Cousins Properties (CUZ): A High-Yield, Undervalued Play on the Sunbelt Office Rebound

In a commercial real estate landscape still grappling with the aftershocks of remote work and shifting tenant preferences, Cousins Properties (CUZ) stands out as a rare blend of disciplined capital allocation and forward-looking strategy. With a raised 2025 FFO (Funds From Operations) guidance of $2.82 per share—a 4.8% increase from the prior year—the company is demonstrating its ability to adapt to evolving market dynamics while maintaining a laser focus on value creation. For long-term investors, this raises a compelling question: Can CUZ's strategic asset recycling, accretive acquisitions, and Sunbelt-centric positioning unlock a meaningful rebound in a sector still in transition?

Strategic Capital Allocation: Fueling FFO Growth

Cousins' recent acquisition of The Link, a 25-story, 94% leased lifestyle office property in Dallas, epitomizes the company's disciplined approach. The property, acquired in June 2025, is projected to deliver an initial cash yield of 6.7% and a gap yield of 8.3%, driven by long-term leases and below-market rents that offer substantial upside. This aligns with the broader trend of Sunbelt markets—such as Dallas, Atlanta, and Nashville—outpacing traditional office hubs due to lower costs, favorable demographics, and a surge in corporate relocations.

The acquisition was funded through a mix of the company's unsecured note offering, ATM program proceeds, and future asset dispositions, highlighting Cousins' ability to optimize its balance sheet without overleveraging. Notably, the company's 2025 FFO guidance now ranges between $2.79 and $2.85 per share, reflecting confidence in its ability to convert capital recycling into earnings growth. Since 2019, Cousins has sold $1.3 billion in non-core assets while acquiring $2.3 billion in lifestyle office properties—a testament to its commitment to portfolio modernization.

The Oversold RSI: A Contrarian Signal?

Despite the strong fundamentals, CUZ's stock has faced near-term headwinds. A 14-day RSI of 32.125 in August 2025 signals an oversold condition, typically a sign of potential short-term buying opportunities. However, technical indicators such as the 5-day ($26.54), 50-day ($27.45), and 200-day ($28.79) moving averages, along with a MACD of -0.290, suggest lingering bearish momentum. The stock's 2.18% decline post-earnings further underscores investor caution, even as Cousins reported a revenue shortfall but raised FFO guidance.

This divergence between fundamentals and technicals creates a unique inflection point. While the “Strong Sell” signal from technical indicators may deter short-term traders, long-term investors should focus on the company's structural advantages: a high-yield portfolio in Sunbelt growth corridors, a $2.82 FFO midpoint that outpaces peers, and a capital recycling model that prioritizes quality over quantity. Importantly, historical data reveals that a simple buy-and-hold strategy based on RSI oversold signals has underperformed dramatically in the past. From 2022 to 2025, buying CUZ when RSI indicated oversold conditions and holding for 30 trading days yielded a negative total return of -5.67%, with a Sharpe ratio of -0.11 and an excess return of -31.27% relative to the benchmark. This highlights the risks of relying solely on technical triggers in this stock, reinforcing the need to anchor decisions to the company's durable fundamentals.

The Sunbelt Office Rebound: A Long-Term Tailwind

Cousins' strategic emphasis on lifestyle office properties—spaces designed for hybrid work, wellness, and community—positions it to benefit from the sector's gradual normalization. The Sunbelt's demographic and economic resilience has made it a magnet for corporate relocations, with Dallas alone adding over 100,000 office workers since 2022. The Link's 94% occupancy rate, coupled with Cousins' pipeline of accretive acquisitions, suggests the company is well-placed to capitalize on this trend.

Moreover, Cousins' active approach to asset recycling—selling non-core and older properties to fund higher-yielding assets—ensures the portfolio remains agile in a rebalancing market. This strategy not only improves cash flow but also enhances risk-adjusted returns, a critical factor as interest rates stabilize and cap rates compress in Sunbelt markets.

Investment Thesis: A Patient Play on Resilience

While the technical indicators paint a bearish near-term picture, the fundamentals tell a different story. Cousins Properties' raised FFO guidance, accretive acquisitions, and Sunbelt-focused portfolio offer a compelling long-term investment case. The oversold RSI may represent a tactical entry point for investors willing to look beyond short-term volatility and focus on the company's ability to generate durable cash flow in a sector poised for recovery.

For those seeking a high-yield, undervalued play on the office rebound, Cousins Properties deserves a closer look. The key will be patience: the Sunbelt's momentum is undeniable, and Cousins' disciplined capital allocation strategy positions it to outperform as the market recalibrates.

In conclusion, Cousins Properties is not just surviving the current commercial real estate realignment—it's thriving. By combining strategic acquisitions, aggressive capital recycling, and a focus on Sunbelt growth, the company is building a foundation for sustained FFO growth. For long-term investors, the current oversold RSI and discounted valuation could be the entry point they've been waiting for.