CUZ - Earnings call transcript Q4 2019 | Cousins Properties Incorporated

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Operator

Good day, and welcome to the Cousins Properties Incorporated Fourth Quarter Earnings Conference Call. All participants will have – will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would like to turn the conference over to Pam Roper, General Counsel. ahead. go Please

Pamela Roper

Executive morning, earnings Good Connolly, to Properties Financial Hickson, Cousins President Gregg Operations; Thank our Adzema, call. and With quarter Chief our Richard Officer; conference Chief Colin President me fourth of and and you. Officer. Executive welcome Vice today our are

comparable reconciled were the The X-K. package, supplemental In package afternoon, measures all financial well to distributed GAAP has measures non-GAAP release directly with press requirements. supplemental as accordance as most the the yesterday and Reg furnished Form in company on G

are not through SEC If a Investor website. you did receive on links quarterly copy, Relations supplemental these and documents of our available disclosures page the the information

available posted not company detailed risks full result a the federal that today results of any update statements, forward-looking statements future report The duty contained statements Please actual to is package the the our constitute some undertake as filings. on Form and these be new may in differ discussed forward-looking is and matters set materially other including factors, regarding annual certain the in uncertainties or due supplemental SEC. otherwise. whether risk of information, aware declaration yesterday, events The with and risks, of laws, factors any SEC variety potential securities forth our in to from other discussion a and meaning may of statements forward-looking does within XX-K the our filings

turn With call Connolly. the that, over Colin to I’ll

Colin Connolly

a an we portfolio premier We transformed properties TIER with productive of everyone. of was in as Atlanta, Tampa extraordinarily Cousins. result. and trophy busy good unmatched Austin, REIT now and office year the morning, and Phoenix for Charlotte, company Pam, own XXXX you, merger, and submarkets the Thank Dallas, the an

Tower. at headquarters the the fourth we Peachtree headquarters quarter financial earnings year, as strong our leased Terminus a the is work acquisitions and and announced team’s including Truist project, hard release. of The value-add the driving Norfolk transactions, Hearst of results, also series in compelling Southern XXXX highlighted Throughout

share are Operationally, of delivered of the exceeded cash, costs. we transaction in our These sector. metrics per attributable cash leasing spreads same-property aside price leased $X.XX square We in the and directly in XXX,XXX before office reported an NOI second-generation growth XX.X%. quarter. X% feet FFO the and our increase expenses best among strong G&A Overall, performance from expectations to during share we’ve

remains in space fundamentals well-positioned with strong As jobs. value trends shareholders. we new continue to increases Office create momentum healthy, and to from economy Cousins and remain measured is supply. begin and new these for for our demand XXXX, add gain exceptionally the businesses steady to

the in First, Sunbelt. strongest highlights I the into office-using Midwest from markets employment strong will growth census significant Sunbelt This highlight our Northeast, the meaningful are why? to migration our the United States. data a markets. shift California and population Recent among translating in is

the top according rent For Boosted among the employment Baird, with by Charlotte, and has markets the growth points. average in to across tailwinds, XXX basis Tampa, exceeded Phoenix, are strongest Atlanta Austin, core market CoStar. by growth our national these office all country

mass own properties, year we our A, XXX% of are in leading the illustrate average the are quality XX% is XXXX. Second, office built sector. Sunbelt To the near Class and portfolio transit the

portfolio trophy this expect, would commands rents. you premium As

than foot, averages. is per Atlanta in market stands our square Class and For example, their XX% A The Sunbelt XX% gross asking $XX.XX rents assets in higher portfolio at weighted which rent average in-place respected above are our peers. substantially now and our Austin

$XXX finished times. unencumbered million we quarter net portfolio have the approximately sheet debt-to-EBITDA currently is Third, financial we and meaningful possess X.XX a a of our XX% rock-solid provides that additionally, approximately We And balance of of with liquidity. flexibility.

portfolio growth. our our our same-property markets, both NOI Given is and earnings X% To organic XXXX growth. sheet, strength highlight, assumes to of Cousins and guidance balance our drive external poised the

announced Further, a a Phoenix. XXX we We XX% sharing lease we commenced project conjunction just professional in Mill pre-leased in last Tempe The and the Fortune company night, in coming had is services company forward with XXX our that to construction firm. specifics announcements look submarket to at weeks. on customers’ the

and development totals pipeline our square XX% that pre-leased. now feet of million Currently, million, is $XXX includes space office X.X

feet development opportunity. we corporate interest a our pipeline, square approximately land feet, footprint. total likely own across Notably, strong. X.X the of existing Domain that square X, in Domain our our office support bank can would Austin which Beyond XXX,XXX is remains million large near-term new in next

to gears transaction updates. Switching

First, price and of executed TIER gross Jersey small Tower XX. scheduled Hearst is previously a we has Woodcrest, options disclosed, its $XXX.X acquired contract scheduled purchase the for New the March as under we merger Closing asset month. close for through is this million. to to

provide Given completed. we agreement, until transaction more we is details are the a to under are unable confidentiality

gross our earnings our in Village option in his million. has XX% a in our disclosed we announcement, $XX.X of interest as Lastly, partner price acquire for Charlotte purchase triggered Gateway to

annual As XX. and invested option price Closing for scheduled on in based the the quarterly highlighted is our is previously on capital. a IRR March Cousins’ supplemental, XX-Ks, in our XX% purchase

has our projected million XXXX, investment. of initial is Over in on in the million a venture, measure. development profits the life to generate Cousins Gateway Village to by been any This $XX.X homerun $XX which approximately commenced

first our funded. our fully development With recent these close sales acquisition Terminus quarter, to pipeline during are are required our current maintain to additional the asset targets. in No dispositions scheduled leverage

In competing to in Cousins In are NAV searching the highlight FFO. and goals. instances, these I that can for we both are investors time. some terms value more growth, be one however, cousins, Lastly, of at do market, we today’s both. appreciate want At proposition to well-positioned

of We the office trophy across towers unmatched own portfolio an Sunbelt.

right properties locations the the meet to customer demand. have right growing We in

total, of $XX earnings. current upon is our addition, projected deliver NOI XXXX. stabilized source both a in projected development leased pipeline and stabilization In In our well creation million value approximately to tremendous long-term is pipeline of annualized

the preeminent REIT. at opportunity on us, excited conclusion, is team In to office of building compelling Sunbelt front the Cousins capitalize in the

it sound we simple, is and believe that may strategy compelling. the While unique

merger With and markets, productive and are us strong the place ingredients our XXXX. a for behind solid in fundamentals the in

turning Cousins’ the and to talents your to company. team, which over Before want all thank appreciate recognize I to passion tirelessly continues the our for call I the in work Richard? Richard, of markets. and

Richard Hickson

Cousins Thanks, a operating Colin. at note. strong on The year XXXX ended

annual Our annual fourth team company’s to XXX,XXX million office over bringing square our feet. history highest total as of activity in the owner. square leasing leasing completed our in the dedicated quarter, This leasing a is activity X feet

Rent large Charlotte and both with leases, two Atlanta, our and Southern the was a core our fourth with cash growth in and the the included was especially of of basis quarter, Truist all and activity XXXX during strong net basis. and rents economically second-generation our notably XX.X% GAAP the a across and broad-based activity on on increasing unique solid year Norfolk While markets. balance XX.X%

at core both occupancy leased leased, XX.X%, The were and Our weighted portfolio The with current all fundamentals of in our occupancy markets line XX.X% essentially weighted same-property portfolio higher a average solid XX.X% ended total percent both Office average quarter X% the XX.X%, at respectively. positive. and with the remain prior in quarter.

the across averages Board markets absorption absorption continue we in were the during of Fourth full-year. job Charlotte consistent and net same outperform growth. posting positive national or largely and true near our first Phoenix growth holds with and Class experienced three The with Occupancy record to A quarter the for are and rent full-year what quarters for record XXXX.

Atlanta Cousins’ higher each Citi markets to respectively, and Tampa of and between employment Cousins’ and core year-over-year research, growth average in X.X%, ahead even well employment recent other X.X% growth growth According of X.X%. favorable while U.S. posted our employment experienced annual markets of the of X.X%. core X.X% was

technology for of to in high-growth of CBRE, Texas have Southeast again CBRE the metros using also office any Austin in top growth XXXX. business-friendly to job like U.S. once XXXX market. in According jobs and global forecasted markets the highest centers to expected be percentage growth are those

experiencing side, closest Austin in Atlanta. are we levels, the all Midtown Downtown our are while and activity the markets in new On supply tracking supply, still growth

However, we completion. relative to at of supply healthy relative lease overall stock in amount submarkets an is under more manageable of still the stage construction stats active view the to these and

space is XX% months pre-leased. will about be Midtown could estimate, order. large development square core million X.X is chatter, the but keeping currently leased available if telling, interesting stands remaining feet demand market collectively particularly a any in handful this be under the up to indicates indication, users coming our a at is Atlanta amount with it Local case. that of encumbered By very by supply. of Midtown substantial in however, of Midtown, appears The and a be short or

stands that Austin at XX% Downtown about has that square estimate million pre-leased. X.X underway, feet about We

This absorbed Austin square market. For that XXXX. demand JLL, is and very frame. feet XX.X compared strong is same clearly XX.X indications in absorption, This feet million supply all to in of continued Austin million square the point entire healthy a the almost of time record has track market new to since

feet solid specifics in XXX,XXX Atlanta of robust, with our square over leases rent Now I’ll activity performance. foot X square with signed some to leasing again Fourth turn on Cousins’ growth. million portfolio quarter once was

Atlanta healthy with Lang quarter, foot prior Our and the quarter leasing our new at lease square at LaSalle activity XXXX in XX% Similar Atlanta of third renewal square portfolio Jones XX,XXX XX.X% a ended a of to a and leased, foot Buckhead. the QGenda in at the Terminus. with XX,XXX expansion quarter. line included Peachtree was

completed square quarter. at XX,XXX We this Plaza leasing also Buckhead feet of

which some some near-term have this out expiring have in-place we past, particular noted rents customers As in simply market, occupancy, the created well at priced of project. pressure has project, of are our on below the been as

about encouraging higher stabilize However, in-place to feel rents. with and much has our we customers from new good demand ability the project been

and to should ground spaces. on exciting market been also and fantastic the far, new leasing in kicked our common so we our we’ve on off Additionally, exterior already about plans from and activity. this project, has floor our an upgrading reinvestment are the excited the provide encouraging customers all momentum focused Feedback

fourth new for as square activity the is and included a XXX which square It our early foot and team this of expansion Tempe also commitment Silicon think renewal foot strategic Phoenix ultimate already endorsement view of in square feet Hayden Mill success strong and again of Ferry SVB a Hayden XX% Downtown quarter. development, important Our an well XXX,XXX by We Bank delivered of it bodes Ferry. the pre-leased. strong XX,XXX at XXX,XXX leasing Valley the submarket,

Tempe For submarket the A running in CBRE, X%. under Class are vacancy still

Austin also portfolio persist job at operating growth if spike. and was again XX.X% quarter, active in-migration to Phoenix from up in Our this Austin XX.X%. ended leased, the continue which quarter should

Our well leased. ended Domain at and Southwest square diversified CBD, X million the XX.X% across foot quarter which is submarkets portfolio, the

of renewal net important team at Once coming Austin an remarkable for Broadcom Our leases feet, totaling in second-generation XX,XXX square delivered rent cash Austin the the signed quarter. growth, XX.X% terrace. including again, at

are Our markets Tampa and well. other core Dallas also of Charlotte, performing

quarter, markets each square these the over these of in quarter and feet executed teams Our leasing portfolios XX% XX,XXX one ended leased. this at of

larger Lastly, our very America Bank I Peachtree want focused on and team pending XXXX our in backfilling that Atlanta. vacancies proactively Charlotte XXXX at note and Peachtree is to in Plaza of

back of Bank While we value-creation occur do XXXX. possession the we year, latter-half these until pending the the in Atlanta at vacancy two this lion’s floors will the vacancies great view four calendar not We all America as of of December of of opportunities. Possession of this end of get XXXX. the get pending share other Plaza building during

submarkets distance within acquired the adjacent respective recall, directly you not of strategy. these their XXXX, were of full they long-stated three properties these of, In all amenity-rich urban in and knowledge properties As of those of enjoy transit. move-outs. if locations short, we with to, walking two fit all and perfectly of All an three three future during first are easy prominent these underwritten these public will our with –

Our are Atlanta excited the year extremely Charlotte and execute in optimistic leasing and to teams in beyond. coming on opportunities these and

With that, I’ll turn to the Gregg. call over

Gregg Adzema

before sheet our with begin followed by of financial discussion including my an our revised a my Richard. remarks providing morning, Thanks, same-property overview everyone. Good performance, closing of results, guidance. remarks XXXX earnings by balance I’ll

costs, tell comments, quarter last many Richard’s which can and fronts. increase FFO you Colin X% fourth from $X.XX were a transaction was per represents over outstanding As year. results TIER share, on our excluding

Beyond very were you the both Leasing focus was operating strong. metrics on solid. we FFO, that and velocity also important

positive, and increased for consecutive NOI were year-over-year spreads leasing cash XXnd Second-generation the quarter. same-property

I’d items, same-property providing like this Included in portfolio. our three quarter’s are before results some on highlight to color

$XX guidance $XX than million. First, year administrative our our for during the general for were quarter significantly higher and $XX they expenses the fourth full-year, million full-year were the of million and

strong share performance development variance. recent Our price clearly behind is this positive a

forecast. we’ve in other G&A our isn’t The a our components G&A first expenses. variance of the in with large reported time This were line

volatility are program performance-based These fact compensation mark-to-market our the each have ensures towards This which long-term aligned be heavily incentive is that quarter. RSUs, cash shareholders. with in historically weighted settled by driven is our RSUs and management’s interests must

with change units also stock, will line Beginning our office will RSUs now year, in the This performance-based use RSUs. settle granted with quarter-to-quarter significantly peers which reduce these this G&A. will impact us who on their put in

leaving of previously years statements. and after through vest all unchanged, run impact performance-based the cliffed couple years, We’re full it’ll RSUs our since issued three financial for take RSUs a to our

immediately. will to begin volatility the decline However,

accuracy. with likelihood play during timing some like of general, I’d can land we and saw Second, any uncertainty quarter. this In predict sales. be to the discuss the sales fourth out often non-core to And difficult land

When land we the and Wildwood North the we’ve now fourth quarter. October, the adjusted we’ve sale forecast during we in we back remaining a sold land during up land accordingly. selling at development guidance Wildwood at Instead, quarter. XXXX to also assumed our quarter-end, a provided the development remaining the Subsequent fourth Point our of ended

quarter also the from to XXXX Third, fourth first the of quarter slipped Woodcrest our XXXX. of asset the sale of

XXXX As close to is earlier, this later scheduled been contract and under forecast this Colin our month, said and has adjusted. property

fourth X% to revenue portfolio. our on X.X% NOI Moving driven during same-property was by Year-over-year, up the growth. quarter,

cash X.X% For NOI up year, over the was XXXX.

longer-term XXXX, look markets. Sunbelt is in increased validating XXXX. numbers, Class cash A the forecast great trend. Not only increase to back and NOI X.X% to in step our of a they’re X.X% in the XXXX, these are strength X% accelerating, Taking at clearly Year-over-year, assets our in continued

balance sheet. Turning to the

at net was the ratio X.XX by quarter interest purchase was fourth Terminus. our Our partners of up quarter, times. This driven last debt-to-EBITDA from

several in And As be lower. out assets report considerably we earlier, net sell we’ll when quarter. during Colin our first laid will the April, again ratio debt-to-EBITDA

time, between since company we’ve XXXX. range As the and a and over times net times, X.X reminder, X this run debt-to-EBITDA managed we’ve generally our within

$X.XX. this With by This $X.XX the per updating and from $X.XX We FFO previous are guidance is that, of up provided we from except unchanged to currently All earnings guidance in I’ll close anticipate the share. between following. the our behind guidance. guidance $X.XX our October, XXXX for assumptions

of This our $XX from of million G&A capitalized $XX of $XX $XX anticipate expenses to million million we First, to down net salaries is previous guidance million.

interest range other $XX increase interest $XX down and net expenses, capitalized on, anticipate to $XX interest. due of million in Moving we of to of million million, to from an capitalized previous $XX the million

anticipate gain I sale that earlier. the at we from Next, Wildwood remaining a land $X.X million discussed

to commencement finally, the of sale Woodcrest guidance, at added And development as our Mill. and the Gateway Village well as we’ve XXX of

back With that, over operator. I’ll call to the the turn

Operator

Please Feldman question-and-answer the first go Lynch. of The begin [Operator from from comes now ahead. will America Merrill We session. Instructions] Jamie question Bank

James Feldman

the buildings? just move-outs, talk about Peachtree some Great. prospects Plaza, BofA those to Thank your Can the comments buildings. for back you. leasing on I to want go of you

started Colin, and the But for times NAV think talking, of on is as think poised those some when of next earnings about accretion. growth you said a for you here And growth that, drag couple spaces, should how then, we Cousins about year? we

Colin Connolly

are backfill to Well, our extremely we – it – look be at like – the other optimistic next about again, as our And to they absolutely that terrific prospects morning, the move-outs, building in all XXXX Midtown Jamie, continue the properties submarkets. and out Anthem those we good space. in where are Uptown be portfolio, moving project building, Charlotte, will an and America Peachtree in XXXX Bank of year,

discussed seen this all being the trends markets the the our well Southeast. overall extraordinarily the to mass transit. by we’ve located boosted proximity that to And really – in migration and in we’ve close They’re Northeast from

backfill we done that feel at we good at on and like Truist. very So about Tower to like Terminus prospects the we’ve did Hearst space others with

I you tremendous my those remarks, in we’re we’re think, having a that actually I as a that space stabilize as drag, and on and doing and closer earnings opportunity that think growth think of NAV creating growth, got and FFO about bigger properties. both to Kind obviously So mentioned that. get as driving to back, backfill we we’ve focused we picture,

we offset will this dilution which particular And got perform customers. multifaceted, that more kind will you our it’s if look get to we right, we’ve pipeline Cousins’ over deliver fabulous into development which extraordinarily have stabilized NOI, downtime strategy, million as well than with existing At of the associated growth. got at really of continues ultimately any where from XXXX, deliver portfolio, and time, same $XX the these

we an a bought it’s as in look XX% as bought and Peachtree, we it those because we And costs. a at so, discount replacement to that, great XXXX location example, at

moving much I asset think, we alternatives, a look bought stabilized if could higher a our much have and they were at knowing that we a yield. lower out, at value

is we growth fantastic does is our create value. move-outs I create think of and really additional NOI XXXX. affords a offset we But But, of terrific think pipeline earnings powerful to team we’ll that and doing will to what development do that stabilize again, might so, is a which that reposition this asset, opportunity best, we’ve this to also us at In have. a lot so for it long-term any got some

James Feldman

right for said? marketing you it guess, saying, you’re I way Is yet, read BofA, you to not even out. – then, moving they’re the And though helpful. even That’s know, what Okay. you’re you’re not that

Richard Hickson

absolutely this been aware already sometime. move-out this in of is market has marketing for Richard. Charlotte quite we’re Jamie, No, Yes. The it.

kind we’ve bulk here already, well-known. end very the talked at of is with of would XXXX. today of I back of one that the that say, three coming the obviously, And earliest this it’s So the about

and floors, more multiple take looks some large from take also And prospects would floors. inquiries butter that both bread and but would we’re users partial already of kind getting good just that

we’re on space actively up today. all The So that leasing is over team it. working

James Feldman

you you would the terms magnitude, compare have total in of how And of size? the terms demand space pipeline to lease versus of in

Colin Connolly

a – lot users users of it both Jamie, big markets. larger different, that, looking said, multiple are there’s small, Richard as at some and of those

just over can in and leases, last quantify. the XX, the particularly hard look months, and talked to Charlotte over the Uptown Truist that step you of kind we’ve again, we XX But, sometimes feet. did activity at if So about be obviously, XXX,XXX square back

to announced Lowe’s Jersey has from their a have more would that moving the of I do announced opportunities. than orientation. Charlotte. just today, think has And urban going as the New Bank to of absolutely suburbs the that we transaction, corporate mix America if space been in Honeywell move have Uptown sizable headquarters they’re some we from they’re for that to those at they

think we to us the again, that, look to, I next that great confidence, similar as year space get or So opportunities. gives we as two, over forward back have

James Feldman

Okay. for then me. last And

at is you of Page supplemental, you Atlanta, you geographic Charlotte. do think If going look I think XX% mix the just how markets, about mean, diversity Austin, two those of XX% XX XX% of the NOI your forward?

Colin Connolly

– Yes. markets some Jamie, diversification went And very the back years some a build over you points best XX%. the probably Sunbelt. we’ve were of been several ago, over at to Atlanta we in geographic intentional bit overrepresented if across

have, today. so created think, And attractive we I really diversification

office And, of terms the list. attractive would I kind meaningful most Charlotte all those in fare well. of near of Atlanta, markets sector rankings think, fact, if Austin, of the the investment, of all in look XXXX, markets three top a recent in you as look and be And have to the in you across Sunbelt, very ULI’s at up

same that market. like we’ve absolutely our look continue we size the to – in other in for we’ll grow our and we’re position time, scale At the to got opportunities this markets. So and

we discussed the Corporate a the in the site Tampa as a sites earlier, Mill submarket And and XXX at build Dallas. and –in fifth got got terrific a announced we’ve we’ve Center of couple really to Tempe of we startup of in building Phoenix, terrific

that think, And we have so it’s be in. other markets. Atlanta in a But great our and positions, to do we’ll the in to Charlotte, Austin, position I quality grow anchor continue to

James Feldman

to markets Okay. to need don’t But any feel you in the shed those numbers bring down? assets those

Colin Connolly

not. do we And

James Feldman

Okay. All Great. you. right. Thank

Colin Connolly

Jamie. you, Thank

Operator

question Paolone next comes Anthony Please JPMorgan. from go from The ahead.

Anthony Paolone

preferences, been markets, or you Yes, to sensitivity The that’s you underway that’s or every surprising while space, a about seems type as talk for it there’s your price but Can trend you, thanks. it relocation like as talk different otherwise? relates that in just another to anything of submarket has day, users just announcement. either

Colin Connolly

and Sure, The we agree Tony. – morning, you. with good

And kind – decision, the we CEOs continuing, less at what’s it’s a talked are doing to these get the reasons. – it’s I then if Sunbelt trend lower is taxes, their lower I anything, that as cost that as potential to accelerating. obvious would customers, regulation think and driving companies obvious of business, of

vibrant surprise the the there’s one feedback been time, of very urbanized. recognize have companies that’s I that the we’ve in community the same And think, appreciate best little mix submarkets rapidly bit a At and in thing a these uses. a of is, of that received Sunbelt

these like in can for might I that continued Francisco. has Atlanta as grow, highly and similar destinations are submarkets, Downtown or that CEOs Austin Manhattan attractive think, you And lifestyle to San these find that employees offer their recognize Midtown

will recruiting. to make companies like are move, do having and they that I the the companies continue Amazon And in as well that, think other as their companies confidence that the and accelerate. success And as it we others so see to gives think, NCR

will that portfolio. very think trend we So play favorably to our continue,

demand. you discuss I think the quality space, as focus that think, at where they And quality statistics, certainly it outweighing have And focusing out the oftentimes expense. a the estate on on back it talent. from again, it Class to cost are taking specific overall are the to proves look tended flight higher cost A And that to retaining that’s real I place. we and comes recruiting is that companies properties faring better recognize

Anthony Paolone

All for right. Thanks Okay. that.

gating What’s Like being What’s spec, need a the Domain factor on up do you that? there? Another you starting do X, pre-lease? would mentioned question on for you the deck or potentially decision it next. that on

Colin Connolly

we’re terms of decision or it Yes. Tony, forward it in development, our with pre-lease. – speculative to as space, move relates project-by-project to

it and they’ve Domain the done around nice appropriately really construction job taking that team of X, closing elements project, get will we since adding the relates to users. attractive As of relates Domain, to the as a understand the to original sometime a our merger think, design it arms to amenities our taken has I and be few that think design

excited about if we’re are And think, project. we’re how of I you distant think Hopefully, I the in we’ve the too So a project. market that share future. look news Domain and the confidence some is, to – at in good the not have got we’ll the demand with and overall move lot bullish to forward tight

Anthony Paolone

you. Thank Okay.

Operator

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

Blaine Heck

Hey, Good thanks. morning.

Just pipeline. development on to shadow the follow-up

you’re of there land I was land that actually look or or previous up just kind that more and in any that your you Colin, for land? little holdings give you’ve just previous is happy submarkets, update a hot most submarkets in conversations, think, on noticed be I looking the or on calls you you’ve light for see might search wanted I on and to coming? whether you’re infill any And in commentary that right can market that of some then would now. markets if in think being your talked land how Charlotte, about out with given

Colin Connolly

land it’s customers to attractive a us – those for very position continue bank a new for looking that Cousins important to have to It space. we next Yes. ourselves up, believe show trophy that when

to a dimensional position that project. the We look And I delivered forward, actively is and ourselves land. a pieces in now as that fronts, that Charlotte, to multiple working site so, the as is multiple we place market mentioned of need we’ve do team clearly on past, our acquire

we’re in way And submarkets. we’ll to the continue I be Charlotte. the the and in to position we’re right think, submarkets type urban ourselves those will, I very look think in for as today. invested near land, relatively I be do we that And able the well-amenitized of that, it think are encouraged future, that

In that, mentioned, are other, the that submarkets Charlotte have that’s there you really absolutely South end. as got and and But some amenities. also attractive coming Uptown up

And I for opportunities we’ll think type those well. in submarkets of so as look

Blaine Heck

second concession right. then square one the me, on That’s It looked the leases, Colin. percentage ratio guys bit. All of as And or foot just per costs rent the a increased you, quarter or per foot for helpful. your as for quite did a maybe square Richard you though leasing this

free Obviously, could drove around on But that And to the to seeing see bounce wanted TIs in based specific that’s just can going the your were attract any with whether I tenant? leases increase? mix. from you’re recent general, to there you any quarter-to-quarter on or needed movement that rent markets in to respect comment the

Richard Hickson

And see to a the board, difficult Yes. place. the of a quarter-to-quarter rents in the our That’s – across costs. of a trying But about we still great of we compare it’s level construction high leasing where because the – and pressure because is geography percent as question. taking quarter. the point mix, up is fourth do And your you’re right pop that I of did sequentially

before is factor we’ve it is that and about and So a talked something continuing.

time, held to if of higher So we’re over it’s work that through we’ve Generally, we net rates, kind it’s not, increase. to rent trading so found address off to or free our continuing effective stable, fairly continuing that been with that. it that rents whether able through getting

be – hope case. over our I So that, still think be that will is the time,

were they to situations of couple quarter, then And of fourth higher which just in specifically that had far there bit to a of couple specific mix, drive specific not unique little up a lease of drove space. deal is to have little always enough that we economics. TIs go obviously that kind know as as first-gen the I get things. its As our a tends leasing a shelf couple as were in TI a to of needed costs And dated which bit. instance, – we a little out, into new spaces and ahead higher, that were tends a for build that of but demo is part

would seeing we that call our again, time. So, a construction point, that continue feel not multiple that, costs trend over And at I going it’s to business. this that we that pressure we’re of areas and we’re something counterbalance to say, able be in to

Blaine Heck

me, pre-leasing XXX Great. in just the remind That’s helpful. those included on numbers? And Mill is

Gregg Adzema

numbers? which In

Blaine Heck

[Multiple Speakers]

Richard Hickson

were quarter. Those the Yes. in not fourth

Gregg Adzema

Yes. Those were…

Blaine Heck

Okay.

Colin Connolly

done in was first year the That quarter. this all

Blaine Heck

Got guys. it. Thanks,

Operator

Guinee John The Please next call comes from Stifel. go ahead. from

John Guinee

thoughts Great. asset lease is want purchasing, own you on big to question, Gateway when to much. is you picture they these banks want and the Tower. Hearst the Village, in very Do Thank A Truist have BofA purchased asset? when big

Colin Connolly

and John, than the is specifically feedback own noticed transaction that the give you very top think But Truist the five, banks it’s their we corporate They to we what and top in want banks visibility XX absolutely the headquarters. largest called I could and – could. good certainly that morning. highlighted better

there a Outside think, specific and of particular bit sensitivity to around that. very much less is been it’s flexibility I And unit how want. has little group their they corporate the think I that headquarters, what business

very at at significant a facility purchased driven of by that Gateway in evolved the to is what much our center. underlying really it has think, partner Village. project, for data It them I I Gateway this mission-critical point, is the think portion a to Village was use

I security of there’s there a effectively move that and that. them drove think for important forward that them control they XX% – that decision I cost and to ultimately, think capital And from space. And for time control a think, realized, standpoint, I it’s their obviously, it’s to

John Guinee

Gateway me Village. It about it’s like looks cap, to the XX

has Your that XX% bought about interest been a cap. Does make XX sense? at

Gregg Adzema

the rates XX% with a to at Hey, or do purchase just it price has XXX% do nothing highly values on to $XX.X John, it’s returning was with our invested cap It Greg. market And has appraisals It capital. million, or all. really deal. structured of IRR a

we priced, So although, are that’s that’s sure $X.X it. look in it basis, at about giving relevant million million, annual way NOI really a how not on and to an not up I’m GAAP $X was

John Guinee

up foot a what that big basis. question. for below for building understand How Last NAVs. priced over Oh, I you parking, – you can understand. in extra parking, It’s foot, important structured people about to do get just Tempe? do parking, Tempe, $XXX describe grade land for way to $XXX $XXX a you’re who it’s

Colin Connolly

Yes. note which that. we’ll lose question, Sure, it relates one Gregg able which – really NOI and time, I with that still think disposition, thing is the guidance, to But XXXX we last your And back actually important same at some to as our raise going that’s powerful. just even from as is to John. mentioned, to were Gateway,

you drove that Domain. foot, And that cost it Moving driving think, a $XXX right, in and I it’s labor tighter to which the of cost Tempe, a smaller, if the project over project cost of at number, particular, a as per foot, similar projects bigger you’re trades. at really the size the what’s that square certainly XXX is compare market is is One, over twofold. those Mill to some

that airport. even foot, proximity ultimately underground But per And and our customers really then with very the of with that the deliver is – that – at to parts development comfortable some similar given cost square cost rent project that are I the the particular to commercial pipeline. in building and by returns height we we’ll the justifies the restriction our project, other its importantly, higher that think Tempe, were parking, required a

John Guinee

the DART DART one, you’re my with market and TIER Domain I this you’re basis you what development. then value or But the recollection – you merger? DART think, And their pay still showing is, fair are Okay. the to in showing at TIER for at the acquire the

Gregg Adzema

referencing XXX You’re Mill?

John Guinee

Yes.

Gregg Adzema

So project. legacy XXX a Mill Cousins is

John Guinee

Oh, forgot. I

can I Sorry, it. correct

Gregg Adzema

Yes.

John Guinee

Thanks it. a right. I can Great. lot. correct All

Colin Connolly

you, Thank John.

John Guinee

All Enjoy. right.

Operator

comes Baird. Please next [Operator The ahead. Dave from from go Rodgers Instructions] question

David Rodgers

good morning. Collins. Hey,

sales your – will guess, But the or dilution don’t How move-out. I those think you having to some not I to the to move-outs faith of maybe earlier you tied you BriarLake, balancing sell non-core and how to of development the the of consider your of want to kind about keeping offset non-core and turning FFO heard markets Just assets the kind about that Plaza be and Burnett the comments assets versus might developments timing do assets? those own. the and of some of

Colin Connolly

have terrific Well, balance sheet a to Dave, get position. hard worked the we in really

interest today, partners development to fund So, make pipeline pressure any purchase at really dispositions the additional feel where to no of the we our we current recent again, or, sit Terminus.

as or expand a And along. other over think to to development I property come those. decisions time, of the strategic look we new we fund as identify capital assets opportunities as opportunities pipeline always to acquisitions, investment non-core those can compelling evaluate source we’ll new those investment

to do. value some BriarLake In assets at drive leasing to you there to some and continues the referenced, that the meantime, opportunity be

So pressure. to that job team opportunities, to lead immediate and new over we to time likely no no sell. a so time, I’m over But, confident investments. our fund could do new will match There’s identifying need again, just feel sales terrific

David Rodgers

with to don’t mean, joint Mill, if joint why of came they move had I the how there? the kind joint some remember about, that. venture? for talk in and ownership can Thanks in venture the you I venture forward that XXX you about regard land

Colin Connolly

in in – kind have Hines XX/XX to And a do the XXX a Tempe. Dave. a the supplement and It’s at very ground as Tempe, executing of to It’s Hines basic team. our page at of them the working deals. really, as Mils with Avalon. great the project at structure a on it. those a rationale at with we has It outlines sure, structure, experience in terrific structure our – similar look we’ve And we that behind We’ve terrific got team Avalon. had

the construction any personnel on do have Hines development or and We not ground does.

we operations and relationship local with the a so Hines leverage to and two our it’s team I really team construction felt together think, our and organizations our Managing, Will leasing good who development expertise. like Creyer bringing And is there

David Rodgers

you asset Okay. a guys, for Two North made What for land quite that obviously more because bit? quick non-core you ones the Point like me.

be, now exploration? And fee? you that Have then any in for NASCAR, would their potential maybe the of on question on Richard year of updates given last just a under kind terms they’re

Colin Connolly

And think – that piece is you is land is outside that property of that, a referenced at delivers highest suburban best new holding if ultimately I use. be legacy really surprised quite a it office. is for sometime. and Point The probably of the North It over the something time, owner wouldn’t I

our make to that. it continue own to today, sense for us didn’t just core So business for

Richard Hickson

to terms a pushing talking for over and a year-and-a-half, your in little but question imagine, on little answering maybe them, And a NASCAR, them, is early though. engaged we’re of and still might already Yes. you in as year it out discussions. It’s

at NASCAR great Fame NASCAR’s Plaza The this Hall of and building situation, I’d is just say connected represent is looking in it. general, it’s to does building. And named the headquarters. that that a

So continue in feel that good a situation we way. to evolve positive

David Rodgers

Great. Thank both. you,

Operator

question-and-answer remarks. any to closing the concludes This turn over our session. back like I conference Connolly would Colin to for

Colin Connolly

productive time energized Thank all team a participating you, The fourth your today for Cousins earnings you and is in call. for quarter excited and XXXX.

– Our forward of you phone Thank course phone, if questions, seeing to all over year. of you we’ll the over many we’re always have available the is look and you. the

Operator

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

You may now disconnect.

Cousins Properties (CUZ) 6 Feb 202019 Q4 Earnings call transcript