CUZ - Earnings call transcript Q4 2021 | Cousins Properties Incorporated

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Operator

Good morning, and welcome to the Cousins Properties Fourth Quarter Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. [Operator Instruction] Please note this event is being recorded. I would now like to turn the conference over to Pamela Roper, General Counsel. ahead. go Please

Pamela Roper

the Executive morning, earnings Good Connolly, to Properties Financial Hickson, Cousins President Gregg Operations; Thank our Adzema, call. and With quarter Chief X-K. GAAP were our all package, supplemental the Richard in Officer; conference has Chief The reconciled supplemental press Colin afternoon Reg President well the release me fourth package G and comparable as of and In as financial and you. Officer. Executive most measures accordance with to non-GAAP yesterday measures distributed welcome furnished directly Vice today our on Form requirements. are company

the our over and with posted call is in Connolly. detailed any a discussion not federal page events With copy, the quarterly turn be statements Please annual within XX-K The statements, the does other our to our of that and you The and from filings statements the not full undertake otherwise. SEC due of constitute website, package or of to risks certain differ on supplemental and in yesterday, result as forward-looking factors, forward-looking results aware meaning uncertainties the If materially update variety securities may Colin any contained today forward-looking matters are forth Relations SEC available report links statements these in company disclosures whether available receive may factors of and and of new potential through is that, set to duty the other a these cousins.com. information future laws, filings. supplemental our did the Form on discussed information, SEC. a regarding the Investor actual risk documents risks the declaration I'll including

Colin Connolly

XXXX strong Thank was you, for and morning year Cousins. a everyone. good Pam

bright XXXX. impact are summer performed has Omicron a managing And hopeful quarter, extremely we well. COVID last variance Delta to the from our for While the of this team

the to quarter addressing trends, highlights longer-term I want strong Before positive results. fourth some financial few office a our provide outlook and of

On Same-property cash the increased delivered the per $X.XX a X.X%. on in FFO. earnings basis team front, share NOI

In on up market. volume in have pandemic. that replaced changed to the fueled been that highest signs with growing the second that with Based we and minimal a Remote direction X% recognizing by time interesting has the start and return The the generation believe stock done a companies since square thinking has leasing It is more person. quarter Note over with conversations are innovation demand. challenges. interest the of variant a our cash years. to on still second the leased we of rents. phased since was future fluid. hybrid of the much impact worth organizational the addition, likely Office the booming increase customers, first, customers our After recently overtime years, hybrid best of is flexibility, office and XXX,XXX headlines is are how collaboration transition It second our past showing five feet work office can mask the by forward culture, office. which two firming an low XXXX best on rates in the slowing, A market, to noting plans is Omicron more media conviction in for or is in

we that simple. a compelling pipeline have on And strive leasing As Cousins, our is preeminent business principles. Sunbelt strategy. office that At company. be the four strong. unique It's result, We execute core we to a and

in footprint. the markets leading First, trophy across to with own of the geographic sub our premier Sunbelt concentrations portfolio properties office urban quality

attractive to investments our generate returns. add where new value Second, on platform focus capital can maintain with and a approach allocation disciplined a

so local quickly that we relationships flexibility, customer Third, operating service, when fourth, provide to an our arise. take preserve And opportunities platforms approach our best-in-class can market leverage local entrepreneurial balance deep execute and financial to strong involvement. sheet community

strategy from Our macro benefits several trends.

continues an culture U.S. pro you business to office users to to migrate their lower space work that walk them. that promotes environment experience an cost population compete talent, in quality search on the energizing, and the me of Let in are the of daily increasingly environment. Sunbelt in for through The To of upgrade collaboration. war choosing with emphasis

is portfolio office these As take market. today's trophy shape, for our trends exceptionally positioned Sunbelt well

pandemic, gained acceptance. the have these During widespread and trends accelerated

XX Cousins, company the in we and tailwinds. at were have of portfolio these years. capitalize we executing made And Importantly, been ahead have great to Sunbelt the over curve. We for progress the strategy our on on positioning

last recent We We XXX% activity. of our now year some in signed me with quarter speculative June the a months. our project. wins. we In a square than of some basis the on leased foot of XXX,XXX have significant began terrific with less lease at six a Domain development in office and leasing had Let highlight space X development Amazon Austin,

is also expired component Avalon renamed We we floor strong ago. here our an Mill start two full Promenade Southern’s less lease Norfolk Central. leased is lease and now than now Atlanta, months Tempe development building XX,XXX and in additional two XXXX XXX% Peachtree, at XX% The at now leased; square we Office XX,XXX leased. Avalon floors given XXX have Central of Promenade which a in feet at XX,XXX

in Turning XXX gross for million. XXX investment Congress we sold price to a of our Austin activity,

acquire XX% XXX Austin Congress a Colorado a also $XXX.X was for price gross XXX, our As in from million XXX million. redeployed for in It Congress exceptional we for in XXXX. an of investment reminder, interest XXX We shareholders. partners capital purchased to the

downtown highly Tampa's Union, property in the neighborhood $XXX.X also historic of a heart We amenitized Heights acquired million. Heights for

We reduced including Plaza and that of portfolio, XXX Cousins construction Burnett are same billion new CapEx the XXX added At office Nashville properties the X experiential harvested XXXX, to vintage on back Domain the development. assets, Neuhoff. a Looking commenced profile. Heights In Congress upgraded invested and the $X are our Union, South. we All interesting representative the in and Colorado, X, portfolio, older acquisitions Ponce busy year, and and the and of future. on very XXX of entered we quality time, over

are new of executing we acquisitions generate to add And transactions through on we maintained blend leveraged the development. by basis. compelling attractive in value balance strategic flexibility healthy returns positioned neutral a Importantly, our a sheet

Looking ahead, Cousins is poised for growth.

rental in rock growing Cousins positions of pre-leased. highly sheet balance is unmatched Organically, Further, as have growth Office opportunities occupancy and great our XX% fast have development we in markets. external We an drive desirable in pipeline to properties. opportunity the for component portfolio The million a $XXX rates well. solid remains a Sunbelt

as Given have we unique Sunbelt starts proven some we will opportunities the past, are growing well. identify in trophy for the demand development XXXX, as office and new in acquisition product, we optimistic

our team Before company's every turning each who Richard. to service bring hardworking of it over They thank success. I'll the day. and Cousins turn Thank call to outstanding our are to want talented, Richard, the you. to I over customers foundation the

Richard Hickson

morning, Colin. Thanks, everyone. Good

Sunbelt operations broad stride, continue the full to Our operating team as in closed tailwinds quarter year running enjoy results markets. our fourth delivering economic at we terrific

the delays our While incrementally Omicron oriented remains to space. by demand overall with generating see operations, remain long in the encouraged high a the office term quality we more for pandemic returns. We factor office variant

along utilization cases ceiling lead and a of increase and office anticipate in a put uptrend holiday which over Omicron portfolio solid parking the know, the a all increased we that, further recovery and revenue utilization. rapid past couple we year months, to progresses. COVID and seasonality, Despite on as the with variants As temporary quarter-over-quarter parking our

Turning to fourth results. quarter operating

percentage was lease being unchanged total solid a largely portfolio and quarter Our office this XX.X%.

occupancy relative the average the XXX in quarter. quarter weighted XX% came a in Our representing point basis third fourth decline to at

quarter disclosed occupancy move the in by of was lower Midtown out driven Gambrel previously in at reported Atlanta. Promenade largely Our Smith Tower the

Peachtree our renaming to of reflected slightly already is Peachtree, quarter Colin XXXX Promenade well. Central in redevelopment rebranded a supplement. name aside, our with Promenade Peachtree Tower properties. the new kick-off in new we an the Promenade a Their of mentioned past are earnings XXXX names and adjacent As This XXXX and as conjunction of

to results. back Now

Our team a Rent produced property X.X with only solid over second representing remains XXX,XXX This average XX decrease. X% total weighted with with square quarter, I the years. activity. leasing of basis. past quarter, cash in posting We XXX,XXX growth consistent a results this in our activity leases throughout note continuing net rents core rents increasing trend XX% on the that of all this included produced non-core square new leases, would and feet a of feet quarter increases and our totaling our and generation a extraordinary term leasing year. cash upward executed Houston expansion of markets

XX.X%. generation second level portfolio our activity, Houston cash increased our rents Excluding

record at company quarter Finally, are or average. our higher not, rents in fourth which net pandemic the four were trailing XX.X% a leasing quarter outstanding effective is results. Global $XX.XX, these than

pleased our completed of that some of disruption tell year amount it with overall did on We impact inquiries leasing the healthy. volume. the in is the also to leasing to our the create the early With remain activity start noting It that leasing since XXXX. and will leasing early worth said, But initial quarter too variants and the the upswing first pipeline. in are is is pipeline stage logistical Omicron that late process very that interest our

a XXXX. backfilled. And of X.X% out move completely expiration our thrilled in of known square at expire also coming our only largest feet rents that Colorado this already are is year, Austin We Tower contractual during XX,XXX annual

U.S. demand more an quality office. than competence in in research, Beyond contracting, activity is are suggesting term the what our long seeing are we in space relocation that XXXX are Sunbelt expanding statistics was corporate into office for there Across to illustrate own their high footprint high. markets. CBRE uptick According they companies office portfolio,

Midtown Amazon's X square square in lease Mill in new seen From XXX at Promenade lease to Amazon not to Austin, We square mention clearly by our expansion XX,XXX foot XXX,XXX our this with Central at in development Tempe. at new Domain manifest Atlanta, foot the activity. our foot and own Visa have XXX,XXX

square in leaving signed that new XXX entry creating another technology Mill LiveRamp a new-to-market foot into growing the stands in with technology marking portfolio and XX% activity absorption based Phoenix end, leasing an In our fourth leased. quarter quarter at operating posted leases in waste. Net of Coincidentally, feet we the market strongest latest Phoenix market. foot office solid Francisco report a a we the for new quarter strong in and note, cited a to company a market. on quarterly its additional XXX XXXX in lease executed year increased subsequent XX,XXX ended fourth XX,XXX was California. XX,XXX San of during headquarters portfolio our square company the has square XX.X% its Atlanta, With XX.X% lease CBRE quarterly feet Additionally, its leased. We XXX,XXX and and at hub Phoenix Mill, the the early seen square signed quarter since now yet that lease, to tenants

Atlanta, due Research Buckhead also showed of recovering activity white in made the pronounced, increased Research is Class office to driven quality has believe continues including Austin to with with absorption in another recovered for markets Looking especially was This pandemic. quarter. The fourth is expansions, close from quarter noting job trophy net fully at at Not In local is country. be corporate labor that employment expansions corporate the and the in has history fastest XX% a hometowns Midtown almost the very year, near flight of pegging Atlanta to in leasing collar and areas positive economy, migration. here variety to and weekend of since has the positive. by metro And using JLL one factors, Atlanta's the surprisingly, lowest X.X%. migration the growth skilled A from JLL workforce continued unemployment of or onset large posted significant only also the picture Austin, pandemic. Research. in JLL poised to growth in has the CoStar We the strong trend levels been activity fourth to the XX% pre-pandemic our likely product.

We have been dropped noted poised since XXX,XXX for more not XX,XXX Charlotte square feet, with development X.X has Securities recording the XX.X% more research beginning South million very best sites End Florida. immensely I'll was at certainly sub the leased. better XX.X% for yet square the healthy foot sub that job steady net square Austin with million all Last, be some has held portfolio our the now quarter Domain not over at last feet in and Charlotte portfolio as square metro recently absorption to of market, We leased. fourth two in Unemployment to acquisition Further, there market positioned absorption. Our pandemic markets a in feet at market. ever, recently economic to the as Heights Truist overall on South nation's end well. than XXX,XXX popular portfolio growth is strong that operating Union core of in published our jobs square stands X.X% XX.X%. jobs the Tampa was to leasing stabilized quarter, XXX% an also solid X.X our of XX,XXX existing foot In Domain leased. in of the of Like remains before space positive soared least as XXXX leases approximately of fourth Tampa in could uptown than JLL and Tampa. year-over-year portfolio new executed and in quarter well strong our began. nearly recovery volume added our and with touch fantastic area. the at is the Austin, office Demand showing

want successful to They year. a Before exceptional results you continue handing fantastic great to it team team. I and entire to to look off A our such XXXX we that XXXX thank together. thank our forward to made heartfelt a produce Greg? Greg,

Gregg Adzema

brief I'll earnings a Then providing morning, discussion overview with XXXX. quick activity, Richard. initial my markets followed everyone. guidance a remarks review on Good by efforts, for capital our our before a development begin results. by financial remarks our I'll closing of my of Thanks, move to of

while As balance tell $X.X to XXXX, best-in-class non-core early the Colin’s million pandemic new of sold developments, for active us of a you string in here started very million acquired quarters billion Cousins. fourth new COVID $XXX all onset can remarks, sheet. properties, continue quarter $XXX a Since from assets, the and for in maintaining we've

just away almost positive X.X leases, fourth over activity that XX% out tremendous as to a However, leasing closed year, quarter we all which take discussed, don't with signed our volume, in transaction operating a Richard square want Starting solid attention we from of million performance. busy finished in XXX,XXX increase feet very XXX,XXX leasing starting leasing quarter, XXXX. square in square in during feet feet year the ramped only of year. Better the up fourth XXX,XXX quarter. the signed quarter, with the feet feet quarter, XXX,XXX yet, in the After square second first with square velocity we and third the a

lumpy, years. Although [ph] revenues be excuse also little positive. a couple over a the very metric again, trend. is can a quarter-to-quarter, me, little this encouraging jumpy, that's of the recent has CoPay But trend parking impacted our past

For and Context, revenues. total between X% X% parking property our revenues of comprise

guests and XX% growth. up as increased fourth will fourth the and return the which rolled which XX.X% pandemic. increase cash a basis XXXX. XX, and Notably, up follows on a leases expanding markets single every on expiring rents of office on during we the XX.X% efficient during a gradually levels, revenues quarter, throughout parking to XX% the During from XXXX XXXX. room are leaves improve and our of revenues their X% calendar quarter, to Rents in plenty cash year continue basis we They're customers over new trough project roll third and in Sunbelt were want space. of Customers they about pre-COVID quarter parking to office. still in for below coming quarter COVID their up And the

at of economics building is outlined the a strong advantage we've the portfolio of during global And of our ability years a these rents outset our a increase the call, Colin take As trends. positive to to validation strategy. of spent pandemic

a in important as and a AFFO overlooked. not company that calculation years. well drives on activity, distribution to its performance supplements, metric have our a the often is as FAD for development followed ability analyze critical It's well compared flow as closely own, Funds nevertheless wanted our We company's detailed is FFO FAD and pay peers. to ultimately office called provide for to metric quarterly turning true to its sometimes as financial cash available because to the of its reflects highlight I Before we an dividends.

and the largest of know generation difference between most is you second As CapEx. FFO FAD

noncore we new with XX.X% grew our have XXXX FAD sold FAD requirements over with has than CapEx our replaced and the alone, previous FFO. In year. per and developments, As significant older, assets acquisitions grown materially them efficient our share faster

Second office gen companies. in CapEx XXXX. total represented only NOI XX% XX% analyze I eye of to as you XXXX encourage in you versus FAD an on keep

in CapEx across underestimate So the office to differences very significant it's easy requirements portfolios. very

assets. investment four to Turning represents X.X feet a across development million $XXX Cousin's development million current our and efforts, the pipeline total square of

last assets XXX from the venture of these While Colorado purchase XX% the our due interest increased assets partners are unchanged quarter. to our in fourth the during quarter, development investment has joint in

ATM by Union lower sold issuance settle basis. acquisition the out be XXXX. first On We evenly to due in point The full quarterly anticipate across the two of run for a that part the initial to X.X $X.XX earnings acquisitions, discussed. basis, equity did front, of million. but capital I'll not The providing forward the We're contracts guidance. just quarterly dispositions, gross settlements development a guidance and starts. during operating our on of It per I earnings large in Tampa, not first $XXX half contracts share. items. half Quarterly between to guidance, I've $X.XX property will occupancy primarily this XXXX sold includes or and include be does driven neutral in year, providing our of proceeds distributed earnings not want forward the This XXXX. new rate fund any will using our our recent of by we million shares proceeds currently markets were expect XXXX the on we year program shares Heights leveraged of a FFO close

for fee rolled term a consolidated into signed Not at Expedia, their our facilitate only us. building with also rent recently newly substantial term Expedia lease they the extended DX DXX Amazon to leading new that Expedia’s did lease. space intending Building. sublet and a clear to up developed we We of was from leasing helped we win operations the at from First, prior our This and the a the Domain were get direct Amazon. the

six However, of months first tenant downtime experience year the we in Amazon as completes improvements. half will their the of

to blocks Central Atlanta, Promenade moved a Second, our for away. the Midtown few in Norfolk Southern them recently built we new from headquarters property

X, of Promenade to to offline transition execute multitenant we've Central a taken As January a building.

As the and we've earlier, Richard with during two executed for parking development largest XXXX. combined Central, into Central of Union recently me that, steadily With leases and the with Amazon the your turn indicated moving the customer Visa, two already Heights over back the of revenues fourth higher XXX progresses. will XX% questions. new Operator? their completed over move let Promenade increasing DX, Mill Phase earnings the and moving call drive stabilization into beginning year quarter for Promenade Visa operator to as properties, of in

Operator

question [Operator Anthony Barclays. first with Instructions] from Our comes Powell

go You ahead. now may

Anthony Powell

Thanks morning. the question. for good Hi,

a you of Just did leasing lot curious, last year.

really So to tenants still kind tendency in leasing COVID. you Or a all behaviour very COVID? is changing would responding it start years year, two you COVID, our to office changing or if negative systems last way their volume it were was have to layouts downsizing of We're signs see any into strong. of did see go? during Theoretically,

Colin Connolly

And what probably say in might the would question. Good headlines. guess Colin, media I appreciate contrary and you're what morning. you to It's read your

thinking layout how little any customers significant We have I'd change changes. or the of say space very are their in seen, about our

contract. to customers of we're the alluded one indicated than firms by actually more leasing of done the Richard major expand seeing think I one study that

quality carefully significant been over the over I I say has more been within not of topic the users And the like a think -- users as really the seeing emphasize would to years broad studied that of together. hopefully quality their so are bring an space. accelerate, we are excited changes space to teams space to a been companies back, are to concluding two office last their seen the who biggest to their we've And think teams there's you're on as the office and course many that last change and make environment to, couple they try properties. they to amongst to as base to office I of flight more create closer is teams by conviction want inch that day years and this the has excited to again, spend focus of their back highest return bring their

Anthony Powell

Thanks.

on capital maybe allocation. So one

So stars you to maybe development want and do acquisitions you year. this that mentioned some

last of with should as look office? rates at And you of equity? You at cap rates And cap to looking now funded do the continue high relative for higher guess for right year XXXX? sales acquisitions expect after a forward, low same given deals and bit we equity we I How in office dispositions percentage the stocks? quality did

Gregg Adzema

Anthony, off, Good Well, good its Gregg. morning. morning. first

kind assured we can do fund running span of on half we and times years. because a of whatever and for net over broad basis. And years, leverage perfectly. And company do debt-to-EBITDA span and whatever things quarters, continue the rest new We've continue we'll we'll four the five of off, investments basis. be year. to the uncover neutral to neutral going It uncover to between fund that a forward. First the can't a on broad But we we'll sometimes you little last over lumpy been that quarter-to-quarter continue leverage time

we at time type available which capital is new of the depend the and what's for those terms In what time. will the of investments, cost of on funds use it at that

to sense makes it it sometimes with, fund asset sales. noncore And

we that time we it at to And capital. that's look when sometimes it every investment. in external at makes with it And incremental look something sense fund

commit we'll beyond, neutral whatever in XXXX on we leverage a but commit, as we'll I do I source use and can't you to So do funding basis. can't what a

Anthony Powell

Alright, thank you.

Operator

Our next question America. comes of from Bank with Jamie Feldman

ahead. go now may You

Jamie Feldman

question or you. And good sticking I the question. capital morning, just portfolio thank guess with Great,

XXX like at still it about into redeploying of fits XXX is you what color forward. more you a selling and we the can think talked can portfolio, commodity Colorado, think give you of noncore Congress, the older versus, -- going what office sounds on, of future, and dispositions sense the so in better think, you get you As into kind

Colin Connolly

remarks, morning, a that been of I It more Jamie. Yes, Cousins a and quite undertaking building that, – And good here are strategy out we've at it's prepared on, laid more is as my growing future, interesting some in the companies. and the the focus that that assets time. for that office experiential, and attract

funded so assets. we vintage And the sale have that older overtime of with

developments, And that, recycling generate the quality at so compelling allowed value the blended time, and that to profile. some upgrade returns, attractive reduce with has add same us the CapEx and

progress significant made recycling have that effort. We in

If back, X I this, South, We XXX. over mentioned sold sold sold as year, we we last Burnett Plaza. you look

statistics. our portfolio as The vintage, across age a today, smaller the kind average about interesting today is percentage portfolio, would of I of so And we is of characterize the a look XXXX. portfolio older is, noncore assets much is

headway But in great made identify of Again, as still sales will we asset an and But that selling past. is don't a at We've we at be assets. in or we sell is because opportunities, function about will we've of will be point whether entirely some potentially that a of so an My acquisition disposition. the those we likely shape, sense future, as that of in the there. again, noncore handful new the look the that anything harvest. And that talked Houston, growth that do identifying we'll compelling great sheet investment sake asset need some for opportunities. have balance that's new to

Jamie Feldman

bucket? into percentage fall or to that So feet square are able you of Houston. you And mentioned NOI that quantify

Colin Connolly

lot but from quarter-to-quarter you've to seen always a specific we've going dispositions together the years. percentage been pretty it's percentage over do that certainly We but about portfolio provide able year, in not and several work feel, to And we've that we terrific not We Yes. I'm portfolio. the the properties assured rest the, a small made only the we put last list. last a today the of feel assemble. of a a, it's

Jamie Feldman

just thinking moderation then it couple the parking And you versus where I income talked and questions. you helpful. guidance, first, normalized guess, and run rate about how then a much think quarter? that's different you term to You in income the portfolio the a we across think leasing that about And was of of you grow can that short talk the you could what How other leasing Okay, included can And is, to? your about should similarly, guidance? spreads XXXX? fourth spreads? had and mark-to-market in in

Colin Connolly

Jamie, past that start of number in over impacts from to and And as a at We've always X%. said Richard with described, the was same leases it terrific us that excluding execute. mentioned Houston, But, it is which vary mark-to-market on This I'll quarter then our question. turn mix Yes the the and will was properties a double I'll digit, store. Colin. team how mark-to-market its the that terms in the quarter-to-quarter, you we mark-to-market for on the and of basis, the, as based a parking other cash that result. components past

Houston, or a over on we statistics again, think delivered broader can over is mark-to-market great. at entirety, it that cash that. underlying weighed we think think kind consistently, we've said store, achieve sizable course in generation the I lease And second to same I XX% and on the its X% again, leases. a if But a XX% particular look this spectrum, XXXX of quarter, you of over we

the results produce quality again, the to, we've properties strong got. given of leasing really, able really been we've So

Gregg Adzema

regards XXXX. after kind And troughing Jamie, I of it's said, it in parking, Gregg. of in gradually in gotten as the to And fourth better my has opening remarks, quarter

up we're dropped. to point. bottom room left mean to to XX% return I pre-COVID But ago, of year that about there's a levels. So from XX% go kind

us, item the And suburban build parking transient for fiscal is and for COVID to some customer the So I been to think, the of growth run our our paid opportunity in as customers occupancy on by parking terms has in line larger, buildings. all at upon, obviously the lower some than office little of the bit mean whether mean, or there's going some start We more impact it's of And still on it's have quarter. fiscal approach driven which it's flow progresses. kind permanent the parking, of occupancy I cash a rate, I peers. first we year use. dependent

the So It's lower and the year the reasons starts it's one FFO the year And as as progression of progresses. reasons. during it'll that it's one of grow but the reason, increases our steadily moves not XXXX on.

Jamie Feldman

occupancy you is it, your Sorry, say year did if I missed for end? guidance what but

Gregg Adzema

no, a didn't even provide Jamie never didn't. we've we guidance item, line we before that. on. That not We was occupancy COVID. guidance provided No, And provided

Jamie Feldman

but for Okay, guidance is think like normalized you by your parking guess year-end? I the

Gregg Adzema

will believe because the close half in where was done to Yes, done of be it It'll pre-COVID. we second it XXXX. be

Jamie Feldman

All right. you. Thank Okay.

Gregg Adzema

Thanks, Jamie.

Operator

Blaine next from Heck Wells with Our question comes Fargo.

may You now go ahead.

Blaine Heck

or morning, back great the market? Domain, can in Are you them of working little Colin a a has just Texas? for talk as got open the slower San a tech we've more to bit Francisco, little which a the guys. about Great, You've in Good been everyone. But especially bit you Austin more Richard, in thanks. arrangements exposure seen lot you there, to seeing the and little same office. from come have been the companies to tech flexible

Colin Connolly

you a office And because in And success. We And was continued think technology have at accounted we've again, Austin our results are Austin to of lot that for almost look of really for the results, a lot from California. demand the is companies. Blaine, when activity. leasing XX% this coming and I quarter's leasing strong again, of

a, like business where, all statement think square lease signal, again, effectively about take was of see should I the think XXX,XXX important company and think, together I validating of importance culture I how to a And feet Domain they being collaboration. X. think and that it Amazon, an and their and

telling and and, time. what they're still And so, not hotels, becomes over what bit even hoteling, as of I of think hybrid long mentioned, increased that's a hybrid, while what amount not signal I say companies perhaps they without perhaps, But And a the the but term, that's today think that space. significant technology are or should in the they but course it a a in over hybrid it of they overnight might say, several you, need more also looks by amount doing. years, of significant an I office significant flexibility environment,

Blaine Heck

appetite the then, little Great, that seeing you Switching have on that you're about market your the that's guys versus Colin you Have for land would affect pick market? booked bank where and And land you're that future continued value it? where to values now, a it carrying bit might can purchases? talk how what land And increase? of on gears you here, helpful. the in they

Colin Connolly

I? great It's, it's Well, a question.

I today, think, cases, prices so. some in relevant in and materially land increase the we because seeing absolutely market are

record in the land just of Atlanta, seen we've for pricing in Austin in to as kind yesterday, price record and well. here think I continue Midtown look was announced opportunities. We'll

and buildings our some I newer cases, have think, more what increase. are that's customers indicating customers that to again, land in are quarter It's just in that focused willing we our, did quality. pay telling kind interesting, vintage that as high last prices you for on quality, demonstrated, of is

we'll specific active markets, in mentioned, we market. development to on we certainly right this additional site potentially very I the to said, site on a over at been active And don't year. two, of feel material could active relative we've market, our with very think our we each last least some allow in kind been be allows has on got kick as that of market, land reluctant give good a to our to today, to and in is fortunate our in customers that there's terrific again, discussion if that want to land. our, really to I being us migrating to to the add look, But I think years, mark-to-market the That be that we'll new the three land strategic, look portfolio in bank think the there's, one the been, of we price. strategic land And have as to books our I what's So us bank. today. there's continue that off we increases upside be find

Blaine Heck

kind top XX in Last work fair. remain of and tenant one for that's we your Okay, just We list. you.

and numbers your XX they're think I XX.

flexible signing providers you I to co-working portfolio comfort thoughts So consider get their space and or footprint wanted on and in additional the leases your them? whether with your latest your with existing

Richard Hickson

this and like Yes, are component a operators nice for serve felt of always a we've Yes, Richard. office is customers. can purpose beneficial we feel flexible the portfolio and our of kind our mutually

it has this two, and It the but view our hasn't years, is sense asset like much. three past I'd a but percent it So some at for something specific location of say everywhere, the it its make our stable make portfolio point, it market as to sense. really sense where doesn't in places it's might we and make been does changed where

a large [Indiscernible] You're and industrials. component, is also right, we work

out the have a doing diverse they're last X actually very positive Coming we operators, performance good portfolio has that months. of of months, we see pandemic, well. XX been their over So the

our we So of about feel good business. that part

Blaine Heck

Great, thanks.

Richard Hickson

Thanks, Blaine.

Operator

comes Rodgers question Dave from next Our with Baird.

You ahead. may go now

Dave Rodgers

just everybody Yes maybe with you. good start to morning Richard wanted

over square still give after move sense of about is of of give Colorado to tower, kind how feet out how largest want the And progressing want largest out? sharp got doesn't rest the last terms can stabilizes, conversations? know how move of kind Colorado XXX,XXX that that given year? in of occupancy of you of known You've track? at look And you occupancy the in the I I that XXX,XXX to us like just or guidance, where out reduction but Gregg you a tower. your feel the of leases expiring of the expiration kind is understand move the the

Richard Hickson

a that's good question. Sure,

on both And Let already I XXX%. largest the said, both sold our it me say, this. out. of a clarify, our at It's we've largest January. Colorado let expiration as exploration, of But back me at it's move at take I’d known end to Tower. and the run happened

very back XX,XXX I'd which some to into explorations, downtime our we're large very out build and square few quarter, and that are XX,XXX new fourth kind there. going half customer are took six are you again, re-occupy. the, quarter. more five, they in of for if in are generally there that period, level, of the XQ customary Kind foot months, that's have So generally just the to they're say, the the up of bunched less, third or below of the balance

got XXXX middle expiration a fairly So excuse me, profile balanced of you've at the beginning, the or

Dave Rodgers

And duration, a this sense. you visibility you this shake though getting at a good should though that's of with point, think have point, if they're, would months I still five pretty weighted or kind four average be at three, out how to going on out.

Richard Hickson

Obviously, Yes, rest, on fairly made point. And the of we've we good have activity first we They're largest and the and ahead feel about this visibility good have our so good do we've position. us. all at backfill progress. really just we good

Dave Rodgers

Okay. that? it have kind wanted comfortable a to go Maybe us were, waiting more the would for Thanks for starting starts where in a give you're out than tenant, where can development and to of of just any how if sense portfolio, thoughts that. be you the in And back then XXXX. I Colin you maybe you around you speculatively, confident

Colin Connolly

well. you really kind couple you've new over that think again, look they're performing we're haven't, years, of markets in, very pretty the you importantly, if across Yes the all last think I in few our of And I starts. seen footprint

think of Sunbelt preleased not in. we continuing can whole And see the it we here existing potential there's a attractive lot where not, of that's the so so, I continues, a opportunity construction kind not significantly the migration underway, into

And, In we But and terrific accommodate so development the really I I where of got terrific and so of feel land the a Domain look we the, mentioned forward most some Central, the year, that or our fortunate are over XXX,XXX think got can just that going call as square and land. what markets. leased our we we Austin, we've to we're move all got it as X. very all some last We’ve paths, again, think we sites And we site we've over current unique across, Domain earlier, the owned compelling. selective project, really course of three be feet.

to has So again, Midtown Austin. been economic strong. a feel say, here continue winds performers best country. one And Atlanta we has of Midtown. in the The lot of been, in about the great in Atlanta great activity across

course there going that is But couple continue to at. a well. of good so will look start And the market all We're Richard to alluded we really to sites Tampa Charlotte. not a performing very could that the the customers be with having over those. in do think balance with more year, one conversations the enquiries the or that, we're and start and optimistic we'll we year. we buildings of potential the that -- we're we demand think of the over

Dave Rodgers

have sale any question. lease differently Maybe Gregg, Thanks that. think last the pre funding of about any today market in spec assets for these in do any versus starts? you prefund development for way? starts that do would And you developments

Gregg Adzema

have we actively any assets being market don't in haven't. We marketed, today. Nothing currently the

a treat capital. of preleased a treat differently do we So, than in they require both spec mean, I development? development we terms

no. going development generally a the and We're, put as you're is, you averse shovel the risk So started to once on you finish know answer it. know, historically we pretty ground

what fund that's single don't we to do. that's and the pre And take off as to every we'll risk we try table development, as although can. early we much So what as continue

Colin Connolly

And roll on which leased, end is, one our come Mill the you Dave pipeline. largely as first the to the is follow to your got project, forward company, off you of of really at just development XXX our question will look and quarter,

And XX% X% over component. as so is that development total office pipeline that it enterprise preleased relates in the as look at about just and company, totality, we of that, have the our to value in we'll

relatively terms the to the the exposure again, very well within modest. positioned, portfolios, the of it's be schedule we're think in really land. of the and company's markets, both I again, will a And relatively expiration limited strength So development terrific existing

take taking are, for opportunities. we're measured, very not risk to go going at to some position going risks, sake we any risks best the risk. we're always be we ourselves and do the to for as try So think time, But the same there's taking and of not

Dave Rodgers

Agree. Alright. Thanks, everyone.

Operator

with comes question Michael Truist. next from Our Lewis

ahead. go now may You

Michael Lewis

fees. management the higher for I My noticed question first Hey, thanks. Gregg.

anything Is time the about know that Or one I was a costs it going dollar reimburse forward? item? includes quarter, line some This now that in higher JVs. runway there million in

Gregg Adzema

out, just was get those of it most onetime a reimbursed fees because item. was it at was they're expenses It netted level. And property a management the

it's item that P&L line you through at So material, a runs really a know, as not all.

Michael Lewis

little but then or flight the And been risked velocity just for question big great. Colin. encouraging. a reduced was to Okay, might argue but pandemic, is is Cousins the this demand, it's because business quality, to compared cat office where some the space believer backs second the in before B the environment wordy and C like how But for But challenging I up. getting picture a far a attractive REITs, for so question, have in my it it not today has pre-pandemic, on I'm you this certainly business office your unattractive REIT leasing looks Class and

available, there's just zero, space be sublease it's that You more It that I'd are contractions, cited contractions included more companies curious number to appears space. than expansions that whether overall leaving.

could in Class And segments like here. the kind you up, so of market my question do think and holding Class stay A it is so is Cousins well, A looks really, far

like the some looks it like, long is demand probably pandemic, because to it term While office. there looks reduction certainly, of

maybe your So, thoughts just that? on

Colin Connolly

couple this year a Sure, quarter the was highlighted, almost the square net XXX, we've again in leasing out years. the same it. second history. account delivered just done our effective CapEx feet at past our volume XXX,XXX time, start so takes leasing leasing we've into five I, pointing which statistics performance last highest already Michael best was, in the rent costs at or we company's which and And this I first would quarter, that off by

leasing capabilities. development inventory. an here smaller in the office able so is grow the like performing in we've at the well, larger growth I'd to compelling portfolio, a create share now demonstrated market a same the And overall time, an to, in we highly a just and of Maybe we're Cousins say is, organic demand and business is externally, is, the trophy what through ability position unique, economics our feel on focused right Sunbelt, even share really in to we the of are we're seeing the with unmatched but

actually in are our activity better seeing that, actually of I because we're than before that pandemic that describe. so dynamic the was it And that's assets just some

A, market and what have for your And analyzes evaluates be studies work I think of their many everybody's of growing that CoStar, for teams. is think, environment, office and detailed I who's Class no a and to in longer as today more by to the bit that described Class are think the I the going kind everybody best experience considered I is A, best for think companies so in by some granular cases, component innovative looking that

Michael Lewis

That's great, you Thank helpful.

Operator

Our Advisors. from Daniel Street comes question with next Ismail Green

go now may ahead. You

Daniel Ismail

Great, rate percentage a the just gen guys mind thank number you your back the you. for CapEx Maybe But current NOI for the second run being declining CapEx good as along of the lines of what portfolio. I'm in year-over-year. of of if granular a normalized have is mentioned curious more Gregg, you

Gregg Adzema

the of our as decade, second over over time. can XX% leasing past averaged of when span of and broad look or costs know, building you Danny, the give you Yes, NOI. related at bumpy total be over both But it gen time, have take improvements CapEx, total it our

So kind been. it But, And of it's that's generally it it's but where generally will jump. where now. is

Daniel Ismail

why curious cons and I'm ATM do maybe of Gregg, another doing then basis pros Got And you, one and of so? it. That’s helpful. the maybe for forward as the some a on issuance to

Gregg Adzema

we Sure, forward not basis issued purchased was stabilized. that was that because on asset the the reason with it we equity a

the to go stabilize physically occupied, I property lock the in now, believe capital. is right of later and it XXXX. But ahead because wanted and we about that will So in XX%, cost

to that but sheet, forward. lock So we equity our price. we're just against used trying what actually balance to And that's on the wanted bringing balance a we in to

Daniel Ismail

one last this me. then And it. for Got

much they to rates, line to in back are are back pretty utilization push I'm as pick rates curious parking to the were? up, rates, discussion, looking you or guys Going where

Colin Connolly

good question That’s there. a

can at that our rates We charging. looking whether are where COVID not always or absolutely and we're optimize how we

parking flexibility opportunity And transient and the so can had rates. most you the we imagine in

absolutely looking that. And yes, we're we're, at so

Daniel Ismail

lot. a Thanks Great.

Operator

Our Jamie from of Bank America. Feldman next question comes with

go ahead. You now may

Jamie Feldman

a just want follow to I quick Thanks. up. ask

have You office. plan had call talked get it you a in a the phase how tenant to differs and to thoughts seeing. on And just throwing returned customers market your what want differs size? it about you're talking about by to I how [ph] by

Colin Connolly

portfolio influences kind of guess characterize question. it geographic would return we I is any generally specific Yes Jamie, on the great don't to our know of office. I in the in and of see what that the Sunbelt would, kind I I XXX% And

what company it's the size of type large been more think frankly, company I of international and the to, some of companies. attributable is, the

to relates for U.S. We've a the to logistical fits across starting world. to out phased reasons to said, return. the phasing, one have we're They've strategy to see in and and many I February office lot think around of I now size the that think returning start of anywhere it been though conviction I make more seen April. those reopening, them March customers, announcements have and of to as slower all begun from as

other the lot in might that. bank, quite still to just international street relatively instances be for some that our a leased are occupancy significantly XX% a this kind midsized quiet. up, building like the smaller to of where utilization building autonomy. we those building quite been there's local XXXX, back and Peachtree, seen in of has -- companies, here regional got But you large we've down that some over portfolio get the headquartered it's XXX% into well pick we're if companies at our We've go that As And time.

Jamie Feldman

Based things And is Okay. from space in the and Thank decide what the you. using the as just it? are lag? you about there's want mean, companies terms do of think then you're they thinking just actually risk pace they thinking now, on I months year six through they having conversations are it? How don't how I this a much guess of that here.

Colin Connolly

increasingly gotten been the eventual -- pandemic look the to I on more of further narrative our the I I customers, the with into return kind have the office. and think, as Yes, think we've positive that, discussion

probably that's you the I that's guess, And that described it, there, there. so that always risks been

think they after recognize had, pandemic, and that many kind been to Before I relationships have seeing share starting the with us now, in, years borrowing that that but are on turnover had the we a to companies built of the and amount are of two been that recognize with pandemic. many prior kind that of they've the trust

indicated in cases, world, I to stock new nine company starting said organizational think many of about had take I market them folks are a many in a eroding days used One to it to challenges. that board of was And cultures. taking think it worry booming perhaps employee was virtual a XX kind on masking months. them earlier, a lot perhaps, as I recognize remote

see think appropriately And customers do going to happen going and in companies so, And have over don't are that we that return. to confidence it's think time I overnight. I smartly. you'll many

let and week, the started over push likely then half So time, and phase I of think kind right, think that market that the dictate I higher. maybe

Jamie Feldman

you thinking then safe Okay. Thank that that would potential already it you. you're Is land your just development it be me, for assume last And about existing starts. own? on to

Colin Connolly

own, looking obviously I we're well. opportunities the potential but think out new land that there's we on currently market always in some as at

at creative as be and certainly want to And here adjusted find and, and to so best want we're, creative We're, discount be try well. risk the flexible. we Cousins opportunities for and shareholders wouldn't try to I that we so

Jamie Feldman

you Thank much. right. All Okay. very

Operator

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

Colin Connolly

in to everybody in and thank want participation time and I the for call today your Cousins Properties. interest

reach feel you of any look to to questions, out some If Imbeaux. Roni hopefully seeing always Gregg We you have forward to or please free soon. myself,

Operator

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

may You now disconnect.

Cousins Properties (CUZ) 4 Feb 222021 Q4 Earnings call transcript