Cousins Properties Incorporated (CUZ) reported third-quarter 2014 FFO (funds from operations) of 20 cents per share, beating the Zacks Consensus Estimate by a penny and easily surpassing the year-ago figure of 9 cents. Robust revenue growth aided the 81.8% year-over-year rise in FFO per share.
Following this announcement, shares of this real estate investment trust (REIT) gained 0.39% during the regular trading session on Oct 30.
Quarter in Details
Total revenue for the quarter jumped 76.7% year over year to $89.1 million. It also exceeded the Zacks Consensus Estimate of $83.0 million.
Also, same property revenue edged up 4.9% year over year to $26.1 million while same property operating expense improved 6.6% year over year to $11.3 million. As a result, total same property net operating income (NOI) rose 3.6% year over year to $14.8 million.
In the reported quarter, Cousins Properties inked new leases or renewed prior ones for 550,283 square feet of office space.
During the quarter, the company bought a 698,000 square foot Class-A office tower – Fifth Third Center – in Charlotte for $215 million. On the other hand, Cousins Properties divested Lakeshore Park Plaza in Birmingham, AL, for a gross sales price of $25 million.
Moreover, subsequent to end of the third quarter, the company acquired a 1.5 million square foot Class-A office asset – Northpark Town Center – in Atlanta for $348 million.
During the quarter, Cousins Properties offered 18.0 million common shares and reaped $223.4 million in proceeds.
The company exited third-quarter 2014 with cash and cash equivalents of $7.2 million, up from $6.3 million at Jun 2014 end.
Our Take
Keeping its winning streak alive, Cousins Properties’ came up with strong results yet again on the back of its impressive operating portfolio performance. Notably, the company has an average FFO surprise of 8.9% in the trailing four quarters. Cousins Properties’ portfolio is primarily focused on the high-growth Sun Belt markets, which due to their long-term demographic trends, is expected to exhibit above-average job growth. Moreover, the company aims to shape its business on a simpler platform by specifically targeting trophy assets and opportunistic investments. This ensures a steady revenue stream.
Cousins Properties currently holds a Zacks Rank #2 (Buy). We now look forward to the other REITs that are scheduled to report next week. These include HCP, Inc. (HCP), Vornado Realty Trust (VNO) and Regency Centers Corporation (REG).
Note: FFO, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation, amortization and other non-cash expenses to net income.
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