Cousins Properties (CUZ) 29 Jul 222022 Q2 Earnings call transcript

Good morning, and welcome to the Cousins Properties Second Quarter Conference Call. [Operator Instructions]. Please do note that this event is being recorded. I would now like to turn the conference over to Pamela Roper, General Counsel. Please go ahead.

you. Thank welcome Second and Call. Earnings Cousins to morning, Quarter Properties Conference Good Operations; our me our our Richard of Conley, are Executive Gregg and President With Colin Officer; President today Financial Chief Officer. Chief Executive Vice and Adzema, Hickson, distributed and furnished well X-K. were Form afternoon as The press package yesterday release supplemental as on directly company requirements. in measures accordance Reg G package, In all financial GAAP the the supplemental measures comparable non-GAAP reconciled has to the most with

risks disclosures be filings. XX-K constitute whether our risk are federal does If as supplemental you annual page statements, declaration future Form in of any on a forward-looking not events a report other result and materially The new and The to receive any full links otherwise. through the securities other SEC forward-looking undertake today information, company and factors did certain duty may update factors quarterly or SEC of our our of regarding posted yesterday, discussion on due Connolly. Colin supplemental forward-looking differ the is With potential I'll copy, meaning from results the these with within statements laws, these package risks information discussed available set call and is of or to the documents contained detailed a statements website, over forth to SEC. and aware available not Investor in matters uncertainties including that, the filings may the Relations in turn and cousins.com. the actual that statements variety Please a

morning, and good Pam, you, everyone. Thank

quick quarter a environment observations I some to trends, financial overview provide our providing the of macro second and Before on highlights. want

in team delivered On the FFO. earnings $X.XX per the share front,

are front XXX,XXX roll-up. during we us. XX.X% cash in leased by pipeline an the These with the of we quarter results, feet encouraged remain and rent leasing square strong Importantly,

at X macro trends. the I'll environment, important Looking highlight

inflation and fiscal were extraordinarily Reserve cases, levels economy. to in The surprisingly, labor market the stimulus disruptions Europe and companies created tightening as rates many know, supply layoffs. have tight a decades. slowing in financial some First, higher monetary interest and plans Federal Accordingly, conditions. chain an Not in and announcing all begun has slow hiring unprecedented not result we seen is are from COVID

mentored. want sides office, same the organizations of want stock office to collaboration continues They are growing and and be to frustrated prices college experience. Second, graduates with to weakened future to CEOs at to work. deteriorating. comradery, the time, Encouragement listening. are particularly they from and the in-person have both and workers accelerate. is build return softens. job Financial the record as for likely younger recent premier remote office and to results want employers is attrition At market now trained, looking Culture, are the they the levels. to is from increasingly and return relationships, an to be They their are bottom top the are growing

e-commerce or the through pay statement by will Let declarations that reverting made normal channel now travel placed me as new have narrative office to I point. mix is than be at parallels even What approximately share right that regarding data revert eventually also should see from the permanently current suggested remote they office work. the "we this to roughly be Will Many to the XX off off. bet retail X statement the leap market. market pre-COVID would this the have were they it regarding we didn't X,XXX in clear employees, physical would now mean. similar the of rather dollars Shopify a a see or years." laid ahead mix, paraphrase It's recent bet that

collaborate, critical commodity speak While for problems solve office grow remain that and believe build will office, culture, we for premier talent. to suburban or can't innovative I companies

Lastly, feet. the to absorption square XXXX broader becoming positive XXX greater To resiliency pronounced. outperformed XXXX the for million even is since illustrate, more continue market. quality to assets flight experience and net buildings is Trophy built since

net to XXXX feet. prior XXXX is for contrary, XXX built staggering million loudly. The square since negative absorption the is a difference. speaking buildings That On market is

So for rising this to more weakening and interest economy. not mean a will or we all rates are financial challenging, impact likely strategy? our Cousins what of conditions does in immune Market become the

Cousins However, all we the economic phases to built of thrive during cycle.

today. positioned well exceptionally are We

will why: demand highlight believe as in Sunbelt migration more We from to than trophy we fair the we and quality. benefit Austin, me portfolio Tampa, that flight both First, the to continue and submarkets office leading share Atlanta, Let we of Nashville. the Sunbelt best get our Dallas own Charlotte, leasing Phoenix, of

our Second, pre-leased, office of our XX% million the pipeline development component with current $XXX positioned for appropriately is the share approximately climate.

by incremental will from modest We XXXX a benefit having only meaningful during and speculative NOI leasing risk. XXXX of amount

at Next, at Southern are us. XXXX the Peachtree known behind by Anthem move-outs Promenade and Norfolk

happen, were the attractive a overall to extend to the these could it footing. complete While solid our of on if timeline re-leasing is properties, portfolio recession,

XX.X%, in XXXX through the totaled sector. lowest expirations just among lease the office Our

our Lastly, balance sheet is best-in-class.

debt-to-EBITDA of compares was X.Xx. quarter at second end to the the X.Xx. of office average This Our the approximately sector net

kept were and of we strategy. include and amenitized will Sunbelt strategy Many of premier, a changing company. range cash compelling much Cousins, pricing be portfolio more we preeminent few the pure-play office this short-term remained potential properties the We unique have At many powder of over have in key The of which are dynamic have spring ingredients Today, ready. be in They'll priced a later, We teams the underwriting. cap development operating and a in attractive. just rates and with on high opportunities disciplined earnings. leading local with that believe our and our a looks months way, highly a a and low office, percentage ample platform creative liquidity balance approach. innovative Sunbelt the notwithstanding strong value deals creates X anticipation properties, deals market, the development residential and mixed-use had entrepreneurial XXXX. the compelling course markets, in through on announced of evaluated have our and the sheet dry, leverage markets, to a recently accretion In we

have been for we executing decade, committed and We a strategy over it. to this remain

term, will portfolio forward, of the new accomplish to we a modest reinvest prioritize own percentage bar the be is In development capital to long-term and properties and near stock, goals. our is will at less strategic selling use unique point which relevant our for our if higher. the continue this that Looking developments most the compelling into acquisitions,

cap implied yield own development costs look to stock. quite is demand on and strong compressed While has yields product, less rates they the for our material escalations today compared in acquisition so construction new attractive

We construction will costs expect moderate.

will we exciting we team potential soon be mindful yields enough development In higher So short-term closing, with back of impact results. some interest as the on and of rebalance. are rates a to economy development the slowing projects

the separate optimistic office strong with will premier are sentiment. in its investor a improved over term, we asset very that own However, into class position. long Cousins is

the Sunbelt we a trophy is own and in portfolio, dedicated sheet for a right are and We have and markets. primed opportunities. We right team, our talented balance

skill to Richard? work creativity, team thank Richard, I as call who as and their continue turning hard Their their customers to talent excellent resilience day. our Cousins entire to every our to to jobs over us and the ahead. will provide well service want Before propel

Diving solid team markets. users this with able was Despite indication results. good and our in to current our morning. portfolio office our produce In results. operations backdrop, leasing quality is is a Sunbelt that macroeconomic our Colin, quarterly resonating again clear right the the quarter once Thanks, particular, activity of well into

respectively. XX.X% total XX.X% Our portfolio office and weighted percentage lease and occupancy average were

occupancy quarter-over-quarter Our weighted was increasing XX average points. basis virtually unchanged

We total We XX a of move incrementally the XXX,XXX weighted also for saw a term X.X during utilization regard the leasing, quarter. square feet physical to was quarter average leases of higher outstanding. years. executed With with

XX% over with volume Our XXXX. terms signed ever is in up relative transaction The XX% was third quarter square first tied our to count run the XXXX. represents foot quarter lease quarter the rate count especially notable highest quarterly up our in and this of and

activity New in technology of growth our quarter diverse the strong, XX.X% total leases the with second-generation with services increasing customers a and rents and industry represented net Rent of professional was with terms this in mix the our on was of leading XX% Only was way. this quarter leasing traditional cash activity sector. activity XX% in expansion quarter, basis.

Our yet portfolio's $XX.XX. again rents to increased in-place gross also

geographic strong per we leasing than lower quarter to to $X.XX XXXX. was and growth, more $X quarter rent to compared effective free with as lower lower in This rent leasing square quarters the more $XX.XX, net foot concessions were last addition in seen than relative rents to modestly in concessions, the primarily lower due of at $X.XX our In year, Despite our what recent line sum first posted tenant XXXX. half of came in levels improvements defined than per decrease mix. last and

say healthy Brier remains services we square It's in Lake balanced to that diverse Houston that continue Looking of are have market that XXX,XXX in group a With shown pipeline among at level, forward, of disruption. I'm activity seeing foot our we pleased also markets project by a traditional signs companies. elevated reminder professional holding. a late-stage remaining our prices date oil is well to noncore no has anchored and interesting lease Houston. to an quick A

welcome conditions further screen our in well year. new yet. stronger going almost Houston activity in we activity economics some are closely not Despite portfolio. our are that lease certainly portfolio healthy and seeing simply pipeline, our be strong Houston a activity our overall monitoring have back While in any half markets, certainly and there net recent positive that deterioration on holding to acknowledge to almost in of would would not negative this forward leasing will impact We relative core to the and our macroeconomic

probably trend market to look feet XXX,XXX example impact an highlighted of we Colin do to negative According Tampa. better overall continue JLL remarks, posted has flight the for his see As There's in net square year-to-date. of trend. this of no to Research, market absorption the in quality the to

properties positive segment net has the and highest square CBD the submarkets, our absorption quality and Class are Westshore located, feet. However, XXX,XXX of A where posted

seek out trends leases in Atlanta, expansion including an Tampa portfolio leasing during XX%. of property with leasing activity to has creating According committed in X-year new X and a Austin is with also where pipeline of Walmart, and in showing we benefited in JLL, 'XX, of square Atlanta's in flight resumed above same at quarter, In has of remaining relatively the clear the the XX,XXX 'XX, McKenzie has stable Broader part completed blended feet rent like X companies XXXX, quality greatly continued XX.X% many filled quarter. and pre-pandemic nicely space lease rents of of currently and quarter in office in Prominent also activity Colin growth are this Park Austin have to XXX,XXX with repeating after at X There's inflation record led CBRE, leasing office believe to has Like leased, of of economy rents quarter, including occupancy our past new migration hubs great stabilized no trends. leading these impressive to all doubt The up to rolled roll-up Atlanta's peaks. and transaction asking Plaza rent Austin first Our years our Visa, expansion Northwest could XXXX XX over return cash quarters. levels was this activity Atlanta the also the markets property's Midtown pressure submarkets what feet Castle to foot surpassed square in since in Average Central nation high and Nike property average gains rental strong square average last market and Atlanta. over the from earlier. a put of levels over XX,XXX fantastic according interest occupancy quarter. that market. our to come. to This this a rising for rates in at will out renewal realize and Systems Austin to they square continue long [indiscernible] at term. positive core was that Cadence early It data according Research rates office quarter absorption. Systems those market submarket. and Nevertheless, a that office this the feet the our said the remained XXX,XXX leasing on Design we as bears last Atlanta, companies high also high-quality net were the health

the headwinds through of incredibly The of economic are are and enviable only encouraged end annual expires couple We the of position XX.X% as of are our threaten. that past years rent behind larger XXXX. of us, in stability contractual expirations an we

the thank Cousins Before want I team. entire off to Gregg, to handing

As always, your hard our of Gregg? success. the foundation work is

providing performance begin Thanks, development markets by move detail Richard, our I'll pipeline, and good our to activity, on revenues. morning, everyone. transaction followed quick on upfront, Then our activity second solid sheet the our despite remarks remarks a updated our our by balance capital parking in same-property some uncertainty. and I'll before discussion volatility Overall, XXXX. balance information of of Colin my stated on closing outlook with quarter economic my our the as were and numbers for

these its significant pool. to in and performance, Focusing include in in [indiscernible] Tower by X.X% decreased update move-outs that Promina recent operating These on this we've in same advantage Atlanta, and Despite kept a Buckhead had driven our a here of compared as are decrease properties X net last undergoing large Peachtree cash X.X% property properties. XXXX Midtown take expenses. have both each X.X% income and buildings same-property and redevelopments we decrease work, in to revenues numbers year,

same-property a fundamentals Excluding during buildings, our increased quarter, the X.X% of better second have portfolio. cash these within would current reflection NOI the X underlying

the of For months NOI, X XXXX, XXXX last first is Peachtree flat to Promina compared and including year. Tower cash same-property

We of and for Domain improvement months positive 'XX commencement on driver X improve full year. over A entire growth same-property for X the the X large property. July anticipate NOI final we this lease cash expect this of Amazon's is our to and

out, Domain to a As reminder, prior the and newly Expedia's up we extended consolidate Prior no a this empty beginning the with out this building. rent operations Expedia XXXX their signed been of as and moved move rolled Amazon has revenues quick since from that term lease at developed to our the building XX generating lease.

have we as months place. X the Amazon had However, downtime of transition to takes

quarter. earlier, increased at has it. mentioned fiscal parking first occupancy properties have They're to our the compared As with and X% our up grown revenues Richard along

of about the total context, For they property improvement, about a X% recent despite comprise parking our below And revenues rate. revenues. run XX% remain stabilized

Later for we This activity. XX% properties million. acquired originally Avalon who payment the in to submarket Atlanta in second of piece a submarket of sites the $XX.X parcel are quarter, of a the we here identified the a for sold of we million. quarter, a Uptown a growth. our it ventures $XX.X We early one interest controlled transaction bought Dallas for negotiated and Early land the $XXX.X joint bought its located Dallas This to with in interest partner X the included Turning million. development in Heinz in victory developed value of promote was had and terrific our in represented we that our located in well. partner's land it price of

than a purchase, and multifamily. our area initiated of and is a high-rise location more retail since highest best now great generated has residential use emerged and a this the We of However, rather office sales as we process outcome. and site the

was Our share the $X.X the sale million. from gain of

May. another this financial of $X terrific the forward during million our execution of the is first billion per execution a issuance quarters of proceeds X-year with a at our really Near XXXX. third $XX.XX a HEIGHTS X.X common leverage-neutral at in The gross facility on On share. shareholders. pricing end of point week quarter, on similar settled prior our Tampa acquisition we the stock in a new 'XX we time. covenants. capacity and the The basis. of shares the It's unsecured XX, the price a fourth sold Union and of for commitment maximum of basis It's and funded date on capital improved credit new It's maturity markets a front, this closed April during terrific remains

Austin X budget. remain Domain development our efforts. Mill on and XXX to projects, in X All Nashville New Hakan in Turning Phoenix,

funding Our $XXX entered of covered our is pipeline. commitment derisked We pipeline small, and more existing which relatively this approximately our future liquidity financing, is remaining than million, for this earnings. with development a uncertainty by construction highly period retained

the quarter. Looking second at leverage during reduced we our balance purposefully sheet,

just net debt earlier, As now Colin EBITDA X.Xx. stated is to

$X.XX between Our guidance. $X.XX full per and economic down with rock is $X.XX updating anticipate 'XX close these or midpoint adjustment is of our as rates, challenging $X.XX We earnings navigate a earlier, discussed financial to the times. $X.XX. variance as This by partially X.X% I'll of NOI. we a I from negative position currently year per FFO land by of $X.XX by higher interest share of is midpoint XXXX prior solid due This Victory driven $X.XX $X.XX $X.XX from share. well as offset property improved the

SOFR long-term forecast curves forecast the Focusing forward credit short-term curve use the to XX-year spreads and and on LIBOR interest rates. forward we treasury to plus rates rates,

at the Since I taken and that earlier our reflected time call, that guidance and actual in rates even provided increases quarter short- place had As March, conference higher. year. have we on stated moved forecast first the long-term already rates in both

points. year-end forward points. XX-day XXX an has and curve from the X.X%, For from mid-Xs, rate to has of X.X% the per to about basis LIBOR increase an example, $X.XX issuance generates or XXX moved 'XX more Applying XXXX basis increases for at million low during expense fixed Xs interest $XX The share. to moved about in tenure these increase the coupon high of

curves you look I'd the to credit spreads Beyond as update 'XX, earnings your models encourage forward you us. for at XXXX and

currently the that, property operating property primarily about operator. over to improvements prior of driven back parking to NOI, $X.XX call is anticipating per 'XX the turn and share our expenses. revenues Turning by I'll guidance. we're higher With This lower over

[Operator Instructions].

Barclays. will Powell question come first with Our Anthony from

pipeline the the set you you focus companies a your You on are from current I more will your bit And incremental of What by of demand tech sort and they think quarter. a to diverse then demand of your how was tech. incremental wanted a in be in do tech. your What hearing markets in had markets current driven mentioned lot are pretty this forward? environment? that tenants reacting leasing going given you the to

our tech this out Systems. look was Cadence renewal then. Design activity, with Austin and at a was large Again, was piece expansion in of that you and a tech small that question. for our really, first Thanks piece the the called quarter activity very I And XX% activity of quarter and of our

big doing really is XXXX completed in Everybody clear. tech levels see to headlines look significant contingent the tech hearing You is have is our to demand back activity. very what It's and the of reading right now. to

So it for us. 'XX, not encouraged showing the is close super at feet 'XX But I time, fact like quarter was certainly to the from with demand up square the tech sector. we that very little XXX,XXX activity this in by think in completed the same I'm of that of

think that in in at and old see other professional is we'll I pipeline on continue just that legal, encouraging activity we'll demand the business companies, the what consulting I services So based area. continue today our have to miscellaneous completed in to the services that our strength good sector, accounting, fashioned look

you space Anthony, couple leased in mentioned, years office with space, of users growth of cities office last a the Charlotte, professional I'd a are of have really economies. of just the the over not greater Austin, accounting firms, large while very the dynamic firms, to of a add financial numbers. services returning the like and and markets traditional now that lot been couple very has over lot again, again, driver at look our as Atlanta years, of tech And diverse Richard as last

of demand the sectors other kind And pent-up do in there's economy. believe of so I some

you on a Got update you're cautious it. your us It for being Central. And development, on seems more like can on given bit development. comments you Domain

So this going started to still be that potentially later year? is

rebalance have become that bar our new in to that and/or think becomes than believe we faster forward. product, more down And And new to justify mentioned, to optimistic time, see flight opportunity happen the include -- higher. up for development think I many going up, again, rents I actually in even and commentary. Point if financially recessionary there's yields it go attractive. need do I over as that I'm to us as Domain to world to flight demand little so to other an to the quality the Look, for quality levels that's I costs development see those have come the are gone to But less a again, attractive. pronounced. costs would that that for for is to being alternatives -- I moving relative the we're will get need time bit think of

will come from next Fargo. with Blaine question Our Heck Wells

how dry Colin, comments opportunities the So you opportunities on for? are you investment guys what color you that suggest bit can expect just maybe do play to where you up the And is you guys your that on looking powder provide current market best likely emerge. more think the delevering little for a building are going And are to stress out? emerge, to and

Blaine, -- Yes, stands now X.Xx debt question. balance EBITDA. great we're at to the about sheet And again,

give So in of perspective, here there us opportunities that pretty has at capacity that be pricing. from spring to do submarkets our in less think interesting the hopefully, assets advantage our the and that become available acquire high-quality debt time, see. summer, repriced targeted we opportunities substantial at has we same as advantageous to does take later to could And from

come. those And so to the be which on likely lookout hunt for think the I will -- be opportunities, and continue we'll

consider in to the you property taking number your multifamily we've Recently, properties diversify other related that, in of to portfolio, from X types? of you JVs. exposure future any exposure types, away multifamily, have guys or guys currently including multifamily the peers on would property other seen office Kind ever that into and a something both is

great Blaine, quite you experience in we in pointed And context. have mixed-use sector of Yes, bit a do question. a the residential out, as

think those and itself mixed opportunities that, continue a as time. of But will in opportunities see we to and are, are urban oftentimes, over our premier office both We committed that I mentioned, to as office residential. use differentiate submarkets,

this the We've will both Dallas, projects of Central, going out residential bank be would and we've past. so in an office that forward. of sites on a I'm that today those can project. some and support Midtown land type And office got executed Atlanta. Domain got confident Charlotte on And that X that accommodate in And of terrific we'll we've execute residential

a got mixed-use take great land. we'll no arise, of when land we've advantage those bank And So opportunities of doubt them.

for Last helpful. one That's Great. me.

decision I your was in and your to have Dallas. whole thoughts or thoughts you in on the it or as on if the around market partner? in operating mutual it market, committed your partner sell commitment the just there future think X Dallas that and you driven to to Is fact, level of the more Just kind the Heinz any wanted a that assets with of land moment, -- And given Victory a only was and JV? that then get you the decision are, to development at Dallas. by still

vibrant in it's Yes. focused and right and opportunities. disciplined the committed We're for large, Dallas, we a on market still to in finding the and Dallas. Sunbelt remain us

As Victory. it transaction relates to at the

multifamily. best use residential was out, highest and and do As the joint he conclusion to that came who buyer discussion decision it partner high-rise a was of the Heinz, site the have was platform. with became pointed that Gregg capital they a And collaborative as with ultimately we a

for a mixed-use open multifamily development, in and out willing I think think larger it we're tend conjunction will site. in to absolutely as with I I to invest earlier, pointed but us, be

that at interest was time, price. the felt So we forward attractive with multifamily to appropriate at move in had an it

us for attractive decision pricing. And exit to at so the was right felt like we

of next with from question Jamie Feldman Bank come America. Our will

debt or color you development kind just a, like -- redevelopments get How balance and take what from rate break out avoid of to to kind was your these strategy. your down on in just plan just in kind that? process of do number more by you out: I to secondly, just sheet about hoping think if future in you do versus the the rates; moves were you to of earnings break debt So balance debt? Can maybe floating philosophy longer-term

Jamie, it's Gregg.

a So And maintained balance it to total debt got is if with to it decade, we Typically, this about is. on our as we've the a a optionality. This total that you percentage debt of rate XX% closer decision than of made debt. was little last higher us over purposeful we've XX% look sheet. some provide currently, normally floating

table As the $XXX as and the know one about this I at of of do end do refinance the the us it call, of got XXXX. on probably you and options to stated matures that more earlier deal. was for inaugural $XXX And of beginning debt we've an in million to bond unsecured debt million. you the that right, And year need of than

so do unsecured some a we'd of go not bond quarters deal. we facility the the way balance in down couple economics to of going our route. the clearly, over an have credit last And of up that built that decided we on to have macro gotten so full use that, the proceeds if Well, and we're probably not

floating And types term we'll insurance, there's and been. private where quarter it other the the market closer of rate has process, historically the debt, in liquidity else. we'll get and that bank to in placements, next do we'll for loans, down something in our debt or -- So refinanced lower

level. target Your level? that what's And Okay.

XX%. Right around

If every much been go the quarter. over at look our balance XX% pretty last close very and about you decade, it's sheet back to

guidance And Okay. can about. if about from you get come you have anything think then talk thinking more down risk asset you're numbers done that may the Like you to sales?

very we sale time that can't is the strong. uses philosophically, again, we ins an use those sit on sheet trying and we and But of -- we're there's perfect, of take to see that sell the change, in Jamie, we lot the us. we time, opportunities. over change. advantage balance I to always a liquidity think the proceeds. the be up what as were opportunity And less if -- best those executing a does consider My that to certainly, hope and if today, can. could as relevant Well, core Again, we such certainly would We'll have to market. be focused we attractive investment sales My hope And everything match outs. say is I'd not sources and

Yes. it's Gregg. Jamie,

We we've I important net note, this at sub-X to terrific sheet don't is as anything in the would debt-to-EBITDA, a sell change. That it's with choice sell shape. need point. think be about, balance to to talked

do like today. new stock we interesting our there's going And of come We from -- capital to had are Yes. as a also along. -- an we also own sale. source I alternative if said, felt we acquisition a look can think at noncore a And there's we opportunities

until on project. kind what I All a for, finally, an comment you time finish development X-year you start sense. watching given are right. better conditions. makes your pausing of mean on new That And on to lead then see office to economic it's

Look, -- that looking what our are Yes. development yields attractive we're are other relative to it alternatives. for

costs out we make time, I escalated I in out ourselves want compress and for to ground an here today, into think yields sit be at but very the as want it return. ground. of to clear get leasing just new of solid and lock attractive want and to development, therefore, demand there's we same good the time to building, building get build construction a build We the that to point don't

rents I absolutely over the it's I push going second the rebalance going get customers you'll half to of so And do on think year see products. into believe, think moderate. some higher we And are costs, to new to

ground. hope rebalance of we're out that and will that got At great our a it does. Cousins, we've land be so the bank, And will first and what

question Our will Baird. come Dave with from next Rodgers

by things I question is But makes feel about leasing Richard, cautious uncertainty. this I leases, your you of directly more you and build Obviously, you Maybe pipeline, lot just this stuff that like view? that about is versus point can directly guess guys much the across seeing seeing coming that you, really tone come worried but cautious macroeconomic you're of you Do there's both Colin -- are you're guys informed tenants more will maybe cautious. tone toward more you the number talked demand so to from that down much encouraged to and more that volume, you more little earlier much does Austin, usually as bit in you're but yet record the the of there, across cautious. good a obviously go this a

demand. few quarters development the our quarter not X beyond construction a from or perspective, is thought by over materially just that our have informed by escalated or around in informed what really is costs ago. we leasing Again, It caution last

price last us being yields and want to go. thing moderate, compressed do going opportunities. of year costs looking as any at those we'll a at those to second half costs But over higher development costs an could ready that have will into of what this overall that believing -- and that's year cautiousness disciplined the other is GMAX we those into mentioned, so believe, we and ourselves But be change, yields attractive. there become capital next to return. the allocators really And lock offer with that I to then attractive But perhaps financial is more be a development don't the and and and

cautious can we there that maybe share to those on the any you to if of anything more make purely details of cautious are close the length you you makes separate that maybe just lines component. development Then our in out time along activity, deal terms I side. know a there leasing don't

-- our Yes. hold pipeline we're there is moment should certainly on change, our and tone I we GDP on summer years. that phases market the every of the of always any Cousins, broader from tour customers. shown are mean, existing up do Look, signs interpreted nothing headlines the it well. But summer, today, read but of positive at in if say, of activity that all of seeing the a we you couple had would is say were positioned want leasing day. obviously -- same feedback -- the slows make at seeing from some to the we today. within And bit you economic again but sure our see that constructive cycle. the that has be It's no, as typically over economy perhaps and numbers thrive I any very been we the positioned to or last parts during do kind to ground I papers read as realistic, also the but the market we're anything not on ourselves

broader and data. we're headline so macroeconomic watching And that

to of kind able more question, activity those. downtime space, just maybe to the Peachtree that Backlog Anthem on Great. Tower. backfill Maybe before expectation of kind last finish the you're on any and specifically leasing of up timing, of

in properties. market on top activity stations on in got both We've in effectively of sit right here Again, down other both submarkets. One their respective and Buckhead the Midtown.

and those ground of kind finishing floor up we both of are of of amenity space outdoor projects. the think importantly, I the renovation

shape. kind just they're of So taking

customers of And our to can can now we them half project firsthand that should begin as experience so first we've kind that of and been year. and the believe we accelerate during into to drawings the bring they opposed renderings showing the lease-up

will Mizuho. question from with come next Malhotra Our Vikram

talked a you've average Can you're see in spread just about seen about values sort and Maybe of the in development and what versus little things talk just like product yields you asset out you where also your shake that you that pausing market? when between one, to and out. where trades are may first trophy look called maybe the

it on again, again, again, on waiting remain hopefully quickly to we as to relates but cautious rebalance. pricing constructive those Well, and demand for development,

environment the to As real discovery kind a price lot or again, has the in of relates in say, side, markets for June. material of debt I there pricing, the other really change yet on been rate a estate should that occurred not it capital

finding be deals of product. I people we're as do haven't to seen today, level. think relates higher of in that about yet type asset out trades is pricing still kind values But completed value-add for more and kind you could discussion change seeing are of any XX% there its again, market so some really the And talk a it

growth specifically, then that seeing helpful. on an translate top And markets, does the -- into that just your for can slowdown What can for some so you TI what mean mark-to-market tech Cousins about -- and your incentives? financials the market That's they're you services. towards does and maybe comments that now just rent if mean for and of maybe how Okay. just professional and should trajectory. still more And think or we uptick

This is Richard.

perspective going to change more not is and perspective, technology I'm I anything a really traditional customers. think that from with sure concessions I to TI and a rotation that mark-to-market see from

again, still And levels, like talked we driver will I there. I the think are think the of primary about that be demand earlier, general economics. lease

big our I'm real or not So in economics that accomplish a see the in I sea to going to sure we're markets. be able change change

the versus like both into metrics softening translate level for that meant demand, Cousins how at those does I specifically? in market Just

the next Well, would it's haven't haven't speculate would what on Colin. softening latter I an of again, softening. the looks we of we certainly, said, does, kind of have would yet to in know economy that year again, if broader extent Vikram, want seen rents don't the impact. today just because the pipeline don't that we pretty half in add, change solid, year today like and material the really that I Richard a the But look or seen and concessions. as over

Okay. And last question. then just

were would to you rate isolating which the be rate of the by at I mentioned. much a in the 'XX the the impacts Would interest numbers to costs? annualize impact, to debt terms look adjusted way forward curve from fair for thinking magnitude need that you've be how just say guide about XXXX. down that, to about reasonable think we cost, higher You it just mentioned think to If come $X.XX,

Vikram, Gregg. it's a That's terrific question.

'XX looking made were we would full a number. not year 'XX, use if year adjustment a And $X.XX the at number. clearly you for annualized full you was So annualized

kind However, second 'XX forward curve short-term that the current LIBOR first, then peak come rates downward. of the in quarter assuming is and of

XXX earlier, closer to lower points. It's So 'XX. much in the in the over probably to the last 'XX basis mentioned basis increase is of X XXX months rates short-term points I

a smaller what period. we previously longer time to adjustment it's from in, applied but had upward So a

Our next come from Ismail will question with Green Daniel Street.

digging more. softening comments looked guys The the healthy on the when Dallas lens Great. you equation comes Colin, seeing guys you side construction sold are maybe it pretty of land pricing, to into at a the development? bit any in

say It I sticky. But have not wouldn't seen, would change available. over in sometimes I be a seen tends we bit pricing. have little quarter, a yet become the we say land more last to land

say so prices. some different starting But I'd are -- we change it I there likely of And more seen change have we've seen at be at we look to opportunities, that some in in but the but expect would to of not a yet pricing. those that price. not

opportunities mostly the evaluating? in evaluating, then is backup there a specific coming sheet. be you ability a Got in as curious pricing function you potential on I'm opportunities you say, potential rates? in issues potential those acquisition all higher And it. up are your the Or just are guys given tenant those balance to of mentioned are any, opportunistic

some I find perhaps have tenant-driven. pools. available, and have debt that seen But to any less wouldn't they're for different been I say funds, with reason, think buyer smaller whatever trying you've instances cues, liquidity

we'll think demand. I that And think office over term opportunities I us the outsized buyer. cash for we so a long think some continue a generate trophy that be interesting efforts create premier could quality could given And opportunities to on we focus that will our

quality will And And opportunities. that rebalance be some some so opportunities think I that point there'll at like the have will development the we hopefully, do then and past. in our road, properties. I be market think of down to pivot focus And we'll the on development

so and between we capital allocators provides And pivot agnostic of and again, most willing be continue to kind compelling whichever the of to and focus return. on development acquisitions

Cousins. just owner updated the country that in And now within the expansion potential on opportunities for Science submarket then horizon for in just the thoughts sector the confirmation asked on acquisition there's I on any call. science life largest about But in life developing last me. curious, potential Austin, last and is science Life one the

evaluate and I market. science mentioned, have sector projects, life of be the context think going understand also We're have in urban use. uptick actually and residential we'll in active that seeing in forward that been to mixed-use open the we'll residential we're an Atlanta, but taking Yes. activity in note Austin. obviously again, the as Again, activity seeing And science of mix and I the we're in sector, active a life in an

over it's local market today, be think something with our opportunities lack and -- priority and likely of us. get could But experience. think I think for we given time in I we to science, we expertise, history we'll life but on that a the I offer lack there experience perhaps groups it's lower some could of smart partner

a from next follow-up with is question Our Fargo. Wells Blaine Heck

And that in repurchases Can place? at is. you've preference at us you guess this have you rank this deployment? investment capital for Colin, mentioned point times your in point? I a so, implied your a repurchase rate does And just given as where option program potential for if few capacity cap remind buybacks a where what if

in a in question. I'll week, Gregg. let second part. of first But to approval with simple it's share Colin place, program not Board start And the and part I'll of repurchase it's you do you the put set in program a the could place. days it Ben, very have answer a as within have We few know, up. a place.

not not complicated, time consuming. it's it's So

quickly. can when we emerges of identify so capital, in that compelling we is place potential a And share source of capital very use put repurchase most the and

of don't Again, of financial our merits share we Yes. capital, the add look Gregg's to able and past. in repurchases, we're to door, lot down done strategic and that to a acquisitions, comments. we generate development have if sources sit with have I along and the we and/or as at Blaine,

value us on on focus and -- and dispassionate the capital shareholders. is, are dependent in and opportunities and it investors again, today, time drive right where what of to for the of be be our We those to price X the on, agnostic will and try think front share at of source we'll the uses have be again, that's I all conversation, to executed going certainly part

question-and-answer session. over our closing conference concludes back to I the like turn would for Connolly any remarks. Colin This to

Cousins to weekend. great your if Have today interest feel Thank have free Please Properties. all very reach or to and in Thank Adzema, much. Imbeaux, continued follow-up you you you a for further us all questions. Roni joining myself, Gregg any out

has conference presentation. today's The Thank for concluded. attending you now

disconnect You lines. may now your