Cousins Properties (CUZ) 27 Oct 232023 Q3 Earnings call transcript

Good morning, and welcome to the Cousins Properties Third Quarter 2023 Conference Call.

[Operator Instructions] Please also note that this event is being recorded today. I would now like to turn the conference over to Pamela Roper, General Counsel. Please go ahead.

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

on available the did If Relations SEC a through are the receive documents supplemental quarterly not our you information of these links Investor page website, and disclosures copy, cousins.com.

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

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

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

We rent square leased during cash roll-up. XXX,XXX feet X.X% with quarter the a

square feet. and New leases totaled XXX,XXX expansion

have environment. but more XXX market. I in more months. interest observations XX conditions a will has the terrific executed These upon in are now we slowing Real on materialize, equity are and The they The To any than rates are significantly estate expensive. rates past Federal inflation, available to less few renewals raised and and key the Reserve economy Tampa. impact with points financial and is tame rapidly tightened. addition, basis debt been us. higher slow In have of the macro over Atlanta start results

As sales a tightening frozen a typical asset to points spread This of rate and the get This meaningful be should better. worse likely emerged is a has defaults. cycle. The temporarily data few has vacancy not for macro in all the relevant investment sector accelerating a behavior this rising Media leading is surprise. loan rates for be it bid-ask office pricing. result, and None market focus narrative before on reporting to will wrong. will gets

However, it significant a will overgeneralization. be

and where invest matters. quarter, last you what said in I As

XX premier older focused mixed-use we a Sunbelt environment, Cousins vibrant last intentionally well-amenitized our some neighborhoods. few. than commodity suburban downtowns investments in in macro Despite years, portfolio. I'll nondescript in office is the the in on challenging strategy locations. in entirely seeing has positive Over and an properties lifestyle trends This are different and office located highlight

has patterns to the in-person gaining and activity increased sentiment is portfolio, normalize X are week cases, within X, First, X, mandating in in work a begin work days some work has around require finally shifted. we return announcements remote of and to accelerating many Company are and our properties. momentum. seeing compliance. In-person CEO

than at are key whose lifestyle the data, serendipity professionals advancing and to and of Castle not headline properties you'll of the our different are which with in is a As properties. of of one mentoring visit story properties least set be trophy next Collaboration, an around turns lifestyle proving aside, as is see very time. working office it full the representative Come office, to careers. out, their most

is Second, to quality the pronounced. flight becoming more

the demand. of most commanding is product vintage Newer

negative for since to net for account This of feet XXX absorption. feet Properties statistic before office properties positive story. captures according Over of XXXX the built accounted the built last XXXX clearly absorption. square have XXX net million JLL, months, square XX million

the than Third, their goes credit customers prospective it little more ways. Cousins for evaluated landlords customers. with is growing for and market credit Prospective important like office of Historically, landlords. capital Sponsorship structures ever. properties vintage capital increasingly Today, the important. now both of surprising, capital Not no evaluating share. Fourth, the more there to sound their development. are lower-quality flight to brokers older owners is new speculative availability or are is

one-size-fits-all what answer. office emptying same time, will and they filling in will sector? is over repurposed are offices There's bifurcation are lifestyle not is the It for a implications market. and the stagnate Many At torn So office the until are the thrive up the traditional or term. down. a long

the previously, office do. not way, is market dead. under is the is media to the mentioned continue oversupplied. There office who investors Commodity office dead. have I another market this. is The not underappreciate is Obsolete As opportunity demolished. office Said for and

mean Early Cousins? are this trophy does Belt What Sun shape for green for shoots taking portfolio. our

greater accelerated shrinking reducing competition, is focused in is in the demand firmly development pipeline force, lifestyle remains the and best best on Our customers obsolescence submarkets. returning properties are the

the the already market While on many pressure creating office has time, constraints is estate real Financial change. to likely take players it Thus, likely will rebalancing term, process. Longer reshape. sector are platforms. are begun market the to

to office if and together. pricing The market remains investors to liquidity. Similar different And increasingly addition, office. are In cycles, capital REIT well-capitalized unique like will we too commodity private constrained, media a converge public would fundamentals lifestyle need that past occurred for a scenario will public-private from the create just Cousins. aggregated have such be valuations in a believe public opportunity differentiate market pricing with find resets to

about In of closing, on earnings. potential rates our and the the higher interest economy are negative impacts realistic we

Cousins peers. advantageous to And in cycle. position our we phases thrive to all other the economic today, built are during of an we of However, many relative office

own the near-term modest trophy We markets. expirations. are in Sun portfolio a lifestyle right We lease belt with

balance a near-term maturities, well-covered debt minimal a dividend. we have fortress We sheet and with have

opportunities compelling and see across I optionality we'll our believe Belt at unique Sun footprint. have that we Cousins

playing of disciplined patient, we remain is to downward sheet. and private assets Thus, prioritize balance out. the maintaining a continue and cash repricing flow However, in driving still market the strong

we We closely, be will are watching though, ready. and

I Richard, team to to to you. thank excellent want service over Their forward. entire call Cousins our the dedication, propel customers. continue our work turning us provide hard who Before Thank to and resilience at

Richard?

to operational I'm Good Thanks, quarter the results everyone. Colin. report are this pleased our morning, solid across board.

will We week. also of work to and the companies employee by growing believe the employees companies continue collaboration, to overall encouraged return of this productivity number as continue majority be office efficiency. increasingly the to focus the for on We trend asking

about reviewing I Financial and talk Group. WeWork SVB Before want results, to

all Cousins. lease landlords, stated including WeWork probably of its you heard, is As have with has pursuing that it restructures

locations feet at our representing WeWork, share. square XXX,XXX with X X.X% have totaling We of and annualized rent

at As WeWork its X of month rental to XXX Atlanta payments on locations, and Trinity. due Ponce XXX X is us West today, past

As a we are reminder, XX% owner a XXX of West Trinity.

other the late in of X,XXX leases of WeWork feet and at lease rental event there XXX will is those locations, rent feet, X rejected we lease share the a the on square West XX,XXX our Ponce bankruptcy. The WeWork the no square outcome, the feet. of on While is is locations. status of is anticipate is eventual current payments X Trinity which the Based be guarantee XXX XX,XXX payments square at X

for in leases. of letters meaningful both place credit have we Fortunately,

us the spaces. most one alternatives would on XXX buildings for a in with are is confident Atlanta, currently the the of located those directly X dynamic of leased. these that We office range and Midtown of underlying is Ponce quality is high future office in present Beltline new properties East XXX%

working users, traditional opportunity have we either expect that, office office WeWork flexible with alternative a different with even an to to lease continue structure. an or backfill in spaces to Given the operator

broader Regarding September prior SVB Hayden XX former XXX,XXX Phoenix. and Ferry Hayden SVB Ferry rent project. Financial through has of redevelopment entire as of the been foot part out Group, Ferry customer in of at vacated the our I with Consistent I paid since square operation our taken guidance, Hayden property. a

As project of I prospects number various It's backfill about in component the and end expiring but to we of market. space. We believe overall have construction sizes the redevelopment this of the Tempe wrap average by below of have interesting SVB's I, anticipate submarket especially are of will the will this toured already opportunity was early, Ferry the XXXX. the a up Hayden redevelopment excited redefine quality rent before, standard given stated

Now our operating results. for

Our occupancy square feet new total team lease our percentage our highest XX.X%, total quarterly feet term of volume These those respectively. over of office occupancy XX portfolio to increased activity. XXXX. of lease leasing In and able was and XX% leases, continued a XX% and uncertainty, to average and end-of-period our lease weighted we economic represent average totaling quarter, leases completed quarter office the weighted XX of percentage were of XX,XXX Despite years. office deliver both volume square and over XXXX. expansion the X.X% amid leases highest end this declining XXX,XXX X.X national since with our third represented leasing levels

volume important Peachtree higher Center Corporate included XXX,XXX Tampa. this another at renewals. Atlanta Our One quarter XXXX for feet in at long-term feet XXX,XXX sizable for in square square X and

expiring The portfolio Further, XXXX. We're with our line we the expiration contractual pleased previously stability expire of our should latter expires this in XX.X% including lease year was our a activity, XX% substantially rent operating was but X.X% end due term. Average more early came lower contractual it and quarter's which full With in of in customer have only rent the XXXX. annual at sequentially $XX.XX, only XXXX. for XXXX. to somewhat now with renewal annual near early the calendar year that through in in provide XXXX, any rent net than quarter given with profile of no the this leasing our in

concessions, below also of defined rate. lower were sum $X.XX, rent free at improvements about X last and leasing average X% However, the run tenant our quarter as

result, X% last rate. $XX.XX, run net remained rent only average a effective X about strong below at quarter As our

quarter, at rent this on net coming growth second-generation basis. a a X.X% improved strong cash Lastly, in

these net also in every Again, board. cash We market rent grow this results quarter. solid are across the saw

pipeline. Now quick on for our a leasing update

of negotiation feet. leases Our approximately line currently last sits quarter in in with late-stage leasing pipeline at XXX,XXX square consisting

was late-stage double it what pipeline of a As reminder, our beginning almost XXXX. the at remains

to pleased continue up our also with medium overall We pipelines, to activity tour with early-stage be relative prior the and quarter. again

to better we highest in that outperform. very continued the our across office look see provide Atlanta. while Belt, we it This portfolio evident at the firsthand in a is quality As Sun work occupants with lifestyle buildings

we signed quarter were this XXX,XXX this new of Midtown in XX% As of our of over XXXX million the built assets JLL years assets noted, XX.X since X over negative saw XXXX million to built our feet while activity Further, with Buckhead, expansion have of in square feet absorbed and and prior portfolio last Atlanta the XX% Atlanta square X.X over absorption. In has in of Atlanta space signed quarter, feet leases square leases leases.

Buckhead in redeveloped signed XXX recently for nice campus square feet XXX,XXX foot a year-to-date. and Our to square feet excited XX,XXX of Terminus with our expansion to XX,XXX validation The report Buckhead. Snowflake that also properties. with over another of strong a continues we of XXXX Midtown activity quarter, Promenade also signed in that at leases there is negotiations in are see recently Peachtree for I'm in one redeveloped square we new latter occupancy at lease this

In office remain development. the retail and by in Nashville, Neuhoff interest our we encouraged mixed-use

of While signed is this almost in feet negotiation, office. feet we leases XX,XXX have were square which of no new XX,XXX quarter, leases square

with have summer. list the continues proposals exciting currently the set over on this apartment to next to early XXX,XXX continue we The and momentum at addition, open of square active horizon robust announcements retail prospect outstanding. feet project with In a

the weighted to that lease term. want in near-term no positioned supply Austin availability I our to very expirations market. At with near-term quarter, is to portfolio Austin and well lease relatively view of material portfolio years reiterate enjoying of X.X third the our the coming was challenges leased XX.X% Finally, and end that into weather little average

Austin signed cash rolling feet this leases square team of XX,XXX net Our rents XX.X%. up quarter

thank play day. it Before you a in Gregg, want to critical great work success. Gregg? Each every I handing our truly do continued best-in-class operations the to our off role of they team for

earnings discussion my begin 'XX. update for our on performance. details balance overview remarks of results to as Richard. before development our our providing some of a by followed Good brief as our pipeline, remarks well Thanks, to sheet of an with I'll move by closing I'll everyone. quick the balance morning, our a my outlook on Then same-property

upfront, stated earnings solid, them were third Colin strong. remain behind and the economics operating As very our quarter

a million. XXth noncore only cash quarter. $X.X million rent the The very over for was uninterrupted positive note were growth. Leasing spreads approximately leasing cash for Second-generation also accelerated quarter. X That's gain of land generated Atlanta straight of item velocity in increased. same and clean $X.X It property of a sale line was years that a year-over-year in

Before discussing performance to results this COVID. step of a and at moment the numbers, from to take back I onset same-property our quarter's since wanted look

share -- period excuse share it has this quarter Southern excluding flat, of FFO increased second actually fees. While AOI a quarter been Norfolk XXXX, $X.XX was this quarter $XX to of XX%. Compared in $X.XX this me, Quarterly per quarter. or $X.XX over per has million -- the steadily

past So completion up FFO new well? interest and answer and this our highlight why as cash an We've The years. increased higher I'd lease-up the growth X through driven properties is underlying to and point flow is out the over the cash expense. redevelopments. flow developments from rents of

around which headlines lifestyle is the buildings industry earlier, lost out Sun trophy in perform the pointed general. office office in continue in the negative Colin often well Belt As to

same-property NOI decreased taxes. during revenues basis points, increased our X.X% XX to third last Cash property driven Cash by Moving while expenses the to year. compared increased performance. lower quarter X%,

Austin, bills. The our tax by savings the our next addition our reduced lower assessments, that XXXX be to expected our was appeals net quarter. during from quarter tax triple market of approved month to which therefore, voters are of In portfolio recurring our is largely a reflected and recognized in and benefited Texas and, expenses in both tax cuts the well-publicized in property revenues also majority taxes this

Austin. in interest to and Domain is The of pipeline in development current in efforts. development X Turning Neuhoff of comprised a XXX% our XX% Nashville

the construction is $XX Neuhoff of by $XX to costs million our remaining cash million funded flow. be leaving which be only development by loan, will of share our $XX operating million Our funded

supplement. to wanted a to Before pipeline I change moving earnings a point take report in to moment our XX our sheet, made Page balance on we development to out the

dates. for reflect we've Specifically, project. the development of stabilization each stabilization definition adjusted To estimated the actual

dictates the Previously, before practice, helpful. To since the be is investors not a progress. the GAAP in stabilization it is Hopefully, many be In dates that reflected this stabilization. disclosure dates came deadline X-year typically This to estimated on after X-year new our changed clear, completion proved concept stabilization. for of earlier or estimated stabilization policy. capitalization the we've confusing actual developments

We have disclosure improved these the simply around dates.

Looking at net an sheet, industry-leading EBITDA balance debt Xx. is to our

remaining credit XXXX. laddered well outstanding facility. our on liquidity our $XXX.X billion Our schedule maturities only position debt in remains $X strong maturity with million And is unsecured with no

maturity Looking has schedule pieces extension and X at debt 'XX our with debt of beyond, options.

X-month term a of First, is in we August have $XXX maturity million four loan with an that initial extensions. 'XX

term September until X Neuhoff at it and -- has as has our option. with Second, we have account, $XXX a these an as in X-month million taking an XXXX, loan a X-year debt well. initial single next initial third, maturity is well into extensions not of construction 'XX. significant extension extensions loan has X-month maturity And our maturity four When extensions March 'XX, July

including extension our XX of out, supplement. financial is schedule options all maturity laid debt Page Our on

and represents this full from is in midpoint we've midpoint FFO are by guidance. the development dispositions that primarily currently items. 'XX and share. guidance. FFO $X.XX $X.XX acquisitions, included property by row a close starts third of our of increase We per previous in earnings two updating property of year with our increased a quarter driven the No share guidance. The anticipate or our $X.XX 'XX between per $X.XX is This midpoint up I'll

for as reduced First, call, year. in we I the tax have property our outlined earlier the assumptions

Guidance any our WeWork Second, X annual does gain places. from land impact not on recorded in third we've included the quarter include during the numbers. our

leases will have survive. bankruptcy potential Richard As and earlier, in X leases rejected will be X a we assumed outlined

of of exposure balance the letters cover have X for the sheet lost all leases year. credit rejected that and We revenue for remainder the

claim As be SVB WeWork and with If any can also and $X.XX update. of dollar. and is $X.XX SVB concerning amount will Guidance unsecured this any they bankruptcy case, timing quickly. not timely but approximately fluid potential which trading in the change bankruptcy, we change, exact estimate our recovery provide of between million. on things the assumptions claim gets include not currently does we a are are known, bonds yet payment currently materially to our $XX The unsecured

significant there solid. results be will anticipate in eventually this do we quarter were our claim. Bottom third value So line,

intact, we and Our call the liquidity raising that, questions. turn over strong guidance. With your me leverage the let position to and are remains FFO back operator for

Fargo. Instructions] At this our Heck with will [Operator Wells we come time, first will take Blaine question, from which

an I more the detail which helpful. markets a little the reasons occupancy weakening just maybe weaker is very weakness? of and Richard, But taking your stability step your kind you'd markets a some on rent might about or which bit most of back, each and showing you strength and portfolio for be generally the from relative or in can are of say standpoint guess the talk

Sure.

answer my last what is about to very think similar I So we talked quarter.

much I dynamics think continue work. competing lot and with Atlanta I well all a been people dynamics strong kind quality and and leasing there positive everything of XXXX. We of the is rising a to its some healthy Tampa and as rates to for for very as between have as so undercurrents. then that all of our continue feel of size for returning Tampa else. displaying bifurcation executed but lot in in any are out interest like us to market, markets play, volume of has point But

to much flight dynamic quality play. the very there is in So

the encouraging activity. tour thing leasing had Phoenix there say for as to really I'd conversion same activity But well. and We've

year. of But called in We're obviously, a fact in lot this have vacancy are say very available the a continue at with a good the we there of don't has our stability. I lease. position challenges. and strong there that the positive lot been not things Austin, to time, to about to supply as same past flag So have every out volume market. we've And

So weather kind we well. there the of cyclical dynamics can very

there Colin, sales not can But very return the with hurdles in then, talk And capital of investment cost are increase might acquisition in understand whether and few there you about to market. things? I on opportunities point to or be changed interesting investments emerging the have on your the internal new side are transactions any how that

return I'd up. gone say expectations definitely our Well, have

until of putting of it's fluid. define because unlevered there's specific still IRR to kind some early be continues rates, of I stability the or I rate our so in precisely there's we think will until in fluid. But actual that too are of I think think kind to cap to market aside to terms the opportunities interest the And starting some nominal we an that direction are stability rate uptick continue be see tracking.

going mezz I require a to in and still for say, between, early of dynamics in playing tracking capital many lenders, there are think cases, are to think situations capital but a we that I'd are, interesting time. could because I out are lenders in opportunities, but we wait insert right bit outside that owner opportunities still be cases, ourselves many number it's need to patient those and structure or the and be

come Jay Poskitt Our Evercore next from with question will ISI.

I between how was has that and wondering changed the kind breakdown breakdown if renewals quarters? and just of of you leasing over past couple pipeline the can just new

expansion. our executed Well, of activity this Sure. quarter, was new we XX% and

so seen of the If new to will over little prior you kind XX%. back pipeline, of a expansion pop that's late-stage to kind quarter, levels up we've look this and leasing

activity is what going And drive will And going that our that to of on looks kind to schedule, be expiration expiration fluctuate drives Colin. what schedule. And really it's the really, Jay, that's like. renewal quarter-to-quarter. based Those numbers

And quarter-to-quarter. will it fluctuate so

the relatively your I large know year? are next as you 'XX to do you -- in ahead any muted. And But look known move-outs then sorry, Great. that have expirations

expirations, have next Yes. large a low and we expirations. of year, also It's few -- percentage have very we

we so talked just accruent quarters. that past forward looking feet, We have that the within over And be X. about at square really to would XXX,XXX portfolio in customer one next year, Domain that's and

And the sits you land That's point X. Domain. there 'XX. But August within Domain Rock and is think all or main they leave. a rows, the feet entertainment expectation And it's retail one in I significantly arguably again, the it's to have out, Our Domain of the XXX,XXX square on likely and over have just to single-story original buildings site best in that of of avenue the that vintage downsize little that directly we toured of many Domain. are in kind the

it long so land terrific us valuable land short-term But us. ultimately as a at renew might to be term, And to aggressively be site than perhaps space, lease for cards. a would that in the more the trying for it's least

February other, next expires have about XX,XXX square the say, I'd which expiration of is about that, of significant that that year feet end Outside NASCAR year. Again, only the we've in Media, we is next talked a many XX,XXX XXX building the this long-term at quarters. a for going be space times facility renewal some past South This relocated they're to at in did our racetrack. is new project. NASCAR into that

so it scheduled And into originally this They delivery line new the of that center. to their media to year year. next extended up was this with expire

are those it so year. And for next really

question next Upal come KeyBanc. Rana with will from Our

So in working maybe your that flow maybe any help next seeing realty year tax by the you that other you this Can year? savings that cash market or where support down on break plans potential And cost remarks. can you're that? either reduction maybe prepared you're highlighted

in quarter Sure. property savings of our Upal, own where Texas. And of tax majority Texas vast in the The is we majority in it's were Gregg. vast this Austin.

it will kind Once be overwhelmingly a of approved It So resets been the the here weeks. voters that approved it savings hasn't primarily of but yet, by were bar. in Austin. in couple happens,

so we X to of quarter. any the caught do this months year, with quarters accrual, And up the first X as we

accrual reporting adjustment will be quarter, the a X-month fourth it into just an period. In period. reporting kind months So pushed X you saw of of X-month

as this as Texas it So the then in bar be quarter. was but we large it reset won't we'll And still enjoy going forward. some quite savings,

moving forward So it's a for legs us. favorable has that kind outcome of

adjustment step our millage other policy the here. take values you or property tax We general. haven't rate kind we market-wide that or seen of a any office statewide to like But markets, back no realize happening in anything what's all and property of to in large

assessments So we of on going should appeals tax forward. be successful property just in general,

there the we're some to going returning those side have property same side, the headwinds. headwinds just I well owners, general So tax are the certainly But to office. as office as inflation think people on for expense don't on

Great.

my next mean, for putting question, other Are some So that and strong I all on places? of liquidity? in can think do to kind you you buybacks liquidity. your still Or work you start strong maybe some your going you maybe focus sheet highlighted balance of that to or

Yes, again. it's Gregg

talked Colin value. the ago, We've of the As few maintained moment. are it liquidity. value cycle liquidity we tremendous And just about, the where our a periods at minutes always has these

And to deploy to we're going advantage thoughtful and and treat before opportunities so it. competitive is patient it, we're There be to it disciplined but will going as a we deploy be it be very because one.

optimistic forward come we'll so the kind to of is are we'll up something and chance each do that Things going pace The look increasing as to opportunity with liquidity. at threshold. that we're starting arrive. a they And with slightly, have

Bonnel come Our Bank of from question will America. next with Camille

on questions follow-up few A balance the sheet.

today's in raise where most capital? see generally to places the do more First, market, attractive you

rates of and that Camille, capital useful. is on the at talking us equity find But at office other we're priced depends capital not levels type it moment, what about. would obviously

talking I at equity think So about raising the don't you're moment.

LTVs there are debt office have placement typically but lower, the investment-grade more can they would expensive. And assets debt probably the moment. execution right available spreads on both mortgages have on seen you've right On you been debt, what buildings. an the for available The than those higher is or at liquidity, the of been. if much obtain the whether assets. most that's a historically cost-effective debt the be execution But side, are Unsecured seen emerged bond there's you And you've liquidity product fronts. it's those some has hasn't

of see the pricing generally So on you that. can kind

are, that become In alternate liquidity I liquidity than difficult or more venture might partners terms has of pricing been trying there's the I limited moment think, has will that, typical also And of of something to going don't where think office there. think be actually back joint market out they're it when of from kind it. be historically. a like the sources The venture and I occur figure at a at taken the returns. have joint they're liquidity out step forefront to

happens. going I think what they're watching to be

can And secured spreads around you helpful. or numbers raise some try you where today, to debt? think are you if put unsecured That's

Yes. do I say them, mean, trade but -- can you I would REIT of changes, Not it they unsecured it's the fluid. see every REIT lot a trade, But office day. and -- trade. bonds that they

I XXXs that. basis can out I in unsecured XX you low of So trading XXXs see secured tighter high think spreads to the over kind are XX in office the probably the higher bonds than XX-year there. points debt, spread. investment-grade you're And think to the that the And then terms of

will and I like to redevelopment around projects there color. comfort appreciate that? X when is barriers such Hayden gives finally, cost out unknowns Domain high rents you pencil ultimately what Ferry the underwrite potentially And or where

Camille, Colin. it's

a of we've the Gateway, able see a we the us lot premier executed lifestyle Hayden underwriting for certainly pay here history types seen that and the similar also to Ferry. And we which a type repositioning Tempe is and I gives recent and a we're our direct street redevelopment Ferry in again, solid very from we've office effectively to were then some project, of got in customers Ferry. that we're to willing Tempe, Hayden the Atlanta, a visibility successes executed confidence able redevelopments think our And Gateway are out to repositioning Hayden how in across Ferry. that rate of Tempe looking projects, specifically the were achieving lot and Promenades with rents demand properties. And Hayden into of of just achieve and

with Our from next question Mizuho. Vikram will Malhotra come

Georgi changed the for X is this you are sublet from work recent how dynamics? any over has months? on the This can Vikram. And home seeing last on And What from space? comment impact on you

our markets largely across in the been Sure. relative say flat. Belt, quarter have to the third sublease second I'd activity I'd say quarter the Sun

far sublease seen of And they leased. taking -- rethink We markets, in certain of as at I'd the an along were some here I mentioned, the that we have less combination impacts as secular headlines. plans. I a office tell say seen secular Cousins a with risks year seeing down. on it you, the -- lifestyle some sublease availability. we and a work not on their in that the in would certainly, that's from ago, are about cyclical concerned in home you we from focused we're major come been And today, that's economy. market look actually that here increase we've at that Sun work instances, was that space off risk certainly actually in we the risks home of the being sit trends customers And that the in space Belt. as trophy its

X a their moving to the in that going that -- was the just is announced consensus announcements in trend often. announced Atlanta their for, that to the are a again, buildings Fortune we work probably the a mentioned, X had had I in I X I think been week And back XXX that that were best accelerating And not those and days week. company Fortune as to employees Atlanta many a days of X among days they and in highest-quality hear We've CEOs had days. here employees XXX this company professional And just many just are -- week.

about we're that -- say, I'd so less today. And concerned far

where like a for quick to you next months? today just about you And corporates you talk assets would X the I guess, me. And to see XX that over and Can last do sell? one

there's cap are data points not lot rates today. really a on of Again, where

experience moving the invest of Sun investors of think do this make for Belt. think lifestyle for again, trophy And again, are a rates over looking are process, think Cousins And look of bets. probably you why that of have still the the and in I of we're those interest I fluid. that see kind market in going it's Investors think bets. And going when I still to course pivot to willing going just at back many confidence investors we to kind the before to arrives, to is of Properties office will are and in they stability moment and investors pandemic. more I are place where are direction begin

-- you a and ago minutes able we've just start actually been from sheet. a while income few maintaining our net pandemic the of XX% fortress do that balance Gregg that by if operating the And highlighted to to now, grown

and it And durability the the office and future growth Sun showing is in stability lifestyle the so the in Belt.

near-term back. We come firmly in need for that until dispositions. investor so I in the no will it capital pursue huge we're markets. And think to best assets We've a Cousins great focused think sheet, And time be got hurry in liquidity. at the best not will comes, balance that a

on And the so while we're patient on moment, we're patient acquisitions the the also at dispositions.

Powell will Barclays. Our Anthony next come from question with

of markets leasing just question and always tenant lot case be about the of hear does cost in to in seem coastal We improvements. space a market. increasing, A on stories your a growing TI

you can quarters. and the those maybe talk few about how past evolved in TI requirements in your markets So

I indicative we aren't project tenant total the Sure. we're Richard. through necessarily But cost. how when pressure inflation those looking of results, do to flow they we're mean in and allowances improvements giving. of continue to This at are see our is certainly, amount that costs. construction and some They

able the at truly and signed, able our we've over and effective leases offset been that to successfully. net that time So increasing where can more look to and out a you to it concession to get actually seek negotiation rents felt been we've higher TIs you to rate exposure like And had our results we've in is any deal. see -- given in a manage we that just

have So about earlier to maybe these you this talks on of space? the exiting entered the so related maybe start. WeWork, the releasing leases maybe -- that or and Or as is work with them on to some restructuring in to

the Anthony? repeat question, you Could

leases? potentially about reworking you it that to to is with the for Have WeWork. start? Or Yes, discussions too them started have process early

This is Richard again.

speaking proceedings situation. are earlier, bankruptcy ours, WeWork. as potentially it's in higher -- important we fluid partner happen. and It situation on and with alternatives. a for very a of years. But about We dialogue yes, what's a nondisclosure lot But have is many we there, agreement under been we lot are a mentioned the a can level and going an are And exploring different of

from And come Peter will question next Jefferies. with our Abramowitz

color Peachtree. comments the XXXX the appreciate on I and

Congress. Just wondering about if you you as could as your in portfolio buildings talk about at Northpark talk well X of the other significant One Could with activity Eleven vacancies.

those large the contribution any is there? interest potential 'XX. and spaces vacancies in how have for Just You some

at And It for properties, Colin. been looking velocity our Atlanta. bit to has more long some Northpark its challenge the of sits It X markets. a us. perimeter more on that over central has right has suburban here in Georgia. a leasing would great than It's Yes. a those term, forward. market of going more the recover things is I say, some property urban been slower in Northpark

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difficulty more there property find many with a I that's believe technical has Northpark. we ago, markets more to And likely Central the One and able than again, ahead Congress on gosh, a leasing hopefully X, years on campus. in Eleven done be some think been to later. challenging is Northpark have but its when occupancy Eleven slower there. that with right property of activity, does One food was redevelopment perimeter in little sooner the major a Austin, has we'll our hall great significant a some we customer, drive that campus, -- the for bit X directly stock urban that have that Sorry mentioning recover seen activity. MARTA was been Northpark positives just a I a

slower question. then have Got just it. this That's and a of peers And cycles. helpful. decision-making your deal talked about A lot just longer quarter higher-level from generally tenants

you or hasn't Just case any you similar see had been if the wanted whether the for you're in color a you? seeing on if that really had experience portfolio to that if

in Fed there's I we're we forces. rates, always say and the more of to that at are time, Cousins say raises has active they're I forces interest competing at efficient. those that And and some at and play. They real want this think center I'd become some they very, tied spend are carefully. rates some negative some competing people realizing are on estate force At that And -- headcount, the And in we've here characterize directly alluded as bottom have some got all Richard companies on focus instances, of are deals seeing profits. back also higher So very scrutinizing to their I'd back driving think work. And therefore, line instances, in employees companies as and kind don't the the space. higher to, greater forcing enough interest instances to interest of same they rates G&A the are

a can. we leasing our so the portfolio to market belief of a And going regardless as that and our fund as to quality is work are ability we really our we're seeing that much that costs there. And pull with push and of gain hard to share

Street. from Dylan question will Burzinski, with Green come And next our

to year, leasing but level you bottomed Apologies and I'm next the guys say just here? occupancy that missed the I lease minimal at it's would if I maybe joined year-to-date has portfolio fair it strong activity given say as late, curious, expirations

so. you year, kind no accruent, expirations modest than We have significant hope large known And next of other again, mentioned, we as move-outs.

our XXXX than aside, of as certainly with certainly a monitor that there So be our But -- end XXXX. is And is situation occupancy is some again, negative and evolving WeWork. higher modest But end the positive goal. a fluctuations at company the quarter-to-quarter. could it WeWork is we'll have to certainly I'd goal hope say to

you of the of here saw pandemic. coming relative then recently down more Have from guess into one to level just the And out-of-market we sort guys I slow tenants. on that sort activity inbound seen that

Well, to that's into right. to to it's And pandemic. I was prior it's XX trend up a has where again, would been been for reverting And this underway the back say it XX the been years.

the all think it the know, we'll to was the see mean. and that I certainly I back for we think supercharged obvious revert likely pandemic, during to that reasons

higher I'd just relocations is in residential the the mortgages. term, challenge think some say I the biggest immediate of of near cost the to

And until markets, slow to their they hiring so I kind or that think company the rather Sun the within are mitigates relocate companies that. shifting Belt than normalizes. full-scale the a of of which might do moving is seeing what lot we are of growth But employees, and relocations

and expanding full-scale in term on near-term likely slowdown kind more say a more I to hubs of I'd So perhaps think you're continued see activity near -- relocations.

question next BMO. our John Kim come And will with from

profitability whether that could between locations you rent they On share anything the characteristics, WeWork, the noncurrent? or on occupancy X is on current there versus it's remain

under of at are specifics an can't we share performance Unfortunately, we this about Yes. time. the so each location NDA,

to confidence Okay. And leases rent remaining what current gives that that? I'm just wondering X continue the on will you like still pay

physical kind of our will who's that -- moment. But the a on we But on coming is current decision activity, is guide on be decision we spaces. the able to -- properties X. rent what again, we certainly X to see made And not looking I see our think we're fluid. guide a -- doing I is pay rent at based the they've to and we kind if activity in Again, other a pay and lot and see to think, made own of look, WeWork going of

Got it.

know quarter, I space some provided and was on if And space. -- that you? of the if I an update to you provide the of chance back update Okay. subleasing you any lease a that? some give that could further to On NCR, wondering to last company there's that

spin-off. So complete corporate NCR their did the

to today, there it separately -- traded is are companies. So X public

lessor, public X with still is lease our master of original kind our companies. of X lease, those Our

they new with our As them already think They market is certainly of some I as some And interesting with right you there in have back. space. shareholders efficient. But no of that of that our on in space more some opportunity actually tenant it's the the give potential I rights go to split to we'll change attempting the prospects lease, companies have space some become space. And conversations, have they a meaningful along that mentioned, comes are have and think direct in they've some and they any no if sublease a an for long-term -- ultimate X customer sublease space. put into engage those for to to

in them. stay touch our to certainly if shareholders, them And win-win there's continue engage. a we'll we'll so with solution for And and

for Gregg. Final question

are on disclosure the developments, some there you periods capitalized can us stabilization extend interest required the On that your you on remind expense just interest improved on completion? the capitalized X-year policy, period? you're if Or ways to that after could interest

typically that drop after interest a X-year completion. we than it's capitalize and No, no on space unoccupied greater

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

Thank and your interest your Properties. for time this Cousins morning in you

forward look Have NAREIT great many to hopefully will in in of you a a out We seeing weeks. weekend. few

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

your disconnect may You now lines.