Cousins Properties (CUZ) Q4 FFO Meets Mark, '24 View Issued
Cousins Properties’ CUZ fourth-quarter 2023 funds from operations (FFO) per share of 65 cents were in line with the Zacks Consensus Estimate.
Results reflect year-over-year growth in the top line, aided by healthy leasing activity, a rise in occupancy levels, and decent improvement in second-generation net rent per square foot. However, higher same-property rental property operating expenses are a headwind in the quarter. CUZ also issued its 2024 outlook for FFO per share.
Quarterly rental property revenues came in at $196.6 million, lagging the Zacks Consensus Estimate of $202.4 million.
On a year-over-year basis, while FFO per share declined 1.5%, rental property revenues increased 1.5%.
In 2023, Cousins Properties reported an FFO per share of $2.62, in line with the Zacks Consensus Estimate. The figure fell 3.7% from the prior year’s $2.72. Full-year rental property revenues of $799 million increased 6% year over year. However, the reported figure missed the consensus mark of $807.1 million.
Quarter in Detail
Cousins Properties executed leases for 452,688 square feet of office space in the fourth quarter, including 190,589 square feet of new and expansion leases.
The same-property rental property revenues, on a cash basis, rose marginally year over year to $177.1 million. The same-property rental property operating expenses on a cash basis fell 4.6% to $60.4 million in the fourth quarter of 2023. As a result, the same-property net operating income, on a cash basis, climbed 3.5% to $116.7 million from the prior-year period.
The weighted average occupancy of the same-property portfolio was 87.5%, up 80 basis points from a year ago. Our estimate was pegged at 87.2%.
CUZ ended the quarter with the same-property portfolio being leased 90.6%, down from 90.7% at the end of the year-ago period.
The second-generation net rent per square foot (cash basis) climbed 0.8%.
However, interest expenses jumped 24.3% year over year to $27.5 million during the quarter. Our estimate for the metric was pegged at $27.6 million.
Balance Sheet
CUZ exited the fourth quarter with cash and cash equivalents of $6 million, down from $6.9 million as of Sep 30, 2023.
The company’s net debt-to-annualized EBITDAre ratio in the quarter was 5.14 compared with 4.93 in the year-ago quarter.
2024 Outlook
Cousins Properties expects 2024 FFO per share to be in the range of $2.57-$2.67. The Zacks Consensus Estimate for the same is presently pegged at $2.58, which is within expectations.
CUZ currently carries a Zacks Rank #3 (Hold). 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
Boston Properties Inc.’s BXP fourth-quarter 2023 FFO per share of $1.82 outpaced the Zacks Consensus Estimate by a penny. However, the reported figure fell 2.2% year over year.
BXP’s quarterly results reflect better-than-anticipated revenues on healthy leasing activity. However, higher interest expenses during the quarter marred its year-over-year FFO per share growth. BXP also issued its guidance for 2024 FFO per share.
Alexandria Real Estate Equities, Inc. ARE reported fourth-quarter 2023 adjusted funds from operations (AFFO) per share of $2.28, missing the Zacks Consensus Estimate by a penny. However, the reported figure climbed 6.5% from the year-ago quarter.
Results reflect lower-than-anticipated AFFO per share. However, a rise in revenues, aided by decent leasing activity and rental rate growth, supports the results to some extent. ARE also issued its 2024 outlook.
Crown Castle Inc. CCI reported fourth-quarter 2023 AFFO per share of $1.82, outpacing the Zacks Consensus Estimate of $1.79. However, the reported figure declined 1.6% from the year-ago quarter.
Results reflect better-than-anticipated revenues aided by healthy site-rental revenue growth. However, higher interest expense on debt obligations and lower contributions from adjusted EBITDA were undermining factors. CCI maintained its outlook for 2024.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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