Cousins Properties (CUZ) 28 Oct 222022 Q3 Earnings call transcript

Good morning, and welcome to the Cousins Properties Third Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Pam Roper, General Counsel. ahead. go Please

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

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

We very Thank had you, third Cousins. at and morning, strong quarter a everyone. good Pam,

cash in per same income operating front, on On X.X% a $X.XX the delivered team basis. FFO increased earnings share and the net property

quarter, the rent square X.X% Importantly, non-core up, feet and our we with during excluding roll cash a leased XXX,XXX Houston. X.X% in asset

XX% Chapel Square, interest $XX.X our a Carolina Additionally, terrific in gain in we for mixed-use property are a These North Carolina results. million. sold $XXX million, of recognizing Hill,

for and/or Before on rates inflationary conditions at to few have Cousins, some unwinding and probability growth. all the to growing, are the other tightened, Federal economic layoffs demand take estate? macro a likely real to the is soften on observations will update This Despite I share implications What leasing providing a environment. the slow our will rapidly play environment, the recession have around central strategy interest time increased. product likely raised of First, out. the an types. current has Financial Reserve are world across process slow banks

becoming expensive. Second, the availability both of equity while debt has decreased, and more also capital,

and spread ask challenging bid widened this has the is result, buyers a investment As and there silver market, long-term sales dramatically taking Cousins. between shape the market linings has for real sellers Amidst slowed. a

accepted properties of above a lose pre-COVID customers in Remote Within massive work government to the an many we returning commute. stimulus. greater well with do have portfolio, widely occupancy of a force. want not effectively and our First, became XX% convenience our dining lockdowns levels. workers pandemic era physical room Understandably, in

physically XXXX many refrained. back lows, productivity mentorship more of attrition and of Financially, stock to fallen has surprising, labor not are down least teams together recognizing to workforce. levels has culture leaders are clearly historic the prices time. work profits However, to directives most has are a anticipate lower. are Corporate increased, remote from at and more We is now declining the for shortcomings

COVID-XX XXXX feet of nationally. square properties the positive absorption continues. quality have Second, recorded the onset net to million Since of XX since built flight

the negative of the properties. The in built square trophy now a feet is a on absorption. growing which accelerating. focused At net percentage outperformance strategy, Cousins, unique these commodity represent time, During pronounced. properties workplaces, the office the is of becoming build leasing of the bifurcation. same premier a obsolescence At Sunbelt exclusively of period, recorded top even we the have demand market is This of RIET. XXXXs and Effectively, same staggering million the is XX compelling preeminent more

XX Cherry plan executing We have we in on purchase of with XXXX. been a completed recently, our the over for years. merger transformational Most

sold relevant Colorado XXXX, acquisition the Union in vibrant and highly differentiated less and During properties our Atlanta reinvested These in in Tampa. XXXX Charlotte, Austin, $X.X the X in Nashville, billion and XXX the Thompson Domain development and are XXX Neuhoff We asset accelerated we Heights in proceeds neighborhoods. properties of recycling. into of RailYard and all

Looking will become likely challenging. forward, conditions financial market more and

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

well let exceptionally are positioned We highlight why. today, me

recently third the portfolio submarkets Nashville. get First, customers the Phoenix, old migration redeveloped, of five both will more years less best fair quality properties are of and the Austin, Encouragingly, in our in growing. Tampa, trends. benefit demand, that share we leasing believe to premier from we workplaces or than own we a Dallas we and flight leading Sunbelt Sunbelt our as of Charlotte, our than With Atlanta, existing

than quarter, had Looking we through XXXX at our more expand renewals contract. have third the customers

the through annual favorably lowest to us in positions XXXX lease office contractual occupancy and expirations time. XX% total our this just rent, of among sector grow the Importantly, our over

million preleased for sized Next, the approximately XX% our the is component and development $XXX office positioned with appropriately climate. current pipeline,

NOI caution. from have XXXX, will XXXX during only we We XXXX modest while we Today, incremental speculative risk. with and approached benefit have

best-in-class our new Importantly, we have over prioritized investments far. balance sheet thus wisely

this million at mortgage loan in quarter closing, are than on to million of sector $X of X.X Atlanta. higher closing interest the credit In times, economy of less no will rates and short-term the to have impact third on our average billion X.XX of Terminus the our XXXX results. the potential net a end, times. $XXX rate Upon EBITDA Terminus outstanding the end on of into mindful compares maturities a $XXX slowing a was we closed locked After revolving Street loan and and million $XXX we Green mortgage, significant facility. at quarter had property Our we debt term

However, will are separate over is uniquely asset with positioned. that own Cousin class workplaces we strong its into the long-term, sentiment. premier improved optimistic

the We we Sunbelt right have trophy are own a sheet. in markets, balance portfolio, fortress we a

Importantly, capacity liquidity time our to a competitors and many we do new have significant of investments at perceive not. when

team be creative and will talented Our ready.

want dedication, of continue to ahead. who every jobs talent our propel will turning us skill to to work their to call Richard, to the well excellent and as their hard you. Cousins, employees Richard? I and service all provide as Thank our Before at thank over resilience day. Their customers,

of Similar increasingly Colin, last operations Thanks, macroeconomic and solid the team our good to morning, in conditions. results challenging quarter, everyone. produced face

Our focused and time during space. intently continues this team portfolio to resonate our office is high-quality with of complicated users

weighted quarter, office XX.X% percentage period of occupancy and average our total XX.X%, third end and respectively. leased portfolio the For were

Our lease impressive. in down while occupancy important feet. leases is unchanged, only in metrics. unchanged, It to square We was percentage the totaling stability were Leasing our see these was executed results X.X%. weighted encouraging once again average XXX,XXX XX quarter, quarter virtually this

quarterly footage than Our our last the record volume our first run our and of count line rate transaction four with year. was count was in half square the fewer largely in only quarter

office continue lease X.X a Our to term years, of commitments companies for long-term third evidence average that quarter make space. activity also clear produced weighted

represented expansion leasing sectors in XX% with services and per defined and as Leasing terms concessions accounting in financial New professional our activity total was of improvements of activity general for foot average square tenant representation, leases the again $X.XX. previous and rent quarter of and the quarter at volume. legal, $X.XX our this in industry four balanced most of of to customers free compared sum services came

of of rents pleased this concessions, quarter the were this $X.XX the higher XXXX. to net effective the to highest beginning relative since benefit have to stable first $XX.XX, the I'm year. Net effective With we recorded also that of increase quarter this second moved a note rents half

growth Second-generation representing basis in on cash recent X.X% third quarters. in a net quarter, the increased rents lower than

to mentioned see stronger out quarter. we Houston, foot activity this rent signed our markets. might You XX,XXX in cash will second-generation the completed, in increased two stronger relative When Houston. quarters, That it likely X.X%. proved square past roll-up if And this well renewal our recall a that excluding quarter a that screen would not core I was

the still by relative remain volume when landscape activity includes of have on flight quality activity likely economy Regardless, in to our markets, submarkets however, our our in continue do we again, negative pipeline, leasing is to optimism users as we that as forward, the the I about healthy on that a pipeline, reported our to our encouraged the further forward. the toward once lease of well monitor a and across our macroeconomic acknowledge inquiries pipeline in leasing likely of impact activity positive Sunbelt Houston, completed. and that activity sizable Despite trend Looking would pipeline. note, weakening metrics have as amenity-rich our effect office dampening late-stage see impact the and level and gravitate early-stage going leasing properties. continue to we would

where focused Atlanta, dynamic or on in near either of transformational with number two submarket fantastic instance, we completion. seeing a we For redevelopments projects a Midtown, existing requirements are at have

projects Visa commence absorption. occupancy, representing One will important where soon Prominent of the Central, new-to-market is

order Tampa this pre-COVID Research. and our quarter, XXX,XXX with square We We've feet Phoenix, average choosing quality, existing volume of the to expansion place properties taking also high-quality in our space in is perform the up impressive XX.X%. submarket. quarter, XX%, of XX,XXX this were employees attract in in continues XX,XXX move into Phoenix, Tampa, Phoenix vacancy to cash this Our leases talent portfolio activity quarter leases XX% feet to made seen new of amenitized XX% according in since of the which, this leasing many of signed back In Buckhead portfolio in entice direct this higher well, quarter, square lowest square JLL leasing an total of to roll-up an just now under nicely XX% office. We to signed with vacancy in-town leases. Atlanta feet and companies of JLL. new rent according Class as Similarly, are A to

direct Austin, want vacancy XXX of Now two recently including floors I our square this where we last Colorado portfolio district. signed briefly the of for developed feet the business the of in building two our leases central on new XX,XXX to leases highlight quarter, in strength

feet income the outsized leased million Austin third have our sector, portfolio square and and The includes average domain XXX% an sector produced to net companies. of to feet XX.X% total the XX% healthy clearly currently term Similar the of Austin past. XX% I has in leased. Austin market square do submarkets. is six Remarkably, technology as are driver nearly weighted the enjoys Our and that is entirety technology it very at X.X been an approximately exposure traded X.X in-place would our operating the the our a in of large-cap over at important lease publicly demand we distinct years. technology million exposure high-quality, in three quarter, of portfolio Austin of with in point in domain whole, note which

are very Austin all with short, strength. of top portfolio only XXXX our enviable the in in annual our technology customer of of of We position Austin In quality an during base rent XXXX. Austin portfolio X.X% On of in pleased expires our that, contractual sits otherwise. and or

rent XX.X% many of are also our XXXX. end in dynamics of through portfolio Austin our ahead, expires compelling of Only contractual operating within entire the present annual our portfolio. Looking the

expiring the XXX,XXX climate about the leases we positioned markets. the continue commencement status one high-quality in Cousins square XXXX. a the have yet greater portfolio remain seeking are that not foreseeable feet fourth We of XXXX to expansion third square best the our yet feet for that expiration second XXX,XXX we recognize have approximately a during the of average feet but customer that in signed, new complex weighted incredibly and size and expiring very and are to square We in than of is stable, quarter, Sunbelt economic space quarter. only Further, encouraged in XX,XXX well and companies renewal. Last, our for currently is with future, weighted is quarter commenced. feet have are These any see of average the in office the the opportunities we markets. customers ahead average high-quality square in XXXX. date XXX,XXX firsthand At

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

skill success. work continue hard to Gregg? Your and drive our

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

same X.X%, is essentially This by to net quarter Focusing operating on two in increase compared the were largely Domain our entire the property improvement the flat an for performance, income commencement from driven property on of increased Xst cash last with July the which Amazon's Austin. third year. during first year, lease to X quarters

of that be cash positive, same-property XXXX. all are will For XXXX, compared guidance NOI our we reaffirming to

and continued it. mentioned properties along our Colin earlier, our revenues As with to has increase, parking grown fiscal have occupancy at

to compared anticipate of XXXX, will revenues we X%, all be For a under up parking XXXX. little

activity. transaction to Turning

by through Carolina, nature joint $XXX Carolina opportunity University us Square over to $XX our the driven by assumable with refinancing this of generating property attractive the we relationship largely our at no from execute interest, gain of recent represents a sourced footage this outcome our sell of square million. joint the for a brought believe on We an the long-standing we was of our Carolina sale in for to was asset and partner. partner of sold It it to During quarter, help partner shareholders. to venture time venture terrific we of opportune development Square. total only the interest the XX% with debt in start, our Office Overall, just heavy very project. it, was was million, and a that our our mixed-use cost North due non-core XX% third our the

loan during very quarter busy On started were and the term the productive the and fix by SOFR. with $XXX change rate we the both rate SOFR through million outstanding capital markets to an whereby goal efficiently of maturity. us front, interest X.XX% at swap, allowed amending a base the subsequent changing We quarter third to LIBOR rate to execute we floating interest This fixed from to underlying end.

the legacy consistent Union proceeds closed Next, XXXX our extensions. in that with credit matures on existing to our Promina and and includes pay month term loan. loan a outstanding X Both Tower of million pricing X to We we a term facility bank March off and maturing month are new with our these syndicate used $XXX portion covenants and mortgages.

threefold. properties process activity be on the is the will the continued principal mortgages X.XX%. all terminus move end upper on rate would to this been Finally, year. higher interest the before combined while our -- in since current ago. of we existing date this has to The extended debt here will today, a was me, the initiated the locked to of terminus the Atlanta goal this of rate $XXX close lender. we rate January the excuse Rigs extension This with on at the in increase And X%. the expected XX, of XX million, two be extending locked and Maturities and to have from rate January

First, to of were in year. this that maturing $XXX the fourth of first year the mortgages and quarter refinance during quarter next the million

debt Second, to we billion rate the commercial approximately level. rate create floating third, to real by floating return the our have is accomplished, debt, created of, additional care investment in mortgages in And estate to dry dislocation taken its markets. opportunities potential take debt mission XX% the historical were advantage exposure Overall of powder. current of liquidity the total and $X to to back almost

have of three is over rate past properties, our floating as valuable new have new facility, This debt past total rate health now, moment, debt a recycle we XX% for our the our total years. which stack; debt flexibility around believe we the rate capital floating and us few Right only aggressively loan floating our credit provides on pieces debt we consistent our composition we over on done debt with of term loan. decade. with construction Focusing

Looking XXXX. about maturing of in debt forward, we total have only X%

XX% through the Midtown a asset this Specifically, tied be confident office of medical is even venture a XXX% refinanced in Emory. very building property have a mortgage We most difficult of can Atlanta this We adjacent with leased. hospital own we feel times. essentially to joint a that to successfully

development Turning our efforts. to

the three mill X our Nashville. in joint XXX Neuhoff venture have in Phoenix, in projects We Domain and pipeline, at Austin

Our retained remaining earnings. under funding more is commitment for just this which future than liquidity pipeline construction referenced and $XXX covered is by million, just the I financing,

during the quarter. continue Looking to we leverage at reduce our sheet, third balance

Colin debt earlier, times. EBITDA As stated net is now X.XX just to at

our XXXX challenging currently interest share. a partially per updating in of rock these by $X.XX driven by Our We and year with property solid guidance. share, This by rates. navigate we close between share is is financial anticipate increase times. XXXX a up position $X.XX continued a $X.XX. I'll $X.XX economic NOI, as stronger-than-anticipated This FFO is midpoint full offset increases

On the particularly prior No increase property properties our NOI item the assumptions single is spread many categories. and noteworthy. side, is among against

as the rates, short-term on rates. long-term calls, curves Focusing the curves, on use forecast XX-year have LIBOR spreads to previous and to discussed continued rates have plus on these forward treasury move forecast curve, SOFR we we interest up. Based current earnings to credit rates and forward

simple as look for back would call turn forward us. Looking we model encourage to With you questions. is operator XXXX clean, and earnings credit forward, at debt the to our I'll you your schedule spreads, and update curves over the that, for very your the and

session. go Wells ahead. We from Please [Operator Our will with the Instructions] is question-and-answer question begin first Fargo. now Blaine Heck

is expect you you Colin, have and provide emerge. suggest dry your color building current to play likely more of out think opportunities guys up the you where that are kind deleveraging opportunities been for you best going some Great. market guys and morning. on Good to emerge? the the how just investment to for, that maybe you stress Thanks. what around powder comments looking are Can

right. earlier, as opportunities mentioned investments pricing. better we have over prioritized the year-to-date and anticipation in sheet Blaine morning, Yes, new good attractive I more and And you're balance

opportunities be do always on and approach continue singularly do workplaces forward, attract opportunities look to that brightest think will and that premier companies. focused into And we and some are as to be product, going we our we XXXX. to there are As those us, best going move growing high-quality think for the we

higher the folks out, have some to and I we'll plays that leverage rates should. continue product high-quality I to again, than structures. And has perhaps how of that think apply terms capital think going current pressure perhaps to liquidity environment In on trophy that's more likely continue, focus broken they that

play think in I and see the out some underway. construction development existing that's you that of can new

opportunities And so, advantage to low look of Parkway our try this in from and that like liquidity and past, we'll range opportunities level asset to at I corporate we've cycles leverage like done opportunities think take environment, our could and cure. with anything

helpful. Okay, great. That's

that your would Can the subleases and of you tenants be stepping market giving at worst you whether Second and at that exposure question, backs your back get obviously, portfolio? of through headlines space concerns suggest are or in have a back guys around leasing whether terminations. space, talk kind from tech lot tech the any about best to just

And And ways of many right, I of and stepped forever. now of anticipation years, you're to going it's to lack in And interest normalize of them the things world Yes. look obviously, technology lease tech fund back if at driven environment demand a to in capital product on back think, change you the having remote really the back. continue those the space over impact you're the I staffed some up companies, to And last I starting customers couple the step for of this markets. in business, think seeing Blaine, time, some the and think we're same space. Colin. have the rate in capital by see an and that's

the other and be look finance as rightsize the their going now we will by are and so, to who tech seeing legal ultimately sectors we void back. and And businesses that and fill banking left that customers, forward,

remarks, terms exposure us to Richard with good technology And the relates as large, over in term. traded As well-capitalized it our ultimately, lease laid exposure, of his companies. of -- XX% in publicly with out is pretty

of effectively were sublease. in we that covered with multi-tenant an space, that to of some back portfolio. so, opportunity the moment, within look But And nothing an as they think opportunity sublease did as that Colorado I get we That's to significant for those in lease-up partially at if our XXX aware space. the us at buildings we're

me. you potential where one mention That's I hear Colin, that Okay. you was. price share given about helpful. didn't talked this your quarter. last share quarter, repurchases, Last for

wondering your So since and that I'm deployment option of changed thoughts where for capital quarter? point at whether kind and preference ranks this have your last

with something price our that Absolutely, share always Blaine. consider. us absolutely it's about and prices, at Board We evaluate our to repurchases and regularly. for current talk Certainly,

I optionality we've opportunities that we to think evaluate investment the be past the got as and at certainly moment, capital. invest shares to we and to what leverage greater the prioritize continued in the opportunities other always potential the open might low be. liquidity, repurchased we'll we all on until But clarity it we've have

All right. Colin. Thanks,

Absolutely.

Rodgers The ahead. is from Please go next with question Baird. Dave

first maybe negative. the not what Richard as -- seeing Maybe to you're more question you're little bridge terms kind morning. currently. to some of Good of Colin, of much gap Richard. I try between for wanted in Yes.

negotiations the the see tours, the that those tours seeing thing Richard, talk and dialog you're you I are the negotiations kind pipeline maybe view. Colin So, But you guess, having, the I will or next at the can a macro level? to Richard get shrinking today. still pipeline kind of actually lease quarter in about Or lease activity you're two? in start of itself consistent that are

I'd pipeline that late-stage of a from Yes, perspective, question. more it's same. great the that's a say

on incremental probably on seen early-stage haven't trading little there's tours and anything, early-stage We activity of bit the proposals, If significant just there. a softness changes.

at levels. call So I drop we're seeing healthy this off some at a impact. still wouldn't large it's But point. it again,

as your if to know into Colin, and Gregg question, back this going well. will I Okay. dovetail That's don't helpful.

of You built getting part I great balance credit think sheet, a and is using it. have that for guys

about don't And your so, the for as perhaps, maybe up, can you, how levering of using balance But sheet know talk you're willing kind but that's up to to take advantage asset you're comfortable opportunities where balance I being if use out the those, debt. where own you of again will that's end and perhaps know take I a about of kind sheet talk buying go maybe to advantage.

Dave. being pursuing characterized sheet portfolio, lot periods then of appropriately in it the of And over of down. and not ability And of a have you in of Certainly, of could And periods have by the -- we when I one front able periods able we identify don't tremendous opportunity our a And there, capital if and a we that time lot embarking we we're patient additional competitors time opportunities and sheet our when And years, think and our perhaps but last of value bit believe leverage leverage those lot of high-quality And to add past to investments balance a ready, capital. in demonstrated of times the that properties it. those on we're attractive on others capital, shareholders leverage willing if past, if using deploying have one good is have fortress really but the as have a of asset, do those a to to back that certainly is you to think our for seize only in us. and if history, premier to time. take use the we're brought the would opportunities. we again, at maintained create effectively I XX up look in balance our kind be

level As X to back we near times, of zone pushing a the in near have mid-X X to But high-quality it push? you to have you maybe times a mean, comfort your sounds willing want term? peers EBITDA, a in you're do I of at But look debt some times, stress you like term, sub to kind number. X% get do the X

year, forward over we the say I'd Well, we like as think plays opportunity out next might. look it the investment

that going use leverage capital, think, good of investment is use and probability the take be leverage determined that line us by how for the leverage. to quality of say we've our the as we our of have. balance to the wouldn't take the hard far than specific down But sand we the I in going that, would got that I would advantage opportunities, will higher opportunity. be sheet up a

think driven will be that, the of in of opportunity I that front the quality us. by

Last Colin. one, Gregg Thanks, you. for

this was FFO XX% XXX in point the terminus. up, think think, was I up, sequentially, it Just decline. I basis occupancy

Just curious if or there there was some unusual numbers? those something in move in

good Yes. Dave, morning. Hi

quarter, So I'm we we had were some the during and TI TI once is completions recognize that that -- were sorry, completed revenue the TI completed.

And so, it TI was just a on completions. timing issue

everyone. Thanks right. All

from ISI. go Please is Evercore ahead. Brian question with next The Spahn

be you on comments these find how Colin, on Do dislocated just to thinking favor you're can new external you versus about building acquisitions underwriting I guess, how some adjusting today, just of you your the to potential distressed and deals? return thresholds as opportunities. your you think about growth talk you. some Thank just already, Good call. how extent you're for Hi. you just you're acquisitions? the evaluating today development And search chances? maybe Can

in Hi, that relates rates funnel that think it acquisition I for investments, good new to development. morning. higher the our the Clearly, bar clearly, with an interest rise be or rates, as drives whether and certainly compromised be And on searching have in some capital perhaps there environment, opportunities. for I the we'll be opportunities this those that structures assets investment high-quality think and will of lookout perhaps

But in Atlanta of demonstrated have too to normalized for and yields I a south willingness you're believe construction coming and create capital the be in employees for acquisitions a how we're the fantastic the thoughtful That's driven want. I I some not distant exactly bar in really Domain pay Austin. going patient. costs, they think potentially opportunity. development higher development viable year, higher think with new again stock. environment the very or opportunities going customers makes diligent will out And We're we their that But call, just Midtown what relative on in for be in the exceptional perhaps our and think see for that workplaces rates, last interesting current that the quarter think and space development to the cap Charlotte, going said own to or I going going that's the and as to and future of of want to higher allocate of realities over development I to high-quality our higher. some be end be do sites I the about to by

we'll opportunities, it the return deploy we at shareholders. when look so, think right for risk-adjusted it's the and And we'll all

Okay. given Gregg, I bigger moving talk just you the about the just next you're the pieces headwinds earnings realize and thinking interest for for but growth could not next implied of rate year, is next as fourth guidance expense we where quarter And and model you're run for about year, year? providing some

Yes, sure.

the reported and to quarter. third the that performance, fourth that's you full there's So quarter items guidance that. you're I of really think solves And for subtract midpoint actual number phone the year number the first in is, 'XX nine it two if below in you take the we of just are net And our what accurate. alluding that's month moving a

in the recognized fees the we during million Atlanta third Norfolk Southern $XX-plus in quarter. our development from First, last of here

quarter, third all of of million, recognized during million about that's the nine for recognized we first the in in 'XX about million now. done months, $X $X.X fees So fees $X

been in. heard interest in Southern fourth piece that sure pretty call, Norfolk for the rates, you've every and on fees I'm you've no beyond. the And second would much of there's participating that be quarter So which

one mean, the the the Using third curve, X%, quarter rate difference. SOFR just that's average was over this be current example, will quarter as Just during year rate this dramatic SOFR during X%. of year over forward average a just the I the fourth

interest just through 'XX. third versus a of has we and And push then impact like so, expense negative a on our obviously as that quarter peers, lot into beyond our quarter that P&L, fourth

That forward going is from at into a provide peers indicator quarter that items most that take earnings 'XX, you our of rate be run the was just it now say, kind kind future you being next guidance on in of a run of little fourth We good than quarter a I typically for a third better if premature will the So the the rate much described. look fourth said, us. two the call. and quarter like well, of

Okay. That's it for Thank me. you.

of The go Please next Bank is with from America. question Bonnel Camille ahead.

Hi.

Following by can in you're your expansion up what customer and prepared to size taking? speak seeing portfolio they're your that you on industry for remarks,

already, The think has definitely the shifted I is mix technology. we've industry, Yes, about from this talked -- away like Richard.

fairly mentioned I think, have seeing as that's there's in of plenty we're say that diversified. portfolio expansion, our has past, in and renewed I Colin services another. customers wouldn't we have saw recent it's any the when They're that that's more than we collectively, much we like very outsized said, from But backfilling technology that and industry sector legal driving services. before. the one financial professional demand the

third an in Square update on your job on Can quarter. pipeline? disposition on latest selling Carolina you us just nice the give And thoughts Okay.

Camille, it's good and afternoon. Colin,

the as slowed has, sellers. sales mentioned I'd dramatically widening market say, prepared a and As between in bid-ask the I my investment gap spread remarks, in buyers

As would slow. into we will year that as rates for next with I I interest the say, at anticipate and there's is everyone accelerate. and on moment, move rate visibility so, think the clarity, it's likely I'd relatively in terminal market more Fed the that looks -- relatively

with Square, additional for of an to pricing. there's fortunately no we need I like we And Cousins feel have the we've exceptionally the pursue appropriate at we sheet. Carolina dispositions laid moment think, have until out, as balance sale strong really

as So seller. us to of sense we'll evaluate the buyer I a a more think, versus it, continue in

It quarter. on Park. me feet square North from XXX,XXX looks like this back was given finally And

Given the from just where vacancy? of availability XXX,XXX how elevated perimeter update feet. remaining square these rates Home assets in going is lease-up central Depot the and Can subleasing far away us not the too is on the on you being Atlanta

Fortune likely Park. North majority a time will a little asset bit and We It suburban our portfolio. have backfill take at that us did more move large think is the of that overwhelming it site, And I a as and been companies. [MARTA] But XXX a more to our out with a and in it's Atlanta some terrific and release an down large really on for has of property destination attractive availabilities Midtown example. perhaps

Northwest past further which in good highlight there a a week, the recent, market in reevaluate their submarket, XXX of pulled And market space customer little think, back was market, a just sublease space from physical of that of just a view mentioned summer. in But I Park interestingly is off the significant in approach to a really kind normalization Fortune work this large quietly the on Atlanta amount away last company the sense. enough, You And North I'd Depot, put work. project. and perhaps was that as Home the of kind a example place taking in that

so, watch to interesting as trends those will other similar companies world see if continues And the it to to decisions normalize. be make and

my taking Thank interesting. questions. Very you for

The Vikram go next Mizuho. with Malhotra Please question from is ahead.

for Thanks taking question. the

quickly run is 'XX? core interest fundamentals your rate, almost the was rent trajectory in quarter, next on rate of forward just you you're gains higher portfolio et a interest trying FFO the And give expense on rates, or see on the basis, on shaking where it guidance know or on gains some from So but out. cetera, model. the limit safe out to say flattish the sort could any assumptions uptick of occupancy comments to going wipe probably like are such to just the around that, just run I spreads curve, through those through I a just

not in but come for real owners for remain to we here. have again, us I estate will The past. any rates all that, to do But interest owners. a time guidance and us, as office Well, all just for for headwind want years early provide don't

have 'XX, rate it's certainly will floating well. got over has pretty up and gone rate rate and enter you've that's with, debt if fixed we everybody's reduce fixed Even they've as any maturing so, everybody it And if is growth. earnings much it dealing any going something they be to and as debt, don't that debt got to roll

to including prove to industry, the going a it's be for in headwind everybody us. So

remaining higher -- that give I and in us flattish way, the seemed And yes, say, around would all those for what you a rate or have alluded guide being just to on? to what think, I be -- other the to to will guess, move occupancy renewal if like, gone other or few what it, yes, lease and that's rent adds it. numbers. it to we've rent even here put seen of least surprised and the gone. just helpful the I last, through fair the it where quarters, and lower 'XX have with you given that, adds to in or pressure spreads and guardrails at sort what rates that the new development expense can think, trajectory financed some debt guidance I I five out lease has bake on pointed and to of there wait I peers but such people curve near-term rates quickly floating debt mark-to-market opportunities rate from Is spreads, is ran all guess, it

buildings within again, it's Colin. to workplaces, truly premier that see I our demand. continue and within represent think Vikram, that we markets And

of of in we certainly even core not market are we that's all do some that office those only the companies that these technology are portfolio, outcome. we've specific and other firms, as everyone from so continue cash it's opportunities. I'd is, activity continue roll-ups. to our that statistics. to really did Houston. last cetera, banks, the lease of seeing different markets, could a the lot the forces, those market weigh going with in the economy, active, And terrific perhaps That there the large linings And kind those we continue much on we're leases being are And are retrenches to in in And grow hopeful than dynamics are space. financial remind companies important recessionary of And to the our markets, said, years couple energy But with far, silver to Houston Houston drive pursue and organizations and we're of add as to less quarters, And I that seen to pursue Richard of continue we'll some that within other as rent our space. caveat think look kind rents forward more to of throughout mentioned, to space. et hold. the positive are a increased coming segments seeing COVID thus services, the in as law

headwinds can face. pent-up the a entire that to to there's going that we some some sector buffer so, do macro perhaps overall think demand the And provide of is

fair. That's

As be just uncertainty you same-store you all given some rate, just occupancy, consider the environment, around this NOI, in provide lease helpful guardrails helpful to guidance, rate providing it of would if that can would it provide the that. be more

a bottom the utilizing as I'm to per invest referenced opportunities you is balance guess, important basis at But I wondering, of question, the last ultimately, Just in be you really where cycle, on sheet the that a the terms arise. going of like foot lot, may basis.

Where aggressive? And Where you for to anticipate is seeing is the -- the cap bid-ask base or so, do today where are you assets? just get what hearing can you your then the or like to us for if are thoughts, maybe basis? give rates trending you

available. it's the think typically to be we to I to are be, specifically, us, it's a Vikram, over. those little for I Yes. The going higher going start come typically later. think see bit quality quality And become roll lowest to when first properties

are to be opportunities. and high-quality to a for wait thoughtful We we're patient those some and pressure But and to think, starting going on hear see assets. I types of of continue

we'll to other resume of coming, going high-quality best guess. off see loan Then, when force anybody's to expirations happens is But I sometime whether I it's which about a to market next can some trade level a think are We'll the I think some and assets of there, patient. perhaps However, in will think quality transaction, and the be do again, thoughtful a And start that create we looming an of. trades, that's you'll And asset-level start if to you be some deploying see create get transactions. space, capital. transaction, corporate-level year. start lower again that a exactly market

Thank it. Got you. Okay.

next Powell Anthony question Please go Barclays. from is ahead. The with

Hi, on acquisitions ventures. and A good morning. question joint

would basically balance are consolidated, that consider? Or Is management. wholly are more and peers do exclusive they're other doing some could you doing an that your owned ventures acquisitions you when sheet your of given that Some joint deals actually doing something asset strength? are

if question, Great certainly venture, doing joint an Yes. consider merit strategic specific would asset. there entree perhaps And ventures that a to Anthony. we was into some

too opportunity transaction could higher. -- do for some But we for venture. we'll ventures. our into consider were capacity there to be of willing incrementally some right the with again, existing times, we a significant peers, opportunity move be leverage and the for size X.XX right at to And very that our If the so, the of unlike asset, to the absolutely come large, opportunities have leverage joint willing And joint would do that. right

your there big when financial it. Thanks. the you market. market. a there's supplement. Obviously, when other on And of firms us the Florida and seems refresh look a the maybe just you moving gap a it to market, mapping firms and Got like It's think of South bit more there's at

interest that that would side? acquisition show overtime think market a the on you So in when about is you markets broadly,

absolutely. other and evaluate we a like South have that do We be and monitor markets of Florida we dynamics. think handful could Yes, interesting positive

of industries, a couple workforces Florida seeing asset the years, from and they, lot broadly other as country. like management to as distribute interest across firms, South services alluded in certainly, you're of more last more including the their look financial you to, think I technology,

play average existing And in just constrained kind Florida. markets. start note where of evaluate. constrained so, would we a opportunity larger certainly capacity any don't to dynamic a That's market feel that, market But matures, continues I of you in or continue that we'll and and that to our out to customer see again, South

pursue markets But over that so, versus deploy others, expand probability current future. at within I a that we'll the we'll look continue And the like in environment. think our and in perhaps time, it's markets we expansions likely capital and existing to

one more one. quick Maybe Great.

non-core. it the I lease you is called sell Houston, of terms up know, to it there it? In plan and

just Just for the curious sell maybe asset? to what looking line the is time

been from meantime opportunities think line specified the perspective climate. future, Yes. thought that positive a we for have that into perhaps economy. have have we us in in at the I again, point will would sell some that oil the Houston starting The in may perceptions again, an see We by selling point have change you're investor a appropriate would the that could to on means the energy kind and a do time where around is And I don't of capital definition, with markets price. pricing leasing think that to non-core It that to there's past. just price We do And our asset. think think price when again. And can is be we I sense future. not I the time fair we and normalizes sell to companies in made the value drive incremental Houston, in it think as create grow like starting a investment I a better a exit where feel it's time.

right. All

is Green Ismail Please from The ahead. Instructions] Daniel question [Operator go with next Street.

put Or done that the negotiated It like market? thank a going to to Carolina latter, was Great, I price? confirm. at was back just sounded that Maybe you. Square, but just wanted

into And a Danny, on asset elected for to to that the it us combination sell visibility our that -- an that ultimately, reasons gave both. had the we joint of Gregg debt, in It was we a alluded price. to was around venture with partner. the [Estel] good market market

bit Got you're then aside, can best higher leaving be for maybe you're seeing this prospects your across the touched but markets? Richard, maybe, where a describe others? demand Any rate Houston that gains mean, the call, seeing throughout net specific I to on you outpacing, And seem it. effective submarkets rental you than

Sure.

that activity we XX.X% there. in rents year we've this but Tampa pushing ones to Tempe. quarter, come we've the last alluded few ability this been the to in up or another my in very that think, plus, consistently, on I just push over an Phoenix. the rents did leasing a quarters on But where seen not successful standout We've quarter, mind. I roll is to seen mind really

in in of where more assets Plaza our close Heights good submarket, have continue would the assets rents been, pushing in where we Tampa. to reinvested have the but are essentially our also And I properties then, in leased, Atlanta, in we growth Buckhead thought to but Midtown. also but we've successful rent in we've CBD. see than like Heights of the here we Union, All again, most Union Westshore acquired fully

had a many then, is of rent where really over growth for course, been market just of wonderful long we've just and in success years I mention terms It's to Austin. So, continued time. a have

bit across little and about felt everywhere board. submarket certainly the to it's good specific, push our ability rents a we've So, really but

portion absorption? just Got just bit that of overall office demand unpack there. you net curious and is it. happening that's it's I true but maybe And can market? know potentially I'm curious if portfolio, curious, connection new the a then just as oil small Or mentioned prices better it I'm a that just the between if school Houston chairs I'm more. you in one. last is

great a That's question.

want good that, the about I come and both. Houston same need the to that employees the in work country mention talking think for combination across there to we're I time. are a is creating it's would a for have thing back exciting One about dynamics who of workplaces commute that motivate probably

seeing in And now relative kind is our right that's there driving a think activity. to that's what of dynamic Houston, usable I if happening a so, of And lot share it. we're

Great. Thanks everyone.

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

and Properties. Thank few weekend. San Cousins Francisco great in your just you interest of in look We has everybody in at Hope for your time a you out continued seeing a many weeks. today to forward NAREIT

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

may You now disconnect.