Cousins Properties Q1 Earnings Call Highlights

Cousins Properties NYSE: CUZ reported what management repeatedly described as an “excellent start” to 2026, highlighted by above-consensus funds from operations (FFO), record-setting leasing volume, and an increase to full-year guidance. Executives also pointed to improving Sun Belt office fundamentals, including a return-to-office trend, continued “flight to quality,” and limited new supply.

FFO tops consensus; guidance raised

President and CEO Colin Connolly said the company produced $0.73 per share in FFO for the first quarter, “$0.02 a share above consensus.” Cousins raised the midpoint of its 2026 FFO outlook by $0.02 to $2.94 per share, which Connolly said would represent 3.5% growth over 2025 and mark a third consecutive year of FFO growth.

Executive Vice President and CFO Gregg Adzema said updated full-year guidance calls for FFO of $2.90 to $2.98 per share. He attributed the higher midpoint primarily to the company’s share repurchases and “better than forecast execution on the debt financings,” partially offset by the removal of a prior assumption for a mid-year SOFR rate cut. “We now have no SOFR cut assumptions during 2026 in our guidance,” Adzema said.

Leasing volume among the strongest in company history

Cousins completed 49 office leases totaling 932,000 square feet during the quarter, with a weighted average lease term of 6.6 years, according to Executive Vice President of Operations Richard Hickson. Connolly called it “one of the highest quarterly volumes in the history of the company.”

Hickson said 52% of the completed leasing volume was new and expansion activity (483,000 square feet), while the company also completed 19 renewals, including a renewal in Austin that addressed what had been the company’s largest 2027 expiration.

Lease economics were also highlighted across the call. Cousins reported a 15.2% cash rent roll-up on second-generation leasing, which Connolly said marked 48 consecutive quarters of positive rent roll-ups. Hickson added that average net rent for leases signed in the quarter was $44.54, about 18% higher than full-year 2025, while average net effective rent was $32.28, which he said was “second only to the third quarter of 2024.”

Management characterized demand as broad-based and increasingly supported by employers bringing workers back to offices. Connolly pointed to Fidelity’s announcement of a five-day office mandate as another sign that companies are “phasing out remote work.” He also said the company is not seeing evidence that artificial intelligence is reducing long-term demand for high-quality office space, adding that many AI-focused companies “are also prioritizing collaboration, talent density, and physical presence.”

Occupancy improves; late-stage pipeline expands year-over-year

Hickson said end-of-period leased occupancy was 91.8% and weighted average occupancy was 88.9%, both higher sequentially. Connolly said the company increased occupancy to 88.9% during the quarter and reiterated that growing occupancy remains the top priority.

On the pipeline, Hickson told analysts that the company’s late-stage pipeline is about 2x the size of this time last year and roughly in line with the prior quarter. He said the number of overall prospects increased about 15% since last quarter, with technology “slightly ahead of financial services” among the largest drivers of activity. Hickson said the company had 1 million square feet of leases signed in the second quarter to date or in negotiations, and that the late-stage pipeline had grown by about 200,000 square feet in the prior two weeks.

When asked about occupancy expectations, Hickson said the company’s goal remains 90% occupancy by year-end, and that only a “relatively modest” amount of incremental leasing is needed to get there. Connolly said the longer-term goal is to drive the portfolio back toward historical stabilized levels “in the low to mid 90%,” noting the typical lag between lease signing and occupancy. Hickson later said signed-but-not-yet-commenced leases were weighted toward “late third quarter timing” on average.

Market and asset updates: wins in Austin, Atlanta, and Nashville

Management cited several significant leasing wins, including a large renewal with the company’s largest customer at The Domain in Austin and new leases with Oracle and KPMG.

• Austin: Hickson said Cousins signed 339,000 square feet of leases in the quarter, including a 273,000-square-foot renewal at Domain 8 with a “Fortune 10 technology company.” Cousins’ Austin portfolio increased to 95.3% leased as of quarter-end.
• Atlanta: Cousins signed 192,000 square feet of leases, including a 105,000-square-foot new lease with KPMG at Proscenium in Midtown. Hickson also said the company signed a new 46,000-square-foot lease with CallRail at 725 Ponce after quarter-end. The Atlanta portfolio was 89.3% leased.
• Nashville (Neuhoff): Executive Vice President and CIO Kennedy Hicks said the roughly 400,000-square-foot office component at Neuhoff is now 84.3% leased, up from 55.3% last quarter, “largely driven” by a 116,000-square-foot new lease with Oracle. Hicks said the company is in negotiations for the remaining two full floors, which could bring the office component to “almost 96% leased.” She also said the 542-unit apartment component stabilized at 92.6 leased. Hicks said Neuhoff phase two, planned as an approximately 300,000-square-foot office building, would likely require pre-leasing and rents that support new construction before moving forward.

Hickson also provided examples of rent growth across markets, citing approximately 20% rent growth at Buckhead Plaza in Atlanta over the past year, roughly 40% growth since 2021 in Dallas Uptown, about 10% in Charlotte for newly leased product over the past year, and about 20% since 2024 at Hayden Ferry in Phoenix following redevelopment completion.

Acquisition, dispositions, and capital markets activity

During the quarter, Cousins closed on the acquisition of 300 South Tryon, a 638,000-square-foot office property in Uptown Charlotte, for $317.5 million ($497 per square foot), which Hicks said represented “a significant discount to replacement cost.” Management said the company has already executed a renewal and an expansion with a tenant at the property.

On the disposition side, Hicks said Cousins sold Harborview Plaza in Tampa for $39.5 million ($191 per square foot), describing the pricing as a “low 9% cap rate.” She also said Cousins is under contract to sell 111 Congress, a 519,000-square-foot asset in Austin’s CBD, with a closing anticipated early in the third quarter, and remains under contract to sell the 303 Tremont land parcel in Charlotte for $23.7 million, with an expected closing before year-end.

Adzema said the company issued a $500 million 7-year unsecured bond in early February at a 5% yield to maturity, which he said addressed the company’s 2026 refinancing needs. He also noted that Cousins repurchased 3.9 million shares in the first quarter at a weighted average price of $23.36. After quarter-end, the board increased share repurchase authorization from $250 million to $500 million, with about $410 million remaining available.

Adzema said leverage was “a bit elevated” at 5.66x net debt to EBITDA due to timing, and that it should return to the company’s targeted “low 5x range” after planned asset sales and funding actions. He also addressed second-generation capital expenditures, saying it can be “super lumpy,” but could be higher for full-year 2026 than the prior couple of years due to elevated leasing volume.

About Cousins Properties NYSE: CUZ

Cousins Properties Incorporated NYSE: CUZ is a publicly traded real estate investment trust (REIT) specializing in the development, acquisition and management of high-quality office and mixed-use properties. Headquartered in Atlanta, the company focuses on urban infill and suburban markets across the Sun Belt, with a strong presence in metropolitan areas such as Atlanta, Austin, Charlotte, Nashville, Orlando and Tampa. Its core activities encompass full-service property leasing, asset management and construction oversight, serving a diverse mix of corporate and institutional tenants.

Founded in 1958 as a privately held real estate concern, Cousins Properties completed its initial public offering in 1992.

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