Cousins Properties Q1 2026 Earnings Call - Record Leasing Volume and Raised FFO Guidance Signal Sun Belt Office Rebound

Operator: This call is being recorded on Thursday, April 30, 2026. I would now like to turn the conference over to Pamela Roper, General Counsel. Please go ahead.

Blaine Heck, Analyst, Wells Fargo0: Thank you. Good morning, and welcome to Cousins Properties 1st quarter earnings conference call. With me today are Colin Connolly, our President and Chief Executive Officer, Richard Hickson, our Executive Vice President of Operations, Kennedy Hicks, our Executive Vice President and Chief Investment Officer, and Gregg Adzema, our Executive Vice President and Chief Financial Officer. The press release and supplemental package were distributed yesterday afternoon as well as furnished on Form 8-K. In the supplemental package, the company has reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Regulation G requirements. If you did not receive a copy, these documents are available through the quarterly disclosures and supplemental SEC information links on the investor relations page of our website, cousins.com.

Please be aware that certain matters discussed today may constitute forward-looking statements within the meaning of federal securities laws, and actual results may differ materially from these statements due to a variety of risks, uncertainties, and other factors, including the risk factors set forth in our annual report on Form 10-K and our other SEC filings. The company does not undertake any duty to update any forward-looking statements, whether as a result of new information, future events, or otherwise. The full declaration regarding forward-looking statements is available in the supplemental package posted yesterday, and a detailed discussion of the potential risks is contained in our filings with the SEC. With that, I’ll turn the call over to Colin Connolly.

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Thank you, Pam, and good morning, everyone. We had an excellent start to 2026 at Cousins. On the earnings front, the team delivered $0.73 a share in FFO during the quarter, which was $0.02 a share above consensus. In addition, we increased the midpoint of our FFO guidance by $0.02 a share to $2.94 a share for the full year in 2026, which represents 3.5% growth over 2025. This would be our third consecutive year of FFO growth and represents a 3.9% compounded annual growth rate since 2023. Cousins’ earnings growth during this three-year timeframe is unmatched among traditional office REITs. Leasing remained robust. We completed 932,000 sq ft of leases during the quarter, which is one of the highest quarterly volumes in the history of the company.

Our cash rent roll-up on second-generation leasing was 15.2%, which marks 48 consecutive quarters of positive rent roll-ups. Significant leasing wins included a large renewal with our largest customer at The Domain in Austin and new leases with Oracle at Neuhoff in Nashville and KPMG at Proscenium in Midtown Atlanta. These results underscore the strength of our portfolio and depth of customer demand for high-quality lifestyle office space. I’ll start with a few broader observations on the trends driving the office market. First, most major companies are phasing out remote work. Yesterday, Fidelity became the latest to announce a 5-day-a-week office mandate. At Cousins, we call it the return to normal, it is boosting demand across all of our markets. Second, the flight to quality is unrelenting. Customers are prioritizing high quality, well-amenitized, and well-located buildings to promote engagement and collaboration.

According to JLL, nearly all of the positive net absorption in the office sector since the onset of COVID has occurred in buildings that delivered from 2010 to present. Third, the Sun Belt migration has re-accelerated. We have seen a significant uptick in relocation activities as proposals to meaningfully increase personal and business taxes in New York, California, and Washington have advanced. Starbucks recently announced a major East Coast headquarters in Nashville. Apollo is looking for a second headquarters in Texas or Florida. Capital Group announced a major hub in Charlotte. Each of these companies specifically state access to the growing talent pools in these markets as a major reason for their decisions. These are not back of house or support jobs that they are creating. We believe that we are still in the early innings of this migration trend and expect these announcements to continue.

Lastly, record high office conversions combined with record low new development starts are leading to shrinking inventory of office properties. Given the 3 to 4-year lead time to deliver a new project, this is unlikely to change until 2030 at the earliest. Simply stated, demand is increasing while supply is decreasing. The net result is an emerging shortage of premier lifestyle office space in the best submarkets of the Sun Belt, and one that will become increasingly acute over the next several years and favor landlords. Cousins is uniquely positioned to benefit from these trends. Before moving on, I want to briefly address a topic that has received a lot of attention recently, and that’s artificial intelligence. While AI is shaping how companies operate internally, we are not seeing evidence that it is reducing long-term demand for high-quality office space.

In fact, many of the companies most actively deploying AI are also prioritizing collaboration, talent density, and physical presence, which aligns well with our lifestyle office portfolio in the Sun Belt. Ultimately, space decisions are still being driven by people, culture, and access to talent. In that respect, these trends we’re seeing in our leasing activity remain very encouraging. Turning to our strategy, as we outlined in prior earnings calls, our focus remains unchanged. We are sharply focused on driving sustainable earnings growth while maintaining our best-in-class balance sheet and continuing to enhance the quality of our Sun Belt lifestyle office portfolio. Our team’s ability to drive both internal and external growth is key to this effort. During the quarter, we advanced that strategy. First, we increased occupancy to 88.9% across the portfolio as a result of robust leasing activity.

Second, we closed on the acquisition of 300 South Tryon, a 638,000 sq ft trophy office asset in Uptown Charlotte for approximately $317 and a half million. Third, we repurchased 3.9 million shares of our own stock at a weighted average price of $23.36. Lastly, we sold Harbor View Plaza in Tampa for $39 and a half million and entered into an agreement to sell 111 Congress in Austin. Looking ahead, the number 1 priority for Cousins is to continue to grow occupancy. We have modest lease expirations this year and a robust late-stage leasing pipeline that will support this effort. More broadly, we remain focused on optimizing our portfolio, maintaining flexibility, and creating optionality in our capital allocation decisions.

As I mentioned earlier, everything we do is guided by a disciplined approach that prioritizes earnings accretion, balance sheet strength, and continuous improvement in our portfolio quality. We are excited about what lies ahead for Cousins. The office market is rebalancing, new construction is virtually non-existent, and high-quality lifestyle office space is becoming increasingly scarce. Despite ongoing macro concerns and volatility in the public markets, Cousins continues to outperform, supported by a strong operating platform, a highly efficient G&A structure, and one of the strongest balance sheets in the office REIT sector. Before turning the call over to Richard, I want to thank our talented Cousins team. Their commitment to excellence and to serving our customers is the foundation of all of our success. Richard?

Blaine Heck, Analyst, Wells Fargo1: Thanks, Colin. Good morning, everyone. Our operations team delivered the strongest start to a calendar year since Cousins began its focus as a pure play owner of Trophy Sun Belt Office. In the first quarter, our total office portfolio end-of-period leased and weighted average occupancy percentages were 91.8 and 88.9% respectively. Both metrics increased sequentially and were driven by a combination of organic growth and our recent investment activity. Our portfolio leased percentage increased in nearly every market, with Atlanta, Charlotte, and Austin as the largest contributors in terms of organic growth. Nashville’s leased percentage increased materially with our recently signed 116,000 sq ft new lease with Oracle at Neuhoff. That project will not be included in our overall portfolio statistics until it is stabilized.

The largest market contributors to organic growth in our weighted average occupancy were Atlanta and Austin. Our lease expirations through 2027 now total only 8.3% of contractual rent, which is 320 basis points lower than at the end of 2025. Coming off of a very strong fourth quarter, our leasing activity in the first quarter was record-setting on a number of levels. Our team completed 49 office leases totaling 932,000 sq ft during the quarter, with a weighted average lease term of 6.6 years. Our square footage volume was the highest for a first quarter in well over a decade and was also our highest quarterly level in general since the second quarter of 2019.

On a square footage basis, 52% of our completed leases this quarter were new and expansion leases, totaling 483,000 square feet. New and expansion leasing volume was essentially in line with our very strong fourth quarter, which we view as a great repeat performance. The team also completed 19 renewals during the first quarter, including a material renewal in Austin that took care of what was previously our largest 2027 expiration. Regarding lease economics, our average net rent this quarter came in at $44.54, approximately 18% higher than the full year 2025. This quarter’s average leasing concessions were essentially in line with the full year 2025.

As a result, average net effective rent this quarter came in at a solid $32.28, second only to the third quarter of 2024. Finally, second generation cash rents increased yet again in the first quarter at a strong 15.2%, with cash rents rolling up in every market where we had activity. Beyond our excellent recently completed activity, our overall leasing pipeline remains very healthy at a level comparable to this time last quarter. In our early March investor presentation, we shared that 1.2 million sq ft of activity was either signed first quarter to date or in lease negotiations. Even after completing 932,000 sq ft of volume in the first quarter, as of today, we have 1 million sq ft of leases either signed second quarter to date or in lease negotiations.

This late stage pipeline has been growing nicely throughout the second quarter. In fact, it has grown by about 200,000 sq ft just in the past two weeks and currently includes 450,000 sq ft of new and expansion leases. We believe our late-stage pipeline has us very well positioned for continued strong leasing performance in the near term. Turning to our markets. In Atlanta, according to JLL, leasing activity was strong, with 2.3 million sq ft of leases signed in the first quarter. Sublease availability declined for the eighth consecutive quarter and is now at its lowest level since the start of 2021. Additionally, average asking rents had the largest quarterly increase in two and a half years.

We continue to see solid demand in our own portfolio, where we signed 192,000 square feet of leases in the first quarter. This included a 105,000 square foot new lease with KPMG at Proscenium in Midtown. Subsequent to first quarter end, we also signed a new 46,000 square foot lease with CallRail at 725 Ponce in Midtown. CallRail is a homegrown Atlanta-based technology company that decided to relocate to 725 Ponce from downtown because of the property’s location, quality, and direct access to the BeltLine. We are excited to welcome them as a customer. Our Atlanta portfolio was 89.3% leased at first quarter end.

In Austin, JLL notes that tenant demand increased 30% year-over-year from about 3.9 million square feet of requirements in the first quarter of 2025 to nearly 5 million square feet today. The market continues to digest speculative development delivered since 2023. However, new speculative development is now at its lowest level since 2013. Across our Austin portfolio, we signed an impressive 339,000 square feet of leases in the first quarter, including a 273,000 square foot renewal of a Fortune 10 technology company at Domain Eight. This sizable renewal demonstrates a strong commitment to the Austin market and to the value of high-quality office in the core of The Domain.

Our Austin portfolio also increased to 95.3% leased as of 1st quarter end, driven primarily by encouraging new activity in the CBD. In fact, our Austin team has seen a notable increase in overall tenant demand in the CBD since the beginning of the year, and it’s focused primarily on availability in the highest quality office segment. In Charlotte, market-level leasing activity maintained strong momentum in the first quarter with a 74% increase year-over-year. In our portfolio, we signed 181,000 sq ft of leases in the first quarter, 58% of which were new and expansion leases, and the team rolled up cash rents 26%.

Activity included a 72,000 sq ft new lease with Scout Motors at Five Fifty South and a 54,000 sq ft renewal and 27,000 sq ft expansion of a major law firm at our newly purchased Three Hundred South Tryon. Touching on our redevelopments, our Five Fifty South project is very close to completion within weeks, and with that, we have seen a nice uptick in early-stage leasing interest. Regarding Two Oh One North Tryon, that redevelopment project is well underway and should be substantially complete during the first quarter of 2027. In looking at our recently completed redevelopments, whether it be Buckhead Plaza and the Promenade buildings in Atlanta or Tempe Gateway and Hayden Ferry in Phoenix, we generally saw a meaningful boost in demand and importantly in lease economics once the projects approached completion and prospects could see the finished product.

Based on this experience, and also knowing the shortage of available premier space in the market is becoming more acute, we are taking an intentionally patient approach to leasing at the property. In short, we are willing to trade some number of months of timing of occupancy in return for meaningfully better net effective rents and outcome for shareholders. In Dallas, the market recorded 3.6 million sq ft of leasing activity during the first quarter, above first quarter 2025 levels. New supply also remains limited, which is helping to boost top-tier assets and drive rent growth. Light quality remains the dominant theme consistent with all of our markets, with Class A space accounting for 73% of quarterly lease volume. In our 800,000 sq ft portfolio, we signed 65,000 sq ft of leases, rolling up cash rents over 32%.

This past quarter, we also took over the management of Legacy Union One in Plano, and I’m pleased to report that subsequent to first quarter end, we signed a 52,000 sq ft long-term lease with U.S. Renal Care, representing our first direct lease with an existing subtenant at the property. Our Dallas portfolio was 98.1% leased at the end of the first quarter. Finally, and as I mentioned earlier, our leasing volume this quarter included a 116,000 sq ft new lease with Oracle at Neuhoff in Nashville. We are very encouraged by this activity, and Kennedy will share more details about Neuhoff in her remarks. As always, a big thank you to our entire team for the work you put in to make the start of this year an incredibly positive one. We appreciate everything you do.

I will now turn the call over to Kennedy.

Kennedy Hicks, Executive Vice President and Chief Investment Officer, Cousins Properties: Thanks, Richard. I’ll start with the updates from our recently completed Neuhoff project in Nashville. As you may have noticed, we moved this mixed-use project off of our development schedule in our supplement this quarter, given its near-stabilized status. The approximately 400,000 sq ft office component is now 84.3% leased, up from 55.3% last quarter, largely driven by the 116,000 sq ft new lease with Oracle. The company leased five floors on a long-term basis to accommodate its ongoing rapid growth in Nashville, citing it as the center of Oracle’s cloud and AI growth. We are excited for the company’s employees to take occupancy later this year and add to the vibrancy of this unique project.

I am also pleased to share that we are now in lease negotiations for the remaining 2 full floors of the project, which, if executed, will bring the office component to almost 96% leased. The accelerated interest in Neuhoff is indicative of the demand we continue to see across our portfolio for best-in-class differentiated assets. The 542 unit apartment component at Neuhoff stabilized this quarter at 92.6 leased. I want to point out that I added Neuhoff phase two to the land inventory on page 27 of the supplement. As part of the phase 1 development, we completed significant infrastructure, including all of the parking for a future office building that is planned to be approximately 300,000 sq ft.

The cost for this work, including the allocated land value, are now reflected in our total land inventory number, whereas they were previously part of the overall Neuhoff project spend. Given the work and investment already completed for this next phase, we believe we will have a significant competitive advantage in terms of both speed and pricing when the time is right to move forward with the development. As a reminder, we own Neuhoff in a 50/50 joint venture. Turning to our investment activity, we had another busy quarter. In February, as we previously disclosed, we closed on the off-market acquisition of 300 South Tryon in Uptown Charlotte. We acquired the building for $317.5 million, for $497 per square foot, a basis that represents a significant discount to replacement cost.

The 638,000 sq ft highly amenitized asset is an excellent strategic fit for our portfolio and representative of the continued advantage we have in the market as a buyer for large trophy assets. As Richard said in his remarks, we have already executed a renewal and an expansion of a large customer there, enhancing the remaining lease term and validating the mark-to-market in rents that can be achieved at the building. Across the country, the office transactions market has opened up, with sales volume steadily increasing. Both equity and debt sources are realizing the strengthening fundamentals and are now more constructive around opportunities. Smaller transactions are generating the most depth. Accordingly, we continue to pursue select dispositions within our portfolio that we think line up well with market demand.

I will add that we are in the fortunate position that we don’t need to sell any of our assets, so we plan to remain disciplined in our approach. In late February, we closed on the previously discussed sale of Harbor View Plaza in West Shore, Tampa. The building sold for $39.5 million or $191 per sq ft. The pricing equates to a low 9% cap rate. As I mentioned last quarter, this standalone asset needed capital upgrades, and we believed our capital was best focused elsewhere. We remain under contract with a residential developer to sell our 303 Tremont land parcel in South End Charlotte. The contract price for the 2.4 acres is $23.7 million, and we expect it to close before the end of the year.

We are always evaluating the highest and best use of our land bank and resources and determine that this site is now better suited for a residential development as opposed to the office towers that we originally contemplated. We are also now under contract to sell 111 Congress in Austin. This 519,000 sq ft asset was built in the late 1980s and is prominently located in Austin’s CBD. Our ownership of this asset dates back to the Parkway transaction in 2016, and similar to Harbor View, our view is that this asset is better off in the hands of private capital going forward, and we intend to redeploy the proceeds as part of the funding of 300 South Tryon. We were pleased with the process and the positive sentiment towards the asset and the Austin market.

We will disclose more details around pricing after closing, which is anticipated to be early in the third quarter. These dispositions are representative of our strategy to continuously monitor our portfolio and identify opportunities to recycle out of non-core assets to fund acquisitions. Acquisitions of either assets or our own stock, if that’s the better use of proceeds at the time. We only intend to do so in a manner that is neutral or accretive to earnings. We believe that this ongoing portfolio optimization will only enhance the resiliency of our assets and future cash flows. Going forward, we plan to be opportunistic when it comes to both acquisitions and dispositions, as well as other investment opportunities such as development. We have the flexibility to invest in a variety of ways throughout a capital stack, including preferred equity and mezz positions, as we have demonstrated in the past.

Given the emerging scarcity of available lifestyle office space, we believe that there will be select instances where development is compelling and offers an appropriate return premium to trophy acquisitions. We are currently evaluating opportunities with the goal of breaking ground within the next year. We will provide more insights if and as those transactions materialize. With that, I will turn the call over to Gregg.

Gregg Adzema, Executive Vice President and Chief Financial Officer, Cousins Properties: Thanks, Kennedy. I’ll begin my remarks by providing a brief overview of our results, spending a moment on our same property performance, moving on to our property transactions and capital markets activity, before closing my remarks by updating our 2026 earnings guidance. As Colin stated up front, our first quarter results were outstanding. Second generation cash leasing spreads were positive. Same property year-over-year cash NOI increased and leasing velocity was exceptionally strong. Focusing on same property performance for a moment. Cash NOI grew 5.5% during the first quarter compared to last year. This was comprised of a 4.5% increase in revenues and a 2.7% increase in expenses.

These numbers were positively impacted by a combination of increased occupancy and the expiration of rent abatements, primarily at Promenade Tower, Tempe Gateway, 300 Colorado, and Hayden Ferry. Before moving on, I wanted to take a moment to highlight our recent same property expense performance. Despite lots of talk around accelerating property level inflation, including taxes, utilities, payroll, we have held same property expenses to an average annual increase of just 1.95% over the past four years. I suspect this sub 2% number is well below most investors’ perception of office expense growth over the past few years. A new and efficient portfolio located in affordable and business friendly markets is what has allowed us to contain expenses. As Kennedy Hicks discussed earlier, we acquired a property in Charlotte during the first quarter. We will fund this acquisition with the sale of three non-core properties.

We’ve already sold Harborview during the 1st quarter, and we’re under contract to sell 111 Congress during the 3rd quarter, and as Kennedy said, 303 Tremont land during the 4th quarter. We also received repayment during the 1st quarter of our $18.2 million mezzanine loan secured by an equity interest in the 110 East property in Charlotte. Moving on to our capital markets activity was very busy and was very productive. We started by issuing a $500 million 7-year unsecured bond immediately after announcing 4th quarter earnings in early February. It was a great execution, generating a yield to maturity of 5%. With this issuance, we have effectively taken care of all of our 2026 refinancing needs.

In total, we have issued four unsecured bonds for $1.9 billion since receiving our investment grade credit rating in April 2024. As Colin stated upfront, we also repurchased 3.9 million shares at a weighted average price of $23.36 per share during the first quarter. Please note that subsequent to quarter end, the board authorized an increase to our recently launched share repurchase program, taking the authorization from $250 million to $500 million, of which approximately $410 million remains available. We now have both a share repurchase program as well as an ATM program available for use. We have actively employed both over the past 12 months.

In addition to the shares we repurchased this past quarter, we issued 2.9 million shares on a forward basis under our ATM program during the first and second quarters of 2025 at an average price of $30.44 per share. We have not yet settled these forward shares. On April first, we closed a new 5-year, $1.2 billion unsecured credit facility, increasing the prior facility that was scheduled to mature in April 2027 by $200 million. As part of this process, we also amended our existing $400 million and $100 million unsecured term loans, adding 2 six-month extensions to each. The borrowing spread improved by 15 basis points on both the credit facility and the larger term loan, and by 30 basis points on the $100 million term loan.

Before closing with guidance, I wanted to briefly provide some context on leverage. Our goal remains, as it has since 2014, to maintain net debt to EBITDA in the low 5x range. Metrics a bit elevated this quarter, 5.66x, but it’s only a timing issue. Once we complete the asset sales to fund the Charlotte acquisition and we complete the funding of the share repurchase, leverage will return to its historic level. With that, I’ll close my prepared remarks by updating our 2026 guidance. We currently anticipate full year 2026 FFO between $2.90 and $2.98 per share, with a midpoint of $2.94.

This is up from our prior midpoint of $2.92 and represents an increase of approximately 3.5% over the prior year. The increase in FFO guidance is primarily driven by the share repurchases I just discussed, as well as better than forecast execution on the debt financings, partially offset by the elimination of a prior mid-year SOFR cut assumption. We now have no SOFR cut assumptions during 2026 in our guidance. Our updated guidance assumes the 3.9 million share repurchase that we executed in the first quarter is funded with proceeds from the settlements of the 2.9 million shares we previously issued on a forward basis. In reality, we may ultimately fund some or all of the share repurchase with non-core asset sales.

As Kennedy stated earlier, we are constantly monitoring the sales market and exploring additional sales candidates. For modeling purposes, we have assumed the settlements of all outstanding forward shares during the second quarter, and this is what’s in our guidance. As I mentioned earlier, our guidance also assumes the 300 South Tryon acquisition is funded with proceeds from Harborview, 111 Congress, and 303 Tremont.

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Finally, our guidance does not include any additional property acquisitions, dispositions, or development starts in 2026. If any of these take place, we’ll update our guidance accordingly. Bottom line, our first quarter results are among the best we have reported in recent memory. The important operating metrics that we track were outstanding, and we raised full year guidance. Office fundamentals in the Sun Belt remain strong, and we continue to deploy capital into compelling and accretive opportunities. We look forward to reporting on our progress in the coming quarters. With that, I’ll turn the call back over to the operator.

Operator: Ladies and gentlemen, we will now begin a question and answer session. If you wish to ask a question, just press star one on your touchtone phone. If you would like to withdraw from the questions, just press star two. First question comes from the line of Blaine Heck from Wells Fargo. Please go ahead.

Blaine Heck, Analyst, Wells Fargo: Thanks. Good morning. Colin, you commented on the leasing pipeline in the earnings release and again here. Can you and/or maybe Richard give any more detail on size of the pipeline today versus maybe 1 year or 18 months ago and versus your historical average? Maybe give a little bit more color on any trends you’re seeing with respect to tenant size or industry. Are you seeing any specific segments or markets strengthening or weakening?

Blaine Heck, Analyst, Wells Fargo1: Sure, Blaine. This is Richard. I can take that, and then Colin can add on if he’d like. For starters, you specifically asked the size of the pipeline overall today. Certainly, the late stage is what I’d focus on more versus, say, a year ago. It’s about 2x the size of this time last year. That is the late stage pipeline. It’s about the same size right now as this time last quarter. Year-over-year, it’s grown significantly. Just some additional detail on the overall pipeline. I would note that the number of prospects in the pipeline overall has increased quite a bit. I’d say on the order of about 15% since last quarter. That’s encouraging to see.

The, the net size, again, is comparable to last quarter. The mix of industries is roughly the same. I’d say technology is slightly ahead of financial services at this point. They’re both neck and neck and very big drivers of our activity. Legal continues to be a significant component of our industry mix, with professional services coming in last and then a good mix beyond that. I mentioned we had about 200,000 sq ft that built into the late stage pipeline here in the last couple weeks. It’s been growing nicely throughout the quarter. We’ve seen the most increase in activity migrating through the pipeline in Atlanta, especially in Buckhead and in Midtown. Phoenix has had some nice bump.

Nashville certainly is contributing as well. As Kennedy mentioned, we’re going to leases with two more floors there. Some good activity in Austin. It’s, it’s pretty broad based.

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Blaine, it’s Colin. I would just add too, as it relates to the 900 plus thousand sq ft we leased this quarter and this kind of 1 million plus sq ft pipeline. You know, one kind of piece of commentary that I’ve seen is that the Sun Belt is largely back office and support function. I would characterize just about all of the leasing activity that we’re doing as very much front of house revenue producing employees for very dynamic companies, whether it be in technology, financial services, investment firms, you name it. Particularly also AI companies beginning to kind of infiltrate the Sun Belt. I can very much kind of push back on that narrative.

While there are certainly suburban properties in Atlanta with back office employees, the same holds true with back office employees in suburban New York. The quality of the pipeline or the portfolio that we have and our lifestyle properties is very much attracting very well-educated, knowledge, revenue producing employees.

Blaine Heck, Analyst, Wells Fargo: Great. That’s really helpful commentary. You all mentioned that asking rents have grown the most this quarter in 2 and a half years. I was hoping you could quantify that increase. Also, you know, can you comment on what you think is a reasonable forecast or range for net effective rent growth in your segment? You know, Class A+ or trophy within your markets, and whether there are any standout markets on the positive end of that metric or any that could be more muted.

Blaine Heck, Analyst, Wells Fargo1: Sure. This is Richard again. In terms of rent growth, we have a number of different examples we can give on really impressive rent growth across the portfolio. In Atlanta, for instance, at Buckhead Plaza, we’ve been able to grow rents 20% in the last year or so. In Dallas Uptown, it’s really been breathtaking how much rents have grown, in particular in Uptown. I think the general number is about 40% in growth since 2021. I think new product and top of market asking rents right now are $80 net. So extremely impressive rent growth there. If you look at Charlotte, all the new product that has leased up in the last year or so in the market is they were kind of taking down large blocks.

We pegged that rent growth during that process at roughly 10% during that time. In Phoenix, lastly, where we’ve done our redevelopment of Hayden Ferry, which is now complete, we’ve grown rents about 20% since 2024. Those are just some examples of some really bright spots of where we’ve been able to push rent growth. It’s really just a dynamic market where Colin has mentioned that the supply is shut down. We’re not gonna see any new supply really added to virtually any of our markets that isn’t already leased, and demand is still allowing us to push net effective rents. In terms of how much those will grow, I mean, we certainly posted very impressive net effective rent growth this quarter.

It was broad-based. The mix of where we did our leasing this quarter was very favorable in a lot of our highest rent markets. We feel good. It’s always hard to prognosticate on exactly how much we’re gonna grow net effective rents in any given quarter versus another. Over time, we’re confident that we’re gonna continue to be able to grow them in a manner that we’ve done so here in the recent past.

Blaine Heck, Analyst, Wells Fargo: Great. Thanks. Just lastly, can you talk a little bit more about the optionality you have for funding the share repurchases? I don’t believe you’ve issued the forward shares yet. Can you talk about the strategic and economic merits for stock issuance versus additional sales? Are there certain cap rates or other factors that would make you lean towards sales instead of the forward equity?

Gregg Adzema, Executive Vice President and Chief Financial Officer, Cousins Properties: Hey, Blaine. Good morning. It’s Greg. We’ve issued the forward shares, we just haven’t settled them. I just want to make sure everybody understands that.

Blaine Heck, Analyst, Wells Fargo: Sure.

Gregg Adzema, Executive Vice President and Chief Financial Officer, Cousins Properties: We have the flexibility right now to settle those shares through year-end 2026, but that can be extended with the banks that helped us issue those shares. We’ve got ultimate flexibility there. In terms of, you know, we’ve assumed for modeling purposes because you need, for your models, to put in some type of assumption in there. This is the most conservative and cleanest assumption, and that’s what we provided. Is that what we actually do at the end of the day? Maybe, maybe not. As Kennedy talked about in her opening remarks, you know, we’re always in the market exploring kind of the market and liquidity and pricing for our non-core assets. We don’t have a lot of non-core assets left, but we do have a handful, and so we’re out there exploring.

I think how we ultimately pay for the $90 million share repurchase that we executed in the first quarter will depend upon the clarity that we get over the next month or two or three on some of these efforts that Kennedy’s out there doing with the non-core assets. It’s, you know, we’re in a sources and uses business, and ultimately, at the end of the day, we’re trying to drive accretion on a leverage neutral basis. You know, I think one of our secret sauces here at Cousins is I think we’ve been very nimble about, in a position to be nimble with the balance sheet that we have to figure out a way to maximize shareholder value but maintain the balance sheet.

I think we’ve done a good job of that in the last few years, and I think we’ll continue to do so. This transaction, the share repurchase and the funding of it, will just be one more kind of example as we process that strategy.

Blaine Heck, Analyst, Wells Fargo: Great. Thank you all. Congrats on a great quarter.

Gregg Adzema, Executive Vice President and Chief Financial Officer, Cousins Properties: Thanks, Blaine.

Operator: Your next question comes from the line of Steve Sakwa from Evercore ISI. Please go ahead.

Blaine Heck, Analyst, Wells Fargo2: Perfect. Thanks for taking the question. In light of the really good leasing volumes, I just wanted to ask about your expectations for like second generation CapEx spending going forward. I know you don’t necessarily guide to FAD. I’m just trying to understand and square FFO versus FAD growth, kind of like in the near-term future.

Gregg Adzema, Executive Vice President and Chief Financial Officer, Cousins Properties: Hey, it’s Gregg again. Second gen CapEx, as you know, if you’ve looked at our earnings supplement over the last few years, can be super lumpy. It just depends upon the leasing that we do, and then honestly, when the tenants that we lease to come to us and kind of want their TI dollars back. FAD is a cash basis metric, we base it upon when the actual cash goes out the door. Some tenants can ask for it very quickly, some tenants can wait a while before they ask for the money. It’s really, you know, hard for us to predict. But it is loosely tied to leasing at the end of the day. You’ve seen it elevated a little bit over the last few quarters because we’ve been leasing so much space.

You could see it for calendar year 2026. Again, I don’t want to comment on quarterly numbers because they’re very difficult to predict with any accuracy. For the full year, I think you could see, you know, second-gen CapEx be a little higher this year than it was the last couple of years, just because we’re leasing so much space. Once we stabilize the portfolio in the kind of the midterm, as Colin has talked about, you’ll see second-gen CapEx kind of decline to its more historic levels.

Blaine Heck, Analyst, Wells Fargo2: Got it. That’s appreciated. I know you previously talked about your kind of like year-end occupancy target for 2026 now being a quarter in, and obviously with leasing being very strong, the pipeline being very large. Just wanted to ask how you feel about kind of like the occupancy trends, kind of by like year-end 2026 and how bullish it makes you kind of going forward into 2027.

Blaine Heck, Analyst, Wells Fargo1: Sure. This is Richard. you know, when you step back and look at all the building blocks, which we typically don’t give that level of granularity or occupancy guidance. When we look at all of the building blocks on net, we’re seeing a relatively modest amount.

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Of new leasing that we need to do, incrementally to what we already have in the pipeline or have already completed, to get to a year-end 90% number, which is our goal. We’re confident that modest amount is achievable and still feel good about our expectations for getting to 90%.

Blaine Heck, Analyst, Wells Fargo2: Okay. Thank you so much. I appreciate it.

Operator: Your next question comes from the line of John Kim from BMO Capital Markets. Please go ahead.

John Kim, Analyst, BMO Capital Markets: Thank you. You have a 1 million sq ft pipeline or already signed in the second quarter, that’s versus roughly 800,000 sq ft expiring this year. You’re also selling 111 Congress, which is a little bit under leased versus your portfolio. I’m just wondering, where do you think occupancy or lease rates could go to, either by year-end or maybe over the next 12 months?

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Hey, John, it’s Colin. You know, as Richard just outlined, the goal for the, you know, the end of the year, which we think is achievable, is 90%. You know, I think over the medium term, our intention is to drive this portfolio back to kind of historical stabilized levels, which is absolutely, kind of in the low to mid 90%. That will take a little bit longer to get to. Just keep in mind, while we’re, you know, leasing a lot of space this quarter, we believe we’ll lease in the 1st quarter, we think we’re gonna lease a lot of space in the 2nd quarter. There’s typically a lead time, in many cases of a 1 year plus, from signing of a lease to actual occupancy.

Our ability to kinda incrementally keep driving those ups, the occupancy up, will be dependent upon the timing of the need of our customers. The underlying demand is there, and it’s robust, and it’s being driven by certainly the return to office, which might be more temporary, but more longer term. You know, the slight to quality is insatiable. The migration to the Sun Belt is only accelerating.

John Kim, Analyst, BMO Capital Markets: Okay. The large renewal you had in Austin, it sounds like that was with Amazon, just based on your commentary. I’m wondering if you could share any insights that you have on your largest tenant, just given they, you know, they talked about reducing a lot of desks, almost 14 million square feet of office space globally. Is there anything we should read in the renewal term? It was a little bit lower at 4.7 years versus the new leases signed this quarter.

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Hey, John, it’s Colin. I can’t be overly specific due to certain confidentiality provisions. You know, you can, again, you can go look at our supplement and, you know, seems like you’re on a pretty good track there. You know, a couple of thoughts. I shared this last quarter, some commentary specifically around, you know, Amazon, which has gotten a lot of publicity for, you know, announcing some small reduction in their workforce of, I think, 40,000 employees. You have to kinda put that in perspective that they grew their headcount over the five years of the pandemic by almost 700,000 people. I think a company like that found that, you know, many of those workers were remote.

Many of those workers were kind of redundant hires during the pandemic. They view that as, you know, again, a modest downsizing to create more efficiency, less bureaucracy, and again, requiring that workforce to be back in the office 5 days. As it relates to their core hubs in places like Austin, you know, we’re confident that you’ll continue to see them prioritize, you know, their space. There was certainly, in this large renewal we’ve done, there was no reduction in space. As it relates to term, you know, when you add this particular company’s extension on top of the term that they already have, that places them well into the 2030s.

I think it should be interpreted as a very positive signal as to their confidence in the domain.

John Kim, Analyst, BMO Capital Markets: Appreciate it. I think the result was a 10, not a 67.

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Good memory, John.

Operator: Your next question comes from the line of Nick Thillman from Baird. Please go ahead.

Nick Thillman, Analyst, Baird: Hey, good morning, guys. Colin, maybe a question for you. You guys have clearly defined the type of assets you wanna own. Just trying to get a sense of the overall scope of maybe just looking at your market share within your individual sub-markets, what percentage of that trophy lifestyle office does Cousins own versus the opportunity set, longer term? Maybe level setting and start with that.

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Well, yeah. Good morning, Nick. It would certainly, you know, vary market by market. When we put together kind of the, you know, and go through our various sub-markets in our Sun Belt cities, you know, we still think that there’s ample opportunity with the trophy lifestyle buildings that exist today. Certain buildings like the Proscenium that can be bought and substantially renovated to convert into lifestyle office. As Kennedy alluded to, we do think there’ll be an emerging new development opportunity that I think a public REIT such as ourselves with such a strong balance sheet might be uniquely positioned to capitalize on.

Nick Thillman, Analyst, Baird: That’s helpful. Kennedy, you mentioned a little bit of the flurry of just mezz potential mezz investments but in the past, you guys have also highlighted with the intention of owning those assets longer term. We look at some of the mezz investments, they’ve all been paid back. We’ve seen some of those transact. Maybe just give us a sense of how core pricing has moved. I mean, the Dallas Saint Ann Court property sold, the Nashville property is in the market. Just give us a sense of what you guys were initially underwriting with that mezz investment to basically where they’re transacting, how much of that pricing has moved for core product.

Kennedy Hicks, Executive Vice President and Chief Investment Officer, Cousins Properties: Yeah. All of the mezz pieces that we did at the time, you know, were low to mid double digits. Those were unique in that they were cut from an existing senior loans. I think that pricing, depending on where you fall in terms of last dollar, is probably still low double digits. The opportunities that we’re seeing now are more on the origination side, so dealing directly with the sponsor. I, you know, I mean We’re seeing pricing hold generally for core assets, the acquisition side. Some of the assets you mentioned, I think we’re still trading in the low 7 caps. We think it’s a nice premium to that.

With the goal of, if we’re originating it, having a path to own the asset eventually.

Nick Thillman, Analyst, Baird: That’s helpful. Maybe just one last one for Richard. On the 450,000 sq ft of new and expansion leases, is any of that include redevelopment projects? Maybe as we also think of just larger chunks of portfolio and addressing that, this is a little bit of ways out, but the NCR building, is there any opportunity there similar to the situation you guys did with Meta and IBM, look at opportunities there as well?

Blaine Heck, Analyst, Wells Fargo1: Sure, yeah. There’s a small amount of redevelopment activity in that 450. There’s also obviously activity at Neuhoff in the development category, though we obviously now have it in our operations, and have migrated it over there. In terms of NCR, you know, we continue to have a very good dialogue with NCR. Over time, you know, they still have roughly 7+ years of term. It’s a super high quality asset, as you know, and a great location. You know, we’re open to, over time, exploring creative strategies just like we always are with any customer to explore win-wins. We’ve demonstrated a track record of success there over time.

It’s tough to predict how that particular situation will play out, but I think the real estate, the quality of it, the quality of the building and location will win the day ultimately. Right now we view it as nothing but a great opportunity in the future.

Nick Thillman, Analyst, Baird: Great. That’s it for me. Thank you all.

Operator: Your next question comes from the line of Vikram Malhotra from Mizuho Financial Group. Please go ahead.

Blaine Heck, Analyst, Wells Fargo4: Morning. Thanks for the questions, and congrats on a strong quarter. I guess just first, you know, you’ve been talking about refining the portfolio now, you know, for a while. You’ve clearly executed. I’m wondering between sort of what’s closed and what’s to be closed in terms of acquisitions and, you know, dispositions, where does that leave you in terms of a net, what, you know, the pool that you may need to dispose of as maybe a % of the portfolio? Is all of this activity sort of accretive or dilutive near term?

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Hey, good morning, Vikram. You know, as you know, we’ve been a very active recycler of assets certainly over the last 5 years, but even longer dated than that, with a clear eye on building the leading lifestyle office portfolio across the Sun Belt, because we think that’s where there’s gonna be the highest amount of demand and the greatest opportunity to drive rents and therefore drive earnings. You know, at the same time, over the last 5 years and really an intentional decision during COVID when most of our customers were not here, we engaged, you know, many of our properties engaged in pretty substantial renovations as well that now position those properties as lifestyle office buildings.

As we look at the portfolio as a whole, you know, certainly the percentage that we would characterize as non-core is in the single-digit percentages. We think that we’re kinda almost done as feeling if the next pandemic came along, we own a portfolio that will continue to thrive. That being said, we’re always going to have a bottom percentage. As we see opportunities to upgrade and that we can do that upgrade while, you know, staying consistent with our core principles of driving earnings accretion, upgrading the quality of the portfolio and continuing to, you know, have a best-in-class balance sheet, we’re gonna do it. But we think we’re kinda almost largely through the non-core and into a world where we can be opportunistic as it relates to, you know, trying to recycle and upgrade.

Blaine Heck, Analyst, Wells Fargo4: That makes sense. You know, I found your, you know, front office, back office comments interesting, especially about the pipeline. Maybe just stepping back, given all this, you know, misconceptions around the Sun Belt and particularly back office. Have you looked at your portfolio? Are there any stats you can share in terms of what % of the tenancy is back office? I guess, what % is SaaS? Any other statistics that sort of give us a flavor of what you described with the pipeline.

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Yeah. Again, I would characterize our percentage of back office in a portfolio of the quality of Cousins is probably among the lowest in the office sector. You know, again, I’m sure we have some maybe out at Northpark, but this would be, you know, in the single digits. Again, the, you know, the narrative about the Sun Belt being back office is a dated one. These cities have certainly grown up and urbanized. Today they are attracting kind of the best and the brightest and highly educated workforce who are seeking, you know, a vibrant place to live and work and at the same time, have it more affordable.

That’s why companies like Oracle and Goldman Sachs and The Capital Group and Starbucks and others continue to shift their corporate operations into these dynamic markets in the Sun Belt.

Blaine Heck, Analyst, Wells Fargo4: Okay. Just lastly, if I can clarify. As you go back to sort of the stabilized mid-90, low to mid-90s, you now have a pool of assets perhaps, you know, less burden in terms of CapEx. Assuming sort of cash flow recovers over the next 2, 3 years with the occupancy, like, where are you comfortable with, you know, with the payout ratio, dividend payout?

Gregg Adzema, Executive Vice President and Chief Financial Officer, Cousins Properties: Good commits, Gregg. You know, if you go back and look historically, our payout ratio has lingered deliberately, intentionally in the low to mid 70% as a payout ratio to FAD. We’re very comfortable with it being right around there as well. This quarter was a little bit lower. That’s just again, because of the lumpiness that I talked about on a previous question. As I sit here today, you know, we’ve been comfortable in the low to mid seventies, I think we’ll stay comfortable there. Let me caveat that. At the end of the day, it’s a board decision. We’ll talk to them about it, we’ve got an active board, they’re very interested in kind of our operations, we talk about the dividend every quarter.

I don’t want to make a decision on their behalf in advance of that. But historically, we have paid out low to mid 70%, and I think that’s where we’ll be in the immediate future. Beyond that, again, it’ll be a bigger strategic discussion with the board.

Blaine Heck, Analyst, Wells Fargo4: Okay, thanks so much.

Operator: Your next question comes from the line of Andrew Burger from Bank of America. Please go ahead.

Andrew Burger, Analyst, Bank of America: Great. Thank you, and congratulations on the strong quarter. Colin, in your opening remarks, you talked about how companies that are deploying AI are prioritizing co-collaboration. Can you give us a sense of how much space per employee tenants in your portfolio are using today? You know, whether or not you think this could potentially rise over time as companies invest more in collaborative space.

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Good morning. Well, I guess I gotta zoom out a touch and look back to the, you know, the kind of the pandemic era, where there was a lot of discussion of what was going to happen to, you know, employee densities and changing of floor plans. I’d tell you that over time, where we are today is exactly where we were in 2019 as it relates to densities within our portfolio. Looking forward, again, I don’t wanna speculate other than to share we’re very active, obviously, in a lot of leasing with major technology companies, financial services, and legal, and we’re really not seeing any immediate shifts in how they’re using space as AI begins to roll out in greater degrees.

Andrew Burger, Analyst, Bank of America: Great. Thank you. Obviously, very strong quarter as it pertains to the cash leasing spreads 15%. Last quarter was pretty similar, excluding Northpark. Obviously, leasing spreads can be a bit lumpy. It sounds like there were some larger leases this quarter. My question is, do you have a general sense of how your portfolio’s in-place rents compare to market rents today? Ultimately, whether or not we should expect to continue seeing these double-digit increases on a cash basis, just given the demand versus supply dynamics that you’ve been talking about.

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Well, it’s Colin. I would say that, you know, again, it’s hard to predict quarter to quarter because of the underlying mix of customers, buildings, markets. We do think that the portfolio today is still below market, as we are now starting to see market rates rise. Looking forward at the existing late-stage pipeline, we’re confident that we’re gonna continue to drive rents. We’re hopeful that, you know, this time in 3 months, we’ll be announcing our 49th consecutive quarter of a positive cash rent rollout.

Andrew Burger, Analyst, Bank of America: Great. Thank you.

Operator: Your next question comes from the line of Brendan Lynch from Barclays. Please go ahead.

Brendan Lynch, Analyst, Barclays: Great. Thanks for taking my questions. Clearly a lot of progress at Neuhoff. What needs to happen before commencing Neuhoff phase two construction? How should we think about the mix of products that you might pursue?

Kennedy Hicks, Executive Vice President and Chief Investment Officer, Cousins Properties: Hey, good morning, it’s Kennedy. I think, you know, the pre-lease would help kick that off. As I mentioned, we feel really good about activity there and certainly the speed in which we can deliver new product. We’re actively talking to customers and we just need to make sure that the pre-leasing demand is there and the rents are there too. As the new building will require a little bit higher rents than what we’re seeing in the current. We’re encouraged. Was there a second part of the question?

Brendan Lynch, Analyst, Barclays: Just whether it’s going to be purely office or there’s also potential for additional resi or retail on the property.

Kennedy Hicks, Executive Vice President and Chief Investment Officer, Cousins Properties: That particular phase is pure office with a little bit of ground level retail. We do have rights for future phases that could include a mix of uses.

Brendan Lynch, Analyst, Barclays: Okay. Thank you. Then it sounds like you’re slow playing the lease up of some of the development space given your rent growth expectations. How does that inform your approach to 2027 expirations?

Colin Connolly, President and Chief Executive Officer, Cousins Properties: I’m sorry, say that one more time.

Brendan Lynch, Analyst, Barclays: Sure. Just it sounds like you’re slow playing the lease up of some of the development space given your rent growth expectations and kind of holding back as those projects are completed because you’re getting better rents the closer you are to finish, the finish line. How does that inform your approach to 2027 expirations? If you expect that market rents are gonna continue to be improving, maybe you hold off on some of the discussions until they’re closer to the expiration date.

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Yeah, a good question. I would say generally speaking at Cousins, we’re, you know, if we’ve got customers that want to lease space with us, we’re trying to meet the market and, you know, to certainly drive occupancy. You’re I think referencing 201 North Tryon, which is a particularly unique situation where, you know, we’ve got a project that is kind of mid-construction. At the same time, we see over the second half of this year a real shortage of lifestyle space emerging. When those two collide, you know, we sit here today and look at opportunities and there is demand today that really reflects what I would characterize as pre-construction economics.

In the not too distant future, call it, you know, end of the year, first quarter, we think we’re gonna be able to drive post-construction lease economics. As Richard alluded to, we’ve had, you know, a lot of success at our redevelopment projects with a similar strategy and saw, you know, meaningfully, meaningful increases in rental rates, you know, in some cases over $5 a foot. Our thinking on this particular asset is if we’re able to, in a 6 to 9 months, increase rental rates by $5 a foot times 300+ thousand sq ft, that’s $1.5 million a year, you know, call it on a 10-year, on 10-year leases.

We think a little bit of patience for that kind of reward in this very specific instance is certainly worth the trade-off.

Brendan Lynch, Analyst, Barclays: Great. Makes sense. Thank you.

Operator: Your next question comes from the line of Dylan Burzinski from Green Street. Please go ahead.

Dylan Burzinski, Analyst, Green Street: Hi. Hi. Thanks for taking the questions. Just wanting to talk a little bit more about sort of the corporate immigration trends that you guys are seeing. you know, Apollo obviously is reported in the market. You’ve seen the moves from Starbucks, KB Home. I guess as we look at the pipeline today in terms of that activity, would you say it’s largely geared to those big corporate users that are either looking to move headquarters or plan to large call it headquarters too, or is it more predominantly concentrated into smaller outposts, companies looking for smaller outposts within the Southeast?

Blaine Heck, Analyst, Wells Fargo1: You know, this is Richard. I think it’s a mix of both, frankly. We’re still continuing to see the large in-migration. I think that’s only gonna accelerate as we’ve talked about. There are certainly instances where, and I think KB Home may be a good instance to reference that it is truly a headquarters relocation, but it’s not a 200,000 foot user at the same time. We’re continuing to see in Phoenix, in particular, a steady stream of companies that probably have a requirement for a headquarters of 1, 2 floors coming out of California, and those add up. We’re very encouraged by both the kind of smaller, if you will, flow of headquarters relocations. Also could be outposts, but the big ones are still there. They’re in Dallas, without a doubt.

We’ve talked about Charlotte, where some of these requirements have landed in the past couple of months that are 200,000 sq ft apiece, and taking up quality second-gen space. Nashville was a great example of a very large requirement by Oracle that has endured to our benefit. We’re seeing a little bit of everything at this point. It again, we feel like it should do nothing but accelerate.

Dylan Burzinski, Analyst, Green Street: That’s helpful. Just maybe going back to some of your comments on rent growth. Dallas clearly seeing or has seen strong rent growth over the last 4 years. I think you mentioned sort of call it cumulative growth of 40%. You know, is it unreasonable to think sort of that’s where the rest of your high-quality Sun Belt office submarkets are headed similarly following that trajectory? Is there something unique?

That you guys think that has happened in Uptown over the last several years that might not sort of make that a good parallel for the rest of you guys’ submarkets?

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Hey, Dylan, it’s Colin. I’d say, you know, the demand in Dallas, you know, accelerated faster than in some of our other markets. Dallas got to the inflection point of a landlord-favored market quicker and, therefore, rents were able to move. It’s just simply, you know, supply and demand. Now many of our other markets are at or nearing, you know, similar inflection points, with the shortage of space due to the lack of supply. We’re hopeful that you’ll see similar instances of being able to drive those rents. I’d use kinda one example, where I’m sitting today in the Buckhead submarket of Atlanta.

If a user today needed 100,000 sq ft, or had a 100 sq ft requirement in a, you know, what I would characterize as a trophy lifestyle office building, they have exactly 0 options. You know, the existing rents in this market today, the top end, you know, I would say are in the mid to, you know, high $50s to $60 range. New construction would cost every bit, and that’s on a gross basis, new construction would cost over $90 a sq ft. It’s a pretty significant leap, and would take 3 to 4 years to deliver. That’s 1 example as we’ve alluded to as a, you know, increasing demand, decreasing supply, should allow us to drive lease economics.

Dylan Burzinski, Analyst, Green Street: That’s helpful context. Thanks, Colin.

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Thank you.

Operator: Your next question comes from the line of Upal Rana from KeyBanc. Please go ahead.

Blaine Heck, Analyst, Wells Fargo3: Great. Thanks for taking my question. You know, Richard, you know, could you provide a timeline on your signed but not yet commenced leases to come online or convert to cash? Just wondering if there’s a quarter where we should expect to see most of it come online or is it more spread out?

Blaine Heck, Analyst, Wells Fargo1: Sure. At this point, what we have signed and not yet commenced relative to 2026, which I presume you’re probably more focused on, I would call that late third quarter timing on a weighted average basis.

Blaine Heck, Analyst, Wells Fargo3: Okay, great. That was helpful. Then maybe for Kennedy, I wanted to ask about competition on the transaction front. You know, last year you mentioned, you know, large private capital coming into the market and you noted transactions are starting to pick up. Just wondering how pricing has trended recently and what you’re seeing out there.

Kennedy Hicks, Executive Vice President and Chief Investment Officer, Cousins Properties: Yeah. We do feel like it’s continuing to pick up. As I’ve said a few times though, we don’t see still a lot of competition in the true trophy space, particularly as the assets start to get north of $250 million. We’re also encouraged by the fact that people are being more constructive around office opportunities. We’re seeing high net worth and family offices come back pretty robustly, some new entrants. Feel like, you know, that works to our advantage as a seller, but as a buyer that we can still be viewed very positively by sellers given our ability to move quickly and our cost of capital.

Blaine Heck, Analyst, Wells Fargo3: Okay, great. That was helpful. Thank you.

Operator: There are no further questions. Presenters, please continue.

Colin Connolly, President and Chief Executive Officer, Cousins Properties: Thank you for your time this morning and interest in Cousins Properties. We hope to see many of you in New York at NAREIT in June. In the meantime, if you have any follow-up questions, please do not hesitate to reach out to Roni Imbeaux or Gregg Adzema. Have a great afternoon.

Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.