CUZ — Cousins Properties Incorporated

Summary of Cousins Properties (CUZ) Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Fourth Quarter FFO: $0.71 per share, in line with consensus.
• Full Year FFO: $2.84 per share, representing a 5.6% increase over 2024.
• Leasing Activity: 700,000 square feet completed in Q4, second highest in four years.
• Portfolio Occupancy: 88.3% at year-end, impacted by the expiration of Bank of America's lease.
• Average Net Rent: $36.52 in Q4, with average net effective rent at $23.18.

2. Strategic Updates and Business Highlights:

• Acquisition: Recently acquired 300 South Tryon, a 638,000 square foot office property in Charlotte for $317 million.
• Leasing Demand: Strong demand noted, particularly from West Coast and NYC firms, with a robust pipeline of 1.1 million square feet.
• Market Trends: Corporate migration to the Sub Belt is increasing, and office fundamentals are improving as remote work declines.
• Development Plans: Aiming to identify a new development project by year-end 2026, targeting areas with high demand and limited supply.

3. Forward Guidance and Outlook:

• 2026 FFO Guidance: Projected at $2.92 per share, indicating a 2.8% growth over 2025.
• Occupancy Goal: Targeting 90% occupancy by year-end 2026, contingent on lease commencement timing.
• Investment Strategy: Plans to remain opportunistic with acquisitions and dispositions, focusing on enhancing portfolio quality.

4. Bad News, Challenges, or Points of Concern:

• Occupancy Risks: Current occupancy is affected by lease expirations, particularly from Bank of America, and achieving the 90% target is dependent on timing.
• Market Conditions: A slowing labor market raises concerns about office leasing, although demand remains strong.
• Impairments: Recognized impairments on noncore assets, including a $13.3 million impairment on Harbourview Plaza.
• Concessions: Increased leasing concessions noted, with average concessions at $10.58, which may affect net effective rents.

5. Notable Q&A Insights:

• Development Opportunities: Management indicated flexibility in development strategies, considering both owned land and potential joint ventures.
• Leasing Pipeline Confidence: The late-stage pipeline has a high conversion rate (95%-100%), with significant activity expected to drive occupancy in 2026.
• Tech Sector Monitoring: While concerns exist regarding software companies, management noted strong demand from well-capitalized tech firms like Amazon and Google.
• Funding Strategies: Management discussed various funding options for acquisitions, emphasizing a focus on maintaining a strong balance sheet and capital allocation discipline.

Overall, Cousins Properties reported solid financial results and a positive outlook for 2026, driven by strong leasing demand and strategic acquisitions, despite facing challenges related to occupancy and market conditions.