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Cousins Properties-Parkway Merger Gets Shareholders' Nod

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The previously announced merger deal between Cousins Properties Incorporated (CUZ - Free Report) and Parkway Properties Inc. has received approval from stockholders of both the companies by an overwhelming majority. Now, subject to the satisfaction of certain customary closing conditions, the merger is likely to close in fourth-quarter 2016.
 
Notably, at the end of April, Cousins and Parkway Properties inked a definitive agreement for more than $2 billion for a stock-for-stock merger and the simultaneous spin-off of the Houston-based assets of both companies into a new publicly traded REIT ("HoustonCo"). In fact, the aim of Cousins was to exit the Houston office market, which was crippled by the decline in oil price. Though Cousins’ portfolio has performed comparatively well in Houston, the deal was done to free up the stock price of both the companies from the uncertainty prevailing in the Houston market.

Atlanta, GA-based Cousins focuses on acquisition, ownership, development and management of upscale office and mixed-use properties throughout the Sunbelt markets of the U.S., with special focus on Georgia, Texas and North Carolina. The merger will bolster the company’s presence in Atlanta, Austin and Charlotte and offer it the chance to operate in Phoenix, Orlando and Tampa. Further, this will raise the portfolio of Cousins to 51 properties with 15.8 million square feet of rentable Class A office assets concentrated over the high-growth Sun Belt markets, which, due to their long-term demographic trends, exhibit above-average job growth.

Cousins puts in concerted efforts to build a stronger platform with trophy assets and opportunistic developments in high-barrier-to-entry submarkets in Austin, Dallas, Houston, Atlanta and Charlotte. In some of these office markets with tight office vacancy and very high rental rates, Cousins is indeed very well-positioned.

Both Cousins and Parkway Properties presently carry a Zacks Rank #3 (Hold).

Investors interested in the REIT sector can consider stocks like Alexandria Real Estate Equities, Inc. (ARE - Free Report) and CoreSite Realty Corporation (COR - Free Report) . Both the stocks hold a Zacks Rank #2 (Buy).

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