CUZ Cousins Properties Inc

Cousins Properties Inc. (CUZ), a real estate investment trust (REIT), reported second quarter 2011 FFO (fund from operations) of $10.9 million or 11 cents per share, compared with $7.9 million or 8 cents in the year-earlier quarter.

Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation, amortization and other non-cash expenses to net income.

The reported FFO was in line with the Zacks Consensus Estimate. Total revenues were $45.4 million during the quarter versus $52.6 million in the year-ago period. Total revenues for the reported quarter were well ahead of the Zacks Consensus Estimate of $38 million.

During second quarter 2011, Cousins Properties executed strong leasing activities across its portfolio. The company leased 225,000 square feet of office space and 199,000 square feet of retail space. Office properties were 91% leased at quarter-end, while retail space was 88% leased.

Subsequent to the quarter-end, Cousins Properties renewed the lease agreement for 238,000 square feet of office space at Ten Peachtree Place a high-rise in Atlanta. In addition, the company also renewed a lease for 86,000 square feet of office space at The Points at Waterview in Texas, extending the lease agreement to 2023.

During the reported quarter, Cousins Properties started construction work on a mixed-use project in Atlanta titled Emory Point. The Phase I of the project, which is currently underway, includes 443 apartment units and 80,000 square feet of retail space and is scheduled to open in fall 2012. Total construction cost for Phase I of the project is expected to be $102 million.

Cousins Properties is currently shoring up its balance sheet and increasing liquidity by selling non-core assets. At the same time, the company remains focused on leasing activities and intends to maintain steady occupancy levels across its portfolio. During the quarter, the company sold 108 residential lots for a net gain of $398,000. At quarter-end, Cousins Properties had cash and cash equivalents of $4.3 million.

We maintain our Neutral recommendation for Cousins Properties, which currently retains a Zacks #3 Rank that translates into a short-term Hold rating. We also have a Neutral rating and a Zacks #3 Rank for Duke Realty Corp. (DRE), one of the competitors of Cousins Properties.

 
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