Cousins looking for partner at 191 Peachtree as one performance indicator tops Wall Street forecast

By David Pendered

As it executes a business strategy that includes reducing its footprint in Atlanta, Cousins Properties Inc. posted a key measure of profitability Wednesday that exceeded Walls Street expectations.

191 Peachtree

191 Peachtree

The strategy could include bringing in a joint venture partner for the company’s trophy tower in downtown Atlanta, 191 Peachtree Street.

According to the 10-Q report filed Wednesday with the federal Securities and Exchange Commission, Counsis is “exploring bringing in a joint venture partner” for 191 Peachtree. The purpose is to reduce Cousins’ amount of outstanding debt, according to the report.

Cousins is carrying a mortgage of $100 million on 191 Peachtree, according to the 10-Q. The interest rate is 3.35 percent and the note matures in 2018. Cousins’ entire note load is $671 million as of Sept. 30, compared to $630 million as of Dec. 31, 2013, according to the 10-Q.

Cousins reported third-quarter funds from operations of 20 cents a share. The expectation had been 19 cents a share. More details are expected to be discussed in an investor conference call today at 11 a.m.

Although funds from operations are not the same as earnings, they are a key performance indicator because they consider net income and add back into the equation financial issues including amortization and depreciation. The forecast was predicted by Zacks Investment Research, based on the average estimate of analysts.

Cousins is a bellwether Atlanta-based REIT that has plotted a post-recession recovery by expanding in southeastern markets, according to Cousins annual report for 2012 filed with the federal Securities and Exchange Commission.

The success of Terminus 100, which Cousins Properties reports is 98.3 percent leased, is one reason Cousins is bullish on metro Atlanta. File/Credit: jamco-inc.com

The success of Terminus 100, which Cousins Properties reports is 98.3 percent leased, is one reason Cousins is bullish on metro Atlanta. File/Credit: jamco-inc.com

Cousins’ portfolio consists of 16 office projects comprising 15.1 million square feet of space; six operating retail properties containing 566,000 square feet of space; and two projects (one office and one mixed use) under active development, according to the 10-Q report Cousins filed Wednesday with the SEC.

In its latest report, Cousins stated that its business strategy continues to:

  • “Target urban high-barrier-to-entry submarkets in Austin, Dallas, Houston, Atlanta, Charlotte, and Raleigh/Durham. Management believes these markets continue to show positive demographic and economic trends compared to the national average.”

Evidently, the strategy is serving Cousins well. According to highlights cited in the 10-Q report:

  • “The Company leased or renewed 691,492 square feet of office space during the third quarter of 2014, bringing total square footage of office space leased for the year to 1.5 million.
  • “Net effective rent, representing base rent less operating expense reimbursements and leasing costs, was $16.81 per square foot for office properties in the third quarter of 2014 and was $16.55 for the first nine months of 2014.
  • “Net effective rent per square foot for office properties increased 36.3% during the third quarter of 2014 and increased 33.1% for the first nine months of 2014 on spaces that have been previously occupied in the past year.
  • “The same property leasing percentage remained stable throughout the first nine months of 2014.”

 

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

8 replies
  1. Burroughston Broch says:

    Sounds as if Cousins believes growth prospects for Atlanta are not as enticing as other areas. This is not what the Metro Chamber wants to hear.Report

    Reply
  2. Burroughston Broch says:

    Sounds as if Cousins believes growth prospects for Atlanta are not as enticing as other areas. This is not what the Metro Chamber wants to hear.Report

    Reply
  3. The Last Democrat in Georgia says:

    Burroughston Broch  If the Metro Chamber does not want to hear that the growth prospects may not necessarily be as enticing as other areas then the Metro Chamber needs to come up with much more innovative ways for the Atlanta region and the State of Georgia to fund their transportation infrastructure needs than just begging taxpayers to beg for tax increases (T-SPLOST) that they know will be wasted on an inefficient and ineffective status quo.
    The Metro Chamber and the Metro Atlanta/North Georgia/Georgia business community needs to step up to the plate and come up with new and innovative ways of raising revenue for pressing transportation needs that do not involve raising taxes and asking taxpayers to flush their hard-earned money down the toilet.Report

    Reply
  4. The Last Democrat in Georgia says:

    Burroughston Broch  If the Metro Chamber does not want to hear that the growth prospects may not necessarily be as enticing as other areas then the Metro Chamber needs to come up with much more innovative ways for the Atlanta region and the State of Georgia to fund their transportation infrastructure needs than just begging taxpayers to beg for tax increases (T-SPLOST) that they know will be wasted on an inefficient and ineffective status quo.
    The Metro Chamber and the Metro Atlanta/North Georgia/Georgia business community needs to step up to the plate and come up with new and innovative ways of raising revenue for pressing transportation needs that do not involve raising taxes and asking taxpayers to flush their hard-earned money down the toilet.Report

    Reply
  5. Burroughston Broch says:

    The Last Democrat in Georgia That’s not the Metro Chamber’s style. Their style is to make believe the problem doesn’t exist, and attack those who dare say different. They are very much the iron fist in the velvet glove type, like the Woodruff Arts Center.Report

    Reply
  6. Burroughston Broch says:

    The Last Democrat in Georgia That’s not the Metro Chamber’s style. Their style is to make believe the problem doesn’t exist, and attack those who dare say different. They are very much the iron fist in the velvet glove type, like the Woodruff Arts Center.Report

    Reply

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