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Cousins Properties to Boost Austin Portfolio With Trophy Office Asset
CUZCousins Properties(CUZ) ZACKS·2024-12-11 15:20

Core Viewpoint - Cousins Properties (CUZ) is set to acquire a premium lifestyle office property in Downtown Austin, TX, fully leased to a Fortune 20 company, for a net purchase price of 521.8million,withthetransactionexpectedtocloseinDecember2023[1][2].Group1:AcquisitionDetails−Theproperty,knownasSailTower,coversapproximately804,000squarefeetandwasdevelopedin2022,locatedneartheSecondStreetentertainmentdistrict[2].−ThisacquisitionwillenhanceCousins′existing1.7millionsquarefootofficeportfolioinAustin,contributingtoimmediateincrementalrevenues[3].Group2:StrategicPositioning−CousinsPropertiesisfocusedonupgradingitsportfolioqualitythroughacquisitionsoftrophyassetsandopportunisticdevelopmentsinhigh−growthSunBeltsubmarkets[4].−Thecompanyrecentlyacquiredanotherlifestyleofficeproperty,VantageSouthEnd,inCharlottefor521.8 million, with the transaction expected to close in December 2023 [1][2]. Group 1: Acquisition Details - The property, known as Sail Tower, covers approximately 804,000 square feet and was developed in 2022, located near the Second Street entertainment district [2]. - This acquisition will enhance Cousins' existing 1.7 million square foot office portfolio in Austin, contributing to immediate incremental revenues [3]. Group 2: Strategic Positioning - Cousins Properties is focused on upgrading its portfolio quality through acquisitions of trophy assets and opportunistic developments in high-growth Sun Belt submarkets [4]. - The company recently acquired another lifestyle office property, Vantage South End, in Charlotte for 328.5 million, aligning with its strategy in dynamic submarkets [4]. Group 3: Market Performance - There is a recovery in demand for Cousins' high-quality office properties, evidenced by a rebound in leasing activity, with 114 leases executed for a total of 1.6 million square feet in the first nine months of 2024 [5]. - The weighted average lease term for these leases is 7.8 years, indicating stability in cash flows [5]. - Shares of Cousins Properties have increased by 32.2% over the past six months, outperforming the industry growth of 12.7% [5]. Group 4: Financial Outlook - Analysts have a positive outlook on Cousins Properties, with the Zacks Consensus Estimate for its 2024 funds from operations (FFO) per share revised to $2.68 [6].