CUZ - Earnings call transcript Q1 2022 | Cousins Properties Incorporated

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Operator

Good day! And welcome to the Cousins Properties First Quarter Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Pamela Roper, General Counsel. Please go ahead.

Pamela Roper

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

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

Colin Connolly

and Pam, good you, morning Thank everyone.

a outlook, highlights. I addressing financial Before few longer want to term provide the

for I'm past, have start. transitional a to that off strong to Cousins discussed in report XXXX is As are we we and a pleased the year

team the share front, in earnings per $X.XX FFO. delivered the On

we in generation addition, rents. feet increase with XX% second XXX,XXX a leased square In cash

office represents Turning the only leasing a XXXX. to accounted for XX% Belt of Sun new-to-market facts. few national XX% inventory share the and will of in The outlook, yet I

XXXX Over accounted feet the national of since net past square million XX built for few quarters’ absorption. buildings

side, nationally Phoenix, negative over built The jobs Charlotte, has flip office to and Tampa, are all XXX top XXX,XXX other watch February using Triangle, feet. markets XXXX Dallas Austin, Research sectors. leading the Atlanta. added XXXX, buildings ULI’s tech XXXX Nashville, On absorption since net industry accounted million of industry before square The U.S. in for

focused the ranking. cities. U.S. for for do Austin office put, markets one a to more dining a of portfolio are is than inventory. best and south not largely properties As Atlanta Culture, to These This in decade. for and you ranking table. Because Select account much or dynamic are it Demanded suburban court a Cousins to Atlanta, end a rents sector. investment. It’s remote in quality is tailwinds. cut demand The from COVID-XX or of over share a room a the commodity way. cities offer intensified exciting the the exciting suffer gateway XX% goal the high migrating to midtown sense. Tempe, Not our the now heights for together products Google home AFIRE’s just setting. this at the on Why mentorship, focused the of To with Collectively, by very attractive trends daily in cities rising ranked to Sun flight percentage the permanent capitalize shifting is in cost. locations. convenience on meaningfully have Microsoft. driven know, tech Office number person, two and to markets is employers narrowing pickleball each few. the Tampa these investors. office top cities downtown quality urbanized Charlotte, relationships all are talent. companies emphasize, trust, in come attract to investor a logical dressed I users Belt the significant in highest their make Austin, highly following surprising, as Conversely These interesting data? market. collaboration, in of more with domain; on The the Cousins global product, an Simply are Atlanta, to highlights last name global poised and To Amazon, era alternative lower is a experience the it the has most trends won't work Sun offer a a growing up the sophisticated driving this is these teams by being Belt respectively two just space these NOI. number percentage quality. and Buckhead invested survey in is of XXXX and

Austin, replicate decade. and a Sun the XXX Heights years We last reinvested and XXX and Domain in $X.X in the recognizing of differentiated in proactively These trying Union path. trophy Neuhoff in portfolio RailYard two relevant and now to trophy properties. development our our sold Tampa Charlotte. Belt are Belt Colorado have X highly we successful Nashville, powerful Ponce Atlanta, proceeds In Others amenitized have are less properties been in and assembling all of alone trends acquisition the for billion the the over into Sun

and for and to However, will that the behind is require lifting us. Cousins, of easier heavy said future noise. is portfolio buys sells our At lots largely than position the and it done

drive increase of our this For to been more never I reason, the have and shareholder value. about excited earnings power platform

specifics. share me Let some

differentiated new the In and recent our that leases we product in executed end will expirations, million not Belt quarter occupied away. is of quality million approximately It into office highlight, year total, wins. growth and is the Sun to today. end and roughly over far at result most opportunity have square has earnest was in approximately XX as portfolio recent XX% growth foot and largest expansion XX% known leasing years, is commence in NOI due organic and XXXX. a X de-risked been highest To portfolio at Our XX creating the square feet leased of

expirations addition, is office total lowest lease just XXXX among In the XX%, the sector. in our through which

Our XX% pipeline start the current of nothing this phase Austin component is transformational use we a There is potential it late leased. development else And first including to plan development of and domain. office the million like domain strong mixed the central and a the investments, we is opportunity have in $XXX heart year. totals project, which pipeline of new in our

acquisitions continue generate tremendous to footprint, ad new strategic to our we developments confident returns. with are across attractive we Looking that value can pair

We of rates are tensions. tremendous from Notwithstanding, at and potential we inflation, in front near mindful risks of a Cousins. opportunity us term rising have interest geopolitical

Our strategy intersection the positions compelling market us unique powerful trends. of and at

Belt Our premier customers return have own We accelerated Sun portfolio. their the to office.

external a and have the organic have We balance growth and to we and team on capitalize opportunities best-in-class attractive, sheet moment.

Before turning each thank to dedication providing who the of our excellent Richard. foundation Richard, Thank call their to entire customer the want our success, jobs to I you. are service, day. over Cousins, skill and

Richard Hickson

everyone. Good morning Colin. Thanks

end operating team and the operations again once quarterly positive into year results. XXXX Our momentum great of from the last delivered carried

high in first our for quarter quality referenced, best space the Sun demand office the and Colin performance strong resilient markets. As Belt demonstrates

customer a larger and have may in Cousins the variant to since I'm months. Omicron corporate that in a namely is we technology on utilization I kicked had the that happy muted Whether you preceding say office office sectors users, As the marked previously Of particular on recall, timeframe. is that levels. that improvement, in our to note mid-March. February positive a this seen noted or of call off services financial announced number returns not, primarily

did started activity well a results, impact first for it should this balance the the not meaningful our quarter quarter on While later the of have in year. and bode

on Now operating results. our quarterly to

with square explorations those from of to Promenade lease In and came of quarter-over-quarter. weighted percentage portfolio blocks total footage occupancy are expected negative two a nearly both weighted terms, pipeline operating companies decrease respectively. of rent, note at be composition portfolio Regardless, lease both occupancy completely declined Our average to addition Colorado is occupancy with Those changes our points Austin. that XXX great back quarter it technology weighted that and say XX.X% on filled are redevelopment. pleased a from the this our the and net basis cash occupancy. fourth average lease in our portfolio our office higher changed this Central space Please in in year. XX.X% XX.X% I'm development average and of of of removal the occupancy status our had two in while modestly XXX XX% impact quarter and were

the of begin to we expect year. next our quarter modestly the reported reminder, we occupancy second a to move as half through rebound then As decline and

November As and an this end move of revenue These X in leases as commenced. our With above of implied does of embedded square foot the clear, annual new that lease expansion signed we portfolio leases growth To today not Colin gross and and yet this of see level million touched in not rental a feet only gross as the contractual have expiring XXXX development our date a on, in rents. we XXXX. square average occupancy through Domain XXXX, portfolio XX.X% X.X% rent in-place current Austin. late building starting for our include our rate existing strong commencement over average into of be have in X signed full weighted XXX,XXX that as $XX.XX, have of just we rental our

XX% basis. of to for of of the solid first XX% delivered with a second feet the total a leases was the the and executed all This new also XX increases this markets years. in first in results in rents eight net representing team well, square feet, term compared average XXXX, fantastic XXX,XXX leases, increasing of weighted quarter. higher and leasing cash quarter quarter XXX,XXX generation activity. total our XX.X% leasing included on over in expansion of Our a XXXX square We as produced Like quarter with cash of core our Rent fourth quarter. of rents growth

the rent [ph] a all for that strong quarterly metric Finally, average highest print the activity net company's $XX.XX, per foot history. on in in was square second our quarter

than the shorter importantly rent would for quarter, concessions the however, that basis, rents we Despite higher the pre-pandemic. Year. per solid in average XXXX. with in were affected this primarily improvements the per in a There's for exceptional net disruptions square because five normal in in to into in in cost challenge upward fast disproportionately lease likely first per net late leasing were company. last it XXXX the This first XX% a is tenant lease, was quarter New year growing seen elevated portfolio for doubt of tenant a and Most during quarter about to of is net the rent at tours on the we pressure have leasing leased that we Mill Similar smart in in I space at expect concessions that, our XXX it this development our determined February quarter the that higher though, occupancy term, lease space. to in would for continue; led year rents last in had operating and utilization, only half a But investment were generation by new process, levels effective $X.XX generation our XXXX. one to note of in this the improvements While posted XXXX similar $X been and technology was this generally was Omicron Tempe. effective variant activity and This first logistical $XX.XX, defined line noted I a as of what than half no sum concessions year. that foot free

disruption was lived been since. Fortunately activity short the and robust has

time first quarter The XX% pipeline prior health was stage our also our of lease more Beyond total square are first to last is first at XX% the in of the compared end and gears, the this the first feet in Switching our XX% were arguably which prior demonstrate end leasing I today, quarter These than reported specific to compared trend that it leasing of the important XXXX. address space quarter. trend and some proposals XX% the is users. our trends. the quarter. think more tours to There quarter significant. is market of in the is number higher business is pipeline. to office of showed flight outstanding experience higher at about than data quarter metrics of our the are quarter important but that here activity this what activity, quality, The the late Both most encouraging

A of XXX,XXX signing leased, XX% to especially record anticipate have feet square of not rental bring redevelopment, does One nuances. and are there point leasing this our apply though only that important that though, lowest is applies in redevelopment activity XX% been This is that feet XX,XXX product the Atlanta. part the to at imminently. study in is We it. another story an XXXX properly things amenity it perfect important of also and during has a pandemic. late in to approximately not rich Buckhead square a and fantastic COVID since most for started prior older its mention with completed at nuance completed But the is team to modernized. case rates. well from As trend Plaza product, new is incredibly success and leased, located, of we project recently midst activity our the This will shareholders, our to project,

makes us portfolio in located much vacancy more Promenade Plaza Our experience of XXXX Central, a with our that at remaining is Tower excited Peachtree Atlanta. Buckhead portion that also and Promenade sizable

All similar redevelopments are of currently the end properties are these that scheduled completion undergoing of XXXX. for by

ahead, Belt markets. large high scale, the quality about XXXX office very of have Sun Looking remainder and in beyond. located the optimism the has best Cousins only portfolio we

As normalcy, the to continues further sense hopefully to flight to in a and back returning of trend. office acceleration our get important quality a more expect even to see to country critically renewed the customers we

day. off work all and thank We Cousins want demonstrate Regardless to entire every of everything it hard of the handing thank they you I Before you Gregg, work functional Gregg. to area dedication resilience, that for the they in, do. team.

Gregg Adzema

of morning a with our outlook same parking closing providing a XX.X% the We Overall marked followed since stated generation of as my quarterly the our activity cash good Notably solid. able rents the our XXXX, second remarks quarter our quick of for rents I'll XXXX. Thanks believe pipeline, our growth averaged balance overview to brief remarks XXnd and this numbers results, property discussion including were revenues, Despite positive with and balance our begin net second almost Richard, up front, everyone. information sheet detail my by our of development transaction financial on on performance, by updated quarter Colin before the first in increased. that can rents pandemic in COVID over coming we quarter beginning throughout increase XX% cash has period. metric were the quarters. up strength, averaging rent still every single we XX.X%. roll raise straight the It's even generation this some

last person, both advantage performance, Midtown. you kept in we’ve Buckhead our increase each property and had property redevelopments to move outs operating to moments X.X% same in driven Richard about vacancy them net this that had temporary same significant increase X.X% large buildings include on here seen cash ago, and many Focusing update Tower we are as income take numbers in increased in recent XXXX expenses. undergoing of which and pool. have properties These properties. rents, two a the of compared work, Despite X% Atlanta; in these just in in by year, talk a Promenade

the NOI first these experience buildings, the our cash variant. reflection a Excluding quarter accelerated, of during our physical better by recent mentioned while the a most during portfolio. have X.X% two underlying Also same fundamentals has pause as did at first COVID occupancy the would earlier, Richard we within properties property driven increased quarter,

pre-COVID payment and sites our a result, XX% included properties to parking quarter total XX% interest levels. for a $XX flat over here value partners, million. located end, of about As our quarter-over-quarter. to parking we essentially $XXX.X they in little between price represented acquired Context a remained revenues partners comprised the property a and Subsequent promote revenues it the were revenues in X% control our million. This who X% and the Avalon development of Atlanta two of negotiated below

our terrific shareholders. Our unlevered of a investment was return payment for after been healthy a It's XX.X%. promote the very

and XX office detailed well wanted again on you focus quarter. focus followed we provide it's here increased Cousins it's us companies. Before turning this FFO; We calculation you FAD encourage on to to at our quarterly metrics which activity, I in a that highlight not on analyze as other page know as critical supplement. our financial as a as nevertheless as closely development I on I quickly FAD, to however,

Turning development assets. a total development pipeline during asset million of to our The in $XXX quarter. earlier, efforts development remaining Richard moved investment one Cousins was as Austin off in mentioned first square our XXX schedule feet Colorado three across the X.X million represents pipeline

covered is liquidity which than this existing Our our more pipeline remaining earnings. for funding and retained approximately by $XXX commitment is million, future

Looking last to low interest to while Central quarter, our well from is new very debt midtown building peers, a from blocks by developed as is in at rate well assets coverage Austin; Promenade few fixed new Domain to weighted Expedia's at property. move X.X%. out average to a is a our Norfolk XX we it’s charge undepreciated out from debt relative a EBITDA in space Southern’s our X XX%, maturity in up is schedule and balance the well sheet, very X.XXx, our Domain largely Atlanta, them EBITDA, as attributable debt driven to decline Net is X.Xx, headquarters their laddered healthy office at our away move still for

Southern we space Amazon. Central a to of reminder Promenade quick Domain and Richard primarily at the of X XXX% released to As Norfolk XX% Expedia as and covered space earlier, visa in

to between end guidance. any share approximately forward We call. unchanged per on starts. the of FFO currently leverage the sheet It our the prior does XXXX, X.Xx speculative This from of our dispositions expected a $X.XX fund little debt neutral include heights $XXX property by since XXXX by that I Avalon the acquisitions, guidance lumpy in union return new year full acquisition discussed $X.XX close net million the we issued also in XXXX contracts and year. operating our and in and earlier Although not to Tampa continues anticipate I'll from development it earnings updating settlement be can to includes It guidance. equity include to transaction Xx recent that EBITDA property our or basis. a managed we’ve between range quarter-to-quarter, balance to

pressure, increase impact includes supply our guidance it short long construction term Our as includes challenges impact and impact physical occupancy, customers in well the rates, an factors, includes expense the the both as activities. rising and of by term operating macroeconomic of interest on chain driven and of our

Our customers like experiencing with delays our ability revenues. frustrating in we general do, don't a deal can in their recognize particular tenant architects often and contractors completing and to which are improvements, for delay living

into combined As to in the will I year moving XXX let call be back These are a said and year, operator. we steadily Promenade me bit of moving our FFO development over increase as that, Mill parking stabilization the expect generally the later in earnings Union as Central higher February X increasing call, with drive cadence and lumpy, Heights turn the properties, XXXX. little With two through revenues to but into recently earnings Domain and Amazon completed to progresses. the

Operator

[Operator you. Instructions]. Thank

Fargo. come Please with first from Blaine Our will Wells question ahead. go Heck

Blaine Heck

you the the dominant leases you were Maybe your of there a unpack or recent of higher say in of there are specific the Richard, Great! to or many about that did around Thanks. than this representative markets or Good in anything Colin as quarters. in and any rents Is so particular Were that whole? cash were portfolio anything leasing number? results that very kind for would those strong quarter morning!

Richard Hickson

leasing a in morning! balanced Richard. Blaine! of is for I’d say Hey Good activity. it’s terms This us quarter one,

remarks, market saw I its very mentioned I our had and market. of still my of of had very say results Every we producing every activity of I higher market strong. is So above this cash Austin terms kind other than ups every markets in been encouraging said Like is some level the thing is Atlanta punched in usual on certainly roll you quarter's has most roll-up. rental average, weight I'd good but think in tell about only Phoenix, volume. the I’ll as

some really good portfolio role size, there healthy some ups and Phoenix have We to activity too. our had very in relative

Blaine Heck

close to little Great! seems That's bit about to Buckhead a a in of Midtown see that bit activity, see you from could the been, fair where you maybe Is sticking with think tenants starts a been we in lot talk to helpful. Buckhead from look the rent maybe some a bucket It to Richard, anywhere you have characterization interests a do the a perspective slower that can but And and as we point Midtown market. and attractive Atlanta more has just little though growing continues recover. are market.

Richard Hickson

Sure.

great been market the has Midtown we and encouraged that seeing leader know be; are You healthy demand very a and a kind is there. Atlanta continues in and no doubt sub by to too. Buckhead it of activity But

fans these We like Buckhead kind to down talk and to frankly and very, office flight submarket you and product much the for, to what about any think still I you we of do that are kind looking as remarks. there, growth highlighted at have of of both are We've days, of drill very activity. users quality in rent of different growth, look in say assets. Plaza need total activity it’s entire seen my coincidence I some our terms of our in a quality in rent and terms strongest incredible locations I’d portfolio Buckhead frankly not is the and of

to to point getting making highly the think like. Peachtree. It's product what you’re it's to super redevelopment on look the about product that I So our a we're we're is where can at leasing project specific going encouraged really as prospects the see and end progress XXXX

good So we about Buckhead. feel

Blaine Heck

effect And more seen that and are a a looking bit helpful. we’ve on Can pricing rate going it's seen for, plan about guys here. has add the you you what bit you value then little you a as whether just talked any part properties more me. something tilted core on increases acquisitions have strategic component, for as give just towards of one forward. or That's color Colin of Great! more

Colin Connolly

Blaine. morning good Well,

been customer strategic I more those us for like, think to assets again portfolio is have create focused opportunities advantage you very our assets other to are really can the as whole, know given we're additional Cousins Again, strong I ad. see know of look leverage highly are high history so of you attributes. us some market there if to we additional a we if to our when can acquisitions own are create record, in looked with those and been our that those and our know our add development that base, quality a you have on, our platform assets that of proximity those acquisitions close here those has are within and our have think strategic they all really over to we're positive can track always for we our at synergies upgrade some portfolio, value. been value a for But or quality core to flexibility looking we focus Others but and – find complement to also portfolio in competitive platform. you acquisitions looking

And portfolio some best and at the to acquisitions of value development have ad to overall us concentrations blended activities really of build attractive and time our some so the set upgrade collectively the has returns in really quality attractive allowed the same and markets.

Blaine Heck

Thanks helpful. Very everyone.

Operator

go Barclays. Please with question Anthony next Powell Our ahead. come from will

Anthony Powell

morning. Good Hi!

longer companies while tenants your curious the for I'm of have space talked hybrid footage Are it renew their tenured some behaving But their of You renewing. when about utilization for to Belt how seeing comes any a markets. as environment? they moving change leases a and Sun benefit their been in are in to or about demand you square more their space, there

Colin Connolly

Good seen morning an less the we've about discussion of one workplace. say given a change of would hybrid to-date might lot think, I You Anthony! than know kind of

underlying and know urban need outlook – seen seen will that oftentimes highly their offered think And to something hybrid, flexibility. expand. users some that's you I particularly in I’d and a the customers business of to know You our more specific contraction do within We've amenitized the has hybrid collaboration and differentiated underlying means handful been flexibility portfolio, I I amenitized be our thing large many think we've in in workers mention again that think say context But portfolio are companies’ are for as urban an probably contract. one and highly looking will and the companies. and that to urban setting, the come office by by you knowledge be our together, creativity.

I commodity office is you make in a a of suburban or think setting you're separate which more know decision, seeing remote. more customers

kind our more majority to-date, perhaps much of out is not so companies strategy than seeing hybrid be commodity adopting the demand in in And in requiring a an think to which office of I product. portfolio we suburban have of seen the and a kind flexible of folks you're time, on less impact

Anthony Powell

thinking I like like when that maybe corporate one Palm seeing markets or some with kind like Miami you about or you’re your Florida, recently. lot expand you specifically and of happy are a you to current guess your to either acquisitions thanks, markets West or Yeah markets, would more South the two, about know, activity where talk of or

Colin Connolly

at always Cousins, kind of markets Yeah, opportunities. evaluating new we and are new

and a differentiator look has that us, think and operating we you local mass know enough can it us. know of at I that we kind have lens. that to we a markets macro for in recruiting for know new platform that that any critical can we a for create look into really confident that been that and create structural you advantages and on through a team time really talent, market, size got same for decision tailwinds the in feel certain you time have the ground too it so expand over companies growth at justify that entrepreneurial in we approach Does market,

Sun about market, over Nashville that the year. the particular and Atlanta, continue Charlotte, to like today, in entered just be excited Belt in opportunity whether market the footprint really We all you last across market Dallas, Tampa, the excited markets across to We're so look in. we'd I time recently constrained we're out Austin, we today, in we’re think it feel don’t we're about As grow and of presence that that that Phoenix. our

So again, where happy look opportunities, we’ll we are. to continue of kind we're but for

I it have broadly markets. We’re relates and imminent as new entered happy see to don't anything too to Nashville

Anthony Powell

Alright, thank you.

Operator

will go Our Feldman from question of Jamie Please with Bank come America. next ahead.

Jamie Feldman

Great! Can of growth and you rent rents being of you the you able in much know markets. your or increasing power actually are the have or talked Good in you you you. comment do how some pricing think kind about push markets? your morning! think your Thank your about I to in leases talk initial actually signing rents more

Colin Connolly

on and of even within percentage Midtown rate focused and equal. demand portfolio Buckhead narrowing to increases. our we've some in customers Jamie, but have last even the are on drive year, our are seeing market, to costs, on the helped Atlanta we able tier TI's mid-single we or But here growth able of lower not while you digits to for the how said Austin, if our top within you so we been a as and rent, which been to at say are we've rate those created over or growth, you know are growth, and know kind Richard kind to know Richard growing rental been alluded very the us in in mentioned, continue as of the us a commodity places again some of the context urban look see increases at rents. like But to basis has to in and rental free are in in properties downtown line as overall we've inventory, rate of share I drive back I’d pressure I kind compress net as do to been rate top costs so instances and our know all you continuing buildings, And earlier, that have think you grown, rental line we've able been suffer. drive looking drive think a able construction effective you percentage those pleased are top properties drive think know of I to in I that percentage the rental those able

Jamie Feldman

sensed And to Amazon's real them? Do know you about talked more have you in maybe with you you. night several earnings in you change – thank any know last Okay, estate. markets. I have obviously they exposure from efficient then getting them

what know means You sense about change for behavior? or of in or tone – any you anything this a do heard have you office

Colin Connolly

tone haven't We in or from any seen behavior Amazon. really change

office space, and industrial is been there's the towards it as they in relates of have towards retail directed their to comments over perhaps industrial that extended perhaps space. As more pretty understanding – I directed online obviously that we But with of kind activity Amazon market. you growth as are not rapid was think seen know

Jamie Feldman

still think of may non-core. think the there Okay. you about what And kind That then is a you about to prepare you to you're pipeline portfolio. done you've pretty getting lifting How comment terms as also in rid a know know – or still want we about big kind heavy of made of should you sell? you the of

Colin Connolly

at, that feel development, acquisition we’re capital portfolio source for opportunities, best the an I the and you a I think over portfolio trophy in as mean feel last non-core. to today, don't Jamie, largely sell whether and certainly and I we think opportunities, us. less that's couple an we been is than capital – that believe probably have sit the pleased assets again, XX% a or of but very view investment our into lifting, of do we we investment know see we to the great carefully certainly this over Sun will at as our of and If we behind know as trying this be of for new pressure in of very here is shape look you think in absolutely we've But portfolio the us us qualify future decade done those last of at properties, any a we that manner. we’ll asset the fit but recycling would particularly say point say we I’d kind were things I’d of and that don't office, Yeah compelling years, certainly cultivate of heavy the curate disposition, look of lot Belt the that now we that

Jamie Feldman

Okay.

So at you square portfolios grow kind feel like that if are at to to to opportunities, continue like you're suggest recycle when footage. you the size want wouldn’t or find going the does of their maximum size? actually right You

Colin Connolly

to and sources the look I again we're identify Again of compelling capital. it opportunities, we new think No. for best going see investment when –

would growing not in an where We that have justify also sale. evaluate venture a be could the to the past, and right. stock equity company. the joint sit think been I distant likely market too we today, The prices there asset

at also when to opportunities, different create as of and balance again, to our try see all capital investment earnings make shareholder our capital we so not of the value, look trajectory compelling going best sources that's funding we'll And those only well. but decision

Jamie Feldman

would How explore, now? decent bid characterize There is do you right How or JV you do gauge that? the partners. for appetite a

Colin Connolly

asset. strategically know by willing us we're been think in I but absolutely! the asset demonstrated to portfolio in for and do capital. driven in that the not got, past, with been – past a a to position venture Yes, balance a been us, compelling for the reason joint compelling an strategic it's and driven or need a you a we there's development. but for sheet again in typically joint certainly venture for it’s to that we’ve that reason the We've great It's

Jamie Feldman

good. Okay, you Thank much it sounds for very thoughts. your

Colin Connolly

Okay, thank you Jamie.

Operator

with Our Please question Mizuho. will from ahead. go come Malhotra next Vikram

Vikram Malhotra

some the heavy the taking really guess obviously total you lot of may or the years have for building I over quality earnings. store recycling just same on a and guess upon you've I lifting previous lower much mentioned, question. few reduced maybe last just of so done Thanks pressure questions put

it dilutive be historically. process, least tends the at to Given

three cash your earnings growth, minds. longer sustainable I'm NOI it of as your term, forward that's you years, So and wondering, what's whether look to five sort call FFO or FAB in

Gregg Adzema

Hey Adzema. Good the question. It’s I Vikram! Gregg morning. appreciate

that a provide you to Colin message, thematic question, know years. of of provide we a and year, that it’s adjusts is think property I the overall three doesn't heavy the little on, know happening I’m associated think to just some typically reluctant with behind pool, associated the dilution the current earlier great earnings earnings. the lifting affect but that But some can be in to five guidance with beyond up because guidance to what about same was to noise I so dilutive us the in be the can what's pool, it and don’t you Q&A talked there's be message It the in specific going that, noise macro but from out you earnings.

that for assets development now or properties will might remain and cap to the typically takes powerful is portfolio at come going the in You which to dilutive pipeline into that The assets, forward. few non-core of is be it shape. saw of got the down very a pretty asset and either extent we've cap The best right assets terrific opportunities be number sell of know a higher like capture that so the very capital and can investment cap non-core behind rates you lower we out rate source cap going gate come forward, the the we low reinvest while that acquisitions in going sales higher rates, is can and lot of that in a said, rate and us.

of few portfolio we're growth of much last true that. been But about the it the as really and clearer as kind some to core of earnings we've combination much and a well sight shorter kind drag. now excited lumpy clean our accelerated growth. southern a had, line the that [inaudible] has fees earnings is going Norfolk forward most So over the recycling, years, prominently The fee, of

Vikram Malhotra

helpful. again, going obviously that's Okay, related last, a depend on years. for ask just TI’s what maintenance will as CapEx can forward, quality, a if to over on cost could guess your But And as know as a we've just NOI seven we inflation. partly should I it earnings, you or you I seen move or up the or I'm of something – and like well construction mentioned rate percent the you sort of CapEx the wondering share. maintenance percent given range portfolio, call a good maybe NOI run for of CapEx expect

Colin Connolly

gen maintenance sure We CapEx. CapEx Well, defined and first you two buckets, how second as I'm not define gen. kind of

– you awhile been million in what quarters measured it's I second few last So we which and generation for know CapEx believe about totality, is has you're quarter. each talking the $XX

but the not large percentage been total and upper in years. also and We in running past as its absolute for basis, many measure the by it of NOI of a teens just kind

NOI. If look at it XX% was year you of last total

For five NOI. the to years past it’s total averaged XX.X%

pretty consistent So it’s been a metrics.

know You attracted sure talk know for customers. that that you a are been there’s done years I with increased lot know associated We've making lately now. cost about properties an your to

remains what we consistent consistent. of second call on maintenance run and rate So CapEx, our been darn pretty your has CapEx generation calling what kind

Vikram Malhotra

Okay, from consistent. seems of in divide great. other your markets and quality about markets obviously that a pretty And your then lot just one lot more. We've just peers the talked a

you just can So a maybe anecdotes, share your in I’m of better you markets can can maybe near the environment it of customers of space, post-COVID you in the new in for quantify two just industry about sense top talk specific or looking there's get wonder this terms big by pipeline pipeline if expansion if to of how specific examples just names the term? is this over or

Colin Connolly

really and for look has there is to certainly across of our all the expansion. Meta, Oracle, as fact But Tesla, of based their start you again, kind the in if growing advanced negotiations. and been etc., of list growth pipeline levels that on, on large Well, companies can COVID, on example Belt of kind markets. it that's our I the since but like the Sun and at in Google, again, Atlanta you really in and and broad announcements that an coming pre-pandemic last two from Austin back of international particular over right, of Amazon, seen the of think are years And in middle is as are companies touch goes – that pandemic Microsoft, strong Richard current number their and as deals you’ve the national major know choosing course the

of So office our the of in pretty stronger. here footprint activity economic has and think across you been development in our all with I their a particular using share agencies time that pipeline it's never exciting Sunbelt pipelines would

Vikram Malhotra

Great! much. Thanks so

Operator

come from will question next Our with Michael ahead. go Truist. Please Lewis

Michael Lewis

kind that's other Thank been this might million about in quarter. income but have the you. a in and interest past That the missed quarter, what item. of this, line Gregg, was I was negligible $X.X

Gregg Adzema

we that Yes, was joint developed that for venture most a that interest the quarter moved a payment lots. residential in the thing this had residual that

a of typically long You involved ago a time was lot a may through we actually sales our when residual and... in long residential of and happened joint interest those development, liquidated Cousins we future one ventures ventures, ago, remember, joint time and retained it and

Michael Lewis

one-timer. So, a that’s

Gregg Adzema

It’s a one-time.

Colin Connolly

got “hey, the really And that's you've through venture residual interest, and out the you them we residual line and our buy joint partner our sold of item. just interest and to what's to put bow a so this running a on discussion, said it” lot recently, can back us came you this know of blue we

Michael Lewis

Okay, got it.

you gave quality encouraging I a some guys the on with leasing you number. for of agree flight Sunbelt. know You

occupancy everywhere Phoenix, Houston, I a should down you're of Tampa. what’s I the and assumption the you improve? There think the how is to you you up leased or When you expect I and know all small look Dallas everywhere, and Atlanta, When the think about what that about maybe percentage? sense. Do Austin, just do the for the portfolio, makes Charlotte, I about percentage in down You that pretty know sequentially much lot but but think differences, in of was except at guidance rest year-over-year, lease Charlotte, occupancy look year. that lease else. we think

Richard Hickson

how ins I asset clarify want into to which and its which XXX% I redevelopment. Promenade coming reported is is outs occupancy this Central out our in thing zero going this So, of we leased as some the occupied, one to went Richard. with the one had is portfolio, was and mentioned that obviously quarter. in

modestly up. So that's looked went occupancy It where actually in it. down our like making, as it we actually went report, the way Atlanta

how already back any those will you So that in fact to and the the weird those with backfilled Austin, two year a about Atlanta. relative that are half reoccupy of are talked little already we bit the difference others movements really the leases are or of nuance typical numbers in driving calculate we then given that of really, are the it, quarter. majority see they and but fairly at and least they are down, that as kind of you differences said, more negligible

Colin Connolly

time level, known large think and is know same move decline outs, the would in Promenade you of here XXXX Peachtree, a Peachtree the a at of Plaza a again, during Buckhead. we've one, now Central and macro just has driver in assets. been actively I COVID Michael On very I XXXX Buckhead share, occupancy specific – repositioning you been handful it know some has been

And through that quality – we know building, justify upgrading rents should so that the we’ve are kind going of meaningfully are you as that and the the investment. of think we effort, we obviously been that

issue behind a leasing leases So know success it we've and rents little moving of creating just great of willing and pay out but bit occupancy. customers not have timing seen been some rents, those a between It you of a move up and we've had creates to lot of value. signing

at and million we've that into commenced shared, we not as of signed look XXX that between hope a know the And But next our end again towards as year X over end of so be those and the towards square have year. of occupied then percent delta explains, and basis that year. point been the will the We here leased. feet percent you converge leases our yet got our really over you statistics, that should and

Michael Lewis

sense. earlier makes I Avalon that the Alright, wanted investment about this ask month. to

that capital? know about accurate, why maybe are that a kind in numbers that. your that five like numbers about caps, over like but out to was and they an you valued and coming at some So I was the the I talk attractive $XXX know if you around used building something accurate, some that I of supplemental use don't are of if square of

Colin Connolly

just it's project is Atlanta. Cousins. dynamic as for a and just been outside tremendously kind successful the Well, the again square frame of what mixed that buildings Michael to two It's XXX most of project, XXX,XXX really of probably whole, in town use kind feet under in

the So whole a as has it's us. run been – project home a for been

was outside speculative with both a Hines, you some the came it's an pretty of of those a of from basis folks project side the basis, of obviously project a an we determine looking as started on and value to promote. on fair had market over and return at that net today, agreement we unleveraged On what development start know you to life of price, kind know we buildings XX%

own a been sense it, huge think it’s but consolidate it rent, own opportunity run, in those we and do growth already So market Avalon a to We left, the and ownership there our XX% is home further of those perspective made from buildings. XXX%. so

Michael Lewis

me. guys. That's all Thanks for

Colin Connolly

Michael. Thank you,

Operator

Instructions]. [Operator

Our with come ahead. Daniel Ismail will question from Green Please next Street go Advisors.

Daniel Ismail

that historical we’re number of over around most think really for new year, as just the we on you have portfolio a years I'm how two now its you out curious I'm what two I use XX%, across had when of but you that trended are planning acquisitions know either Great! or the you. know years? the you has retention are retention quality the how, making good question XX% curious do rates post, to trended rates. generating a post guys Thank past planning and rest the to COVID, on how companies,

Gregg Adzema

kind kind from tell say just Danny, pandemic. still to we're Yes of emerging it’s early I’d and right, the

lot and in, we've that moving to our view ring our again relates kind know we’re say portfolio to outperform should be. again early given that had are metrics and last you market a think this those locations of we’ve the dynamic think trying our bit know statistics, But of out to fence by and look of outs I’d the and it’s define construction. their the would as quality that skewed lot several companies still large the expirations to our But what that rates. a year the occupancy forward, specific, exact retention I’d are a they still retention that as I are it is again strategy rate and you I portfolio we driving of year, figure move rental and retention exactly say got just new

Daniel Ismail

then And life Got science curious it. our across markets. about

in the owners Sunbelt. year up we've science You life asset picked over and a a two past science last call in partial science life life two Tampa or enter seen the of the it quarters largest

So new on I’m potential just you know it. and is that how evaluating thoughts Cousins opportunity curious, any

Colin Connolly

lot for life I that’s across Yeah, of Atlanta, historically overall in Belt at see been we an positive and the are here Sun opportunity by look has really the market Dell addition that for Georgia Cousins. change, time markets of that to if large seeing Austin create a things CDC. activity driven not part Medical the perhaps at a But of our look some you and science to and Downtown we're in think starting School, Tech a happening and the and the

long ourselves, there something that, And focus have term some so opportunities getting and to science work with life need that us local know got so up there that want folks relationships. educating be you experience, more and and but to are to of and expertise certainly really, attention perhaps we and our is for perhaps that's speed could

places look certainly across but out same are of has very Northeast migration, sectors the Belt again we Coast West watching, all to fronts, taking and the in today. you're see and encouraged to that Sun something all it's really a offer So hard the that overall starting studying what and at you the know

Daniel Ismail

Colin. Got Thanks it.

Colin Connolly

Danny. you thank Yes,

Operator

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

Colin Connolly

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

We is and person are at Nariet Thank hopefully you. the June. look where of to encouraged we're and many in in headed company seeing forward where you

Operator

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

disconnect. You may now

Cousins Properties (CUZ) 30 Apr 222022 Q1 Earnings call transcript