CUZ - Earnings call transcript Q3 2024 | Cousins Properties Incorporated

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Operator

Good morning, ladies and gentlemen, and welcome to the Cousins Properties Third Quarter Conference Call. [Operator Instructions] The call is being recorded on Friday, October 25, 2024.

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

Pamela Roper

Thank you. to Third welcome Call. Earnings and morning, Cousins Quarter Properties Conference Good

Operations; Executive me our Officer; our Richard of Connolly, are and Executive Hicks, and President With Chief Colin Officer; Gregg President Adzema, today Financial Chief President Vice and Chief our Executive Vice Kennedy Investment our Officer. Hickson,

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

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

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

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

Michael Connolly

Thank you, Pam, everyone. morning, and good

Cousins. at quarter third strong a had We

roll X.X% very a net This volume a leased was highest the leasing since share square strong. operating feet at XXXX. cash cash delivered basis. our earnings the income FFO in $X.XX rent remained X.X% On and a the We quarter during up. XXX,XXX quarterly Leasing team same-property on increased front,

portfolio continue fantastic These we accretive inaugural executed to new and issuance. and are completed leading bond sheet. strength Sun of best-in-class and addition, achievements resiliency highlight lifestyle unsecured balance and our our and office In the compelling investments Belt

the return market. as KPMG discussing construction recent X-day back announcement. The or just Amazon to Fundamentals made survey, companies will I the sometime buildings detail, office shift of Fortune declining years. and We torn same measures. is week is are In with leasing At demand on expect XXX X the improving. of a days office the considering observations so down more in existing converted is almost X Before more a a their supply a buildings quarter older few companies requiring accelerating CEOs, as of know in are XX% next they start nonexistent. of time, attendance will office. to similar the companies other new

quarter We the is sector. off not volume office leasing national highest vacancy and reaching a peak since believe third far during in lifestyle prepandemic. surprisingly, Not is the was market tightening the

these are opportunities. sheet. tailwinds, driving maintaining internal focused so, remains we earnings balance while our best-in-class our both external and on growth, To prioritizing With strategically team do growth

XX.X% from up the year. end, at quarter at occupied of XX.X% was start portfolio Our the

the occupancy drive our share market levels. back the to and our stabilized grow real of quality strength to leasing balance Given intend our we and estate more sheet, of

expiration in America's Bank is that of bump Charlotte process. year a speed next in

we intermediate XXXX, flow the in activity our existing the upside in leasing the of with and modest in believe meaningful there pickup cash is otherwise However, expirations through term. portfolio

Ann are of a Kennedy terrific collateralized joint Dallas. more Externally, by we building venture Midtown executing provide locations. closed and in Atlanta. purchased We high-quality subsequent the in acquisition on Uptown loan a are a on Court specifics opportunities. And Both compelling end, we will to Saint Proscenium in investment moment. quarter assets whole

to open point wide are joint highlight including a the at ventures in acquisitions of transactions this structured that opportunities, and cycle. variety we transactions, property debt, The

properties or Invest strategy near-term However, target same: already accretion that core priority. our are the Belt can remains be lifestyle remains a Sun our markets, in office positioned in into

are markets remain falling, capital challenging of the there for While private signs office.

for and spreads equity expensive. on legacy investors unsecured sidelines. Asset-level meaningful is signs Cousins market Many public to prices of and debt limited valuations improvement. has the Liquidity Conversely, begun and equity public Office portfolios finally have their investment compelling and as and This a debt tightened. rebound. the creates in market private share private reached in show issues are converge. grown have have the environment markets

conclusion, highly commodity for they is properties. no leasing so properties to Values reset can will the be bifurcated. office demand In demolished. There or the market office these and older vintage capital to At reimagined time, little lifestyle same continues improve. market the remains or for

It The construction up. picking historic not New off. at while a is is demand is shortage XXX. lows, is Econ market is far of and premium space leasing rebalancing

built environment. for thrive all economic in Cousins' we And position. advantageous uniquely We've company this the positioned cycles. highly to are today, during a

Belt quality REITs, and our access is the all leverage great markets, office for our all we about America excited on short, bonds capital portfolio lowest at our across spreads among We ranks have pricing Bank Cousins. as sector. are office vibrant Sun of in the trade among companies. to are growing the tightest unsecured The to the and future traditional the treasuries In highest

to Before They are success. Cousins our the I our turning of and want to foundation call Richard, employees, provide the our Richard? excellent talented service dedicated, who hard-working are to thank over customers.

Richard Hickson

Thanks, Colin. Good morning.

Both with percentages in results and continues end-of-period third respectively. XX.X%, last essentially are total and in portfolio occupancy to team quarter, metrics were Our the operations line weighted leased outstanding XX% our office average XXXX. quarter. In deliver

this the space at Some comments Atlanta. quarter's start, XXX impact occupancy. on To WeWork's of giveback Ponce full reflects in occupancy

also this We X quarter. portfolio changes had

expiration original August. quarter, ] as and our last upon Austin Domain X out lease First, in of outlined I [ in portfolio operating Accruent's brought

our was Second, the portfolio Proscenium our recent Midtown at share. in Atlanta, acquisition, operating XX% added to

of set year's through only changes, footage higher square quarter. and end, X.X% and the occupancy of we in portfolio our expect XXX,XXX commence modestly total about feet XXXX square to in expiring expansion to fourth these trend signed new With leases

to result move-outs ones America Atlanta, third quarter. smaller Looking OneTrust a the and handful a in should of of of through Bank Charlotte other in in downdraft the XXXX, long anticipated trough and in temporary occupancy

However, end we towards with otherwise demand, continued and back building beyond. low of strong leasing to occupancy expirations and expect the begin XXXX

quarter for from This leasing perspective. was a exceptional an Cousins

XX very strong of third a During team our an X.X average the weighted years. leases, quarter, term office completed with square feet totaling XXX,XXX

nearly leasing quarter were represents also quarterly as was I highest relative activity quarter's leases, leases to the of the we one our have of same activity. new that we signed note our It's to highest expansion this XXXX and of our year-to-date This in our volume today, XXX,XXX XXXX portfolio of volume than and totals XXXX. size. completed our all also second quarter want encouraging signed of of since representing in feet of square that XX% also

XXXX. lease will Included IBM quarter's speak activity was to was will the later. our announced at January IBM through X, this and from the lease Meta this lease lease XXXX, full from of in in recently more Austin. Platforms I also extended as XXXX with XX foot assume XXX,XXX Domain officially square building

last $X. with the again over quarter highest solid eclipsing Average X.X%. next a and by the Regarding third quarter solid this quarter seeing the in rent by rent record-breaking roll-ups. Tampa contributor cash largest quarter, a increased net our in lease at Like portfolio economics, second-generation Atlanta was also Austin came $XX.XX, rents

relative This to average of quarter, rent leasing improvements, the last a the few quarters. tenant concessions, and $X.XX, sum decrease free were

result, at this a quarter net our company a As $XX.XX. broke effective average rent also record

continues level, market good the development to momentum. in At our show Neuhoff Nashville

the taking foot with the leased. office square Boston portion XX,XXX quarter, team commercial the Group, a project lease to completed This of XX% Consulting

another negotiations We office X take square and commercial are with XX% project would the these totaling of to in the also portion feet, XX,XXX more lease leased. users

a Neuhoff XX% sit end. as at impressive leasing I'm today at time multifamily we to has that for slower is that quarter seasonally leased compared quarter. As apartment to This the in multifamily reminder, second say began a pleased -- accelerated XX are in XX% at we leasing. given leasing

market in continues vacancy the assets our first XX% and also to transactions this In expansion the the XXX,XXX are feet XX,XXX time office Class of in also reflected for quarter X JLL. space XXXX Atlanta since across this high-quality portfolio, leases greater. A new with absorption dropped leases Atlanta Class to of quarter. see quarter leases. A returning signed Atlanta, and most this Large were feet or signed demand square we In square positive for

noted this feet the the that first largest square year for block market mid-XXXX. return is leasing activity has third year, with JLL also leasing with quarter. every surpassing seeing recently leases a this quarter since Austin in X new million activity X.X time large in quarter increased signed of the also quarterly the of the of

Our XX. Domain XXX,XXX by rolling feet Austin cash our quarter, at That this team rents of up IBM X%. signed second-generation lease leases new with square includes

of excited We lease, size, about incredibly not are several as important but other the IBM its because just for reasons well.

sector the domain view continue invested strong and to lease that Austin we particularly the highly term. technology be over long this in signal will as the First, a market the

core the domain Second, the as will ever. we believe be IBM takes energy of the than in occupancy, better

last, the this of exploration transaction profile term is lease can a platform lease of types extended power great regardless the customers this And creative Cousins of of the our the Third, that solutions of derisked portfolio. the and came our provide example domain market. with significantly

of of of Center America I'm and which XX,XXX property sublessee's to on during remains focused quarter, basis, building. expiration. of of move end the we redevelopment at ladders the direct as the upcoming set of existing our We of customer the square to quality extended July at in X Charlotte, view feet foot to an XXX,XXX experience Bank team floors remain sublessee finalizing for the In Third vote that know, plans longer the the out Uptown XXXX. at confidence Fifth the is pleased a for material incrementally of where, square on decision that of Bank short-term a report America as you full

seen attribute transformational that XX,XXX portfolio, Hayden the Phoenix, complete. Ferry of experienced We our tour project, August this which the net in quarter. with this activity monthly noted to CBRE posted average. Class In redevelopment In nearly A absorption square is the positive interest of office unprecedented Xx has feet

XX,XXX signed XXX,XXX new of feet XXXX. of quarter, a Hayden square X the first that lease with a floors Ferry leases, will in our This including team Phoenix X impressive square the foot customer an second half occupy

initiative an foot particularly is customer notable X. transaction bring We technology back and also at office. company expand and This was the driven to square renewal by Ferry for of expansion a square that a to this foot XX,XXX XX,XXX signed need employees the to Hayden

the the nearly space stable, to square strong market office million of leasing remained Tampa decreased According square Further, XXX,XXX JLL, feet activity by in also quarter. feet and recording sublease year-to-date. X.X

quarter, increased rolled the This Tampa our portfolio rents cash to total team signed of X.X%. and a up X second-generation leases by and occupancy XX%,

by up IBM. driver pipeline. on quarter subsequent -- end, touching markedly. leasing leasing strengthened, wrap of lease our with that quarter late-stage was I'll One our that second pipeline Recall to pending our

However, our that level. signed, pipeline late-stage now at even very remains a with lease healthy

what activity. Our more optimistic encouraging, takes to that signed about remain ahead. recall, is short, it even we In to early-stage pipeline time though translate for lies

to the extend thank a second preparedness a for approach positioning Kennedy? was not recent well. doing to with support They to so and after hardworking are them. Tampa performed an job proactive of team operations hurricanes, only special and always, another, damage. And as minor so our the our you incredible to big but Their with storms, and leading up reason just properties during our you to do professional and I none. important to one us well thank talented want As team.

Jane Hicks

Thanks, everyone. morning, Richard. Good

and acceleration The our discuss coinciding pleased to is Belt leasing acceleration that in I'm with our investment core with of thoughtfully lifestyle invest accretively office X transactions in to strategy, align activity environment. Sun recently activity. an transactions, completed

an loan is we A Class assets foot at acquired Ann was end, the leased. December par, XXX,XXX of basis Uptown acquired secured square of an the per loan quarter asset At points. acquisition, submarket. The time rate square a of The has First, Court, the XXX a interest XXXX, Dallas foot. maturity dynamic $XXX mortgage subsequent XXXX in SOFR a to by million of and XX% loan the was that Saint loan plus $XXX initial in built office X, basis

the and and allocate earn a has period ask As reprice of time a aware, sellers. This spread we return office is you mezzanine sector remains come recently often to a X bid an capital risk-adjusted between and approach. are buyers loans continuation to during also attractive the in acquired that as way which

a XX-XX A XXth In of in all-cash Midtown the will and foot Atlanta. an joint We XXX,XXX August, is addition, Lane, acquired square basis. interest at Cousins XX% of in located that for Class vintage acquired square with well Proscenium, provide or property redevelopment services Street $XXX the we on an office Peachtree management, extremely foot the intersection $XX in building partnership. and building and the million XXXX Town leasing for venture per the heart owns

excited several for We're transaction reasons. about this

of building the profile that compelling. some First, occupancy next square has the few XX% was leased, opportunistic per repricing XX% quarters. time value-add drop is assets. acquisition. has is for above projected the averaged is The XX% initial an foot, to basis to of With the particularly approximately return leased move-outs, at reflective $XXX long-known occurred, over very of historically This profile but

Campus, similar of that are efforts executed part Promenade stabilized several in is significant XXXX. All leasing of we're will our competitive capital upgrades advantage. be begin replacement neighboring by These properties a early Cousins This the strategy we that building. early today's we As interest building. anticipate successfully half modernize significant has reposition acquisition, will the than including the other redevelopment planning less encouraged and recently, at our a and to cost, basis in in,

Lane. to The strong in backyard allows our team. venture opportunistic fantastic in and development have to Second, in us our in participate joint a an we partner attractive, this excited Town with transaction are investment leverage executed Atlanta

needed, allows maintaining the other create while investment repositioning at for meaningful value capacity transactions partnering accretion. the more lease significant near-term into level for offer to Given take materialize transaction to us Therefore, the this up and efforts Town it Lane will with time that property long-term acquisition on accretion.

is interesting for to this that intend optimistic just the where an Cousins, remain beginning advantage. of we competitive our we Finally, one transaction cycle press

mentioned, other to all quickly challenging As a JV ability for of highly expenses. parties. our obtain Colin Proscenium, office us and partner remains move a asset and close level cash gave regarded the significant over case interested debt with to In advantage

We Belt continue variety to evaluate Sun and acquisitions structured investments across a markets. of our

lifestyle can environments. be guiding repositioned are be Our that criteria is to underlying assets or trophy

opportunities and We on makes our to it buy also venture with partners have we'll joint ample like-minded assets sense. where capacity own, our evaluate investment

I will call Gregg. the over to turn

Gregg D. Adzema

results, Thanks, guidance. property markets on a balance same by Kennedy. remarks I'll few our earnings with discussing spending begin our my capital remarks to our update development closing sheet a providing before on Then an my 'XX moving brief overview activity to of our performance. our minutes and and

Overall, as third quarter stated Colin outstanding. results upfront, were our

of straight nonrecurring a items year-over-year was spreads note. significant, was the unusual leasing also XXnd or were no leasing It excellent same positive cash Second-generation property quarter. and were for There NOI very quarter, increased. velocity clean cash

GAAP by Focusing quarterly in largely compared XXXX last the positive at increases and as numbers well our Phoenix. San Gateway a X.X% building NOI to in of on cash with during XXX gains same-property cash early Mill the This in property third occupancy and grew performance recent began Jacinto buildings most quarter string Tempe as NOI our driven continues for grew X.X% year. that a same moment, Austin

point same-property sometimes taxing that the bit. to Property around out by expense we moment assessments quite a can quarterly can take to as taxes. the authorities, wanted numbers driven through tax run property from actual our push also receive true-ups, quarterly I the oftentimes lumpiness numbers, a

frames at always numbers. expense it's best use to looking time when So longer-term

Moody's all office notes bond credit pricing to completed our spread markets inaugural as it ratings with issued second we the from we the with Colin said activity. on improved Moving bonds markets XX% at closing on And billion. investors cost an the orders the XXXX. third XXX us After our over for treasuries S&P In Investor in advantage. of significantly. $XXX in of REITs, strong Subsequent capital million tightest offering, bonds and quarter, a in unsecured among trade $X receiving issuance traditional our now our critical to and was investment-grade was to have providing demand capital the submitting earlier, secondary quarter. due mid-August, X. widespread

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

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

from We second schedule remains with XXXX Construction generally of provided original on XXXX. underwriting. line and of space quarter estimated the the our fourth the commercial in is stabilization to Neuhoff at quarter of leasing the

customer are later a forecasted. we However, bit than move-in originally dates had

net and excellent. outstanding position and $X is cash balance EBITDA Looking quarter nothing at our over with equivalents. industry-leading X.Xx, an facility our million our debt ended sheet, the in and We liquidity cash to is credit on $XX billion

We attractive earlier. have Kennedy balance discussed Colin sheet transaction and market as explore we the ample capacity

I'll full close share 'XX activity. between updating We midpoint of guidance. is currently FFO our up favorable $X.XX we our and most by $X.XX. provided per anticipate assessment $X.XXX taxes recent real prior realized the $X.XX a and guidance $X.XX from estate with and XXXX guidance. increase driven outcomes by short-term July earnings is as interest original This we in year lower up rates, from lower new The investment

these we'll remains property earnings dispositions, transactions. guidance are starts accordingly. no clean. any our earnings markets If acquisitions, guidance capital property do place, of update There development Our or speculative take

The off at Our quarter on that will is Nashville maturity par date the rate the be Radius refinancing, in the prepayment prior second guidance they however, an has a and paid floating the we acquired we mezzanine year-end. to with property loan and of loan open no loan It's defeasance. is assumes borrower a pursuing successful. currently penalty or XXXX, to assume early June during

whole acquired we X. date Ann Dallas December paid in the just Saint assumes of Our loan off the guidance also property maturity in the at par Court on

earnings are quarter office growth Bottom positive we quarter. our excellent, we third few FFO believe increasing guidance one to line, XXXX. forecast REITs the are and third results are of straight in the for I

and to intact, deploy best-in-class activity leverage accretive declining liquidity continue with new investment remains continue and opportunities. into leasing and fundamentals to we supply, office accelerating compelling Our position improve capital

We are what significant we owners productive with We often of reporting the the a part office in cycle and of the it our very early for innings in forward progress quarters. of enter advantage. is to capital cost a look coming

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

Operator

question from America. with Instructions] first of Jeff comes [Operator Your Bank Spector

Jeffrey Spector

Congratulations the on quarter.

you First we and around question, cycle. Do leverage more. Sun markets? focus continue other can optimism If transaction talk you if teams? the current yourself comments about Belt your planning on to a bit little into you can around footprint to that your Are looking see

Michael Connolly

today in in the remain Sun markets the I Belt. I'd really always to invested Sun today. evaluate. that would them focused office as markets. the Belt within as characterize we on Metro continue very in We've very Florida on markets that We're and lifestyle been mentioned are constructive evaluating past. But both we Raleigh, I of South operate new new we those we the say investment Durham, and do wouldn't that footprint for environment

look to continue we'll those. so And at

we've in those presence feel the markets really we the in today markets in there's don't got say imminent in today, and boots nothing that on a would ground. as I opportunity-constrained

Jeffrey Spector

I question, is XXXX, of then assume talked compared a I you've you've second my -- times purposeful. which couple to And know

But XXXX. So there? this in tie year. around you more levels, how play picture, you've about a about again XXXX 'XX and -- was concessions talk I provide can maybe that Can where know of a quarter and very you you talked more rent? compared may do you to guess, little bit strong even thoughts free terms big occupancy any color out. in I

Michael Connolly

Colin Sure, again. Jeff, it's

XXXX refer think it's effective strip it as results -- prepandemic to you to kind relates XXXX leasing compare of or et rents, that today, continue of the better. performance were XXXX to and in we year cetera, to net in to I volumes, out if our at our

we're our about return parallel are about in with that. so normal. And back time And demand re is at the Cousins, to talking office spending customers force, less running turning more time leasing to and more

our with and specific And some so one today years the discrete and we've believe next less that last dealt related move-outs year. occupancy couple we that really that over was of COVID

it and we we of But a to the across this north portfolio goals do we that appreciate XX%. own of quality can portfolio reach us the that to That year occupancy, all believe ranking, return and that's or those normalize has portfolio today, one, the to certainly of capacity the but certainly X of take Bank -- might America, REITs, number lifestyle we levels that.

office I think a market, going the stabilize. speaking, as to is And whole, broadly

see You're today. while and certainly lower going quality candidly highest that process is repurposed up, buildings quality the properties to and underway disappear fill back

And largely of the a gives XXXX where XXXX. us in in we were were I company lot that optimism. exceeds -- what we so performance think or the again, mirrors And of

Operator

next question Blaine from Wells Fargo. Heck with comes Your

Blaine Heck

guidance. Can you corner. than alternative you a us said, potential got happens? much Court other just a the in maturity the little that's mortgage being through something talk any know acquisition? But run right about scenarios Saint there's around that's can whether It's probability Gregg think paid and more what maturity at you the it's date of I Ann bit back

Michael Connolly

back obvious office have of today, strategically how constructive are and step which, for we're Yes. mentioned the again, let market on Well, the lifestyle again supply demand me how looking Blaine, just, reasons. I highlight and at kind we again,

invest returns. have a are evaluate we the think that buildings of lifestyle while compelling and the we're across our to Cousins, this equity basis have that At list buildings have structure with And we as those we with in consistent look in at certainly capital risk-adjusted an criteria. we our environment, appropriate we -- markets we target so bias, willing office

mezzanine course of X XXXX, we've the over acquired loans. so And

spectrum done opportunities. acquisition and one joint to a continue of loan. whole we'll wide at venture We've look Now, a

does December paid of is You year. on still that off we'll noted the way the early in loan in too and that to this Court ultimately loans, whole Saint that, mezz it's say particular that. Ann at expectation mature maturity. our But I'd on speculate be

think pay does However, we'll if borrower us appropriate certainly prepared not the I and those outcomes off, assess are rights ultimately, still take uncertain. and our remedies to action. And be

We're and early highly comfortable conversations it's I loan just to the basis. can't collateral in today. the quality of our and I think speculate too specific beyond But that comment on any

Blaine Heck

Okay. guys That's made here. intention and even was to of on to you of entity-level commented just which really everything out Cousins you large on seems in maybe sticking as And your kind helpful, find it including mean, the the dry has invest to market, done past. transactions, the with gather dislocated up though I or portfolio table, the ways Colin. powder pandemic first coming for kind of investment as really decision the in

to Could portfolio the anything entity Is in we transactions? environment, that of one-off this probably you Or -- transactions, think smaller likely see more level kind case? transactions, large deals? still be any it's do

Michael Connolly

be -- transactions, again, and we're creative focused access to flexible going Cousins the compelling in in continue returns, how we and Look, risk-adjusted we accretive of Yes. invest. and to appropriate we're again, be to we're basis and how terms on at complete going

spreads, got be bit you've certainly, think with more I to the early mentioned, cycle, a in as part And bid-ask creative. the of Kennedy

market values converge. that public to values we private market I are see starting and do think

an all so an think curate probably where, really up and we more the property that's is to open I And opportunity do to to assets we'll add and a right to for going traditional opportunity always bespoke acquisition certainly select arena. property up any to consolidate again, in think opportunity to near-term that's do acquisitions. And the that's portfolio, but and approach assets evaluate the opportunities, the going open take us

Operator

comes Your next with Anthony from JPMorgan. question Paolone

Anthony Paolone

activity decent just is I just of there having best near guess, first, term? prospect desirability of activating of any you in amount the or assets development there, a discussion the any about the build-to-suits and the land of with the

Michael Connolly

Sure, Tony.

markets, and We being challenge that works build-to-suits are estate capital capital and more is and more existing and/or appropriate think include the the in return future other to their of customers. see of the customers with about balance construction discussions or to for I cost costs types able that find -- current real having a And starting today's development. could with rent needs

you're development to very I similar behind. do where are don't situation first. to fill think that And do think going again, to So it's, I see think existing the I with up far going is IBM, buildings But encouraging.

having in select conversations are think term, the an as I with Some example, about And of that really who we're Domain that their the customers submarkets you'll thinking development longer needs. space specific very be see like very not far off.

Anthony Paolone

the you you now how on maybe right like and can think you that think talk mark-to-market looks Okay. just coming the about what about look? as due one, second And leases XXXX, just then might

Michael Connolly

we I again, do. opportunity of we this specific can't roll are confident specifically think that to by deals XXXX. marked And which quarter-to-quarter. that XXnd be XXXX. consistently optimistic an our again, degree, do, what up can roll-ups, to That comment have on But dictated rents. will remain that continue will think we we we I renewals what Tony. into I and early straight renewals that vary Sure, quarter But ultimately what completed, we're

Operator

John comes Your with BMO from next Capital question Markets. Kim

John Kim

We know with? large about signed the I kind Richard quarter. was, third Austin the who was of, IBM all the made wondering leases on lease X market and in but I There was lease, think that second

health I'm looking other is for large the leasing know currently in of the discuss tech space. out NVIDIA there market? just tech market. could leases if the you if in And that there's We wondering

Richard Hickson

Sure.

signed just the significant fringe, at second the Domain. lease a Domain X, outside is of the PayPal, which So of is expansion core on the who Tower

So kind tech second of it of sector with part your the dovetails question regarding activity.

we I of a an already do some searching and business companies presence. Austin And do of company increase currently don't know and in making a a that that we long-term decision example their number other think technology that that's, with with are others of to specifically. business the we again, technology market

of come to feel that's amount we about good So fruition. starting the activity to

John Kim

on And Court Ann the as as And up opening potentially think the where at with the mortgage far Harwood? with owner, you relationship you discuss following you? up Okay. you then they're Saint been can debt. in Have contact

Michael Connolly

Sure, John.

as we'll need evolve, own. think up-to-date we may we the maintain I may mentioned too any that confidentiality or with have As we keep And we're just confidentiality borrowers need discussions I earlier, any early to across I discussions you relative again, have. to to of to -- to we And but maintain speculate. our to loans certainly these not continue relative certainly, any it's

John Kim

that gets think paid accretion. not commentary I for X you're I was that know purposes? actually or this Or just weeks it's I'm assuming for of will mortgage Gregg off. making guidance But X you imagine you're that investment that is mentioned -- just what debt wondering happen?

Michael Connolly

from pay we off felt assumption not and outcomes paid but earlier, maturity. as mentioned any -- we if and our does Well, guidance, loan And to we'll go our guidance. are the investments appropriate assumptions rights make a on to going was it we expectation that our again, all to, those off, that there. our make, again, remedies assess our are it some expectation like borrower at make. -- are to ultimately, we and relates our certainly Again, as uncertain, that need us I And we within make

Operator

Your with Baird. next Nick from Thillman question comes

Nicholas Thillman

out pipeline, wanted kind between on new touch Richard, you pipeline late-stage that? break the of leasing had to the leasing, if and renewal I First, that

Richard Hickson

Yes.

XX-XX like would leaning and driven note, over longer perspective. we I we're it's of exploration in new mix, leasing. So leaning an A time, fact a a still profile that but toward average, expansion. our more lot the still new the that, good very and mix expansion from On towards still is position remain by in a is pipeline

because So and we're going more have new expansion activity. that, to naturally, of

Nicholas Thillman

with OneTrust spend on leaving? And Fifth pending did if bit costs Helpful. at assuming and maybe the for a some touch redevelopment Third within I for of large Gregg, any there's wanted Northpark What then, you're little basis X additional you portfolio. to the

Gregg D. Adzema

Sure.

on our in Third about the Fifth we've several So We're plans this redevelopments talked Charlotte. in previous calls. still times finalizing

you or specific answers really have call. February in we'll more specific our think I for

today, look that cost done. like But redevelopments previous to likely here sit as in we it's we've very like

development details Promenade more we'll example, good in And Atlanta you For a on call. the example. in have would that February for be

Northpark, going Richard let I'm that. to about about Northpark talk On

Richard Hickson

Sure. I the think back, need say, customers mean, we help we property -- quality help stepping maintain constantly drive whether I we making our in to proactively would our to portfolio, improvements and at level evaluating be we're deserve leasing, that demand. every

you actively improvements are we make reinvesting, if some in properties we so OneTrust year. light we're specifically to And other we of the that of around amenities where But handful proactively can expiration -- looking first at we have markets. multiple in will, a primarily of across next Northpark, quarter making the are

Michael Connolly

And this kind is additional Colin. some portfolio add I'll highlights kind just of today. of that color think the I

were XXXX buildings the XXXX, we to over we If you'll sold in cetera. of Promenade, highest several buildings and say, office that like our capital. Ferry, the those from reinvested like substantially needed quality have Peachtree, XXXX of, the assets Hayden amount years, et last then probably lowest recall, billion And over $X I'd

Third like shape continue renovations Northpark, high top So to we portfolio is in and bottom. quality, Fifth really and some upgrades and overall to the properties to while from terrific evaluate

the in others some to think portfolio amount and really a just relative And capital our of is needed so place. good we

Operator

from Your comes next question Rana with Upal KeyBanc.

Upal Rana

about at reaching XX% some point the Colin, you talked future. in occupancy

do next through in XQ XX% like you occupancy track maybe you're possibly Given XXXX? feel even talked and reach to some on about you occupancy still downdraft year,

Michael Connolly

in through not mention kind And And long what as we've expiration, and in America which XXXX. modest has set specific I pipeline of known hit is do leasing very to think trough I short and be did again, But XXXX, order. will think recover of we dates. been occupancy. expiration we're to a in I'd -- front Bank the have, of going that, think done our that do in say, already I we we hope once that the certainly us fairly of Look, I a

certainly I prepared a date in that's really specific But half and I'm occupancy to then not yet. 'XX on the so to allow going it to think put of us just into And second XXXX. move late

drive the said, goal as goal of I XX% think beyond to levels. occupancy company. I But very is absolutely XX% a And is ultimately, certainly, it's do more think I to, do our stabilized achievable.

Upal Rana

was it. the Meta's Got what's forward? was quickly market going in I IBM took lease. that rest can That you the the Okay. Austin on plans place? give of us helpful. then on just And wondering if some color And how

Michael Connolly

think, -- I So the markets. highlights the the challenges IBM again, current still private lease, the capital in

space. financing actually might adjacent And just to unable necessary speculative development that recall a project had signed the you also lease new ultimately, that move some to Domain IBM of to some had the anchor forward. to that a we're obtain And

with a it's a some by IBM Cousins, a creative Meta, terrific So I solution utilize transaction. very and for our to up really Meta win-win-win ultimately kind underutilized came space of find and think and team a

we're that kind space to high-quality again, think, about all company, ways and are and going ultimately to development. to the lead will think for market comments cost terrific I then new the that that's excited utilize my the currently I But from effectiveness, of outcome. I a highlights think tighten customers transaction earlier available, find a see and

Operator

Abramowitz comes question from Jefferies. next Your Peter with

Peter Abramowitz

interest your build-to-suits of one of lot quarter Sun an the peers mentioned markets. Yes, uptick in in a this Belt for

you're those part with opportunity set Just if conversations curious of well? you if that's capital as considering up of raised? are for you And the the picking kind

Michael Connolly

are development commencing. X the likely regarding usually to happening. and kind I ultimately before is. that for still new regarding a path conversations discussions out for and investments acquisitions most and of, build-to-suits years that but near-term, start It And again, those project believe X like investment conversations new those are us,

as So conversations long-term ready those acquisition -- we're would investment had less pre-leased But of If X perhaps investments having becomes how our down compelling, to a sequence, that the we'll our activity are on a really period very speculate development profile. excited hopefully, I'm attractive and team a highly continue are to conversations see starting. are opportunities market year attractive think is those growth so attractive. time the road, where I or I in that to go some with

Peter Abramowitz

question, to favorable market. the your between if I dislocation guess around the and And like back the kind private look of market. philosophical are comments back step in then said, private go challenging and the environment, market's things public your to maybe public pretty and you cost pretty the the of at you just a capital, and

market cause change particularly dynamic, next the anything you you and things or of could I could so? do year that to Or that is about of maybe private the dynamic on see converge? out guess, that over side anything sort there sort think that there change

Michael Connolly

Well, the it you of more ultimately, mean, ago, -- markets is cost advantageous the had converge. still months capital side say would XX private And a public. than probably I

itself will likely I they'll think that's But probably time. that term, today. think longer converge. But reversed take some I

moment their do public in be longer are of challenges resolve instant capital part dislocation debt the capital the is position sector. private than both players, kind market there And legacy on work is kind is private in issues. that through existing those that clear -- to equity and the so private into new side the I on they of a before portfolio take think the so And have on liquidity private at governor office to trying allocate share that, own and to the many of and their side, of can where

Operator

with next Your from question Street. Burzinski comes Green Dylan

Dylan Burzinski

horse you maturity. off, sort but assessing And this of loan but trying extend don't implied likely to your at guidance curious, for or paid possibly in get not of talked just remedies to maturity paid being your appetite at sense you Saint get rights just dead if a the a loan beat Court by sort on or off about that's to being Ann what's possibly

Michael Connolly

to going we're discussions those have any and we're going and -- that of possible And happen out, are continue to to paths lender. certainly, ultimately borrower confidentiality. until again, those Domain kind play conversations Look, just between

to think are as and the highly comfortable wide to continue and we our variety is I that back off, and outcomes. the continue as loan in as I process quality paid and we're a assuming to collateral it's mentioned this again, the reevaluate our in out than of we'll that of is there's fluid. the -- basis, and But use go that could and be expectation One, guidance we assumption -- it plays we'll

Dylan Burzinski

or -- in markets bid any to hit universe where more the as just appetite side? there, guess evaluating certain guys just there either of equity are And you higher you're other wanting sellers seeing it's I are investment where whether debt a given terms opportunities, investable ask on today

Michael Connolly

in there in across geographic all to us, important our want will our in think that I'd and enhance over No, think to note And long be for there'll opportunity. say -- we term, grow it's market that the Charlotte, footprint, Nashville, do be continue our diversification we share like places I to Dallas.

of and have lot our Atlanta a all conviction We Austin. including markets, across of

come risk-adjusted unique on office and lifestyle is attractive compelling to period invest of attractive we time. kind invest medium returns, of up we We're high-quality hope an markets going in this accretion. any think some to basis. really of of so kind in situations And with opportunistically near when our where a we can term

Operator

question Lynch Brendan next from with comes Your Barclays.

Brendan Lynch

Austin portfolio? it you strong. IBM. pretty like in Meta between do tech tenants other back within is any will And sounds anticipate square outcome great tech scale and demand There's your But footage

Richard Hickson

we other This Richard. No, back. don't any anticipate significant scaling is

Brendan Lynch

Great. there but One maturity The could Okay. December, Court. Ann date extension is on quick one Saint you discuss? initial in embedded option that an is

Michael Connolly

are embedded more can't required just will There options any certain provide thresholds met. beyond that. be specifics in we extension certain unfortunately, that that, that And

Brendan Lynch

down cash It quick like a to other property sounded the NOI were same half. first taxes relative in little one coming one. the a maybe bit consideration And Understood.

that call out there's else that anything be if wondering specific might that could Just decline? behind you

Gregg D. Adzema

by that It's largest far. Gregg. was the component No,

Operator

John comes from next question Markets. Your Instructions] [Operator with BMO Kim Capital

John Kim

comment -- the your wanted on in Charlotte. commentary follow-up sorry, to on I Second follow-up. BofA lease

how done if short-term wondering provide leasing as term you've long any the there's mentioned was with sublessee. you far I any direct could color that some mark-to-market? if as was and You

Richard Hickson

Sure. The line. mark-to-market like a customary in more kind was escalator of

will. the -- X-phase needle extension, all. you a if So that move it's But really at the didn't

the and be expire expiring the at will end floors at of the of one will balance of So 'XX. 'XX end the then

John Kim

other subleased there go opportunities to tenants? any Are with other direct

Richard Hickson

No. with going That as as direct far only really the one is sublessee.

tour So early is say pretty would unique I yet compelling already, pipeline we very BofA space even from activity encouraging the have Charlotte fairly an stage vacate though But and is a perspective. situation. that leasing to

John Kim

status And noticed guidance your bankruptcy million the that begin realize with, I no we was? supplement. of SVB wondering but part to your I what of was $X.X longer the Okay. in that wasn't is then mentioned it claim of

Gregg D. Adzema

million. dollar. It's are we still Gregg. $X.X But The still $X.XX bankruptcy they in are. and as process trading continues out market between unsecured have that of secondary on the bonds for claim kind $X.XX the slowly The along there always

still our that's any there. So out in It's of just not guidance.

Operator

call There Colin are turn further to time. over no the questions at closing for will now I this remarks.

Michael Connolly

we out hope your for a any to Thank you of reach conference interest Properties. joining morning in Gregg the us follow-up. day. feel Have you November. Vegas to Las Please see with questions out and this Roni great free all and/or And Cousins NAREIT at or to in in many

Operator

ask call your thank that your you gentlemen, for We and this lines. today. you disconnect please Ladies participating for conference and concludes

Cousins Properties (CUZ) 25 Oct 242024 Q3 Earnings call transcript