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Cousins Properties (CUZ) Q2 FFO In Line, Revenues Up Y/Y

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Cousins Properties Incorporated (CUZ - Free Report) reported second-quarter 2020 funds from operations (FFO) per share of 66 cents, in line with the Zacks Consensus Estimate. Notably, the reported figure comes in lower than the prior-year quarter’s 71 cents.

Rental property revenues for the quarter came in at $175.1 million, marking a 30% jump, year on year. The figure also outpaced the Zacks Consensus Estimate of $172.6 million.

Quarterly results reflect growth in rental property revenues and net rent per square foot. However, fall in same-property Net Operating Income (NOI) was a concern.

The company informed that its rent collections for the second quarter was 97%, including 98% from office tenants. In July, the company collected 98% of its rents, including 98% from office tenants.

The company also updated the current-year outlook in light of the coronavirus pandemic.

Quarter in Detail

Cousins Properties executed leases for 302,877 square feet of office space during the June-end quarter. Same-property NOI, on a cash basis, edged down 1.6% from the year-ago quarter. However, second-generation net rent per square foot (cash basis) climbed 20.6%.

Weighted average occupancy for the company’s same-property portfolio of 91.5% for the quarter ended Jun 30, 2020, expanded 10 basis points from the prior quarter.

Cousins Properties exited the second quarter with cash and cash equivalents of $28.3 million compared with the $124.6 million recorded as of Mar 31, 2020. The company has in excess of $1 billion of available liquidity.

2020 Outlook

The company has provided updates regarding its current year guidance.

On May 4, the company acquired a parking garage in Charlotte for a gross price of $85 million. The property is expected to generate NOI of $1.5-2 million and stabilized NOI of $4.5-5 million.

The company expects a fall in parking revenues to impact the NOI by $5.5-9.5 million compared to $3.5-9.5 million earlier. Moreover, in the current year, Cousins Properties expects a fall in general and administrative (net of capitalized salaries) of $27-29 million compared with the $33-35 million expected earlier.

Nonetheless, the company expects a rise in property level NOI amounting to about $0.3 million. This due to the prior disclosed Parsley Energy lease amendment at Colorado Tower which was accounted for as a lease modification rather than a termination.

Cousins Properties currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported second-quarter FFO as adjusted of $1.81 per share, up 4.6% from the year-ago quarter’s $1.73. The reported figure came in line with the Zacks Consensus Estimate.

Boston Properties Inc.’s (BXP - Free Report) FFO per share of $1.52 missed the Zacks Consensus Estimate of $1.74 in the June-end quarter. The reported figure also decreased 14.6% from the year-ago quarter’s $1.78.

Highwoods Properties Inc.’s (HIW - Free Report) FFO per share of 93 cents surpassed the Zacks Consensus Estimate of 89 cents in the second quarter. The figure also improved 7% from the 87 cents reported in the year-ago period.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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