Cousins Properties Incorporated CUZ inked a lease renewal deal with Transocean Ltd. for 255,413 square feet of space at Greenway Plaza in Houston, TX. The deal reflects solid demand for the company’s properties.
Transocean occupies the entire 4 Greenway Plaza and the above mentioned deal fully renews its current occupied space at the building, postponing the lease expiration to Jan 2023 from Jan 2017. The company also occupies an additional space of 13,552 square feet at 3800 Buffalo Speedway in Greenway Plaza, the lease for which expires in Jan 2017.
Notably, this international provider of offshore contract-drilling services for energy companies is the fourth largest customer in Cousins' Houston portfolio. Following the abovementioned renewal, the Houston portfolio’s weighted average lease term presently stands at around 7 years with no single lease greater than 100,000 square feet expiring until Dec 2018.
This alleviates the company’s lease exposure in Houston for quite some time and ensures a steady source of rental revenues. Encouragingly, with the Transocean renewal, the leasing at Greenway Plaza now stands at 90%.
As such, Cousins Properties’ focus on trophy assets and opportunistic investments augur well for its future. Renewal activities and achievement of significant roll-ups in rental rates reflect solid demand for the company’s properties in favorable locations.
Last month, Cousins Properties came up with decent results for first-quarter 2015, with funds from operations (“FFO”) of 21 cents per share beating the Zacks Consensus Estimate by a penny. Results were aided by growth in same property net operating income.
Cousins Properties currently carries a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider stocks like Extra Space Storage Inc. EXR, First Industrial Realty Trust Inc. FR and SL Green Realty Corp. SLG. All these stocks hold a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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