Cousins Properties Reports Third Quarter 2014 Results

Cousins Properties Incorporated (NYSE:CUZ):

Highlights

• Funds From Operations for the third quarter was $0.20 per share.
• Same property net operating income for the third quarter on a cash basis was up 12.8% over the prior year, and on a GAAP basis was up 3.6% over the prior year.
• Issued 18 million shares of common stock for net proceeds of $223.4 million.
• Acquired Fifth Third Center in Charlotte, North Carolina for $215 million.
• Subsequent to quarter end, acquired Northpark Town Center in Atlanta, Georgia for $348 million.

Cousins Properties Incorporated (NYSE:CUZ) today reported its results of operations for the quarter ended September 30, 2014.

“We continue to string together very solid quarters, driven by continued progress with the implementation of our strategic plan combined with improving office fundamentals in our Sunbelt markets,” said Larry Gellerstedt, President and Chief Executive Officer of Cousins.

Portfolio Activity

• Leased or renewed 550,283 square feet of office space during the third quarter.
• Second generation net office rent per square foot on a cash basis increased 7.6% for the third quarter, and on a GAAP basis increased 36.3% for the third quarter.

Transaction Activity

• Sold Lakeshore Park Plaza, a 197,000 square foot office asset in Birmingham, Alabama, for a gross sales price of $25 million, and recognized a gain of $13 million.
• Acquired Fifth Third Center, a 698,000 square foot Class-A office tower located in Charlotte. The gross purchase price for this property was $215 million, before adjustments for customary closing costs and other closing credits.
• Subsequent to quarter end, acquired Northpark Town Center, a 1.5 million square foot Class-A office asset located in Atlanta. The gross purchase price for this property was $348 million, before adjustments for customary closing costs and other closing credits.

Financing Activity

• Issued 18 million shares of common stock for net proceeds of $223.4 million, which includes customary legal, accounting, and other expenses.
• Subsequent to quarter end, closed an $85 million non-recourse mortgage loan secured by 816 Congress. This loan has a fixed rate of 3.75% and a ten-year term.

Financial Results

FFO was $41.7 million, or $0.20 per share, for the third quarter of 2014, compared with $17.2 million, or $0.11 per share, for the third quarter of 2013. FFO was $113.6 million, or $0.57 per share, for the nine months ended September 30, 2014, compared with $42.8 million, or $0.33 per share, for same period in 2013.

Net income available to common stockholders was $19.3 million, or $0.09 per share, for the third quarter of 2014, compared with $59.4 million, or $0.36 per share, for the third quarter of 2013. Net income available to common stockholders was $22.3 million, or $0.11 per share, for the nine months ended September 30, 2014, compared with $107.0 million, or $0.83 per share, for same period in 2013. The nine months ended September 30, 2013 included $56.8 million in gains recognized on the sale of 50% of the Company’s interest in Terminus 100 and on the acquisition of Terminus 200, which was achieved in stages.

Investor Conference Call and Webcast

The Company will conduct a conference call at 11 a.m. (Eastern Time) on Thursday, October 30, 2014, to discuss the results of the quarter ended September 30, 2014. The number to call for this interactive teleconference is (212) 231-2920.

A replay of the conference call will be available for 14 days by dialing (402) 977-9140 and entering the passcode 21734636. The replay can be accessed on the Company's website, www.cousinsproperties.com, through the “Q3 2014 Cousins Properties Incorporated Earnings Conference Call” link on the Investor Relations page.

Cousins Properties Incorporated is a leading fully-integrated real estate investment trust (REIT) with extensive experience in development, acquisition, financing, management, and leasing. Based in Atlanta, the Company actively invests in top-tier urban office assets and opportunistic mixed-use properties in Sunbelt markets.

The Consolidated Statements of Operations, Consolidated Balance Sheets, a schedule entitled Funds From Operations, which reconciles Net Income (Loss) Available to FFO, and a schedule entitled Same Property Information, which reconciles cash basis same property net operating income to rental property revenues and rental property expenses, are attached to this press release. The change in second generation net rent per square foot represents the aggregate net rent (base rent less operating expense reimbursements and leasing costs) paid by prior tenants compared to the aggregate net rent paid by current tenants for spaces that have been re-leased in the office portfolio. Second generation leases exclude leases executed for spaces that were vacant upon acquisition, new leases in a development property, and leases for spaces that have been vacant for one year or more. More detailed information on Net Income (Loss) Available and FFO results is included in the “Net Income and Funds From Operations - Supplemental Detail” schedule, which is included along with other supplemental information in the Company’s Current Report on Form 8-K, which the Company is furnishing to the Securities and Exchange Commission (“SEC”), and which can be viewed through the “Supplemental Information” and “SEC Filings” links on the “Investor Information & Filings” link of the Investor Relations page of the Company’s website at www.cousinsproperties.com. This information may also be obtained by calling the Company’s Investor Relations Department at (404) 407-1898.

Certain matters discussed in this news release are “forward-looking statements” within the meaning of the federal securities laws and are subject to uncertainties and risk. These include, but are not limited to, the availability and terms of capital and financing; the ability to refinance indebtedness as it matures; the failure of purchase, sale, or other contracts to ultimately close; the failure to achieve anticipated benefits from acquisitions and investments or from dispositions; the potential dilutive effect of common stock offerings; the availability of buyers and adequate pricing with respect to the disposition of assets; risks related to the geographic concentration of our portfolio; risks and uncertainties related to national and local economic conditions, the real estate industry in general, and the commercial real estate markets in particular; changes to the Company's strategy with regard to land and other non-core holdings that require impairment losses to be recognized; leasing risks, including the ability to obtain new tenants or renew expiring tenants, and the ability to lease newly developed and/or recently acquired space; the adverse change in the financial condition of one or more of its major tenants; volatility in interest rates and insurance rates; the availability of sufficient investment opportunities; competition from other developers or investors; the risks associated with real estate developments (such as zoning approval, receipt of required permits, construction delays, cost overruns, and leasing risk); the loss of key personnel; the potential liability for uninsured losses, condemnation, or environmental issues; the potential liability for a failure to meet regulatory requirements; the financial condition and liquidity of, or disputes with, joint venture partners; any failure to comply with debt covenants under credit agreements; any failure to continue to qualify for taxation as a real estate investment trust; and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including those described in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The words “believes,” “expects,” “anticipates,” “estimates,” ”plans,” “may,” “intend,” “will,” or similar expressions are intended to identify forward-looking statements. Although the Company believes that its plans, intentions and expectations reflected in any forward-looking statement are reasonable, the Company can give no assurance that such plans, intentions or expectations will be achieved. Such forward-looking statements are based on current expectations and speak as of the date of such statements. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise, except as required under U.S. federal securities laws.