CUZ - Earnings call transcript Q3 2018 | Cousins Properties Incorporated

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Operator

Good morning, and welcome to the Cousins Properties Third Quarter Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Pam Roper, General Counsel. Please go ahead.

Pam Roper

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

Larry Gellerstedt

continues XXX,XXX end well robust positive economics pipeline the than We Atlanta built an formally new delivered an the square would straight which at on to to rent two leasing front. investment important, floors second total progress morning, to new already fronts. Avalon, feet. strong Of have accomplishment healthy schedule the to of X. December. and NCR both Colorado, added good on bring leased. XX the and third consolidation offices XX% renewal completing Construction of negotiations, leases is team Cousins in executed activity The financial leasing we their results impressive a begin the the square rollouts, of execute week. complete on Equally has have current and bringing the footage the operating quarter represented XX,XXX with particularly square in to XX% is October In from are on everyone. and Pam, next of we quarter remaining a and tower, the more by the feet XXX to NCR that for portfolio occupying expected made XXXX, begun Austin, phase and Thanks, Cousins XXX,XXX exceptionally investment significant pre-leased. property in

to feet have to land in Street Atlanta, we bank. been we at we these up Peachtree addition In West of developments, where adding closed this our month, land develop office. our XXX,XXX could steadily square Earlier on to potentially XXX assemblage Midtown

potentially venture to we Tempe, with Heinz site close to to This XXX,XXX square Mill, feet. agreement our quarter, build in our XXX finalize on up joint plan and

of depth the details announcement could that for in all Dallas this These milestones, with and reflect into With the quality fifth recent addition the balance before assets, another Colin how sheet, that has Gregg addition our and touch to Victory talented million office Cousins team. upon a in growth. dive the the accommodate important, new own another our or backdrop, quarter-after-quarter, I'd square to of the health up operating results the quarter's positioning control Center earnings of its A pad the Against the an Tampa, like the of and consistently Class breadth of quarter. these space. along at very of portfolio the in while executed investment of sites, markets, quality Corporate strength continued Equally for site X.X to now we and snapshot and of Cousins provide quarter results, feet excellent sites

and on investments, -- serving Chairman I will the the newly for excuse know, that and civic will supporting while as I'm key last abilities, be experience, an the long-term of a strategic ongoing profitable Adzema three, and and Pam cycle-tested a me lead Colin, Connolly success. partnered you been along innovative effective collectively excited exceptional relationships, the commitment with allow individually, in has to of more Colin, years. as the Colin role appointed begin Furthermore, by President governance, of and me, client his with Company's CEO. many All instrumental as Chairman with Gregg serve I executive shareholder, me next leadership their X, era instrumental Board Executive and led and sustainable Roper, XXXX. As longtime team. will into and focus as seven And mindset, couldn't have Board team in has January confident Board Executive growth. the This Cousins to been Cousins strategies,

shareholders turn in I'd today. CEO June too were the I over listening of we are who before time, Finally, and team, with we to leverage much to most that new development-oriented At I diversified XXXX. were REITs, Like became thank land. it all call like producing and also REIT. to non-income a over the development

the had The well learn. of sheet; execute then those lot as consistent lot do we a days, leader part manner, large in first, of importantly, a be balance journey and and to, has in small, and I'm an strategy; deliberate the the most it. I community, build stabilize and opportunities, to with a a then of create a and finally, lot opportunity grateful lot team; both compelling as shareholder fun As to a early a been to proceeded new that unknown then for to But find REIT strategy; value. define a

face-to-face forward remarks, more opportunity. the will to Francisco. company early honestly you are upside confident I'll innings that, for never forward. of NAREIT With with we many speaking the at and this more next I've can conclude month tremendous of say, However, look us strategy, all call the my with the been I team, San this over about in to in in which turn carry Colin. prospects excited I nor future

Colin Connolly

well Directors want their story. unwavering thank I'm proud Company and time, Thank you, seven commitment look want mentor for for whole. next our morning. its Cousins and our shareholders. take honored together to to Executive Chairman. Board to over as he's for I and Larry. during Larry, moment a to transformational our ideal that been of the working forward his a and good long lead leader opportunity, every I I also the in years; a chapter and to as our day, and as to our the together I Properties enjoy thank as Company role me personally collaboration work been the for We've continued for in

Lastly, it privilege team. to Cousin be on colleagues, is to a your my

creating You're on value relentless for shareholders focus inspires day. me every our

and be to future, proud exciting of you. that an have part with I'm We

opportunity excited more for Looking Cousins. forward, I could the not be about

strategy target clear Sunbelt to benefit portfolio, playing and and well from compete to capitalize trophy Southern I'm a that that our jobs will balance the future and on the team and in compelling go our present positions us the of and opportunities. continue ongoing rock the solid out confident submarkets. urbanization have US best-in-class rapid migration We into sheet

Turning this percentage effective GAAP from square with to basis five cash rates to markets. rents occurring remained with largest smallest in on the of a quarter's solid is came was but lower Sunbelt Leasing strong feet of our one-year our profile up X.X% a board, contributions XXX,XXX feet markets positive of the our quarter, our a across properties. results in all basis Rent Net some activity leasing each were XX,XXX from market. in our square rolling XX.X% a in in strong, purely our and the this our rent run under result on rate, during of higher growth quarter. of

the X.X% XX.X% portfolio with is now of over Our leased, portfolio just operating through XXXX. expiring

square Now of starting feet the for the XXX,XXX third portfolio office quarter. in specifics, executed across leases some of our team in the market Atlanta,

with in technology their The that's Importantly, team via up signed of XXXX. living in focus AIG's of leases suburbs those XX,XXX easily a was car. ahead and to commute square foot total, the a including largest transaction company lease a to northern that new expansion was the OneTrust and square town A picked square significantly Center, in wanting foot Search feet XXX,XXX Town enter to finding of MARTA, be square activity expiration accessible base from In talent at project, at Northpark of will XX,XXX the space early relocating XXX,XXX by feet leases. primary commute OneTrust, Midtown. live wanting growing

that solution their during We scheduled They to space move second Northpark. found thrilled permanent into are at XXXX. are OneTrust of their the quarter

across to presence for a Top levels activity Just increased brain historically to market Buckhead. of the positive hub, submarkets metro beginning are to that services to call technology it; of attainment city with technology see and Atlanta impact both this jobs net a are the technology Buckhead. Buckhead of expanding CBRE, has we access continue been and other market but as in south, and like degrees a is earned particularly area, have total here. the According X the MARTA created. on gain, We in a office financial believe number will educational in companies they their the

During tech add week, growing announced XXX with third their foot giant, team Buckhead. commitment executed Salesforce, respected just XXXX last a a our to another the Peachtree lease Workday, square at company. XX,XXX software quarter, team And their to highly jobs in

overall. bodes growth with Buckhea own well Salesforce in which building, at expirations venture Cousins focused market on the was a in the JPMorgan. We While Terminus, XXXX XX-XX the for our joint it not we remain

largest renewal X.X project in A feet. the since end June, the in vacant of square positive square we back highlight concentrate and quarter. XXXX, UBS is not will lot our from at downtown until market, located the in the XX,XXX any have XX% of with discussions and the a according customers, with are floor Austin advanced of as currently feet a space a Austin renewals we very While CBD tech quarter, office companies activity receive on Class CoStar. the feet now in including portfolio, local space of end X.X% X.X have San XXX,XXX continues the Jacinto during market March potential our to square to grown seven this executing Center vacancy and activity Without foot to To in absorbed which robust nearly the Over full at is with rate just million the customer. square remains team key leased, Austin, growth the million

us new result the Fareground hall activity as project we of we good in helps leases XX,XXX quarter. during Just street January, which square Congress, across at food feet One of are Eleven the a the seeing opened execute that new

negotiations property in currently are this on as full floor another well. We at

square third quarter. Turning activity experienced of has A market to the Class during level highest it this year. absorbed Charlotte; the XXX,XXX The feet

positioned, Our portfolio rate modest well is Uptown with near-term and expirations. occupancy XX%

XXXX. of XX,XXX of of South End, venture the Advisors are This of these we our to at amount out Fund months. contributions signed first Place delivery of Therefore, date their build Dimensional a leases, being of Fund floors Fifth through space, the Dimensional Fifth to their joint by will feet beyond Third team Fifth spending on Over long-term extension Center are a over the in in significant the deliver additional Advisors Dimensional the remain square two Bank February quarter quarter, with most couple in by delayed Center. money XXXX. our significant Third track at Third which

Phoenix; quarter, to feet marking on net CBRE. consecutive the another XXrd office absorption, this square the Moving market positive absorbed XXX,XXX according of to quarter

Importantly, Class below X%. vacancy A is Tempe in now

office understand down to the Our of team largest XX,XXX customer finally, new history and feet own, posted Ferry. signing the and we Tampa, square in of the This be lease impressive Westshore foot to net year. market expanding California per in square submarket, market. over absorption strongest occupying had $XX their will be numbers Southern at an from overall both is And the their Hayden the quarter Phoenix what

during of half Our the square quarter, team Harborview. space including Spine XX,XXX Tampa at the backfilling feet portfolio across leased Laser our

about for with We building. the are feel space great Harborview pleased our at and the remaining progress at the prospects

there blocks Tampa to call are our for that, Westshore XX% of available the over in financial large I'll overall portfolio is space Our and a turn performance. the Gregg leased, submarket. few With currently of very review

Gregg Adzema

our begin to XXXX overview balance I'll sheet update earnings financial everyone. of our my including my before providing then morning, closing on same-property by with an an performance; to remarks our guidance. move I'll results, Good Colin. remarks Thanks,

exceeded share could the second remains generation and a continued solid, you to up, from and as metrics same-property spreads we positive, volume third share. firmly was that As NOI very quarter. the Colin's Net $X.XX performance clean matter tell roll quarters. per leasing was income strong $X.XX per most remarks, FFO Overall, had leasing was prior

below lumpy recent been couple the during over our third runs and the years, has of was case income in and administrative expenses trend. quarter incentive our the long-term As accrual, the through item, statement compensation general past line which

As a our here quick SNL our by relative long-term of incentive management's vast determined with at Cousins return Index. total reminder, performance the shareholders' in performance-based order interests are is compensation aligned ensure the majority to Office to interests,

positive office the our NOI declined with power of terrific REITs. year-over-year testament quarter marked decline total markets revenue X.X% of and seven-year are the third cash accrual our the quarter, underlying ranks index, property portfolio, X.X% year-over-year by by to was During at period. this averaging X.X% XXth consecutive top I'm cash These numbers, Sunbelt they increases over or return the the urban cash confident accordingly. and for X.X% growth, quarter, downward a third adjusted It's the all of driven assets. flow the us our near NOI same and growth. during a compared the up was to Within X.X% of our

nothing as facility, held unsecured in cash. on we over million to our sheet, $XX balance we quarter $X our end, and billion Turning had drawn of credit

times, Our average ratio rate average net coverage was was times. was X.X interest weighted maturity and fixed and debt X.XX years. X.XX%, The debt-to-EBITDA ratio X.XX on our was weighted charge our our

sheet have We some our industry. FFO our remains pay after was prepay The early, advantage XXXX XXXX. mortgage did among our mature now until up the comments and property of until We called The of Pointe office to property XX% to compared loan in without to and option; balance of peers any Tampa but very Overall, during the penalty today take XXXX, non-recourse prepayment this a significance a quarter. unencumbered. best REIT months not solid used on wrap guidance. under our of this cash mortgage, rock the six maturities both our debt is entire by NOI third paying did and of we loan updating just my available no off I'll

share. and quarter release, third $X.XX we As $X.XX we our have outlined of our to earnings to per in range guidance raised tightened a

this the of a $XX.X million million, $XX.X incentive to between and assumption, All expense our due long-term unchanged decrease the to to lowered I which G&A do are We're the not assumptions with of mentioned and compensation useful. consistent of million fourth number recognizing providing I trying to our that XXXX on We'll FFO to guidance provide now, million of our items call, we have exception are quarter But that prove yet. prior did earlier. with range investors that in practice. forward-looking accrual $XX.X conference analysts $XX.X couple many forecast from previous may want a

effective to First, incremental becomes we capitalized. the that on G&A January standard statement. new expense require will leasing internal leasing our income XXXX item $X.X X, run previously line FASB through approximately will expense in corporate costs expense that us the This million

although asset anticipated We the Hospital. months XXXX. process located few Second, a we medical in building this building adjacent for Mark over Northside few weeks, XXX,XXX the Hill types it's anticipate it attractive developed in of or for Pill is North note matures a August to on is that assumed is non-core Mark although robust many buyers, will a anticipate that Meridian loan in and asset prepaid. very need us, of in that mortgage be not Please we and demand. it XXXX, different sales to our This square Atlanta, closing the foot with the Meridian the first there is submarket XXXX -- beginning office next during for

Operator, some Before additional we call I'd supplement over provided in like our out turning have detail quarter. the this the to to financial point

page nine, metrics and added we've current key schedule performance rents to providing data. historical gross First, our in-place both on

settlement, within additive. rents so rents on We new data gross this will leasing effective continue activity the is all providing net

items, of excluding pipeline Hopefully, any I'll find development Operator. page capitalized on XX. now turn to helpful that, as in over our back providing With additions we're total the both schedule these analyze performance. costs, Second, call you'll cash you our the

Operator

[Operator Jamie Bank Instructions] America with The first comes Feldman from question of ML.

Jamie Feldman

stages your of Great. morning and the next Good Thank to everyone careers. for you. congratulations

build? how the some think feet about more getting the I having actually you conversations you're talk of kind mentioned sides potentially we you just started? guys the should square and think X.X could potential anything -- timing can Just about So, you for development million of of

Colin Connolly

outline, thanks Collin, look IV Jamie. sites, representative of development in that We terrific Hey, some your in Larry and strategy Sunbelt Center hope site close shortly down across, very Tampa. question. one have It's here Dallas in and to you at importantly, Atlanta; for do, with as Corporate as our out Tempe in terrific we and Uptown

through working team for predevelopment various those is projects. our actively So the

pleased I think but have be sites, of any kind really are of March to here demand-driven that the We'll and focus those working would with work we've the likely the as got could those year, hard and the earliest customers. ground phase actually of is some optimistic potential through predevelopment we projects. of on conversations next be we our process of we anchor place with that taking keep sites break

Jamie Feldman

you are far would say any like discussions pretty along So or kind your necessarily? in of not imminent there's that

Colin Connolly

cases, all to discussions across have able the got who've active all customers some some those adjacent we're our in of fortunate to folks growth They're prospects -- and existing but we're another to have don't hopeful able tenants discussions as of today toward -- get ground potential imminent, that and anchor I XXXX, out to look but project with also we so we're market in with pre-leasing think in properties, our report the are some with discussions to buildings. some be would I existing some to be locations; I with that Look, need. say anything many we of and fantastic we're in customers. incoming good that's we'll of and optimistic

it news into share we'll So we to some XXXX. you for as we'll roll good keep hopefully working have and at

Jamie Feldman

there's project. any about Gulch opportunity then involved The that lot And any with and of you guys mean a you around could I zone in press thanks. Can think Atlanta, development, or in sticking have that guess Atlanta? if to what you get Okay, been activity opportunity just in would talk for even

Larry Gellerstedt

for has Good decades. that World of Mercedes-Benz approved, immediately a downtown have and the Atlanta Farm comments. Center. is has one The Jamie, site in expect the Arena, Yes. they thank and parking almost morning, vetted so. to been by the the Congress to State adjacent or XX-acre be developer been Gulch the that for an would It's months, I and a or last and be area Georgia couple in is you Stadium Council it surface CIM basically process has to in as development being going agreement -- that on and City another way been next resolved lots month

be sort forward Council the debate approval terrific Atlanta development with initial would residential downtown mixed-use for the would be thing, it's component it complex City talking or really in up it. as a of going on probably with the whether the fairly the been that not, So, certainly energize just We brings and to air retail a contentious it on city, this think of. of developers it's part not been that's a would about or a

development So, Cousins air are for to note CNN Tom developed is, clarity we XXs. the back footprint to pulling Center that that has XXXXs, when the it rights and for to back happen. just the One in small go Cousins back of certainly go

number out. sort to project purchase as won't that of been rights It something a wanted finalized that to would that. developer those their relative on part assume land just would likely approved air but want of Nothing's Cousins, be I we negotiated that Council is that be the if the So significant to assemblage. by would point or has CIM

Jamie Feldman

from Okay, a helpful. standpoint? office-supply do supply And competitive think you how -- it that's about

Larry Gellerstedt

site, underutilized we've of will terms just civic regarding add CIM sits to air and of just for the would to organizations as so four of allocation, -- that it's below It really conversations so with working platform a couple is to the the I just forays with just the had that years' XX a sales the would have particular their been doesn't district site, town. had the three what developable increment that. will cost that there street a also, some need is reason capacity is that long or work would begin which think tax to Well, I my grid, air the I've do the to -- -- to feet feet we've financing reasons in in worth one our get that leave development had platform reason appear initial don't several XX be tax the they're And in financing several of rights, and and to and in finance create office. have this leading the they me of business

think to competitor in don't it because just I that to the in for place. long take will the office-supply it be for So platform Hello? time a future -- foreseeable would get an

Operator

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

Blaine Heck

Thanks. Good morning.

Just site, a follow-up just question, West on and Atlanta get on to wanted on Eighth in specifically and Peachtree your Jamie's general. Midtown thoughts

market, but think, a are construction of are number there getting either very strong projects under or it's there, ready a launch. to been seems as that I though

especially supply on how do around project, there? commencement feel given And can you So, you the BlackRock's more for intended that given reports on color talk about, demand the issues? any have potential recent down about do move then, that you

Colin Connolly

Colin. It's Blaine. Sure,

the put Georgia because location We to good have that of unique it's about do square that to As construction MARTA Midtown, and are Eighth developers together we feel Peachtree, pretty X.X we are actively the and there XX% some in site. to feet million a certainly, pre-leased. got today, There about we've about projects. proximity in their And under own sit really Tech. other trying the that's both West market is terrific

that we well. So bodes think

the development, capital leasing is demand driven kind focused as demand-driven on real to said -- ultimately of think, I going be the in for market I markets earlier.

is there. to urban with think, very migration I a external Cousins' new one prospect out right overall Metro strategy well customers, Chamber very some There which kind office Sunbelt active is in on again, -- the company. others. potential speaks touched You are of rumored several potential now, say, I'd

South, continues to And out. so, that key Atlanta very beneficiary from that. to think, positioned play a think, the to well of is, see I North migration Midtown we I be And

So, our conversations prospects site well there very positioned But how see out those compete the there. we of end the like go to in is go. marketplace. of lot are We'll day, a feel the at

Blaine Heck

Very be supplemental And someone then, helpful, couple quarter interesting should of shifts have quarter. would interesting. on the the a noticed to touched in third from we second

your at the XX, per yearly looking $XX. seems footage and percent in on square the it increased expirations a Page of to annual So rent like the didn't foot rent the for quite XXXX expiration $XX but much, increased bit square from change

top secondly, first. I was -- that's going but rent So, tenants also with behind looks that And linked, on it then guess expansion what the has top to I'm just last like something considerably. in two. those the do late if renewal Bank America's guessing the annualized wondering on this? those were pretty page, of jumped And of year,

Gregg Adzema

morning. Hey, Blaine. Good It's Greg.

Blaine Heck

morning. Good

Gregg Adzema

my we in-place this page mentioned why net the have in the rents, prepared versus you're and using rolled through gross I've rents referring numbers. we've is of supplements supplement you're the the As that previously to, now that using in gross seeing remarks, that's rents now added jump to

Blaine Heck

Makes Got sense. you. Thanks.

Operator

SunTrust. Michael go The next comes ahead. with from Lewis Please question

Michael Lewis

about are costs talk Place. anything about to there talk guys you pipeline? down Spring, but notable Avalon, just slightly Could you. in Dimensional of the for changes there? Is XXX it Not like the XXXXX some the development XXX active Thank looks Colorado,

Gregg Adzema

I've Hey, It's prepared capitalized good now mentioned again. that that numbers including morning. remarks, Gregg on in costs. we're excluding page, are my Michael,

the largest capitalized as interest. excluding why that's is on So numbers seen a kind capitalized small all that costs; which those the on in you've we're of reduction projects of the

So these cash numbers now the schedule. are in

Michael Lewis

Okay, you. understood. Thank

for of and the into of term fair? streak several at in the last been, kind the you pretty that look the insight But comment confidence limited about spreads rent might at realize Could have your to you whatever this talked that? over have go. continued you're You plus quarters kind XXXX good six, point. NOI it lease years, next cash like seven, of Is spreads giving I I five, when of looks rent average long rent growth, markets strong growth on core the market impressive would the and

Gregg Adzema

Sure.

over XX% that the and year So, in-place that rents provided below the into we've number today we've case 'XX. got market, going past are remains so, to or where X% the

to that run our you'll see 'XX. in So weakening seeing remain same-property portfolio any our of fundamentals. not in We're Fundamentals through continue supermarkets. strong

that from 'XX guidance, underlying not we behind perspective, February, remains again, guidance assumptions in have that we strong. we're as always So the but providing will

Michael Lewis

to with where deliveries any be lastly when should the then me, you think may push coming one for material about and there up low And are Okay. you be But horizon? over look a income. the may there bumping your an again, in for dividend not way on and but have next the dividend at to look think growth few Could guidance, we I up ratio payout the at you quarters? I the realize some will the development to frequently. on Board increase start

Larry Gellerstedt

dividend by our ultimately decided is our Board. Well,

front never decision. their have would for solid. year we of I of quarter every just years. the past the increased several first dividend business in And as fundamentals to I've in remains get the want But of calendar the mentioned, So the

I that -- which thing get see ultimately So, decided would do the our is Board. no be would front increase, dividend worst of would I I in a continue. But by again, could reason to why

Michael Lewis

Of course.

you. thank Okay,

Operator

go of from John ahead. comes question Stifel. next Please The Guinee

John Guinee

you. Thank here. Guinee John

there excess to office it make and excess land readout do truly we though when came you. to was, going development. Larry, First, think, one to miss the I want correction to worst are your excess leverage, I comments. Cousins disparate

a of in XXXX. You in were your league own

markets, your eggs sort is do in enough? in enough one that's Larry, but Is good for one land? you of up each to this all of you're and that I your think putting mean, basket. you have Second, site

Larry Gellerstedt

to John, first these earnings your not I'm me, on mispronounced of problem. comment, But name my hear to used calls. look all, thank having trust to having the same forward with you your consistently for and I name,

is stated at actionable would Charlotte need. I we're think, look other I'm key range a in hope become And to what optimistic markets. of I X% that next we may at that some looking we I -- site add in that sites to sometime our X% to continue the we And about year.

[indiscernible] hope opportunities back looking the thing weren't the would submarkets. really total now offer growth we you in that to just have sites continue we that continue now I we on I to want But so can we number. can customers The to customers. and what as that key were these -- to inbound find it, be in a versus for existing have we to know position, selectively now fund we company, we a are considering have and to So, to add them

And would would -- years. I action have more that the on we sites the in team expect coming so,

John Guinee

Okay. And then, Colin, congratulations first.

Colin Connolly

Thank you.

John Guinee

Larry's involved And know, WeWork. is you son in then, as

Larry model a better not out out to you've do WeWork, why? I have lot like on with So some with of you allowed which got is you Colin, this. think, do and -- opine leases Regus;

Colin Connolly

John, groups. -- we do it both with have leases

in as different year, in just We so forms. two terminus that opened think, the have about in this with first XX,XXX and part aggregate, two over comes feet XXX,XXX model They're model. WeWork Regus, probably really a aggregate. early floors, Regus store is traditional we as our in well I [ph] or of the which Spaces

the kind in winner pick a us that rates it's will for be. who early of think I little bit So to

to think, portfolio both, Spaces well. The little services -- which portfolio, finish, higher along a think, continue more in what buildup the in and a have -- that. stores quality is a of nicely. and with doing, as But perform I you're do the is just go our seeing I a model kind amenities this statement, that general they toward more bit our WeWork

would that Regus portion convert looking segments think I those. to I appeal to their -- So, business continue we'll demand, type And expect do They to both to flexible for both. of continue room to a space. likely Spaces model. inventory But the of with I look, large for different of office there's of

John Guinee

a sounds pretty good. out those actually of XX% one you per asset with cash, Right. good But to level? Are of at square it hand, last GAAP enough And lease combine spread foot when year, value metrics create takes question of sale. that On for then that $X.XX lot X% wind kind the per releasing you.

Colin Connolly

over to was below couple that years, XX%. John, I has the of our kind X% think Well, been closer X%, trend of think which last of I kind

mix And leases so, this that just of by quarter of the particular was have. impacted we some

and factor in And be they well economics continue as look so the the rents, at do net lease we they ten that's value residual effective effective months we rents, to XX that particular -- underlying and our when And take continue an in years, in at does we to that the on those leases and trend by as seven as lease to next direction. right well look have of expiring asset. rate the always and extend cap impact a positive, net we the as that

math which that that and achieving value very we in look to doing believe we our that are at So, portfolio. to the we're in math is the create continuing leasing closely we the economics continue and by

John Guinee

very you much. Thank Great.

Operator

Rodgers question Baird. comes next ahead. go with Please from Dave The

David Rodgers

Yeah. Good morning, guys.

just Just for for GAAP Firth maybe a Obviously, Gregg, follow-ups rent side just build-to-suit continue to of of Third they'll in I longer. between Firth and accounting rent bit you little pay a duplication couple But Fifth accounting staying have reasons on to DFA Third? me, Third. assume, it, DFA the cash quick the a just

Gregg Adzema

No, so. I don't No. believe

David Rodgers

at if it moving build-to-suit, [Indiscernible] makes sense. that

Larry Gellerstedt

when We'll new occupy. a building. It's it. ran They they commence

David Rodgers

Right.

opposed to what potential move backfilled ins last you have build Colin, impacting quarter delay remember any And then all the DFA, there? helpful. of as follow-up at activity can the I the you're or about discussions Okay, said in there and and maybe then up. That's on

Colin Connolly

bit little Place. a additional a been the It's the doing at been Yes. of Dimensional that moving given building target, we've new work

good So discussions on that's for active we going team. a our have certainty very now challenging the got bit has hard with been potential as and several little But with and our made we've customers. it that date, specific team

in a of with remarks, now absorption very, got going. And March, space It's available got continues we're terrific in As that year. Charlotte we've my been I the to strong. mentioned activity we've specific very being prepared that net be pleased date

David Rodgers

to the thoughts And Firth Third? on any initial mark-to-market

Colin Connolly

given have consistently we the XX% across Again of X% guidance portfolio. the to

some give to with not a short careful relatively up. guidance roll suite that But Keep that see did been Fund that in term we've optimistic rent Dimensional we so, specific we'll particular I'm And on tenant. was mind or a lease Advisors.

So, haven't that be really churn optimistic there. an had be there's -- result to enough outsized there'll But that mark-to-market. a think I positive we're

David Rodgers

the and your I on seeing then, And Midtown were Buckhead activity -- you there. comments sorry, heard leasing that earlier Great.

on. at move that Just you were said the that with out you and talked XQ, backfill the the working the maybe wanted about in terminus XQ you to tie out

And of you there behind in the outs so kind through then a Can got two activity of to you and floors you What's you put kind you're that of do of pending planning the with seeing? did, then year. kind walk the And that WeWork left? math? move next what's in couple that floor are you

Colin Connolly

Yeah.

two in that's customers Bain, agree, that will about between feet. we year square CBRE have XXX,XXX I aggregate So do vacate next and

And mind, prepared remarks, so, keep is JPMorgan. my again XX-XX that a in mentioned in as with JV I

to effectively that here just have so financials, hard a is Atlanta, The asset about work. for as best-in-class team XX,XXX in is us at we're market our And it's of the works Buckhead Terminus encouraged. block So that and not through is activity feet. good. type and in our overall

market, assets. would to a different we technology the that foot I which them a confident is just that see when square Buckhead, at with something Workday I to was lease been would have in did mentioned competing terrific the have available Workday, if and we It's were been feel As come at earlier, company. with two exciting space terminus XX,XXX

market So, and the we the roll encouraged closer, to space think very becomes XXXX and we're prospects of as I that there. by into our execute ability

David Rodgers

you Okay, Thank great. the both for color.

Operator

from with Please Ismail ahead. Street. go comes Green question next Daniel The

Daniel Ismail

values rates cap Hey, bidding peers hear trends and Earlier your might a some on that today, to your markets, softening one thoughts curious commented the be in guys. bit of markets. across your

Colin Connolly

-- morning, question. good for the thanks Daniel, Well, it and

acquisition and We available. continue look the that's been in participate market everything at to

anything really have haven't that an our active in particular not Sunbelt, compelling and been point. for strategy this across the that's participant we We as been found we've But in throughout at focused pullback of lot still that kind of in sees a pricing that fundamentals a the underlying seen cap on we the There's same or very the is do. Sunbelt rates. and capital

seen I think, in have as the we we nationally, across market other markets. some softening look

I for been last really really foreign that's of impacted continue of from robust here very disproportionately pullback you investors. the product. larger months, some demand Sunbelt, markets. best-in-class probably coastal attention pay kind the over think But to a some we've flows capital composition the If bio seen we see XX And the in and to

Daniel Ismail

of would you That's you earlier? Maybe the to break going level guys to pre-leasing you us those any helpful. of in ground Thanks. remind can development, back what discussed need sites

Colin Connolly

for stand-alone Daniel, threshold do of look don't as specific company think facts, based make prospects, project can look market-to-market. is we at on the have stated competitive supply, a risk-adjusted ultimately What look on which a the the then policy. we we basis kind of vary of fundamentals, the those at we what market individual pipeline look really right and decision is, future we -- each all at general at and a

we recent do pre-leased, of seen about in Atlanta. us here pre-leased XXX% the you've some cycle at our Tower the Austin in past early part in XX% projects started projects Colorado a So at and the most

activity very I of we the pipeline started demand did continue be that we that. bullish construction, by XX% we as For product. very about up at And encouraged through there type we're moving and to the think, for we the Avalon, and pre-leased, for the because that felt

be it's very, specific project very specific time. again, that to market So, and going at

Daniel Ismail

a Got it. Thanks lot.

Operator

of question a ahead. we Next, have go America. from Please follow-up Bank Instructions] [Operator Jamie Feldman with

Jamie Feldman

I you. us over move-outs some of CBRE, and of the Bain exactly moves timing and just like XX that about, of going could largest you space soon conversation when to you back go the you as the these to And walk want then occupied next as big thank just to again? get are have some Can months. other the Great, through hit?

Gregg Adzema

from them and that relative national expires move-outs two. T. feet XX,XXX be that on. made be the Really through walk into of -- of other Sure, expiration, saw I aggregate, We'll year. really next your CBRE, Third kind overall Center the size, about there will there, Fifth would the Rowe which stage Rowe in the of which And of -- in would other end their then January be happy February size Bain few Jamie. would decision touched out XXXX. at are T. a It's of the on I just that's the portfolio, to consolidate to of it. be to note offices one on and of moving In Price very

will shut the So office down. Tampa be

build to needs. And in out so we year we've the general, put -- typically downtime get to four tenant of we to and to or world, space perfect got, have again, that customers' we work ready new back. expirations, over if those months the before three go improvement so see upon customer a a in In the for next the states

next to would the to go. have that length be ready expect, so customer we the And if

good work have that good included, we'll the As and space team expirations, we And Rowe as hopeful at is at it. the of actual T. coming we've activity relates is to to closer to hard in we're expirations. share got all news those get quarters those on

Jamie Feldman

else you. up? And is expecting? year's you're schedule, you come -- think that any sizable Okay. there next mean, about Any if ones other anything Thank expiration that's I now

Colin Connolly

discussed else really size. just We XX,XXX that's in over feet the nothing of everything portfolio. large There's

Jamie Feldman

right, All you. Okay. great. Thank

Operator

remarks. to would over go ahead. question-and-answer now Please any to Larry This and I Gellerstedt, back Chairman turn concludes session. the conference like closing CEO, for our

Larry Gellerstedt

we'll on today the you all person being NAREIT able be We month. you most everybody much. at of appreciate next very to see and hope call Thank in

Operator

today's you conference attending now for presentation. concluded. Thank has The

disconnect. now may You

Cousins Properties (CUZ) 26 Oct 182018 Q3 Earnings call transcript