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Cousins Properties Stock Up 35.9% in a Year: Will This Continue?
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Key Takeaways
CUZ stock rose 35.9% in a year, outpacing the industry's 8.5% on strong Sun Belt office demand.
In Q1 2025, CUZ signed 47 leases totaling 539K sq. ft., with rising rents and long lease terms.
Strategic asset deals and low new construction position CUZ to benefit from the flight to quality trend.
Cousins Properties (CUZ - Free Report) shares have rallied 35.9% over the past year, outperforming the industry's 8.5% growth.
The company’s portfolio of Class A office assets in high-growth Sun Belt markets is witnessing higher leasing activity backed by tenants’ preference for premium office spaces with class-apart amenities.
With negligible new starts, limited ongoing construction activities and a growing emphasis on return-to-office mandates, Cousins’ development pipeline is well-poised to embrace this flight to quality opportunity.
Image Source: Zacks Investment Research
Factors Behind CUZ Stock Price Surge: Will the Trend Last?
Amid favorable migration trends and a pro-business environment, corporate relocations and expansions in the Sun Belt markets have gained pace, driving the demand for office space. As a result, Cousins Properties is witnessing a recovery in demand for its strategically located office properties, as reflected by the rebound in new leasing volume. For the first quarter of 2025, the company executed 47 leases for a total of 539,063 square feet of office space with a weighted average lease term of 6.3 years.
The rising demand for quality office spaces is helping landlords command premium rents for their assets. In the first quarter of 2025, second-generation net rent per square foot on a cash basis increased 3.2% for Cousins. The company enjoys a well-diversified, high-end tenant roster with less dependence on a single industry. This enables it to enjoy steady revenues over different economic cycles.
CUZ makes efforts to upgrade portfolio quality with trophy assets acquisitions and opportunistic developments in high-growth Sun Belt submarkets. It also makes strategic dispositions for a better portfolio mix. Apart from the TIER REIT transaction, from 2020 through the first quarter of 2025, the company acquired 2.9 million square feet of operating properties for $1.54 billion, completed 2.2 million square feet of development at total project costs of $909 million and sold 5.5 million square feet of operating properties for $1.28 billion.
Cousins Properties maintains a healthy balance sheet position and exited the first quarter of 2025 with cash and cash equivalents of $5.3 million and $38.7 million drawn under its $1 billion credit facility. As of March 31, 2025, Cousins Properties had a net debt-to-annualized EBITDAre ratio of 4.87. With considerable liquidity and access to capital markets, the company seems well-placed to bank on long-term growth opportunities.
Key Risks for CUZ
High competition is likely to affect Cousins Properties’ ability to retain tenants at relatively higher rents, impacting its pricing power. Concentrated portfolio and high interest expenses also ail.
Analysts seem bearish about this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for CUZ’s 2025 funds from operations (FFO) per share has moved 1 cent southward over the past week to $2.80.
The Zacks Consensus Estimate for VICI Properties’ 2025 FFO per share has been raised marginally over the past two months to $2.34.
The consensus estimate for W.P. Carey’s current-year FFO per share has moved northward 1.2% in the past two months to $4.88.
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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Cousins Properties Stock Up 35.9% in a Year: Will This Continue?
Key Takeaways
Cousins Properties (CUZ - Free Report) shares have rallied 35.9% over the past year, outperforming the industry's 8.5% growth.
The company’s portfolio of Class A office assets in high-growth Sun Belt markets is witnessing higher leasing activity backed by tenants’ preference for premium office spaces with class-apart amenities.
With negligible new starts, limited ongoing construction activities and a growing emphasis on return-to-office mandates, Cousins’ development pipeline is well-poised to embrace this flight to quality opportunity.
Image Source: Zacks Investment Research
Factors Behind CUZ Stock Price Surge: Will the Trend Last?
Amid favorable migration trends and a pro-business environment, corporate relocations and expansions in the Sun Belt markets have gained pace, driving the demand for office space. As a result, Cousins Properties is witnessing a recovery in demand for its strategically located office properties, as reflected by the rebound in new leasing volume. For the first quarter of 2025, the company executed 47 leases for a total of 539,063 square feet of office space with a weighted average lease term of 6.3 years.
The rising demand for quality office spaces is helping landlords command premium rents for their assets. In the first quarter of 2025, second-generation net rent per square foot on a cash basis increased 3.2% for Cousins. The company enjoys a well-diversified, high-end tenant roster with less dependence on a single industry. This enables it to enjoy steady revenues over different economic cycles.
CUZ makes efforts to upgrade portfolio quality with trophy assets acquisitions and opportunistic developments in high-growth Sun Belt submarkets. It also makes strategic dispositions for a better portfolio mix. Apart from the TIER REIT transaction, from 2020 through the first quarter of 2025, the company acquired 2.9 million square feet of operating properties for $1.54 billion, completed 2.2 million square feet of development at total project costs of $909 million and sold 5.5 million square feet of operating properties for $1.28 billion.
Cousins Properties maintains a healthy balance sheet position and exited the first quarter of 2025 with cash and cash equivalents of $5.3 million and $38.7 million drawn under its $1 billion credit facility. As of March 31, 2025, Cousins Properties had a net debt-to-annualized EBITDAre ratio of 4.87. With considerable liquidity and access to capital markets, the company seems well-placed to bank on long-term growth opportunities.
Key Risks for CUZ
High competition is likely to affect Cousins Properties’ ability to retain tenants at relatively higher rents, impacting its pricing power. Concentrated portfolio and high interest expenses also ail.
Analysts seem bearish about this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for CUZ’s 2025 funds from operations (FFO) per share has moved 1 cent southward over the past week to $2.80.
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are VICI Properties (VICI - Free Report) and W.P. Carey (WPC - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for VICI Properties’ 2025 FFO per share has been raised marginally over the past two months to $2.34.
The consensus estimate for W.P. Carey’s current-year FFO per share has moved northward 1.2% in the past two months to $4.88.
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