Cousins Properties (CUZ) Q2 2024 earnings summary

Executive summary

• Q2 2024 FFO was $103.3 million ($0.68/share), flat year-over-year and above expectations, with strong leasing and NOI growth in Sun Belt markets.

• Same property NOI grew 5.1% year-over-year on a cash basis; 391,000 sq ft leased in Q2, with 61% from new/expansion leases and 18.2% positive cash rent roll-up.

• Portfolio occupancy increased to 88.5%, with weighted average occupancy at 88.5% and office portfolio 91.2% leased at period end.

• Acquired two mezzanine loans secured by Sunbelt lifestyle office properties, with a total commitment of $27.2 million and weighted average spread over SOFR of 8.66%.

• Net income available to common stockholders was $7.8 million ($0.05/share), down from $22.6 million ($0.15/share) in Q2 2023, mainly due to higher depreciation expense.

Financial highlights

• Q2 2024 rental property revenues were $211.5 million, up 3.7% from $204.0 million in Q2 2023.

• Q2 2024 NOI was $139.8 million, up 7.3% from $130.3 million in Q2 2023.

• Q2 2024 operating expenses increased to $70.6 million from $67.1 million year-over-year.

• Net debt to EBITDA at quarter end was 5.12x, with net debt/total market capitalization at 43.7%.

• Q2 2024 interest expense was $29.7 million, up 14.5% year-over-year.

Outlook and guidance

• Full-year 2024 FFO guidance raised to $2.63–$2.68/share, midpoint $2.655, up $0.02 from prior guidance, driven by improved leasing, higher parking revenues, and mezzanine loan acquisitions.

• Full-year 2024 net income guidance updated to $0.31–$0.36/share.

• Guidance excludes any recovery from $9.6 million SVB bankruptcy claim and any property acquisitions, dispositions, or capital markets transactions.

• Sufficient liquidity is expected to meet obligations, with $682.9 million in available credit facility capacity and $6.0 million in cash as of June 30, 2024.