In This Article:
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FFO (Funds From Operations): $0.69 per share for Q4, above the midpoint of guidance.
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Same Property Net Operating Income: Increased 3.4% on a cash basis year-over-year.
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Leasing Activity: 462,000 square feet of leases completed in Q4 with a 6.7% cash rent roll-up.
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Occupancy Rate: Portfolio occupancy at 89.2% at year-end, up from 87.6% in 2024.
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Equity and Debt Raised: $469 million in equity and $400 million in unsecured senior notes issued.
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2025 FFO Guidance: Midpoint of $2.78 per share, representing approximately 3.5% growth over 2024.
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Acquisitions: Vantage South End in Charlotte for $328.5 million and Sail Tower in Austin for $521.8 million.
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Net Debt to EBITDA: 5.16 times, indicating strong balance sheet capacity.
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GAAP NOI Growth: 5.3% year-over-year for Q4.
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Cash NOI Growth: 3.4% year-over-year for Q4.
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Development Pipeline Costs: $39 million remaining, funded by construction loan and operating cash flow.
Release Date: February 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Cousins Properties Inc (NYSE:CUZ) reported an exceptional fourth quarter with FFO of $0.69 per share, exceeding the midpoint of their guidance.
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The company achieved a 3.4% increase in same property net operating income on a cash basis.
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Leasing activity was strong, with 462,000 square feet of leases completed during the quarter and a 6.7% cash rent roll-up.
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Cousins Properties Inc (NYSE:CUZ) invested nearly $1 billion in trophy lifestyle office properties in Sun Belt markets, which were immediately accretive to earnings.
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The company maintains a best-in-class balance sheet with the lowest leverage across the sector, providing great access to capital.
Negative Points
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The office market remains highly bifurcated, with little to no leasing demand for older vintage properties.
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The private capital markets for office assets remain challenging, with limited and expensive asset-level debt and equity.
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Cousins Properties Inc (NYSE:CUZ) anticipates a temporary occupancy downdraft due to the move-outs of One Trust in Atlanta and Bank of America in Charlotte.
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The company faces macroeconomic uncertainty, particularly concerning interest rates, which could impact financial results.
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There is a potential headwind from the cessation of capitalizing interest on certain development projects, affecting earnings in 2025.
Q & A Highlights
Q: Can you talk a little bit more about the investment pipeline as you look into 2025? Have you found that the acquisition market has become more competitive? A: The pipeline remains strong, and fundamentals are improving with limited new supply and accelerating leasing demand. The capital market remains somewhat dislocated, providing a compelling time for Cousins to invest. We hope to see more transactions with limited competition, positioning us as a preferred buyer for high-quality office assets. - Michael Connolly, CEO