CUZ - Earnings call 4 2023 | Cousins Properties Incorporated

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the Cousins Properties Fourth Quarter Conference Call. [Operator Instructions] As a reminder, this call is being recorded on Thursday, February 8, 2024.

I would now like to turn the conference over to Roper. Please go ahead.

Pamela Roper

Thank you. to Fourth welcome Call. Earnings and morning, Cousins 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,

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

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

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

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

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

Michael Connolly

Thank morning, quarter We everyone. and at you, good Pam, Cousins. had a fourth strong

delivered share the on FFO positive in during per $X.XX rent a and operating the square On basis. cash up. a X.X% cash the We income with net team increased front, leased earnings quarter roll feet same-property XXX,XXX

rent with leased a For square cash million we feet the year, rollout. approximately X.X X.X%

for activity accounted leases of XX% expansion leasing year. our during the and overall New

is square increase in-place XXXX at year-end a These results. year-end was average XXXX. $XX.XX foot, per weighted terrific are rent XX% gross over Our which

fundamentals. with will observations few on market I start a

to in the is First, accelerating. properties lifestyle office work return

around time. in at are properties full of least with the most centered the professionals is teams, lifestyle office of collaborating Our whose their

up filling is demand professional and garages despite higher result, a are layoffs. increasing space for As parking our our

old repurposed and properties. these The or there no Second, are little towers commodity to buildings begun. is CBD of until tall capital demand already will they stagnate torn down. or for has process suburban customer or Many

new in. supply retail today's that rate new of to is office as math shutting begins is sector. Thus, not contract ago across for same States out in just The the not demand just environment. higher work does process played development in properties likely interest the United the improve. The to Third, long supply

are rebalancing retail off. in far Remember lifestyle when forces now it Sun Belt market our a the view, a in market similar office manner. office was not wasn't, In is of dead, until properties the shortage

temporarily level less sales to far Turning higher as adjust has available equity markets, to The and the frozen debt capital and for market today. expensive players investment private rates. cap is more significantly asset office

the global environment in months. attractive Conversely, now for REITs in proved and market, unsecured in crisis debt tightened along the dynamic recent with converging. an after all office public financial for have rates be show signs markets similar office the cap to to public the NAVs investment A market of discounts occurred Valuations and REITs. and improvement. be to implied appear private for Coupons

accelerating focus will is likely this not the worse gets on the loan office will wrong. In short and for narrative be the it vacancy reporting better. defaults, high term, sector Media before to and get rates

long-term is said to office that Cousins, drive last be quarter, I earnings our priority lifestyle maintaining commodity an with as a strong However, while sheet. growth office. will balance At overgeneralization it conflates

trends. executing Belt regional and build intentional from to an REIT, over flight the ongoing years We migration last have pursued Sun to leading benefit which that XX goal office quality aggressively the lifestyle will strategy by

cycle. this extremely the we in remain we own in the Sun Today, eventual turn premier for Belt. And well office positioned portfolio lifestyle an

among Our are through the the sector. expirations XXXX in lowest lease

of lowest Net setbacks. is pandemic Our disruption best-in-class. is and interest X.Xx sheet have of the the the the higher in rates the the To undoubtedly impact from been balance COVID debt-to-EBITDA be office clear, sector.

our strategy many, XXXX was proved net However, to to in has our resilient. compared property higher XX% Surprising income operating XXXX.

guidance is includes to Our coming XXXX to flat FFO in year-over-year. and hope We this the growth return that outperform years.

highlight the building blocks. Let me

term intend to the over XX.X% intermediate occupancy we First, year-end from in back XX% XXXX. at drive

will be or can lumpy, move-out around a you the due know, large As metric quarter-to-quarter from bounce so office large business this a to commencement.

our on in portfolio that return we back a we levels. can multiyear optimistic normalized are to occupancy However, basis,

flight The Belt our return trends flight are that all capital Sun of to support the efforts. migration, office, to and quality, will

plan and we We advantages, competitive have grow to market share. multiple

intend and on capital we basis. accretively to allocate a Second, thoughtfully stabilized

a equity, most opportunities track sales have record identifying creative source the capital funding debt, property We and JVs. with of of investment efficient them and

converging. As the appear markets I valuations public mentioned earlier, be private in to and

in discussions and key market-leading development of the remain more compelling owners office appear we will of can are lifestyle several than And term, early, development. remain more Cousins. Belt lifestyle or into Near for part with active Sun mixed-use while are likely on a that term, and longer still Medium our a creates growth and repositioned it's properties projects This lenders. strategy. environment acquisitions office. focused be We

few our redevelopment will of and value the over be highlight platform. contributors next development and the projects development years current meaningful Our

a our in Lastly, interest growth decrease rates profile. enhance would

efforts. hopefully, realistic While Any trend in competing year. and have many we downwards control activity we forces later positively this, transaction sometime the can't or closing, begin support market. obviously this the our asset peaked values, movement about to would such are on rates count development In and

thrive cousins market during built to conditions. we all However,

position an to other advantageous And are today, companies. office relative we in

right with markets. the lease Belt own a Sun are We expirations. portfolio lifestyle in near-term trophy We modest

minimal believe optionality a We have unique I have us. have a dividend. balance of near-term debt in a and opportunity with maturities, sheet well-covered fortress we we and front

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

Richard Hickson

morning, Colin. Good everyone. Thanks,

by Our team operations quarter. very strong. team economic closed was the for so another finishing year our unprecedented marked uncertainty, past with of I'm out year XXXX solid proud This

To start, an on have I WeWork. update

we locations WeWork a of they represent feet annualized at X Atlanta and totaling have Charlotte, X.X% square share. XXX,XXX our As rent in and reminder,

While WeWork to has not XXX formally rejected active our Atlanta. Terminus at negotiations our modify and in any of we in are leases West Trinity leases,

by size rent about both we today, and those or to locations be X/X of square the to feet XX,XXX reduced at As for share of reduced. expect be of

WeWork to from be to the XXX in this Regarding due multiple have negotiate users, and office to expect at location Atlanta, with demand strong rejected. we lease traditional decided Ponce not

Lastly, lease accept without modification. in expect the to we WeWork rail yard Charlotte

and a note with owner leases are we meaningful As ongoing credit I our reminder, supporting very XXX the and WeWork West and have fluid of XX% both are Trinity letters of have today. negotiations Ponce. XXX been would West at we a XXX Trinity

to On results.

fourth XX.X%, above the quarter, the Both For in sequentially end-of-period average down respectively. metrics our where and percentages total first year modestly XX.X% weighted portfolio and occupancy we and were lease were or at stood quarter. the office finished

occupied the Silicon Hayden occupancy sequential numbers is decline. now Ferry from quarter Hayden lease it and by was Bank, the a redevelopment. and a portfolio Valley its XXX% as leased Our building so under I full I driver fourth was of removal previously operating Ferry exclude partial

this was team square quarter, signed under with leases over X.X This totaling our X.X square feet, square mixed-use just Nashville, completed fourth activity of In our lease another expansion term feet weighted a footage feet year was second this were XX% XX,XXX for XX average years. representing and completed activity. office office fantastic for and highest the of year XXX,XXX XX leasing volume completed new of leases, activity total quarter leases our Notably, leasing square our XXXX, in development, of quarter. of new of quarterly million our the Neuhoff we our Cousins. at just

office the This project adaptive reuse to of building the XX% to and overall portion lease. brings XX% the

approximately We retail remain and by prospects. office the which of square also feet includes XXX,XXX encouraged pipeline,

spring. We component the leasing will this begin residential also project the of

renewals Fargo with both Wells Our completed quarter combining Terminus at included space. and X for square also in Northpark renewed activity this Atlanta, of XXX,XXX feet important

floor pleased a Overall, and our full Plaza. from a market to long-term Apache's Lake lease very both Brier added the activity, leasing perspective. of at also industry diversity I'm with We headquarters

our average year. this the quarter Regarding net lease rent in economics, came full for $XX.XX at and $XX.XX

defined concessions, leasing X% of average free rent improvements were run the quarter, sum tenant and is which as quarter rate. This of our within $X.XX, third

$XX.XX was average rent at and As year. full quarter net for $XX.XX a result, the came this in effective

building history average our net of in highest the in perspective, only included which X our in with lease the some Austin. effective the for Domain XXXX was XXXX, For exception full rent

under the in fourth Finally, second-generation cash rents quarter X%. just increased at again

In completed where rents to recent compared geographic quarter Some attribute short, of this lease to of was and average. metrics net quarter generally our activity. this our our mix buildings in the were softer than leasing lower this quarters, we are leasing

For I'm already pipeline, of first report about cash expansion XX% our feet Lake pleased Wells the we Apache to of X.X%. our Northpark, quarter, leasing about increased with example are new square completed which excluding second-generation and rents activities and and regard Fargo With Brier leasing to that have to XXX,XXX leases. in

activity. are in seeing overall are healthy, stage pipeline the the begin leasing especially Our encouraged pipeline early the we by tour year, our and is we to trends and

of aggregate X months, over instance, over at Hayden demand in of Ferry we For toured prospects the Phoenix. last representing feet have I square XXX,XXX couple

therefore, always, stage could volume. we XXXX lower also few translate and note to to As demand leasing complete, into early expirations that activity. signed I this want have multiple renewal so quarters to can translate volume because through lower likely take into total

lowest overall As some just sector. enjoy expirations the to continues in portfolio office our the near-term I entire operating mentioned, of

had in end including XX.X% low a our we the very XXXX, XXXX. contractual As of of through only X.X% annual expiring XXXX, rent of

expect is case, some worth that always move-outs to as noting. have do that be we However, the expirations are we

be of greater happens on XXX,XXX call, than XXX,XXX at expect also in vacate last our Austin. of discussed the we square square year, this end at our This August expiration feet only to X Domain to XXXX. feet accruent in As

office square is adjacent single-story a reminder, developable the the corridor to a As foot Domain. of retail X prime main Domain land entertainment on building and XXX,XXX

a term on in order As almost to deals limit short as building result, in certainly our future those we to this leasing this land. maintain will optionality

square XXX,XXX are than have feet. Looking that we X expiring to customers only greater XXXX,

at XXXX. I Bank America square XXX,XXX Currently, The the feet of end of leasing discuss first through will Center in Fifth Third Charlotte. is July

excellent that begun bank of shared America locate discussions, discuss with and employees this the properties the and though architecture, Third Center on date view to Bank and presence Fifth months and to now. move possible. Street that out those in by Uptown where timeless have We Based as a on Charlotte is have they directly upon would has we from owned great prefer probable access expiration, bank XX about still a parking. expiration corporate Charlotte Tryon

successfully its upgrades bones, with to are property and reenergize those working have projects at portfolio. plans we similar across to Sun already finalize our we Given completed Belt good to this amenities

the XXXX nearly XXXX expiration of September foot of square X other years The is customer Domain expiring in a now. size XXX,XXX in from

to Austin customer. while early, Our with encouraged. very is And this begun team has team engage the

only even looking we little have overall than and to square a X customers, XXX,XXX into over XXXX, expirations lower each set expire. Finally, in feet XXXX

XXX,XXX lease XXXX, commenced the larger expiration true We and about of demand, those low customers out total are expansion the of occupancy that X.X% sum, in near-term in feet expectations of move one is but represent of usual square around renew WeWork, to even probable new not than signed our discussions over yet current tailwinds profile early. and one potentially absorption. already portfolio and with In leasing leases which a

the XXXX. end of We expect to maintain hopefully by and begin occupancy the through then XXXX to and level into end XXXX build our occupancy of

high-quality dynamics. XXXX, metro 'XX return volume lease of the million to some in metrics. XXXX larger fourth office Leasing above almost by activity began market. to area office feet, return to X.X to the the in total JLL, especially and to Atlanta most 'XX. levels quarter segment Turning is in some in as U.S. square totaled the accelerated accelerating According market-level show deals continued also The from fundamentals, and to the stabilization

Midtown, final According demand activity Wakefield, by in months which quarter. XX.X% Atlanta in space Further, quarter-over-quarter. to dipped down remains sublease X% in quality highest Cushman sublease third for is the strong availability the and X of the -- up & XXXX, from best located

QX feet fourth positive the Our of Atlanta feet square activity solid the quarter market in signed a XXXX team leasing leases XXX,XXX seeing square our office since per In Austin, million X.X all momentum the strongest surrounding level spanning at of JLL. the year concluded quarterly submarkets. with

little Additionally, end availability. our Austin. stable the diverging fourth remained portfolio with relatively early from its upward XX.X% XXXX, of sublease the leased, trend Austin was in quarter, availability since At quarter-over-quarter immediate

XXXX always, want year. We As Gregg? successful I together. to team hard talented operations thank made productive whose our forward a work to a XXXX look

Gregg D. Adzema

Good Thanks, remarks remarks as well by a same our sheet as before our by everyone. on results of some morning, I'll 'XX on I'll Richard. my followed our balance our closing a providing property earnings performance. brief our around Then begin some of overview discussion pipeline, my color move development quick providing guidance. details by to initial

solid, upfront, behind the them stated Colin quarter metrics As our remain and operating earnings were fourth strong.

There increased. remained uninterrupted quarter. with was That's of note. leasing consistent straight pre-COVID no cash XXth were spreads or property cash items very Leasing same NOI positive a velocity of almost XX quarter. were clean and nonrecurring Second-generation growth. for levels unusual the It years rent year-over-year

we rate $XXX maturity in swap Subsequent the $XXX fixed to fixes our to million maturing swap through quarter floating remaining interest The 'XX. a X.XX% of term so March end, loan of entered the date. initial for on a million into

For original midpoint from year. up share, $X.XX with the share forecast from original is despite our This FFO our guidance earlier primarily $X.XX properties. year, bankruptcy in of driven impact versus was at a per per we per outperformance a full of the negative the SVB share. the This $X.XX reported 'XX

fourth a Digging decreased NOI performance impacted by XX property were quarter, basis, Consistent on property deeper was same cash the increased basis to solid our our a year cash little year. Full increased taxes. quarter, expenses NOI X.X% X.X% same-property performance revenues was with since during last into last compared best XXXX. while points, a Cash which these numbers X.X%.

well-publicized our In the benefited recently voters. half assessments, to the tax that were second approved tax Texas year during regular from the cuts addition appeals of our of by portfolio also

both Austin, our during lower property expenses therefore, was of the quarter. savings taxes largely revenues triple a tax majority The is reduced in and market which net and

on, compared trend fourth wanted of during saw quarter moving to parking increased revenues the positive quarter. up another also all I over the we 'XX Before for and point 'XX. X% XX% prior to continued were out parking in Overall, total revenues the

pipeline Turning to in XX% Domain our of development comprised development efforts. The Neuhoff interest of X current and Nashville is XXX% in Austin. in

flow. $XX funded development construction costs the these combination for projects our million, be cash of which a and of share will estimated X Neuhoff is loan Our remaining by our operating

Looking balance an our is sheet. Net industry-leading X.Xx. at debt-to-EBITDA

have We of no until maturities significant July debt 'XX.

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

reminder, was than As a over current dividend common our higher it is pre-COVID. quick XX%

their number increased REITs of in are small a dividend office have XXXX. since We very actually that

$X.XX. a 'XX currently I'll of a close our by midpoint We XXXX providing year $X.XX guidance. full and anticipate FFO share $X.XX initial with between a share

property of starts our acquisitions, or place, capital take are term is clean. transactions. guidance any items, Our onetime no these dispositions, very update property we'll If do unusual accordingly. no market are earnings There guidance including nonrecurring There fees. significant development

earlier, discussed expectations we're is with WeWork while consistent Richard Richard finalized, is with nothing negotiations our As active guidance the outlined. in

We have February for these conservatively date effective a potential all X assumed of outcomes.

recovery be guidance bankruptcy not case, will amount include and SVB currently against trading does our in unsecured is $X.XX timing not $X.XX which estimate payments but of the are The claim Our on currently claim dollar. million. we $XX known, exact any around SVB yet the to approximately unsecured bonds of this

do in we anticipate significant this there value be will claim. So eventually

impact providing discussed guidance at 'XX our expiration 'XX we're on beyond at offset numbers Third earlier probable America and we this the from of And period. Bank 'XX that expiration and the while redevelopments impact negative developments in this potential on the several of the will be no not 'XX call. Richard more guidance anticipate of than Fifth time, There's by that stabilization during Center lease

property performance. Bottom quarter results strong same fourth line, solid, driven by our were

remains intact, position and our well leverage remains best-in-class dividend Our liquidity and covered.

guidance as WeWork well over let developments expense as losses offset numbers 'XX our in operator. With as earnings the call with new from by properties our anticipated me NOI flat 'XX redevelopment higher deliveries. the forecasted turn Our and interest and that, existing back is increase are to

Operator

comes Jay first Instructions] from [Operator question Evercore Your Poskitt from ISI.

James Poskitt

just to specific was for little could a wondering occupancy the the intermediate you to XX%. defined be I getting if more color be you timing I as any would great. that of kind but term, on back know there more it

Michael Connolly

to blocks building and there. back provide I very feel a not ins don't forward occupancy, we walked drive as we're comfortable And -- specific do we XX%. over going of multiyear said, will earnings the through guidance, forward so occupancy process think outs the of It But Yes. earnings guidance. the I kind up provide as over Richard forward that

James Poskitt

you more your then you're And any head more and most just helpful. I view. was cautious markets, broader which could wondering 'XX? ones into provide on on as a we you're That's ones just if commentary excited about which

Michael Connolly

It again, to Belt looking diversified strongest Yes. benefits we've in which base. from continues broadly speaking, the very Atlanta, markets Sun seen say leasing a has at customer perform where date to well, I'd the specifically -- and been certainly very activity our here

great space And leasing a so lot it we we've a up. of here, lot had success and have of

active at out couple of have has to I also we're looking other of a And market, market and to lot our rate really what's got our Phoenix vacancy at today, project Ferry. lowest exciting that a the been, the then I'd in of of overall Hayden repositioning but It's doing Phoenix, think markets specifically some note activity very we've probably a the very I'd attribute well. of within to been market out continues today. so say And that footprint Tampa highly perform

Operator

Fargo. from question comes next Wells from Your Blaine Heck

Blaine Heck

are market downsizing either and or was maybe engaged leasing either just thinking demand overall quarter-to-date renewing versus market relocating that's activity by helpful, your lease the adding guys how can and but on about expirations today are within or pipeline, how that to tenants the have much might footage new commentary leasing in same or is at of the tenants driven activity those trending? talk about that square the just The you are proportions you be expanding

Richard Hickson

contracting renew, rather but financial to a Yes, a of Richard. bit if generally they're there a services look generally I'd of it proxy, net this showing say when expanding customers a of space is that still industry, we're back was we we based renewing. Yes, bit on XXXX there's than certainly reduction where average dynamic is a on tech, little maybe that's some customer in is the

an have we in like and and activity to inbound -- interesting we're we position at new as But that well seeing feel at some in we're the certain looking overall, actually stance markets. product our when pipeline to activity optimistic again, looking in market or lease

major full-blown but robust, it particular brewing, regional primary call headquarters headquarters some a in good, though are here we they're we are they whether leasing, Colin -- optimistic that good Atlanta little into moving wouldn't I feel be bit that like as Phoenix, seeing also of in in but there's in certain Tampa, in pipeline. for the early-stage markets, mentioned, interest things happening

Blaine Heck

second And Very just then helpful, Richard. question. my

much up capacity Xx around investment levels that leverage you'd about targeted goal. have affords to sitting leverage guys You equity deal in above also powder And Can down? how just that opportunistic long-term think or to for comfortable you for be you? debt-to-EBITDA units a the investments? how you right you on dry opportunity? Where you think And talk how leverage using keep bringing are much OP right just about basis kind you just your of a

Michael Connolly

oftentimes leverage kind and it it Yes, lot an think -- profile, painted do and Blaine, leverage we've from I of over a certainly the defensive leverage, last that we But our got that with about think is and significant a of low provided is posture, -- balance support really years. sheet been perspective. low several And defensive offensive it's a capacity.

X.Xx I'd think, could. high of it And moved as our, in as most transactions up, bring down even leverage Xs, done made in we past but dislocation I in have then some or back in years the of we've a the times to and past, say, as priority high that interesting leverage

do the have office right a our today, But we'll provide if to really, that advantage to characteristics able product got transaction willingness along, do lifestyle drive come and opportunities be of function So those. we a so that with is our will that to and fit accretion. take of going certainly are earnings opportunities

and debt investing provide it's terms will sales sources we or so whether and is at that at equity lifestyle totality, office and it focused shareholders in in a be, might our stabilized. funding property such accretion look way look in that of or And of in but that on high-quality what to that our that think when about doing holistically, we

Operator

Your next Bonnel of comes America. Bank from from question Camille

Jing Xian Tan

Your a from occupied this XXXX? portfolio such wide half spread Can is commencing in are year the weighted? and of a back commencements the or even quantify timing you space. healthy throughout perspective, pretty has leased And between how much

Richard Hickson

Camille, it's Richard.

of prepared -- my a about XQ. had X,XXX that in kind that XXX,XXX that early little of or that in XXX, weighted and 'XX, So is over remarks, I

Jing Xian Tan

the Appreciate color on the lower in fourth the quarter. leasing also And the spreads details.

rolling can details across forward, look you around over leases any the mark-to-market year? we the As provide

Michael Connolly

it's Colin. Camille,

past mix this impacted quarter the mentioned, spreads. Richard As those leasing

course As our that continue and the I'd rent we've over visibility is we'll I where to and focus positive pipeline we specific the got we've guess And our of hope forward narrow to the late-stage drive that look year. very rollouts. got

Jing Xian Tan

more sneak And I if Okay. one can in.

your market submarkets to for even challenges type Just the with for net you industry? the where a pricing more of landlords the the power seeing to in you're absorption. to have? office grow yourself or continue possibility positive Is rents broadly talk there Can in

Michael Connolly

States market I play. generally think a still real down when it overall narrow you focus of Well, your best United office to I without in today, for think favors and But down the at new future not-too-distant product. demand today, meaningful I the there swing tenant. can I in as beginning the return, supply and mentioned, properties quality in any of the lifestyle time see that is the -- really construction we see coming lot pendulum into forces do We think the still are market office

overall I XX, XX generally next are today, months. course And while rents flat so over the -- think the of

I the as market Cousins. I that, shift said, power think bring like think could and of office to pricing I owners back lifestyle

Operator

Your from next Paolone JPMorgan. comes from question Tony

Anthony Paolone

Okay.

First comments for to just caught make sure one, just Richard, want right. I clarify, I your

at you you in So occupancy guidance 'XX. the of ended your end XXXX think is Is better where apples-to-apples than right? that

Richard Hickson

Generally in line.

Anthony Paolone

think line. emerge you you just Okay. start Can to Colin, talked capacity. then, the look think to about like unfolds? investment, debt in of balance might where have what you a IRRs this you're or or like rates either In going talk deals like playing look what offense that you And in economically terms and sheet whether it maybe maybe you as cap as

Michael Connolly

great Tony, question. Yes.

I will rewarded very of are interesting As as they the ago. think more over becoming that increasing and last will ultimately be be amount the think XX an XX cap we be rates are higher We've we ultimately, -- mentioned, months, been were think that do opportunities the think, higher than we we I months seeing increasingly invest the patience patient because IRRs for actionable. and I've XX, will

of look again, efficient at, drive office as a and most out, in our how rate lifestyle think I investing it cap as less we source shareholders. with of the as for capital it's a that's function of specific those of funding pencil it accretion stabilization is said, I to ultimately going properties holistically ultimately,

specify driving our So drive those it's that's to a cap specific -- not will metrics, ultimately hard what's investment. rate really

Anthony Paolone

more just if could sneak one And I in. Okay.

on Neuhoff. Just

about that just talked I can it completed, drive because is. think more a past, it, in once it's you traffic maybe of unique bit how product nature being the that the

Just wondering just the just in getting looks there's in that that's side comment if on either supply any shifted Or way? market? on what now that like if anything the demand you can competitive if and

Michael Connolly

and adaptive right be Nashville, food property component River. and Cumberland and banks unique the mix along most some the with the it compelling the reuse really the is It the of will the certainly hall retail multifamily of in office, then uses of No. what

to that professional all that, advertising, demand across will think we from services, continue types, marketing and seeing and industry we're So financial broad-based services. to strong drive that demand, legal,

goal ultimately broad-based attractive We've feet rent our roll seen and say, the to diversified retail. to interest. have -- the leasing Neuhoff XX,XXX square our a apartments XX,XXX And at a quarter really of multi-tenant drive and is I'd very really, to complement

Operator

question from Next Kim John from comes Capital Markets. BMO

John Kim

opportunities discussing on what repurposed as opening lifestyle? What like of another older Or Colin, is it your asset in you they're types? Is commodity participate assets And being any this? is markets far seeing medical are into? or as your being repurposed. Cousins it remarks, for type there to office other in

Michael Connolly

headline is gosh, product, or some cite could type Yes. torn very week, you older larger, today, down repurpose. every And more say John, across We to we that building are being I'd a see towers. down our examples being it's -- starting media a you're the it's a to seeing replaced markets. to residential about see that suburban had And multifamily office actively play it I probably and torn specific product out. with and properties. say mixed-use very basis low be if characterize purchased commodity ultimately at that be I'd office, either

In is to cost prohibitively those down expensive. bring buildings some cases, the

both seeing some of those. trade some those you're are where hospitality, looking at either of some there, developers low combination so of basis assets that at multifamily, converting into And very

deal is can either some. looked a have But have be broadly of perspective, our be of I great study. office. into those We'll more or converted and focus are feel to some an going at already look think asset again, we to lifestyle continue that from our at speaking, I conviction we that think

John Kim

place question into until keep form just That's plan on is plans? Or are clarification execute think Is asset redevelopment to to looking you Domain leaves? this you mentioned accruent option it My is as leases? short-term helpful. and Okay. X. as development once an a was second I your that

Michael Connolly

Yes.

make to that we're at I not a decision. think point we're ready where

Richard As does building this There later later. in that's one expire an a is accruent other the year customer mentioned, got or that so lease expiration, year.

so short and find who term. long-term it. drive And absolutely our to intention We're NOI specific we some sign customers way, we'll that definitely any to open If can want if leases can not period. in for consider is a the very that we short space

think see But do continue that we'll kind decision a and a with I later make at wait on we specifically asset of to what and date.

Operator

from Rana question Markets. from Capital KeyBanc next Upal comes Your

Upal Rana

what plans forward? with your or leases X Yes, any be WeWork, there. you the curious associated on I'd Just to cancel, on are that to that anticipate reduce color going

Michael Connolly

What WeWork leases? the plans on are our X

Upal Rana

are Yes, going that and with the be reduced to canceled? potentially ones

Michael Connolly

Well, in hope again, one stores leases there's those X And our very with Charlotte the strong rent. them. strong will and modify to be those for shrink that and will is our Two, reduced and well, in are space -- in today. going view that we really of modified. own believe we those have are a are a we that buildings performer in think again, don't I It's X WeWork, --

company that the amenity In other Our with economics, users to on is move were of to terrific no our from partner much building. in for to just demand debt from will Richard interested have earlier, there a WeWork XXX, that mentioned the customers case economics. too buildings. restructured with side that in view a traditional forward those office them us as of the space in the bankruptcy and was a hope much this perspective, emerges stronger as nice be And little our

pass. to chosen we've So

Upal Rana

today? rents Got And online where current you was That Neuhoff started and the there And construction? on just originally when Okay. relative yield it. coming where is development to in then are June, helpful. concessions

Michael Connolly

Neuhoff Yes. to perform well. very continues

As the TIs rents being expected, I specific, would net we higher without that we but the at effect originally say are look of so are rents. than the

And the TIs have have so the we we continue of and that's to been something to as faster more net a certainly date. of effect -- stabilize effectively line, forward move flat project, in time that kind monitor to we'll to We'll we'll consider. if rents that to that finalize give

attribute I'd say we higher expense. obviously, a yield, effectively would started had have The rate solely And interest certainly has and than rents But loan. the the a development we have to SOFR floating I'd that project, flat. our cost -- effective date, of be it net to That's moved. lower been overall

has we higher that the originally been so interest expense anticipated. on And than project

Upal Rana

squeeze can what's What's Austin mentioned decent on in. -- that momentum momentum? going been some one more there? you And Richard, you Can things doing of that? really had ground the driving I has on if elaborate some And more -- in some here.

Richard Hickson

this while sublease think call I little Austin than Well, Austin for to still point, in, so other big listings now. our are dynamic a clarify markets, seeing less and dynamics have a guess say, I'd at we that I I'd that's positive in the as active stabilized, been

turn, me, is that, in So other say, potentially but to is it our than still stabilize leading to a more starting nice of let's things indicator markets. quiet,

Operator

Your next question Green comes Street. Burzinski from from Dylan

Dylan Burzinski

because are of footprint are Whether at of currently be there looking as Most but a been have acquisition sort and sort for it that just markets I has certain of more? a opportunities, back than of are others? attractive demand? your pricing questions guess outlook you better Or degraded whether supply going little guys it more bit because asked, my across just to

Michael Connolly

of I'd speaking, new Dylan, greater in some or of certain a -- as really investment the in We've to generally of others. They're company Atlanta have and percentage great beyond time, markets. Most absorb say, we see opportunities to today to the certainly like over our than some of more the supply that beyond a Austin. supply strength grow it cities pursue I'd But will confidence would we'll some in any are, our say by take time markets. in got and them. of all driven would perhaps

bit. of certainly opportunity interest geographic a so And emerges But We'll got in have we absolutely lot would geographic and I a like Atlanta because we'd Tampa longer or just the we've Nashville mean say But enhanced see that's over period markets that Dallas pursue over expertise of that doesn't in to really a Austin, time, compelling time. enhance great I'd like a where diversification Charlotte and great like and those. to diversification and platforms.

Operator

Abramowitz from question next Peter Jefferies. from Your comes

Peter Abramowitz

office trim are lenders unfavorable and partners there. been to of One this of on or quarter out to take their pretty either is the get just that willing themes terms exposure emerging that's

of what's in in the curious right just And role So if market any you've of your overall markets? signs transaction distress that now? the seen

Michael Connolly

is that the or are Peter, got diversify together, lenders starting exposure. time, of maturities amount a coming estate, the we see and at their -- you're is to things real to in are see beginning all are a office are to yes, same significant to that say would of you -- investors out It in in of XXXX. happen kind you've which I occur And seeing a lot question. there's debt for is catalysts answer trends to starting appreciate trying the that. I couple different of that

And have to you increased pay leasing improvements commissions. activity, and requires also capital which tenant leasing

And who so going is a fund that. that as conversation forces to

confidence and more the to as And so investment to why course that's mentioned, I got opportunities. to year, that's begin investment ingredients much over we're And see actionable that all transaction some going Cousins. create opportunities we've this for of

Operator

further proceed time. There remarks. Connolly, at Mr. are questions your closing please no with this

Michael Connolly

Thank you interim. to and . but forward to reach all to your Properties. We a seeing team us questions joining out look for day. free feel you in interest the in with hopefully soon, Have great please any continued our Cousins today

Operator

Ladies Thank conference and this gentlemen, today's call. concludes for you participating.

now may You disconnect.

Cousins Properties (CUZ) 8 Feb 242023 Q4 Earnings call transcript