Cousins Properties (CUZ) Q3 2024 earnings summary

Executive summary

• Q3 2024 FFO rose to $102.3 million ($0.67/share), up from $99.0 million ($0.65/share) year-over-year, while net income fell to $11.2 million ($0.07/share) due to higher depreciation expense.

• Achieved highest quarterly leasing volume since 2019, leasing or renewing 763,000 sq. ft., with 80% from new/expansion leases and a 7.2% cash rent rollout.

• Completed $500 million unsecured bond issuance, trading at tight spreads, and acquired a 20% interest in Proscenium, a major Atlanta office property.

• Signed a 320,000 sq. ft. lease with IBM at Domain 12 in Austin, replacing Meta and extending the lease to 2040.

• Raised full-year 2024 FFO guidance midpoint to $2.68/share, driven by lower interest rates, lower real estate taxes, and new investments.

Financial highlights

• Q3 2024 rental property revenues were $207.3 million, up from $198.4 million in Q3 2023; nine-month revenues were $627.6 million, up from $602.5 million.

• Same property NOI on a cash basis increased 4.4% for Q3 and 5.4% for the nine months year-over-year.

• Cash and cash equivalents stood at $132.9 million as of September 30, 2024, with no outstanding balance on a $1 billion credit facility.

• Total assets were $7.77 billion and total liabilities $3.33 billion at quarter end.

• Net debt to EBITDAre was 5.10x, with net debt/total market capitalization at 37.5%.

Outlook and guidance

• Full-year 2024 FFO guidance raised to $2.66–$2.70/share, with net income guidance updated to $0.26–$0.30/share.

• Guidance assumes payoff of the Saint Ann Court and Radius loans at par on maturity.

• No speculative acquisitions, dispositions, or development starts included in current guidance.

• Expect modest occupancy increase in Q4 2024, a temporary dip in 2025 due to major expirations, then recovery toward and above 90% occupancy by 2026.

• Portfolio is well positioned in high-growth Sun Belt markets, benefiting from the flight to quality trend.