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Cousins Properties’ CUZ portfolio of Class A office assets is concentrated in the high-growth markets in the Sun Belt region. The company is witnessing healthy leasing activity due to tenants’ preference for premium office spaces. Its capital-recycling efforts and healthy balance sheet augur well.
Analysts seem positive about this Zacks Rank #2 (Buy) company. The Zacks Consensus Estimate for CUZ’s 2025 funds from operations (FFO) per share has moved 1 cent northward over the past two months to $2.79.
Shares of this office-based real estate investment trust (REIT) company have gained 6.1% over the past month, outperforming the industry’s growth of 1.7%. Given the strength of its fundamentals, there seems to be additional room for growth.
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Factors That Make Cousins Properties Stock a Solid Pick
Solid Portfolio and Diversified Tenant Base: Cousins Properties has an unmatched portfolio of Class A office assets concentrated in the high-growth Sun Belt markets. This region is experiencing a population influx. Amid favorable migration trends and a pro-business environment, corporate relocations and expansions in the Sun Belt markets have gained pace, driving the demand for office space. Properties in these markets are also expected to command higher rents compared with the broader market.
With a significant presence in the best urban submarkets in each city, Cousins Properties has been able to enjoy healthy demand for its properties. The company has a well-diversified, high-end tenant roster with less dependence on a single industry. This enables it to enjoy steady revenues over different economic cycles.
Healthy Leasing Activity: Cousins Properties is witnessing healthy leasing demand for its high-quality, well-placed office properties, as highlighted by the rebound in new leasing volume.
Going forward, with the continuation of inbound migration and significant investments being announced by office occupiers to expand the footprint in the Sun Belt regions, Cousins Properties’ leading trophy portfolio of Class A and highly amenitized office realties across the region is well-positioned to recover faster.
Further, the company is seeing several tenants returning to offices or announcing plans to report to workplaces. This, too, is likely to support office market fundamentals in its markets.
Capital-Recycling Efforts: Cousins Properties’ capital-recycling moves to enhance its portfolio quality with trophy asset acquisitions and opportunistic developments seem encouraging for long-term growth. Its notable development pipeline is likely to deliver meaningful additional annualized net operating income in the upcoming years.