Cousins to Record Charge in Q3

Real estate investment trust Cousins Properties Inc. (CUZ - Analyst Report) recently said it would record an impairment charge of $39 million, or 74 cents per share, in the third quarter relating to its joint venture interest in Terminus 200. This 565,000 square feet office building in Atlanta, in which Cousins holds a 50% stake, was completed last month.

The company said the impairment charge would not impact its ownership interest in the project and it would continue to be the property manager and leasing agent of the asset.

In a separate development, Cousins announced a public offering of 32 million common shares and an underwriter option to purchase an additional 4.8 million shares. The company plans to use the proceeds to repay its debt under the revolving credit facility and for general corporate purposes. J. P. Morgan of JPMorgan Chase & Co. (JPM - Analyst Report), Bank of America Corp. (BAC - Analyst Report) and Morgan Stanley (MS - Analyst Report) are the joint book-running managers for the offering.

Cousins acquires, finances, develops, manages and leases office, retail and industrial properties throughout the U.S., including Atlanta, Charlotte, Austin, San Francisco, Los Angeles and Washington DC. The company also provides leasing and management services to third-party investors.

Market fundamentals are deteriorating for office and retail landlords throughout the country due to the continued economic downturn. With high market vacancies and no job growth, rental rate growth on new leases will also be non-existent for some time. Consequently, with no short-term growth indicators, we expect continued volatility in the sector.

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