Cousins Properties’ CUZ fourth-quarter 2022 FFO per share of 66 cents beat the Zacks Consensus Estimate by a penny. However, the figure declined 4.3% from the prior-year quarter’s 69 cents. Our estimate for FFO per share was pegged at 65 cents.
Results reflect year-over-year growth in the top line aided by healthy leasing activity and improvement in second-generation net rent per square foot. Yet, higher same-property rental property operating expenses and lower occupancy levels were headwinds in the quarter.
Quarterly rental property revenues, although missing the Zacks Consensus Estimate by just 0.06%, increased 3.6% year over year to $193.6 million. We estimated the same to be $191.3 million.
In 2022, Cousins Properties reported FFO per share of $2.72, outpacing the Zacks Consensus Estimate of $2.71. The figure, however, fell 1.1% from the prior year’s $2.75. Our estimate was pegged at $2.71. Full-year rental property revenues of $753.5 million increased 1.9% year over year. The reported figure missed the consensus mark by a whisker. We estimated the same to be $751.3 million.
Quarter in Detail
Cousins Properties executed leases for 632,379 square feet of office space in the December quarter, including 300,300 square feet of new and expansion leases. This marked 52.5% of total leasing activity.
The same-property rental property revenues, on a cash basis, rose 2.8% year over year to $160.4 million. The same-property rental property operating expenses on a cash basis increased 3.3% to $59.3 million in fourth-quarter 2022. The same-property NOI, on a cash basis, climbed 2.5% to $101.2 million from the prior-year period.
The weighted average occupancy of the same-property portfolio was 86.2%, down from 88.5% as of Dec 31, 2021. Our estimate for the same was 86.3%.
CUZ ended the quarter with the same-property portfolio being leased 90.1%, down from 90.8% recorded at the end of the year-ago period.
The second-generation net rent per square foot (cash basis) climbed 7.3%.
During the reported quarter, CUZ closed a $400 million Term Loan that matures in March 2025 and has four six-month extension options.
CUZ exited fourth-quarter 2022 with cash and cash equivalents of $5.1 million, down from $5.5 million as of Sep 30, 2022.
The company’s net debt-to-annualized EBITDAre ratio in the quarter was 4.93 compared with 4.86 in the year-ago quarter.
Cousins Properties expects current-year FFO per share to lie in the range of $2.52-$2.64. The Zacks Consensus Estimate for the same is presently pegged at $2.61.
CUZ currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cousins Properties Incorporated Price, Consensus and EPS Surprise
Cousins Properties Incorporated price-consensus-eps-surprise-chart | Cousins Properties Incorporated Quote
Performance of Other REITs
SL Green Realty Corp. SLG reported fourth-quarter 2022 FFO per share of $1.46, lagging the Zacks Consensus Estimate of $1.48. The figure fell 3.9% from the year-ago quarter’s $1.52.
SLG’s results reflected lower-than-anticipated revenues and a fall in occupancy. However, same-store cash NOI improved year over year.
Boston Properties Inc.’s BXP fourth-quarter 2022 FFO per share of $1.86 outpaced the Zacks Consensus Estimate of $1.84. The figure increased 18.7% year over year.
The quarterly figure also exceeded the mid-point of the company’s fourth-quarter guidance by a cent, reflecting portfolio outperformance. In addition, BXP experienced solid leasing activity in the quarter. The company revised its 2023 outlook for FFO per share.
Highwoods Properties Inc. HIW reported fourth-quarter 2022 FFO per share of 96 cents, in line with the Zacks Consensus Estimate. The figure compared unfavorably with the prior-year quarter’s $1.06. We estimated FFO per share for fourth-quarter 2022 to be 96 cents.
HIW’s quarterly results reflect better-than-anticipated revenues on robust leasing activity and improvement in rents. However, higher operating expenses were a headwind in the quarter.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.
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