Cousins Properties Incorporated (CUZ) sold five shopping centers, spanning about 486,000 square feet, for $79.5 million to a single buyer. With the sale completion of the properties, which were anchored by Publix, Cousins Properties successfully fulfilled its retail ownership divestiture goal.
This real estate investment trust (REIT) reaped net proceeds of around $34.5 million from this divestiture. As a matter of fact, the company owned the vended assets in two joint ventures with Watkins Retail Group.
We are encouraged with this transaction as it will provide dry powder to Cousins Properties to shape its business on a simpler platform by specifically targeting trophy assets and opportunistic investments.
Notably, Cousins Properties primarily focuses on investing in the properties that are primarily concentrated in high-growth Sun Belt markets. Accordingly, earlier this month, the company inked a joint venture deal with Hines – a Houston-based real estate investor – for constructing a trophy office tower named ‘Victory Center’ in the Uptown Dallas submarket of Texas (read more: Cousins-Hines Team Up to Build Victory Center in TX). 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. Such deals promise strong growth prospects.
In the previous month, Cousins Properties reported third-quarter 2014 results with 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 (read more: Cousins Properties Q3 FFO and Revenues Beat)
Cousins Properties currently holds a Zacks Rank #2 (Buy). Other better-ranked REITs are Duke Realty Corp. (DRE), EastGroup Properties Inc. (EGP) and Alexandria Real Estate Equities, Inc. (ARE). All stocks have the same rank as Cousins Properties.
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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