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Here's Why You Should Add Cousins Properties Stock to Your Portfolio
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Cousins Properties’ (CUZ - Free Report) portfolio of class A office assets is concentrated in the high-growth markets in the Sun Belt region. The company is witnessing healthy leasing activity due to tenants’ preference for premium office spaces. Its capital-recycling efforts and healthy balance sheet augur well.
Analysts seem positive about this Zacks Rank #2 (Buy) company. The Zacks Consensus Estimate for CUZ’s 2025 funds from operations (FFO) per share has moved 1.1% northward over the past month to $2.76.
Shares of this office-based real estate investment trust (REIT) company have rallied 23.6% over the past year, outperforming the industry’s rise of 4.9%. Given the strength of its fundamentals, there seems to be additional room for growth.
Image Source: Zacks Investment Research
Factors That Make Cousins Properties Stock a Solid Pick
Solid Portfolio and Diversified Tenant Base: Cousins Properties has an unmatched portfolio of Class A office assets concentrated in the high-growth Sun Belt markets. This region is experiencing a population influx. 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. Properties in these markets are also expected to command higher rents compared with the broader market.
In 2024, the second-generation net rent per square foot on a cash basis increased 8.5%. With a significant presence in the best urban submarkets in each city, Cousins Properties has been able to enjoy healthy demand for its properties. The company has 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.
Healthy Leasing Activity: Cousins Properties is witnessing healthy leasing demand for its high-quality, well-placed office properties, as highlighted by the rebound in new leasing volume. For 2024, the company executed 157 leases for a total of 2 million square feet of office space with a weighted average lease term of 7.9 years. This included 1.2 million square feet of new leases, 612,763 square feet of renewal leases and 206,827 square feet of expansion leases. With modest lease expirations lined up, the company is well-positioned for growth.
Going forward, with the continuation of inbound migration and significant investments being announced by office occupiers to expand the footprint in the Sun Belt regions, Cousins Properties’ leading trophy portfolio of class A and highly amenitized office realties across the region is well-positioned to recover faster. Further, the company is seeing several tenants returning to offices or announcing plans to report to workplaces. This, too, is likely to support office market fundamentals in its markets.
Capital-Recycling Efforts: Cousins Properties’ capital-recycling moves to enhance its portfolio quality with trophy asset acquisitions and opportunistic developments in high-growth Sun Belt submarkets seem encouraging for long-term growth. It makes strategic dispositions for a better portfolio mix.
Apart from the TIER REIT transaction, from 2019 through 2024, the company acquired 5.0 million square feet of operating properties for $1.95 billion, completed 2.2 million square feet of development at total project costs of $858 million and sold 5.5 million square feet of operating properties for $1.28 billion. Such efforts have helped the company shed slow-growth assets from its portfolio and redeploy the proceeds for developing and acquiring highly differentiated amenitized properties in the Sun Belt submarkets.
As of Dec. 31, 2024, Cousins Properties’ development pipeline consisted of two projects with an estimated total cost of $736.1 million, of which $441.6 million is the company’s share. Out of the above total, around $674.3 million has been incurred through Dec. 31, 2024. Its notable development pipeline is likely to deliver meaningful additional annualized net operating income (NOI) in the upcoming years.
Balance Sheet Strength: Cousins Properties focuses on maintaining a robust balance sheet, with ample liquidity and limited near-term debt maturities to capitalize on improving market fundamentals. The company exited the fourth quarter of 2024 with cash and cash equivalents of $7.3 million. As of Dec. 31, 2024, Cousins Properties had a net debt-to-annualized EBITDAre ratio of 5.16. As of the same date, it had $112.3 drawn under its $1 billion credit facility. Thus, with considerable liquidity and access to capital markets, it enjoys ample flexibility to pursue compelling growth opportunities.
The Zacks Consensus Estimate for Gladstone’s 2025 FFO per share is pegged at 54 cents, which indicates year-over-year growth of 14.9%.
The Zacks Consensus Estimate for Sabra’s full-year FFO per share stands at $1.49, which calls for an increase of 3.5% from the year-ago period.
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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Here's Why You Should Add Cousins Properties Stock to Your Portfolio
Cousins Properties’ (CUZ - Free Report) portfolio of class A office assets is concentrated in the high-growth markets in the Sun Belt region. The company is witnessing healthy leasing activity due to tenants’ preference for premium office spaces. Its capital-recycling efforts and healthy balance sheet augur well.
Analysts seem positive about this Zacks Rank #2 (Buy) company. The Zacks Consensus Estimate for CUZ’s 2025 funds from operations (FFO) per share has moved 1.1% northward over the past month to $2.76.
Shares of this office-based real estate investment trust (REIT) company have rallied 23.6% over the past year, outperforming the industry’s rise of 4.9%. Given the strength of its fundamentals, there seems to be additional room for growth.
Image Source: Zacks Investment Research
Factors That Make Cousins Properties Stock a Solid Pick
Solid Portfolio and Diversified Tenant Base: Cousins Properties has an unmatched portfolio of Class A office assets concentrated in the high-growth Sun Belt markets. This region is experiencing a population influx. 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. Properties in these markets are also expected to command higher rents compared with the broader market.
In 2024, the second-generation net rent per square foot on a cash basis increased 8.5%. With a significant presence in the best urban submarkets in each city, Cousins Properties has been able to enjoy healthy demand for its properties. The company has 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.
Healthy Leasing Activity: Cousins Properties is witnessing healthy leasing demand for its high-quality, well-placed office properties, as highlighted by the rebound in new leasing volume. For 2024, the company executed 157 leases for a total of 2 million square feet of office space with a weighted average lease term of 7.9 years. This included 1.2 million square feet of new leases, 612,763 square feet of renewal leases and 206,827 square feet of expansion leases. With modest lease expirations lined up, the company is well-positioned for growth.
Going forward, with the continuation of inbound migration and significant investments being announced by office occupiers to expand the footprint in the Sun Belt regions, Cousins Properties’ leading trophy portfolio of class A and highly amenitized office realties across the region is well-positioned to recover faster. Further, the company is seeing several tenants returning to offices or announcing plans to report to workplaces. This, too, is likely to support office market fundamentals in its markets.
Capital-Recycling Efforts: Cousins Properties’ capital-recycling moves to enhance its portfolio quality with trophy asset acquisitions and opportunistic developments in high-growth Sun Belt submarkets seem encouraging for long-term growth. It makes strategic dispositions for a better portfolio mix.
Apart from the TIER REIT transaction, from 2019 through 2024, the company acquired 5.0 million square feet of operating properties for $1.95 billion, completed 2.2 million square feet of development at total project costs of $858 million and sold 5.5 million square feet of operating properties for $1.28 billion. Such efforts have helped the company shed slow-growth assets from its portfolio and redeploy the proceeds for developing and acquiring highly differentiated amenitized properties in the Sun Belt submarkets.
As of Dec. 31, 2024, Cousins Properties’ development pipeline consisted of two projects with an estimated total cost of $736.1 million, of which $441.6 million is the company’s share. Out of the above total, around $674.3 million has been incurred through Dec. 31, 2024. Its notable development pipeline is likely to deliver meaningful additional annualized net operating income (NOI) in the upcoming years.
Balance Sheet Strength: Cousins Properties focuses on maintaining a robust balance sheet, with ample liquidity and limited near-term debt maturities to capitalize on improving market fundamentals. The company exited the fourth quarter of 2024 with cash and cash equivalents of $7.3 million. As of Dec. 31, 2024, Cousins Properties had a net debt-to-annualized EBITDAre ratio of 5.16. As of the same date, it had $112.3 drawn under its $1 billion credit facility. Thus, with considerable liquidity and access to capital markets, it enjoys ample flexibility to pursue compelling growth opportunities.
Other Stocks to Consider
Some other top-ranked stocks from the broader REIT sector are Gladstone Land (LAND - Free Report) and Sabra Healthcare REIT (SBRA - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Gladstone’s 2025 FFO per share is pegged at 54 cents, which indicates year-over-year growth of 14.9%.
The Zacks Consensus Estimate for Sabra’s full-year FFO per share stands at $1.49, which calls for an increase of 3.5% from the year-ago period.
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.