Earnings call transcript Q4 2022

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Operator

Good morning, and welcome to the Cousins Properties Fourth Quarter 2022 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

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

Pam Roper

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

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

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

of that Please actual certain report materially these the may on Form and and matters from in filings. be differ and the set results other including factors, annual forward-looking uncertainties due risk of aware risks, meaning factors SEC variety securities forth our to federal other a statements may laws, today constitute discussed statements XX-K within our

in yesterday, not result special contained undertake a any supplemental potential statements, forward-looking update forward-looking any declaration or our is to in posted detail with risks The duty as regarding statements available does filings future package full new whether otherwise. and information, of SEC. the company events is the of The the

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

Colin Connolly

to morning, close and Pam, good We at everyone. productive out a had fourth XXXX. Cousins you, Thank strong a quarter

in and income X.X% basis. increased On cash the team operating net earnings same on property per front, $X.XX FFO the delivered a share

roll-up. with quarter during rent leased cash XXX,XXX we Importantly, feet X.X% the square a

Apache, cash foot XX.X%. roll-up we renewal rent where signed XXX,XXX Houston, a and expansion square with the Excluding was strategic

terrific with square approximately full-year XXXX, results. out. a are of These of leases For executed X cash rent roll X.X% the million we feet

update banks the Federal observations an world despite will employing growth. other economic space. In around on Reserve and Financial central a environment: becoming Cousins, I macro reducing slow In at the companies our on to are share the providing efficient. rates interest people strategy raised more First, response, Before few includes tightened. office conditions rapidly have fewer this and have cases, some inflation,

Second, during XX%. averaged week in the start increase last According of office XX% highest led an Austin, at over are market office of to Castle, the occupancy since our January, physical pandemic. we seeing the second largest the survey the utilization.

health pressures grow, companies. the CEOs increasingly and As mentoring collaboration surveys. and culture, accelerated, have to now innovative this mandates priorities are likely fades financial on trend is to focused office more Rebuilding are for and clearly continue. crisis results and Return

is there demand or Third, little properties. to older no capital office lower-quality leasing for available vintage,

types the these properties This the a overall teardown. office likely meantime, of a play process repurposing reprice out. will of a even impact likely stagnate to In market. As buildings will these and have the or will result, a time facilitate take reduced to values on

the Lastly, development projects shrinking. new is pipeline for speculative

the expanding So are is amid the estate. real soften, demand office is likely to shrinking implications headcounts. challenging short-term, In office what leasing footprint for

the process begun rebalance. linings shape. to has The office silver taking However, market are

inventory. Our Accelerated in is returning the customers reducing are existing obsolescence greater force.

far development world, fundamentals will they is to premier New after and size properties. again. Improving companies supply not minimal. and adapt a more grow are And right that for normalized the demand horizon over

Sun towards is outsized Sun their locations. innings. is demand distributing headed quality continues. The of Belt The affordable early the to still across premium companies workplaces flight workforces the growing trophy trend The portfolio. our attractive, Belt [Indiscernible] in in is markets for in amenitized Leasing

continues Our conviction to grow. simple preeminent around the Sun build REIT our to strategy and compelling belt

in XXXX. become will conditions As I more market likely challenging mentioned,

thrive cycle. However, economic the during we phases built to all Cousins of

today. well positioned exceptionally are We

Let highlight why. me

Tampa, Charlotte, in own the belt some, Atlanta, Sun Phoenix, Nashville surprising our First, customers Likely leading portfolio growing. office trophy are submarkets Dallas. the and we Austin, best to in

renewing by expanded square During XXXX, in total. XXX,XXX feet customers our

X.X% annual through of favorably averaged despite sector. a lease expirations to XXXX our office just positions contractual grow per softer lowest rent Importantly, occupancy This market. us year in among the the

$XXX the and office the appropriately million component with climate. sized our pipeline XX% Next, is development current for pre-leased positioned

XXXX, We will NOI XXXX during XXXX incremental caution. meaningful benefit from speculative having approached with risk. and only modest while We

intentionally values While asset our we over best-in-class balance prioritize new were repricing, and investments. patiently sheet

average at of closed X.X to debt-to-EBITDA Street Green net times. the This year X.X Our compares the times. sector

significant pursue no peers on in $X to dislocated to now have we approximately and credit capital investments near-term put, a loan billion maturities our market liquidity have significant available $XXX lack compelling compete. Importantly, capacity new million and many Simply we revolving facility. when

interest In the higher rates a potential and of closing, mindful economy. we of slowing impacts are

we However, with asset sentiment. long-term, strong the into optimistic premier own that over separate its improved workplaces are an will is position. Cousins class exceptionally

and Sun markets; the have and We talented right portfolio; we own a creative belt a is are team sheet in differentiator. our a fortress balance trophy we

and over of I to to the our thank Richard? to call customers. resilience to Before employees excellent all continue work Their us Richard, propel provide you. who hard Thank Cousins dedication, at turning our want service forward.

Richard Hickson

good and morning. Colin, Thanks,

trends midst team with for backdrop. We another intact. that our encouraged of the a migration and out quarter. of solid XXXX Belt closed I'm team quality proud to finishing the operations well are in remain complicated flight year Our very Sun the macro

pleased companies Additionally, office. to see the we in a influential employees in for number of industries time more more to together are spend calling

this expect continue. trend to We

leased million, into office end-of-period quarter, our XX%, new the and operating occupied portfolio. and the average XX.X% were total weighted For and respectively. the fourth XX.X% in of include occupancy percentages Those Phoenix numbers and lease portfolio development addition $XXX

couple have in and down at Austin driven of both X.X% explorations Center Jacinto the of in Our occupancy primarily San was Gateway Phoenix, average been by quarter, and backfilled. weighted Tippy partially a which

Houston. largely in increased Plaza Corporation's full foot a announced new the at almost Brier for by Our lease from percent square quarter, lease recently headquarters XXX,XXX percentage last driven Lake Apache global

announced culture. Apache's an when company be enhancing part experience collaboration this will they a arrive state-of-the-art of foster when and we workplace we to are employees said, BriarLake, Colin importance excited of. employee this workplaces engaging, the and highlights at and lease, As Premier

we quarter, executed new fourth of highest it XXXX. excluding totaling our average was leases lease since with feet XXX,XXX square quarterly This of a weighted quarter footage square XX.X XXXX. also the the office of And years. was term development, third In volume XX the highest

signed activity total under Our million feet, just X Cousins. leasing for fantastic full-year year for the of was a square

quarter was weeks leasing to big our Apache The volume. a fourth clearly contributor

say were fourth leasing economics also outsized net weighed all in Houston, and on and basis rent relatively However, in overall the sum it muted pleased market, concessions, as elevated improvements non-core full-year. defined free net Houston it the and given to for the recent weaker rents. even namely on that in the of second-generation our activity effective was leasing X.X% our with and X.X% quarter cash I'm increased a activity for rents tenant

our core to the metrics behind markets. excluding quarter in into some share provide also activity, I of Houston, want to fourth order insight leasing our better

fourth we X.X Houston totaling lease leases weighted with in a feet square the executed Excluding XXX,XXX quarter, activity, of years. XX average term

of Atlanta of in in activity XX% of New balanced net activity of and and and expansion leases total leasing industries. terms our was Austin Houston was activity. represented XX%

$XX.XX, nine of this $X.XX first effective quarter quarter, excluding excluding Houston, this Further, net the year. concessions, company when the average were XX.X% Houston. were risk our months Leasing record for weighted below a

XX.X% the quarter. second-generation a Lastly, on cash basis Houston's net increased in fourth when rents excluding

XXXX. captured market in flight to million built gross favor, compared broader some million XX.X past quality trend market. since pipeline feet continues in net from JLL From we the XX.X% are seeing and also that with the leasing to slowing less macroeconomic to persists previous a our XXXX XX-years quarter, quarter According X.X a of perspective, technology old feet square our of JLL, pauses. found the leasing activity positive assets powerful last to XX.X% increase bifurcate than saw companies assets cycle. square absorption in large this the as uncertainty in Even and to quality demand flight share Research

in We leasing likely expect moderate is total our XXXX. that to activity

only leasing fewer have during Thus, rent With renewal XXXX case lease of sample to may our smaller year. In be opportunities our expirations the economy, annual and activity, the highly to size modest geared more of also especially leasing statistics there net lease is the softening in geography. which be the volatility we rent. of in could have with addition size growth, mix we contractual at a quarter-to-quarter. X.X% This

a are instance, They to feet. For in we renew XXXX not are user for expiry and lease our office decade. XXX,XXX about rent largest escalated negotiations customer has traditional square their in-place a in

rents a we net modestly their renewal. on expect to roll As result, down

and next Cousins, renewal lease potential impact have couple metrics in being could size the quarters. leasing Given an a it fantastic outsized one of the despite on of for

feet the of XXXX, of year. a leases to and of renewal minimal XXXX maintaining expirations and to otherwise about square path anticipated end commence this we expiration, our With growing XXX,XXX hopefully yet largest see occupancy towards reasonable occupancy the in signed

redeveloped all posted rents recently quarter, Moving in rents that XX,XXX to this were noted square total net square up The past the most last driven million We seven annual years in of the some for of amenitized, of submarkets the Atlanta cash over dynamics. leases Metro recorded to feet, in highly XXXX to by according Midtown JLL Class market net XX% our to square feet growth than also average. up on be the across year. XX% bringing buildings. quarter, feet and rent newer absorption continuing over X.X signed JLL. XXX,XXX Atlanta greater rolling A X% market year-over-year,

activity X.X Austin the JLL for Austin, XXX,XXX feet, cash the quarter quarter, last average in of pre-pandemic rents square In quarter and million XX% We pegged market square net over feet just the on rolling net up below with positive absorption leases fourth average. full-year. at last signed leasing

XX,XXX renewal a a of domain. customer included technology expansion activity and Our foot of the square Adobe,

in XX% an that JLL as requirements XX,XXX pause. activity leases of than could leasing square quarter less in Research see momentum feet, cited larger for we also that occurred Austin slow this Austin’s indication

as ’XX, exploration Austin only quarter ‘XX annual leased than XX,XXX that our expire through six XXXX, of one XXXX. is third years the weighted XX% is of in contractual and balanced our in of feet rents Fortunately, X.X% over larger between square only average lease in-place and equally portfolio including term

demographic one well Long-term, in cities to Austin In of nation the job strong the the with growth work short-term, from most desirable our softening and live portfolio drivers. is insulated remains and fundamentals.

poised technology the we sector to and growth. economy the be expect strong rebalances, Austin for As

strong In increasingly to conclusion, our team the headwinds. a challenging despite year finish had macroeconomic

optimistic as Sunbelt back companies in seek space stable well best will the ahead, positioned the term continue office. Cousins great high-quality, is for highly long amenitized that portfolio employees Looking to markets. high-quality office they bring the increasingly we are with a into

I a forward hard work We whose Gregg, Cousins, team to off XXXX to to it Gregg? handing look XXXX want a made productive at year. our talented Before together. thank successful

Gregg Adzema

by remarks on of for markets our on with a before some my our begin balance I'll our detail move I'll our everyone. XXXX. morning, providing brief quick of performance remarks information by Good well outlook development as Then and Richard. in Thanks, same-property our initial on results, closing my sheet capital a pipeline, as followed overview revenues. parking our activity discussion to

Colin It items was clean also stated impacted solid. Overall, same that spreads the really as no brisk, quarter or second-generation numbers were NOI remained property, Leasing a velocity up, very and gains other There upfront, positive. year-over-year leasing cash fees, quarter. results. fourth our unusual were materially were was

and points was higher quarter, of Daily quarter X.X% driven up quarter, by compared averaged expense the significantly to interest said, fourth the basis being fourth SOFR fourth only quarter during XXXX. X.X% the the rates. third in during during X interest That

our NOI in same-property the gains improvements last on of XXXX, for Domain compared year. fourth largely continues at Cash with quarter increased to Austin. a during properties during the X.X% string by a Focusing moment. driven performance This

quarters during Looking leasing and both to anticipate be over GAAP a NOI growth bears cash as forward, our past we several the same-property a basis positive XXXX fruit. on strong

year-over-year. earlier, mentioned has the quarter XXXX, our And all grown revenues utilization and XXXX. revenues were have up during since quarter were of physical Parking to it. first the continued parking along increase, the revenues Colin As they parking XX% for of fourth been have with highest

our to activity. markets capital Turning

we existing syndicate matures to Tower bank on extensions. six-month loan $XXX We closed maturing XXXX mortgages. these our our a in proceeds the term four off used legacy with pay fourth Union Promina a portion During and quarter, million new and that of includes

lender, existing terminus XXXX. our January also of we the the properties XXXX quarter, on the current in from to mortgages with During two Atlanta extending it January refinanced

of our in X% Looking forward, we have only about debt XXXX. maturing total

the venture Specifically, a refinancing closing. We've office process a own we with property have adjacent to essentially building of late University. initiated Emery XXX% that a this a a joint medical hospital mortgage tied through spring leased. is and Midtown to Atlanta XX% We anticipate

Turning to our development efforts.

million schedule our was moved earlier, the off $XXX development quarter. mentioned Phoenix during fourth Richard As asset, one

XX% Neuhoff pipeline of Domain in of Our Nashville Austin. interest a comprised is X XXX% current development and in in

of the costs the of leaving funded be development our by over an million, is just $XXX Our be as flow projects share which Neuhoff by remaining construction are operating $XX these years million in-place $XX will funded loan million two next completed. to cash

to net peers. our the office Looking EBITDA is times at best our sheet, of among debt balance X.X

only Our liquidity FAD strong million drawn facility billion dividend position covered XXXX. well in payout with $XX remains XX% only and $X on ratio with our an of our credit remains

is Our these navigate position rock solid we challenging financial times. as economic

development property guidance. $X.XX. $X.XX place, We are earnings share initial by this XXXX and we update guidance any guidance. earnings a property do starts with dispositions 'XX midpoint No share or will of full transactions our I'll accordingly. If close in anticipate per FFO providing currently our $X.XX acquisitions, between included year a take

no there around within a variable refinancings. debt for rates. risks property exposure pending transactions, rates are debt speculative While guidance Whether rate our remain risk or all interest through

for they've of been used forecast to curves As rates. extent curves quite a expense. so we and which treasury interest many forward the doing years, the these bit change, have sofer To lately, our interest we

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

Operator

session. Anthony Our first Barclays. will We begin come question-and-answer will from Instructions] [Operator Powell the now question with

ahead. may You go now

Anthony Powell

there? kind year, be Neuhoff year, change Hi, conversations -- helpful. leasing in changing going And given kind at environment, next morning. office approaching you of end the your how would leasing, as good completion Any you're on of are that of the Question Nashville. there in how the early so

Colin Connolly

Neuhoff and now see experience form, that into to The Colin. to folks project and in can an is Hey, of good increased touch that starting excited kind coming morning, remain component that Neuhoff. office is predominantly about. as Anthony. It's feel The reuse project, project. we adaptive incredibly now we're shape activity And and

some customers conversations So we encouraging. have are several do that prospective going with

Our meaningful if time some numbers. have XXXX given just half is impact space a occupancy those certainly, I solid think to year would signed not to impact towards in numbers. the leases, a hope likely of can XXXX this on be But and back have leases do the year. sign we build we out think and the our our

Anthony Powell

Are the the in an I Maybe what things you market? are deals so as maybe guidance, more you rates, from helpful. transaction get more seeing just on know nothing the thanks. environment update cap Okay, but difficult seeing office space? it's on volumes,

Colin Connolly

out. still maturity or of Yes. reach characterize somewhat either in and we costs pickup capital an don't is The need I'd to as deals, off-market see to marketed owners ultimately terms strong market, transaction discussions -- fund a starting starting as on leasing upcoming hold actively say, that a have deal to but with in loan structure I are or

and think capital where in start sellers. needs see become to some as discovery cap between bid so And in are. conversations I bit seeing still say you’ll as you’re pickup find But a focus, start a and buyers more I’d transaction spread price activity of a happen. rates app to there’s to those

Anthony Powell

thank Alright, you.

Operator

Our with will next Capital Kim from question BMO come John Markets.

now may go ahead. You

John Kim

on there's Thank you. percentage guess, Richard Can you that occupancy of clarify, up a environment because grew occupancy? saying point is this would prepared the occupancy this that in his slow be a and spread currently, should just remarks, trending hopeful basically or mentioned that. year basis that you year. leasing you're think I you Because lease XXX-basis

Richard Hickson

Richard. it's John, That's on Hey, occupancy.

John Kim

Okay.

a do XXX-basis that spread on leases when point in have you those So delta? occupancy, lease begin

Richard Hickson

signed they in I feet for have leases XQ square weighted mentioned the have commenced, frame? -- about that is of, XXX,XXX yet know you that if kind average, XXXX all not commencement we just Well, time the

John Kim

it? so commenced the I'm so, the or just taking and remaining XXX,XXX difference what you're hold hasn't between Okay, to expiring just yet. hopeful

Richard Hickson

have again, we the historically more expirations right. is which of we're timing the we're the we next the build given how to, demand to those, that are year, of talked really back low like just through towards maintain looking put we hopefully, of that be and toward that's commencements Yes, I and think at blocks the going building the willing, that are that mean, end that year, the about the year. then feel we to able occupancy

Colin Connolly

the of percentage between leases some percentage won't leased our commence John, delta some and And those until of ones XXXX. that occupied, are

move of get some lift into be XXXX. some us component will tailwind for So just as of we component that, that XXXX. in again, We'll a

John Kim

And Colin, that's what think happen of assets? any is different percentage And some your of to in do can these the in you stock to you mentioned Is your going markets? there overall quantify obsolescence obsolete way you markets.

Colin Connolly

million-dollar -- in our Sun That's than question properties Belt varies it there, certainly, from look I'd say John. the -- of vintage see you what markets, a our some the market-to-market. markets. I'd gateway It is average newer as would at you by say, of is

again, in going of I'd So to from need anywhere XXs product. XXs that you of it's built there's that as vintage to inventory. it's into reprice. happens look overall in markets, What at less get XXXXs kind XX% I our to I markets. think, to, But still some the obsolescence and XX% I anything And -- was the think think before

product. mentioned, there's little leasing As or very of I demand capital that for type

That some market. removed be property I aren't that. less becoming And think -- and if have that help to you to that will capital it in in to tear on from think overall data to interim, to less those will have importantly, to process instances, some to premium a so anything properties. not invest eventually, bones, it the overall reprice just effectively, to reprice we'll supply inventory. residential it’ll demand convert will relevant a But built down -- from think the the either I And the there, are center to and just to product rebalancing I And allow value will with office a it's the of new will of time. properties for sort take a

John Kim

Gregg, capitalizing. My rather following up start just treatment on is Can final accounting your a just expensing when you on for than question on that interest Neuhoff. us you remind

Gregg Adzema

the Yes. occupied. project, Neuhoff development We'll for been delivered until unoccupied a becomes including any space capitalize interest or XX% year the on property has either on

John Kim

Great. Thank you.

Operator

with Bonnel come Our Camille America. of next question will from Bank

ahead. go now may You

Camille Bonnel

morning. good Hi,

any You market mentioned these leases, And that elevated you at cash signing leasing was there leasing Houston the to levels? spreads driving do spreads higher, particular the significantly excluding were expect levels? continue

Richard Hickson

Hi, Camille, and has was did quarter excuse this XX% to over me, roll-ups. well. But this been is Richard. or Yes, XX% Austin Austin -- over drive Atlanta was in as the

the but a on in Austin we report how remarks, as near-term, some in -- mentioned But see so softening lease geography. day, so the So happening could and Again, I at we've end really, in mix metrics there. driver those of Austin volatility there's said we is the potentially really always in my that moderate. based

to quarter-to-quarter. tough it's predict any So

Camille Bonnel

Gregg, strategy. latest market. debt That's target to with thinking strengthening but And know I on signs floating a like consumer being rate the I'd about your of XX% to your your helpful. as you're thoughts and Okay. past in job the how get robust you've spoken about level,

Fed keep rates I continues that think there's not high, if risk them. increase to the

So latest thoughts this as a do still plan Or your you target? to here? what's level keep

Gregg Adzema

Sure.

So you're right.

it debt That's the as XX% right that a take way, back. debt total And step as -- of median that's We with well. by for is as the office is let target rate XX%. of with, curve, year-end. a arrived floating where at the space consistent today, long-term me level percentage Our around

but some X, at are higher. are much Some

average XX-odd XX%. office If look around out companies a you there, right the take the is at

do not some That oftentimes low we some is benefit debt our high least have of we're which to rate books, floating prepayable So being relative peers. of not having our without the that debt floating is a rate or penalty. said, on

kind able be our want sources and of at we to looking we're uses, to when opportunistic. be And

some repaying without option a so is And tool have. debt having we powerful of pretty to penalty, the think,

has other reasons, been what that's that, some on books. we have is we have so our among why floating And rates

going in It around been So the it you're I to right XX%. don't materially XX%. in from see here, been think it's move the always past I've XX hasn't years

on issued, it see I it's keep don't will think is new we pieces and for health it, and of X something as It's the debt, comprised necessarily. going And our I on. but it's term only It remain it credit XX%. that forward the changing we construction loan there. of really That's well, eye facility. solves that just it's an

Camille Bonnel

my Okay. Thank questions. for you taking

Operator

question will with Michael from next Lewis come Truist. Our

now go You ahead. may

Michael Lewis

you. thank Great,

were was if I gave during Houston. but Richard Houston, high great like a concessions detail the the also the on reasonable. in was elevated, It for the quarter Apache looks So of of portfolio related don't rest the looked maintenance how because very that know cost little lease to CapEx actually too.

my rents is But markets your buildings. more question and effective they your where are for in broadly and going net where might be

very the spreads. and do rents You and period we physical consistently over for all occupancy challenges see given net industry. But the strong rent for for tech office grow what your time apparent layoffs you it's pick all have to think next, these effective possible

Colin Connolly

it's TIs pressure there's rents and that on so a able have face we've Colin. the of in I'd kind but offset to period of that. to inflation of concessions things been Good escalated, couple years during Michael, is bit drive like our been our experience last quite say over overall morning,

we're at cycling a point economy softening, in grow And effective so where potentially obviously, down. rents we net been think I time, have the to able is

them of like economic think that that coming And into rents in we're yet soften. trophy year, we perhaps not we cycle. but again, of of we're at broader too cycles, were this out and I'd But in. office early so in, is last out working we're not as net I kind we premier But process today, typically, of unfolds we've question characterized leases around I markets the on flattish, still see as we that an transitioning it's you do the kind look for properties effective look existential say to growing rents economic tell. think effective do this believe net forward, as

like goes think GFC the And Atlanta we to so Austin expect and continue. after recover as to the they markets markets after and down, the our that would be will did what pandemic, first we

quality very So up remain that we're we that broader locations we net the own properties the and optimistic of medium effective and going the right time. longer period the into of term, we drive that own, rents over to

Michael Lewis

Colin, rates Great. talked and bid-ask this spread. And then about cap you

So it poses and I on guess sell. two questions, right, on the the buy

the on acquisitive capital of you the first, kind then that Houston offers situation out? of do Or do leased this in development. but something on XXXX, still you So it, wait market opportunity you more to side to focus is your or you sell, now is don't buy that think asset? maybe I do markets an on other for sort And know, weren't maybe

Colin Connolly

balance don't lot is Yes. got so and is sell to we've strong. strength a Well, of because about sheet we the the of optionality, our great balance the -- need sheet anything, thing

better to relatively in XXXX. very at year. we're investments We keep last think patient would So to if at if potential pursue look for we I something I of neutral. speaking, looking opportunities say at source were the an we think sell going elect opportunity sheet do presents it's we'll than would time, balance year dispositions same more certainly this we're thinking that leverage it. new look But as to more a the worth, capital prices see broadly itself to But

to I to to prove going to maturities. loan the correct. hopefully that's value think their get or costs I having some I owners with think, preserve deal leasing And closer fund either And think asset

of be arise, those to we'll hopefully But capitalize that for to you're transactions think when ready opportunities. poised going the some I might be compelling and the year. some latter in half that see on

Michael Lewis

Thank Hey, you. great.

Operator

will from Baird. Dave Our next Rogers with question come

may You ahead. go now

Unidentified Participant

such of sales say, Maybe on you've of years, your with efforts That's assets. vein kind exposure a more couple portfolio and time? guess of investment as same on increased off to are this how over past exposure Nick exposure through kind the I what portfolio geographic you like also viewing you over positioning today? Colin of the to in just vintage and our It's gain and/or Atlanta recycling Charlotte for positioning metros, Austin. your of guys. some markets looking kind are Hey, more Dave. tech-heavy the And the like downsized on older starting like

Colin Connolly

was say quality. of I'd focused question. percentages years over focused geographic important is Yes. is of flight on kind couple the and recycling most what less trend, on Good to the last which think the And more the we the

And of older got have and into CapEx vintage described that the so that railyard Ponce over we I $X trophy in sold properties obsolescence XXX reinvested type billion and like higher capital growing terrific properties Charlotte.

to looking like opportunities a up markets. in our some But we'll recycling, is you're and continue in slowdown we'll of say, capitalize opportunities any and representative after again, Atlanta attractive find like hard right in incredibly continue certainly to if well our to as despite under we a markets. be derisked our we right, markets. exposure we and so And I'd look those that others the and Charlotte, we're, grow like certainly little portfolio Dallas, arise, tech in But activity, and to completing in Austin and markets that positioned those grow like lot, a

Unidentified Participant

helpful. Very that's But the might long-term space have on on as on then walls have those And in properties some domain, particular of a areas I sublease you know maybe like space. your curious comment listed? sublease just that any question your such just areas.

Colin Connolly

got really, subleases There what who've customers in and look in today. got are DX of We've some oftentimes will out the next some some subleasing. Expedia got -- on. number there. portfolio has significant DXX focus that's space property a you people think got at DXX, I as -- DXX we've the it, some DXX in across portfolio, the our large customers Yes, but little bit And a and deliver year. very the domain, tech not

as Our thing a any perspective diversification of wouldn't with no some near of did those termination on that is standpoint term, those kind the options customers with multi-tenant long-term from us. for bad actually in be buildings actually those of leases on a

we'll arise today, And to as we with work positive continue for if us. stand sublease. are material monitor amount situations not But a there's of that We'll so them.

Unidentified Participant

Thanks, Colin.

Colin Connolly

you. Thank

Operator

Our from next Jay Evercore come question will Poskitt ISI. with

may You go now ahead.

Jay Poskitt

these on Hey, any pretty sites. $XXX you good projects bank taking million. hasn't guys curious Thanks thoughts your have of of size question. what I of for land of if curious that And know of good development these what of a to guidance I'm just starts, change those? for any called just of are kind you Thanks. my your know the sort what I morning. with that certain kind in but to order kind you're some in I'm thoughts not utilizing next playing land. of your do mindset need of couple out see are years, on

Colin Connolly

mean materials, X% land I bank, bank to balance own that a give us at tried and the between sheet to always overall Yes. really land of and size we've we terrific raw the role a ultimately will, X% if land, to that business. it's the customer have start win new don't comes and of the if and we've market you the you hard piece development a to to past projects, found in the

or today about we're X.X% so. about So

the and this in office the be room, pulling and the those return any So appropriate an opportunities land development setting, it's a relative bit got have cost projects, environment. the little of of we trigger ultimately might or to has in risk. on we actually some whether see mixed-use a to residential development a But

and near-term, could side. that on you But know, the opportunities. we're attractive going again, never be in customers are build-to-suit there see opportunities is sense some out today we're that talking to acquisition there potential to the more My

consideration. those will worthy so of And certainly be

Jay Poskitt

Great. Thanks from all that’s me.

Operator

from next Wells Fargo. with will Our come question Ku Young

You ahead. may go now

Young Ku

you. Thank Great.

largest the guys provide that, you think associated additional Could XXX,XXX 'XX, color whether on be which lease any is? market space? I square then feet. expiration about mentioned you some expansion that in guys there Just contractions it will with or And

Richard Hickson

Richard. Atlanta. about is Their of November This It's existing in It's XXX,XXX. Yes. year. feet square in this

XX% to a call So of it's contraction, a existing going so renewal. be it modest space

Young Ku

And you Richard. 'XX, are rates just that for regarding Thanks it. guidance kind assuming? for then retention guys what Got of your

Colin Connolly

a obviously of lot But budget. and renewals. a active different This is buildup certainly Colin. on with customers in We potential do create to customer-by-customer discussions our we're

And of that the shared don't that so anything in compromise we're just to want our and of. retention rates could we've negotiations publicly do the midst some never

Young Ku

it. Got

fair you. that’s Thank Okay, enough.

Operator

questions. over any Colin This back remarks. the appears It Connolly like are turn no I our question-and-answer for session. further concludes conference to to there closing would

Colin Connolly

for you and in time Thank your today Properties. Cousins interest all

questions, you've see you out to you. to any reach If follow-up soon. got please Gregg all Roni Adzema Thank feel Hope or free Imbeaux. to

Operator

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

You disconnect. may now

Cousins Properties (CUZ) 10 Feb 232022 Q4 Earnings call transcript