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Cousins Properties (CUZ) Boosts Portfolio With Two Transactions

Cousins Properties (CUZ) announces two strategic transactions in Downtown Austin to strengthen its portfolio.

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This story originally appeared on Zacks

As part of its capital recycling strategy, Cousins Properties CUZ recently announced two transactions in Downtown Austin. CUZ sold 816 Congress, a 435,000 square foot office building for $174 million.

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The office property constructed in 1983 is currently 78% leased. With expirations, 816 Congress will be 60% leased by early 2023.

On the flip side, Cousins Properties acquired the remaining 50% interest in 300 Colorado from its partners, Riverside Resources and Ironwood Real Estate, for $162.5 million. The buyout comes as part of CUZ’s efforts to upgrade its portfolio quality with trophy assets.

The 369,000 square foot office building completed in 2021 is currently 88% leased. With an advantageous location, the newly-built property has an attractive tenant base.

Cousins Properties received $15.7 million at closing for its partner's share of tenant improvements and allowances for future leasing costs.CUZ also paid the 300 Colorado construction loan fully and without penalty in advance.

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.

Per management, "We've had a highly productive year at Cousins Properties, during which we invested over $1 billion in new development starts and acquisitions while selling over $600 million of primarily older vintage, capital intensive assets."

Cousins Properties has an unmatched portfolio of class A office assets concentrated in the high-growth Sun Belt markets, witnessing a population influx. Therefore, strategic transactions in Downtown Austin poise the company well to ride its growth curve. However, a competitive landscape due to high supply in the office real-estate market is expected to adversely impact CUZ’s pricing power.

Cousins Properties currently carries a Zacks Rank #4 (Sell). The stock has gained 4.4%, underperforming the industry’s rally of 7.1% over the past six months.

Zacks Investment ResearchImage Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks from the REIT sector are OUTFRONT Media OUT, Cedar Realty Trust CDR and Condor Hospitality Trust CDOR.

The Zacks Consensus Estimate for OUTFRONT Media’s 2021 fund from operations (FFO) per share has been raised 13.8% over the past two months. OUT’s 2021 FFO per share is expected to increase 45.71% from the year-ago quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

OUTFRONT Media flaunts a Zacks Rank 1 (Strong Buy) at present. Shares of OUT have gained 4.6% in the past six months.

The Zacks Consensus Estimate for Cedar Realty’s current-year FFO per share has been raised 2.6% to $2.36 in the past two months. Over the last four quarters, CDR’s FFO per share surpassed the consensus mark twice and missed the same on the other two occasions, the average surprise being 6.4%.

Currently, CDR sports a Zacks Rank of 1. Shares of Cedar Realty have appreciated 39.4% in the past six months.

The Zacks Consensus Estimate for Condor Hospitality Trust’s 2021 FFO per share has been raised 25.8% over the past two months. CDOR’s 2021 FFO per share is expected to increase significantly from the year-ago quarter’s reported figure.

Condor Hospitality sports a Zacks Rank of 1 at present. Shares of CDOR have soared 49.3% in the past six months.

Note: Anything related to earnings presented in this write-up represent FFO — a widely used metric to gauge the performance of REITs.



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Cousins Properties Incorporated (CUZ): Free Stock Analysis Report

 

Cedar Realty Trust, Inc. (CDR): Free Stock Analysis Report

 

OUTFRONT Media Inc. (OUT): Free Stock Analysis Report

 

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