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Cousins Properties (CUZ) Beats on Q1 FFO & Revenues, Ups View

Cousins Properties’ CUZ first-quarter 2023 funds from operations (FFO) per share of 65 cents beat the Zacks Consensus Estimate by a penny. It also surpassed our estimate of 63 cents. However, the figure declined from the prior-year quarter’s 67 cents.

Results reflect better-than-anticipated revenues, aided by healthy leasing activity and improvement in second-generation net rent per square foot. Yet, higher same-property rental property operating expenses acted as a dampener. The company also raised its 2023 FFO per share outlook.

Quarterly rental property revenues came in at $200.1 million, surpassing the Zacks Consensus Estimate of $195.5 million and our estimate of $194.4 million. Moreover, the figure increased 9.2% year over year.

Quarter in Detail

Cousins Properties executed leases for 257,838 square feet of office space in the first quarter, including 158,639 square feet of new and expansion leases. This marked 61.5% of total leasing activity.

The same-property rental property revenues, on a cash basis, rose 6.1% year over year to $182.5 million. The same-property rental property operating expenses on a cash basis increased by 8% to $69.1 million in the first quarter of 2023. As a result, the same-property net operating income, on a cash basis, climbed 4.9% to $113.4 million from the prior-year period.

The weighted average occupancy of the same-property portfolio was 87%, down from 87.4% as of Mar 31, 2022. Our estimate for the same was 86.5%.

CUZ ended the quarter with the same-property portfolio being leased 90.6%, up from 90.5% recorded at the end of the year-ago period.

The second-generation net rent per square foot (cash basis) climbed 6.1%.

Balance Sheet

CUZ exited first-quarter 2023 with cash and cash equivalents of $3.6 million, down from $5.1 million as of Dec 31, 2022.

The company’s net debt-to-annualized EBITDAre ratio in the quarter was 5.13 compared with 5.28 in the year-ago quarter.

2023 Outlook Raised

Cousins Properties raised its guidance for 2023 FFO per share.

It expects the same to be in the range of $2.55-$2.65, up from the prior guided range of $2.52-$2.64. The Zacks Consensus Estimate for the same is presently pegged at $2.57, which lies within the guided range.

CUZ currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cousins Properties Incorporated Price, Consensus and EPS Surprise

Cousins Properties Incorporated Price, Consensus and EPS Surprise
Cousins Properties Incorporated Price, Consensus and EPS Surprise

Cousins Properties Incorporated price-consensus-eps-surprise-chart | Cousins Properties Incorporated Quote

Performance of Other REITs

SL Green Realty Corp. SLG reported first-quarter 2023 FFO per share of $1.53, surpassing the Zacks Consensus Estimate of $1.42. It also beat our estimate of $1.39. The figure, however, fell 7.3% from the year-ago quarter’s $1.65.

SLG’s results reflected better-than-anticipated revenues. However, a fall in occupancy in Manhattan’s same-store office portfolio was a deterrent for the company in the reported quarter.

Boston Properties Inc.’s BXP first-quarter 2023 FFO per share of $1.73 outpaced the Zacks Consensus Estimate of $1.70. It also surpassed our estimate of $1.68. However, the reported figure fell 4.9% year over year.

BXP’s quarterly results reflected better-than-anticipated revenues on healthy leasing activity. However, the company noted that higher interest expenses during the quarter marred its year-over-year FFO per share growth. BXP raised its outlook for 2023 FFO per share.

Highwoods Properties Inc. HIW reported first-quarter 2023 FFO per share of 98 cents, surpassing the Zacks Consensus Estimate of 93 cents. It also beat our estimate of 91 cents.

HIW’s quarterly results reflected rent growth. However, a fall in occupancy and higher operating expenses acted as dampeners. The company also revised its outlook for 2023.

Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.

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