COUSINS PROPERTIES INC
For the period ended Dec 31, 2023. Filed Feb 7, 2024.
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FY2023 · Filed Feb 7, 2024
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Item 2. Properties
The following table sets forth certain information related to operating properties in which we have an ownership interest. Except as noted, all information presented is as of December 31, 2023 ($ in thousands):
Operating Properties (1)
| Company's Share | ||||||||
|---|---|---|---|---|---|---|---|---|
| Office Properties · Rentable Square Feet · Financial Statement Presentation · Company's Ownership Interest · End of Period Leased · Weighted Average Occupancy (2) · % of Total Net Operating Income (3) · Property Level Debt (4) | ||||||||
| Terminus (5) | 1,226,000 | Consolidated | 100% | 86.3% | 83.8% | 6.5% | $220,687 | |
| Spring & 8th (5) | 765,000 | Consolidated | 100% | 100.0% | 100.0% | 5.5% | — | |
| Buckhead Plaza (5) | 678,000 | Consolidated | 100% | 95.2% | 89.6% | 4.1% | — | |
| Northpark (5) | 1,539,000 | Consolidated | 100% | 74.0% | 73.4% | 4.0% | — | |
| 725 Ponce | 372,000 | Consolidated | 100% | 100.0% | 100.0% | 3.8% | — | |
| Avalon (5) | 480,000 | Consolidated | 100% | 100.0% | 97.4% | 3.1% | — | |
| 3344 Peachtree | 484,000 | Consolidated | 100% | 95.1% | 96.3% | 2.9% | — | |
| Promenade Tower | 777,000 | Consolidated | 100% | 82.9% | 63.2% | 2.4% | — | |
| 3348 Peachtree | 258,000 | Consolidated | 100% | 76.9% | 80.5% | 1.0% | — | |
| Promenade Central (6) (7) | 367,000 | Consolidated | 100% | 71.3% | 55.9% | 0.9% | — | |
| Medical Offices at Emory Hospital | 358,000 | Unconsolidated | 50% | 99.5% | 99.5% | 0.9% | 41,158 | |
| Meridian Mark Plaza | 160,000 | Consolidated | 100% | 100.0% | 100.0% | 0.8% | — | |
| 3350 Peachtree | 413,000 | Consolidated | 100% | 60.3% | 57.0% | 0.4% | — | |
| 120 West Trinity Office | 43,000 | Unconsolidated | 20% | 100.0% | 100.0% | 0.1% | — | |
| ATLANTA (7) | 7,920,000 | 86.6% | 83.3% | 36.4% | 261,845 | |||
| The Domain (5) | 1,899,000 | Consolidated | 100% | 100.0% | 99.5% | 13.8% | 72,296 | |
| 300 Colorado | 378,000 | Consolidated | 100% | 100.0% | 100.0% | 4.1% | — | |
| San Jacinto Center | 399,000 | Consolidated | 100% | 95.9% | 86.9% | 3.3% | — | |
| Colorado Tower | 373,000 | Consolidated | 100% | 98.8% | 97.4% | 3.2% | 106,605 | |
| One Eleven Congress | 519,000 | Consolidated | 100% | 80.5% | 79.9% | 3.0% | — | |
| The Terrace (5) | 619,000 | Consolidated | 100% | 79.9% | 77.6% | 2.9% | — | |
| Domain Point (5) | 240,000 | Consolidated | 96.5% | 100.0% | 100.0% | 1.6% | — | |
| Research Park V | 173,000 | Consolidated | 100% | 93.0% | 89.0% | 0.9% | — | |
| AUSTIN | 4,600,000 | 94.4% | 92.8% | 32.8% | 178,901 | |||
| Corporate Center (5) | 1,227,000 | Consolidated | 100% | 93.4% | 92.3% | 5.7% | — | |
| Heights Union (5) (6) | 294,000 | Consolidated | 100% | 100.0% | 100.0% | 1.9% | — | |
| The Pointe | 253,000 | Consolidated | 100% | 90.4% | 89.3% | 0.8% | — | |
| Harborview Plaza | 206,000 | Consolidated | 100% | 83.7% | 79.3% | 0.7% | — | |
| TAMPA | 1,980,000 | 93.0% | 91.7% | 9.1% | — | |||
| Fifth Third Center | 692,000 | Consolidated | 100% | 91.1% | 91.1% | 3.5% | 126,369 | |
| The RailYard | 329,000 | Consolidated | 100% | 99.0% | 99.2% | 2.4% | — | |
| 550 South | 394,000 | Consolidated | 100% | 96.7% | 96.7% | 2.1% | — | |
| CHARLOTTE | 1,415,000 | 1569000 | 94.5% | 94.5% | 8.0% | 126,369 | ||
| Hayden Ferry (5) (8) | 792,000 | Consolidated | 100% | 90.9% | 88.5% | 3.3% | — | |
| 100 Mill (6) | 288,000 | Consolidated | 90% | 98.1% | 81.3% | 2.4% | — | |
| 111 West Rio | 225,000 | Consolidated | 100% | 100.0% | 100.0% | 1.0% | — | |
| Tempe Gateway | 264,000 | Consolidated | 100% | 75.9% | 64.8% | 0.9% | — | |
| PHOENIX | 1,569,000 | 90.9% | 84.4% | 7.6% | — | |||
| Legacy Union One | 319,000 | Consolidated | 100% | 100.0% | 100.0% | 1.8% | — | |
| 5950 Sherry Lane | 197,000 | Consolidated | 100% | 79.3% | 77.5% | 0.7% | — | |
| DALLAS | 516,000 | 92.1% | 91.4% | 2.5% | — | |||
| BriarLake Plaza (5) | 835,000 | Consolidated | 100% | 96.8% | 79.0% | 2.9% | — | |
| HOUSTON | 835,000 | 96.8% | 79.0% | 2.9% | — | |||
| TOTAL OFFICE (7) | 18,835,000 | 90.9% | 87.6% | 99.3% | $567,115 | |||
Table continued on next page
| Company's Share | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Office Properties · Rentable Square Feet · Financial Statement Presentation · Company's Ownership Interest · End of Period Leased · Weighted Average Occupancy (2) · % of Total Net Operating Income (3) · Property Level Debt (4) | |||||||||||
| Other Properties | |||||||||||
| College Street Garage - Charlotte (6) | N/A | Consolidated | 100% | N/A | N/A | 0.6% | — | ||||
| 120 West Trinity Apartment - Atlanta (330 Units) (6) | 310,000 | Unconsolidated | 20% | 95.3% | 93.6% | 0.1% | — | ||||
| TOTAL OTHER | 310,000 | 95.3% | 93.6% | 0.7% | $— | ||||||
| TOTAL (7) | 19,145,000 | 90.9% | 87.7% | 100.0% | $567,115 | ||||||
(1)Operating properties exclude properties in our development pipeline and properties sold prior to December 31, 2023.
(2)The weighted average economic occupancy of the property over the period for which the property was available for occupancy during the three months ended December 31, 2023.
(3)The Company's share of net operating income for the three months ended December 31, 2023. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for the definition of net operating income and a reconciliation to Net Income.
(4)The Company's share of property-specific mortgage debt, net of unamortized loan costs, as of December 31, 2023.
(5)Contains two or more buildings that are grouped together for reporting purposes.
(6)Not included in Same Property as of December 31, 2023. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for the definition of Same Property.
(7)A redevelopment of Promenade Central reached substantial completion in the fourth quarter of 2022. This building will be excluded from the Atlanta, Total Office, and Total Portfolio calculations until stabilized.
(8)Hayden Ferry 1 in this group of buildings has been excluded from Same Property, end of period leased as of December 31, 2023, and weighted average occupancy for the quarter ended December 31, 2023 due to commencement of a full redevelopment of this building effective October 1, 2023.
The above table has annualized rent of $741.6 million, which represents the sum of the annualized cash rent including tenant's share of estimated operating expenses, if applicable, each tenant is paying as of the end of the reporting period. Included in this amount is$27.7 million related totenants not paying rent as of December 31, 2023 due to free rent concessions. For those tenants, annualized rent is calculated based on the annualized contractual rent the tenant will pay in the first period it is required to pay rent.
Office Lease Expirations (1)
As of December 31, 2023, our leases expire as follows:
| Year of Expiration | Square Feet Expiring | % of LeasedSpace | Annual Contractual Rent (in thousands) (2) | % of AnnualContractualRent | AnnualContractualRent/Sq. Ft. |
|---|---|---|---|---|---|
| 2024 | 840,324 | 5.2% | $36,158 | 4.3% | $43.03 |
| 2025 | 1,496,330 | 9.3% | 67,847 | 8.0% | 45.34 |
| 2026 | 1,279,164 | 7.9% | 59,697 | 7.1% | 46.67 |
| 2027 | 1,701,666 | 10.5% | 78,010 | 9.2% | 45.84 |
| 2028 | 1,659,725 | 10.3% | 85,221 | 10.1% | 51.35 |
| 2029 | 1,750,273 | 10.8% | 91,173 | 10.8% | 52.09 |
| 2030 | 1,299,773 | 8.0% | 66,433 | 7.9% | 51.11 |
| 2031 | 1,485,103 | 9.2% | 89,137 | 10.5% | 60.02 |
| 2032 | 1,826,243 | 11.3% | 106,127 | 12.6% | 58.11 |
| 2033 & Thereafter | 2,820,642 | 17.5% | 165,276 | 19.5% | 58.60 |
| Total | 16,159,243 | 100.0% | $845,079 | 100.0% | $52.30 |
(1) Company's share of leases expiring after December 31, 2023. Expiring square footage for which new leases have been executed is reflected based on the expiration date of the new lease.
(2) Annual Contractual Rent is the estimated rent in the year of expiration. It includes the minimum base rent and an estimate of the tenant's share of operating expenses, if applicable, as defined in the respective leases.
Top 20 Office Tenants
As of December 31, 2023, our top 20 office tenants were as follows:
| Tenant (1) · Number of Properties Occupied · Number of Markets Occupied · Company's Share of Square Footage · Company's Share of Annualized Rent (in thousands) (2) · Percentage of Company's Share of Annualized Rent · Weighted Average Remaining Lease Term (Years) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Amazon | 5 | 3 | 1,107,805 | $59,942 | 8.1% | 5.2 | ||||
| 2 | NCR VOYIX | 2 | 2 | 815,634 | 40,595 | 5.5% | 9.4 | ||||
| 3 | Pioneer Natural Resources | 2 | 1 | 359,660 | 25,868 | 3.5% | 7.7 | ||||
| 4 | Meta Platforms | 1 | 1 | 319,863 | 19,481 | 2.6% | 7.6 | ||||
| 5 | Expedia | 1 | 1 | 315,882 | 17,926 | 2.4% | 7.3 | ||||
| 6 | Bank of America | 2 | 2 | 347,139 | 12,648 | 1.7% | 2.0 | ||||
| 7 | Apache | 1 | 1 | 210,012 | 9,760 | 1.3% | 14.6 | ||||
| 8 | Wells Fargo | 5 | 3 | 198,507 | 9,153 | 1.2% | 5.1 | ||||
| 9 | Ovintiv USA | 1 | 1 | 318,582 | 8,313 | 1.1% | 3.5 | ||||
| 10 | WeWork (3) | 4 | 2 | 169,050 | 8,058 | 1.1% | 9.8 | ||||
| 11 | ADP | 1 | 1 | 225,000 | 7,668 | 1.0% | 4.3 | ||||
| 12 | Westrock Shared Services | 1 | 1 | 205,185 | 7,487 | 1.0% | 6.3 | ||||
| 13 | Regus Equity Business Centers | 5 | 4 | 145,119 | 7,393 | 1.0% | 4.9 | ||||
| 14 | BlackRock | 1 | 1 | 131,656 | 7,065 | 1.0% | 12.4 | ||||
| 15 | Workrise Technologies | 1 | 1 | 93,210 | 6,712 | 1.0% | 4.6 | ||||
| 16 | Amgen | 1 | 1 | 163,169 | 6,607 | 1.0% | 4.8 | ||||
| 17 | Samsung Engineering America | 1 | 1 | 133,860 | 6,482 | 0.9% | 2.9 | ||||
| 18 | McKinsey & Company | 2 | 2 | 130,513 | 6,357 | 0.9% | 8.9 | ||||
| 19 | Time Warner Cable | 4 | 2 | 120,140 | 6,048 | 0.8% | 2.0 | ||||
| 20 | Visa U.S.A. | 1 | 1 | 122,764 | 5,864 | 0.8% | 9.8 | ||||
| Total | 5,632,750 | $279,427 | 37.9% | 6.6 | |||||||
| (1) | In some cases, the actual tenant may be an affiliate of the entity shown. |
| (2) | Annualized Rent represents the annualized cash rent including tenant's share of estimated operating expenses, if applicable, paid by the tenant for December 2023. If the tenant is in a free rent period for December 2023, Annualized Rent represents the annualized contractual rent the tenant will pay in the first month it is required to pay full rent. Included in this amount is $3.0 million of annualized base rent for tenants in a free rent period. |
| (3) | Additional information regarding leases with this tenant can be found in note 13 of the Notes to Consolidated Financial Statements within this Form 10-K annual report. |
| Note: | This schedule includes leases that have commenced. Leases that have been signed but have not commenced are excluded. |
Tenant Industry Diversification
As of December 31, 2023, our tenant industry diversification was as follows:
| Industry (1) | Percentage of Company's Share of Annualized Rent (2) |
|---|---|
| Technology | 27.0% |
| Financial | 15.5% |
| Professional Services | 10.2% |
| Legal | 8.5% |
| Consumer Goods & Services | 8.0% |
| Energy | 7.3% |
| Real Estate | 6.0% |
| Health Care | 5.9% |
| Insurance | 3.5% |
| Other | 3.1% |
| Marketing/Media/Telecom | 3.1% |
| Construction/Design | 1.9% |
| Total | 100.0% |
| (1) | Management uses SIC codes when available, along with judgment, to determine tenant industry classification. |
| (2) | Annualized Rent represents the annualized cash rent including tenant's share of estimated operating expenses, if applicable, paid by the tenant as of the date of this report. If the tenant is in a free rent period as of the date of this report, Annualized Rent represents the annualized contractual rent the tenant will pay in the first month it is required to pay full rent. |
Development Pipeline (1)
As of December 31, 2023, information on our projects under development was as follows ($ in thousands):
| Project · Type · Market · Company's Ownership Interest · Construction Start Date · Square Feet/Units · Estimated Project Cost (1) (2) · Company's Share of Estimated Project Cost (2) · Project Cost Incurred to Date (2) · Company's Share of Project Cost Incurred to Date (2) · Percent Leased · Initial Occupancy (3) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Neuhoff (4) | Mixed | Nashville | 50% | 3Q21 | $563,000 | $281,500 | $472,531 | $236,266 | |||||
| Office and Retail | 448,000 | 22% | 4Q23 | ||||||||||
| Apartments | 542 | —% | 2Q24 | ||||||||||
| Domain 9 | Office | Austin | 100% | 2Q21 | 338,000 | 147,000 | 147,000 | 122,524 | 122,524 | 98% | 1Q24 | ||
| Total | $710,000 | $428,500 | $595,055 | $358,790 | |||||||||
| (1) | This schedule shows projects currently under active development through the substantial completion of construction as well as properties in an initial lease up period prior to stabilization. Amounts included in the estimated project cost column are the estimated costs of the project, including direct financing costs as of project commencement. Significant estimation is required to derive these costs, and the final costs may differ from these estimates. |
| (2) | Estimated and incurred project costs are construction costs plus financing costs on project-specific debt. Neuhoff has a project-specific construction loan (see footnote 4 below). The above excludes any financing cost assumptions for projects without project-specific debt and any other incremental capitalized costs required by GAAP. |
| (3) | Initial occupancy represents the quarter within which the Company first recognized, or estimates it will begin recognizing, revenue under GAAP. The Company capitalizes interest, real estate taxes, and certain operating expenses on the unoccupied portion of office and retail properties, which have ongoing construction of tenant improvements, until the earlier of (1) the date on which the project achieves 90% economic occupancy or (2) one year from cessation of major construction activity. For residential project construction, the Company continues to capitalize interest, real estate taxes, and certain operating expenses until cessation of major construction activity. |
| (4) | The Neuhoff estimated project cost will be funded with a combination of $250.6 million of equity contributed by the joint venture partners and a $312.7 million construction loan. The estimated project cost, as of project commencement, includes approximately $66 million of site and associated infrastructure work related to a future phase. |
Land Holdings
As of December 31, 2023, we owned the following land holdings, either directly or indirectly through joint ventures:
| Market · Company's Ownership Interest · Financial Statement Presentation · Total Developable Land (Acres) · Cost Basis of Land (in thousands) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 3354/3356 Peachtree | Atlanta | 95% | Consolidated | 3.2 | |||||
| 715 Ponce | Atlanta | 50% | Unconsolidated | 1.0 | |||||
| 887 West Peachtree (1) | Atlanta | 100% | Consolidated | 1.6 | |||||
| Domain Point 3 | Austin | 90% | Consolidated | 1.7 | |||||
| Domain Central | Austin | 100% | Consolidated | 5.6 | |||||
| South End Station | Charlotte | 100% | Consolidated | 3.4 | |||||
| 303 Tremont | Charlotte | 100% | Consolidated | 2.4 | |||||
| Legacy Union 2 & 3 | Dallas | 95% | Consolidated | 4.0 | |||||
| Corporate Center 5 & 6 (2) | Tampa | 100% | Consolidated | 14.1 | |||||
| Total | 37.0 | $162,812 | |||||||
| Company's Share | 36.0 | $156,008 | |||||||
| (1) | Includes a ground lease with future obligation to purchase. |
| (2) | Corporate Center 5 is controlled through a long-term ground lease. |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.