Cousins Properties Q4 2024: Contradictions in Investment Strategy, Development Outlook, and Rent Growth

These are the key contradictions discussed in Cousins Properties' latest 2024Q4 earnings call, specifically including: Investment Pipeline and Acquisition Market Competition, Development Start Expectations, Leasing Activity Trends and Strategy, and Net Effective Rent Growth:



Strong Earnings Performance:
- Cousins Properties reported $0.69 per share in FFO for Q4, exceeding the midpoint of their guidance, with same-property net operating income increasing 3.4% on a cash basis.
- The performance was driven by strong leasing activity, completing 462,000 square feet of leases with a 6.7% cash rent roll-up.

Investment in Trophy Properties:
- The company invested almost $1 billion in trophy lifestyle office properties in Sun Belt markets, with acquisitions including Vantage South End in Charlotte and Sail Tower in Austin.
- These investments were immediately accretive to earnings and were funded through a combination of equity issuances and debt offerings.

Capital Market Dynamics:
- Cousins issued $186.1 million in common stock in November and $282.8 million in December, alongside a $400 million unsecured senior notes issuance, indicating strong capital market liquidity.
- The issuances were at favorable terms, reflecting the company's strong balance sheet and access to capital.

Leasing and Occupancy Trends:
- The company's total office portfolio occupancy improved to 89.2% at year-end, up from 87.6% in 2023, with 45 leases completed in Q4.
- The progress was supported by strong demand in lifestyle office segments and minimal new supply, with expectations of future occupancy growth despite Bank of America's expiration in Charlotte.