Cousins Properties Soars to New Heights in Q4 2024: Strong Earnings and Compelling Investment Opportunities
Cousins Properties, a leading owner and operator of Class A office properties in the Sun Belt region, has reported an exceptional fourth quarter (Q4) in 2024. The company delivered strong earnings, with FFO (Funds From Operations) reaching $0.69 per share, surpassing the midpoint of its guidance.
In a conference call to discuss Q4 results, Colin Connolly, President and Chief Executive Officer, highlighted the team's accomplishments, citing same-property net operating income that increased 3.4% on a cash basis. Leasing activity remained robust, with 462,000 square feet of leases completed during the quarter, representing a 6.7% cash rent roll-up.
Cousins Properties also made significant investments in trophy lifestyle office properties in its Sun Belt markets, committing almost $1 billion to these initiatives. The transactions were immediately accretive to earnings and helped fund growth on a leverage-neutral basis. The company raised $469 million of equity in two separate issuances and $400 million of debt through the issuance of unsecured senior notes.
Looking ahead to 2025, Cousins Properties has released guidance that indicates continued strength and resiliency in its leading Sun Belt lifestyle office portfolio and best-in-class balance sheet. The midpoint of the range is $2.78 per share, representing approximately 3.5% growth compared to 2024.
Colin Connolly noted that market fundamentals are improving, with existing supply of office buildings declining as older buildings are converted or torn down, and new construction being almost nonexistent. At the same time, leasing demand is accelerating, reaching a new post-pandemic peak for the third consecutive quarter, and net absorption was positive for the first quarter since 2021.
These tailwinds have allowed Cousins Properties to drive earnings growth while maintaining its best-in-class balance sheet. The company is prioritizing both internal and external growth opportunities, growing its leasing market share, and driving occupancy back to more stabilized levels. Bank of America's expiration in Charlotte this year presents a small speed bump, but with the pickup of leasing activity and modest expirations through 2026, there is meaningful upside in the cash flow of its existing portfolio in the intermediate term.
Externally, Cousins Properties has been executing on compelling investment opportunities. During Q4, the company closed on the acquisition of Vantage South End in Charlotte with a purchase price of $328.5 million and the acquisition of Sail Tower in Austin with a purchase price of $521.8 million. Both properties are leading lifestyle office assets located in vibrant neighborhoods near other Cousins' holdings.
These strategic new investments have allowed Cousins Properties to grow earnings on a leverage-neutral basis, upgrade the quality of its portfolio, and enhance the scale of the company. With its strong track record and compelling investment opportunities, Cousins Properties is well-positioned for continued success in 2025 and beyond."
