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    CUZ
    Earnings call· Mar 2026(Q1 FY26)

    COUSINS PROPERTIES Q1 FY26 earnings call CUZ

    Apr 30, 2026 Source

    Executive summary

    Cousins Properties Q1 FY26 — Strong Leasing and FFO Growth

    Cousins Properties reported a strong first quarter, driven by robust leasing activity and increased FFO guidance. The company is benefiting from reaccelerated Sunbelt migration and flight-to-quality trends, leading to an emerging shortage of premier lifestyle office space. Management continues to optimize its portfolio through strategic acquisitions and dispositions, while maintaining a disciplined capital allocation approach.

    Highlights

    5

    • Delivered FFO of $0.73 per share, $0.02 above consensus.

    • Increased midpoint of full-year 2026 FFO guidance by $0.02 to $2.94 per share, representing 3.5% growth over 2025.

    • Completed 932,000 square feet of leases, one of the highest quarterly volumes in company history.

    • Achieved 15.2% cash rent roll-up on second-generation leasing, marking 48 consecutive quarters of positive roll-ups.

    • Increased portfolio occupancy to 88.9%, up sequentially.

    Concerns

    1

    • Net Debt to EBITDA ratio elevated to 5.66x due to timing of asset sales and share repurchase funding.

    Guidance & targets

    4
    CategoryTargetConfidence
    Full-year 2026 FFO per share
    $2.90 to $2.98
    high materiality
    High
    Full-year 2026 FFO growth over 2025
    3.5%
    high materiality
    High
    Net Debt to EBITDA
    low 5x range
    medium materiality
    High
    Development starts
    breaking ground in the next year
    medium materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Atlanta
    Portfolio lease percentage increased, contributing to organic growth. Market-level leasing activity was strong with 2.3 million sq ft signed in Q1. Sublease availability declined for the 8th consecutive quarter, now at its lowest since early 2021. Average asking rents had largest quarterly increase in 2.5 years.
    Lease percentage: 89.3% (Q1 end)Leases signed: 192,000 sq ft (Q1)New lease: 105,000 sq ft with KPMG at PresidiumSubsequent new lease: 46,000 sq ft with Coal Rail at 725 fonts
    		————
    Austin
    Portfolio lease percentage increased, contributing to organic growth. Tenant demand increased 30% year-over-year to nearly 5 million sq ft. New speculative development is at its lowest level since 2013. Notable increase in overall tenant demand in the CBD, focused on highest quality office segment.
    Lease percentage: 95.3% (Q1 end)Leases signed: 339,000 sq ft (Q1)Renewal: 273,000 sq ft with Fortune 10 technology company in Domain 8
    		————
    Charlotte
    Market-level leasing activity increased 74% year-over-year. 550 South project nearing completion. 201 North Tryon redevelopment substantially complete in Q1 2027. Intentional patient approach to leasing at 201 North Tryon to achieve better net effective rents.
    Leases signed: 181,000 sq ft (Q1)New and expansion leases: 58% of Q1 volumeCash rent roll-up: 26%New lease: 72,000 sq ft with Scout Motors at 550 SouthRenewal and expansion: 54,000 sq ft renewal and 27,000 sq ft expansion at 300 South Trion
    		————
    Dallas
    Market recorded 3.6 million sq ft of leasing activity in Q1, above Q1 2025 levels. New supply remains limited, boosting top-tier assets and driving rent growth. Class A space accounted for 73% of quarterly lease volume.
    Lease percentage: 98.1% (Q1 end)Leases signed: 65,000 sq ft (Q1)Cash rent roll-up: 32%Subsequent new lease: 52,000 sq ft with U.S. Renal Care at Legacy Union 1
    		————
    Nashville (New Hakan Project)
    Office component is now 84.3% leased, largely driven by Oracle's 116,000 sq ft lease. Apartment component stabilized at 92.6% leased. In lease negotiations for remaining 2 full floors, which would bring office to almost 96% leased.
    Office component leased: 84.3%Office component leased last quarter: 55.3%New lease: 116,000 sq ft with OracleApartment component leased: 92.6% (stabilized)
    		————

    Operational metrics

    19
    Cash rent roll-up on second-generation leasing
    15.2%
    Q1 FY26

    Marks 48 consecutive quarters of positive rent roll-ups, with cash rents rolling up in every market with activity.

    Total office leases completed
    932,000highest for a first quarter in over a decade; highest quarterly level since Q2 2019
    Q1 FY26

    Comprised of 49 office leases with a weighted average lease term of 6.6 years.

    New and expansion leases
    483,00052% of completed leases; essentially in line with Q4 2025
    Q1 FY26
    Weighted average lease term
    6.6
    Q1 FY26

    For the 49 office leases completed during the quarter.

    Average net rent
    $44.5418% higher than FY25
    Q1 FY26
    Average leasing concessions
    in line with FY25
    Q1 FY26
    Average net effective rent
    $32.28second only to Q3 2024
    Q1 FY26
    Late-stage leasing pipeline
    1.0Mcomparable to last quarter; grown by 200,000 sq ft in past 2 weeks
    Current (as of call date)

    Includes 450,000 sq ft of new and expansion leases. About 2x the size of a year ago.

    Atlanta sublease availability
    declined8th consecutive quarter of decline
    Q1 FY26

    Now at its lowest level since the start of 2021.

    Austin tenant demand
    30%from 3.9M sq ft in Q1 2025 to nearly 5M sq ft today
    YoY
    Charlotte market-level leasing activity
    74%
    Q1 FY26 YoY
    Contractual rent expiring through 2027
    8.3%320 bps lower than end of 2025
    through 2027
    Shares repurchased
    3.9M
    Q1 FY26
    Remaining share repurchase authorization
    $410Mincreased from $250M to $500M
    as of Q1 FY26 end

    Board authorized an increase to the program subsequent to quarter end.

    Forward shares issued under ATM program
    2.9M
    Q1 & Q2 2025

    Company has flexibility to settle these shares through year-end, or extend.

    Unsecured credit facility
    $1.2Bincreased by $200M
    5-year

    Closed on April 1. Prior facility scheduled to mature in April 2027. Also amended $400M and $100M unsecured term loans, adding 2 6-month extensions to each, with spread improvements of 15 bps and 30 bps respectively.

    Same property expense increase
    1.95%
    average annual over past 4 years

    Held expenses below 2% despite property level inflation, attributed to new and efficient portfolio in affordable/business-friendly markets.

    Mezzanine loan repayment
    $18.2M
    Q1 FY26

    Secured by an equity interest in the 110 East property in Charlotte.

    Dividend payout ratio (FAD basis)
    low to mid-70%
    Historically

    Company is comfortable maintaining this level. This quarter was a little lower due to lumpiness.

    Industry KPIs

    9
    MetricValueDetails
    Occupancy rate88.9%%
    Revenue growth4.5%%
    Disposition volume$39.5MUSD
    Same store noi growth5.5%%
    Investment volume closed$317.5MUSD
    Net debt adjusted EBITDA5.66xx
    Leasing bookings volume signed932,000sq ft
    Ffo core ffo normalized ffo per share$0.73USD
    Lease renewal spread re leasing recapture15.2%%

    Orderbook & backlog

    4
    New Hawk Phase 2 (future office building)approximately 300,000 sq ftQ1 FY26

    Significant infrastructure and parking completed; cost reflected in land inventory. Goal to break ground in the next year.

    111 Congress (under contract for sale)519,000 sq ftQ1 FY26 end

    Expected to close early Q3 FY26. Pricing to be disclosed after closing.

    303 Tremont land parcel (under contract for sale)2.4 acresQ1 FY26 end

    Contract price $23.7M. Expected to close before year-end. Better suited for residential development.

    Late-stage leasing pipeline1.0M sq ftas of call date

    grown by 200,000 sq ft in past 2 weeks

    Includes 450,000 sq ft of new and expansion leases. About 2x the size of a year ago.

    Deals & partnerships

    5
    —Acquisition of a 638,000 sq ft trophy office asset in Uptown Charlotte.$317.5M

    Closed in February. Funded by proceeds from non-core asset sales. Already executed a renewal and expansion with a large customer, enhancing lease term and validating mark-to-market rents.

    —Sale of Harborview Plaza in Tampa.$39.5M

    Closed in late February. Part of strategy to recycle out of non-core assets to fund acquisitions.

    residential developerSale of 2.4-acre land parcel in South End Charlotte.$23.7M

    Site determined to be better suited for residential development than original office towers. Part of evaluating highest and best use of land bank and resources.

    —Sale of 519,000 sq ft asset in Austin CBD.

    Asset built in late 1980s, ownership dates back to Parkway transaction in 2016. View that asset is better off in hands of private capital. Positive sentiment towards Austin market noted.

    —50-50 joint venture for New Hakan mixed-use project in Nashville.

    Company owns New Hakan in a 50-50 joint venture.

    Capital programs

    2
    550 South projectnearing completion

    Seeing nice uptick in early stage leasing interest as completion approaches.

    201 North Tryon redevelopmentunderway

    Taking an intentionally patient approach to leasing to achieve meaningfully better net effective rents once project approaches completion.

    Risks & headwinds

    4
    Elevated Net Debt to EBITDAQ1 FY26 (temporary)

    5.66x

    Mitigation: Expected to return to low 5x range once asset sales and share repurchase funding are complete.

    Macro concerns and public market volatility

    ongoing

    Mitigation: Company continues to outperform supported by strong operating platform, efficient G&A, and strong balance sheet.

    Long lead time for new office developmentuntil 2030 at the earliest

    3- to 4-year lead time

    Mitigation: Leading to shrinking inventory and emerging shortage of premier lifestyle office space, which favors landlords.

    Potential for increased personal and business taxes

    proposals to meaningfully increase

    Mitigation: Driving reaccelerated Sunbelt migration, benefiting Cousins' markets.

    What to watch in Q2 FY26

    5

    Portfolio Occupancy

    year-end 2026
    Current88.9%
    Target90%

    Why it matters

    Achieving 90% occupancy by year-end is a stated goal and indicates continued demand and successful lease-up of the portfolio.

    When you step back and look at all the building blocks, which we typically don't give that level of granularity or occupancy guidance. But when we look at all of the building blocks on that, we're seeing a relatively modest amount of new leasing that we need to do incrementally to what we already have in the pipeline or have already completed to get to a year number, which is our goal. And we're confident that, that modest amount is achievable and still feel good about our expectations for getting to 90%.

    Q&A highlights

    6

    Asked for more detail on the current leasing pipeline size compared to prior periods and trends in tenant/industry segments.

    Richard Hickson stated the late-stage pipeline is about 2x the size of a year ago, comparable to last quarter, with the number of prospects up 15%. Technology and financial services are neck and neck, with legal and professional services also significant. Activity is broad-based across Atlanta, Phoenix, Nashville, and Austin. Colin Connolly emphasized that leasing is for "front of house revenue-producing employees" in dynamic companies, pushing back on the "Sunbelt is back office" narrative.

    “the late pipeline. It's about 2x the size of this time last year”

    asked by Blaine Heck · answered by Richard Hickson

    2 min read7 chapters

    Detailed Narrative

    01

    Office Market Trends and Demand Drivers

    The company highlighted several key trends driving the office market, including major companies phasing📎 out remote work and implementing 5-day office mandates, leading to increased demand. The "flight to quality" remains unrelenting, with customers prioritizing high-quality, amenitized, and well-located buildings. The Sunbelt migration has reaccelerated due to proposed tax increases in other states, attracting major corporate hubs and talent.

    02

    Shrinking Inventory and Future Supply

    Record high office conversions combined with record low new development starts are leading to a shrinking inventory of office properties. Given the 3- to 4-year lead time for new projects, this trend is expected to continue until at least 2030, creating an acute shortage of premier lifestyle office space in key Sunbelt submarkets and favoring landlords.

    03

    AI Impact and Leasing Activity

    While AI is shaping internal operations, management sees no evidence it's reducing long-term demand for high-quality office space. Companies actively deploying AI are also prioritizing collaboration, talent density, and physical presence, aligning with Cousins' lifestyle office portfolio. Leasing activity remains encouraging, with space decisions driven by people, culture, and access to talent.

    04

    Portfolio Optimization and Capital Allocation

    Cousins continues its strategy of optimizing its portfolio through opportunistic acquisitions and dispositions. The company acquired 300 South Trion for $317.5 million and is funding this with the sale of non-core assets like Harborview Plaza ($39.5 million) and planned sales of 111 Congress and 303 Tremont land parcel. This approach aims to enhance portfolio resiliency and future cash flows while maintaining a strong balance sheet.

    05

    Strong Leasing Performance and Pipeline

    The operations team delivered a strong quarter with 932,000 square feet of leases completed, the highest first-quarter volume in over a decade. The late-stage leasing pipeline remains very healthy at 1 million square feet, including 450,000 square feet of new and expansion leases, positioning the company for continued strong performance.

    06

    New Hakan Nashville Project Update

    The New Hakan mixed-use project in Nashville is nearing stabilization, with the office component now 84.3% leased, up from 55.3% last quarter, largely due to a 116,000 square foot new lease with Oracle. The 542-unit apartment component stabilized at 92.6% leased. Phase 2, an approximately 300,000 square foot office building, is planned, leveraging existing infrastructure.

    07

    Balance Sheet and Capital Markets

    The company issued a $500 million 7-year unsecured bond at 5% yield, addressing 2026 refinancing needs. They also repurchased 3.9 million shares at $23.36 and increased the share repurchase authorization to $500 million. A new $1.2 billion unsecured credit facility was closed, improving borrowing spreads. Net Debt to EBITDA is temporarily elevated at 5.66x but is expected to return to the low 5x range after asset sales.

    AI-generated summary of the company’s earnings call. Not investment advice.