CUZ — Cousins Properties Incorporated

Earnings Call Summary for Cousins Properties (CUZ) - Q1 2026

1. Key Financial Results and Metrics

• Funds From Operations (FFO): Reported at $0.73 per share, exceeding consensus by $0.02.
• Full-Year FFO Guidance: Increased midpoint to $2.94 per share, reflecting a 3.5% growth over 2025.
• Occupancy Rates: Portfolio occupancy rose to 88.9%, with a total office portfolio lease percentage at 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: Achieved 15.2% on second-generation leasing, maintaining 48 consecutive quarters of positive roll-ups.
• Same-Property Cash NOI: Increased by 5.5% year-over-year, driven by higher occupancy and the expiration of rent abatements.

2. Strategic 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.
• Leasing Pipeline: Strong late-stage pipeline with 1 million square feet of leases signed or in negotiations for Q2.
• Market Trends: Noted a return to office trend, flight to quality in office space, and a reacceleration of migration to the Sunbelt, with significant corporate relocations.
• AI Impact: No evidence of reduced demand for office space despite AI advancements; companies deploying AI still prioritize physical presence.

3. Forward Guidance and Outlook

• 2026 FFO Guidance: Anticipated between $2.90 and $2.98 per share, with a midpoint of $2.94.
• Occupancy Goals: Targeting a year-end occupancy of 90%, with a modest amount of leasing needed to achieve this.
• Long-Term Strategy: Focus on sustainable earnings growth, optimizing portfolio quality, and maintaining a strong balance sheet.

4. Bad News, Challenges, or Points of Concern

• Market Volatility: Ongoing macroeconomic concerns and public market volatility could impact future performance.
• Leverage Metrics: Net debt to EBITDA increased to 5.66x, though expected to normalize post-asset sales and share repurchases.
• CapEx Uncertainty: Second-generation CapEx spending may rise due to increased leasing activity, creating potential cash flow variability.

5. Notable Q&A Insights

• Leasing Pipeline: The late-stage pipeline has doubled year-over-year, with technology and financial services leading demand.
• Rent Growth: Significant rent increases observed in various markets, with Dallas seeing a cumulative growth of 40% since 2021.
• Corporate Migration: A mix of large corporate relocations and smaller outposts is driving demand in the Sunbelt, with companies like Oracle expanding.
• Share Repurchase Strategy: Flexibility in funding share repurchases through asset sales or forward equity, aiming for accretive outcomes.
• Future Development: Neuhoff Phase 2 will commence once pre-leasing demand is confirmed, with a focus on office space and some retail.

Overall, Cousins Properties reported a strong quarter with robust leasing activity and positive financial metrics, while maintaining a cautious outlook on market conditions and operational challenges.