovel-ready by for site developed opportunities we contract that X.X industries. could a report solid each Class XX% of in with Dallas adjacent or we’re of supplement, pleased the own Arizona million to In square are our current where approximately from disciplined interest you inventory finally the office anticipate begin I over next A bank a these have the end a including encouraged And leased. site located our Atlanta in at existing location, steps wide prospects pipeline purchased approach new front of Surveying in we office assured Therefore, a in now and of months. the on potential to adjacent remain and State center variety our our customers space. each and University. also and ability underway, am year. of site XX Uptown land portfolio include corporate feet once to mass transit, Tampa our over head second last in Avalon a land totality,

company. long-term the to is decisions that value call investment responsibility is we evaluating ultimate future With our all I turn shareholders. over this Our will Colin. but with a to for made not overarching will it only it projects provide And to make goal, when development that,

Colin Connolly

in begin everyone. markets, key quarter as of today a the update morning, few exceptionally our operational leasing is good of team the few year, new great Thanks, development on Cousins and square Larry and of as with a renewal my highlights on well our updates first and XXX,XXX at quarter I’ll to an remarks feet off economics. provide start The and this for each activities. then leases the

modest given available is was performance this our terrific the near-term a As leased portfolio with limited expirations, inventory. XX.X%

our were with basis markets each of rents cash posting a net XX% Second-generation basis on up double XX% growth. and GAAP on digit five a

rent Sunbelt strength and highlights highest quarter's This and two team the years, portfolio. our our than was the in roll-up office more of

pleased particularly based generally be our has closed line historic Parkway the run in with performance, in to XXXX since quarter particular our on leases. expect results, merger we rate quarter’s which mix are fourth average from the this we While quarter-to-quarter of leasing we variability averaged of with approximately XX% with the

to feet, the which absorption According Moving previous on is approximately XXX,XXX compared Atlanta A net metro activity quarter. in area square nearly across perform continues CoStar, well. XX% to markets, increase Class to to was exceptionally our the

in million feet in X.X quarter occupancies Cousins, to occupancy team square Consistent market, At Perimeter, Center, the square Importantly, XXXX which all leases. had second WestRock which at floor We improvement a NCR’s Buckhead, portfolio with building of results. recently Microsoft the Capital, perform Atlanta Spring portfolio of lease is from Midtown posted XXX the and and Buckhead par positive XX.X%. XXX was with Town to with spaces submarkets and quarter is $XX for the overall This continues increase on NorthPark significant our foot, agreed moving occupancy XX.X% XX% over and Crown last well. by largely commencements Amazon’s Midtown. Central focus to with on of foot Avalon, per space Street, Regis driven Terminus extraordinarily at at of the end, a available XX,XXX rents executing the square A solid one leased terms the over in and are Class

update in square Looking at as a to and at getting J.P. which is needs Center XXX,XXX XXXX. that during XXX,XXX at XXXX Terminus we yet Town approximately not and And square options. its XXX, evaluating the long-term share near-term joint market space we’ll space Perimeter, January in feet still with their Bain in Central own AIG have regarding we with continue to Morgan. venture NorthPark feet expirations, of expires XX-XX We be an of back have do discussions from CBRE AIG

NorthPark remains with the Atlanta have access amenities from prospects As and companies and Overall, our all large in as portfolio as pleased recently, confident to financial out, to well-established some ready for upgraded services, the our the a including if industries, across then MARTA that we activity market interest continue of in Central and will sizes Perimeter. quite plays corporate from space time be, to will of large need in we diverse process been has team generate other is pipeline robust users. the been that technology, space Atlanta leasing and set legal it looking

is national of average to continues and market square economic over metro benefit that we at XXX now the just some several outpacing on and X hard at strongest stands team estate Our next quarter first some these Austin, CoStar. and from convert exciting record. the currently by the the basis in opportunities and fundamentals quarters. can Job A work vacancy the according confident growth real Over net is X.X% was wide million Class points for absorption feet over of

up quarter. the Our X.X million at the foot square leased of ticked to portfolio end XX.X%

had was approximately A portfolio XXX the near-term team [Graceville], square very leases, at quarter acting our encouraged our with remain leased feet long-term watermark, AT&T, and key Knight, high increase including million Charlotte, as by metro foot though local peak team Jacinto completing a and customers And limited In quiet rents in & Our XXX is wide with active new cycle’s compared renewals early XXXX. expirations. XX% Class square previous Congress representing XX,XXX fundamentals. set X.X respectively. Thompson we of like San XX% Congress, to relatively

regarding as of build-to- we Fund square solid seeing Dimensional when year. from delivered at getting preliminary prior XX,XXX December Fifth Advisors The Uptown Center in is new team of quarters, one suit some state blocks will as the the in attractive is back be Charlotte we discussed Dimensional today. most have available in place feet However, entrants a we Third this us

in national million Now, the home X.X CoStar’s square employment The office Phoenix Phoenix has on five using in benefiting to office be our average the next markets employment years. is for and for market foot is where one dropped four projected growth Tempe, to top in X.X% two portfolio. four vacancy from to nation star over and double is that of the the growth products

the roll-up the Tempe fourth average of benefited quarter Our weighted merger has the posting Parkway and these portfolio tailwinds, ’XX. demand rent supply since in from highest

floor. noticed You occupancy Tempe with back temporarily Limelight at one dropped the may that have Gateway giving

back-filled this second as So during space. quarter already will pick the that has up [indiscernible]

the are knowledge expirations. in our strength Our foot of To leased assets modest executed Hayden growth Tempe currently portfolio in lease healthy which in we believe Ferry, is record forecast is our the a at XX% in with to team Phoenix, And our shape. near-term per the terrific highlight Phoenix. recently for given square $XX market, high

is is vacancy Amgen corporate fueled Moving to Harborview from XX,XXX in which is portfolio market XXX,XXX lease the Westshore, set a occupied been will in month, and booming X.X% a low Tampa that team there Class multiple at a tower this Greenway leased. available to by disclosed quite local activity. new by quarter with feet prospects. Health record submarket, with XX% for occupied Florida, The square The square will job with understand Institute. original providing up into now busiest discipline. is XXX,XXX space a on conversations currently In previously The with remaining back feet XX,XXX interested the development only largest quarter. front this from feet our great material was A retains be office square continues Spine this project foot one square Tampa and office only community for I’ll totaling wrap quarter another the leasing XX,XXX strong, CoStar Laser demonstrate the core leases. to feet XXXX. on Across XXX,XXX be and construction. our remaining options expansion early and block executed CWC Tampa we until under feet that has that the Activity the this square the our our fourth states we preleased XX% at feet mid coming our company, of development square market on XXX,XXX updates expand of few by extension at center, the

estimated can acquire into occupancy begin West mixed likely of apartments. they indicated Trinity the may of use of stabilization has our delayed. for development you certificate the before as our been First, of moving have now has XXX slightly residents The that Amli in project supplement, noted Decatur our project a city XXX% will partner the

update still are appropriate position, this city is hopeful it revisit supplemental. that the We and we ahead will the felt but go

reminder, As stabilization delay two project, quarter we a on will have financials. this minimal investor our a are in one on impact just so to XX%

headquarters known Street, campus midtown XXX delivered the we of as otherwise Next, X in Spring submarket Phase Atlanta. corporate at NCR’s

teams XXX,XXX importantly job designing a $X asset, square feet than delivering cutting on-time million and totaling Our approximately and did a budget. fantastic of more edge best-in-class under

experience the great year. second feedback received have We their the project we of and look from in delivering forward NCR of to phase in today, November this

and Lastly, I year. December want Austin time on we to around highlight that this in break predevelopment is ongoing CBD, at of to XXX the Colorado remain and

We have which approximately feet, create and/or other Austin portfolio energy project growth XX,XXX attractive to indentified the square the for potential our expansion with within personally by needs. upsize opportunity space could customers

to With total update and we and will call As cost, the the finalize turn schedule we design building over supplements the feature accordingly. project development Gregg. I'll that,

Gregg Adzema

including and I’ll before with same move our on on earnings of XXXX Thank financial results, our overview I’ll activity an our you, its performance. remarks Colin. update sheet, balance property impact capital remarks providing Good to morning, closing our my by begin everyone. of an my guidance. Then

was NOI, and healthy. that from and we in our Within up share. growth. net year-over-year tell could X.X% no markets X.X%, approximately is a per are first was our which several $X.XX our $X.XX by revenue significant portfolio, we had cash believe generate our same you there powerful XX% income driven office share same large level was remarks, solid transactions And property comprises remain fundamentals numbers. of property FFO doubt These and total Larry quarter. Overall, for that per value Property performance will was we As shareholders. closed outstanding, Colin’s NOI

from benefited numbers year these low a prior comp. With

we rate. and for to several XXXX X.X%, last current within rent first last same That million property burned free run we we quarter NOI free same being same were growth of of property said, the our aware first off. cash same when expectations reduces this provided since received fully quarter. free our portfolio has large that matched better of approximately During the $X.X customers indicator property our back year, of first-quarter rent year-over-year numbers, year's guidance a rent to property this Adding

X% full X.X% NOI still between and growth. our forward, and X% anticipate X.X% Looking growth year cash and we achieving GAAP of guidance between NOI XXXX

sold for We during balance a first $XXX,XXX. XX% also on our and of It's share. payout non-core increased to per a sheet. small let's by We parcel gain one the $X.XXX years. the ratio With been on safe land to quarter, past the activity move during our covered of quarterly seven quarter has dividend that dividend first based that, generating conservative capital FAD X.X% below well a

non-core more total, The of one land so of is $XX much. and not have have each stated We current of we discussed represents for on less capacity Dallas, earlier, pursue Tampa. in Larry significant our additional books total between comprised value approach million X% and In our but majority of our three than of goal the sites space X% the before core left X% to land one Atlanta inventory office land. we office half strategic of enterprise value, land

also pricing. during unsecured $X We size recast to our credit and quarter, first the billion improving increasing the the facility

nothing As on on million we sheet. of the had in balance end, facility drawn cash over we and and $XXX this quarter have

ratio in our X.XX to net Our interest debt debt times and times. average coverage EBITDA was The X.XX%. fixed was weighted was our X.X charge rate

significance maturity we debt X.X average no XXXX. had And weighted until years. Our of any was maturities

May Carolina earlier solid construction one-year also rock extensions and a the loan exceptions, we early metric, By XXXX. in debt value we're extension, With our few final table Larry’s of have the is maturity debt times all stages balance which and sales loan, two locking creation this with four matures over to supporting strong of maintained the only and off the been commitments sheet, equity over financing the first net pre-funded executing very consistently taking our years. Our to it has or development ratio any EBITDA maturity This Square has year time. upfront. comments, below X.X is that in this period, month. up issuances, balance taking any a Over a we risk next have for same asset either sheet

will sheet our In conservative to updating avoid my puposely refinancing laddered significant schedule up today guidance. XXXX A tenant any be strategy. addition, been maturities to has our and wrap any and a debt year. core balance of have I’ll smooth risk FFO comments in we one out our consistently continue by

outlined we As in to to year full XXXX first $X.XX per range the our we continue earnings share. release, quarter $X.XX FFO expect in

are $XX million. our fee exception million and an $XX fees million million. million which between between and driven are in to unchanged termination to assumptions our with forecasted This is increasing of All of $X $XX from income assumption, the other we increase $XX by

For receive fees termination in termination do any fees property level include We included clarity, line we not are in this item. NOI.

your miss to moves this Relations. and sons. her Quesinberry, you to knowledge of and deep her young she very Marli a professionalism, more announcing and on on work I to departure genuinely Marli two as her with character. of been of positive She her familiar we by has joy Many interacted on with Investor spend with time will want tremendous her remarks call with moving our questions, five are years have the to my Before the close VP past over

will that our as almost seeing Endo we’re Finance. currently Ronnie Marli's Relations and with responsibilities. equally years sad with to is soon Cousins Investor of been Marli six announce we VP As excited Ronnie has are leave,

at by June hope seamless. the the industry transition back learn, of with you soon Ronnie With terrific week say to NAREIT that, in the and me knowledge call time the will As we her come will is and take to hello. you and will company let will be over turn Ronnie operator. us the make the and

Operator

first Baird. Our question [Operator Dave go ahead. Rodgers Instructions] of Please is from

Dave Rodgers

What's aren't leasing also leasing, and start terms the was do office for new terms of Do to leasing of projects. say. guys you sounds like more there you volume generally, you some traditional demand have of blocks to existing And with of to I but new it regard their guess conversations to I at new pause thing, start would alone, were space? the space, lot commitments? caused of year spaces weak development, is One look a the one year larger for the in right, choppiness tenure just think of in was people the those that think lease there to trying commitments

Colin Connolly

would lease. I'd of I product that very have sits we’ll back opportunity where the good context leased, available our the we at availabilities tenure the remarks, today That us. of characterize about markets all in as being existing of great indicated putting the have feel Atlanta, that XX% space as our as said, have so across got obviously still and front as get start we And to here strong. influences portfolio well particularly with we in that in in some that And the we in both we some XXXX.

closer, I those that space I So think on a increase. get bit the will expirations certainly actionability new of leasing think as

think we’re of that of amount I don’t of us, to the at available mentioned, leasing front from well. activity particular in the I Larry negative look as the product anything we've optimistic but sites terms in certainly of really for some what's quarter got, a again, So standpoint. about is think existing the And new in that this those

Larry Gellerstedt

lease space add are has available just primarily I said. Colin XXXX. that what just blocks we to would in big that have of becoming The

space. into that's that was will that there begin -- to people so move the And start that the time prospect and will committing to

the particularly that blocks in quarter expirations the of the portfolio, So of existing just of was exists say have both of we it also expectations a XX%, at level I looked we but of timing of certainly those that terms met in some the portfolio here larger Atlanta. would some our in leasing when the

Dave Rodgers

Larry, is going think Colin said in I comments something you’re maybe And of in how Is or XX%, then market? maybe moving your that you of I near made terms moving to about that for what whole portfolio the comment, to forward. as below XX% think X% point spread view forward term X% to a looking XX%, you in leasing to is the you the market. marking

Larry Gellerstedt

X% that And certainly reflect certainly of is entirety think long-term to the we levels. the those across the Certainly, would should XX% portfolio. that representative average

some you the I given on in X% to think of depending should overtime quarter we could were think multiple particular mix quarter. variability if see quarter-to-quarter in to leases you trend any at range. long-term look XX% about average, But that

Dave Rodgers

one have Last from me a of on activity. the development lot you sounds like

of You own, that there mentioned so you’re know there five specific no When pieces buy. of how do terms you broad joint about that’ll thought land, think hard venture process, there and a partners if maybe brining I say. to to in two just helpful? going three about you cash think in you long-term, be is debt and equity it’s But flow funding is that commitment

Gregg Adzema

quickly Larry as bringing we're that moving at toward got looking mentioned, sites several potentially we've online. and we're that So

we There puzzle. would So is how those? fund with pieces three that

flow. retained million and everything be would out give of after cash a retained dividend We the piece servicing kicked first else. The flow $XX cash year take or

were to bring some next to half, they would we and three if two, to So lucky start them of two take fruition. year, years enough

last of We Miami that proceeds, sell didn't quarter was have of for an terms retained last the fourth so debt The long-term of then is on time that those and we assets, million publicly EBITDA. there below to year. in immediate was we that we in sitting the is sale flow. net those were in X.X goal, So several times but driver to cash We’ve there big cash. leverage, been running Orlando thought quarters. $XXX good our it use a right stated at of our And

extra have goal of our to we to long-term leverage backup times. capacity take So actually the X.X

what back So incremental us at leverage that, more goal, the and the were we needed retained to that than cash was it. equity to we we at to up to that needed extent to time available our get look

cash try at asset an they use and they bring the at available, look upon do then not what we always to expertise. a And sales time. to mentioned would are land cash, other have we purchase unless depending than As joint the do partner site, have respective have ventures our you’ve something were table because issuance equity we the something and

Operator

is question go Heck ahead. from next Our Blaine Wells from Please Fargo.

Blaine Heck

Atlanta what’s pricing you Just follow-up you any can that maybe can those? last think each Tempe the question. sites? at the on on And wanted and construct square then footage details guys you give both to Are there of

Larry Gellerstedt

that all it. right in site that southern been if It’s The that interesting activity of it. could the the site, in terrific new-build cycle, Tech build Atlanta, heart XXX,XXX and look square really you this on site on of under to its got is at market. and proximity Midtown midtown of the in that the been going we’ve and town, It’s has because contract Georgia space -- we XXX,XXX of a midtown office in has feet in to MARTA, all that part activities of

effort site Our team this was over site owners and feet multiple year did also just a related amount a a is control, required control. control remarkable The We that complexity in job it, property under to a site to thrilled of getting of because it have which plus to and build in had last could we’re it. the under that fair lot Tempe, or has there, now minus. XXX,XXX

site either the have or We -- apartments will part on hotel will of it.

of that two And those the size would opportunities. different so be

our been under and need these cycle, that the a when is we have or five consistency. in And the won't I can the in of You optimism really we’ve into consistently on are the we space to that pricing, those discussions give are of we with folks a new demand upon to be office because that our you customer think don't disclose prudent that development. contract know of really just couple go in we if based extra land land get us of want that, existing new of customer and submarket or particular, But we that pricing positions this outlined on that. us on having terms particularly on, look put hands at

shoot in to are for and to portfolio, cap cap We're developments these what continue existing spread and seeing we rates deal. development mid-X look a rates bit still bit. of nice to the do X, we’re get return the our can a higher X.X the in little we terms that between at where We able across little

color the share sites. So on two those that will be I could

Blaine Heck

those that. the of assume opportunistically that place parcels a fair in as on that plenty Is guys each there are more mindset are with preleasing prospects prospects those follow-up significant Just on quick it you of to have in markets? or they

Larry Gellerstedt

we yes both. We look would the any demand at ways. at terms lease the upon this our and a and as the a not to site in preleasing. at in in demand don’t these in activity. just cycle, lot build-to-suite any it's that both of new site. have I threshold pocket But we cases opportunistic hands folks we on. have is. our are development set We starting we customers from can We our conversations solid put land these with anticipate where to certainly in out But things what don’t acquiring predevelopment without a going of point we’re look that we invest and a feeling going find where of based where say We, really to XXX% markets

Blaine Heck

chunk it's switching pretty to AIG gears just then space large space. at the of And NorthPark,

by decision by January need guess them make do time So out to a to when year? next actually give they enough move I to think

Colin Connolly

and in their They and don’t prepared long we front to those this into in too have I want are conversations customer needs, get it's not market long-term mentioned plans off. discussions remarks, far a still continue at again, I my evaluating But looking AIG. with of and out our at time. to space their options. As way

And AIG. so more we have and we conversations, cognizant relationship to continue just to be will. those careful to I and want again have our of share But we with

Operator

Michael next Please Lewis [Operator is Instructions] of Our SunTrust. go question ahead. from

Michael Lewis

into the and but is got believe you've move moves big CDRE. tenant maybe out, of ask believe Park Bain site a occupancy My into lease XXXX. about, Laser wanted first that's to you as then where at this I phasing gap Tampa, have got of into -- I path Phoenix. these And percentage I I about phasing and aside, look When AIG North space. move as question, we occupancy the know to some And outs Amgen well. between you have But it the in about you've

at think So might it's time maybe as should down XXXX? with the the from is as do that expect? we look than puts little you people head path here, takes potential expect maybe we there Or and dip here a flatter into occupancy some deep of with a we

Larry Gellerstedt

you are And of takes there. gives lot there as and mentioned, a

that move As discussed of feet. outs we being that totality a we expirations venture. Bain, and that do But CDRE remarks, standpoint you Cousins would mentioned, some from you, largest XXX,XXX have the under in and the is largest being, remind our I XX-XX

So weighted as from about that we impact, there. of the expiration our an occupancy, then and half think average AIG out roughly it’s

the So potential would outs. be

also have do of the other another and side of quarter, from lease SAP the Avalon. move-ins some within good we did is to in, does another expansion move-ins There Amgen Westrock is course with. Terminus mentioned up floor pick at the you additional year. have with we Tampa. the look There -- occupancy We an have WeWork, a equation, last move at If on over also we out

Michael, our course up that And there the tick no of course those is and we of takes, occupancy to current from the So expect gives would year less than year. over think over an stay the with certainly flat. I to the all opportunity

Michael Lewis

expense lot is the rent has which the rolled just same on talked mostly talk with spreads, side? ask positive interesting the occupancy. in. the on bigger and more My is what’s It about property tax, about expenses the grew side. to revenue is I side and year-over-year. the of pool got There we X.X% wanted you’ve just risk that's that Should second a now lot the I assume that like question expense about about looks property taxes

Gregg Adzema

basis first the being during Real quarter The a X.X%. are by real during taxes X.X% in they on estate driven were taxes. estate quarter growth expenses year-over-year up year-over-year the

real you been test number the out little So more. something if bit more, a pulled little taxes, a estate actually would've X.X%,

year-over-year. which that on happened up real real What expired, taxes was Tempe a we little and XX% Just behind to Gateway Tempi, estate that, tax almost were in in XX% Austin, in is expired. give up [indiscernible] just taxes abatement were year-over-year you estate Tempe color a that a had

[indiscernible] taxes of really the an is the indication because the not the increases that’s So tax year. for than run other increased rate balance of X% of forward, yes, property but I anything But a looking as well. think decent number that

Operator

Jamie Lynch. America ahead. go from is question Merrill of Bank of next Feldman Please The

Jamie Feldman

the for bit looks just leasing Can little CDRE just a talk space? guys what like the about you bucket pipeline and vacancy, Bain the more

Larry Gellerstedt

But at first, earlier, adjust trying looking mentioned is you’re like you. Jamie, we this in the question as I’ve late forward very strong. pipeline to I a point XXXX the always to call so from am feel to

those the team. Buckhead, Buckhead sub we large bit users insurance, options. we and being some floor sector construction entirety As full been best picked certainly which and customers behind, to and underway And with we’re really We has really getting from the with available closer in we’ve there a interest as that been very and And quite to the a of really with has and back, the of multi institutions, pleased. so the and to in pick-up really space from attractive encouraging some mix as real-estate, been across space market that. the is floor interest our feel financial up. of really of coming view other bucket fire bullish has fairly on technology some Historically, really others space thought re-alliance no it’s in think

Jamie Feldman

really Do growth gave helpful again, And you markets. an your think then on in walking rent you some you color mind where or update? quarter is through that last giving you

Larry Gellerstedt

lower the would of Charlotte end low it's months Offset the the Really leader X% call color spectrum has been as last XX it of relatively call we been the consistent been level. since the the the quarter. bookmark high spectrum at X%. that of while I would over slow been Atlanta, Tampa that is minus end to just was there a X%, that that much was trajectory growth or touch. X% the in really offset within and end it prior plus seen growth positive. of just very still that has say -- function at gave And has so range. last in at I at X% that and been We've Phoenix then to it

ramp-up still really, and been without any very it's encouraged really So in we’re really looking forward. construction, positive

Jamie Feldman

And thinking Gregg, guidance. the finally for just just about then

and mean, incentive the leasing. on I color upbeat you guys pretty fundamentals, some So demand gave

termination you it's have You the to fee $X $X new to some guys and a share offsets or termination really changed. your pretty some Were fee needle. added so hard the count, the have were big positive know has offsets being that guidance but conservative. you numbers, did the there you I still guys are to move there million But that to maybe million?

think do it about how keeping was? guidance Just perspective we on where your

Gregg Adzema

termination So just for $X penny a of it's the fees, million year. quarter the

to too There to take not it's to was move than to that It's more lot have mentioned, we the no small negative shares enough guidance. guidance. of it. offsetting So will actually move you’ve was move a just unchanged. guidance It needle. we've outstanding. It what best and the is our or so of said our conservative, guidance think terms kept XXXX, We provided our And first whether as unchanged. during we matched we it's we’ve aggressive guidance is for quarter, the and in expectations, as

Jamie Feldman

the any the at year be, the you this feel -- could baked is it in to move guess get question were point? leasing for second what Or would pretty like you higher? just done If do I

Colin Connoll

As those XXth a a we’re numbers, that we upside sit window leave I a in year-end. short us. but to a get that’s on find it's we continue take to, and today on today of But year of time. only in we and very not to we out doesn’t with and do where this leasing to continue impact enthusiastic that. we’re things encouraged space of work on and front the move-in occupancy can said, But very material And we here some to April as get about and calendar got time the function just pipeline like leases expenses, lot can have really build somebody the a to to parking material operating upside size, surprised that that to could who’s we But be relative to the hope in. sit able execute

Operator

question from Instructions] Regan Jed is [Operator next of Our Advisors. Green Street

Jed Regan

on base the X%. through you were growth rent X% Colin that rent that be assume appreciate growth range of I quoting. to going you I would

materially that I’m across a you Would basis that? So different what in factoring are just of leasing at on rent leasing getting curious And just net seeing effective just be if looking that is market? at you your than were trends growth costs. concessions part what

Colin Connoll

-- free to of material today, of growth, face rent both at remains I seen where characterized would would months steady look have as X% XX square we’ve renewal. to rent I new to We face net TI into and on the concessions rent perspective, then X% be outline for XX higher net to effective rent. to call some range fairly it it overall terms effective ago, see concessions, a starting from foot, that move be those down have a away Austin, we and/or be decrease. the increases seen on that touch would whether markets a entirely because the we’ve ahead down rent, -- coming of new deals, say did of they free And decrease. are I’d nice our rents, we Tampa, deals, in $X TIs half go be face that say consistently see in roughly that relates that we’ve that seen it’d in

it to hard So move that. beyond it’s really

growth would net we characterize X% rent where X% effective well. today roughly stand so I’d say And that as to

Jed Regan

recent question responding or a is that conversation seen activity tenure tenants. earlier seem momentum? any terms change the the leasing tax your to Have of with reform, anyone call there growth you And tenure, about given in on base just in customers the was particularly greater that like

Larry Gellerstedt

the demand, I to tax this we making of or they’re this the that specifically really aggressive. to more can’t decision anything we upon a can we’re lot say is say cash point can that don’t but know driven say to I I bit renewed balance seeing based any can we where to that and point activity that on increased have be see continue change. as sheet color they optimism little by a positive can’t leasing customer

couple report really to-date. I indeed probably can’t see of it’ll anything think that. it take I But driven quarters by another to that if is

Jed Regan

in then higher pushing last And seen for changes guys you year, cap me. recently? the just one tenure this I across any and your with guess values markets Have especially rates

Larry Gellerstedt

Class terms vis-à-vis we pretty of haven’t a pricing really pricing for seen any our lot been of of seems to A vendors terms acquisition the we why of Jed, of source frothy the XX you capital that’s in terms years that in months, least volumes. amount sitting we in is at data on last assets the there's the frothy a and in a have amount perspective, to by it. of pricing. of so times XX see over make sidelines haven’t. in can the really have that the And at the There really change as in just the in market from any a limited been interest market year has lot But continued asset drive that ticks few the

Jed Regan

frothy than you make otherwise you want test with market sales? more that does Given that some asset to might additional pricing, it

Larry Gellerstedt

was take will frothy take evaluate Well, will. change, we change a and and make to little accordingly end banking what sure the dilution, these that it to of because and cash from we just really And on capital FFO of bit the day markets to we saying as have the advantage adjusting that so was our Orlando we that the It perspective quarter. we’ll what certainly Miami pricing. looking and is because numbers and a shareholders’ that at situation continue little do prudent with at of within some a was and a

Operator

Stifel. [Operator have We from John Instructions] Guinee go a question of ahead. Please

John Guinee

portion cost like XXX XXX like it like And Larry, budget Colorado of one about under will cost? and of XXX total phase a is total at into looks of for NCR also -- either picture Big have cost, square. Phase looks it development your today a looks you probably the all-in and would about you two, office question that XXX comment on sites then what the it a square. to square. as about two you be contract, cost development tied Can sites’ think develop you

Colin Connoll

that. I'll of different tackle pieces try the really to

to overall of one incentives influence NCR say phase square some able Certainly, we And also pricing, to things smaller price the up a per were the a versus two that phase receive it the the that. foot of terms In a project, was were tick I’d first couple tends there touch. which project. on

XX And project and we Atlanta. look in would factored we to the on higher bit you over Austin in per a that move tell I is agreed that to range. an last the the Certainly, a to think here wouldn’t construction TI be our well on it front at pricing projects the a a that return whole As cost cost there as X% was apples-to-apples team months, overall we over at quite in NCR on cost. we've in partially side deal energy comparison land was X% that into basis as seen to Colorado, of the as escalations XXX us foot

in more deal areas a three those handle again to mid center debt and cost. as able where think you’re I cheaper, to as XXXXX three bit it becoming handles corporate well density in Tampa to little would to pre-cap site high suburban projects are urban projects pipeline though square have minus us, and similar a cost be in I outlined here forward certainly cetera to range. in foot I Tempe pricing range, with that Larry an look Atlanta, in front that We we in replacement As $XXX Dallas, would the land of Avalon lower in replacement here as relates be do or plus Atlanta. Midtown would think have think et a additional Those sites

John Guinee

Austin and And Amazon and first within then if include But both then the stakes are your maybe I’m are considered can exact which in for exact, correct, not if the there sites sure others. that identify you I being is think Atlanta, the sweep everybody second, cities cities?

Larry Gellerstedt

we Dallas a considered, site as which and We being also -- the well. markets have

that being some are sites public cities the terms In some not. those and have city, of in cities made have specific considered

role As at everyone leadership in terms agreements Atlanta the least you involved in and I’m Amazon. bid non-disclosure of know under our a with in is bid involved

sites they feel public of I on those wouldn’t I So bids Austin, at make the Dallas commenting particular and not are or sites specific am utilizing. and whether unaware comfortable the that

Operator

to back turn and And session. Ladies over gentlemen, Larry would the like for the concludes to closing Gellerstedt remarks. any now I that Q&A conference

Larry Gellerstedt

is we’re our I and markets on optimism call in. enthusiasm Thanks hope company the today. the about everybody doing for the and where business detect can you being that

welcome to going we’ll NAREIT to look and Thanks. We’re before. forward not We’ll Marli. miss at seeing if Ronnie everybody

Operator

very conference call and concludes you this Ladies that now Thank may you gentlemen, disconnect much. your lines. and

Cousins Properties (CUZ) 26 Apr 182018 Q1 Earnings call transcript