Cousins Properties Q3 earnings reach $17M versus $8.6M
CUZ's expanded repurchase authorization totaled $500 million, with $410 million still available at September 30, 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Cousins Properties Incorporated (CUZ) reported third-quarter 2026 total revenue of $259.4 million, versus $248.3 million a year earlier. Net income available to common stockholders was $17.0 million, or $0.10 per diluted share, compared with $8.6 million, or $0.05. For the first nine months, common-stockholder net income was $18.3 million versus $44.0 million; the company recorded a $36.6 million operating-property impairment during the period.
Nine-month net cash provided by operating activities was $308.3 million, compared with $287.8 million. At September 30, 2026, notes payable were $3.58 billion and cash was $5.2 million; the operating portfolio included 21.2 million square feet of office space and 817,000 square feet of other space. The company acquired 300 South Tryon in Charlotte for $317.5 million and, through its consolidated joint venture, a Dallas land parcel for a $50.0 million gross purchase price. It sold One Eleven Congress for $208.0 million and Research Park V for $42.0 million, recognizing a $9.2 million gain on the latter. First-quarter repurchases totaled 3.9 million shares for $90.0 million.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter common-stockholder net income was $17.0 million, versus $8.6 million.
- Moderate pointNine-month operating cash flow was $308.3 million, versus $287.8 million.
Negative
- Moderate pointNine-month common-stockholder net income was $18.3 million, versus $44.0 million.
Filing Explained
At September 30, $116.9 million of forward-sale proceeds remained pending settlement, while $276.8 million of ATM capacity remained available rather than committed.
Cousins Properties reports 917,000 shares sold under forward-sale contracts through its ATM program during the nine months ended
The filing says forward sales lock in a share price but defer proceeds until settlement; if settled, issuing those shares would increase the share count and reduce existing holders’ percentage ownership.
Separately,
The remaining
Key Figures
Key Terms
variable interest entity financial
non-recourse carve-out guaranty financial
at-the-market stock offering program financial
Forward Sales financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much of CUZ's share repurchase authorization remained?
How much borrowing capacity did CUZ have under its credit facility?
How many shares did CUZ sell under Forward Sales contracts?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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("NYSE") |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
☑ |
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Accelerated filer |
☐ |
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Non-accelerated filer |
☐ |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class |
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Outstanding at October 23, 2026 |
Common Stock, $1 par value per share |
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Page No. |
PART I-FINANCIAL INFORMATION |
2 |
Item 1. Condensed Consolidated Financial Statements (Unaudited) |
2 |
CONSOLIDATED BALANCE SHEETS |
2 |
CONSOLIDATED STATEMENTS OF OPERATIONS |
3 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
4 |
CONSOLIDATED STATEMENTS OF EQUITY |
5 |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
7 |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
8 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
25 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
36 |
Item 4. Controls and Procedures |
36 |
|
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PART II. OTHER INFORMATION |
37 |
Item 1. Legal Proceedings |
37 |
Item 1A. Risk Factors |
37 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
37 |
Item 6. Exhibits |
38 |
SIGNATURES |
39 |
FORWARD-LOOKING STATEMENTS
Certain matters contained in this report are “forward-looking statements” within the meaning of the federal securities laws and are subject to uncertainties and risks, as itemized in Item 1A included in the Annual Report on Form 10-K for the year ended December 31, 2025. These forward-looking statements include information about possible or assumed future results of the business and our financial condition, liquidity, results of operations, plans, and objectives. Examples of forward-looking statements in this Quarterly Report on Form 10-Q include the Company’s business and financial strategy; objectives of management; future debt financings; future acquisitions and dispositions of operating assets, joint venture interests, and land; future acquisitions of investments in real estate debt; future development and redevelopment opportunities; future issuances of common stock, limited partnership units, or preferred stock; future distributions; projected capital expenditures; market and industry trends; future occupancy or volume and velocity of leasing activity; entry into new markets or changes in existing market concentrations; future changes in interest rates and liquidity of capital markets; and all statements that address operating performance, events, investments, or developments that we expect or anticipate will occur in the future.
Any forward-looking statements are based upon management's beliefs, assumptions, and expectations of our future performance, taking into account information that is currently available. These beliefs, assumptions, and expectations may change as a result of possible events or factors, not all of which are known. If a change occurs, our business, financial condition, liquidity, and results of operations may vary materially from those expressed in forward-looking statements. Actual results may vary from forward-looking statements due to, but not limited to, the following: the risks and uncertainties related to the impact of changes in general economic and capital market conditions (on an international or national basis or within the markets in which we operate), including changes in inflation, changes in interest rates, supply chain disruptions, labor market disruptions (including changes in unemployment), dislocation and volatility in capital markets, and potential longer-term changes in consumer and customer behavior resulting from the severity and duration of any downturn, adverse conditions or uncertainty in the U.S. or global economy; risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases on favorable terms and on anticipated schedules); any adverse change in the financial condition or liquidity of one or more of our tenants or borrowers under our real estate debt investments; changes in customer preferences regarding space utilization; changes in customers’ financial condition; the availability, cost, and adequacy of insurance coverage; competition from other developers, investors, owners, and operators of real estate; the failure to achieve anticipated benefits from intended or completed acquisitions, developments, investments, or dispositions; the cost and availability of financing, the effectiveness of any interest rate hedging contracts, and any failure to comply with debt covenants under credit agreements; the effect of common stock, debt, or operating partnership unit issuances; threatened terrorist attacks or sociopolitical unrest such as political instability, civil unrest, armed hostilities, or political activism and the potential impact of the same upon our day-to-day building operations; the immediate and long-term impact of the outbreak of a highly infectious or contagious disease on our and our customers’ financial condition; risks associated with security breaches through cyberattacks, cyber intrusions, or otherwise; risks associated with the adoption and usage of artificial intelligence; changes in senior management, the Board of Directors, or key personnel; the potential liability for existing or future environmental or other applicable regulatory requirements, including the requirements to qualify for taxation as a real estate investment trust; the financial condition and liquidity of, or disputes with, joint venture partners; material changes in dividend rates on common shares or other securities or the ability to pay those dividends; the impact of changes to applicable laws, including the tax laws impacting REITs and the passage of the One Big Beautiful Bill Act, and the impact of newly adopted accounting principles on our accounting policies and on period to period comparison of financial results; risks associated with climate change and severe weather events; and those additional risks and factors discussed in reports filed with the Securities and Exchange Commission ("SEC") by the Company.
These forward-looking statements are not exhaustive, speak only as of the date of issuance of this report and are not guarantees of future results, performance, or achievements. The Annual Report on Form 10-K for the year ended December 31, 2025, including Part 1, Item 1A. Risk Factors include additional factors that could adversely affect our business and financial performance. The Company does not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events, or other matters, except as otherwise required by law.
1
PART I — FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements.
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
|
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September 30, 2026 |
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December 31, 2025 |
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(unaudited) |
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Assets: |
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Real estate assets: |
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Operating properties, net of accumulated depreciation of $ |
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$ |
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$ |
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Land |
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Real estate assets and other assets held for sale, net |
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Cash and cash equivalents |
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Investments in real estate debt, at fair value |
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Accounts receivable |
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Deferred rents receivable |
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Investments in unconsolidated joint ventures |
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Intangible assets, net |
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Other assets, net |
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Total assets |
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$ |
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$ |
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Liabilities: |
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Notes payable |
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$ |
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$ |
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Accounts payable and accrued expenses |
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Deferred income |
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Intangible liabilities, net |
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Other liabilities |
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Liabilities of real estate assets held for sale, net |
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Total liabilities |
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Commitments and contingencies |
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Equity: |
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Stockholders' investment: |
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Common stock, $ |
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Additional paid-in capital |
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Distributions in excess of cumulative net income |
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( |
) |
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( |
) |
Total stockholders' investment |
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Nonredeemable noncontrolling interests |
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Total equity |
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Total liabilities and equity |
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$ |
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$ |
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||
See accompanying notes.
2
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per share amounts)
|
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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||||||||||
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2026 |
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2025 |
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2026 |
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2025 |
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Revenues: |
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Rental property revenues |
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$ |
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$ |
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$ |
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$ |
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Fee income |
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Other |
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Expenses: |
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Rental property operating expenses |
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Reimbursed expenses |
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General and administrative expenses |
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Interest expense |
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Operating property impairment |
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Depreciation and amortization |
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Other |
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||||
Loss from unconsolidated joint ventures |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Gain (loss) on investment property transactions |
|
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( |
) |
|
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Net Income |
|
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Net income attributable to noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income available to common stockholders |
|
$ |
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$ |
|
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$ |
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$ |
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||||
|
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Net income per common share — basic and diluted |
|
$ |
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$ |
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$ |
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$ |
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Weighted average common shares — basic |
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Weighted average common shares — diluted |
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|
||||
See accompanying notes.
3
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited; in thousands)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Comprehensive Income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income available to common stockholders |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other comprehensive income: |
|
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|
|
|
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|
|
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|
||||
Unrealized gain on cash flow hedges |
|
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||||
Amortization of cash flow hedges |
|
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|
||||
Total other comprehensive income |
|
|
|
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|
|
|
|
|
|
|
|
||||
Total comprehensive income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
See accompanying notes.
4
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited; in thousands except per share amounts)
|
|
Three Months Ended September 30, 2026 |
|
|||||||||||||||||||||
|
|
Common |
|
|
Additional |
|
|
Distributions in |
|
|
Stockholders’ |
|
|
Nonredeemable |
|
|
Total Equity |
|
||||||
Balance June 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Net income |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of stock-based |
|
|
( |
) |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Acquisition of partners' |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Contributions from |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Distributions to nonredeemable |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Common dividends ($ |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Balance September 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
Three Months Ended September 30, 2025 |
|
|||||||||||||||||||||
|
|
Common |
|
|
Additional |
|
|
Distributions |
|
|
Stockholders’ |
|
|
Nonredeemable |
|
|
Total Equity |
|
||||||
Balance June 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Net income |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of stock-based |
|
|
( |
) |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Distributions to noncontrolling |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Common dividends ($ |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Balance September 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
5
|
|
Nine Months Ended September 30, 2026 |
|
|||||||||||||||||||||
|
|
Common |
|
|
Additional |
|
|
Distributions in |
|
|
Stockholders' Investment |
|
|
Nonredeemable |
|
|
Total Equity |
|
||||||
Balance December 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Net income |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock issued and tax |
|
|
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
Amortization of stock-based |
|
|
( |
) |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Stock repurchases |
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Acquisition of partners' |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Contributions from nonredeemable |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Distributions to noncontrolling |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Common dividends ($ |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Balance September 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
Nine Months Ended September 30, 2025 |
|
|||||||||||||||||||||||||
|
|
Common |
|
|
Additional |
|
|
Distributions in Excess of |
|
|
Accumulated |
|
|
Stockholders’ |
|
|
Nonredeemable |
|
|
Total Equity |
|
|||||||
Balance December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Net income |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
||||
Other comprehensive income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|||
Common stock issued and tax |
|
|
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
Amortization of stock-based |
|
|
( |
) |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Contributions from |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Distributions to |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Common dividends ($ |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Balance September 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
- |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
See accompanying notes.
6
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited; in thousands)
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Gain on investment property transactions |
|
|
( |
) |
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
||
Amortization of deferred financing costs, debt premiums, and debt discounts, net |
|
|
|
|
|
|
||
Equity-classified stock-based compensation expense, net of forfeitures |
|
|
|
|
|
|
||
Effect of non-cash adjustments to rental revenues |
|
|
( |
) |
|
|
( |
) |
Loss from unconsolidated joint ventures |
|
|
|
|
|
|
||
Operating distributions from unconsolidated joint ventures |
|
|
|
|
|
|
||
Operating property impairment |
|
|
|
|
|
|
||
Changes in other operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
||
Change in receivables and other assets, net |
|
|
( |
) |
|
|
( |
) |
Change in operating liabilities, net |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
( |
) |
|
|
( |
) |
Property acquisitions |
|
|
( |
) |
|
|
( |
) |
Property dispositions |
|
|
|
|
|
|
||
Proceeds from borrower repayment of investments in real estate debt |
|
|
|
|
|
|
||
Investments in real estate debt |
|
|
|
|
|
( |
) |
|
Return of capital distributions from unconsolidated joint ventures |
|
|
|
|
|
|
||
Contributions to unconsolidated joint ventures |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Proceeds from credit facility |
|
|
|
|
|
|
||
Repayment of credit facility |
|
|
( |
) |
|
|
( |
) |
Bond issuance, net of original issue discount |
|
|
|
|
|
|
||
Repayment of term loans |
|
|
( |
) |
|
|
|
|
Purchase of shares under share repurchase program |
|
|
( |
) |
|
|
|
|
Repayment of senior notes |
|
|
|
|
|
( |
) |
|
Repayment of mortgages |
|
|
( |
) |
|
|
( |
) |
Repurchase of shares withheld for taxes on restricted stock vestings |
|
|
( |
) |
|
|
( |
) |
Payment of deferred financing costs |
|
|
( |
) |
|
|
( |
) |
Payment of issuance of common stock costs |
|
|
|
|
|
( |
) |
|
Common dividends paid |
|
|
( |
) |
|
|
( |
) |
Contributions from noncontrolling interests |
|
|
|
|
|
|
||
Distributions to noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
Acquisition of partners' noncontrolling interests |
|
|
( |
) |
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
( |
) |
|
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
( |
) |
|
|
( |
) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
$ |
|
|
$ |
|
||
See accompanying notes.
7
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2026
(Unaudited)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Description of Business: Cousins Properties Incorporated (“Cousins”), a Georgia corporation, is a fully integrated, self-administered, and self-managed real estate investment trust (“REIT”). Cousins conducts substantially all of its business through Cousins Properties LP ("CPLP"). Cousins owns in excess of
Cousins, CPLP, CTRS, and their subsidiaries (collectively, the “Company”) develop, acquire, lease, manage, and own primarily Class A office properties and opportunistic mixed-use developments in the Sun Belt markets of the United States with a focus on Austin, Atlanta, Charlotte, Phoenix, Tampa, Dallas, and Nashville. Cousins has elected to be taxed as a REIT and intends, among other things, to distribute at least
Basis of Presentation: The condensed consolidated financial statements are unaudited and were prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these interim financial statements reflect all adjustments necessary (all of which are of a normal and recurring nature) for the fair presentation of the interim financial statements and accompanying notes. The results of operations for the three and nine months ended September 30, 2026, are not necessarily indicative of results expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. The accounting policies employed are substantially the same as those shown in note 2 of the notes to consolidated financial statements included therein.
The Company evaluates all partnerships, joint ventures, and other arrangements with variable interests to determine if the entity or arrangement qualifies as a variable interest entity ("VIE"), as defined in the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC"). If the entity or arrangement qualifies as a VIE and the Company is the primary beneficiary, the Company is required to consolidate the assets, liabilities, and results of operations of the VIE. In September 2026, the Company entered into the 2401 McKinney Holdings, LLC ("2401 McKinney") joint venture and has determined that 2401 McKinney qualifies as a VIE. The Company owns
Recently Issued Accounting Pronouncements: In November 2024, the FASB issued Accounting Standards Update ("ASU") 2024-03 "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." The ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company does not anticipate the guidance will have a material impact on our consolidated financial statements or notes to our consolidated financial statements.
8
Acquisitions
On February 2, 2026, the Company acquired 300 South Tryon in Uptown Charlotte. On July 28, 2025, the Company acquired The Link in Uptown Dallas. The assets acquired and liabilities assumed were recorded at relative fair value, as determined by management, with the assistance of third-party specialists, based on information available at the acquisition date and on current assumptions of future operations.
|
|
300 South Tryon |
|
|
The Link |
|
||
Closing Purchase Price |
|
$ |
|
|
$ |
|
||
Acquisition Date |
|
February 2026 |
|
|
July 2025 |
|
||
Square Feet |
|
|
|
|
|
|
||
Market |
|
Charlotte |
|
|
Dallas |
|
||
Purchase Price Allocation |
|
|
|
|
|
|
||
Tangible assets |
|
|
|
|
|
|
||
Operating properties |
|
$ |
|
|
$ |
|
||
Intangible and other assets |
|
|
|
|
|
|
||
In-place leases (1) |
|
|
|
|
|
|
||
Prepaid expenses |
|
|
|
|
|
|
||
Above market rents |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Intangible and other liabilities |
|
|
|
|
|
|
||
Below market leases (1) |
|
|
( |
) |
|
|
( |
) |
Accounts payable and other liabilities |
|
|
( |
) |
|
|
( |
) |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Total net assets acquired (2) |
|
$ |
|
|
$ |
|
||
On September 29, 2026, through its consolidated joint venture, 2401 McKinney, the Company acquired a
Dispositions
On February 25, 2026, the Company sold Harborview Plaza in Tampa for a gross sales price of $
On June 26, 2026, the Company sold Research Park V in Austin for a gross sales price of $
On July 29, 2026, the Company sold One Eleven Congress in Austin for a gross sales price of $
9
Held for Sale
The major classes of assets and liabilities of properties held for sale as of September 30, 2026 (303 Tremont land parcel), and December 31, 2025 (Harborview Plaza and 303 Tremont land parcel), were as follows ($ in thousands):
Real estate assets and other assets held for sale |
|
2026 |
|
|
2025 |
|
||
Operating properties, net of accumulated depreciation of $ |
|
$ |
|
|
$ |
|
||
Land |
|
|
|
|
|
|
||
Notes and accounts receivable |
|
|
|
|
|
|
||
Deferred rents receivable |
|
|
|
|
|
|
||
Intangible assets, net of accumulated amortization of $ |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Liabilities of real estate assets held for sale |
|
|
|
|
|
|
||
Accounts payable and accrued expenses |
|
$ |
|
|
$ |
|
||
Deferred income |
|
|
|
|
|
|
||
Intangible liabilities, net of accumulated amortization of $ |
|
|
|
|
|
|
||
Other liabilities |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
Impairment
In accordance with the Company's policy on impairment described in note 2 of the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, the Company reviews its real estate assets on an asset group basis for impairment and records an impairment when circumstances indicate an asset group's carrying value may not be recoverable. This review includes the Company's operating properties, properties under development, and land holdings and considers whether each asset group is held for investment or held for sale.
In March 2026, the Company entered into an agreement to sell One Eleven Congress and determined that it was more likely than not that the expected hold period for the related asset group had significantly decreased. Because the carrying value of the asset group exceeded the undiscounted cash flows over the revised hold period, the property was written down to its estimated fair value, resulting in an impairment of $
10
3. INVESTMENTS IN REAL ESTATE DEBT
The details of the real estate debt investments are as follows ($ in thousands):
|
|
Carrying Value and Fair Value at |
|
|||||
Collateral |
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
110 East - Pledge of equity interest (1) |
|
$ |
|
|
$ |
|
||
Neuhoff - Pledge of equity interest (2) |
|
|
|
|
|
|
||
5th & Walsh - Preferred equity interest (3) |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
|
|
Interest Income for the |
|
|
Interest Income for the |
|
||||||||||
Collateral |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
110 East - Pledge of equity interest |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Radius - Pledge of equity interest |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Saint Ann - Pledge of asset |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Neuhoff - Pledge of equity interest |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
In the second quarter of 2024, the Company acquired the Radius and 110 East mezzanine real estate loans for $
In the fourth quarter of 2024, the Company acquired one mortgage loan at par for $
On January 10, 2025, the Company entered into the First Amendment to Mezzanine Loan Agreement on the Radius loan, which among other things, reduced the requirements for the borrower to qualify for an extension on the loan in exchange for a minimum payment of interest. On March 27, 2025, the Radius borrower repaid the $
In the third quarter of 2025, the Company loaned its joint venture partner $
In February 2026, at maturity, the borrower repaid the 110 East loan at par and paid the interest in full.
On July 17, 2026, the Company acquired a preferred equity interest in a joint venture that owns 5th & Walsh, a
11
As of September 30, 2026, the Company believes the fair value of the investments in real estate debt approximates the invested carrying values and, therefore, did not record any unrealized gain or loss on these investments. The acquisition and origination of the Neuhoff partnership loan was a recently executed market transaction (Level 2) and market instruments for similar debt have not changed significantly since acquisition. In subsequent periods, the Company may adjust the carrying value of this loan investment if required under GAAP fair value hierarchy. Interest and fee income earned, including from any minimum interest guarantees, and any unrealized gain or loss associated with investments in real estate debt are recorded as a component of other revenue on the Company's consolidated statement of operations. Any fee income or expense related to these investments in real estate debt is recorded when incurred and included in other expenses.
4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
The following information summarizes financial data and principal activities of the Company's unconsolidated joint ventures. The information included in the Summary of Financial Position table is as of September 30, 2026, and December 31, 2025 ($ in thousands).
SUMMARY OF FINANCIAL POSITION |
|
|||||||||||||||||||||||||||||||||
|
|
Company's Ownership |
|
Total Assets |
|
|
Total Liabilities |
|
|
Total Equity (Deficit) |
|
|
Company's Investment |
|
||||||||||||||||||||
|
|
Interest |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||||||
Operating Properties: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
AMCO 120 WT Holdings, LLC |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||
Crawford Long - CPI, LLC (1) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|||||
Neuhoff Holdings LLC (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
TL CO Proscenium JV, LLC (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Land: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
715 Ponce Holdings LLC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
The information included in the Summary of Operations table below is for the nine months ended September 30, 2026 and 2025 ($ in thousands).
SUMMARY OF OPERATIONS |
|
|||||||||||||||||||||||
|
|
Total Revenues |
|
|
Net Income (Loss) |
|
|
Company's Income (Loss) |
|
|||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||||
Operating Properties: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
AMCO 120 WT Holdings, LLC |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Crawford Long - CPI, LLC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Neuhoff Holdings LLC |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
||
TL CO Proscenium JV, LLC |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Land: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
715 Ponce Holdings LLC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
||
12
5. INTANGIBLE ASSETS AND LIABILITIES
At September 30, 2026, and December 31, 2025, intangible assets included the following ($ in thousands):
|
|
2026 |
|
|
2025 |
|
||
In-place leases, net of accumulated amortization of $ |
|
$ |
|
|
|
|
||
Below-market ground leases, net of accumulated amortization of $ |
|
|
|
|
|
|
||
Above-market leases, net of accumulated amortization of $ |
|
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
|
||
|
|
$ |
|
|
|
|
||
At September 30, 2026, and December 31, 2025, intangible liabilities were the following ($ in thousands):
|
|
2026 |
|
|
2025 |
|
||
Below-market leases, net of accumulated amortization of $ |
|
$ |
|
|
$ |
|
||
The amortization of the above assets and liabilities are recorded as follows ($ in thousands):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rental property revenues, net (Below-market and Above-market leases) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization (In-place leases) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rental property operating and other expenses (Below-market ground leases) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Over the next five years and thereafter, aggregate amortization of these intangible assets and liabilities is anticipated to be as follows ($ in thousands):
|
|
In-Place |
|
|
Below-Market Ground Lease |
|
|
Above-Market Leases |
|
|
Below-Market |
|
|
||||
2026 (three months) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|||
2027 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|||
2028 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|||
2029 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|||
2030 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|||
2031 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|||
Thereafter |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|||
6. OTHER ASSETS
Other assets on the consolidated balance sheets as of September 30, 2026, and December 31, 2025, included the following ($ in thousands):
|
|
2026 |
|
|
2025 |
|
||
Predevelopment costs and earnest money (1) |
|
$ |
|
|
$ |
|
||
Prepaid expenses and other assets |
|
|
|
|
|
|
||
Lease inducements, net of accumulated amortization of $ |
|
|
|
|
|
|
||
Furniture, fixtures and equipment and other deferred costs, net of accumulated depreciation of $ |
|
|
|
|
|
|
||
Credit Facility deferred financing costs, net of accumulated amortization of $ |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
13
7. NOTES PAYABLE
The following table summarizes the terms of notes payable outstanding at September 30, 2026, and December 31, 2025 ($ in thousands):
Description |
|
Interest Rate (1) |
|
|
Maturity (2) |
|
2026 |
|
|
2025 |
|
||
Unsecured Notes: |
|
|
|
|
|
|
|
|
|
|
|
||
Credit Facility |
|
|
|
April 2031 |
|
$ |
|
|
$ |
|
|||
Public Senior Notes |
|
|
|
October 2034 |
|
|
|
|
|
|
|||
Public Senior Notes |
|
|
|
July 2030 |
|
|
|
|
|
|
|||
Public Senior Notes |
|
|
|
March 2033 |
|
|
|
|
|
|
|||
Public Senior Notes |
|
|
|
February 2032 |
|
|
|
|
|
|
|||
Term Loan (3) |
|
|
|
March 2027 |
|
|
|
|
|
|
|||
Privately Placed Senior Notes |
|
|
|
July 2029 |
|
|
|
|
|
|
|||
Privately Placed Senior Notes |
|
|
|
July 2028 |
|
|
|
|
|
|
|||
Privately Placed Senior Notes |
|
|
|
July 2027 |
|
|
|
|
|
|
|||
Term Loan |
|
|
|
February 2027 |
|
|
|
|
|
|
|||
Privately Placed Senior Notes |
|
|
|
July 2027 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||
Secured Mortgage Notes: |
|
|
|
|
|
|
|
|
|
|
|
||
Terminus (4) |
|
|
|
January 2031 |
|
|
|
|
|
|
|||
201 North Tryon |
|
|
|
October 2026 |
|
|
|
|
|
|
|||
Colorado Tower |
|
|
|
September 2026 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||
Unamortized original issue discount |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
Unamortized loan costs |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
Total Notes Payable |
|
|
|
|
|
|
$ |
|
|
$ |
|
||
Credit Facility
On April 1, 2026, the Company entered into the Sixth Amended and Restated Credit Agreement, which recast its existing unsecured revolving line of credit (the "Credit Facility"), under which the Company may borrow up to $
The interest rate applicable to the Credit Facility is based on Daily SOFR plus a spread of
14
As of September 30, 2026, the Credit Facility's interest rate spread over SOFR was
Term Loans
On October 3, 2022, the Company entered into a Delayed Draw Term Loan Agreement ("the 2022 Term Loan") and borrowed the full $
On June 28, 2021, the Company entered into an Amended and Restated Term Loan Agreement ("the 2021 Term Loan"). Under the 2021 Term Loan, the Company borrowed $
On April 1, 2026, the Company amended each of the 2021 Term Loan and the 2022 Term Loan. Pursuant to both term loans, as amended, the Company pays interest on each term loan based on Term or Daily SOFR plus a spread of
The Company has exercised the fourth of six
Both term loans have debt covenants consistent with the Credit Facility.
Unsecured Senior Notes
At September 30, 2026, the Company had $
Public Senior Unsecured Notes
In February 2026, CPLP issued $
In June 2025, CPLP issued $
In December 2024, CPLP issued $
15
In August 2024, CPLP issued $
The Company's public senior notes are each fully and unconditionally guaranteed by the Company and subject to certain customary covenants that, subject to certain exceptions, include (a) a limitation on the ability of the Company and CPLP to, among other things, incur additional secured and unsecured indebtedness; (b) a limitation on the ability of the Company and CPLP to merge, consolidate, sell, lease, or otherwise dispose of their properties and assets substantially as an entirety; and (c) a requirement that the Company maintain a pool of unencumbered assets. To avoid any such limitations, these covenants require, among other things, maintaining the following financial metrics as defined in the agreement: unencumbered debt ratio of at least
Privately Placed Senior Unsecured Notes
The Company also has $
The privately placed unsecured senior notes contain financial covenants that are consistent with those of our Credit Facility, with the exception of a secured leverage ratio of no more than
Secured Mortgage Notes
In September 2026, the Company repaid $
As of September 30, 2026, the Company had $
Subsequent to September 30, 2026, in October 2026, the Company repaid the $
Other Debt Information
The Company is in compliance with all of the covenants related to its unsecured and secured debt.
At September 30, 2026, and December 31, 2025, the estimated fair value of the Company’s notes payable was $
For the three and nine months ended September 30, 2026, and 2025, interest expense was recorded as follows ($ in thousands):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Total interest incurred |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest capitalized |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total interest expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
8. DERIVATIVE FINANCIAL INSTRUMENTS
The Company had no outstanding derivative financial instruments as of September 30, 2026, and December 31, 2025.
16
As the Company's outstanding derivative financial instruments expired in March 2025, there was no effect on the consolidated statements of operations for the three and nine months ended September 30, 2026, or three months ended September 30, 2025, respectively.
Cash Flow Hedges: |
|
Nine Months Ended September 30, 2025 |
|
|
Amount of income recognized in accumulated other comprehensive |
|
$ |
|
|
Amount of loss reclassified from accumulated other comprehensive |
|
|
|
|
Total amount of interest expense presented in the consolidated |
|
|
|
|
9. OTHER LIABILITIES
Other liabilities on the consolidated balance sheets as of September 30, 2026, and December 31, 2025, included the following ($ in thousands):
|
|
2026 |
|
|
2025 |
|
||
Ground lease liability |
|
$ |
|
|
$ |
|
||
Prepaid rent |
|
|
|
|
|
|
||
Security deposits |
|
|
|
|
|
|
||
Other liabilities |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
10. COMMITMENTS AND CONTINGENCIES
Commitments
As a lessor, the Company had $
Litigation
The Company is subject to various legal proceedings, claims, and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, the Company discloses the nature and estimate of the possible loss of the litigation. The Company does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss would not be material. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business, or financial condition of the Company.
11. STOCKHOLDERS' EQUITY
Share Repurchase Program
On February 17, 2026, the Board of Directors of the Company authorized the repurchase of up to $
17
ATM Program
In 2021, the Company entered into an Equity Distribution Agreement ("EDA") with
During the three and nine months ended September 30, 2026, the Company sold
To the extent, prior to settlement, shares sold under Forward Sales were potentially dilutive during the period under the treasury stock method, the impact of such dilution is disclosed in the calculation included in note 14. The Company did not settle any shares under the ATM Program during the three and nine months ended September 30, 2026, or the year ended December 31, 2025.
Other Equity Transactions
On April 30, 2026, the Company purchased the
12. REVENUE RECOGNITION
The Company categorizes its primary sources of revenue into revenue from contracts with customers and other revenue accounted for as leases under ASC 842 as follows:
For the three and nine months ended September 30, 2026, the Company recognized rental property revenues of $
For the three and nine months ended September 30, 2026, the Company recognized fee and other revenue of $
18
13. STOCK-BASED COMPENSATION
On April 28, 2026, the Company's shareholders voted to approve the Amended and Restated Cousins Properties Incorporated 2019 Omnibus Incentive Stock Plan (the "Amended Incentive Plan"), which replaced the Cousins Properties Incorporated 2019 Omnibus Incentive Stock Plan (the "Prior Incentive Plan" and, together with the Amended Incentive Plan, the "Incentive Plan"), increased the aggregate share limit under the Incentive Plan by
The Company currently has several types of employee stock-based compensation, including restricted stock and restricted stock units ("RSUs"), issued under the Incentive Plan and the Employee Stock Purchase Plan ("ESPP"). While the Company's Incentive Plan also allows for the issuance of stock options, none have been issued or exercised or were outstanding as of or during any of the periods presented. A portion of the Company's independent directors' compensation is also provided in the form of Company stock issued under the Incentive Plan.
The Company's compensation expense for the three and nine months ended September 30, 2026, relates to restricted stock, stock-settled RSUs, and the ESPP. Restricted stock, the stock-settled RSUs, and the ESPP options are equity-classified compensation for which compensation expense per share is fixed.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Equity-classified awards: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted stock |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Market based RSUs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Performance based RSUs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Director grants |
|
|
|
|
|
|
|
|
|
|
|
|
||||
ESPP |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total equity-classified award expense, net of |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Information on the Company's stock compensation plan, including information on the Company's equity-classified awards is discussed in note 15 of the notes to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
Grants of Equity-Classified Awards
Under the Incentive Plan, in the second quarters of 2026 and 2025, the Company granted
Under the Incentive Plan, in 2026 and 2025, the Company granted
The RSU awards are equity-classified awards to be settled in common stock with issuance dependent upon the attainment of required service, market, and performance criteria. For the Market-based RSUs, the Company expenses an estimate of the fair value of the awards on the grant date, calculated using a Monte Carlo valuation at grant date, ratably over the vesting period, adjusting only for forfeitures when they occur.
19
The expense of these Market-based RSUs is not adjusted for the number of awards that are expected to vest or that actually vest. For the Performance-based RSUs, the Company expenses the awards over the vesting period using the fair market value of the Company's stock on the grant date. The expense for these Performance-based RSUs is recognized ratably over the vesting period and adjusted each quarter based on the number of shares expected to vest and for forfeitures when they occur. The performance period for each of the Performance-based RSUs and TSR measurement period for the Market-based RSUs awarded is
The restricted stock vests ratably over
The following table summarizes the grants of equity-classified awards made to employees by the Company during the nine months ended September 30, 2026, and 2025, respectively (in thousands):
|
|
Shares and Targeted Units |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Market-based RSUs |
|
|
|
|
|
|
||
Performance-based RSUs |
|
|
|
|
|
|
||
Restricted stock |
|
|
|
|
|
|
||
The Monte Carlo valuation used to determine the grant date fair value of the equity-classified Market-based RSUs included the following assumptions for those RSUs granted during the nine months ended September 30, 2026, and 2025:
|
|
|
|
|
Assumptions for RSUs |
|
||||||
|
|
|
|
|
2026 |
|
|
2025 |
|
|||
Volatility |
|
|
(1 |
) |
|
|
% |
|
|
% |
||
Risk-free rate |
|
|
(2 |
) |
|
|
% |
|
|
% |
||
Stock beta |
|
|
(3 |
) |
|
|
% |
|
|
% |
||
20
14. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2026, and 2025 ($ in thousands, except per share amounts):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Earnings per common share - basic: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net income attributable to noncontrolling interests in CPLP |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income attributable to other noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income available to common stockholders |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares - basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per common share - basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per common share - diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net income attributable to other noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income available for common stockholders before |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares - basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Potential dilutive common shares - restricted stock units, |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Potential dilutive common shares - Employee options under the |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average units of CPLP convertible into |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares - diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per common share - diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The treasury stock method resulted in no dilution from shares expected to be issued under forward contracts for the future sales of common stock under the Company's ATM Program.
15. CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL INFORMATION
Supplemental information related to the cash flows, including significant non-cash activity affecting the consolidated statements of cash flows, for the nine months ended September 30, 2026, and 2025 is as follows ($ in thousands):
|
|
2026 |
|
|
2025 |
|
||
Interest paid, net of amounts capitalized |
|
$ |
|
|
$ |
|
||
Income taxes paid |
|
|
|
|
|
|
||
Non-Cash Investing and Financing Activities: |
|
|
|
|
|
|
||
Common stock dividends declared and accrued |
|
|
|
|
|
|
||
Tenant improvements funded by tenants |
|
|
|
|
|
|
||
Changes in accounts payable and accrued expenses related |
|
|
( |
) |
|
|
( |
) |
Right of use asset - operating lease |
|
|
( |
) |
|
|
|
|
Ground lease liability |
|
|
|
|
|
|
||
21
16. REPORTABLE SEGMENTS
The Company's segments are based on the method of internal reporting with operating segments being each of the operating office properties. These operating segments are aggregated for
Company management evaluates the performance of its operating segments in part based on Net Operating Income ("NOI"). Office Property NOI is regularly reported to the Chief Operating Decision Maker ("CODM") by operating segment. The CODM is the Company's President and Chief Executive Officer. Each segment includes both consolidated operations and the Company's share of unconsolidated joint venture operations.
Segment net income, individually significant components of rental property operating expenses, amount of capital expenditures, and total assets are not presented in this note because the CODM does not utilize these measures when analyzing segments or when making resource allocation decisions.
Three Months Ended September 30, 2026 |
|
Rental Property Revenues |
|
|
Rental Property Operating Expenses |
|
|
NOI |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Austin |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Atlanta |
|
|
|
|
|
|
|
|
|
|||
Charlotte |
|
|
|
|
|
|
|
|
|
|||
Phoenix |
|
|
|
|
|
|
|
|
|
|||
Tampa |
|
|
|
|
|
|
|
|
|
|||
Dallas |
|
|
|
|
|
|
|
|
|
|||
Houston |
|
|
|
|
|
|
|
|
|
|||
Nashville |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Non - Office Properties |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Less: Company's share from unconsolidated joint ventures |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
Termination Fees |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
|
|
|||
22
Three Months Ended September 30, 2025 |
|
Rental Property Revenues |
|
|
Rental Property Operating Expenses |
|
|
NOI |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Austin |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Atlanta |
|
|
|
|
|
|
|
|
|
|||
Charlotte |
|
|
|
|
|
|
|
|
|
|||
Phoenix |
|
|
|
|
|
|
|
|
|
|||
Tampa |
|
|
|
|
|
|
|
|
|
|||
Dallas |
|
|
|
|
|
|
|
|
|
|||
Houston |
|
|
|
|
|
|
|
|
|
|||
Nashville |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Non - Office Properties |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Less: Company's share from unconsolidated joint ventures |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
Termination Fees |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
|
|
|||
Nine Months Ended September 30, 2026 |
|
Rental Property Revenues |
|
|
Rental Property Operating Expenses |
|
|
NOI |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Austin |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Atlanta |
|
|
|
|
|
|
|
|
|
|||
Charlotte |
|
|
|
|
|
|
|
|
|
|||
Phoenix |
|
|
|
|
|
|
|
|
|
|||
Tampa |
|
|
|
|
|
|
|
|
|
|||
Dallas |
|
|
|
|
|
|
|
|
|
|||
Houston |
|
|
|
|
|
|
|
|
|
|||
Nashville |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Non - Office Properties |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Less: Company's share from unconsolidated joint ventures |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
Termination Fees |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
|
|
|||
23
Nine Months Ended September 30, 2025 |
|
Rental Property Revenues |
|
|
Rental Property Operating Expenses |
|
|
NOI |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Austin |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Atlanta |
|
|
|
|
|
|
|
|
|
|||
Charlotte |
|
|
|
|
|
|
|
|
|
|||
Phoenix |
|
|
|
|
|
|
|
|
|
|||
Tampa |
|
|
|
|
|
|
|
|
|
|||
Dallas |
|
|
|
|
|
|
|
|
|
|||
Houston |
|
|
|
|
|
|
|
|
|
|||
Nashville |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Non - Office Properties |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Less: Company's share from unconsolidated joint ventures |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
Termination Fees |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
|
|
|||
The following reconciles Net Operating Income from net income for each of the periods presented ($ in thousands):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net Income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Fee income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Termination fee income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating property impairment |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reimbursed expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from unconsolidated joint ventures |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net operating income from unconsolidated joint ventures |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss (gain) on investment property transaction |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Net Operating Income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
24
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Overview of 2026 Performance and Company and Industry Trends
Cousins Properties Incorporated ("Cousins") (and collectively, with its subsidiaries, the "Company," "we," "our," or "us") is a publicly traded (NYSE: CUZ), self-administered, and self-managed real estate investment trust, or REIT. Cousins conducts substantially all of its business through Cousins Properties LP ("CPLP"). Cousins owns in excess of 99% of CPLP and consolidates CPLP. CPLP owns Cousins TRS Services LLC, a taxable entity that owns and manages its own real estate portfolio and performs certain real estate related services for other parties. Our strategy is to create stockholder value by owning a lifestyle office portfolio (described in further detail below) in the Sun Belt markets, with a particular focus on the core markets of Austin, Atlanta, Charlotte, Tampa, Phoenix, Dallas, and Nashville. We execute this strategy through disciplined capital allocation, including opportunistic acquisitions, selective developments, and timely dispositions of non-core assets while maintaining a portfolio of newer, more efficient properties with lower capital expenditure requirements. This strategy is also based on a simple, flexible, and low-leverage balance sheet that allows us to pursue compelling growth opportunities at the most advantageous points in the cycle. To implement this strategy, we strive to have strong local operating platforms in each major market.
During the quarter, we leased 546,000 square feet of office space, including 220,000 square feet of new and expansion leases representing 40.3% of total leasing activity. Straight-line basis net rent per square foot increased 31.9% for those office spaces that were under lease within the past year. Same property Net Operating Income ("NOI", defined below) for consolidated properties and our share of unconsolidated properties increased 3.3% for the three months ended September 30, 2026, compared to the three months ended September 30, 2025.
For the nine months ended September 30, 2026, we leased 2.4 million square feet of office space, including 1.1 million of new and expansion leases representing 45.7% of total leasing activity. Straight-line basis net rent per square foot increased 28.9% for those office spaces that were under lease within the past year. Same property net operating income for consolidated properties and our share of unconsolidated properties increased 2.3% for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.
On July 17, 2026, we acquired a preferred equity interest in 5th & Walsh, a 199,000 square foot office building under development in Austin. Our funding commitment of $31.5 million is expected to be invested in 2027.
On July 29, 2026, we sold One Eleven Congress, a 519,000 square foot office building in Austin, for a gross sales price of $208.0 million.
On September 29, 2026, we acquired an interest in a 2.3 acre land parcel in Uptown Dallas, through a newly formed joint venture, 2401 McKinney. We are a 97.5% equity partner in the joint venture and contributed $50.0 million at formation for $42.2 million of 2.3 acres of land, including a fee and leasehold interest, and $7.8 million of predevelopment costs.
During the quarter, we sold 917,000 shares under our ATM program, on a forward basis, at an average price of $31.37 per share. This brings our total unsettled common shares sold on a forward basis to 3.9 million at an average price of $30.66 per share.
We repaid our $99.2 million mortgage note, secured by Colorado Tower in Austin, at par on the September 1, 2026 maturity date. Subsequent to quarter end, we repaid the $115.9 million remaining principal on our mortgage note secured by 201 North Tryon.
We believe lifestyle offices in the Sun Belt, and in particular within the seven core Sun Belt markets in which we own properties, will continue to outperform the broader office sector. This is driven by migration into the Sun Belt and the flight to quality, which is reflected in the tenant leasing demand for lifestyle offices over lower quality assets.
We consider “lifestyle offices” to be well-located buildings that are modern structures or have been modernized to compete with newer buildings, are professionally managed and maintained, and offer a number and type of amenities that are in high demand by customers that are focused on the importance of the physical work environment in recruiting and retaining employees. We believe our “lifestyle office” portfolio improves our ability to renew leases and obtain new customers which results in consistently higher occupancy than the remainder of the office buildings in our markets. We do not consider the expression “lifestyle office” a classification of our properties in accordance with any standard listing criteria in the real estate industry. We, therefore, caution investors that our use and definition of “lifestyle office” may be different than the use and definition of similar expressions and traditional classifications that may be used by other companies.
25
Results of Operations For The Three and Nine Months Ended September 30, 2026
General
Net income available to common stockholders for the three and nine months ended September 30, 2026, was $17.0 million and $18.3 million, respectively. Net income available to common stockholders for the three and nine months ended September 30, 2025, was $8.6 million and $44.0 million, respectively. During the nine months ended September 30, 2026, we recorded a $36.6 million impairment related to One Eleven Congress, and a gain of $9.2 million upon sale of Research Park V in June 2026. We detail below other material changes in the components of net income and loss available to common stockholders for the three and nine months ended September 30, 2026, compared to the same periods in 2025.
Rental Property Revenue, Rental Property Operating Expenses, and Net Operating Income
The following results include the performance of our Same Property portfolio. Our Same Property portfolio includes office properties that were stabilized and owned by us for the entirety of each comparable reporting period presented and excludes any office properties held for sale. Same Property amounts for the 2026 versus 2025 comparison period are for office properties that were stabilized and owned as of January 1, 2025, through September 30, 2026. We consider many factors in determining whether a property has stabilized, including the property’s occupancy (independently and relative to its submarket) and current leasing pipeline, as well as time since the cessation of major construction activity.
Company management evaluates the performance of its property portfolio, in part, based on NOI. NOI represents rental property revenues, excluding termination fee income, less rental property operating expenses. NOI is not a measure of cash flows or operating results as measured by GAAP, is not indicative of cash available to fund cash needs, and should not be considered an alternative to cash flows as a measure of liquidity. All companies may not calculate NOI in the same manner. We consider NOI to be an appropriate supplemental measure to net income as it helps both management and investors understand the core operations of our operating assets. NOI excludes corporate general and administrative expenses, interest expense, depreciation and amortization, impairments, gains/losses on sales of real estate, and other non-operating items. As a result, we use only those income and expense items that are incurred at the property level to evaluate a property's performance.
The following table reconciles net income to consolidated NOI for each of the periods presented ($ in thousands):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net Income |
|
$ |
17,009 |
|
|
$ |
8,778 |
|
|
$ |
18,573 |
|
|
$ |
44,529 |
|
Fee income |
|
|
(1,439 |
) |
|
|
(526 |
) |
|
|
(4,951 |
) |
|
|
(1,516 |
) |
Termination fee income |
|
|
(1,045 |
) |
|
|
(512 |
) |
|
|
(5,115 |
) |
|
|
(3,378 |
) |
Other income |
|
|
(666 |
) |
|
|
(1,339 |
) |
|
|
(1,969 |
) |
|
|
(10,063 |
) |
General and administrative expenses |
|
|
9,854 |
|
|
|
9,510 |
|
|
|
33,809 |
|
|
|
29,957 |
|
Interest expense |
|
|
45,577 |
|
|
|
41,497 |
|
|
|
137,742 |
|
|
|
116,785 |
|
Depreciation and amortization |
|
|
103,258 |
|
|
|
105,272 |
|
|
|
316,509 |
|
|
|
308,276 |
|
Reimbursed expenses |
|
|
139 |
|
|
|
124 |
|
|
|
431 |
|
|
|
420 |
|
Other expenses |
|
|
875 |
|
|
|
440 |
|
|
|
1,702 |
|
|
|
1,305 |
|
Operating property impairment |
|
|
— |
|
|
|
— |
|
|
|
36,600 |
|
|
|
— |
|
Loss from unconsolidated joint ventures |
|
|
2,101 |
|
|
|
2,682 |
|
|
|
6,958 |
|
|
|
6,152 |
|
Loss (gain) on investment property transaction |
|
|
509 |
|
|
|
— |
|
|
|
(8,616 |
) |
|
|
— |
|
Net Operating Income |
|
$ |
176,172 |
|
|
$ |
165,926 |
|
|
$ |
531,673 |
|
|
$ |
492,467 |
|
26
Consolidated rental property revenues, rental property operating expenses, and NOI changed between the 2026 and 2025 periods as follows ($ in thousands):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ Change |
|
|
% Change |
|
|
2026 |
|
|
2025 |
|
|
$ Change |
|
|
% Change |
|
||||||||
Rental Property Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Same Property |
|
$ |
228,210 |
|
|
$ |
221,711 |
|
|
$ |
6,499 |
|
|
|
2.9 |
% |
|
$ |
683,381 |
|
|
$ |
660,738 |
|
|
$ |
22,643 |
|
|
|
3.4 |
% |
Non-Same Property |
|
|
28,055 |
|
|
|
24,238 |
|
|
|
3,817 |
|
|
|
15.7 |
% |
|
|
95,636 |
|
|
|
63,087 |
|
|
|
32,549 |
|
|
|
51.6 |
% |
|
|
|
256,265 |
|
|
|
245,949 |
|
|
|
10,316 |
|
|
|
4.2 |
% |
|
|
779,017 |
|
|
|
723,825 |
|
|
|
55,192 |
|
|
|
7.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Termination fee income |
|
|
1,045 |
|
|
|
512 |
|
|
|
533 |
|
|
|
|
|
|
5,115 |
|
|
|
3,378 |
|
|
|
1,737 |
|
|
|
|
||
Total Rental Property Revenues |
|
$ |
257,310 |
|
|
$ |
246,461 |
|
|
$ |
10,849 |
|
|
|
|
|
$ |
784,132 |
|
|
$ |
727,203 |
|
|
$ |
56,929 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Rental Property Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Same Property |
|
$ |
72,727 |
|
|
$ |
71,335 |
|
|
$ |
1,392 |
|
|
|
2.0 |
% |
|
$ |
219,739 |
|
|
$ |
208,101 |
|
|
$ |
11,638 |
|
|
|
5.6 |
% |
Non-Same Property |
|
|
7,366 |
|
|
|
8,688 |
|
|
|
(1,322 |
) |
|
|
(15.2 |
)% |
|
|
27,605 |
|
|
|
23,257 |
|
|
|
4,348 |
|
|
|
18.7 |
% |
Total Rental Property Operating Expenses |
|
$ |
80,093 |
|
|
$ |
80,023 |
|
|
$ |
70 |
|
|
|
0.1 |
% |
|
$ |
247,344 |
|
|
$ |
231,358 |
|
|
$ |
15,986 |
|
|
|
6.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Same Property NOI |
|
$ |
155,483 |
|
|
$ |
150,376 |
|
|
$ |
5,107 |
|
|
|
3.4 |
% |
|
$ |
463,642 |
|
|
$ |
452,637 |
|
|
$ |
11,005 |
|
|
|
2.4 |
% |
Non-Same Property NOI |
|
|
20,689 |
|
|
|
15,550 |
|
|
|
5,139 |
|
|
|
33.0 |
% |
|
|
68,031 |
|
|
|
39,830 |
|
|
|
28,201 |
|
|
|
70.8 |
% |
Total NOI |
|
$ |
176,172 |
|
|
$ |
165,926 |
|
|
$ |
10,246 |
|
|
|
6.2 |
% |
|
$ |
531,673 |
|
|
$ |
492,467 |
|
|
$ |
39,206 |
|
|
|
8.0 |
% |
Same Property NOI represents Net Operating Income for those office properties that were stabilized and owned by us for the entirety of the 2026 and 2025 reporting periods presented, excluding any office properties held for sale. Same Property NOI allows analysts, investors, and management to analyze continuing operations and evaluate the growth trend of the Company's portfolio.
Same Property Rental Property Revenues, Operating Expenses, and NOI increased for the nine months ended September 30, 2026, compared to the same period in the prior year primarily due to an increase in occupancy at Promenade Tower, Avalon, 3350 Peachtree, and Corporate Center. Same Property Rental Property Revenues and NOI were partially offset by decreased occupancy at 201 North Tryon, driven by the ongoing redevelopment at this property.
Non-Same Property Rental Property Revenues and NOI increased for the three and nine months ended September 30, 2026, compared to the same periods in the prior year primarily due to the acquisitions of 300 South Tryon in February 2026 as well as the acquisition of The Link in July 2025. These increases for the three and nine months ended September 30, 2026 were partially offset by the sales of Harborview in February 2026, Research Park V in June 2026, and One Eleven Congress in July 2026. Operating Expenses for the quarter ended September 30, 2026, were down due to the disposition of One Eleven Congress in July 2026.
27
The following table details consolidated NOI from properties aggregated by market ($ in thousands):
|
|
Three Months Ended September 30, |
|
|||||||||||||
Market |
|
2026 |
|
|
2025 |
|
|
$ Change |
|
|
% Change |
|
||||
Austin |
|
$ |
58,200 |
|
|
$ |
60,243 |
|
|
$ |
(2,043 |
) |
|
|
(3.4 |
)% |
Atlanta |
|
|
54,547 |
|
|
|
50,937 |
|
|
|
3,610 |
|
|
|
7.1 |
% |
Charlotte |
|
|
21,350 |
|
|
|
15,590 |
|
|
|
5,760 |
|
|
|
36.9 |
% |
Phoenix |
|
|
13,489 |
|
|
|
12,166 |
|
|
|
1,323 |
|
|
|
10.9 |
% |
Tampa |
|
|
13,354 |
|
|
|
13,006 |
|
|
|
348 |
|
|
|
2.7 |
% |
Dallas |
|
|
8,154 |
|
|
|
7,082 |
|
|
|
1,072 |
|
|
|
15.1 |
% |
Houston |
|
|
5,817 |
|
|
|
5,660 |
|
|
|
157 |
|
|
|
2.8 |
% |
Office NOI |
|
|
174,911 |
|
|
|
164,684 |
|
|
|
10,227 |
|
|
|
6.2 |
% |
Other Non-Office (1) |
|
|
1,261 |
|
|
|
1,242 |
|
|
|
19 |
|
|
|
|
|
Total NOI |
|
$ |
176,172 |
|
|
$ |
165,926 |
|
|
$ |
10,246 |
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|||||||||||||
Market |
|
2026 |
|
|
2025 |
|
|
$ Change |
|
|
% Change |
|
||||
Austin |
|
$ |
182,071 |
|
|
$ |
180,793 |
|
|
$ |
1,278 |
|
|
|
0.7 |
% |
Atlanta |
|
|
162,331 |
|
|
|
151,898 |
|
|
|
10,433 |
|
|
|
6.9 |
% |
Charlotte |
|
|
62,254 |
|
|
|
49,354 |
|
|
|
12,900 |
|
|
|
26.1 |
% |
Phoenix |
|
|
40,446 |
|
|
|
36,168 |
|
|
|
4,278 |
|
|
|
11.8 |
% |
Tampa |
|
|
39,266 |
|
|
|
39,391 |
|
|
|
(125 |
) |
|
|
(0.3 |
)% |
Dallas |
|
|
25,149 |
|
|
|
14,341 |
|
|
|
10,808 |
|
|
|
75.4 |
% |
Houston |
|
|
16,585 |
|
|
|
16,879 |
|
|
|
(294 |
) |
|
|
(1.7 |
)% |
Office NOI |
|
|
528,102 |
|
|
|
488,824 |
|
|
|
39,278 |
|
|
|
8.0 |
% |
Other Non-Office (1) |
|
|
3,571 |
|
|
|
3,643 |
|
|
|
(72 |
) |
|
|
|
|
Total NOI |
|
$ |
531,673 |
|
|
$ |
492,467 |
|
|
$ |
39,206 |
|
|
|
|
|
From an overall portfolio perspective, in-place gross rent per square foot as of September 30, 2026, increased 1.2% compared to September 30, 2025, contributing to a portfolio wide increase in NOI. NOI from the Dallas market increased $1.1 million and $10.8 million, or 15.1% and 75.4%, for the three and nine months ended September 30, 2026, compared to the same periods in the prior year, respectively, primarily due to the acquisition of The Link in July 2025. NOI from the Charlotte market increased $5.8 million and $12.9 million, or 36.9% and 26.1%, for the three and nine months ended September 30, 2026, compared to the same periods in the prior year, respectively, primarily due to the acquisition of 300 South Tryon in February 2026. NOI from the Phoenix market increased $1.3 million and $4.3 million, or 10.9% and 11.8%, for the three and nine months ended September 30, 2026 compared to the same periods in the prior year, respectively, primarily due to increased occupancy related to the completion of Hayden Ferry I's redevelopment in the fourth quarter of 2025. NOI from the Atlanta market increased $3.6 million and $10.4 million, or 7.1% and 6.9%, for the three and nine months ended September 30, 2026, compared to the same periods in the prior year, respectively, primarily due to increased occupancy at Avalon and 3350 Peachtree and the end of several variable rent abatement periods at Promenade Tower.
28
Fee Income
Fee income increased $913,000 and $3.4 million for the three and nine months ended September 30, 2026, compared to the same periods in the prior year, primarily by providing leasing services to our Proscenium joint venture.
Other Income
Other income decreased $673,000 and $8.1 million for the three and nine months ended September 30, 2026, compared to the same periods in the prior year, primarily due to the sale of our Silicon Valley Bank bankruptcy claim in the first quarter of 2025, for $4.6 million, and a reduction in interest income from the two mezzanine loans and the Saint Ann Court Mortgage Loan earned in the first quarter of 2025. These reductions were partially offset by interest income from the joint venture partner loan, which was issued in September 2025. These transactions are described in further detail in note 3 and note 12 to the consolidated financial statements in this Form 10-Q.
General and Administrative Expenses
General and administrative expenses increased $3.9 million, or 12.9%, for the nine months ended September 30, 2026, compared to the same period in the prior year, primarily due to increases in compensation related expenses which includes leasing commissions incurred providing leasing services to our Proscenium joint venture for which we receive leasing fee income noted above.
Interest Expense
Interest expense, net of amounts capitalized, increased $4.1 million and $21.0 million, or 9.8% and 17.9%, for the three and nine months ended September 30, 2026, compared to the same periods in the prior year, respectively, primarily due to the issuance of the $500 million unsecured senior notes in February 2026, and a higher average balance outstanding on the credit facility. Increased interest expense was partially offset by the repayment of $150 million of the 2021 Term Loan in February 2026.
Depreciation and Amortization
Depreciation and amortization changed between the 2026 and 2025 periods as follows ($ in thousands):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ Change |
|
|
% Change |
|
|
2026 |
|
|
2025 |
|
|
$ Change |
|
|
% Change |
|
||||||||
Depreciation and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Same Property |
|
$ |
91,981 |
|
|
$ |
91,000 |
|
|
$ |
981 |
|
|
|
1.1 |
% |
|
$ |
274,022 |
|
|
$ |
269,354 |
|
|
$ |
4,668 |
|
|
|
1.7 |
% |
Non-Same Property |
|
|
11,130 |
|
|
|
14,151 |
|
|
|
(3,021 |
) |
|
|
(21.3 |
)% |
|
|
42,055 |
|
|
|
38,563 |
|
|
|
3,492 |
|
|
|
9.1 |
% |
Non-Real Estate Assets |
|
|
147 |
|
|
|
121 |
|
|
|
26 |
|
|
|
21.5 |
% |
|
|
432 |
|
|
|
359 |
|
|
|
73 |
|
|
|
20.3 |
% |
Total Depreciation and |
|
$ |
103,258 |
|
|
$ |
105,272 |
|
|
$ |
(2,014 |
) |
|
|
(1.9 |
)% |
|
$ |
316,509 |
|
|
$ |
308,276 |
|
|
$ |
8,233 |
|
|
|
2.7 |
% |
Non-Same Property depreciation and amortization increased for the nine months ended September 30, 2026, compared to the same period in the prior year, primarily due to the acquisition of 300 South Tryon in February 2026, the acquisition of The Link in July 2025, and the completion of development at Domain 9 in March 2025. These increases were partially offset by the sale of Harborview Plaza in February 2026 and the classification of One Eleven Congress as held for sale in May 2026, which was subsequently sold in July 2026.
29
Income and Net Operating Income from Unconsolidated Joint Ventures
Income from unconsolidated joint ventures consisted of the Company's share of the following ($ in thousands):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ Change |
|
|
% Change |
|
|
2026 |
|
|
2025 |
|
|
$ Change |
|
|
% Change |
|
||||||||
Loss from unconsolidated joint |
|
$ |
(2,101 |
) |
|
$ |
(2,682 |
) |
|
$ |
581 |
|
|
|
21.7 |
% |
|
$ |
(6,958 |
) |
|
$ |
(6,152 |
) |
|
$ |
(806 |
) |
|
|
(13.1 |
)% |
Depreciation and amortization |
|
|
3,183 |
|
|
|
3,034 |
|
|
|
149 |
|
|
|
4.9 |
% |
|
|
9,293 |
|
|
|
7,735 |
|
|
|
1,558 |
|
|
|
20.1 |
% |
Interest expense |
|
|
2,797 |
|
|
|
2,830 |
|
|
|
(33 |
) |
|
|
(1.2 |
)% |
|
|
8,165 |
|
|
|
7,058 |
|
|
|
1,107 |
|
|
|
15.7 |
% |
Other expense |
|
|
158 |
|
|
|
99 |
|
|
|
59 |
|
|
|
59.6 |
% |
|
|
518 |
|
|
|
82 |
|
|
|
436 |
|
|
|
531.7 |
% |
Other income |
|
|
(37 |
) |
|
|
(25 |
) |
|
|
(12 |
) |
|
|
(48.0 |
)% |
|
|
(112 |
) |
|
|
(79 |
) |
|
|
(33 |
) |
|
|
41.8 |
% |
Net operating income from |
|
$ |
4,000 |
|
|
$ |
3,256 |
|
|
$ |
744 |
|
|
|
22.9 |
% |
|
$ |
10,906 |
|
|
$ |
8,644 |
|
|
$ |
2,262 |
|
|
|
26.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Same Property |
|
|
1,468 |
|
|
|
1,591 |
|
|
|
(123 |
) |
|
|
(7.7 |
)% |
|
|
4,173 |
|
|
|
4,750 |
|
|
|
(577 |
) |
|
|
(12.1 |
)% |
Non-Same Property |
|
|
2,532 |
|
|
|
1,665 |
|
|
|
867 |
|
|
|
52.1 |
% |
|
|
6,733 |
|
|
|
3,894 |
|
|
|
2,839 |
|
|
|
72.9 |
% |
Net operating income from |
|
$ |
4,000 |
|
|
$ |
3,256 |
|
|
$ |
744 |
|
|
|
22.9 |
% |
|
$ |
10,906 |
|
|
$ |
8,644 |
|
|
$ |
2,262 |
|
|
|
26.2 |
% |
The change in loss from unconsolidated joint ventures was driven by increases in unconsolidated depreciation and amortization expense as well as unconsolidated interest expense. Unconsolidated depreciation and amortization expense and interest expense increased for the three and nine months ended September 30, 2026, compared to the same period in the prior year, primarily due to assets being placed in service as the development of Phase I of the Neuhoff joint venture was completed and initial operations commenced.
Non-Same Property NOI from unconsolidated joint ventures increased for the three and nine months ended September 30, 2026, compared to the same periods in the prior year, primarily due to operations at the Neuhoff joint venture, as the property continues to increase occupancy.
Funds From Operations
The following tables show Funds from Operations (“FFO”) and the related reconciliation from net income available to common stockholders. We calculate FFO as defined by the National Association of Real Estate Investment Trusts ("Nareit"), which is net income available to common stockholders (computed in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from sales of depreciable property, gains and losses from changes in control, impairment of depreciable real estate and after adjustments for unconsolidated partnerships and joint ventures to reflect FFO on the same basis.
FFO is used by industry analysts and investors as a supplemental measure of a REIT’s operating performance. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, Nareit created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from GAAP net income. The use of FFO, combined with the required primary GAAP presentations, has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. Company management evaluates operating performance, in part, based on FFO. Additionally, we use FFO, along with other measures, to assess performance in connection with evaluating and granting incentive compensation to our officers and other key employees.
30
The reconciliation of net income to FFO is as follows for the three and nine months ended September 30, 2026, and 2025 (in thousands, except per share amounts):
|
|
Three Months Ended September 30, |
|
|||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||||||||||
|
|
Dollars |
|
|
Weighted |
|
|
Per Share |
|
|
Dollars |
|
|
Weighted |
|
|
Per Share |
|
||||||
Net Income Available to Common Stockholders |
|
$ |
17,000 |
|
|
|
164,601 |
|
|
|
0.10 |
|
|
$ |
8,590 |
|
|
|
167,967 |
|
|
$ |
0.05 |
|
Noncontrolling interest related to unitholders |
|
|
3 |
|
|
|
25 |
|
|
|
— |
|
|
|
1 |
|
|
|
25 |
|
|
|
— |
|
Potentially dilutive common shares - ESPP |
|
|
— |
|
|
|
5 |
|
|
|
— |
|
|
|
0 |
|
|
|
0 |
|
|
|
— |
|
Conversion of unvested restricted stock units |
|
|
— |
|
|
|
1,157 |
|
|
|
— |
|
|
|
— |
|
|
|
746 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net Income — Diluted |
|
|
17,003 |
|
|
|
165,788 |
|
|
|
0.10 |
|
|
|
8,591 |
|
|
|
168,738 |
|
|
|
0.05 |
|
Depreciation and amortization of real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated properties |
|
|
103,111 |
|
|
|
— |
|
|
|
0.63 |
|
|
|
105,152 |
|
|
|
— |
|
|
|
0.62 |
|
Share of unconsolidated joint ventures |
|
|
3,183 |
|
|
|
— |
|
|
|
0.02 |
|
|
|
3,034 |
|
|
|
— |
|
|
|
0.02 |
|
Partners' share of real estate depreciation |
|
|
(32 |
) |
|
|
— |
|
|
|
— |
|
|
|
(241 |
) |
|
|
— |
|
|
|
— |
|
Loss on sale of depreciated properties: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated properties |
|
|
509 |
|
|
|
— |
|
|
|
0.00 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Funds From Operations |
|
$ |
123,774 |
|
|
|
165,788 |
|
|
$ |
0.75 |
|
|
$ |
116,536 |
|
|
|
168,738 |
|
|
$ |
0.69 |
|
|
|
Nine Months Ended September 30, |
|
|||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||||||||||
|
|
Dollars |
|
|
Weighted |
|
|
Per Share |
|
|
Dollars |
|
|
Weighted |
|
|
Per Share |
|
||||||
Net Income Available to Common Stockholders |
|
$ |
18,302 |
|
|
|
165,324 |
|
|
$ |
0.11 |
|
|
$ |
43,970 |
|
|
|
167,902 |
|
|
$ |
0.26 |
|
Noncontrolling interest related to unitholders |
|
|
3 |
|
|
|
25 |
|
|
|
— |
|
|
|
7 |
|
|
|
25 |
|
|
|
— |
|
Potentially dilutive common shares - ESPP |
|
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Conversion of unvested restricted stock units |
|
|
— |
|
|
|
903 |
|
|
|
— |
|
|
|
— |
|
|
|
771 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net Income — Diluted |
|
|
18,305 |
|
|
|
166,254 |
|
|
|
0.11 |
|
|
|
43,977 |
|
|
|
168,698 |
|
|
|
0.26 |
|
Depreciation and amortization of real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated properties |
|
|
316,077 |
|
|
|
— |
|
|
|
1.89 |
|
|
|
307,917 |
|
|
|
— |
|
|
|
1.83 |
|
Share of unconsolidated joint ventures |
|
|
9,293 |
|
|
|
— |
|
|
|
0.06 |
|
|
|
7,735 |
|
|
|
— |
|
|
|
0.04 |
|
Partners' share of real estate depreciation |
|
|
(373 |
) |
|
|
— |
|
|
|
— |
|
|
|
(765 |
) |
|
|
— |
|
|
|
— |
|
Gain on sale of depreciated properties: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated properties |
|
|
(8,616 |
) |
|
|
— |
|
|
|
(0.05 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Impairment |
|
|
36,600 |
|
|
|
— |
|
|
|
0.22 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Funds From Operations |
|
$ |
371,286 |
|
|
|
166,254 |
|
|
$ |
2.23 |
|
|
$ |
358,864 |
|
|
|
168,698 |
|
|
$ |
2.13 |
|
31
Liquidity and Capital Resources
Our primary short-term and long-term liquidity needs include the following:
We may satisfy these needs with one or more of the following:
Our material capital expenditure commitments as of September 30, 2026, included $187.5 million of unfunded tenant improvements and construction costs. As of September 30, 2026, we had $114.8 million drawn under our credit facility with the ability to borrow $1.1 billion, as well as $5.2 million of cash and cash equivalents. We expect to have sufficient liquidity to meet our obligations for the foreseeable future.
Other Debt Information
In addition to our $1.2 billion unsecured Credit Facility, under which $114.8 million is outstanding as of September 30, 2026, we also have unsecured debt from four outstanding public unsecured senior notes totaling $1.9 billion, two term loans totaling $500 million, and four tranches of privately placed unsecured senior notes totaling $750 million. Our existing consolidated mortgage debt is comprised of non-recourse, fixed-rate mortgage notes secured by various real estate assets. We expect to either refinance our non-recourse mortgage loans at maturity or repay the mortgage loans with other capital resources, including our credit facility, unsecured debt, non-recourse mortgages, construction loans, the sale of assets, joint venture equity, the issuance of common stock, the issuance of preferred stock, or the issuance of units of CPLP. Many of our non-recourse mortgages contain covenants that, if not satisfied, could result in acceleration of the maturity of the debt. As of September 30, 2026, 83% of our consolidated debt bears interest at a fixed rate. The 17% of consolidated debt that bears interest at a floating rate is based on SOFR.
On April 1, 2026, we recast our Credit Facility to provide borrowing capacity up to $1.2 billion subject to conditions. This new facility replaced the Company's existing facility, extended the scheduled maturity from April 2027 to April 2031, and increased the borrowing capacity from $1.0 billion to $1.2 billion. Additionally, we amended our 2021 Term Loan and 2022 Term Loan, adding two six-month extension options to each. Since December 31, 2025, our all-in borrowing spread improved by 15 basis points on both the revolving credit facility and the 2022 Term Loan, and 30 basis points on the 2021 Term Loan. As of September 30, 2026, the borrowing spread on our Credit Facility was 72.5 basis points over SOFR, and the borrowing spread on each term loan was 80 basis points over SOFR. Financial covenants within the new facilities remained generally unchanged.
We are in compliance with all covenants of our existing unsecured and secured debt.
Future Capital Requirements
To meet capital requirements for future investment activities, we intend to actively manage our portfolio of properties and strategically sell assets to exit our non-core holdings and reposition our portfolio of income-producing assets. We also expect to continue to utilize cash retained from operations, as well as third-party sources of capital such as indebtedness, to fund future commitments and to utilize construction financing facilities for some development assets, if available and under appropriate terms. We may also generate capital through the issuance of securities that include common or preferred stock, warrants, debt securities, or the issuance of CPLP limited partnership units. The Company and CPLP have filed a registration statement on Form S-3 with the SEC registering, among other securities, debt securities of CPLP, which are fully and unconditionally guaranteed by the Company. Separate consolidated financial statements of CPLP have not been presented in accordance with the amendments to Rule 3-10 of Regulation S-X. Furthermore, as permitted under Rule 13-01(a)(4)(vi), the Company has excluded the summarized financial information for CPLP as the assets, liabilities, and results of operations of the Company and CPLP are not materially
32
different than the corresponding amounts presented in the consolidated financial statements of the Company, and management believes such summarized financial information would be repetitive and not provide incremental value to investors.
Our business model also includes raising or recycling capital, which can assist in meeting obligations and funding development and acquisition activity. If one or more sources of capital are not available when required, we may be forced to reduce the number of projects we acquire or develop and/or raise capital on potentially unfavorable terms, or we may be unable to raise capital, which could have an adverse effect on our financial position or results of operations.
Cash Flows
We report and analyze our cash flows based on operating activities, investing activities, and financing activities. The following table sets forth the changes in cash flows ($ in thousands):
|
|
Nine Months Ended September 30, |
|
|||||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|||
Net cash provided by operating activities |
|
$ |
308,294 |
|
|
$ |
287,803 |
|
|
$ |
20,491 |
|
Net cash used in investing activities |
|
|
(265,769 |
) |
|
|
(335,512 |
) |
|
|
69,743 |
|
Net cash provided by (used in) financing activities |
|
|
(43,032 |
) |
|
|
45,035 |
|
|
|
(88,067 |
) |
The reasons for significant increases and decreases in cash flows between the periods are as follows:
Cash Flows from Operating Activities. Cash flows provided by operating activities increased by $20.5 million during the 2026 nine month period compared to the same period in 2025, primarily due to the acquisitions of The Link and 300 South Tryon. In addition to these acquisitions there was an increase in cash inflows from a combination of increased occupancy and expiration of rent abatement periods, primarily at Promenade Tower, Hayden Ferry, Domain 9, and 300 Colorado. These inflows were partially offset by increased interest payments from the senior note issuances in June 2025 and February 2026.
Cash Flows from Investing Activities. Cash flows used in investing activities decreased by $69.7 million for the 2026 nine month period compared to the same period in 2025 primarily due to receipt of proceeds from sales of operating properties in 2026 partially offset by increased payments related to acquisitions in 2026 when compared to 2025. In 2026, we received proceeds from the sale of Harborview, Research Park V, and One Eleven Congress and had no dispositions in 2025. In July 2025, we acquired the Link for $218.0 million and, in February and September 2026, we acquired 300 South Tryon and land at 2401 McKinney, respectively, for $317.5 million and $50.0 million.
Cash Flows from Financing Activities. Cash flows used in financing activities for the 2026 nine month period were $43.0 million, compared to cash flows provided by financing activities of $45.0 million for the same period in 2025. During the nine month period in 2026, we received proceeds from the issuance of $500.0 million of 4.875% public senior notes in February 2026. These proceeds were partially offset by a $150 million partial repayment of the 2021 Term Loan, repayment at par of our $99.2 million Colorado Tower mortgage in September 2026, and a $90 million repurchase of outstanding common shares under the 2026 share repurchase program. During the nine month period in 2025, we received proceeds from the issuance of $500.0 million of 5.250% public senior notes in June 2025, partially offset by repayment of $250 million of privately placed senior notes and an increase in net repayments on our credit facility.
33
Capital Expenditures. We incur capital expenditures for the development of new properties, the redevelopment of existing or newly purchased properties, building improvements, direct leasing costs for new or replacement tenants, and capitalized interest and salaries. Components of expenditures included in this line item for the nine months ended September 30, 2026, and 2025 are as follows ($ in thousands):
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Projects under development (1) |
|
$ |
— |
|
|
$ |
2,259 |
|
Operating properties—redevelopment |
|
|
42,018 |
|
|
|
27,633 |
|
Operating properties—building improvements |
|
|
29,453 |
|
|
|
28,388 |
|
Operating properties—leasing costs |
|
|
115,345 |
|
|
|
111,343 |
|
Capitalized interest and other |
|
|
11,903 |
|
|
|
10,837 |
|
Total capital expenditures |
|
$ |
198,719 |
|
|
$ |
180,460 |
|
(1) Includes initial leasing costs. |
|
|
|
|
|
|
||
Capital expenditures increased $18.3 million between the 2026 and 2025 nine month periods, primarily due to partial redevelopment activity at 201 North Tryon, 550 South, and Hayden Ferry.
The above leasing costs include leasing commissions and tenant improvements, which are both capitalized as a component of our real estate assets as they are incurred. Commitments toward those costs are calculated on square foot basis and are included in our leasing activity as leases are executed.
34
Leasing activity details, including the components of net effective rent per square foot, for our office portfolio on leases executed during the nine months ended September 30, 2026 and 2025 are as follows:
|
|
Nine Months Ended September 30, 2026 |
|
|||||||||||||
|
|
New |
|
|
Renewal |
|
|
Expansion |
|
|
Total |
|
||||
Net leased square feet (1) |
|
|
869,611 |
|
|
|
1,304,405 |
|
|
|
228,370 |
|
|
|
2,402,386 |
|
Number of transactions |
|
|
64 |
|
|
|
59 |
|
|
|
28 |
|
|
|
151 |
|
Lease term in years (2) |
|
|
8.5 |
|
|
|
6.6 |
|
|
|
9.2 |
|
|
|
7.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net effective rent calculation (per square foot per year) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net annualized rent (3) |
|
$ |
42.76 |
|
|
$ |
41.69 |
|
|
$ |
49.59 |
|
|
$ |
42.83 |
|
Net free rent |
|
|
(3.05 |
) |
|
|
(1.33 |
) |
|
|
(3.00 |
) |
|
|
(2.11 |
) |
Leasing commissions |
|
|
(3.55 |
) |
|
|
(2.74 |
) |
|
|
(3.83 |
) |
|
|
(3.13 |
) |
Tenant improvements |
|
|
(10.36 |
) |
|
|
(4.60 |
) |
|
|
(9.48 |
) |
|
|
(7.16 |
) |
Total leasing costs |
|
|
(16.96 |
) |
|
|
(8.67 |
) |
|
|
(16.31 |
) |
|
|
(12.40 |
) |
Net effective rent |
|
$ |
25.80 |
|
|
$ |
33.02 |
|
|
$ |
33.28 |
|
|
$ |
30.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Second generation leased square footage (4) |
|
|
|
1,748,363 |
|
|||||||||||
Increase in straight-line basis second generation net rent per square foot (5) |
|
|
|
28.9 |
% |
|||||||||||
Increase in cash-basis second generation net rent per square foot (6) |
|
|
|
14.2 |
% |
|||||||||||
|
|
Nine Months Ended September 30, 2025 |
|
|||||||||||||
|
|
New |
|
|
Renewal |
|
|
Expansion |
|
|
Total |
|
||||
Net leased square feet (1) |
|
|
489,932 |
|
|
|
743,103 |
|
|
|
191,794 |
|
|
|
1,424,829 |
|
Number of transactions |
|
|
60 |
|
|
|
50 |
|
|
|
18 |
|
|
|
128 |
|
Lease term in years (2) |
|
|
7.7 |
|
|
|
7.9 |
|
|
|
8.3 |
|
|
|
7.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net effective rent calculation (per square foot per year) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net annualized rent (3) |
|
$ |
40.46 |
|
|
$ |
36.39 |
|
|
$ |
40.48 |
|
|
$ |
38.34 |
|
Net free rent |
|
|
(2.22 |
) |
|
|
(1.84 |
) |
|
|
(1.45 |
) |
|
|
(1.92 |
) |
Leasing commissions |
|
|
(3.34 |
) |
|
|
(2.55 |
) |
|
|
(2.79 |
) |
|
|
(2.85 |
) |
Tenant improvements |
|
|
(8.56 |
) |
|
|
(4.96 |
) |
|
|
(6.88 |
) |
|
|
(6.46 |
) |
Total leasing costs |
|
|
(14.12 |
) |
|
|
(9.35 |
) |
|
|
(11.12 |
) |
|
|
(11.23 |
) |
Net effective rent |
|
$ |
26.34 |
|
|
$ |
27.04 |
|
|
$ |
29.36 |
|
|
$ |
27.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Second generation leased square footage (4) |
|
|
|
1,115,440 |
|
|||||||||||
Increase in straight-line basis second generation net rent per square foot (5) |
|
|
|
22.1 |
% |
|||||||||||
Increase in cash-basis second generation net rent per square foot (6) |
|
|
|
4.9 |
% |
|||||||||||
35
Dividends. We paid common dividends of $160.6 million and $162.1 million in the nine months ended September 30, 2026, and 2025, respectively. We expect to fund our future quarterly common dividends with cash provided by operating activities, also using proceeds from investment property sales, distributions from unconsolidated joint ventures, indebtedness, and proceeds from offerings of equity and other securities, if necessary.
On a quarterly basis, we review the amount of the common dividend in light of current and projected future cash flows from the sources noted above and also consider the requirements needed to maintain our REIT status. In addition, we have certain covenants under credit agreements that could limit the amount of common dividends paid. In general, common dividends of any amount can be paid as long as leverage, as defined in our credit agreements, is less than 60% and we are not in default. Certain conditions also apply in which we can still pay common dividends if leverage is above that amount. We routinely monitor the status of our common dividend payments in light of the covenants of our credit agreements.
Off Balance Sheet Arrangements
General. We have a number of off balance sheet joint ventures with varying structures, as described in note 6 of the notes to consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025, and in note 4 of the notes to condensed consolidated financial statements included in this filing. The joint ventures in which we have an interest are involved in the ownership, acquisition, and/or development of real estate. A venture will fund capital requirements or operational needs with cash from operations or financing proceeds, if possible. If additional capital is deemed necessary, a venture may request a contribution from the partners, and we will evaluate such request.
Debt. At September 30, 2026, our unconsolidated joint ventures had aggregate outstanding indebtedness to third parties of $425.0 million. These loans are generally mortgage or construction loans, which are non-recourse to us. In certain instances, we provide “non-recourse carve-out guarantees” on these non-recourse loans. We, along with our Neuhoff Holdings LLC joint venture partner, guarantee our respective halves of the borrower's obligations to pay certain required equity contributions and project carrying costs, as well as timely completion of project construction. In addition, along with our TL CO Proscenium JV, LLC joint venture partner, we guarantee our respective portions of the borrower's obligations to pay certain required equity contributions for project carrying costs and leasing and tenant improvement costs. Our portion of the borrower's obligations is $7.8 million. Certain of these loans have variable interest rates, which creates exposure to the ventures in the form of market risk from interest rate changes.
Critical Accounting Policies
There have been no material changes in the critical accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There have been no material changes in the market risk associated with our notes payable at September 30, 2026, compared to that as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 4. Controls and Procedures.
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applies judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding our control objectives.
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer along with the Chief Financial Officer, of the effectiveness, design, and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon the foregoing, the Chief Executive Officer along with the Chief Financial Officer concluded that our disclosure controls and procedures were effective. In addition, based on such evaluation, we have identified no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
36
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Information regarding legal proceedings is described under the subheading "Litigation" in note 10 of the notes to condensed consolidated financial statements.
Item 1A. Risk Factors.
Risk factors that affect our business and financial results are discussed in Part I, "Item 1A. Risk Factors," of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes in our risk factors from those previously disclosed in our Annual Report. You should carefully consider the risks described in our Annual Report, which could materially affect our business, financial condition, or future results. The risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
We made no purchases of common stock and did not sell any unregistered securities during the third quarter of 2026.
37
Item 6. Exhibits.
2.1 |
|
Agreement and Plan of Merger, dated March 25, 2019, by and among the Registrant, Murphy Subsidiary Holdings Corporation, and TIER REIT, Inc., filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on March 25, 2019, and incorporated herein by reference. |
|
|
|
3.1 |
|
Restated and Amended Articles of Incorporation of the Registrant, as amended August 9, 1999, filed as Exhibit 3.1 to the Registrant’s Form 10-Q for the quarter ended June 30, 2002, and incorporated herein by reference. |
|
|
|
3.1.1 |
|
Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, as amended July 22, 2003, filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on July 23, 2003, and incorporated herein by reference. |
|
|
|
3.1.2 |
|
Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, as amended December 15, 2004, filed as Exhibit 3(a)(i) to the Registrant’s Form 10-K for the year ended December 31, 2004, and incorporated herein by reference. |
|
|
|
3.1.3 |
|
Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, as amended May 4, 2010, filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed May 10, 2010, and incorporated herein by reference. |
|
|
|
3.1.4 |
|
Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, as amended May 9, 2014, filed as Exhibit 3.1.4 to the Registrant's Form 10-Q for the quarter ended June 30, 2014, and incorporated herein by reference. |
|
|
|
3.1.5 |
|
Articles of Amendment to Restated and Amended Articles of Incorporation of Cousins, as amended October 6, 2016, incorporated by reference from Exhibit 3.1 and Exhibit 3.1.1 to the Registrant's Current Form 8-K filed on October 7, 2016. |
|
|
|
3.1.6 |
|
Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on June 14, 2019, and incorporated herein by reference. |
|
|
|
3.1.7 |
|
Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, filed as Exhibit 3.2 to the Registrant's Current Report on Form 8-K filed on June 14, 2019, and incorporated herein by reference. |
|
|
|
3.2 |
|
Bylaws of the Registrant, as amended and restated July 25, 2023, filed as Exhibit 3.2.2 to the Registrant's Form 10-Q for the quarter ended June 30, 2023, and incorporated herein by reference. |
|
|
|
22
|
|
Subsidiary Issuer of Guaranteed Securities, filed as Exhibit 22.1 to the Registrant's form 10-Q filed on April 29, 2026.
|
|
|
|
31.1 |
† |
Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
31.2
|
†
|
Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
†
|
Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2 |
†
|
Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
†
|
The following financial information for the Registrant, formatted in inline XBRL (Extensible Business Reporting Language): (i) the consolidated balance sheets, (ii) the consolidated statements of operations, (iii) the consolidated statements of equity, (iv) the consolidated statements of cash flows, and (v) the notes to condensed consolidated financial statements.
|
|
|
|
104
|
†
|
Cover page interactive data file (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibit 101).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
† Filed herewith.
38
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
COUSINS PROPERTIES INCORPORATED
|
|
/s/ Gregg D. Adzema |
|
Gregg D. Adzema |
|
Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) |
Date: October 29, 2026
39