Summary of Cousins Properties (CUZ) Q1 2026 Earnings Call

1Key Financial Results and Metrics

Funds from Operations (FFO): Reported at $0.73 per share, exceeding consensus by $0.02. Full-year FFO guidance raised to a midpoint of $2.94 per share, indicating a 3.5% increase from 2025.

Occupancy Rates: Portfolio occupancy increased to 88.9%, with a weighted average lease percentage of 91.8%.

Leasing Activity: Completed 932,000 square feet of leases, marking one of the highest quarterly volumes in company history. Cash rent roll-up on second-generation leasing was 15.2%.

Same-Property Cash NOI: Increased by 5.5% year-over-year, driven by a 4.5% rise in revenues and a 2.7% increase in expenses.

Share Repurchase: 3.9 million shares repurchased at an average price of $23.36. The Board increased the share repurchase program authorization from $250 million to $500 million.

2Strategic Updates and Business Highlights

Acquisitions and Dispositions: Acquired 300 South Tryon in Charlotte for $317.5 million and sold Harborview Plaza for $39.5 million. Under contract to sell 111 Congress in Austin.

Market Trends: Emphasized a return to office mandates and a flight to quality in office space, particularly in the Sunbelt region. Notable corporate relocations include Starbucks and Oracle.

Portfolio Optimization: Focused on enhancing the quality of the portfolio while maintaining a strong balance sheet. The company is actively managing non-core assets to fund acquisitions.

3Forward Guidance and Outlook

2026 FFO Guidance: Updated to a range of $2.90 to $2.98 per share, with a midpoint of $2.94, reflecting strong leasing activity and share repurchases.

Occupancy Goals: Targeting a year-end occupancy rate of 90%, with a modest amount of new leasing needed to achieve this goal.

Pipeline: A robust late-stage leasing pipeline of approximately 1 million square feet, indicating continued strong demand.

4Bad News, Challenges, or Points of Concern

Leverage Metrics: Net debt to EBITDA increased to 5.66x, higher than the target range of low 5x, though expected to normalize post asset sales.

Market Volatility: Ongoing macroeconomic concerns and volatility in public markets could impact future performance.

Tenant Demand: While demand is strong, the company remains cautious about potential shifts in tenant space utilization due to trends like AI adoption.

5Notable Q&A Insights

Leasing Pipeline: The late-stage pipeline is approximately double the size from a year ago, with strong activity in Atlanta and Nashville. The majority of leasing activity is attributed to front-office roles rather than back-office functions.

Rent Growth: Significant rent growth reported in various markets, with examples of 20% increases in Atlanta and 40% in Dallas since 2021. Future rent growth is anticipated as demand continues to outstrip supply.

Corporate Migration Trends: The company is witnessing both large corporate relocations and smaller outposts, indicating a diverse demand landscape.

Second-Generation CapEx: Expected to be higher in 2026 due to increased leasing activity, but remains difficult to predict on a quarterly basis. Overall, Cousins Properties reported a strong start to 2026, with robust leasing activity and positive financial metrics, while maintaining a focus on strategic growth and portfolio optimization amidst a competitive market landscape.