Cousins Properties Incorporated

Reported second-quarter FFO was $0.75 per share. Same-property cash NOI increased 5.9% year over year in Q2, after a 5.5% increase in Q1. The company completed 924,000 square feet of leasing in the quarter, with 98.8% leased occupancy and 89.4% weighted average occupancy; cash rent roll-ups on second-generation leasing were 9.2%. Full-year 2026 FFO guidance was raised to $2.92 to $2.98 per share, with the midpoint at $2.95, representing 3.9% growth over 2025. Management said the guidance increase reflects stronger-than-expected leasing and the impact of recent property transactions, and it assumes settlement of 2.9 million forward shares in Q3 plus the sale of the 303 Tremont land parcel in Q4.

Colin Connolly struck an upbeat tone and framed the quarter as evidence that the office market is rebalancing in favor of high-quality Sun Belt assets. He emphasized three themes: improving demand, a persistent flight to quality, and historically low new construction starts that should keep supply tight through 2030 at the earliest. Strategically, he said Cousins is focused on sustainable earnings growth, a best-in-class balance sheet, and continuing to upgrade the portfolio, with both acquisitions and development now more attractive as scarcity increases.

Gregg Adzema said Q2 results were strong across the board, highlighting positive second-generation cash leasing spreads, higher same-property cash NOI, and exceptionally strong leasing volume. He detailed the transaction effects: the 100 Mill partner buyout was an equity transaction with no P&L gain or loss, Research Park Plaza 5 generated a $9.2 million gain, and One Eleven Congress was moved to held for sale before closing, so it did not create a meaningful gain on sale. He also said the company closed a new $1.2 billion unsecured credit facility, extended by 5 years, and added extension options on two term loans totaling $500 million; guidance assumes the forward share settlement occurs in Q3, though that timing could shift if more sales are executed.

Analysts focused on rent growth, cap rates, leasing duration, development returns, AI-related demand, and the timing of occupancy gains. Management said rent spreads can vary quarter to quarter based on mix, but they are increasingly optimistic that tighter submarkets will support both higher rents and lower concessions. They also said the 9% to 10% cap rate on noncore sales likely won’t persist as a proxy for reinvestment opportunities, because the company is nearly out of noncore assets and any future sales should have a tighter spread versus reinvestment. On AI, management said Austin is the most robust market for AI-related demand, but they’re seeing activity in several other Sun Belt markets as well.