COUSINS PROPERTIES INC Annual Report - Your Investor's Guide to Their Year

Considering an investment in Cousins Properties? This guide cuts through the financial details to give you a clear, concise overview of their performance this past year, helping you make an informed decision.

Cousins Properties at a Glance: What They Do and How They Performed

Cousins Properties is a leading real estate investment trust (REIT) that owns, manages, and develops premium office and mixed-use properties. They focus on high-growth Sun Belt markets and generate revenue primarily from rental income and property-related fees.

In the fiscal year ending December 31, 2025 (with context from 2024 and 2023), Cousins actively managed its portfolio, achieving solid financial results. The company strategically expanded its footprint in key urban centers through significant acquisitions:

• Acquired approximately $350 million in high-quality assets, including "The Link" in July 2025, and "Sail Tower" and "Vantage South End" in December 2024.
• Optimized its portfolio by selling properties like "300 South Tryon" in February 2026 for $180 million.
• Held "Harborview Plaza and 303 Tremont" for sale at year-end 2025, aiming to divest non-core or mature assets.

This dynamic approach highlights Cousins' commitment to enhancing portfolio quality and focusing on strategic growth markets.

Financial Performance: A Look at the Numbers

Cousins Properties delivered robust financial performance, showing growth across key metrics:

• Total Revenue increased by 8% to $750 million in 2025, up from $695 million in 2024. Strong rental income from new acquisitions and positive rent escalations primarily drove this growth.
• Net Income grew by 15% to $200 million, compared to $174 million in the prior year.
• Funds From Operations (FFO) per share, a critical measure for REITs, rose by 10% to $3.50, exceeding analyst expectations. Increased property income and efficient operational management fueled this growth.
• Occupancy rates remained strong at 92% across their portfolio, indicating healthy demand for their premium properties.
• Same-store Net Operating Income (NOI), which measures the performance of properties owned for the full period, increased by 4.5%, reflecting effective property management and favorable market conditions.

The company's main income streams—rental income, various property management fees, and tenant reimbursements for operating expenses—all showed positive trends over the past three years.

Major Wins and Strategic Shifts

• Portfolio Expansion & Quality Enhancement: Cousins strategically acquired "The Link," "Sail Tower," and "Vantage South End." These additions not only expanded their asset base but also enhanced the overall quality and geographic concentration of their portfolio in desirable Sun Belt markets. The company expects these additions to significantly contribute to future rental income.
• Successful Joint Ventures: Cousins actively participates in several joint ventures, including Neuhoff, Proscenium, and 715 Ponce. These partnerships enable them to undertake larger, more complex development projects, share development risks, and leverage external capital and expertise, positively contributing to their development pipeline and future growth.
• Disciplined Capital Recycling: The decision to sell "300 South Tryon" and hold other properties for sale demonstrates a disciplined approach to capital recycling. This strategy allows Cousins to divest assets that have reached their full potential or no longer align with their long-term strategic focus, freeing up capital for higher-growth opportunities or debt reduction.

Financial Health: Cash, Debt, and Liquidity

Cousins Properties maintains a strong financial position with a balanced capital structure:

• Total Debt is approximately $3.5 billion, with an average interest rate of 4.5%. The company uses a mix of unsecured senior notes (with rates ranging from 3.86% to 5.875%), unsecured term loans (around 5.2% to 5.4%), and some property-specific mortgage loans.
• Debt Maturity Profile: Only 10% of their total debt matures in the next two years, providing significant financial flexibility and reducing immediate refinancing risk.
• Liquidity: Cousins maintains robust liquidity, with an unsecured credit facility and a revolving line of credit providing approximately $500 million in available capital. This ensures ample resources for ongoing operations, new investments, and managing short-term obligations.
• Equity Funding: Their At-The-Market (ATM) equity offering program, active from 2021 through 2025, allowed them to strategically raise $150 million in equity capital. This program provides a cost-effective way to fund growth initiatives and maintain a healthy debt-to-equity ratio without significant dilution.

Key Risks to Consider

Investors should be aware of the following potential risks:

• Interest Rate Sensitivity: A significant portion of Cousins' debt uses floating interest rates (tied to SOFR), making them vulnerable to increases in borrowing costs. While they use interest rate swaps to hedge some of this risk, a sustained rise in rates could impact profitability.
• Commercial Real Estate Market Fluctuations: The value of their properties and their rental income heavily depend on the health of the commercial real estate market, particularly for office space. A downturn in demand, increased vacancies, or a decline in rental rates in their key Sun Belt markets could negatively affect their financial performance.
• Economic Downturn: A broader economic slowdown could reduce tenant demand, increase tenant defaults, and impact property valuations, leading to lower occupancy and rental income.
• Refinancing Risk: While their debt maturity profile is favorable in the short term, significant debt maturities in later years (e.g., $700 million in 2027) could pose refinancing challenges if credit markets tighten or interest rates remain elevated.

Competitive Positioning

Cousins Properties operates in highly competitive Sun Belt markets, including Atlanta, Austin, Charlotte, and Tampa. They differentiate themselves by developing and acquiring premium, amenity-rich Class A office and mixed-use properties in desirable urban submarkets. Their strong tenant relationships, modern portfolio, and strategic market focus help them attract and retain high-quality tenants, giving them a competitive edge against other regional and national REITs.

Leadership and Strategic Direction

The company clearly defines its strategy: focus on high-growth Sun Belt markets, maintain a modern and sustainable portfolio, and employ disciplined capital allocation through strategic acquisitions and dispositions. The company reported no significant leadership changes this year, indicating stability in its strategic execution. Management remains committed to enhancing shareholder value through proactive portfolio management and prudent financial stewardship.

Future Outlook

Cousins Properties anticipates continued growth, projecting FFO per share of $3.60-$3.80 for the upcoming fiscal year. They expect rental revenue to grow by 3-5%, driven by the lease-up of new developments and contractual rent escalations. The company plans to continue its disciplined capital recycling program, seeking opportunities for further portfolio optimization. Cousins remains focused on sustainable development practices and enhancing tenant experience to drive long-term value in their target markets. They will also carefully monitor interest rate trends and market demand for office space.