Cousins Properties Reports in Line - Analyst Blog

Cousins Properties Inc. (CUZ), a real estate investment trust (REIT), reported third quarter 2010 FFO (fund from operations) of $0.9 million or 1 cent per share, compared with an FFO loss of $41.9 million or 71 cents in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation, amortization and other non-cash expenses to net income.
 
Excluding certain non-recurring items, recurring FFO for the reported quarter was $10.3 million or 10 cents per share. The recurring FFO for third quarter 2010 was in line with the Zacks Consensus Estimate.
 
Total revenues were $52.5 million during the quarter versus $56.8 million in the year-ago period. Total revenues for the reported quarter were well ahead of the Zacks Consensus Estimate of $37 million.
 
During the quarter, Cousins Properties obtained a new 10-year $27 million mortgage loan secured by Meridian Mark Plaza, a 160,000 square-foot medical office building in Atlanta, Georgia, and repaid an existing $22 million loan scheduled to mature in September 2010. In addition, Cousins Properties executed new or renewal leases for 487,000 square feet of office space and 158,000 square feet of retail space during the quarter. At quarter-end, the company's office portfolio was 90% leased, while its retail and industrial buildings were 86% and 90% leased, respectively.
 
Cousins Properties sold San Jose Market Center, a 213,000 square-foot power center in San Jose, California, for $85 million, generating a net gain of $6.6 million during the quarter. Subsequent to the quarter-end, the company sold a 51,000 square foot office property in Atlanta, Georgia, for $3.2 million, realizing a profit of $700,000. Cousins Properties is currently shoring up its balance sheet and increasing liquidity by selling non-core assets. At the same time, the company remains focused on leasing activities and intends to maintain steady occupancy levels across its portfolio.
 
At quarter-end, Cousins Properties had cash and cash equivalents of $9.2 million, compared with $9.5 million at year-end 2009. We maintain our 'Neutral' rating on Cousins Properties, which presently has a Zacks #4 Rank translating into a short-term ‘Sell' recommendation.