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Cousins Properties Enhances Scale With TIER REIT Merger

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Cousins Properties (CUZ - Free Report) has announced the closing of its stock-for-stock merger with TIER REIT, Inc. The move has helped create a Sun Belt-focused Class A office REIT which will likely benefit from improved market scale, and realize operational and leasing synergies.

In fact, the merger has created a larger company, with a combined portfolio of more than 21 million square feet of space, spanning across the Sun Belt region, better positioning it to absorb market cycles.  

Further, the merger helps deepen Cousins Properties’ portfolio of trophy office assets in premier submarkets of Atlanta, Austin, Charlotte, Dallas, Phoenix and Tampa, making it a leading owner in the fast-growing Sun Belt region.

Along with a complementary geographic footprint, the combined company will likely benefit from a strong balance sheet, a highly pre-leased development pipeline and significant land holdings in strategic locations which provide opportunities for development.

Particularly, per the company’s prior press release, TIER's pipeline of more than 5 million square feet of development and redevelopment opportunities are anticipated to open up significant growth opportunities for Cousins Properties.

Also, the move is aimed at creating synergies by reducing duplicative costs in markets where both companies have an overlapping presence. Specifically, annual net G&A savings of nearly $18.5 million are expected to be immediately realized on merger closing.

Cousins Properties currently carries a Zacks Rank #3 (Hold). In the year-to-date period, shares of the company have outperformed the industry. While the stock has gained 23.3%, the industry has increased 20.7% during this period.



Stocks to Consider

Some better-ranked stocks from the real-estate space include Duke Realty Corp. , Lamar Advertising Company (LAMR - Free Report) and PS Business Parks, Inc. , each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Duke Realty’s Zacks Consensus Estimate for 2019 funds from operations (FFO) per share moved marginally north to $1.41 in the past month.

Lamar’s FFO per share estimates for the current year inched up 0.3% to $5.83 over the past month.

PS Business Parks’ Zacks Consensus Estimate for the ongoing year’s FFO per share moved up nearly 1% to $6.67 in the past month.

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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