Cousins Properties: A Sun Belt Lifestyle Office Powerhouse in Q4 2024

Cousins Properties (NYSE: CUZ), a leading owner and operator of Class A office properties in the Sun Belt region, reported an exceptional fourth quarter (Q4) in 2024. The company delivered strong earnings, with FFO (Funds From Operations) reaching $0.69 per share, surpassing the midpoint of its guidance. Colin Connolly, President and Chief Executive Officer, highlighted the team's accomplishments, citing same-property net operating income that increased 3.4% on a cash basis. Leasing activity remained robust, with 462,000 square feet of leases completed during the quarter, representing a 6.7% cash rent roll-up.

Cousins Properties' investment in trophy lifestyle office properties in the Sun Belt markets contributed significantly to its earnings growth and portfolio quality in Q4 2024. The company committed almost $1 billion to these initiatives, which were immediately accretive to earnings and helped fund growth on a leverage-neutral basis. This strategic move allowed Cousins Properties to grow earnings while maintaining its best-in-class balance sheet.

The company raised $469 million of equity in two separate issuances and $400 million of debt through the issuance of unsecured senior notes. These transactions provided the necessary capital to invest in high-quality assets, enhancing the scale and quality of the company's portfolio.

In Q4 2024, Cousins Properties closed on the acquisition of Vantage South End in Charlotte with a purchase price of $328.5 million and the acquisition of Sail Tower in Austin with a purchase price of $521.8 million. Both properties are leading lifestyle office assets located in vibrant neighborhoods near other Cousins' holdings. These strategic new investments allowed the company to grow earnings on a leverage-neutral basis, upgrade the quality of its portfolio, and enhance the scale of the company.

Colin Connolly noted that market fundamentals are improving, with existing supply of office buildings declining as older buildings are converted or torn down, and new construction being almost nonexistent. At the same time, leasing demand is accelerating, reaching a new post-pandemic peak for the third consecutive quarter, and net absorption was positive for the first quarter since 2021. These tailwinds have allowed Cousins Properties to drive earnings growth while maintaining its best-in-class balance sheet.

Cousins Properties is prioritizing both internal and external growth opportunities, growing its leasing market share, and driving occupancy back to more stabilized levels. The company's strong leasing activity, with 462,000 square feet of leases completed during the quarter, representing a 6.7% cash rent roll-up, contributed to its earnings growth.

In conclusion, Cousins Properties' exceptional Q4 2024 earnings results were driven by its strategic investments in trophy lifestyle office properties, robust leasing activity, and a strong balance sheet. The company's focus on the Sun Belt markets and its ability to capitalize on improving market fundamentals position it well for continued success in 2025 and beyond.