Cousins Properties Incorporated (
- a real estate investment trust (REIT) - reported fourth quarter
2012 core FFO (fund from operations) per share of 15 cents per
share, beating the Zacks Consensus Estimate by a nickel. However,
core FFO missed the year-ago figure by a cent.
For full year 2012, core FFO per share increased 7.7% year over
year to 56 cents and was also well ahead of the Zacks Consensus
Estimate of 47 cents. The solid performance was attributable to
strong leasing activity and successful execution of other
Including certain non-recurring items, FFO stood at $14.2 million
or 14 cents per share for the quarter compared with a loss of
$110.2 million or $1.06 per share a year ago. For full year 2012,
FFO was $66.5 million or 64 cents per share compared with a loss
of $76.9 million or 74 cents per share in 2011.
Inside the Headlines
Total revenue for the fourth quarter reached $39.3 million, up
from $33.6 million reported in the year-ago quarter. Moreover,
total revenue substantially exceeded the Zacks Consensus Estimate
of $34 million.
For the full year, the company reported total revenue of $148.3
million, substantially higher than $129.0 million generated in
the previous year. Also, total revenue was marginally above the
Zacks Consensus Estimate of $147 million.
Total same-store revenue increased 0.8% in fourth quarter 2012
compared with the year-earlier quarter (office up 0.5%, and
retail up 2.7%), while operating expenses soared 3.4% (office up
3.0%, and retail up 7.4%). Total same-store net operating income
(NOI) in the reported quarter dipped 0.7% on a year-over-year
basis (office down 1.1% and retail up 1.3%).
During the reported quarter, Cousins Properties executed strong
leasing activities and leased 184,000 square feet of office space
and 106,000 square feet of retail space.
At the quarter-end, the company's same-store office portfolio was
91% leased, while its retail properties were 90% leased.
Acquisitions & Dispositions
During the fourth quarter 2012, Cousins Properties divested
$250.8 million worth of operating assets. This includes
divesture of The Avenue Forsyth for $119.0 million; The Avenue
Webb Gin for $59.6 million; and Cosmopolitan Center for $7.0
million. Also, the company divested several land parcels. This
includes sale of the 615 Peachtree land parcel for $11.0 million
and Terminus land parcels for $10.5 million.
For full year 2012, Cousins Properties sold $401.2 million worth
in-service properties, land and other non-core assets.
The asset sale was part of the long-term strategy of the company
to upgrade its overall portfolio by acquiring newer high-quality
properties and divesting non-core assets.
Subsequent to the quarter-end, Cousins Properties inked several
investment transactions. The company purchased 100% interest in
Post Oak Central - a Class-A office complex in Houston - from
institutional investors advised by J.P. Morgan Asset Management
JPMorgan Chase & Co. (
for $232.6 million.
In addition, Cousins Properties purchased the residual 80%
interest in Terminus 200 and consequently, formed a 50-50 joint
venture (JV) for both Terminus 100 and Terminus 200 towers in
Atlanta's Buckhead submarket. The Terminus deal included 2
Class-AA towers spanning 1.2 million square feet. Terminus 100
was valued at $209.2 million while Terminus 200 at $164.0
At the quarter-end, Cousins Properties had cash and cash
equivalents of $176.9 million.
We are impressed with the strong quarterly results of Cousins
Properties. The company's diversified portfolio of office and
retail properties, mainly located in the high-growth Sun Belt
region, helps it to mitigate the operating risks associated with
the economic down cycles involved in operating a single business
Also, the company is currently shoring up its balance sheet and
increasing liquidity by selling non-core assets. At the same
time, the company remains focused on leasing activities and
continues to pursue attractive investment opportunities. We
expect all these factors to provide upside potential for the
company going forward.
Cousins Properties currently holds a Zacks Rank #3 (Hold). REITs
that are performing better and are worth a look include
HCP Inc. (
Simon Property Group Inc. (
, both carrying a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of
REITs, are obtained after adding depreciation, amortization and
other non-cash expenses to net income.
COUSIN PROP INC (CUZ): Free Stock Analysis
HCP INC (HCP): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
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