CUZ - Earnings call transcript Q4 2024 | Cousins Properties Incorporated

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Operator

Good morning, ladies and gentlemen, and welcome to Cousins Properties Fourth Quarter Conference Call. [Operator Instructions] I would now like to turn the conference over to Pamela Roper, General Counsel. Please go ahead.

Pamela Roper

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

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

Michael Connolly

Cousins. quarter We had Thank you, Pam, good and an exceptional fourth everyone. at morning,

a the rent guidance. $X.XX with front, is cash a cash the square basis. Leasing in roll-up. strong. of X.X% completed leases very on income XXX,XXX team the feet Same-property our On midpoint share We during increased which a X.X% of quarter operating the remained earnings delivered FFO, net above

million in growth fund separate basis, billion raised raised Sun transactions $XXX a and in of share, last growth invested trophy To will is XXXX our lifestyle in The consensus was office almost X immediately X.X% debt Belt provide also $XXX equity In this released The $X leverage-neutral markets. Gregg senior on guidance in range night. unsecured the and issuances issuance earnings. addition, we were to $X.XX of properties represents notes. We specifics midpoint of million XXXX. an which we compared with of per accretive more a moment. above to approximately

lifestyle and guidance continues of Our remarkable our resiliency XXXX strength leading balance the to Sun and and encouraging best-in-class XXXX highlight achievements sheet. Belt office portfolio

and the almost on down is Before the accelerating. with detail, construction office torn more improving. buildings buildings The is are start same supply leasing older nonexistent. converted observations I few or discussing a At the existing will of as are market. Fundamentals quarter declining is time, in new demand

is to fourth volume believe nationwide a tightening not new the in transitioning first sector. XXXX. the far net leasing absorption and to positive for since office vacancy quarter for normal. quarter, the post-pandemic and to peak third lifestyle During quarter peak We the is reaching a consecutive is was off return reached Return market a

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

XX.X% portfolio year-end at Our at XX.X% occupied from XXXX. was year-end, up

America's levels. Bank balance and this that bump growing of to driving again, and the we our in year the is expiration share small the leasing stabilized sheet, our of strength occupancy more quality a Charlotte in real Given speed estate of back are process. market

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

opportunities. are we on compelling investment Externally, executing

in End we are of basis, $XXX.X of quarter, fourth and South price Austin South other earnings purchase In the price purchase with assets. the located the a investments, Charlotte acquisition leading of able and million. of the Vantage these on strategic were to Vantage in Sail $XXX.X the with of company. new lifestyle grow During vibrant Tower a in Cousins a closed we portfolio enhance Both of million upgrade on End completing acquisition Tower neighborhoods office near our and properties leverage-neutral quality the Sail scale

at XXXX this creativity including structured ventures team property and and the a cycle, variety of of transaction the our openness activity debt, transactions, point highlights Our joint to wide in acquisitions. opportunities

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

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

the as demand is tightened and is investors remains is have creates showed begun Cousins commodity bifurcated. issues share underway. At materially. office investment debt capital the the conclusion, private and debt market or spreads unsecured to improvement. Asset is remain converge. In sidelines. Conversely, portfolios or public in highly markets for There finally have for equity they can now markets be grown the prices office improving. expensive. Liquidity REIT equity little reimagined older demolished. vintage are existing This and has private lifestyle their same so these opportunity valuations Many legacy Values the public have compelling of meaningful to and rebound. market for Office a resetting, limited and properties. on time, market level and This in process properties no signs leasing the

is for are demand in to off. construction built highly a during the And is leasing economic all We uniquely New company not is lows, we position. today, lifestyle shortage environment. market advantageous while and at thrive accelerating. The rebalancing cycles. a is this far premium of positioned is historic Cousins space

REITs. growing are Sun highest portfolio our in America ranks quality We Bank markets. Belt office the of among all as

to opportunity. have at and the Our spread tightest short, across access capital, to trade is see the among office bonds great on pricing great The traditional our In leverage all lowest companies. treasuries we sector. the we

We are excited for Cousins. about the future

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

Richard Hickson

everyone. Thanks, Colin. morning, Good

were operations team quarter, history. remarkable office XXXX and and the higher recent XX.X%, of were to percentages fantastic basis Our the I'm operating lease average total the one thrilled points to XX.X% company's our respectively. delivering full Both up portfolio years portfolio our metrics XXXX ended end-of-period that XXX most occupancy fourth quarter compared sequentially of fourth XXXX. total weighted with say In occupancy in higher. Further, office a quarter, another our wrapped

quarter and Austin. that I End and weighted of most XX% increase our driven these of Tampa. only both average our accounted Our would Tower of with fourth for fully Phoenix commencements acquisitions, weighted in occupied Sail assets the in note occupancy by in Charlotte lease in of occupancy our December impact quarter occupancy Vantage included build about Atlanta, average the South

reminder in downdraft long lead One expect a and trough of Trust anticipated happen occupancy in which temporary and will quarter. I we Charlotte occupancy. have third through The to still of move-outs Bank one Atlanta America a and to on this year, the

rent back of and lifestyle the year However, of this only we have office, strong coupled exceptionally towards demand end continued When low occupancy we XXXX. for XX.X% through building of beyond. annual see end leasing with the expirations of contractual

fourth results. We've again Now once the was seen on exceptional in Cousins. to quarter for

leases, and X activity this expansion signed our average million most quarter leases exceeded XXX,XXX term our lease the activity square footage year new highest terms. leases was this for XX of our office square completed year, and team weighted XXXX. were of Our feet, with total years. a an total XX% since totaling representing feet This the of X.X quarterly second volume square our XX impressive transaction of in nearly completed

in terms. our year, For XX% and foot full accounted new for square activity the also expansion of activity

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

were with for average rent This were quarter, defined year. the in our XXXX our rent $X.XX. concessions sizable driven concessions, in free and net of third and the This first full favorably came average at in that sum the quarter of as to Austin. Average of $X.XX. $XX.XX improvements quarter, compares by leasing Recall concessions half below well IBM $XX.XX and trend lease the this effective tenant

an represents number impressive increase XX.X% XXXX. year full Our over

the increased its our momentum. Neuhoff in continued in Finally, fourth the second-generation Nashville healthy market a development at level, rents X.X%. At quarter cash again

office XX% leased. to team This square X with X,XXX portion project the quarter, of customers, feet leases taking completed the the of commercial

this end we well equates up month. This as in leased of are of leased Across of per of XXX,XXX according the with leases take XX% a and square We units quarter XXXX, -- advanced rolled amount increase XX also since we in highest the Atlanta to of XXX,XXX an to operating X.X%. Further, square the our sequential was volume portion lowest quarters, commercial to or XX% activity activity. Buckhead availability nicely leasing were all foot an XX% to square In approximately the JLL. lease fourth average additional project notable was that customer its continues XX,XXX feet progress feet X level XXXX negotiations a signed market's the at about in financial total broader XX as Atlanta, points. to cash the and very percentage strong XX% rents sublease would at leased. Multifamily leasing dropped portfolio, of to services quarter,

renewal, to our year Terminus activity of expire Greenberg feet previously XXXX, in left Traurig was the for Importantly, with XXXX. entire in law portfolio XXX. have feet this XXX,XXX renewal firm over expiration we operating now the one XXX,XXX only at our Buckhead long-term set square and in included Greenberg square calendar

JLL overall that million straight have to net absorption. and feet X.X to leasing Turning quarter quarterly with noted stabilized, totaling activity vacancy positive of Austin. a appears square market second

this XX.X% Our and signed our feet X.X%, Austin now leases cash healthy portfolio square stands XX,XXX rolling quarter, at rents a up team leased. of

to net the in marking its market office in XXXX. determined, update, highest note XXXX renewal fourth square new for Time remain Point renewal ended Domain expiration XXXX broader negotiations the is be feet in yet outcome our is only market quarter of square whose our was XXX,XXX material absorption XXXX, positive assumption since per an with occupies with this Charlotte, JLL. volume guidance progress and Warner our included which Time and conservative. In we As and quarters, we encouraged in the September Warner, in our feet expires relatively all not XXX,XXX by leasing view XXXX X at first very level Please

on XXX highly both redevelopment remain and we of focused portfolio, our South Center. the Fifth In Third major

new throughout construction we that since received in well hurricanes. the at will demonstrating is XXXX, resilience the lowest remains Charlotte office market customers seeking redevelopments lifestyle anticipate strong be by Tampa, activity our office multiple its level through XXXX, years. In Given in coming

leases This were new and square quarter, team of leases. which XX% of XX,XXX signed Tampa feet our expansion

quarterly positive is point increased Tempe amenity-rich percentage the corridor, seen Demand and CBRE reduced we quarter occupancy fourth quarter remains firsthand. Phoenix, in this full market particularly the in in largest since absorption a noted leased. In Campbell portfolio Tampa the concentrated XXXX. Our XX.X% and back have of quarter its that fourth which the currently spaces,

team quarter, new also quarter. the This cash which signed XX,XXX rents Phoenix leases. rolled of square were in our also The team XXX% leases, feet X.X% up impressive of

at ahead, our are we momentum. broadly Looking Despite and uncertainty, office lifestyle pipeline leasing continued anticipate remains in encouraging. operational leasing healthy, every stage fundamentals and macroeconomic

to lows. As return in-office week. out has the historic lifestyle will we office in demand have is all every This passing steam new is a further construction hitting seen even and in believe resulted tailwinds in space XXXX. time work gathering play when these recent for headlines, news We activity mostly

made operations talented XXXX I always, our As thank team a work remarkable whose year. to exemplary want

We are looking the continuing in XXXX. Kennedy? momentum to forward

Jane Hicks

Thanks, Richard.

Southeast, and fourth exciting thoughtfully maintaining office strategy and square accretively sheet. In balance for asset one lifestyle core corporate lifestyle one December, heavily restaurants are and across rent End discussed, variety XX% acquisitions to X South project in of invested customers users service between high-profile the who an creating in roll XXXX firms align in Belt strong feet investment activity. invest the professional employee transaction. diverse environments exciting project their a office Vantage environments Charlotte busiest As the retail the an in focus the workspaces X XXX,XXX lease city, significant experience. leases acquired We features early with quarter in both office completed of most The The have of a community. amenity our our with we South a End while of delivered an to energetic off-market of on was buildings Vantage base and in the XXXX. is some the that that and dynamic Sun offering for

million portfolio, square a quality which complementary it's now perspective, X is and our feet. Thirdly, development located efficiencies Charlotte excellent strategy. down is customer this over fit asset strong from a market. From furthering our our project is market portfolio already an station and our also deepening within to relationships Vantage the for very and just South site, the leased XX.X% our operating RailYard our from perspective, street end

activity We in are as encouraged interest by the a and recent whole. overall Charlotte leasing

driven creating immediately financial by earnings. million, and $XXX.X term. the long is per X.X%, the a for spread of GAAP cost The We term. it project in-place is to parking potential far it to a would rents the over below of market future, X.X%, X taken Finally, profile acquired are construction what today. in $XXX with into built yield remaining initial accretive below Furthermore, justify over square the when take years lease upside new foot below compelling well account significant and today's a recently the yield build of what to cash basis would

of and mid-December, leased skyline asset unrivaled building in defining is from for and variety XXX,XXX square the Sail Austin in incredible our office its ground and of and outdoor their the on to team weighted Austin. Lake. Tower quality years steps Tower features XX asset is to anticipated an portfolio closed is next that's Sail Vantage, to this our lease expertise. overall acquisition portion in Next, Austin and the XXXX trophy additive base Lady The add trophy add operational protected The company's Google the the spaces strong XXX% excited terraces and We're and city. in delivered the our foot in our on is customer a to amenity to be enhances and of term. an views, profile Bird the Downtown, location let we portfolio hub. Like

the $XX million $XX.X Sail closing, in, dwindling will in is square the basis at allowance, and of Tower we which per of find million tenant second extremely is approximately $XXX.X our improvement outstanding million sites. with cost of of below replacement We this basis end of at foot. acquired a market for All attractive quarter land $XXX year. a There

December quarter discussed borrower $XXX as in for achieved a beginning growth today. building secured the full previously, Ann date plus yield Court would space XX% in our leverage-neutral this is on to Once upside. of that during a GAAP the time rents months [indiscernible], nearly likely in-place of initial that fourth has we loan basis. Also in potential strategic to long-term accretion, million off transaction loan that In XXXX. the the speak an rate and the interest XXX interest below Gregg period, for transactions Saint initial acquired X, funded for paid and XXXX, provides XX capital the the again, Our by available of what a this [ first SOFR and in in period. default markets will Dallas. us The X, Cousins on base acquisitions these the equals X.X%. ] are investment received be January addition maturity

Gregg. We continue believe over transactions an to the remain and identify year that, have relative on forward, strategy. office public another Sun our turn consistent with of and our we accretive will that execute in are that advantage I call are active on and to competitive be to and Looking grow and portfolio core continue intend Belt buyers, Cousins. With investment to the optimistic manner. allow will to focused a to will us we other private for XXXX both quality

Gregg D. Adzema

on capital our Thank of I'll before moving a minutes providing on results, initial fourth brief I'll earnings closing same-property XXXX to Colin our performance our my as more few little and Kennedy. by upfront, begin you, sheet with results outstanding. color our providing a our stated balance our and a development markets and remarks spend were guidance. Overall, on a on discussion quarter overview activity, before

invested as the XXrd cash we was velocity quarter Second-generation property cash quarter productive billion. year-over-year accretively $X almost was excellent leasing spreads increased. and were for also positive very same Leasing a NOI straight It

positive same-property to continues numbers that property cash in X.X% same the X.X% string This performance XXXX. grew fourth and on last compared NOI early NOI moment, during grew a year. GAAP a of began Focusing quarter for

taxing as moment can to can point gains Gateway quarterly and the quite With the a out we assessments our bit. as the from recent a well quarterly wanted Street that property lumpiness driven through occupancy same-property by in Usually, largely XXXX our and Phoenix sometimes revenues. I Tempe by at tax Atlanta Property take the our actual cash also XXX expense true-ups, numbers pickup quarterly numbers. continued run driven mill to as increases taxes. Peak in most properties push in property authorities a it's receive around parking

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

example, property for of year, in by tax fourth up fourth last true-up For expense XX.X% quarter 'XX. the our was the favorable over same a quarter driven

year, out same-property our if little and a look However, you zoom entire for essentially property bit expenses at portfolio the flat. were tax

to December, We investment-grade Kennedy the initial in X.XX%. common we December, X.X yield proceeds of And $XXX on we capital X in an completed our issued In discussed million quarter support completed fourth during offering, issued markets the activity Moving at shares million of second $XXX.X of shares issuing generating million. earlier. X significant notes In investment of transactions $XXX.X stock, stock, proceeds activity. also of November, of million. common of bond we our generating million

issuance in in currently that August, the December, in tighter Now outstanding, among initial secured this much than office treasuries and completed bonds our X traditional pricing all currently. recent relative REITs the and completed to and is have more issuances debt settling tightest spread $XXX we at unsecured million issuance options bond trade any

EBITDA pursue excellent. is X.XXx, to capacity and industry-leading our investments as is sheet balance debt ample position an have to also liquidity We net

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

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

by midpoint We providing of $X.XX. our between results. XXXX little XXXX currently $X.XX initial $X.XX a FFO or This close with per I'll approximately and over $X.XX share a XXXX with earnings our [indiscernible]. is share X.X% full anticipate a year up per share

with our is $X.X Group and run sold our other it the this which in in earlier includes week. will FFO. This item million of SVB through our line claim guidance bankruptcy for we income included disposition Our P&L, Financial

on Our X. guidance note debt also our this includes the that matures senior is only This maturity assumed the July million of $XXX refinancing year.

guidance Finally, loan the we in Radius at off par Nashville XX. our assumes mezzanine on September paid have the has property in

Our XXXX guidance is these dispositions of does There guidance or accordingly. One update typo development speculative this starts. for quarter. mistakenly not property a remained Domain property do we'll quarter first any note development our schedule include take We before X stabilization place, date our supplement. pipeline any on date should changed If of closing. acquisitions, our the This have in the quick development. the

supplement updated on have posted and We this our in the it website.

results line, of one second both I excellent, straight positive believe XXXX initial indicates earnings for and very are of guidance year growth. the forecast we XXXX our to in FFO generate fourth XXXX. quarter growth our are Bottom office and the REITs few

accelerated over fundamentals call our to coming liquidity back supply, leasing remains Our quarters. With we continue progress investment in operator. forward turn to the best-in-class reporting opportunities. We intact. let improve compelling look leverage me declining accretive and and and position continue the into and that, to the new capital Office deploy with to

Operator

[Operator Blaine Wells from Fargo. Instructions] Heck first Your question from is

Blaine Heck

that competitive? the look what's your or little as all? has able XXXX? acquisition at change of you about investments more in Have strategy being this you pipeline the continue that guess, market found generally, confidence your become size And year? make a just accretive I investment into talk Does more you the to to pipeline Can bit your

Michael Connolly

strong. with Blaine, think think and -- at Supply it's very accelerate. we new I Colin. virtually are private at seeing Cousins with The the many stepping pipeline expensive market today, secured fundamentals And capital the as nonexistent of and the that's and remains, on remains the players relatively And the dislocated back perspective, improving. limited from demand leasing still I still same a the think, supply is debt. somewhat market we're I opportunity just struggling look sidelines time,

a office. So transactions, hopeful this particularly Cousins you're it's time as I for but think think I compelling the looking limited. dislocated still come again, of going competition capital, for invest. think of are an that we market, more high-quality groups we are to out hope to we is And see a And advantageous we're that with cost preferred I relatively buyer to monetize

Blaine Heck

mix Can in your versus operating That's you opportunities kind the pipeline? debt Great. the high-yielding just properties of about helpful. between on that talk are

Michael Connolly

outcome, in certainly Yes. sometimes the openness point and remain and lifestyle bias is right basis do this comfortable Certainly, the look risk-adjusted of But very -- asset, equity investing could positions. it's the capital in opportunities for the a if them. any at an we way at be at this us, a point again, We the perspective through the debt structure. the with is from demonstrated trophy invest If the in more constructive best to debt. potentially those at cycle, in office. invest typically certainly the of But quality part of willingness to we'll we're the cycle,

as certain of to our this I opportunities. strategy us portfolio today lifestyle long-term capital build are across think, an Belt. all bias a to equity pipeline the in structure, Sun and the again, opportunities kind continuing that the quality having of differentiator at is is the continue premier Again, points of but we'll wide long-term of to the But invest evaluate highest a the with the cycle, assets investor, consistent has variety flexibility in

Blaine Heck

continue to sense or will dispositions Okay. them, Great. point? other this deals, That's just an we makes any have funding side, kind if lastly, that, to or of expect the raise you paired be helpful. on large then with And sources of expect should at related funding equity

Gregg D. Adzema

kind Right now, for going both basis new we're -- It's we few -- and using over look equity, last it a on on fresh at it. again, proven for of an Gregg. looking at, acquisitions looking capital, accretive case-by-case can invest we're we've it's at at months. But Blaine, these what depend to we're it basis. clearly that time will the the what and debt on

might is it acquisitions, basis. neutral we to accretive do, these rest first sell to be But to sense something the on Sometimes leverage make it. assured, fund whatever target a

Operator

from of Your from America. Jeffrey is Spector Bank question next

Jeffrey Spector

and Just you sitting or thinking has comments I of about the sitting the I just in or anything about all do for messaging talked 'XX. back how plan improving plan a the and quickly are you when 'XX accomplishments could leasing terms plan, had back the you changed your in and markets guess don't know of X-year if this X-year to year?

Michael Connolly

And execute with the best with occupancy remains unchanged, feel strategy around the the driving plan growth. to growth within to to we around And and That that, going most and we're is the to path building continue Belt submarkets portfolio. leading prioritize kind and as it's office firmly assets first it is Jeff, our earlier, organic stabilized means company really, Sun to highest that. continuing multipronged. back of centered the like Colin. We're I lifestyle our do the levels, a resilient mentioned of more on plan

on potentially for going and we opportunities, out Secondly, environment, a still in still of leasing new both well that balance best-in-class in flexibility to as driving dislocated office positive the capital gives and again, the coming maintain that last external early think that investments. capitalize and share market innings to, in year, compelling us going we to sheet as capitalize on demonstrated market. And environment the we fortress and third, growth is opportunities a accretive this certainly are to we're continue

Jeffrey Spector

Great.

criteria X%. I And around Kennedy positioning, the Houston, those Phoenix, anything approach your both guess current of terms markets, about so to your X%, to talked also know I in confirm, on for X%, new markets? Tampa,

Michael Connolly

at Not all.

Dallas, hope look focused share continue think would geographic Belt -- to going exposure, certain or we Charlotte I we're grow you current remain the on Raleigh, over I to see our and Tampa, in to market think like mentioned, Sun at markets our as as Nashville, we time. we

share got terrific places that we'll look opportunities other Sun Austin in so like across in our where but Belt. these cities Atlanta focused stay large And today, market active and and we've certainly grow and some of we'd share the to been we've at in

Jeffrey Spector

you then in conversations talk messaging your markets? And with, year-to-date last, let's leasing just can technology about say, firms

Richard Hickson

This momentum Richard. is Sure. The continues.

really good And clearly that And into so without technology of really doubt. what we this great from absolutely a that proud That's where companies accomplished. part carrying XXXX calendar we we volume, feel had of conversation are year.

So about the momentum. continuing we're optimistic

Operator

Your from is question next Baird. from Nick Thillman

Nicholas Thillman

kind some tenants kind Maybe more the bit starting included also in that? more pipeline? in and with kind just the the Maybe the there's if pipeline. the commentary size between digging there, larger a of little you're the of just little leasing And into mix then a Richard, on bit looking new of of renewals tenants at that composition, what's average size,

Richard Hickson

Sure.

have and not in lower to say is but don't been that posted lot than is a expirations a still of what immediately part recent skewed that of expansion that we pipeline quarters. so terribly our the ahead than I'd XX% it's of bit in we us. mix it's it's the Obviously, different little new side. in 'XX, So or the

kind to are change to the ahead that at ahead been you new out mix change not are have to an or and and there as size We're happening. go curve, and that's speaking we're looking expansion. And tenants getting So want if We're the upgrade going years of I'd it's are size. of of kind there, of of every automatically to terms hasn't the looking customers really over skew say to take in seeing who map. -- the seeing of size We're seeing really the some expiration far another not of [indiscernible] may with. will, that mix quickly. all space customers in couple move but out of any action, as there's deals and property a a big

Nicholas Thillman

willing portfolio you there occupancy. then to in some to And North that out you're capital to and specific on the prioritize in? like you kind of is willing Or guys of talked the the like guys XX% assets dollars put have like kind that anything one Is of past? door made put prioritize just comments that leasing Park else assets of in about that out bottom occupancy have

Michael Connolly

Yes. had market is of other submarkets. suburban assets only a our one than vacancy North our some of It higher -- in that's is Park

market And in situations, certain I going to prioritize driving again, absolutely we consistently, which ultimately FFO growth. and are so as mentioned, leads occupancy, to share

certain going cognizant trade-off But So ultimately we competitive drive kind advantage, in capital. that absolutely FFO occupancy into translate that to of and because to we'll continuing are concessions are think use instances we of does it, and be I when growth. on with got a focused we've

Operator

And Lewis from from next Securities. is question your Truist Michael

Michael Lewis

does sound your guidance a little And about about to are far does of highly high you're out the would unlikely? a or how from talk to opportunities. not maybe loan development Is It start build star? how sue we economics get and kind the whack far another be, sense of So dispositions optimistic could a bit So have start are? away to those how rents acquisition development opportunities, the there starts. investment like will acquisitions, be maybe include any you

Michael Connolly

by past in again, transactions XXXX we in Michael, not because any our speculative are, definition, again, guidance the speculative. we did have nor include they

XXXX. beginning conversations I expirations. unlikely thinking But XXXX in to about no their the last with of do starts I'd customers any pretty have space, who new premier rebalancing in be market development are brokers XXXX with lifestyle think tell you for are we the large some recognizing virtually leasing a And forward, Looking and construction today or see say they I'd there it's years. that that shortage given several the significant appropriately are could and to

picking are those some conversations So up. of

is that I'd or tell a is any to Cousins where because unique financing external rely position in don't construction I need we think still fairly again, loans challenging. on you market

continue not-too-distant will and So I, do again, Cousins which longer-term opportunity, the and in but materialize to opportunity development believe priority think acquisitions, be certainly be will will the prepared the future. on that for XXXX I near-term positioned in

Michael Lewis

that market that? could knock-on from recovering you it's mop it the you And realize when think? do really to closer But to there very Okay. coming be the maybe well NVIDIA Austin, demand be there. probably kind makes you're Or Great. back then, while be market of recovers? a there'll I do think little up might leased than and a supply think some decision, and in faster we And before

Michael Connolly

drill you pick by submarkets. speaking, companies down I'd we seeing technology think demand sidelines. many to are in need really broadly driven begin the off Austin, I cases, And particular to in that's, in Well, coming say up

California see are a this positive. some There Austin That's to to corporate very week. relocation relocation You was starting from announced activity.

that supply has I to Downtown and amount in will a think will market the greater time. of digest new need it the submarket

at the the our if domain leased, in there's Conversely, almost out you activity domain. good out in look portfolio is XXX% and

the lead submarkets. could most probably opportunity to that on new And other think I so likely development than sooner side

Operator

John from from question Your next Markets. is BMO Kim Capital

John Kim

it amount mezz down a that were? you for been the guidance couple fair just of Now to Saint Ann expectations was that original months of know seemed paid you to a in But the like has down. extend expect your the be December. of discuss Can I paid X.X income. Court past just months? Did like what going work was it

Michael Connolly

say John, clarify, a it's purchase, was focused to a highly as Ann return that Ann Belt, I The were asset I'd and Saint of purchased. the that felt commented made office investing that. we're attractive. we uncertain. and is Colin. in basis in and we Cousins And Dallas, Saint top-tier we loan was clearly on it earlier, assets lifestyle outcome is we Court that that at a at was like But Court It -- Sun when investing a whole

was obviously our we that off And property with and have paid asset. a recapitalized constructive view the and long-term sponsor outcome comfortable perspective, well. the there. outcome of They from wish very were did it any we -- Ultimately, and them ultimately, the

John Kim

comment I you you further in can not you how And in to do mezz invest know amounts? this it's greater incorporate similar but to expect much guidance, year? on expect

Michael Connolly

access time stack. part of time we opportunistic the But we're Again, how did in certainly John, in return invest. think the buy the present fourth themselves our capital And and risk-adjusted the of it this quarter. in opportunities to like best the from we to I at is debt the acquisitions bias -- fee point cycle, is again, simple trophy depend. when part will

And -- but book. a debt plans opportunities our But debt presents, large a a be just -- will more longer will would anticipation build to expectation side on unique point investments long-term term, My opportunistic. really modest we when our of and focus ownership. on capitalize. again, those have don't there This be we'll cycle. is in likely the the And be we for

John Kim

expect market? of great building, the of back the come credit, Google's on Tower, the it? Sail on physical what's and use to And Southeast acquisition and And you asset do some latest it to of occupancy the Okay.

Jane Hicks

John, it's Kennedy.

So the process of all they're evaluating in that. of

a move of I beginning bit think market. the year and that then space in sublease that they we There's space. been to have interest determining this little lot on do of they're do people a in expect

build-out figure their think But long-term begun to they've I sense they're what out to footprint. plan So process do makes trying they occupy their to relative and as well.

Michael Connolly

in had similar opportunity, kind accretive in was mark-to-market. shed add, that. does to or that long-term And and example deal think of over Meta view think and if the the a opportunity, would as building of could would I'd But be it we we'd hopefully that that potential an sublease capitalize of do IBM, that time on some year space -- again, successes, transactions some discussions. those I last over multi-tenant John, Google space, of some interested time, that we just of some and we've to decide create

Operator

is question Steve from from Sakwa next ISI. your And Evercore

Unknown Analyst

with specific on maybe the quick up that how This is Steve. Could about for the question you Neuhoff quarter specifically office had I Congrats the touring [indiscernible] for interested or conditions that to or there be finding you? Just that understand. maybe rate not or What decide in? to sign would space a think is? that term other color Is and reason great again. component. during has they're maybe picked or tenants some on one do the changed for talk you quarter pipeline, on One like for the

Jane Hicks

Kennedy. Sure. This is

user mentioned, floor. Richard late-stage are with do a in we almost negotiations to we As another take lease --

So really positive. we that would mean a say feedback feel opened, more goes as I market with the floor getting of I of the a to we've quarter terms we're the resident that lot about unique every the is to feedback it's activity. in more our living good week And environment a leasing continue there's apartments. there's people from there. talked on, about, We've retail from more experience that's gotten good really in

leases, just if convert don't tours good So space. usually because say activity see tour of that user we doesn't the to those to particular high we continue it's this I'd want end

And so top we the terms the are in market of at of rents.

ultimately and come success people good see conversions decide had the we've not cards in pipeline. and feel good it, ongoing so economically. And certainly, a about sometimes they -- interest that's love then their But in in the in that to

Unknown Analyst

to follow-up What through the that. should quick that watching would of year? well? end appreciate stay the we What as one for end it ahead And out maybe effect we also about terms those and are in of factors the move kind you're think to I higher to lower it guidance would bring questions. the factors bring of that all as

Gregg D. Adzema

in the of and up end, that faced within largest to 'XX have. we and like the of Sure. our the long or do end rates, we're we'd That's on as It's we've down face, right we debt what kind mean of factor XX% it a short indicated rate. both our range moving we've interest well, the Gregg. so I floating

So levered. it's [indiscernible] We're high not or low.

in our cuts than then we more little typically, case SOFR the at point provided do had in an $XXX refinance maturing our less that in have on as unsecured rate point would move base rates end, balance the it have current summer if around have midpoint impact this to the in no well, I assumes some to So leverage sheet. But refinance we note could move 'XX that or could 'XX, unlikely we guidance, around and And a some be change the can results at impact. the and in long the is that that in in XXXX. also billion that

I have and any on, my remarks, earlier stated in stated don't transactions. Colin speculative prepared As we

our on, about budget So talked what in rate past. Richard 'XX there's no we've as done risk from earlier and And the consistent leasing then is that. for with

So what we feel we've provided comfortable with there.

Operator

your from Upal And is Markets. question Rana KeyBanc Capital next from

Upal Rana

space at at still Warner spaces? determine what you they the the domain to Or with space be are looking much other So trying need? looking lease other at holdup -- point? seems are Are the Time they to they how

Richard Hickson

term. working needs them the with now, long through your Richard. longer been a their just point, we're engaged to is latter. this Upal, We're for we've really what It's but are -- time

Upal Rana

Okay. then GSA minimal, potentially exposure That And leases? within what was your office sense think a if is how Great. of I give there wondering helpful. you leasing was your And could to impact going what's could do markets? on you

Richard Hickson

is Cousins minimis. for GSA to exposure The de

Atlanta, it's GSA I to one much Third in Fifth lease think in speak one we have of. Charlotte really and North Park at not small Center but in other

Michael Connolly

I And feet X,XXX federal Charlotte, to it's Yes. in a the judge. think square

have leases the will I markets fairly I speaking, within that impact in lifestyle like think GSA it's our very -- and are buildings, let's office it think submarkets broadly say, little our leasing older assets, large, we on the and in limited and be some operate in, I or candidates think likely suburban will cases, lower which I'd in quality say, very they're even renovations repurposing vintage some significant for by [indiscernible]. of and for

Operator

Burzinski next Street. question is Green And from Dylan your from

Dylan Burzinski

in I looking competitive being Gray anecdotes, a one of to buyers comments appreciate high-quality your of the of wanted to may office. and you John pipeline on Just robust. recent coming guys' sort tents But relatively calling the acquisition sort right, to of and that Blackstone sort effectively at bidding remaining the just most market prove you opinions any on bottom get guys? sort new

CMBS at look issuances year-to-date office compared to for You history. recent high relatively at levels

and you looking for get sense if or to that transactions buyer these guys So some more just trying activity parties see of come to interested at? to more are guys a you starting are in

Michael Connolly

we've scale the I see or not markets. opportunity I in we noted yet pay to Yes. trying say well-capitalized very very coming and comments to start reaction was certainly those landscape that the groups players any Certainly, And XXXX. do you'll to see and have really in Belt in competitive we enter validating our been think out attention to the of and would of those Blackstone of some Sun do our market. noticed what any seen

to certain a transactions lot are capital to and intend larger deploy looking and of markets think bias I a degree, function large transactions New of like have a even a that's towards groups York. then these or single to

should will market be become the that But market get some under some so their say, groups. well hope is Cousins more as cost intermediate of with -- preferred The still I'd public legacy at our point, and and in over the term likely near [indiscernible] arguably the our sense as buyer, And relative is peers private as other focus existing be our will competitive, of from our time, issues. a that, will groups those best but of the peers. absolutely capital private to out

on want time. And capitalize so that to we

Operator

. Your next question is Anthony Paolone from JPMorgan from

Anthony Paolone

for me. left couple a Just

on traffic, anything give us to the thoughts regards or with OneTrust either space, thinking you First, around updated and BofA can or updated there? any building spaces

Michael Connolly

Sure.

with I'll start OneTrust. So

with. We've space actually can had in the encouraging of months, that in OneTrust great imminent, is As very it's interest. that but we've really is past, leaving certainly say we nothing activity the couple some modern mentioned past good us

to the around activity. Charlotte Third will like doesn't again, bank should much redevelopment are process And to and And possibly lifestyle lot we'll space So a floating July to of depart is final demand be that the Center that at equation very it the generate said I I early in attractive to Charlotte we of requirements user, has at larger as some this be view in and of demand again, the the Fifth and interesting redevelopment lot my fast we we from very we that space in moving, at Fifth until this soon underway encouraging. ready start office of that Third planning, as the space, going right some attract users. point. summer. stage buzz can and a in and is to of end remarks, second the all necessarily none, year, this Center largely the that is the if think go. With They're is of not plug-and-play very remain that quality encouraged for point, but regard going

Anthony Paolone

Okay. And on for numbers then matter. the Gregg, just second just

wonder like you can the a what through? what 'XX to where I impact be recall flowing year? OpEx interest us sense the give FFO the that For that say, is from as Just to in if it may once trying stop capitalized versus, is can't asset impact all Neuhoff, stabilized? it's being is or this

Gregg D. Adzema

you what reuse 'XX, office apartments don't We on interest the is summer basis. a the of we property-by-property in and tell ceased can on But Sure. capitalizing in capitalizing that I 'XX. provide we specifics interest the October adaptive ceased on of

we building the which is office, stop And fall. so on all 'XX this we're the -- and of retail, in our summer, in stopped new will the which capitalizing interest

simple are know, a to you as you impact your not it's very earnings. if odds you're So favorable yet, interest not stop stabilized algebra, capitalizing and

the so it's a us but started will a clear headwind 'XX. experience by in we 'XX end in bit up of And to year, the of late that that for already

Operator

from Barclays. Brendan Your next from Lynch question is

Brendan Lynch

how of that your South sense criteria well a potentially are many more End, assets that you could on get Tower, kind market Sail to new, like A+ wanted I Vantage to hit of the leased are pursue?

Michael Connolly

the in interested us criteria our Belt we're list have and portfolio. -- we that of grow It again, so lifestyle a assets build that for Sun to continuing and meet

lot on and year, been a End been the South moment, aren't there market was officially, kind and to qualify the conversations able not in Tower the on mean Sail we say, a hope there sideways, market. of having in work as, Vantage her at not the officially come a of on last have our at of doesn't that and asset But market. there like have were And that team lot bit in. -- hard Kennedy assets say, are I'd that Let's

market not, assets team to be opportunities. hopeful new are And that working are there source hard or are our the on will officially and whether so

So we'll continue to stay focused on that.

Brendan Lynch

you yet? that any willing And already enter markets would in be active you're are that to there not

Michael Connolly

feel Dallas in can our our over again, the are we'd a market and certainly that all like I Raleigh, Charlotte, Belt Belt of to, I kind markets. going some opportunity-constrained on share. we markets we we don't time, -- markets existing over see think like Sun Sun presence to We're greater Nashville, a and our have of have these share mean Tampa. greater can Again, in market remain time, grow and focused

Operator

question next is Fargo. from from Wells Heck Your Blaine

Blaine Heck

same-store guys occupancy It seems stopped have this guidance. you at point and providing like NOI

be without trends cadence you occupancy general overall pipeline for year guess, any of ranges leasing about have and helpful? you relative been the about the would occupancy any be talk guys color end I the at drivers And can both? in and throughout this year America, on up clear the same-store full of helpful? 'XX other on lastly, Bank Obviously, where asking to view end the of but would the end nuances might the of any year, So recent of

Richard Hickson

the is can tackle side of I This Richard. occupancy that.

with And year So like about, third as BofA's end to we'll July. quarter change going big of the stable. we've talked fairly at the come start expiration the in the is

build able don't in to there in basis, So to the half quarter. occupancy filter this give specific kind the we system back and on be average year a trough of to will 'XX. second through certainly We going that that third confident weighted do but begin and guidance, the to of feel in we're

Operator

from And your from Dylan next Street. question Green is Burzinski

Dylan Burzinski

view portfolio prospects markets on leased, a across -- net and your growth. Just of concessions is your if Class much a markets rent still relatively vacancies vacancy get better wanted potential Obviously, for effective trophy in high, across at is headline you well lot A much but guys' to your your shape. look

be So for rent push a effective think able sense guys get when across the you net to just start to trying growth to you'll portfolio?

Michael Connolly

Well, good we've the especially had luck thankfully, and rents luck, time, pressure growing area over effective despite 'XX. building mainly of to good we've 'XX TIs, in had year-over-year net for

is office you the think to vastly we that continue So demand for we do market. broader than different the Lifestyle said, can segment effectively. Like

we're how to we'll by able in I relates the mentioned, much be more situation past. And it to aggressive as be execute be I've we've Park, to will good that feel recent situation. as we so it similarly And think going executed the in Again, concessions. to North again,

could like a again, of skew couple few -- And urban the amount think, that of of of that. the a of at more tighten kind lifestyle a like trophy we're I favor speaking, But owner's shift we seeing over it kind next generally buildings, in leasing for begin outsized has the an to is that, So do years. our building to quarter-to-quarter more very we have that expected number. dynamic market to assets than really been that, is

Operator

There remarks. you. Connolly time. the hand for questions call this further are no the now Colin back will at I closing Thank to

Michael Connolly

Well, appreciate joining time thank us you Cousins your We for morning. interest and this Properties. all in

any Adzema I hope do If to follow-up Imbeaux. questions, has a you weekend. please out have Roni to great hesitate Gregg not or reach everyone

Operator

Thank you conference now ended. joining. has the gentlemen, for and Ladies you. all Thank

all may lines. You your disconnect

Cousins Properties (CUZ) 7 Feb 252024 Q4 Earnings call transcript