Cousins Properties Lifts FFO and Raises Full-Year Guidance
The Atlanta office landlord posted funds from operations of $0.75 a share in the second quarter, up from $0.70 a year earlier, as leasing pushed occupancy to its highest level since early 2020.
Cousins Properties (CUZ), the Atlanta-based office real estate investment trust, reported second-quarter funds from operations of $0.75 a share, up from $0.70 a year earlier, and raised its full-year outlook on the strength of leasing activity and asset sales.
FFO dollars rose to $124.6 million from $117.5 million a year earlier, continuing a climb that has run from $0.70 a share in the second quarter of 2025 through $0.69, $0.71 and $0.73 in the following three quarters. Net income available to common stockholders jumped to $26.2 million, or $0.16 a share, from $14.5 million, or $0.09 a share, primarily on a gain from the sale of an investment property. For the first six months of 2026, however, net income available to common stockholders fell to $1.3 million, or $0.01 a share, from $35.4 million, or $0.21 a share, after Cousins recorded an impairment charge on its One Eleven Congress property in Austin during the first quarter.
Leasing metrics moved in different directions during the quarter. The leased percentage of the total portfolio rose to 92.8%, its highest level since the first quarter of 2020, up from 91.9%. Weighted average occupancy on a same-property basis, however, declined to 88.8% from 90.1% a year earlier, reflecting a gap between space that has been leased and space that has not yet begun generating rent. Same-property cash-basis net operating income grew 5.9% in the quarter, as cash-basis revenue rose 8.2% against a 12.7% increase in cash-basis operating expenses. Second-generation net rent per square foot on a cash basis increased 9.2% in the quarter, down from a 12.2% pace over the first half of the year, suggesting leasing spreads are moderating from earlier in 2026.
Cousins raised its 2026 guidance, lifting the midpoint of net income guidance to a range of $0.08 to $0.14 a share from $0.02 to $0.10 a share and FFO guidance to $2.92 to $2.98 a share from $2.90 to $2.98 a share, citing leasing outperformance and transaction activity.
The company was active on both sides of the transaction ledger. It purchased the remaining 10% joint-venture interest in 100 Mill in Phoenix for $18.5 million, implying a property value of $158.7 million, and sold Research Park Plaza V in Austin for $42.0 million, booking a $9.2 million gain. Subsequent to quarter-end, on July 29, Cousins sold One Eleven Congress in Austin, the property tied to the first-quarter impairment, for $208.0 million. Also after the quarter closed, the company acquired a preferred equity interest in 5th & Walsh, a 199,000-square-foot office development in Austin, with a $31.5 million funding commitment expected to be invested in 2027. 300 South Tryon, the Charlotte office tower Cousins acquired for $317.5 million in February, generated $7.22 million of net operating income in the quarter, up from $4.77 million in the first quarter as the asset ramps toward stabilization.
Cousins closed a new five-year, $1.2 billion unsecured credit facility to replace its prior $1.0 billion facility, which had been set to mature in April 2027, with borrowing spreads improving 15 basis points on the new facility and its $400 million term loan and 30 basis points on a separate $100 million term loan. Net debt to annualized EBITDAre fell to 5.16 times in the quarter from 5.30 times in the first quarter and 5.66 times in the fourth quarter of 2025, extending a multi-quarter deleveraging trend.
The company held its quarterly dividend at $0.32 a share, unchanged since 2025. The FFO payout ratio rose to 48.2% from 43.0% a year earlier, as dividend growth outpaced the rate of increase in FFO.