Cousins Properties (CUZ) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Real Estate· Apr 30, 2026

Source: earnings call transcript

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

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

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

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 FFO per share	$2.90 to $2.98 high materiality	FY26 · 2026	High
Full-year 2026 FFO growth over 2025	3.5% high materiality	FY26 · 2026	High
Net Debt to EBITDA	low 5x range medium materiality	Near-term	High
Development starts	breaking ground in the next year medium materiality	Next year · 2027	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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)	—	—	—	—

CUZ operating KPIs by quarter

CUZ operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Leased rate	91.8% In the first quarter, our total office portfolio end period lease and weighted average occupancy percentages were 91.8% and 88.9%, respectively. Source: earnings call transcript	92.8% For the quarter, our total office portfolio end-of-period lease and weighted average occupancy percentages were 92.8% and 89.4%, respectively. Source: earnings call transcript	+1 pt
Leased rate Atlanta	89.3% Our Atlanta portfolio was 89.3% leased at first quarter end. Source: earnings call transcript	91.6% With this quarter's outstanding activity, I'm pleased to say that Atlanta now stands at 91.6% leased with a lease-to-occupied spread of 5.9%. Source: earnings call transcript	+2.3 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

New Hawk Phase 2 (future office building) approximately 300,000 sq ft Q1 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 ft Q1 FY26 end

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

303 Tremont land parcel (under contract for sale) 2.4 acres Q1 FY26 end

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

Late-stage leasing pipeline 1.0M sq ft as 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

— 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 developer Sale 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

550 South project nearing completion

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

201 North Tryon redevelopment underway

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

Risks & headwinds

Elevated Net Debt to EBITDA Q1 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 development until 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

Portfolio Occupancy

year-end 2026

Current 88.9%

Target 90%

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%.

Find out whether CUZ delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 7 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.