Cousins Properties’ CUZ fourth-quarter 2023 funds from operations (FFO) per share of 65 cents were in line with the Zacks Consensus Estimate.

Results reflect year-over-year growth in the top line, aided by healthy leasing activity, a rise in occupancy levels, and decent improvement in second-generation net rent per square foot. However, higher same-property rental property operating expenses are a headwind in the quarter. CUZ also issued its 2024 outlook for FFO per share.

Quarterly rental property revenues came in at $196.6 million, lagging the Zacks Consensus Estimate of $202.4 million.

On a year-over-year basis, while FFO per share declined 1.5%, rental property revenues increased 1.5%.

In 2023, Cousins Properties reported an FFO per share of $2.62, in line with the Zacks Consensus Estimate. The figure fell 3.7% from the prior year’s $2.72. Full-year rental property revenues of $799 million increased 6% year over year. However, the reported figure missed the consensus mark of $807.1 million.

Quarter in Detail

Cousins Properties executed leases for 452,688 square feet of office space in the fourth quarter, including 190,589 square feet of new and expansion leases.

The same-property rental property revenues, on a cash basis, rose marginally year over year to $177.1 million. The same-property rental property operating expenses on a cash basis fell 4.6% to $60.4 million in the fourth quarter of 2023. As a result, the same-property net operating income, on a cash basis, climbed 3.5% to $116.7 million from the prior-year period.

The weighted average occupancy of the same-property portfolio was 87.5%, up 80 basis points from a year ago. Our estimate was pegged at 87.2%.

CUZ ended the quarter with the same-property portfolio being leased 90.6%, down from 90.7% at the end of the year-ago period.

The second-generation net rent per square foot (cash basis) climbed 0.8%.

However, interest expenses jumped 24.3% year over year to $27.5 million during the quarter. Our estimate for the metric was pegged at $27.6 million.

Balance Sheet

CUZ exited the fourth quarter with cash and cash equivalents of $6 million, down from $6.9 million as of Sep 30, 2023.

The company’s net debt-to-annualized EBITDAre ratio in the quarter was 5.14 compared with 4.93 in the year-ago quarter.

2024 Outlook

Cousins Properties expects 2024 FFO per share to be in the range of $2.57-$2.67. The Zacks Consensus Estimate for the same is presently pegged at $2.58, which is within expectations.

CUZ currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.