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COUSINS PROPERTIES INC (CUZ)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered FFO of $0.69/share and GAAP diluted EPS of $0.05, with total revenues of $248.3M and rental property revenues of $246.5M .
  • Revenue beat Wall Street consensus by ~$5.5M while GAAP EPS missed (Primary EPS consensus $0.098 vs actual $0.05); REIT investors focus more on FFO, which rose year over year (FFO $116.5M, $0.69/share vs $102.3M, $0.67/share in Q3’24) *.
  • Guidance raised: FY2025 FFO per share to $2.82–$2.86 (midpoint +$0.02 vs Q2), driven by higher parking income, termination fees, lower SOFR, and interest income from a JV partner loan .
  • Leasing remained robust at 551K sq ft, second-highest quarterly volume in three years; net effective rent of $28.37/SF was the second-highest in company history .
  • Catalysts: re-accelerating Sun Belt corporate migration, minimal new office supply, pipeline with large users, and Dallas expansion via The Link acquisition ($218M) .

Note: Values marked with an asterisk come from S&P Global; Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • “Strong quarter” with FFO $0.69/share and raised FY guidance midpoint to $2.84/share; management highlighted robust leasing and growing pipeline tied to Sun Belt migration .
  • Record-operational cadence: 551K sq ft leased, average net rent $39.18/SF, concessions down 13.8% QoQ, net effective rent $28.37/SF (second-highest on record) .
  • Strategic expansion: acquired The Link, Uptown Dallas, for $218M at ~$747/SF, immediately accretive; management sees near-term demand exceeding supply in Uptown .

What Went Wrong

  • Occupancy fell to 88.3% (weighted average) and end-of-period leased to 90.0%, largely due to Bank of America’s planned move-out in Charlotte; same-property cash NOI grew just 0.3% YoY in Q3 .
  • GAAP EPS of $0.05 missed Street Primary EPS consensus (~$0.098), reflecting higher interest expense ($41.5M vs $30.8M YoY) and depreciation *.
  • Charlotte backfill/redevelopment timing extends into 2026–2027; management expects occupancy rebuild to be back-half weighted with 201 North Tryon leasing commencements geared more to 2027 .

Note: Values marked with an asterisk come from S&P Global; Values retrieved from S&P Global.

Financial Results

Core Financials vs Prior Periods

MetricQ1 2025Q2 2025Q3 2025
Total Revenues ($USD Millions)$250.3 $240.1 $248.3
Rental Property Revenues ($USD Millions)$243.0 $237.7 $246.5
GAAP Diluted EPS ($)$0.12 $0.09 $0.05
FFO per Share ($)$0.74 $0.70 $0.69
Same-Property Cash NOI YoY (%)+2.0% +1.2% +0.3%
Net Leased Square Feet (000s)539 334 551

Q3 2025 Actuals vs Wall Street Consensus (S&P Global)

MetricActualConsensusDifferenceOutcome
Revenue ($USD Millions)$245.6*$240.2*+$5.5*Beat*
Primary EPS ($)$0.05 $0.098*-$0.05*Miss*

Note: Values marked with an asterisk come from S&P Global; Values retrieved from S&P Global.

Portfolio NOI by Market (% of Q3 2025)

Market% of Total NOI
Austin36.0%
Atlanta31.5%
Charlotte9.9%
Tampa7.7%
Phoenix7.3%
Dallas4.2%
Houston3.4%

KPIs

KPIQ1 2025Q2 2025Q3 2025
Weighted Avg Occupancy (%)90.0% 89.1% 88.3%
Net Effective Rent ($/SF)$25.06 $28.35 $28.37
Second-Gen Cash Rent Increase (%)+3.2% +10.9% +4.2%
Lease Volume (SF, 000s)539 334 551

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Income per ShareFY 2025$0.28–$0.34 $0.30–$0.34 Raised
FFO per ShareFY 2025$2.79–$2.85 $2.82–$2.86 Raised
Drivers (qualitative)FY 2025Higher parking income; better execution on notes; The Link acquisition Higher parking/termination fees; lower SOFR; interest income from JV loan N/A

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Q3 2025Trend
Return-to-Office & Demand“New construction at historic lows; demand robust” and raised FY FFO guidance on parking, taxes RTO tailwinds outweigh layoffs; vacancy declining; net absorption at post-pandemic high Improving demand; favorable supply backdrop
Leasing Pipeline & Large Users873K SF YTD by Q2; robust pipeline Record pipeline; 715K SF signed/negotiation YTD Q4-to-date; 77% new/expansion Acceleration and higher proportion of new/expansion
Dallas StrategyAnnounced The Link acquisition post Q2; accretive The Link closed; Uptown demand exceeds supply; pricing below replacement cost Strategic expansion; positive market setup
Charlotte (BoA move-out; Redevelopment)Occupancy strong pre-BoA; redevelopment plan underway BoA move-out drove occupancy dip; early 201 N. Tryon renewal (McGuire Woods, 127K SF) Backfill/redevelopment progressing; 201 N. Tryon commencements more 2027
Balance Sheet & LeverageSector-leading IG balance sheet; refinancings, ATM forward Low leverage as “offensive tool”; upper bound ~6x per IG frameworks; current ~5.38x Capacity to flex balance sheet for accretive opportunities
Parking IncomeRecovery from 5% trough to ~7% of revenues by Q3 Room to push toward ~8% historical; 75% utilization, 25% price mix Continued upside tracking RTO utilization
Neuhoff (Nashville)Apartments leasing, office/retail leasing progress Apartments ~86% leased; office/retail ~53%, debt amended (spread cut to SOFR+300 bps) Momentum building; financing improved

Management Commentary

  • “This was a strong quarter for Cousins and we are pleased to raise FFO guidance for the balance of the year.” — Colin Connolly, CEO .
  • “Leasing activity is robust and our pipeline continues to grow, driven by the re-acceleration of corporate migration into our Sun Belt markets.” — Colin Connolly .
  • “We do think we’re relatively close to an inflection point where it is likely to become a landlord’s market” given accelerating demand and minimal new supply. — Colin Connolly .
  • “Our low-leverage balance sheet [is] a distinct offensive tool… we plan to continue this streak in 2026.” — Colin Connolly .
  • “Same property GAAP NOI grew 1.9%, and cash NOI grew 0.3%… quarterly tax true-ups can be lumpy, but 2025 net property tax expenses are forecast to be essentially flat vs 2024.” — Gregg Adzema, CFO .

Q&A Highlights

  • AI/layoffs vs office demand: Management emphasized RTO tailwinds and refuted narratives of Sun Belt being primarily back-office; cited strong hubs (Amazon, Goldman in Dallas) and distributed AI demand .
  • Occupancy trajectory: Management expects Q3 to be the trough; rebuild to 90%+ by YE 2026, back-half weighted; prior-year comps (BoA) depress YoY through mid-2026 .
  • Leverage capacity: IG agencies allow up to ~6x net debt/EBITDA; company historically operated ~4.5–5.5x; current ~5.38x with capacity to flex for accretive investments .
  • Parking revenue: Still below pre-COVID ~8% of revenues; recovery driven ~75% by utilization, ~25% by pricing; consistent 75/25 contractual vs transient mix .
  • Dallas Legacy Union One/Ovintiv: Early termination to multi-tenant; subtenants become direct tenants mid-2026; market net rents in mid-$40s net, above Ovintiv historical rents .

Estimates Context

  • Q3 revenue beat consensus ($245.6M actual vs $240.2M consensus), while Primary EPS missed ($0.05 actual vs ~$0.098 consensus); FFO per share rose YoY but is not the Street “Primary EPS” metric *.
  • Consensus tracking: modest beats on revenue and strong leasing could nudge revenue and FFO trajectory higher; GAAP EPS sensitivity to interest/depreciation may limit EPS upside revisions despite operational strength *.
  • S&P Global consensus snapshots:
    MetricQ1 2025Q2 2025Q3 2025
    Revenue Consensus Mean ($USD)$236.4M*$243.6M*$240.2M*
    Actual Revenue ($USD)$248.4M*$238.5M*$245.6M*
    Primary EPS Consensus Mean ($)$0.157*$0.094*$0.098*
    Actual Primary EPS ($)$0.12*$0.09*$0.05

Note: Values marked with an asterisk come from S&P Global; Values retrieved from S&P Global.

Key Takeaways for Investors

  • Positive revenue surprise and robust leasing suggest near-term estimate momentum on top-line/NOI, even as GAAP EPS is pressured by interest/depreciation typical in REITs *.
  • Guidance raised again; midpoint now $2.84 FFO/share, with drivers (parking, termination fees, lower SOFR, JV interest) likely durable into 2026 given RTO utilization trends .
  • Sun Belt migration and scarce new supply form a constructive backdrop; management sees potential inflection to landlord’s market, supporting net effective rents and occupancy rebuilding .
  • Dallas expansion (The Link) and proactive Ovintiv restructuring create optionality to monetize strong demand in high-quality submarkets, with immediate accretion and potential rent roll-ups .
  • Charlotte redevelopment is progressing with notable renewals; expect occupancy rebuild to be back-half weighted, with 201 North Tryon commencements more 2027—plan portfolios accordingly for timing .
  • Balance sheet provides offensive capacity; management willing to flex leverage prudently within IG thresholds to capture mispriced core opportunities .
  • Tactical trading: near-term catalysts include large-user lease signings, Phoenix Hayden Ferry lease-ups, and potential asset rotations; medium-term thesis hinges on RTO/limited supply driving occupancy and rent uplift .

Appendix: Additional Q3 2025 Documents

  • Q3 2025 results press release (link-only release pointing to earnings materials) .
  • Q3 2025 dividend declaration: $0.32 per common share, payable Oct 15, 2025 (record Oct 3) .

Note: Values marked with an asterisk come from S&P Global; Values retrieved from S&P Global.