Financial Data and Key Metrics Changes - The company reported core FFO of $0.17 per share for Q2 2025, exceeding consensus estimates by $0.03 [6][26] - The company raised full year guidance for core FFO to a range of $0.55 to $0.59 per share, representing a $0.03 increase from prior guidance [27] - The same store lease occupancy guidance was increased to a range of 86.9% to 88.9%, reflecting continued strength in the New York portfolio [28] Business Line Data and Key Metrics Changes - The company executed over 400,000 square feet of leases in Q2 2025, with a year-to-date total of approximately 690,000 square feet [7][18] - The weighted average term for leases signed during the quarter was 12.9 years, with starting rents above $90 per square foot [18][26] - The New York portfolio was 88.1% leased, up 70 basis points quarter over quarter, while the San Francisco portfolio was 75.1% leased, down 720 basis points due to a scheduled lease expiration [22][25] Market Data and Key Metrics Changes - In New York, leasing activity excluding renewals was 3.8 million square feet, 10% ahead of the five-year quarterly average [20] - San Francisco's overall leasing volumes are still below long-term averages, but there are signs of stabilization with a decline in availability by 110 basis points quarter over quarter [22][13] - AI-based companies accounted for over 800,000 square feet of leasing year-to-date in San Francisco, indicating a growing demand in that sector [23] Company Strategy and Development Direction - The company is focused on capital allocation strategies that include selective dispositions, joint ventures, and reinvestment into high-conviction assets [15] - The company is committed to enhancing tenant relationships and delivering market-leading hospitality to secure renewals and fill vacant spaces [19] - The company is actively pursuing refinancing opportunities and maintaining balance sheet strength with over $534 million in cash [16][29] Management's Comments on Operating Environment and Future Outlook - Management noted a sustained flight to quality in the New York market, with tenants prioritizing well-located, amenity-rich buildings [10] - In San Francisco, management observed a gradual recovery with increasing tenant interest, particularly from sectors like AI and professional services [14] - Management expressed confidence in the long-term recovery of the San Francisco market despite near-term softness due to lease expirations [28] Other Important Information - The company is undergoing a strategic review to maximize shareholder value, but no further comments were provided during the call [4] - The company completed the sale of a 25% equity interest in 1 Front Street, generating $11.5 million in net proceeds [30] - The company designated Market Center as a non-core asset and has completed its disposal [31] Q&A Session Summary Question: Can you talk about tenant demand for 1633 Broadway? - Management indicated active showings and strong retail performance, with asking rents ranging from $70 to $90 per square foot [34][38] Question: What are your thoughts on concessions and future pricing? - Management noted that concessions have stabilized and expect net effective rents in New York to increase, while San Francisco remains elevated [39][41] Question: Can you provide commentary on large move-outs and renovations? - Management confirmed ongoing improvements at 1633 Broadway and expressed optimism about demand in Midtown [48][50] Question: How is the political situation in New York affecting leasing? - Management reported no hesitation from tenants regarding long-term leases despite political changes [51][52] Question: Is the SEC investigation impacting the strategic review? - Management stated that the SEC inquiry is not expected to significantly impact the strategic review [53][54] Question: How is San Francisco's leasing strategy adjusting to market conditions? - Management noted increased activity across various sectors, not just AI, and a positive trend in tenant engagement [58][61]

Portfolio & Strategy - Cousins Properties focuses on premier Sun Belt lifestyle office assets, with 100% of its portfolio in the Sun Belt and 100% Class A properties built around 2010[3] - The company's asking rents are 16% higher than pre-pandemic levels and 25% higher than Class A averages[3] - Cousins has recycled over $1 billion of older assets during the COVID pandemic[3,44] - The company sourced over $500 million of new investment opportunities in 2024[3] Growth & Development - Cousins has an attractive development pipeline of 1.2 million square feet and a land bank supporting 5.1 million square feet of additional development[3] - Since 2019, Cousins has experienced NOI growth of 18%[3] Financial Strength - The company maintains a strong balance sheet with $1 billion in liquidity[3,57] - Cousins' leverage is at 5.1x Net Debt/EBITDA, among the lowest in the office sector[3] - The company has increased its dividend by 10% since COVID while maintaining a conservative payout ratio[3] Market Trends - The company benefits from the "flight to quality" trend, with 64% of its portfolio developed or redeveloped since 2010[3,30]

Market Trends & Investment Opportunities - The market is experiencing a paradigm shift where the long bond is no longer considered a flight to quality asset, with gold emerging as the preferred safe haven [2] - Gold has surged from $1,800 per ounce to over $2,000 per ounce, indicating strong investor interest [2] - Central banks are accumulating gold, reversing a decade-long trend of selling, suggesting a change in their investment strategy [3] - Gold is now viewed as a legitimate asset class, attracting a broader range of investors beyond survivalists and speculators [3] Monetary Policy & Fixed Income - The Federal Reserve's rate cuts in September 2023 led to a significant increase of 100 basis points in the yield of the 30-year Treasury bond [1] - The speaker anticipates this trend may continue, suggesting a potential inverse relationship between rate cuts and long-term Treasury yields [1] Central Bank Behavior - Central banks previously sold gold at prices as low as $300-$400 and are now buying it back at around $3,000, highlighting their poor long-term investment decisions [4]

Core Insights - Cousins Properties (CUZ) shares have increased by 35.9% over the past year, significantly outperforming the industry's growth of 8.5% [1][9] - The company is experiencing heightened leasing activity in its Class A office assets located in high-growth Sun Belt markets, driven by tenants' preference for premium office spaces [1][3] Market Dynamics - The demand for office space in the Sun Belt markets is rising due to favorable migration trends and a pro-business environment, leading to increased corporate relocations and expansions [3] - The first quarter of 2025 saw Cousins Properties execute 47 leases totaling 539,063 square feet, with a weighted average lease term of 6.3 years, indicating a recovery in leasing volume [3][9] Financial Performance - In Q1 2025, the second-generation net rent per square foot on a cash basis for Cousins increased by 3.2%, reflecting the ability to command premium rents [4] - The company has a well-diversified tenant roster, reducing dependence on a single industry and ensuring steady revenues across different economic cycles [4] Strategic Initiatives - Cousins Properties is focused on upgrading its portfolio quality through acquisitions of trophy assets and opportunistic developments in high-growth Sun Belt submarkets [5] - From 2020 to Q1 2025, the company acquired 2.9 million square feet of operating properties for $1.54 billion and completed 2.2 million square feet of development at a total cost of $909 million [5] Financial Health - As of Q1 2025, Cousins Properties had cash and cash equivalents of $5.3 million and $38.7 million drawn from its $1 billion credit facility, indicating a healthy balance sheet [6] - The net debt-to-annualized EBITDAre ratio stood at 4.87, suggesting considerable liquidity and access to capital markets for long-term growth opportunities [6]