In consistence with the strategy of strengthening its presence in Texas, Cousins Properties Incorporated (CUZ - Analyst Report) completed the acquisition of Texas office portfolio for $1.1 billion. The portfolio – comprising Greenway Plaza (Houston) and 777 Main Street (Fort Worth) – was bought from Crescent Real Estate Holdings LLC.
Greenway Plaza (Houston) is a 10-building office complex that spans about 4.4 million square feet. The 92% occupied asset is located on a 52-acre master-planned, mixed-use development near the southwest of downtown Houston. Occidental Petroleum Corp. (OXY - Analyst Report) is the largest tenant in this office complex.
The other property, 777 Main Street (Fort Worth) is a 40-story, Class-A office tower that spans approximately 980,000 square feet. It is situated in Fort Worth’s CBD, near Sundance Square, and has a projected year-end occupancy of 72%.
Both the aforementioned assets are premium office buildings having promising future development and operating income growth potential. Such high-quality portfolio acquisition fits with Cousins Properties’ strategy of building its business on a simpler platform, with strong focus on trophy assets and opportunistic investments. We expect the latest purchase to boost the company’s portfolio mix and ensure a steady revenue stream.
In a separate development, Cousins Properties disclosed the closure of 2 mortgages. Generating around $303 million in total proceeds, the mortgages, in particular, included The Post Oak Central non-recourse mortgage ($189 million with a 7-year term and a fixed rate of 4.26%) and The Promenade non-recourse mortgage ($114 million with a 9-year term and a fixed rate of 4.27%). The company plans to finance a part of the above-mentioned Texas office portfolio buyout with these proceeds.
Cousins Properties currently carries a Zacks Rank #3 (Hold). Better-performing REITs include Douglas Emmett Inc (DEI - Snapshot Report) and Highwoods Properties, Inc. (HIW - Analyst Report). Both these stocks carry a Zacks Rank #2 (Buy).