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Cousins Properties' (CUZ) Heights Union Buyout Fails to Drive Stock

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  • CUZ
  • PFE

Shares of Cousins Properties CUZ have seen no significant movement since it announced the acquisition of Heights Union in the Heights neighborhood of Downtown Tampa for $144.8 million earlier this week. The buyout comes as part of company’s efforts to upgrade its portfolio quality with trophy assets.

The 294,000-square-foot office property completed in late 2020 is now 93.4% leased. With an advantageous location, the property has an attractive customer base.

The Heights is a live-work-play district and attracts a huge crowd. Anchored by Armature Works, the district holds more than 20 restaurants and bars. This reflects that the location is apt for Cousins Properties to grow via acquisitions.

Heights Union enjoys an outstanding rent roll, with the life-science customers representing 66% of the rent roll. Pfizer PFE has a leased 106,000 square feet of the property for a Global Capability Hub, while AxoGen AXGN has leased 75,000 square feet for its second headquarters and lab space.

The buyout of this property seems a strategic fit for Cousins Properties as the demand for office spaces has been high amid the favorable migration trends and pro-business environment.

Cousins Properties has an unmatched portfolio of class A office assets concentrated in the high-growth Sun Belt markets. In July, the company had acquired 725 Ponce, a 372,000-square-foot office asset for $300.2 million in Midtown Atlanta. The REIT is also well placed to cater to the demand for highly-amenitized office assets. However, stiff competition will likely dent occupancy growth.

Cousins Properties currently carries a Zacks Rank #3 (Hold). The company’s shares have gained 4% compared with the industry’s decline of 3.2% over the past three months.

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