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Good morning, ladies and gentlemen. And welcome to Cousins Properties Fourth Quarter Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would now like to turn the conference over to Pamela Roper, General Counsel. Please go ahead. Thank you. Good morning, and welcome to Cousins Properties fourth quarter earnings conference call. With me today are Colin Connolly, our President and Chief Executive Officer

Richard Hickson, our Executive Vice President of Operations Kennedy Hicks, our Executive Vice President and Chief Investment Officer Officer and Gregg Adzema, our Chief Financial Officer. The press release and supplemental package were distributed yesterday afternoon as well as furnished on form eight k. The supplemental package, the company has reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with reg g requirements. If you did not receive a copy, these documents are available due to quarterly disclosures and supplemental SEC information links the investor relations page of our website Cousins.com. Please be aware that certain matters discussed today may constitute forward-looking statements within the meaning of federal securities laws. And actual results may differ materially from these statements due to a variety of risks and uncertainties and other factors including the risk factors set forth in our annual report on Form ten ks and our other SEC filings. The company does not undertake any duty to update any forward-looking statements. As a result of new information, future events, or otherwise. The full declaration regarding forward-looking statements is available in supplemental package posted yesterday. A detailed discussion of some potential risks is contained in our filings with the SEC. With that, I'll turn the call over to Colin Connolly.

Thank you, Pam, and good morning, everyone. We had an exceptional fourth quarter at Cousins. On the earnings front, the team delivered $0.69 a share in FFO which is above the midpoint of our guidance. Same property net operating income increased 3.4% on a cash basis. Leasing remained very strong. We completed 462,000 square feet of leases during the quarter with a 6.7% cash rent roll-up. In addition, we invested almost $1 billion in Trophy lifestyle office properties in our Sunbelt markets. The transactions were immediately accretive to earnings. To fund this growth on a leverage neutral basis, we raised $469 million of equity in two separate issuances and raised $400 million of debt with an issuance of unsecured senior notes. We released 2025 guidance last night The midpoint of the range is $2.78 per share which was also above consensus and represents approximately 3.5% growth compared to 2024. Greg will provide more specifics in a moment. Our remarkable 2024 achievements and encouraging 2025 guidance continues to highlight the strength and resiliency of our leading Sunbelt lifestyle office portfolio and best-in-class balance sheet. Before discussing the quarter in more detail, I will start with a few observations on the market. Fundamentals are improving. The existing supply of office buildings is declining. As older buildings are converted or torn down and new construction is almost nonexistent, At the same time, leasing demand is accelerating during the fourth quarter leasing volume nationwide reached a new post-pandemic peak for the third consecutive quarter and that absorption was positive for the first quarter since 2021, We believe vacancy is reaching a peak and market tightening is not far off the lifestyle office sector. Return to office is transitioning to a return to normal. With these tailwinds, our team remains strategically focused on driving earnings growth while maintaining our best-in-class balance sheet. To do so, we are prioritizing both internal and external growth opportunities. Our portfolio was 89.2% occupied at year-end up from 87.6% year-end 2024. Given the quality of our real estate, and again the strength of the balance sheet, we are growing our leasing market share and driving occupancy back to more stabilized levels. Bank of America's expiration in Charlotte this year is a small speed bump in that process. However, the pickup of leasing activity, and modest expirations through 2026, We believe there's meaningful upside in the cash flow of our existing portfolio in the intermediate term. Externally, we are executing on compelling investment opportunities. During the fourth quarter, we closed on the acquisition of Vantage South End in Charlotte with a purchase price of $328.5 million and the acquisition of Sail Tower in Austin, with a purchase price of $521.8 million Both Vantage South End and Sail Tower are leading lifestyle office properties located in vibrant neighborhoods near other cousins assets. In completing these strategic new investments, we were able to grow earnings on a leverage neutral basis upgrade the quality of our portfolio, and enhance the scale of the company. Our 2024 transaction activity highlights the creativity of our team and openness to a wide variety of opportunities at this point in the cycle. Including debt, structured transactions, joint ventures, and property acquisitions. However, our core strategy remains the same, invest in properties that already are or can be positioned into lifestyle office in our target Sunbelt markets near-term accretion remains a priority. While there are signs of falling, the private capital markets remain challenging for office. Asset level debt and equity is limited and expensive. Many private equity investors have legacy issues in their existing portfolios and remain on the sidelines. Conversely, the public market showed meaningful signs of improvement. Liquidity has grown in the unsecured debt markets and spreads have tightened materially. Office REIT share prices have begun to rebound. This creates a compelling investment opportunity for Cousins as private and public markets valuations finally converge. In conclusion, the office market remains highly bifurcated. There is little to no leasing demand or capital for commodity and older vintage properties. Values for these properties are resetting. So they can be reimagined demolish. This process is now underway. At the same time, the lifestyle office market is improving New construction is at historic lows while leasing demand is accelerating. The market is rebalancing in a shortage of premium lifestyle space is not far off. Cousins is uniquely positioned for this environment We built the company to thrive during all economic cycles, and today, we are in a highly advantageous position. We are in growing sub adult markets, Bank of America ranks our portfolios the highest quality among all office REITs. Our leverage is the lowest across the sector. The pricing on our bonds trade at the tightest spread to treasury among all traditional office companies. In short, we have great access to capital, and we see great opportunity. We are excited about the future for Cousins. Before turning the call over to Richard, want to thank our talented Cousins employees who are the foundation of our success. They're dedicated, hardworking, and provide excellent service to our customers. Thank you. Richard?

Thanks, Colin. Good morning, everyone. Our operations team wrapped up 2024 with another fantastic Quarter. Delivering one of the most remarkable operating years in our company's recent history. In the fourth quarter, our total office portfolio end of period leased and weighted average occupancy percentages were 91.6% and 89.2% respectively. Both metrics were sequentially higher. Further, I'm thrilled to say that our total office portfolio occupancy ended 2024, a full 160 basis points higher compared to the fourth quarter of 2023. Our fourth quarter occupancy included the weighted average impact of both of our fully occupied December acquisitions. Vantage South End in Charlotte, and Sail Tower in Austin. I would note that these assets only accounted for about 20% of our weighted average occupancy increase in the quarter. With most of our occupancy build driven by lease commencements in Atlanta, Phoenix, and Tampa. I have one reminder on occupancy. The long-anticipated move outs of One Trust in Atlanta and Bank of America in Charlotte will happen this year. Which we still expect to lead to a downdraft in occupancy and a temporary trough through the third quarter. However, we have exceptionally low expirations of only 12.1% of annual which through the end of 2026 when coupled with continued strong leasing demand for lifestyle office we see occupancy building back toward the end of this year and beyond. Now on to results. We've seen in the fourth quarter was once again exceptional for Cousins. Our team completed an impressive 45 office leases totaling 462,000 square feet. With a weighted average lease term of 8.3 years. This was our second highest quarterly square footage volume of this year and our total signed activity for the year exceeded 2 million square feet. The most since 2021. Thirty-one of our completed leases this quarter were new and expansion leases. Representing nearly 70% of our total activity and transaction terms. For the full year, new and expansion activity also accounted for 70% of our activity in square foot terms. Regarding lease economics, our average net rent this quarter came in at $35.81 and $39.77 for the full year. This quarter average leasing concessions, defined as the sum of free rent, and tenant improvements were $9.21 This compares favorably to our average concessions in the first half of 2024 of $9.56 Recall that concessions were well below trend in the third quarter driven by our sizable lease with IBM in Austin. Average net effective rent this quarter came in at $23.88 and $28.17 for the full year. Our full year number represents an impressive 14.7% increase over 2023. Final second generation cash rents increased again in the fourth quarter at a healthy 6.7%. At the market level, our new half development in Nashville continued its momentum. This quarter, the team completed 7,100 square feet of office leases with two customers, taking the commercial portion of the project 46% leased. We are also in advanced lease negotiations with an additional 18,000-foot financial services customer that would take the commercial portion of the project to 50% leased. Multifamily leasing continues to progress nicely as well. As we were at 38% leased to end the fourth quarter, a sequential increase of 17 percentage points. This equates to an average of about 30 units lease per month. In Atlanta, the broader markets 2024 leasing volume was the highest since 2016 and sublease availability dropped to its lowest level in eight quarters according to JLL. Across our operating portfolio, we signed a very strong 151,000 square feet of leases this quarter and rolled up cash rents 8.9%. Further, the total amount of activity in Buckhead was notable at approximately 187,000 square feet, or 75% of all Atlanta activity. Importantly, our Buckhead activity included the long-term renewal of law firm Greenberg Tarrig 100,000 square feet at Terminus 200. Greenberg was previously set to expire in 2026, And with this renewal, we now only have one expiration over 100,000 square feet left in our entire operating portfolio in the calendar year 2026. Turning to Austin, JLL noted that vacancy appears to have stabilized with overall market quarterly leasing activity totaling 1.2 million square feet and a second straight quarter of positive net absorption. Our Austin team signed a healthy 80,000 square feet of leases this quarter, rolling up cash rents 7.5% and our portfolio now stands at 94.9% leased. As an update, we remain very encouraged by our progress in renewal negotiations with I'm Warner. Which occupies 112,000 square feet at Domain Point and expires in September of 2025. Please note, this is our only material 2025 expiration whose outcome is not yet determined. And we view our renewal assumption for Time Warner included in our 2025 guidance to be relatively conservative. In Charlotte, the office market ended 2024 with its first positive net absorption since 2021 and broader market new leasing volume in the fourth quarter was 871,000 square feet marking the highest level in nine quarters all per JOL. In our portfolio, we remain highly focused on the major redevelopment of both five fifty South and Fifth Third Center. Given that new office construction activity in Charlotte, is at its lowest level since 2013, we anticipate our redevelopments will be well received by lifestyle office seeking customers in the coming years. In Tampa, the market remains strong throughout 2024 demonstrating resilience through multiple hurricanes. This quarter, our Tampa team signed 57,000 square feet of leases of which 74% were new and expansion leases. Our Tampa portfolio occupancy increased a full percentage point in the fourth quarter and is currently 95.6% leased. Phoenix, CBRE noted that the market produced its largest quarterly positive absorption this quarter since the fourth quarter of 2019. Demand remains concentrated in amenity-rich spaces particularly in Tempe and the Camelback corridor, which we have seen firsthand. This quarter, our Phoenix team also signed 57,000 square feet of leases of which an impressive 100% were new leases. The team also rolled up cash rents 4.6% the quarter. Looking ahead, our leasing pipeline at every stage remains healthy. And we anticipate continued leasing and operational momentum. Despite macroeconomic uncertainty, fundamentals in lifestyle office are broadly encouraging. As we have all seen in recent news headlines, the return to mostly in-office work is gathering steam ever passing week. This has resulted in demand for lifestyle, office space, in a time when new construction activity is hitting historic lows. We believe these tailwinds will play out even further in 2025. As always, I want to thank our talented operations team whose exemplary work made 2024 a remarkable year. We are looking forward to continuing the momentum 2025. Kennedy,

Thanks, Richard. As of Scott, the fourth quarter was an exciting one for investment activity. We completed two significant asset acquisitions that align with our core strategy. To thoughtfully and accretively invest in Sunbelt lost lifestyle office environments while maintaining our strong balance sheet. In early December, we acquired Vantage South End in Charlotte. In an off-market transaction. Vantage South End is one of the most dynamic lifestyle office environments in the southeast. Offering 639,000 square feet of office and retail across two buildings that deliver between 2021 and 2022. The 97% leased project features a diverse rent roll leased to a variety of professional service firms and high-profile corporate users, who have heavily invested in their workspaces with a focus on employee experience. The restaurants at the project are some of the busiest in the city. Creating an exciting, energetic community base for both customers and the community. Thirdly, from a quality perspective, this asset is an excellent fit for our portfolio and strategy. From a market perspective, it's also very complementary to our Charlotte portfolio. Which is now over 2 million square feet. Vantage is located just down the street from our 98.7% leased rail yard project. And our south end station development site. Furthering our operating efficiencies and deepening our already strong customer within the market. Are encouraged by the recent overall activity and leasing interest in Charlotte as a whole. Finally, the financial profile is compelling. And immediately accretive to earnings. We acquired the recently built project for $328.5 million a basis of $514 per square foot. Well below what it would cost to build today. The initial cash yield is 7.4% With a GAAP yield of 8.4% a spread driven by over nine years of remaining lease term. Furthermore, the in-place rents, when taken into account parking, are below today's market and far below what it would take to justify new construction in the future. Creating significant potential upside over the long term. Next, in mid-December, we closed on the acquisition of Sail Tower in Austin. Sail Tower is an 804,000 square foot skyline defining for the asset in downtown. Depths from Lady Bird Lake, The building delivered in 2022 and features incredible protected views, a variety of terraces and outdoor spaces, and an amenity base that's unrivaled in the city. The office portion is 100% leased to Google for the next thirteen years, it's anticipated to be the company's Austin hub. Like Vantage, the trippy quality of the asset and its location is additive to our portfolio and enhances our customer profile, and overall weighted lease term. We're excited to add this to our Austin portfolio and let our strong team on the ground add their operational expertise. We acquired Sales Tower for $521.8 million at closing. A basis of $649 per square foot. There is approximately $37.2 million about outstanding tenant improvement allowance. $32 million of which we will fund at the end of the second quarter of this year. All in, our basis is extremely attractive and below replacement cost in a market with dwindling land sites. Our initial gap yield for the first twelve months equals 8.7% In this instance, the in-place rents are nearly 25% below what would likely be achieved for available space in the building today. Once again, this is a strategic transaction that provides accretion, growth, and long-term potential upside. Greg will speak to the capital markets transactions that funded these acquisitions on a leverage neutral basis. Also in the beginning of the fourth quarter, and as discussed previously, we acquired a $138 million loan secured by Thanean Court in Dallas. The loan had an initial maturity date of December seventh 2024, and the borrower paid us off in full on January seventh 2025. Cousins received default interest for that time period in addition to the base interest rate of super plus 366. During our investment period. Looking forward, we remain focused on our core strategy, and intend to continue to identify and execute on Sunbelt transactions that are consistent with the quality of our portfolio and will allow us to grow in an accretive manner. We believe we continue to have a competitive advantage relative to other office buyers. Both public and private. And are optimistic that 2025 will be another active investment year for Cousins. With that, I will turn the call over to Greg.

Thank you, Kenny. I'll begin my remarks by providing a brief overview of our results, I'll spend a few minutes on our same property performance, before moving on to our capital markets and development activity Foreclosing with the discussion on our balance sheets and providing little more color on our initial 2025 earnings guidance. Overall, as Colin stated upfront, our fourth quarter results were outstanding. Second generation cash leasing spreads were paused positive for the forty-third straight quarter Leasing velocity was excellent and same property year over year cash NOI increase. It was also a very productive quarter as we accretively invested almost $1 billion Focusing on same property performance for a moment, GAAP NOI grew 5.3% and cash NOI grew 3.4% during the fourth quarter compared to last year. This continues a string of positive same property numbers that began in early 2022. With the most recent quarterly cash increases largely driven by occupancy gains at our 3350 Peach Street property in Atlanta, and our Tempe Gateway and hundred Mill properties in Phoenix, as well as a continued pickup in parking revenues. I also wanted to take a moment to point out the lumpiness that can sometimes run through our quarterly same property expense numbers. Usually, it's driven by property taxes. Property tax true-ups as we receive actual assessments from the taxing authorities, can push the quarterly numbers around quite a bit. So it's always best to use longer time frames when looking at expense numbers. For example, our same property tax expense for the fourth quarter was up 21.9% over last year driven by a favorable true-up in the fourth quarter of 23. However, you zoom out a little bit and look at the entire year. Property tax expenses for our same property portfolio were essentially flat. Moving on to our capital markets activity, we completed three significant transactions during the fourth quarter support of the investment activity Kennedy discussed earlier. In November, we issued six million shares of common stock generating proceeds of $186.1 million In December, we issued 9.5 million shares of common stock generating proceeds of $282.8 million and also in December, we completed our second investment grade bond offering issuing $400 million of notes at an initial yield of 5.46% Now that we have two unsecured bond issuances outstanding, the initial $500 million issuance completed in August and this more recent issuance completed in December Relative pricing is settling in. And our bonds currently trade at the tightest spread to treasuries among all traditional REITs and much tighter than any secured debt options currently. We also have ample balance to pursue investments as net debt to EBITDA is an industry leading 5.16 times in our liquidity position is excellent. Turning to our development efforts, the current pipeline is comprised of fifty percent interest in New Hop in Nashville and a hundred percent of Domain nine in Austin. Our share of the remaining estimated development costs is approximately $39 million which will be funded by a combination of our Newhall construction loan and our operating cash flow. I'll close by providing our initial 2025 earnings with a little color. We currently anticipate full year 2025 FFO between $2.73 a share and $2.83 per share with the midpoint of $2.78. This is up nine pennies per share or approximately 3.5% over our 2024 results. Our guidance includes the disposition of our bankruptcy claim with SVB Financial Group which we sold for $4.6 million earlier this week. This will run through our other income line item in our P and L and it is included FFO. Our guidance also includes the assumed refinance of the $250 million senior note that matures on July sixth. This is our only debt maturity this year. Finally, our guidance assumes the mezzanine loan we have in the Radius property in Nashville is paid off at par on September thirtieth. Our guidance does not include any speculative property acquisitions, property dispositions or development starts. If any of these do take place, we'll update our guides accordingly. One quick note before closing. There's a typo on the development pipeline schedule in our supplement. We mistakenly changed the stabilization date for our domain nine development. This stage should have remained the first quarter of 2025 this quarter. We have updated this in the supplement and posted it on our website. Bottom line, our fourth quarter results are excellent. And our initial 2025 guidance indicates the second straight year of earnings growth. I believe we are one of the very few office REITs to generate positive FFO growth in both 2024 and forecast for 2025. Our best-in-class leverage and liquidity position remains intact, Office fundamentals continue to improve with accelerated leasing and declining new supply. We continue to deploy capital into compelling and accretive investment opportunities. We look forward to reporting our progress in the coming quarters. With that, can we turn the call back over to the operator?

Thank you. Ladies and gentlemen, we will now begin the question and answer session. On phone. Questions will be taken in the order received. Should you wish to cancel your request, please press the star followed by the two. If you are using a speakerphone, please select to handset before pressing any case. Once again, that is star one should you wish to ask a question. Your first question is from Lane Heck from Wells Fargo. Your line is now open.

Great. Thanks. Good morning. Can you talk a little bit more about the investment pipeline as you look into 2025. Have you found that the acquisition market has become more competitive Does that change your strategy or the size of your pipeline at all? And I guess just generally what's your confidence in being able to continue to make, you know, accretive investments this year?

Morning, Blaine. Colin. The know, the pipeline remains, I think, very strong. And from cousin's perspective, just stepping back, as we look at The market and the opportunity today, I think fundamentals are improving. You know, supply new supply is virtually non-existent, and we're seeing leasing demand accelerate. And at the same time, They're the The capital market still remains somewhat dislocated. With many of the private players still on the sidelines struggling with limited and, let's say, relatively expensive. Secure debt. So I think it's a a particularly compelling time for for cousins to invest And I think as we come out of this dislocated market, we are hopeful you're gonna see more transactions, but I think the competition is still relatively limited. And and we hope that we're, again, with an advantageous cost of capital, a a for for groups that are looking to monetize high quality office. Great. That's helpful.

Can you just talk about the mix between kind of the opportunities on on high yielding debt versus operating properties that are in your pipeline?

Yeah. Certainly, the for for us, the the bias is is typically, you know, is is equity positions. But but again, we remain very constructive at at this point in the cycle, investing in trophy lifestyle office But but at this point in the cycle, sometimes the best way to invest from a risk adjusted perspective at the right basis could be through debt. We certainly demonstrated a an openness and a willingness to invest in the debt part of the capital structure. If it's, you know, the the quality of the asset, if we're comfortable with any outcome, we'll certainly look at those opportunities. And potentially do more of them. But the, you know, the pipeline today has kind of a wide variety of of opportunities. Our our long term bias is is as an equity investor, but but again, at certain points in the cycle, us having the flexibility to to invest across the capital structure, I think, is a differentiator. And we'll continue to evaluate all opportunities, again, that are consistent with the long term strategy of continuing to build the you know, this premier portfolio of the highest quality lifestyle assets in the Sunbelt.

Okay. Great. That's helpful. And then just lastly, related to that on the funding side, should we expect continue to expect kind of large deals if you have them will be paired with an equity raise or do dispositions or any other sources of funding makes sense at this point?

Hey, Blaine. It's Greg. Good morning. It's it's we're gonna look at it on a case by case basis. You know? Right now, we can clearly invest On an accretive basis for these new acquisitions, for using, you know, fresh capital of debt and equity. We've proven that over the last few months. But but, again, it'll depend on what what kind of what we're looking at at the time we're looking at it. Sometimes it might make sense to sell something to fund it. But rest assured, whatever we do, these acquisitions You know, the first target is to be accretive and on a leverage neutral basis.

Okay. Great. Thank you all. Excellent.

Thank you. Your next question is from Jeffrey Spector from Bank of America. Your line is now open.

Great. Thank you. Just, you know, sitting back and thinking about all of the comments and how you know, quickly, the markets are improving and you know, the accomplishments you had in twenty four. I guess just sitting back when you you know, talked about your your plan for twenty five or if you could do a three year plan. Has anything changed in terms of the three year plan or messaging you know, to leasing this year? Thank you.

Good morning, Jeff. It's Colin. And and real know, our plan remains unchanged and and it is firmly centered around continuing to execute execute, you know, the strategy of of building the the leading Sunbelt lifestyle office company. With, you know, the best assets and the most resilient submarkets with the highest growth. And our plan around that as I mentioned earlier, is It is is kinda multi pronged. We're we're gonna continue to first prioritize organic growth within the portfolio. That means driving occupancy. Back. To more stabilized levels, and we feel like we're we're on a path To do that, Secondly, in this in this environment, we are going to capitalize on external growth opportunities. And we certainly demonstrated that last year and we think the environment is still Positive. For that and potentially still in the early innings coming out of a dislocated office cap market. And third, we're we're gonna continue to maintain a a fortress best in class balance sheet that gives us the flexibility to, again, capitalize on opportunities both in driving leasing market share as well as compelling and accretive new investments.

Great. Thank you. And so to confirm, I know Kennedy also talked about the criteria for markets. In terms of your current positioning, Tampa, Phoenix, both around eight, nine percent. Houston, four percent. I guess, Anything new on your approach to those markets? Thank you.

Not at all. I think yeah, we we as we look at our current geographic exposure, We're gonna remain focused on the Sunbelt and and I think we would we would hope to see our market share in certain markets like Tampa, as you mentioned, or Dallas, Nashville, Raleigh, Charlotte, continue to grow. Over time. And so, we'll we'll stay focused in in and look at opportunities in Atlanta and and places where we've got large share today, but but we'd certainly like to grow our market share in some of these other terrific cities that that we've been active in across the Sunbelt.

Thank you. And then just last, can you talk about leasing year to date messaging conversations with let's say, technology firms in your markets? Thanks.

Sure. This is Richard. You know, the momentum continues, and and so we feel really good that the from two thousand twenty four where we clearly had great volume Really proud of what we accomplished. That's that's absolutely carrying into this calendar year. And, you know, technology companies are part of that conversation without a doubt. So so we're we're optimistic about continuing the momentum.

Great. Thank you.

Thank you. Your next question is from Nick Thalmann from Baird. Your line is now open.

Hey, good morning. May maybe starting with Richard, just kinda digging a little bit more into the leasing pipeline. Maybe just a little bit more commentary on the mix between new and renewals in that pipeline and then also kind of the composition the size of the tenants you're kinda looking at there, what's the average size, if there's some larger tenants included in that.

Sure. So the the mix in our pipeline is is not terribly different than what it's been in recent quarters. I'd say it's it's a little bit lower than the seventy percent or so that we posted in twenty four, but it's still skewed to the new and expansion side. Obviously. Part of that is that we don't have a lot of expirations immediately ahead of us. So that's gonna automatically kinda mix or or skew the mix to new and expansion. And the as far as the the size of of deals out there, it's it's all over the map. I'd say there's not really a a any kind of sea change happening. We're we're seeing customers of every size. We're seeing customers who Our looking to upgrade space and wanna move in quickly. We're seeing some that are are getting ahead of the curve, if you will, and may not have an expiration in a another property a couple years out and and are looking to go ahead and take action, but there really hasn't been a big change in terms of of the size of tenants that we're speaking with.

And then you guys have made comments on assets like North Park willing to kinda put some leasing capital out the door to prioritize occupancy? Is there anything else in the portfolio that you're willing to kind of put dollars out and prioritize occupancy in or is that just, like, one specific of that, like, bottom ten percent of assets that you guys have talked about in the past?

Yeah. It it is you know, North North Park is one of our only suburban assets. In a market that's that's had higher vacancy than than some of our other submarkets. And so, again, you know, as I mentioned, consistently, In certain situations, we are we are absolutely gonna prioritize market share in driving occupancy, which ultimately leads to to FFO growth. So we'll be pockets in of of kind of that Trade off. With concessions and capital but but I think in certain instances when when we've got a competitive advantage we are going to use it and we are absolutely focused on continuing to drive occupancy because that does ultimately translate into FFO growth.

That's it for me. Thank you.

Thank you. And your next question is from Michael Lewis from Truist Securities. Your line is now open.

Thank you. So your guidance does not include any acquisition, dispositions, or development starts. It does sound like you're optimistic there will be acquisition opportunities, maybe the loan investment opportunities. Is a development start highly unlikely and maybe maybe you could talk a little bit about you know, how far out of whack those economics are to you know, to start a build to sue and how high the rents would have to be kinda get a sense about you know, how far we are away from you know, another start.

Good morning, Michael. Again, we we we did not include any speculative transactions in in our twenty twenty five guidance nor nor have we in the past because they are, again, by definition, speculative. Know, looking forward, do think it's unlikely to see any development starts in twenty twenty five, but I'd tell you that you know, we are beginning to have some conversations with with large customers who are thinking about twenty twenty eight and twenty twenty nine expirations, and I'd say they are appropriately with their leasing brokers recognizing that there could be a pretty significant shortage of of premier lifestyle space given the the rebalancing in the market and you know, virtually no new construction today or for the last several years. So some of those conversations are are picking up. I think customs is in a unique position again where we don't need to rely on any external financing or construction loan. Because I tell you that market is still fairly challenging So I I again continue to believe that the the near term priority and and opportunity in twenty twenty five. We'll be on acquisitions, but but Cousins will certainly be positioned and prepared For the longer term development opportunity, which I do think will materialize in the not too distant future.

Okay. Great. And then in Austin, you know, I I realized you're very well leased there. But, you know, do you think when Nvidia makes a decision, there'll be some knock on demand from that? And Maybe that market could be closer to kinda recovering and coming back faster.

We think, or do you think it's it's probably supply to to to mop up there, and it might be a little while before the market really recovers. Well, I I think you you really need to drill down in particular submarkets and, you know, broadly speaking, we are seeing demand begin to, pick up In Austin, I'd say that's in in many cases driven by technology companies, coming off the sidelines. You are starting to see some relocate activity. There was a corporate relocation from California to Austin announced this week. That's that's very positive. Think the downtown submarket has a greater amount of of new supply that the market will need to digest and it and it will in time Conversely, if you look out at the domain, you know, our portfolio is almost a hundred percent leased and there's good activity out in the domain. And and so I think that could likely lead to new opportunity on the development side probably sooner than than most other submarkets.

Great. Thank you.

Thank you. Your next question is from John Kim from BMO Capital Markets. Your line now open.

Thank you. Not at the same court has been paid down, can you just Discuss. What your original, expectations were. I know the guidance was that it was gonna be paid down in December, but it seemed like a fair amount of work just for, like, a month and a half of income. Did you expect the Mez to extend past a couple months?

Good morning, John. It's it's Colin. The To clarify, the it it was a whole loan at Core that that we purchased. And I'd say when we made that purchase, The outcome of that was was uncertain. But as I commented earlier, cousins were were focused on investing in Sunbelt lifestyle office at assets and and Saint Ann's Court is clearly that. It is a top tier asset in Dallas, and we felt like we were investing at a basis and a return that was highly attractive. And ultimately from our perspective, we were comfortable with any outcome there. Ultimately, the outcome was the spa paid it off, and recapitalize that asset. They obviously have a very constructive long term view the property and did and we wish them well.

And can you comment further on how much you expect to invest in med? This year? I know it's not incorporated in guidance, but do you expect similar to Greater Matt's.

I I it it in John, the the route and it will depend. And, again, we're we're we're opportunistic in how we invest. Again, I think our bias is certainly to buy you know, fee simple trophy acquisitions like we we did in the fourth quarter. But from time to time, when opportunities present themselves at this part of the cycle, the best risk adjusted return and access point is in the debt capital part of the stack. My my anticipation or expectation would be our investments there will will likely be modest. On the debt side, and and really more of a focus on long term ownership. But but again, we will we will be opportunistic and but longer term, we we we don't have plans to to build a large debt book This is just a unique point in the cycle. And when those opportunities present themselves, we'll we'll we'll we'll capitalize.

Okay. And on sale tower, Great. Asset and acquisition and credit. What's the latest on Google's use of the building, the physical occupancy of it, and do you expect some of it to come back to the Southeast market?

Hey, John. This is Kennedy. So they're in the process of evaluating all of that. I think you know, we do expect that they're beginning to move people in this year. And then determining they do have a little bit of space on the sublease market. There's been a lot of interest In that space, So I think they're they're trying to figure out what makes sense relative to their long term footprint. But they they do plan to to occupy and they've they've begun their build out process as well.

Yeah. I I just that over time, If Google does decide to shed some of that space or sublease some of that space, we we would think we we would view that as a a potential opportunity again to to multi tenant some of that building over time and hopefully do it in in accretive transactions and and capitalize on, you know, the mark to market. And and we've had kind of similar successes, maybe IBM, met a deal last year was an example of of that, but but I think that could create some long term opportunity, and we'd be interested in in those discussions.

Great. Thank you.

Thank you. And your next question, as promised, Steve Salko from Evercore ISI. Your line is now open.

Hey. This is Mamos on for Steve. Congrats on the quarter again, and thanks for taking my question. One quick question I had on the pipeline specifically for the new half office component. Could you maybe talk about how touring for that specific one has maybe changed or picked up during the quarter and for tenants that decide not to sign with you, what do you think the reason is? Is that, like, a conditions or rates or term or maybe finding other space that they're interested in, just some color there would be great to understand. Thank you.

Sure. This is Kennedy. As Roger mentioned, we do we are in late stage lease negotiations with a user to take almost another floor. So we continue to feel good about our, you know, floor to a quarter in terms of leasing activity. And I would say the feedback that we're getting from the market is really positive. I mean, it's a it's a unique environment. Environment with every week that goes on. There's more retail that's opened, more as we've talked about. There's a lot of more people living in the apartments. Got really good feedback from the the resident experience there. So we continue to see Good tour activity. I'd say if if we don't Convert those tours to leases is usually just because that particular user doesn't want this high end of the space, and so we are at the top of the market in terms of rents. And so Certainly, people love to come see it, and then sometimes they ultimately decide that that's not in their yeah. Been there in the cards economically. But we've had we've had a good success in conversions and and feel good about the the ongoing interest and pipeline.

I appreciate that. And maybe one quick follow-up question. What are factors you are watching out for in terms of guidance that would bring to the lower end and also factors that would bring you to the higher end as we move through the year. What effects we should also think about to kinda stay ahead of those ones as well?

Sure. It's it's Greg. I mean, the largest factor that we face and we've faced it twenty four as well, are are interest rates both on the short end and on the long end. You know? So if we're moving up or down, we do a fifteen percent of our debt floating rate. That's right within kind of the range of what we've indicated we like to have, so it's not high or low. We're level or leveraged. So typically, that impact is is less than it would be if we had a little more leverage on the balance sheet. But the change in SOFR move our results around. Our current base case that we provided and the guidance, the midpoint assumes no rate cuts in two thousand and twenty five. And then also rates in the long end. I do have to refinance at some point twenty five or I'm likely to refinance at some point Twenty five. Two hundred and fifty billion dollars unsecured note that we have maturing in the summer and that could move around as well, and that could have an impact. As Colin stated earlier on and I stated in my prepared remarks, we don't have any speculative So there's no risk from that. And then as Richard talked about earlier on, you know, our leasing and rate budget for twenty five is consistent what we've done in the past. So we feel comfortable with what we provided there.

Perfect. Thank you. That's for me.

Thank you. And your next question is from Paul Lona from KeyBanc Capital Markets. Your line is now open.

Great. Thank you. So, you know, what seems to be the hold up with the Time Warner at least set the domain point, you know, are you looking at other space are they looking at other spaces, or are they trying to determine how much space they still need?

Well, this is Richard. It's the latter. We're just we're we've been engaged with them for a long time now to your point, but but we're really working through what their needs are Longer term.

Okay. Great. That was helpful. And then I was wondering, could you give a sense of what your exposure is to, you know, GSA leases and and if minimal, you know, how do you think what's going on there could potentially impact that office leasing within your markets?

The exposure to GSA for cousins is de minimis. I think we have one small GSA lease at Fifth Third Center. In Charlotte. And and one other in North Park in Atlanta, but it it's it's really not much to speak of. Yeah. And I'd I think the in Charlotte, it's five thousand square feet to to a federal judge. Think broadly speaking, I I think it'll have very little impact on the leasing for our lifestyle office buildings, let's say, GSA leases within our markets or I get fairly limited and in in the submarkets that that we operate in and I'd say by enlarge, they're in lower quality kinda older vintage assets. I think some of which will likely be candidates Sure. In a very significant renovations, repurposing, or even in some cases, suburban teardowns.

Okay. Great. Thank you.

Thank you. And your next question is from Dylan Marzenski from Green Street. Your line is now open. Good morning, guys. Thanks for taking the question.

Appreciate your comments on sort of the the acquisition pipeline remaining relatively robust, but just wanted to sort of get you guys in opinions on on sort of bidding tents and any new buyers coming to the market that may prove competitive to you guys. Sort of looking at at any notes, right, the most recent one being John Gray and Black Stone effectively calling bottom in in a high quality office. You look at CMBS issuances here today for office at at relatively high levels compared to recent history. Just trying to get a sense for if you guys are starting to see more and more buyer activity or interested come into some of these transactions that you guys are looking at.

Yeah. Certainly, we we we pay attention to the the competitive landscape and and certainly notice or noted those comments coming out of Blackstone and and I you know, our reaction that was it's very validating of of what we've been trying to do. In twenty twenty four. And I I do think you'll start to see some very well capitalized players see the opportunity and enter the market. I would say we have not seen any of those groups really in any scale yet. In in our Sunbelt markets. I think to a certain degree, that's a function of you know, these large groups are looking to deploy a lot of cap capital and, you know, single transactions or even, you know, larger transactions. And and tend to then have a bias towards markets like New York, And so, you know, our our sense is that that will likely be the focus of some of those groups, but but over time as the the market saw and existing private groups get out from under their their legacy issues, the market absolutely, at some point, will become more competitive. But our hope is in the near and in your intermediate term, Cousins will still should be a preferred buyer, I'd say with arguably the best cost of capital relative to our private peers as well as our other public peers. And so we wanna capitalize on that on that on that time.

Thank you. Your next question is from Anthony Powell from JPMorgan. Your line is now open.

Thanks. Just a a couple left for me. First, with regards to OneTrust and BofA Space can you give us any updated thoughts on either traffic, thinking around the spaces or building, or or anything update Updated there.

Sure. So I'll start with OneTrust. As we've mentioned in the past, it's It's modern great space. That OneTrust is is leaving us with. We've had actually really encouraging activity in the past couple of months. Nothing that that we can say is imminent, but certainly some very good interest. So we we remain encouraged that at some point that that space is gonna be very attractive for the right user. As largely plug and play and ready to go. With regard to Fifth Third Center, in that space again that the bank doesn't part? The space until the end of of July of this year. We are very much underway in the final process of of of the redevelopment planning, and we'll start that as soon as we possibly can this summer. And I I think that will generate a lot of buzz and activity Charlotte has some very interesting larger requirements floating around at this point. They're they're all early stage and not necessarily fast moving, but But we we view that that the demand equation in Charlotte is encouraging and and again, like I said in my remarks, the quality of the redevelopment If the third center is gonna be second to none, and it should attract a lot of of demand from from lifestyle office users.

Okay. And then just second for Greg, just on on a numbers matter. For New Hope, can you give us a sense as to what the FFO impact is from that asset in twenty five versus say where it may be once it stabilized. I can't recall, like, all the interests stopped being capitalized or the OpEx is flowing through, just just trying to wonder what that impact is this year.

Sure. We don't provide, you know, specifics on a property by property basis. But what I can tell you is that, you know, we ceased capitalizing interest on the apartments in the summer of twenty four and we ceased capitalizing interest on the adaptive reuse office in October of twenty four, And so all we're capitalizing interest on in twenty five is the new building of her office, which we stopped this summer, and the retail, which will stop in the fall. So, you know, as you know, simple algebra, if you stop capitalizing interest and you're not stabilized yet, odds are it's not a very favorable you know, impact to your earnings. And so it's a bit of a headwind for us in twenty five. That'll clear up by the end of the year. But we already started to experience that in in late twenty four.

Okay. Thank you.

Thank you. You are not question is from Brendon Lynch from Barclays. Your line is now open.

Great. Thanks for taking my question. I wanted to get a sense of how many more assets like Sail Tower, Advantage South Bend are on the market that are new, well leased to kinda fit your a plus criteria. That you could potentially pursue.

It so, again, it it we we have a we have a list. Of of assets that that we're interested in that that that meet kind of the the criteria for us. And continue to build and grow our our Sunbelt lifestyle portfolio. Let's say at the moment, they're officially, they're not a lot of assets that that qualify there as as officially on the market. But that doesn't mean that Kennedy and her team aren't hard at work and having a lot of conversations and and our hope, like last year, You know, Vantage South End was was was not on the market and you know, sales tower asset had had been on the market and had had been a bit sideways, and and we were able to kinda come in. And so whether they're assets that are officially on the market or not, you know, our team will be working hard and are hopeful to source in the new opportunities. So we'll we'll continue to stay focused on that.

And are there any markets that you would be willing enter that you're not already active in yet?

We're we're gonna, again, remain focused on on the Sunbelt, and and we don't feel opportunity constrained in our Sunbelt markets. You know, again, over time, we certainly like to see kind of our market presence and share grow in some of our existing markets like Dallas and Nashville, Charlotte, Raleigh, Tampa. I mean, these are all markets that that over time we could have a greater I think we could have a greater market share.

Great. Thanks. That's it for me.

Thank you. Your next question is from Leila from Wells Fargo. Your line is now open.

Great. Thanks for taking the follow-up. It's seems at this point, like, you you guys have stopped providing same store NOI and occupancy guidance. So I guess without asking the overall range Can you talk about any recent trends in the leasing pipeline and the general drivers of same store and occupancy throughout the year in cadence of both. Obviously, you guys have been clear about Bank of America, but color on any other nuances would be helpful. And lastly, any view on where occupancy might end up at the end of this year relative the end of twenty four would be helpful.

So this this is Richard. I can tackle the side of that. So so we'll start the year fairly stable. And it's like we've talked about the the big the big Change is gonna come with the expiration in the third quarter to the end of July. So on a weighted average basis, that'll kind of filter through the system in the third quarter. You know, we don't give specific guidance, but but we do feel confident that we're gonna be able to Trough. There in the in the second half of this year and and begin to build back occupancy. And certainly into twenty six.

Okay. Great. Thanks.

Thank you. And your next question is from Dylan Berzynski from Green Street. Your line is now open.

Hi. Thanks for taking the follow-up. Just wanted to get you guys with you on on concessions and and potential prospects for for net effective rent growth. Obviously, headline vacancy across a lot of your markets is still relatively high. But your portfolio is well leased. If you look at class a trophy vacancies across your markets, much in a much better shape. So so just trying to get a sense for when you guys think you'll be able to start to push net effective rent growth across the portfolio.

Well, we we've had good luck, thankfully, despite, you know, pressure mainly in the in the areas. TIs, we've had good luck building and growing net effective rents over time, especially know? Year over year for twenty twenty three to twenty four. So we we think we can continue to do that effectively. The like you said, demand for the lifestyle segment is vastly different than the broader office market. And so we feel good that we're gonna The oldest. To execute similarly to how we've executed in the recent past.

And then no. It'll it'll be situation by situation. Again, I think in in a at a North Park, again, I as I've mentioned, we'll be much more aggressive as it relates to concessions. So if we do a you know, an outsized amount of leasing at a building like that, you know, that that could skew, you know, a quarter to quarter number. But again, we have kind of very few assets like that, and I think generally speaking, for our, you know, trophy lifestyle urban buildings, we're seeing the dynamic begin to shift Do more of a and more more in the owner's favor than it has been is that that market is expected to to really tighten over the next couple of years.

Appreciate that. Thanks, guys. Have a good one.

Alright. Thanks, Dylan.

Thank you. There are no further questions at this time. I wanna hand the call back to Colin Connolly for the closing remarks.

Well, thank you all for joining us this morning. We appreciate, your time and interest in Cousins Properties, If you have any follow-up questions, please do not hesitate to reach out to Greg or Ronnie info. I hope everyone has a great weekend.