Oct 30, 2026 earnings call — Bought Uptown Dallas site and raised FFO outlook
Cousins raised full-year 2026 FFO to $2.97 per share, up $0.02 from the prior midpoint.
Revenue $0.3B (est $0.3B) · EPS $0.10 (est $0.10)
Key quotes
"For the quarter, our total office portfolio end-of-period lease and weighted average occupancy percentages were 93% and 89.5%, respectively, both up sequentially and occupancy was up for the third consecutive quarter."
"through a newly formed joint venture, we acquired a 97.5% equity interest in a 2.3-acre land parcel at 2401 McKinney in Uptown Dallas."
"To date, we have issued $1.9 billion in unsecured public debt and our bonds currently trade at the tightest spread to treasuries among all traditional office REITs."
Analyst Q&A 10
2401 McKinney project details
Q (Blaine Heck · Wells Fargo): He asked for total expected spend, yield, timeline, and pre-leasing for 2401 McKinney. He also asked about the JV split, how interest rates were considered, and whether any leases drove the big cash spread this quarter.
A: Management said they are still finalizing building plans and costs and expect key details and potential lease signing in the first half of 2027. They said the JV is 97.5% / 2.5% with Trammell Crow, they have only bought the land so far, and they will manage interest-rate effects while expecting compelling returns. They added that the 19.8% cash roll-up was broad-based across markets and not driven by a single lease, and they expect continued strong roll-ups but find it hard to predict exact amounts.
"So based on the current time line, that's going to be in the first half of 2027." — Michael Connolly (CEO)
funding development and leasing mix
Q (Manus Ebbeck · Evercore): He asked how Cousins will fund new development, how large development spending could span over time, and what early impacts to model for 2027. He also asked the mix of new versus renewal leases in the leasing pipeline and which markets show biggest rent growth potential.
A: They said their two funding principles are that investments must be accretive and leverage-neutral; McKinney is expected to meet both. They listed funding options: unsettled ATM shares (about $120 million), asset sales, and JVs, and said early 2027 earnings impact is hard to quantify now but capitalization of costs means early impact is limited while stabilization will drive significant accretion. On leasing, they said late-stage pipeline is about 63% new/expansion and broader pipeline about 75% new/expansion, with especially strong rent growth in Dallas and Charlotte.
"First, when we talk about funding any investment, including development, as Kennedy pointed out in her remarks, from a funding perspective, we've got 2 north stars, which is, it will be accretive and it will be leverage-neutral." — Gregg D. Adzema (CFO)
occupancy goal and concessions
Q (Jana Galan · BofA): She asked how management plans the next occupancy goal after reaching 90% and how they balance a time target with keeping high re-leasing spreads. She also asked about changes to tenant improvements and free rent.
A: They said reaching 90% by year-end was an interim goal and they are confident they can push occupancy to 92%–93%+ but are hesitant to give a specific timeline because they must balance prioritizing occupancy with driving higher rents. They noted free rent and tenant improvement concessions came down meaningfully this quarter, expect free rent to decline first, and hope TI will decline later as headline rents rise.
"So we're confident that we're going to continue pushing occupancy to those 92%, 93% plus levels." — Michael Connolly (CEO)
cap rates and AI demand
Q (Anthony Paolone · JPMorgan): He asked where cap rates for premium office assets sit today and what spreads they require on development. He also asked for detail on the AI demand the company is seeing and the types and sizes of tenants.
A: They said historically they seek development spreads of 150 to 200 basis points over spot cap rates and in today's higher-rate environment they skew to the higher end of that range, but they avoided giving a specific yield requirement. They said core office assets are generally trading around plus or minus 7% and that AI demand this quarter was concentrated in Austin, driven largely by hyperscalers, with prior-quarter AI interest in Nashville, Tempe and Atlanta.
"But generally, you're still seeing core office assets trade in that plus or minus 7% range." — Jane Hicks
pipeline spreads and Domain site plan
Q (Upal Rana · KeyBanc): He asked whether the nearly 20% cash rent spread is likely to hold as the 1.4 million sq ft pipeline converts. He also asked how combining Domain 4 with Domain Central changes scale and uses and whether the site could support phased mixed-use development.
A: They said much of the pipeline includes potential new development at market rents and that the existing portfolio will benefit from tightening supply and demand, expecting double-digit roll-ups over the next few quarters. For the Domain sites, they said combining the two gives flexibility, they are working on a master plan that includes office, retail and other uses, and the project can be phased though they will be thoughtful about phasing and interaction between phases.
"So we're working on a master plan there that certainly includes a large component of office space, but also retail and the potential for some other uses as well." — Jane Hicks
Austin tenants and McKinney timing
Q (John Kim · BMO): He asked if Google self-managing Sail affects NOI, whether Expedia is in early renewal talks, and Amazon's commitment to its space after layoffs. He also asked why tenants at 2401 McKinney have not been announced yet.
A: They said Google's self-management has no net impact on NOI, Expedia is not in the pipeline for an early renewal, and they have a strong relationship with Amazon and believe Amazon remains committed to its footprint. On McKinney, they said media speculation exists but they must finalize building plans and costs before signing leases and hope to wrap that up in the first half of next year.
"That really has no net impact on net operating income." — Richard Hickson
550 South leasing and other 2027 developments
Q (Michael Lewis · Truist): He asked for an update on leasing at 550 South after Cardinal Health moved out. He also asked whether McKinney is likely the only development start in 2027 and whether dynamics in Austin and Nashville differ from Dallas.
A: They said at 550 South they recently signed about 82,000 square feet, currently have one smaller 6,000 square foot customer in lease negotiations, and have proposals out for roughly 50,000 square feet. They added there are other development opportunities outside Dallas under discussion, each will be evaluated situationally, and they will use joint ventures if scale warrants to participate while managing risk.
"At this point, we have one smaller 6,000 square foot customer in lease negotiations." — Richard Hickson
2027 NOI outlook and acquisitions
Q (Dylan Burzinski · Green Street): He asked whether mid-single-digit same-store NOI growth in 2027 with possible acceleration feels reasonable and if management is still active on acquisitions given potential development starts.
A: They said they are not providing 2027 guidance on this call and reminded that same-property NOI is a lagging indicator because leases must be built out and recognized before NOI reflects them. They said they remain active on acquisitions and development, transactions have slowed so fewer attractive offerings are on market, but they can pursue acquisitions when sellers offer assets they like and may find attractive buying opportunities in this environment.
"When you take a look at same property performance, it's typically a bit of a lagging indicator." — Gregg D. Adzema (CFO)
ADP lease renewal timing
Q (Alexandra Lauren Yaseen · Wolfe): She asked what to expect for ADP renewing, given their remaining lease term of about 1.5 years.
A: They said it's a little early to discuss ADP in depth but emphasized they have a great relationship and that the location is strong: ADP controls the entire building in downtown Tempe and has great signage. Management indicated they will discuss renewal closer to the time.
"I'd say it's a little early for us to be able to talk in any depth about ADP and a potential renewal." — Richard Hickson
forward equity settlement timing
Q (Michael Lewis · Truist): He asked whether the forward equity sales due to mature at year-end must be settled in 4Q or if settlement can be pushed to next year.
A: They said these forward agreements commonly have one-year terms but are typically extendable if the borrower's credit hasn't deteriorated, and they've already extended prior ones. Gregg said they do not have to settle the shares by year-end and will likely extend the agreements for another year.
"No, we do not have to settle those shares by the end of the year." — Gregg D. Adzema (CFO)