Cousins Properties Inc.
), a real estate investment trust (REIT), reported fourth quarter
2011 FFO (fund from operations) loss of $110.2 million or $1.06 per
share, compared with FFO of $10.0 million or $0.10 in the
year-earlier quarter. Fund from operations, a widely used metric to
gauge the performance of REITs, is obtained after adding
depreciation, amortization and other non-cash expenses to net
Excluding certain non-recurring items, recurring FFO for the
reported quarter was $16.1 million or 16 cents per share. The
recurring FFO for fourth quarter 2011 exceeded the Zacks Consensus
Estimate by 4 cents.
For full year 2011, Cousins Properties reported FFO loss of
$76.9 million or 74 cents per share, compared with FFO of $32.8
million or 32 cents in the previous year. Recurring FFO for the
reported fiscal was $53.2 million or 51 cents per share. The
recurring FFO for fiscal 2011 exceeded the Zacks Consensus Estimate
by 7 cents.
Total revenues were $46.6 million during the quarter versus
$52.7 million in the year-ago period. For full year 2011, Cousins
Properties reported total revenues of $178.5 million versus $215.6
million in 2010.
During the reported quarter, Cousins Properties executed strong
leasing activities spanning 266,000 square feet of office space and
122,000 square feet of retail space. At year-end 2011, the
company's office portfolio was 90% leased (down from 91% at
year-end 2010), while its retail properties were 89% leased (86% in
During fourth quarter 2011, Cousins Properties completed the
acquisition of Promenade Two - a 774,000 square-foot Class-A office
building in the Midtown submarket of Atlanta, Georgia, for $134.7
million in cash. The purchase price was well below the replacement
cost of the property and provided a significant growth opportunity
for the company with a first-class tenant base and no considerable
lease expirations until 2016. In addition, with Promenade Two in
its kitty, Cousins Properties presently has a sought-after asset in
all three urban submarkets along the 'Peachtree Corridor' of
As part of the long-term strategy to upgrade its overall
portfolio with the acquisition of newer high-quality properties and
divesture of non-core assets, Cousins Properties sold 2 industrial
buildings and the remainder of its Texas industrial land for total
proceeds of $72.2 million during fourth quarter 2011. The company's
share of the asset sale transaction was approximately $65.2
These included the sale of 'King Mill Building 3' - a 796,450
square-foot building in Atlanta, Georgia, to an affiliate of
Industrial Developments International (
). The company also sold 'Lakeside Ranch Building 20' - a 748,831
square-foot building in Dallas, to
Duke Realty Corp.
). At the same time, Cousins Properties sold two land parcels
within the Lakeside Ranch Business Park and an additional
development site in Lancaster, Texas, to Duke Realty.
The company also divested 3.8 acres at North Point for $2.8
million and 187 residential lots, including all remaining lots at
Tillman Hall and 79 of the remaining 109 lots at Creekside Oaks.
Subsequent to the quarter-end, Cousins Properties entered into a
contract to sell its interests in 18 residential projects held by
its CL Realty and Temco joint ventures for $23.5 million.
Cousins Properties 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 intends to
maintain steady occupancy levels across its portfolio. At year-end
2011, Cousins Properties had cash and cash equivalents of $4.9
million, compared with $7.6 million at year-end 2010. Total debt
outstanding at year-end 2011 was $701.6 million.
We maintain our 'Neutral' rating on Cousins Properties, which
presently has a Zacks #2 Rank translating into a short-term 'Buy'
COUSIN PROP INC (
): Free Stock Analysis Report
DUKE REALTY CP (
): Free Stock Analysis Report
To read this article on Zacks.com click here.