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Cousins Properties (CUZ) Q1 FFO Misses, Revenues Beat Estimates

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Cousins Properties Incorporated’s (CUZ - Free Report) first-quarter 2021 funds from operations (FFO) per share of 69 cents missed the Zacks Consensus Estimate of 70 cents by a whisker. Moreover, the reported FFO figure comes in lower than the prior-year quarter’s 76 cents.

However, rental property revenues for the quarter were $184.8 million, surpassed the Zacks Consensus Estimate of $182.2 million. Yet, on a year-over-year basis, rental property revenues for the quarter slipped 2.3%.

Quarterly results reflect a decline in same-property net operating income (NOI). The REIT noted that during the first quarter, it has collected 98.8% of rents, including 99.1% from office customers.

According to Colin Connolly, president and chief executive officer of Cousins Properties “While Bank of America’s long anticipated departure from our One South property affected same property results, leading indicators in our Sun Belt markets are showing encouraging signs of acceleration.”

Connolly further noted, “Specifically, leasing activity has meaningfully increased as more companies announce plans to return to the office. The most noticeable improvement has been in our early-stage leasing pipeline, where the number of active proposals has increased 68% and the number of space tours has increased 89% compared to last quarter.”

Quarter in Detail

Cousins Properties executed leases for 271,126 square feet of office space in the March-end quarter. Same-property rental property revenues, on a cash basis, fell 1.8% year on year. Same-property NOI, on a cash basis, for the first quarter decreased 2.7% from the year-ago period.

As of Mar 31, 2021, 89.9% of its same-property portfolio was leased, down from 93.5% at the end of the year-ago period. Weighted average occupancy for the company’s same-property portfolio came in at 89.3% for first-quarter 2021 compared with 90.7% in the year-ago period.

Nonetheless, second-generation net rent per square foot (cash basis) climbed 10.5%.

Further, the REIT acquired a land parcel neighboring the company's 3350 Peachtree property in Atlanta for $8 million through a 95% consolidated joint venture.

The company exited first-quarter 2021 with cash and cash equivalents of $14.6 million compared with $4.3 million recorded as of Dec 31, 2020.

Outlook

Cousins Properties revised its outlook and now expects 2021 FFO per share at $2.68-$2.78 from $2.76-$2.86. The Zacks Consensus Estimate for the same is currently pinned at $2.80.

The revision is entirely due to the sale of Burnett Plaza on Apr 7, 2021, and the anticipated sale of the company's stake in Dimensional Place to its partner under the terms of the joint-venture agreement in summer 2021.

Currently, Cousins Properties carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We now look forward to the earnings releases of other REITs, including Vornado Realty Trust (VNO - Free Report) , Realty Income Corporation (O - Free Report) and Healthpeak Properties, Inc. , which are slated to report next week.

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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