4 Reasons Why You Should Add Cousins Properties to Your Portfolio

Cousins Properties’ CUZ portfolio of class A office assets is concentrated in the high-growth markets in the Sun Belt region. The company is witnessing higher leasing activity due to tenants’ preference for premium office spaces. Its capital-recycling efforts and healthy balance sheet augur well.

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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 marginally northward over the past month to $2.68.

Shares of this office-based real estate investment trust (REIT) company have gained 29.3% over the past six months compared to the industry’s increase of 1%. Given the strength in its fundamentals, there seems to be additional room for growth.

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Higher 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 the nine months ended September 2024, the company executed 114 leases for a total of 1.6 million square feet of office space with a weighted average lease term of 7.8 years. Its lease expirations through 2026 are among the lowest in the office sector.

Going forward, the next cycle of office space demand is likely to be driven by an inbound migration and significant investments announced by office occupiers to expand the footprint in the Sun Belt regions. Hence, Cousins Properties’ leading trophy portfolio of class A and highly amenitized office real estate across the Sun Belt region is well-positioned to benefit from the emerging trend.

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Further, several tenants are returning to offices or announcing plans to report to workplaces. This is likely to support office market fundamentals in its markets.

Solid Tenant Base: The company enjoys a well-diversified, high-end tenant roster with less dependence on a single industry. This enables it to generate stable rental revenues over time.

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.

In December 2024, Cousins Properties acquired a trophy lifestyle property in Downtown Austin, TX, for $521.8 million. The property, spanning 804,000 square feet, is 100% leased to a Fortune 20 company.

In the same month, the company acquired Vantage South End, a 639,000-square-foot lifestyle office property in Charlotte’s thriving South End submarket, for $328.5 million. This strategic acquisition aligns with Cousins’ Sun Belt-focused strategy and enhances its presence in one of Charlotte’s most dynamic submarkets.

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