Cousins Properties Q4 2025 Cousins Properties Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Cousins Properties Inc Earnings Call
Speaker #1: Good
Operator: Good morning, ladies and gentlemen, and welcome to the Cousins Properties Q4 Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, 6 February 2026. I would now like to turn the conference over to Pamela Roper, General Counsel. Please go ahead.
Speaker #1: quarter conference call. At this the Cousins Properties fourth mode. Following the presentation, we time, onlines are in listen-only will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator.
Speaker #1: This call is being recorded on Friday, February 6, 2026. I would now like to turn the conference over to Pamela Roper, General Counsel. Please go morning, ladies and gentlemen, and welcome to ahead.
Pamela Roper: Thank you. Good morning, and welcome to Cousins Properties' Q4 Earnings Conference Call. With me today are Colin Connolly, our President and Chief Executive Officer, Richard Hickson, our Executive Vice President of Operations, Gregg Adzema, our Executive Vice President and Chief Financial Officer, and Kennedy Hicks, our Executive Vice President and Chief Investment Officer. The press release and supplemental package were distributed yesterday afternoon, as well as furnished on Form 8-K. In the supplemental package, the company has reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. If you did not receive a copy, these documents are available through the quarterly disclosures and supplemental SEC information link on the investor relations page of our website, cousins.com.
Pamela Roper: Thank you. Good morning, and welcome to Cousins Properties' Q4 Earnings Conference Call. With me today are Colin Connolly, our President and Chief Executive Officer, Richard Hickson, our Executive Vice President of Operations, Gregg Adzema, our Executive Vice President and Chief Financial Officer, and Kennedy Hicks, our Executive Vice President and Chief Investment Officer. The press release and supplemental package were distributed yesterday afternoon, as well as furnished on Form 8-K. In the supplemental package, the company has reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. If you did not receive a copy, these documents are available through the quarterly disclosures and supplemental SEC information link on the investor relations page of our website, cousins.com.
Speaker #2: welcome to Cousins Properties fourth quarter earnings conference call. With me today are Colin Connolly, our President and Chief Executive Officer, Richard Hickson, our Thank you.
Speaker #2: Operations, Gregg Adzema, our Executive Vice President and Chief Financial Officer, and Kennedy Hicks, our Executive Vice President and Chief Investment Officer. Good morning and...
Speaker #2: The press release and supplemental package were distributed yesterday afternoon, as well as furnished on Form 8-K. The company has reconciled all non-GAAP financial measures in the supplemental package to the most directly comparable GAAP measures, in accordance with Reg G requirements.
Speaker #2: If you did not receive a copy of these documents or are available through the quarterly disclosures and supplemental SEC information links on the investor relations page of our website, cousins.com.
Speaker #2: Please be aware that certain matters discussed today may constitute forward-looking statements within the meaning of federal securities laws. An actual result may differ materially from these statements due to a variety of risks and uncertainties and other factors, including the Form 10-K and our other SEC filings.
Pamela Roper: Please be aware that certain matters discussed today may constitute forward-looking statements within the meaning of federal securities laws, and actual results may differ materially from these statements due to a variety of risks, uncertainties, and other factors, including the risk factors set forth in our annual report on Form 10-K and our other SEC filings. The company does not undertake any duty to update any forward-looking statements, whether as a result of new information, future events, or otherwise. The full declaration regarding forward-looking statements is available in the supplemental package posted yesterday, and a detailed discussion of the potential risks is contained in our filings with the SEC. With that, I'll turn the call over to Colin Connolly.
Pamela Roper: Please be aware that certain matters discussed today may constitute forward-looking statements within the meaning of federal securities laws, and actual results may differ materially from these statements due to a variety of risks, uncertainties, and other factors, including the risk factors set forth in our annual report on Form 10-K and our other SEC filings. The company does not undertake any duty to update any forward-looking statements, whether as a result of new information, future events, or otherwise. The full declaration regarding forward-looking statements is available in the supplemental package posted yesterday, and a detailed discussion of the potential risks is contained in our filings with the SEC. With that, I'll turn the call over to Colin Connolly.
Speaker #2: The company does risk factors set forth in our annual report, and does not undertake any duty to update any forward-looking statements, whether as a result of new information or otherwise.
Speaker #2: The full declaration regarding forward-looking statements is available in the supplemental package posted yesterday, and a detailed discussion of the potential risks is contained in our information, future events, or filings with the SEC.
Speaker #2: With that, I'll turn the call over to Colin Connolly.
Speaker #1: Thank you, Pam, and good morning, everyone. We had a strong 2025 at Cousins. On the earnings front, the team delivered $0.71 a share in FFO during the fourth quarter, which is in line with consensus.
Colin Connolly: Thank you, Pam, and good morning, everyone. We had a strong 2025 at Cousins. On the earnings front, the team delivered $0.71 a share in FFO during Q4, which is in line with consensus. In addition, we delivered $2.84 a share for the full year in 2025, which represents 5.6% growth over 2024. Importantly, leasing remained robust. We completed 700,000 square feet of leases during the quarter, which is our second highest quarterly volume over the last four years. For the 47th consecutive quarter, we delivered a positive cash rent roll-up on second-generation leasing. Earlier this week, we acquired 300 South Tryon, a trophy lifestyle office property in Charlotte, for $317 million, which strategically expands our presence in the uptown submarket. These are remarkable results all around.
Colin Connolly: Thank you, Pam, and good morning, everyone. We had a strong 2025 at Cousins. On the earnings front, the team delivered $0.71 a share in FFO during Q4, which is in line with consensus. In addition, we delivered $2.84 a share for the full year in 2025, which represents 5.6% growth over 2024. Importantly, leasing remained robust. We completed 700,000 square feet of leases during the quarter, which is our second highest quarterly volume over the last four years. For the 47th consecutive quarter, we delivered a positive cash rent roll-up on second-generation leasing. Earlier this week, we acquired 300 South Tryon, a trophy lifestyle office property in Charlotte, for $317 million, which strategically expands our presence in the uptown submarket. These are remarkable results all around.
Speaker #1: In addition, we delivered $2.84 per share for the full year in 2025, which represents 5.6% growth over 2024. Importantly, leasing remained robust. We completed 700,000 square feet of leases during the quarter, which is our second-highest quarterly volume over the last four years.
Speaker #1: And for the 47th consecutive quarter, we delivered positive second-generation leasing. Earlier this week, we acquired cash rent roll-up on a lifestyle office property in Charlotte for $317 million, which submarket.
Speaker #1: These are remarkable results all strategically expands our presence in the uptown around. observations on the market. Most major companies are phasing out remote here in Atlanta, is the latest work.
Colin Connolly: Let me start with a few observations on the market. Most major companies are phasing out remote work. Home Depot, here in Atlanta, is the latest Fortune 500 company to end work from home entirely. Thus, office fundamentals are improving. Demand is growing as leasing hit a post-pandemic high in 2025. Vacancy is declining. With new construction starts at de minimis levels, any meaningful increase in new supply is 4 to 5 years away. The net result of these trends will be a shortage of high-quality space that will be particularly acute in 2028, 2029, and 2030. Importantly for Cousins, corporate migration to the Sun Belt, Sun Belt has re-accelerated. As a result, our leasing pipeline is robust across all markets.
Colin Connolly: Let me start with a few observations on the market. Most major companies are phasing out remote work. Home Depot, here in Atlanta, is the latest Fortune 500 company to end work from home entirely. Thus, office fundamentals are improving. Demand is growing as leasing hit a post-pandemic high in 2025. Vacancy is declining. With new construction starts at de minimis levels, any meaningful increase in new supply is 4 to 5 years away. The net result of these trends will be a shortage of high-quality space that will be particularly acute in 2028, 2029, and 2030. Importantly for Cousins, corporate migration to the Sun Belt, Sun Belt has re-accelerated. As a result, our leasing pipeline is robust across all markets.
Speaker #1: work-from-home entirely. Thus, office fundamentals are Home Depot, improving. Demand is growing as leasing hit post-pandemic high in 2025, vacancy is declining, with new construction starts at de minimis levels, any meaningful increase in new supply is forty-five years away.
Speaker #1: The result of these trends will be a net shortage of high-quality space that will be particularly acute in 2028, 2029, and 2030. Importantly for Cousins, corporate migration to the Sunbelt has re-accelerated.
Speaker #1: As a result, our leasing pipeline is robust across all markets. We see a notable pickup in leasing interest from West Coast and New York City-based companies, particularly among financial service, and select large-cap technology companies.
Colin Connolly: We see a notable pickup in leasing interest from West Coast and New York City-based companies, particularly among financial services and select large-cap technology companies. While not necessarily full corporate relocations, they are significant regional hubs and in some cases highlight growth away from high tax and high regulation states. The recent mayoral election in New York and wealth tax proposals in California only reinforce these trends. A slowing labor market is raising some concern about office leasing. However, as I said, demand is actually accelerating. I'll explain why. Office-using employment growth was historically high during the pandemic. At some companies, headcounts almost doubled. Because of the pandemic, many of these new hires were remote and associated office space was never leased. Now, as return-to-office mandates have become widespread, many companies lack the space to accommodate their pandemic-era headcount growth, even after recent layoffs.
Colin Connolly: We see a notable pickup in leasing interest from West Coast and New York City-based companies, particularly among financial services and select large-cap technology companies. While not necessarily full corporate relocations, they are significant regional hubs and in some cases highlight growth away from high tax and high regulation states. The recent mayoral election in New York and wealth tax proposals in California only reinforce these trends. A slowing labor market is raising some concern about office leasing. However, as I said, demand is actually accelerating. I'll explain why. Office-using employment growth was historically high during the pandemic. At some companies, headcounts almost doubled. Because of the pandemic, many of these new hires were remote and associated office space was never leased. Now, as return-to-office mandates have become widespread, many companies lack the space to accommodate their pandemic-era headcount growth, even after recent layoffs.
Speaker #1: Full corporate relocations, they are. While not necessarily significant regional hubs and, in some cases, highlight growth away from high-tax and high-regulation states. The recent mayoral election in New York and wealth tax proposals in California only reinforce these trends.
Speaker #1: A slowing labor market is raising some concern about office leasing. However, as I said, demand is actually accelerating. I'll explain why. Office-using employment growth was historically high during the pandemic.
Speaker #1: At some companies, headcounts almost doubled. Because of the pandemic, many of these new hires were remote and associated office space was never leased. Now, as returned office mandates have become widespread, many companies lack the space to accommodate their pandemic-era headcount growth, even after recent layoffs.
Speaker #1: Simply said, the tailwinds from accelerating return to office remain greater than the impact of a slower job market. This is an excellent setup for Cousins to advance our strategic plan.
Colin Connolly: Simply said, the tailwinds from accelerating return to office remain greater than the impact of a slower job market. This is an excellent setup for Cousins to advance our strategic plan. Our team remains sharply focused on driving earnings growth while maintaining our best-in-class balance sheet and enhancing the quality of our Sun Belt lifestyle portfolio. I will share some 2026 priorities. First, we plan to grow occupancy in 2026. At quarter end, the portfolio was 88.3% occupied and finally reflects the expiration of Bank of America's lease in Charlotte. We have modest lease expirations in 2026 and a late-stage leasing pipeline that now totals over 1.1 million sq ft. While the ramp will be weighted towards the back half of the year, we have a goal of achieving occupancy of 90% or higher by year-end 2026.
Colin Connolly: Simply said, the tailwinds from accelerating return to office remain greater than the impact of a slower job market. This is an excellent setup for Cousins to advance our strategic plan. Our team remains sharply focused on driving earnings growth while maintaining our best-in-class balance sheet and enhancing the quality of our Sun Belt lifestyle portfolio. I will share some 2026 priorities. First, we plan to grow occupancy in 2026. At quarter end, the portfolio was 88.3% occupied and finally reflects the expiration of Bank of America's lease in Charlotte. We have modest lease expirations in 2026 and a late-stage leasing pipeline that now totals over 1.1 million sq ft. While the ramp will be weighted towards the back half of the year, we have a goal of achieving occupancy of 90% or higher by year-end 2026.
Speaker #1: Our team remains sharply focused on driving earnings growth while maintaining our best-in-class balance sheet and enhancing the quality of our Sunbelt lifestyle portfolio. I will share some 2026 First, we plan to grow occupancy in priorities.
Speaker #1: 2026. At quarter-end, the portfolio was 88.3% occupied and finally reflects the expiration of Bank of America's lease in Charlotte. We have modest lease expirations in 2026 and a late-stage leasing pipeline that now totals over $1.1 million square feet.
Speaker #1: While the ramp will be weighted towards the back half of the year, we have a goal of achieving occupancy of 90% or higher by year-end 2026.
Speaker #1: We believe this goal is achievable, but we'll be highly dependent on the timing of lease commencements, which are outside of our control. Simply said, though, timing—not underlying leasing demand—will be the risk in achieving this goal.
Colin Connolly: We believe this goal is achievable, but will be highly dependent on the timing of lease commencements, which are outside of our control. Simply said, though, timing, not underlying leasing demand, will be the risk in achieving this goal. Second, we hope to execute additional accretive investment opportunities. Our track record highlights our openness to a wide variety of transactions, including property acquisitions, debt, structured transactions, and joint ventures. However, our core strategy remains the same: invest in properties that already are or can be repositioned into lifestyle office in our target Sun Belt markets. To fund any new investments, we will always evaluate all of our options. To be clear, new equity at today's stock price certainly does not make financial sense…. Dispositions of non-core assets, settling shares already outstanding on our ATM, and/or utilizing the balance sheet are more likely options.
Colin Connolly: We believe this goal is achievable, but will be highly dependent on the timing of lease commencements, which are outside of our control. Simply said, though, timing, not underlying leasing demand, will be the risk in achieving this goal. Second, we hope to execute additional accretive investment opportunities. Our track record highlights our openness to a wide variety of transactions, including property acquisitions, debt, structured transactions, and joint ventures. However, our core strategy remains the same: invest in properties that already are or can be repositioned into lifestyle office in our target Sun Belt markets. To fund any new investments, we will always evaluate all of our options. To be clear, new equity at today's stock price certainly does not make financial sense…. Dispositions of non-core assets, settling shares already outstanding on our ATM, and/or utilizing the balance sheet are more likely options.
Speaker #1: Second, we hope to execute additional accretive investment opportunities. Our track record highlights our openness to a wide variety of transactions, including property acquisitions, debt, structured transactions, and joint ventures.
Speaker #1: However, our core strategy remains the same: invest in properties that already are or can be repositioned into lifestyle office in our target Sunbelt markets.
Speaker #1: To fund any new investments, we will always evaluate all of our options. To be clear, new equity at today's stock price certainly does not make financial sense.
Speaker #1: Dispositions of non-core assets, settling shares already outstanding on our ATM, and/or utilizing the balance sheet are more likely options. While sometimes characterized as conservative, we view our low-levered balance sheet as an offensive tool.
Colin Connolly: While sometimes characterized as conservative, we view our low levered balance sheet as an offensive tool. At select times in the past, we have modestly flexed up our leverage to take advantage of compelling investment opportunities. Given improving property fundamentals and a scarcity of competitive office capital, this could be one of those moments. We will remain agile and opportunistic with any acquisitions and/or dispositions, and as always, our capital allocation decisions will prioritize earnings accretion, while maintaining our financial strength and enhancing our portfolio quality. Lastly, we hope to identify a new development start that could break ground in late 2026 or 2027. As I mentioned earlier, large users with 2028, 2029, and 2030 expirations are facing a significant shortage of large blocks of premier space and will likely need to consider new construction.
Colin Connolly: While sometimes characterized as conservative, we view our low levered balance sheet as an offensive tool. At select times in the past, we have modestly flexed up our leverage to take advantage of compelling investment opportunities. Given improving property fundamentals and a scarcity of competitive office capital, this could be one of those moments. We will remain agile and opportunistic with any acquisitions and/or dispositions, and as always, our capital allocation decisions will prioritize earnings accretion, while maintaining our financial strength and enhancing our portfolio quality. Lastly, we hope to identify a new development start that could break ground in late 2026 or 2027. As I mentioned earlier, large users with 2028, 2029, and 2030 expirations are facing a significant shortage of large blocks of premier space and will likely need to consider new construction.
Speaker #1: At select times in the past, we have modestly flexed up our leverage to take advantage of compelling investment opportunities. Given improving property fundamentals, and a scarcity of competitive office capital, this could be one of those moments.
Speaker #1: We will remain agile and opportunistic with any acquisitions and/or dispositions and, as always, our prioritize earnings accretion while maintaining our financial strength and enhancing our portfolio quality.
Speaker #1: Capital allocation decisions will, lastly, we hope to identify new development starts that could break ground in late 2026 or 2027. As I mentioned earlier, large users with 2028, 2029, and 2030 expirations are facing a significant shortage of large blocks of premier space and will likely need to consider new construction.
Speaker #1: We hope to capitalize on this dynamic as select development with powerful sources of long-term earnings. Meaningful pre-leasing has been a Cousins. Last night, we introduced 2026 FFO guidance of $2.92 a share at the midpoint.
Colin Connolly: We hope to capitalize on this dynamic, as select development with meaningful pre-leasing has been a powerful source of long-term earnings and NAV growth for Cousins. Last night, we introduced 2026 FFO guidance of $2.92 a share at the midpoint. This guidance forecast implies 2.8% growth over 2025. This would be our third consecutive year of FFO growth and would represent a 3.7% compounded annual growth rate over this time period. This performance is simply unmatched among other traditional office REITs. Our team's ability to drive both internal and external growth is the key. We are excited about what is ahead for Cousins. As I said, demand is accelerating, new supply is at historical lows, the office market is rebalancing, we are growing earnings.
Colin Connolly: We hope to capitalize on this dynamic, as select development with meaningful pre-leasing has been a powerful source of long-term earnings and NAV growth for Cousins. Last night, we introduced 2026 FFO guidance of $2.92 a share at the midpoint. This guidance forecast implies 2.8% growth over 2025. This would be our third consecutive year of FFO growth and would represent a 3.7% compounded annual growth rate over this time period. This performance is simply unmatched among other traditional office REITs. Our team's ability to drive both internal and external growth is the key.
Speaker #1: This guidance forecast implies 2.8% growth over 2025. This would be our third consecutive year of FFO growth and would represent a 3.7% compounded annual growth rate over this time period.
Speaker #1: This performance is simply unmatched among other traditional office REITs. Our team's ability to drive both growth is the internal and external Cousins, as I said, demand is accelerating, new supply is at key.
Colin Connolly: We are excited about what is ahead for Cousins. As I said, demand is accelerating, new supply is at historical lows, the office market is rebalancing, we are growing earnings. Bank of America independently ranks our portfolio as the highest quality in the office REIT sector, and the balance sheet is exceptionally strong, and our G&A is highly efficient for our investors. Before turning the call over to Richard, I want to thank our dedicated Cousins employees, who provide outstanding service to our customers and each other every day. Richard?
Speaker #1: historical lows, the office market is rebalancing, we are growing earnings, Bank of We are excited about what is ahead for America independently ranks our portfolio as the highest quality in the balance sheet is exceptionally office REIT sector.
Colin Connolly: Bank of America independently ranks our portfolio as the highest quality in the office REIT sector, and the balance sheet is exceptionally strong, and our G&A is highly efficient for our investors. Before turning the call over to Richard, I want to thank our dedicated Cousins employees, who provide outstanding service to our customers and each other every day. Richard?
Speaker #1: Strong, and our G&A is highly efficient for our investors. Before turning the call over to Richard, I want to thank our dedicated Cousins employees, customers, and each other every day.
Speaker #1: Richard.
Speaker #2: Thanks, Colin. Good ended 2025 with another great quarter and once again delivered a full year morning. Our operations team of fantastic operating results for our shareholders.
Richard Hickson: Thanks, Colin. Good morning. Our operations team ended 2025 with another great quarter, and once again delivered a full year of fantastic operating results for our shareholders. In the fourth quarter, our total office portfolio end-of-period leased and weighted average occupancy percentages were 90.7% and 88.3% respectively. Our portfolio leased percentage was sequentially higher, driven by gains in Atlanta, Tampa, and Phoenix. Our portfolio occupancy was flat sequentially, as we expected, with occupancy either increasing or holding steady in every market except Charlotte. Regarding occupancy in Charlotte, the impact of Bank of America's expiration at 201 North Tryon is now fully reflected in our occupancy. As Colin mentioned, our occupancy outlook remains the same.
Richard Hickson: Thanks, Colin. Good morning. Our operations team ended 2025 with another great quarter, and once again delivered a full year of fantastic operating results for our shareholders. In the fourth quarter, our total office portfolio end-of-period leased and weighted average occupancy percentages were 90.7% and 88.3% respectively. Our portfolio leased percentage was sequentially higher, driven by gains in Atlanta, Tampa, and Phoenix. Our portfolio occupancy was flat sequentially, as we expected, with occupancy either increasing or holding steady in every market except Charlotte. Regarding occupancy in Charlotte, the impact of Bank of America's expiration at 201 North Tryon is now fully reflected in our occupancy. As Colin mentioned, our occupancy outlook remains the same.
Speaker #2: In the fourth quarter, our total office portfolio end-of-period leased and weighted average occupancy percentages were 90.7% and 88.3%, respectively. Our portfolio leased percentage was sequentially higher, driven by gains in Atlanta, Tampa, and Phoenix.
Speaker #2: Our portfolio occupancy was flat sequentially as we expected with occupancy either increasing or holding steady in every market except Charlotte. Regarding occupancy in Charlotte, the impact of Bank of America's expiration at 201 North Tryon is now fully reflected in our occupancy.
Speaker #2: As Colin mentioned, our occupancy outlook remains the same. Our exceptionally low 2026 lease expirations of only 4.8% of contractual rent and continued strong new leasing demand are important tailwinds in our focus on driving occupancy gains.
Richard Hickson: Our exceptionally low 2026 lease expirations of only 4.8% of contractual rent and continued strong new leasing demand are important tailwinds in our focus on driving occupancy gains. Leasing volume in the Q4 was very strong for Cousins. Our team completed an impressive 39 office leases totaling 700,000sq ft, with a weighted average lease term of 9.6 years. This is our highest quarterly square footage volume of the year and the second highest in the past 4 years. Our total signed activity for the year exceeded 2.1 million sq ft, which was the most since 2019. This quarter, 493,000sq ft of our completed leases were new and expansion leases, representing 70% of total activity.
Richard Hickson: Our exceptionally low 2026 lease expirations of only 4.8% of contractual rent and continued strong new leasing demand are important tailwinds in our focus on driving occupancy gains. Leasing volume in the Q4 was very strong for Cousins. Our team completed an impressive 39 office leases totaling 700,000sq ft, with a weighted average lease term of 9.6 years. This is our highest quarterly square footage volume of the year and the second highest in the past 4 years. Our total signed activity for the year exceeded 2.1 million sq ft, which was the most since 2019. This quarter, 493,000sq ft of our completed leases were new and expansion leases, representing 70% of total activity.
Speaker #2: Leasing volume in the fourth quarter was very strong for Cousins. Our team completed an impressive 39 office leases totaling $700,000 square feet with a weighted average lease term of 9.6 years.
Speaker #2: This was our highest quarterly square footage volume of the year, and the second highest in the past four years. Our total signed activity for the year exceeded 2.1 million square feet, which was the most since 2019.
Speaker #2: This quarter, 493,000 square feet of our completed leases were new and expansion leases representing 70% of total activity. For the full year, new and expansion activity accounted for a healthy 55% of our activity.
Richard Hickson: For the full year, new and expansion activity accounted for a healthy 55% of our activity. Our average net rent this quarter came in at $36.52, and leasing concessions, defined as the sum of free rent and tenant improvements, were above trend at $10.58. As a result, average net effective rent this quarter came in at a lower $23.18. It is important to note that we completed 211,000 sq ft of leasing at Northpark this quarter, including a very important 166,000 sq ft new lease with AT&T. While this activity is clearly very positive, Northpark lease economics are generally lower than the balance of our portfolio.
Richard Hickson: For the full year, new and expansion activity accounted for a healthy 55% of our activity. Our average net rent this quarter came in at $36.52, and leasing concessions, defined as the sum of free rent and tenant improvements, were above trend at $10.58. As a result, average net effective rent this quarter came in at a lower $23.18. It is important to note that we completed 211,000 sq ft of leasing at Northpark this quarter, including a very important 166,000 sq ft new lease with AT&T. While this activity is clearly very positive, Northpark lease economics are generally lower than the balance of our portfolio.
Speaker #2: Our average net rent this quarter came in at $36.52, and leasing concessions—defined as the sum of free rent and tenant improvements—were above trend at $10.58.
Speaker #2: As a result, average net effective rent this quarter came in at a lower $23.18. It is important to note that we completed 211,000 square feet of leasing at North Park this quarter.
Speaker #2: Including a very important $166,000 square foot new lease with activity is clearly very positive, North Park lease economics are generally lower than the balance of our portfolio.
Richard Hickson: So for context, when excluding Northpark activity, our average lease economics were much stronger, with net rent of $41.02, concessions of $10.03, and net effective rent of $27.96. The same dynamic holds true with our increase in second generation cash rents this quarter. In total this quarter, while still positive, cash rents only increased 0.2%. However, excluding Northpark, cash rents increased by a more substantial 10.4%, and every market posted increases this quarter. At the market level, JLL reports that leasing volume in Atlanta registered a 5.8% increase quarter-over-quarter in Q4, marking the highest quarterly volume of the year.
Richard Hickson: So for context, when excluding Northpark activity, our average lease economics were much stronger, with net rent of $41.02, concessions of $10.03, and net effective rent of $27.96. The same dynamic holds true with our increase in second generation cash rents this quarter. In total this quarter, while still positive, cash rents only increased 0.2%. However, excluding Northpark, cash rents increased by a more substantial 10.4%, and every market posted increases this quarter. At the market level, JLL reports that leasing volume in Atlanta registered a 5.8% increase quarter-over-quarter in Q4, marking the highest quarterly volume of the year.
Speaker #2: Context: When excluding North Park, so for activity, our average lease economics were much stronger. With net rent of $41.02, concessions of $10.03, and net effective rent of $27.97.
Speaker #2: The same dynamic holds true with our increase in second-generation cash rents this quarter. In total this quarter, while still positive, cash rents only increased 0.2%.
Speaker #2: However, excluding North Park, cash rents increased by a more substantial 10.4%. And every market posted increases this quarter. At the market level, JLL AT&T.
Speaker #2: reports that leasing volume in Atlanta While this registered a 5.8% increase Marking the highest quarterly volume of the year. We have seen this quarter over quarter in the fourth quarter.
Richard Hickson: We have seen this demand in our portfolio, where we signed a phenomenal 361,000 sq ft of leases in Q4, our highest quarterly volume in Atlanta since Q1 2019.... 70% of our quarterly activity was new and expansion leasing, and included the AT&T lease at Northpark that I've already mentioned. Our total activity also included two renewals with Raymond James, totaling 55,000 sq ft in both Buckhead and Northpark. Net of our Northpark activity, the Atlanta team also rolled up rents an impressive 14.5% this quarter. Our Atlanta portfolio occupancy also increased for the second consecutive quarter to 84.2%, driven by commencements at Avalon and in Buckhead. In Austin, JLL noted that the CBD posted positive absorption for both Q4 and the full year.
Richard Hickson: We have seen this demand in our portfolio, where we signed a phenomenal 361,000 sq ft of leases in Q4, our highest quarterly volume in Atlanta since Q1 2019.... 70% of our quarterly activity was new and expansion leasing, and included the AT&T lease at Northpark that I've already mentioned. Our total activity also included two renewals with Raymond James, totaling 55,000 sq ft in both Buckhead and Northpark. Net of our Northpark activity, the Atlanta team also rolled up rents an impressive 14.5% this quarter. Our Atlanta portfolio occupancy also increased for the second consecutive quarter to 84.2%, driven by commencements at Avalon and in Buckhead. In Austin, JLL noted that the CBD posted positive absorption for both Q4 and the full year.
Speaker #2: demand in our portfolio where we signed a phenomenal $361,000 square feet of leases in the fourth quarter. Our highest quarterly volume in Atlanta, since the first quarter of 2019.
Speaker #2: Seventy percent of our quarterly activity was new and expansion leasing and included the AT&T lease at North Park that I've already mentioned. Our total activity also included two renewals with Raymond James totaling 55,000 square feet in both Buckhead and North Park.
Speaker #2: Net of our North Park activity, the Atlanta team also rolled up rents an impressive 14.5% this quarter. Our Atlanta portfolio occupancy also increased for the second consecutive quarter to 84.2%, driven Avalon, and in by commencements at Buckhead.
Speaker #2: In Austin, JLL noted that the CBD posted positive absorption for both the fourth quarter and the full year. In addition, with 1.3 million square feet of leasing activity market-wide in the fourth quarter, total leasing activity for the full year was the highest for Austin since 2021.
Richard Hickson: In addition, with 1.3 million sq ft of leasing activity market-wide in Q4, total leasing activity for the full year was the highest for Austin since 2021. Notably, leasing by technology companies played a meaningful role in the year's activity, and nearly 1/3 of tenants currently in the market are technology companies. Across our Austin portfolio, we signed a solid 98,000 sq ft of leases in Q4, and we ended the year at 94.8% leased. In Charlotte, CBRE noted that Q4 rounded out with what was one of the strongest leasing years as of late, with leasing activity market-wide increasing 72% year-over-year. About 3/4 of that activity was new and expansion leasing, driven by large block and also new to market requirements.
Richard Hickson: In addition, with 1.3 million sq ft of leasing activity market-wide in Q4, total leasing activity for the full year was the highest for Austin since 2021. Notably, leasing by technology companies played a meaningful role in the year's activity, and nearly 1/3 of tenants currently in the market are technology companies. Across our Austin portfolio, we signed a solid 98,000 sq ft of leases in Q4, and we ended the year at 94.8% leased. In Charlotte, CBRE noted that Q4 rounded out with what was one of the strongest leasing years as of late, with leasing activity market-wide increasing 72% year-over-year. About 3/4 of that activity was new and expansion leasing, driven by large block and also new to market requirements.
Speaker #2: Notably, leasing by technology companies played a meaningful role in the year's activity, and nearly a third of tenants currently in the market are technology companies.
Speaker #2: Across our Austin portfolio, we signed a solid 98,000 square feet of leases in the fourth quarter, and we ended the year at 94.8% leased.
Speaker #2: In Charlotte, CBRE noted that the fourth quarter rounded out what was one of the strongest leasing years as of late, with leasing activity up 72% year over year.
Speaker #2: market-wide increasing new and expansion leasing. Driven by large block and also new-to-market requirements. Along with that, there is no speculative new development currently underway.
Richard Hickson: Along with that, there is no speculative new development currently underway. This supply and demand equation has already translated into solid rent growth in the urban core, and the tightening conditions in Charlotte certainly bode well for our major redevelopments of 201 North Tryon and 550 South. Our 550 South redevelopment is reaching completion at a great time, as the property will see a couple of move-outs in Q2 that combined will total 128,000sq ft, all of which have been long expected and are included in our occupancy outlook. With that said, I'm very pleased to report that we are in lease negotiations with a new 87,000sq ft customer at 550 South, that would take occupancy in 2026.
Richard Hickson: Along with that, there is no speculative new development currently underway. This supply and demand equation has already translated into solid rent growth in the urban core, and the tightening conditions in Charlotte certainly bode well for our major redevelopments of 201 North Tryon and 550 South. Our 550 South redevelopment is reaching completion at a great time, as the property will see a couple of move-outs in Q2 that combined will total 128,000sq ft, all of which have been long expected and are included in our occupancy outlook. With that said, I'm very pleased to report that we are in lease negotiations with a new 87,000sq ft customer at 550 South, that would take occupancy in 2026.
Speaker #2: This supply and demand equation has already translated into solid rent growth in the urban core, and the tightening conditions in Charlotte certainly bode well for our major redevelopments of 201 North Tryon and 550 South.
Speaker #2: Our 550 South redevelopment is reaching completion at a great time. As the property will see a couple of move-outs in the second quarter, that combined will total 128,000 square feet.
Speaker #2: All of which have been long expected and are included in our occupancy outlook. With that said, I'm very pleased to report that we are in lease negotiations with a new 87,000 square foot customer at 550 South that would take occupancy in 2026.
Speaker #2: While we don't yet have any specific activity to report at 201 North Tryon, we continue to see very encouraging demand for multiple large requirements.
Richard Hickson: While we don't yet have any specific activity to report at 201 North Tryon, we continue to see very encouraging demand from multiple large requirements for what we view as the highest quality, second generation, large block availability in the market. In Phoenix, full year 2025 net absorption came in at over 700,000 sq ft, and fourth quarter absorption showed improvement over the prior quarter for JLL. Demand in the market continues to be focused on the most well-located and high-quality projects, especially in Tempe and the Camelback Corridor. As such, the highest quality segment of the market has been successfully increasing rents. For example, prior to 2024, Phoenix had not seen a lease completed with a gross rent over $60 per sq ft.
Richard Hickson: While we don't yet have any specific activity to report at 201 North Tryon, we continue to see very encouraging demand from multiple large requirements for what we view as the highest quality, second generation, large block availability in the market. In Phoenix, full year 2025 net absorption came in at over 700,000 sq ft, and fourth quarter absorption showed improvement over the prior quarter for JLL. Demand in the market continues to be focused on the most well-located and high-quality projects, especially in Tempe and the Camelback Corridor. As such, the highest quality segment of the market has been successfully increasing rents. For example, prior to 2024, Phoenix had not seen a lease completed with a gross rent over $60 per sq ft.
Speaker #2: For what we view as the highest quality second-generation large block availability in the market. In Phoenix, full-year 2025 net absorption came in at over 700,000 square feet, and fourth quarter absorption showed improvement over the prior quarter.
Speaker #2: Per JLL, demand in the market continues to be focused on the most well-located and high-quality projects, especially in Tempe. As such, the highest quality segment of the market has been successfully increasing rents.
Speaker #2: For example, prior to 2024, Phoenix had not seen a lease completed with a gross rent over $60 per square foot. As of today, 20 leases have been completed market-wide north of that mark.
Richard Hickson: As of today, 20 leases have been completed market-wide, north of that mark. In Q4, our Phoenix team signed an incredible 177,000 sq ft of leases, all of which were at our Hayden Ferry project in Tempe. Over 90% of our quarterly activity was with 3 new customers, with all of them relocating their corporate headquarters to Hayden Ferry. I'm thrilled to say the entire project, inclusive of Hayden Ferry One, is now 95% leased. The redevelopment of Hayden Ferry and resulting accelerated lease up of the former SBP space and then some, is one of the greatest success stories in Cousins' recent history. I'll conclude with an update on our leasing pipeline. Our overall pipeline remains near peak levels, and 60% of the overall pipeline is new in expansion leasing.
Richard Hickson: As of today, 20 leases have been completed market-wide, north of that mark. In Q4, our Phoenix team signed an incredible 177,000 sq ft of leases, all of which were at our Hayden Ferry project in Tempe. Over 90% of our quarterly activity was with 3 new customers, with all of them relocating their corporate headquarters to Hayden Ferry. I'm thrilled to say the entire project, inclusive of Hayden Ferry One, is now 95% leased. The redevelopment of Hayden Ferry and resulting accelerated lease up of the former SBP space and then some, is one of the greatest success stories in Cousins' recent history. I'll conclude with an update on our leasing pipeline. Our overall pipeline remains near peak levels, and 60% of the overall pipeline is new in expansion leasing.
Speaker #2: In the fourth quarter, our Phoenix team signed an incredible $177,000 square feet of leases. All of which were at our Hayden Ferry project in Tempe.
Speaker #2: Over 90% of our quarterly activity was with three new customers. With all of them relocating their corporate headquarters to Hayden Ferry. I'm thrilled to say the entire project, inclusive of Hayden Ferry 1, is now redevelopment of Hayden Ferry and resulting accelerated lease-up of the former SVP space and then some, is one of the history.
Speaker #2: I'll conclude with an update on our leasing pipeline. Our overall pipeline remains near peak; overall pipeline is new and expansion leasing. In our December late-stage leasing pipeline update, we shared that 1.2 million square feet of activity was either signed, quarter-to-date, or in lease negotiations.
Richard Hickson: In our December late stage leasing pipeline update, we shared that 1.2 million sq ft of activity was either signed quarter to date or in lease negotiations. Even after completing 700,000 sq ft of volume in Q4, as of today, we still have over 1.1 million sq ft of leases, either signed quarter to date or in lease negotiations. Further, the amount of activity we have in lease negotiations is at its highest level in 5 years. With continued robust demand and activity progressing nicely through our pipeline, we believe we are positioned for an excellent start to 2026 on the leasing front. As always, I want to thank our operations team for everything they do to help make us successful.
Richard Hickson: In our December late stage leasing pipeline update, we shared that 1.2 million sq ft of activity was either signed quarter to date or in lease negotiations. Even after completing 700,000 sq ft of volume in Q4, as of today, we still have over 1.1 million sq ft of leases, either signed quarter to date or in lease negotiations. Further, the amount of activity we have in lease negotiations is at its highest level in 5 years. With continued robust demand and activity progressing nicely through our pipeline, we believe we are positioned for an excellent start to 2026 on the leasing front. As always, I want to thank our operations team for everything they do to help make us successful. Again, 2025 was another fantastic year, and we are looking forward to continuing the momentum into 2026. Kennedy?
Speaker #2: Even after completing 700,000 square feet of volume in the fourth quarter, as of today, we still have over $1.1 million square feet of leases either signed, quartered to date, or in lease negotiations.
Speaker #2: Further, the amount of activity we have in lease negotiations is at its highest level in five years. With continued robust demand and activity progressing nicely through our pipeline, we believe we are positioned for an excellent start to 2026 on the leasing front.
Speaker #2: As always, I want to thank our operations team for everything they do to help make us successful. Again, 2025 was another fantastic year, and we are looking forward to continuing the momentum into 2026.
Richard Hickson: Again, 2025 was another fantastic year, and we are looking forward to continuing the momentum into 2026. Kennedy?
Speaker #2: Kennedy? Thanks, Richard. Good morning. As Colin discussed, one of our key objectives remains to identify and execute acquisitions that meet our criteria. Lifestyle sunset belt assets consistent with or better than the quality of our current portfolio that we can acquire and fund in a manner that is accretive to earnings and cash flow.
Kennedy Hicks: Thanks, Richard. Good morning. As Colin discussed, one of our key objectives remains to identify and execute acquisitions that meet our criteria. Lifestyle Sun Belt assets consistent with or better than the quality of our current portfolio, that we can acquire and fund in a manner that is accretive to earnings and cash flow. While office transaction volume is increasing across our markets, we believe that we still have a competitive advantage as a well-capitalized buyer and operator, particularly when it comes to larger offerings. To that end, I'm excited to provide more detail on the acquisition of 300 South Tryon in Uptown Charlotte, that we closed earlier this week. The 638,000sq ft trophy asset is an excellent strategic fit for our portfolio.
Kennedy Hicks: Thanks, Richard. Good morning. As Colin discussed, one of our key objectives remains to identify and execute acquisitions that meet our criteria. Lifestyle Sun Belt assets consistent with or better than the quality of our current portfolio, that we can acquire and fund in a manner that is accretive to earnings and cash flow. While office transaction volume is increasing across our markets, we believe that we still have a competitive advantage as a well-capitalized buyer and operator, particularly when it comes to larger offerings. To that end, I'm excited to provide more detail on the acquisition of 300 South Tryon in Uptown Charlotte, that we closed earlier this week. The 638,000sq ft trophy asset is an excellent strategic fit for our portfolio.
Speaker #2: While office transaction volume is increasing across our markets, we believe that we still have a competitive advantage as a well-capitalized buyer and operator, particularly when it comes to larger offerings.
Speaker #2: To that end, I'm excited to provide more detail on the acquisition of 300 South Tryon in Uptown Charlotte that we closed earlier this week.
Speaker #2: The 638,000-square-foot trophy asset is an excellent strategic fit for our portfolio. The highly amenitized building sits in the heart of the urban core, boasting a Walk Score of 95, as well as very convenient vehicular access and direct connectivity to the Kempton Tryon Park Hotel.
Kennedy Hicks: The highly amenitized building sits in the heart of the urban core, boasting a Walk Score of 95, as well as very convenient vehicular access and direct connectivity to the Kimpton Tryon Park Hotel. Since its completion in 2017, the 100% leased building has served as Barings' global headquarters, while also attracting a who's who of Am Law 100 and other professional service firms such as Mayer Brown, Ameriprise Financial, K&L Gates, and RSM. Barings leases approximately 30% of the building. We acquired the building off market for $317.5 million, or $497 per square foot, a basis that represents a significant discount to replacement cost. This equates to a 7.3 cash cap rate and an 8.8 GAAP cap rate.
Kennedy Hicks: The highly amenitized building sits in the heart of the urban core, boasting a Walk Score of 95, as well as very convenient vehicular access and direct connectivity to the Kimpton Tryon Park Hotel. Since its completion in 2017, the 100% leased building has served as Barings' global headquarters, while also attracting a who's who of Am Law 100 and other professional service firms such as Mayer Brown, Ameriprise Financial, K&L Gates, and RSM. Barings leases approximately 30% of the building. We acquired the building off market for $317.5 million, or $497 per square foot, a basis that represents a significant discount to replacement cost. This equates to a 7.3 cash cap rate and an 8.8 GAAP cap rate.
Speaker #2: Since its completion in 2017, the 100% lease building has served as bearings global headquarters, while also attracting a who's who of Amwall 100 and other professional service firms such as Mayor Brown, a Mayor Prize Financial, K&L Gates, and RSM.
Speaker #2: Approximately 30% of the Bearings leases the building. We acquired the building off-market for $317.5 million, or $497 per square foot—a basis that represents a significant discount to replacement cost.
Speaker #2: This equates to a 7.3% cash cap rate and an 8.8% gap cap rate. There's currently over six years of weighted average remaining lease term, and strong upside potential given that the in-place rents are approximately 20% below today's market rate.
Kennedy Hicks: There's currently over 6 years of weighted average remaining lease term and strong upside potential, given that the in-place rents are approximately 20% below today's market rate. This transaction and the seller's desire to work with us directly validates our competitive advantage within our markets. The asset is a great complement to our existing Charlotte portfolio, bringing it to 2.7 million square feet. The Charlotte market has recently been a top performer, leading the country in job growth in 2025 amongst major MSAs. As Richard mentioned, this dynamic, along with the dwindling supply of high-quality urban space, has led to demonstrable recent rent growth in the top tier buildings. We expect this trend to continue and perhaps even accelerate. Turning to dispositions, the private market continues to improve, with equity and debt sources becoming more constructive around office opportunities, especially those of a smaller size.
Kennedy Hicks: There's currently over 6 years of weighted average remaining lease term and strong upside potential, given that the in-place rents are approximately 20% below today's market rate. This transaction and the seller's desire to work with us directly validates our competitive advantage within our markets. The asset is a great complement to our existing Charlotte portfolio, bringing it to 2.7 million square feet. The Charlotte market has recently been a top performer, leading the country in job growth in 2025 amongst major MSAs. As Richard mentioned, this dynamic, along with the dwindling supply of high-quality urban space, has led to demonstrable recent rent growth in the top tier buildings. We expect this trend to continue and perhaps even accelerate. Turning to dispositions, the private market continues to improve, with equity and debt sources becoming more constructive around office opportunities, especially those of a smaller size.
Speaker #2: This transaction, and the seller's desire to work with us directly, validates our competitive advantage within our markets. The asset is a great complement to our existing Charlotte portfolio.
Speaker #2: Bringing it to $2.7 million square feet. The Charlotte market has recently been a top performer. Leading the country in job growth in 2025 amongst major MSAs.
Speaker #2: As Richard mentioned, this dynamic, along with the dwindling supply of high-quality urban space, has led to demonstrable recent rent growth in the top-tier buildings.
Speaker #2: We expect this trend to continue, and perhaps even accelerate. Turning to dispositions, the private market continues to improve, with equity and debt sources becoming more constructive around office opportunities.
Speaker #2: Especially those of a smaller size. As we've discussed in the past, we view dispositions as one of several funding options for new acquisitions and eventually development.
Kennedy Hicks: As we've discussed in the past, we view dispositions as one of several funding options for new acquisitions and eventually development. Given the quality of our portfolio and balance sheet, we don't need to sell. But when there are opportunities to creatively rotate into assets that improve our portfolio composition and mitigate higher CapEx needs, we plan to execute. We are currently under contract to sell Harborview Plaza in West Shore, Tampa, scheduled to close in Q1 for $39.5 million. This is a 2002 vintage building that is approximately 81% leased and due for a renovation. We were encouraged by the depth of investor demand for the building and decided that our resources are better invested in other assets going forward.
Kennedy Hicks: As we've discussed in the past, we view dispositions as one of several funding options for new acquisitions and eventually development. Given the quality of our portfolio and balance sheet, we don't need to sell. But when there are opportunities to creatively rotate into assets that improve our portfolio composition and mitigate higher CapEx needs, we plan to execute. We are currently under contract to sell Harborview Plaza in West Shore, Tampa, scheduled to close in Q1 for $39.5 million. This is a 2002 vintage building that is approximately 81% leased and due for a renovation. We were encouraged by the depth of investor demand for the building and decided that our resources are better invested in other assets going forward.
Speaker #2: Given the quality of our portfolio and balance sheet, we don't need to sell. But when there are opportunities to accretively rotate into assets that improve our portfolio composition and mitigate higher CapEx x needs, we plan to execute.
Speaker #2: We are currently under contract to sell Harborview Plaza in West Shore, Tampa. Scheduled to close in the first quarter for $39.5 million. This is a 2002 vintage building that is approximately 81% leased and due for a renovation.
Speaker #2: We were encouraged by the depth of investor demand for the building, and decided that our resources are better invested in other assets going forward.
Speaker #2: We also have a land parcel, 303 Tremont in South End, Charlotte, that's now under contract to be sold to a residential developer. The contract price for the 2.4 acres is $23.7 million, and we expect it to close in the second half of the year.
Kennedy Hicks: We also have a land parcel, 303 Tremont in South End, Charlotte, now under contract to be sold to a residential developer. The contract price for the 2.4 acres is $23.7 million, and we expect it to close in the second half of the year. As you know, we maintain a very modest land bank, but similar to the rest of our portfolio, we are always evaluating the highest and best use of our capital. As this area of South End has evolved, our view is that this particular site is now better suited for a residential development as opposed to the office towers that we originally contemplated.
Kennedy Hicks: We also have a land parcel, 303 Tremont in South End, Charlotte, now under contract to be sold to a residential developer. The contract price for the 2.4 acres is $23.7 million, and we expect it to close in the second half of the year. As you know, we maintain a very modest land bank, but similar to the rest of our portfolio, we are always evaluating the highest and best use of our capital. As this area of South End has evolved, our view is that this particular site is now better suited for a residential development as opposed to the office towers that we originally contemplated.
Speaker #2: As you know, we maintain a very modest land bank, but similar to the rest of our portfolio, we are always evaluating the highest and best use of our capital.
Speaker #2: As this area of South End has evolved, our view is that this particular site is now better suited for a residential development, as opposed to the office towers that we originally contemplated.
Speaker #2: Given the aforementioned office supply shortage in Charlotte, we continue to advance pre-development efforts on our other South End site, 1435 South Tryon, and remain enthused about the prospects for that eventual office development, as well as others across our markets.
Kennedy Hicks: Given the aforementioned office supply shortage in Charlotte, we continue to advance pre-development efforts on our other South End site, 1435 South Tryon, and remain enthused about the prospects for that eventual office development, as well as others across our markets. Looking forward, we're optimistic that 2026 will be another busy investment year for Cousins. We continue to be opportunistic when it comes to acquisitions and dispositions, as well as other investment opportunities. We have the flexibility to invest in a variety of ways throughout a capital stack, yet we'll maintain discipline as to quality with a constant eye towards ultimately increasing earnings. Finally, I want to provide an update on Neuhoff, our mixed-use development project in Nashville. We finished the quarter with the apartment component up to 89% leased, and today it sits at over 90%.
Kennedy Hicks: Given the aforementioned office supply shortage in Charlotte, we continue to advance pre-development efforts on our other South End site, 1435 South Tryon, and remain enthused about the prospects for that eventual office development, as well as others across our markets. Looking forward, we're optimistic that 2026 will be another busy investment year for Cousins. We continue to be opportunistic when it comes to acquisitions and dispositions, as well as other investment opportunities. We have the flexibility to invest in a variety of ways throughout a capital stack, yet we'll maintain discipline as to quality with a constant eye towards ultimately increasing earnings. Finally, I want to provide an update on Neuhoff, our mixed-use development project in Nashville. We finished the quarter with the apartment component up to 89% leased, and today it sits at over 90%.
Speaker #2: Looking forward, we are optimistic that 2026 will be another busy investment year for Cousins. We continue to be opportunistic when it comes to acquisitions and dispositions, as well as other investment opportunities.
Speaker #2: We have the flexibility to invest in a variety of ways throughout a capital stack, yet we'll maintain discipline as to quality, with a constant eye towards ultimately increasing earnings.
Speaker #2: Finally, I want to provide an update on new hops—our mixed-use development project in Nashville. We finished the quarter with the apartment component up to 89% leased, and today it sits at over 90%.
Speaker #2: We did move the stabilization date to the first quarter of 2026, as we expect to achieve over 90% occupancy in this quarter. On the commercial side, we remain very encouraged by the recent activity, both in the market and at the project.
Kennedy Hicks: We did move the stabilization date to Q1 2026, as we expect to achieve over 90% occupancy in this quarter. On the commercial side, we remain very encouraged by the recent activity, both in the market and at the project. We now have a late-stage lease pipeline that is nearly 120,000sq ft. We look forward to providing further updates. I will now turn the call over to Greg.
Kennedy Hicks: We did move the stabilization date to Q1 2026, as we expect to achieve over 90% occupancy in this quarter. On the commercial side, we remain very encouraged by the recent activity, both in the market and at the project. We now have a late-stage lease pipeline that is nearly 120,000sq ft. We look forward to providing further updates. I will now turn the call over to Greg.
Speaker #2: We now have a late-stage lease pipeline that is nearly 120,000 square feet. We look forward to providing further updates. I will now turn the call over to
Speaker #2: Greg. Thanks,
Gregg Adzema: Thanks, Kennedy. I'll begin my remarks today by providing a brief overview of our results, spending a moment on our same-property performance, and then moving on to our property transactions and capital markets activity, before closing my remarks by discussing our inaugural 2026 earnings guidance. Overall, as Colin stated up front, our Q4 results were outstanding. Second-generation cash leasing spreads were positive, same-property year-over-year cash NOI increased, and leasing velocity was exceptionally strong. Focusing on same-property performance for a moment, GAAP NOI increased 0.4%, and cash NOI increased 0.03% during the Q4 compared to last year. These numbers were negatively impacted by the large Bank of America departure that Richard discussed earlier. But despite that, we've kept this property in the same-property pool.
Gregg Adzema: Thanks, Kennedy. I'll begin my remarks today by providing a brief overview of our results, spending a moment on our same-property performance, and then moving on to our property transactions and capital markets activity, before closing my remarks by discussing our inaugural 2026 earnings guidance. Overall, as Colin stated up front, our Q4 results were outstanding. Second-generation cash leasing spreads were positive, same-property year-over-year cash NOI increased, and leasing velocity was exceptionally strong. Focusing on same-property performance for a moment, GAAP NOI increased 0.4%, and cash NOI increased 0.03% during the Q4 compared to last year. These numbers were negatively impacted by the large Bank of America departure that Richard discussed earlier. But despite that, we've kept this property in the same-property pool.
Speaker #1: Kennedy. I'll begin my remarks today by providing a brief overview of our results. Spending a moment on our same property performance. And then moving on to our property transactions and capital markets activity.
Speaker #1: For closing my remarks, I discuss our inaugural 2026 earnings guidance. Overall, as Colin stated upfront, our fourth quarter results were outstanding. Second-generation cash leasing spreads were positive.
Speaker #1: Same property year-over-year cash NOI increased, and leasing velocity was exceptionally strong. Focusing on same property performance for a moment, GAAP NOI increased 0.4%, and cash NOI increased 0.03% during the fourth quarter compared to last year.
Speaker #1: These numbers were negatively impacted by the large Bank of America departure that Richard discussed earlier, but despite that, we've kept this property in the same property pool.
Speaker #1: Excluding 201 North Tryon, same-property cash NOI increased 2% during the fourth quarter. As Kennedy just discussed, we're in the process of selling two non-core assets.
Gregg Adzema: Excluding 201 North Tryon, same property cash NOI increased 2% during Q4. As Kennedy just discussed, we're in the process of selling two non-core assets. These assets were reported as held for sale on our year-end balance sheet, and we recognized impairments on both during Q4. At Harborview Plaza, we recognized a $13.3 million impairment, which, as a depreciable asset, does not impact NAREIT-defined FFO. At 303 Tremont, we recognized a $1 million impairment on our land parcel, which does run through FFO. ... Before moving on, I want to provide a little bit more detail on the Tremont impairment. We originally purchased this parcel in 2021 for $18.9 million. It's currently under contract to sell for $23.7 million, so there's been significant depreciation.
Gregg Adzema: Excluding 201 North Tryon, same property cash NOI increased 2% during Q4. As Kennedy just discussed, we're in the process of selling two non-core assets. These assets were reported as held for sale on our year-end balance sheet, and we recognized impairments on both during Q4. At Harborview Plaza, we recognized a $13.3 million impairment, which, as a depreciable asset, does not impact NAREIT-defined FFO. At 303 Tremont, we recognized a $1 million impairment on our land parcel, which does run through FFO. ... Before moving on, I want to provide a little bit more detail on the Tremont impairment. We originally purchased this parcel in 2021 for $18.9 million. It's currently under contract to sell for $23.7 million, so there's been significant depreciation.
Speaker #1: These assets were reported as held for sale on our year-end balance sheet, and we recognized impairments on both during the fourth quarter. At Harborview Plaza, we recognized a $13.3 million impairment, which, as a depreciable asset, does not impact neighboring defined FFO.
Speaker #1: At 303 Tremont, we recognized a $1 million impairment on our land parcel, which does run through FFO. Before moving on, I want to provide a little bit more detail on the Tremont impairment.
Speaker #1: We originally purchased this parcel in 2021 for $18.9 million. It's currently under contract to sell for $23.7 million. So there's been significant depreciation. However, while we held it, we spent $5.4 million. It's these pre-development costs that led to the impairment.
Gregg Adzema: However, while we held it, we spent $5.4 million in pre-development costs. It's these pre-development costs that led to the impairment. And just last night, we received repayment at par of our $18.2 million mezzanine loan, secured by an equity interest in the OneTen East property in the South End submarket of Charlotte. We assumed this repayment in our 2026 guidance. Finally, although we didn't sell any common shares during Q4, to date, we have sold 2.9 million shares through our ATM program on a forward basis at an average gross price of $30.44 per share. None of these shares have yet been settled. With that, I'll close out our prepared remarks by discussing our 2026 earnings guidance.
Gregg Adzema: However, while we held it, we spent $5.4 million in pre-development costs. It's these pre-development costs that led to the impairment. And just last night, we received repayment at par of our $18.2 million mezzanine loan, secured by an equity interest in the OneTen East property in the South End submarket of Charlotte. We assumed this repayment in our 2026 guidance. Finally, although we didn't sell any common shares during Q4, to date, we have sold 2.9 million shares through our ATM program on a forward basis at an average gross price of $30.44 per share. None of these shares have yet been settled. With that, I'll close out our prepared remarks by discussing our 2026 earnings guidance.
Speaker #1: And just last night, we received repayment at par of our $18.2 million mezzanine loan secured by an equity interest in the 110 East property in the South End submarket of Charlotte.
Speaker #1: We assumed this repayment in our '26 guidance. Finally, although we didn't sell any common shares during the fourth quarter, to date we have sold 2.9 million shares through our ATM program on a forward basis at an average gross price of $30.44 per share.
Speaker #1: None of these shares have yet been settled. With that, I'll close out our prepared remarks by discussing our 2026 earnings guidance. We currently anticipate full year 26 FFO between $2.87 and $2.97 per share.
Gregg Adzema: We currently anticipate full year 2026 FFO between $2.87 and $2.97 per share, with a midpoint of $2.92 per share. This is approximately up just a little under 3% from the prior year. Our guidance includes a refinancing of approximately $465 million in debt that matures between August and October of 2026. Our unsecured bonds currently trade at the tightest spread to treasuries among all traditional office REITs and are much tighter than any secured debt options. This will provide us a significant cost of capital advantage as we pursue this refinancing. Our guidance also assumes the 300 South Tryon acquisition is funded with proceeds from the Harborview and Tremont sales, as well as approximately $200 million in additional non-core asset sales.
Gregg Adzema: We currently anticipate full year 2026 FFO between $2.87 and $2.97 per share, with a midpoint of $2.92 per share. This is approximately up just a little under 3% from the prior year. Our guidance includes a refinancing of approximately $465 million in debt that matures between August and October of 2026. Our unsecured bonds currently trade at the tightest spread to treasuries among all traditional office REITs and are much tighter than any secured debt options. This will provide us a significant cost of capital advantage as we pursue this refinancing. Our guidance also assumes the 300 South Tryon acquisition is funded with proceeds from the Harborview and Tremont sales, as well as approximately $200 million in additional non-core asset sales.
Speaker #1: With a midpoint of $2.92 per share, this is up just a little under 3% from the prior year. Our guidance includes a refinancing of approximately $465 million in debt that matures between August and October of '26.
Speaker #1: Our unsecured bonds currently trade at the tightest spread to treasuries among all traditional office rates, and are much tighter than any secured debt options.
Speaker #1: This will provide us a significant cost pursue this of capital advantage as we funded with proceeds from the Harborview and Tremont sales, as well as approximately $200 million in additional non-core asset sales.
Speaker #1: We provided this additional sales assumption for modeling purposes. In reality, as Colin stated earlier, our strong balance sheet puts us in a position to be very patient and opportunistic on the ultimate funding acquisition. The 300 South Tryon acquisition is assumed in the modeling.
Gregg Adzema: We provided this additional sales assumption for modeling purposes. In reality, as Colin stated earlier, our strong balance sheet puts us in a position to be very patient and opportunistic on the ultimate funding for this acquisition. Our guidance does not include any additional property acquisitions or development starts in 2026. If any of these do take place, we'll update our earnings guidance accordingly. Bottom line, our Q4 results are excellent, and our initial 2026 guidance indicates the third straight year of earnings growth. Our best-in-class leverage and liquidity position remains intact. Office fundamentals continue to improve, with accelerating leasing activity and declining new supply, and we continue to deploy capital into compelling and accretive investment opportunities. We'll look forward to reporting our progress in the coming quarters. With that, I'll turn it back over to the operator.
Gregg Adzema: We provided this additional sales assumption for modeling purposes. In reality, as Colin stated earlier, our strong balance sheet puts us in a position to be very patient and opportunistic on the ultimate funding for this acquisition. Our guidance does not include any additional property acquisitions or development starts in 2026. If any of these do take place, we'll update our earnings guidance accordingly. Bottom line, our Q4 results are excellent, and our initial 2026 guidance indicates the third straight year of earnings growth. Our best-in-class leverage and liquidity position remains intact. Office fundamentals continue to improve, with accelerating leasing activity and declining new supply, and we continue to deploy capital into compelling and accretive investment opportunities. We'll look forward to reporting our progress in the coming quarters. With that, I'll turn it back over to the operator.
Speaker #1: Our guidance does not include any additional property acquisitions or for this development starts in 2026. If any of these do take place, we'll update our earnings guidance accordingly.
Speaker #1: Bottom line, our fourth quarter results are excellent, and our initial 2026 guidance indicates the third straight year of earnings growth. Our best-in-class leverage and liquidity position remains intact, office fundamentals continue to support leasing activity and declining new supply, and we continue to deploy capital into compelling and accretive investment opportunities.
Speaker #1: We'll look forward to reporting our progress in the coming quarters. With that, I'll turn it back over to the improve, with accelerating operator.
Speaker #2: Ladies and gentlemen, we will now begin the question and answer session. If you have any questions, please press star, followed by the number one on your touchstone phone.
Operator: Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. If you would like to withdraw from the polling process, please press star followed by the number two. If you are using a speakerphone, please make sure to lift your handset before pressing any keys. Your first question comes from the line of Blaine Heck from Wells Fargo. Please go ahead.
Operator: Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. If you would like to withdraw from the polling process, please press star followed by the number two. If you are using a speakerphone, please make sure to lift your handset before pressing any keys. Your first question comes from the line of Blaine Heck from Wells Fargo. Please go ahead.
Speaker #2: You will hear a prompt that your hand has been raised. If you would like to withdraw from the polling process, please press star, followed by the number two.
Speaker #2: If you are using a speakerphone, please make sure to lift your handset before pressing any keys. Your first question comes from the line of Blaine Heck from Wells Fargo.
Speaker #2: Please go ahead.
Speaker #3: Great, thanks. Good morning, everyone. Colin, I thought your commentary on starting a new development project was interesting. Can you talk about which markets are most supportive of development from a yield perspective, and whether you're likely to develop on land you own?
Blaine Heck: Great, thanks. Good morning, everyone. Colin, I thought your commentary on starting a new development project was interesting. Can you talk about which markets are most supportive of development from a yield perspective, and whether you're likely to develop on land you own, maybe redevelop something in your portfolio, like your opportunity in the Domain, or whether you'll be looking to purchase land associated with that new development?
Blaine Heck: Great, thanks. Good morning, everyone. Colin, I thought your commentary on starting a new development project was interesting. Can you talk about which markets are most supportive of development from a yield perspective, and whether you're likely to develop on land you own, maybe redevelop something in your portfolio, like your opportunity in the Domain, or whether you'll be looking to purchase land associated with that new development?
Speaker #3: Maybe redevelop something in your portfolio like your opportunity in the domain or whether you'll be looking to purchase land associated with that new development?
Speaker #4: Good morning, Blaine. It's not a specific development yet that I'm referring to, but given the number of opportunities that we're looking at across our footprint, that does make me hopeful by year-end we will have identified one, and I think it could be in several different markets. Dallas—Uptown Dallas is extraordinarily tight, and we're seeing rents today approach replacement cost rents.
Colin Connolly: Morning, Blaine. It, there's not a specific development yet that I'm referring to, but given the number of opportunities that we're looking at across our footprint, that does make me hopeful by year-end, we will have identified one. And I think it could be in several different markets. Dallas, Uptown Dallas is extraordinarily tight, and we're seeing rents today approach replacement cost rents. You alluded to the Domain, which is, you know, effectively 100% leased, and we've got great land there. We referenced a tightening Charlotte market in the South End of Charlotte, again, where we own great land, where we're seeing a shortage of large blocks of space.
Colin Connolly: Morning, Blaine. It, there's not a specific development yet that I'm referring to, but given the number of opportunities that we're looking at across our footprint, that does make me hopeful by year-end, we will have identified one. And I think it could be in several different markets. Dallas, Uptown Dallas is extraordinarily tight, and we're seeing rents today approach replacement cost rents. You alluded to the Domain, which is, you know, effectively 100% leased, and we've got great land there. We referenced a tightening Charlotte market in the South End of Charlotte, again, where we own great land, where we're seeing a shortage of large blocks of space.
Speaker #4: You alluded to the domain, which is effectively 100% leased, and we've got great land there. We referenced a tightening Charlotte market in the South End of Charlotte.
Speaker #4: Again, where we own great land, where we're seeing a shortage of large blocks of space. Even in Buckhead, where I'm sitting today, there's not a single block of space over 100,000 square feet today in a Class A building.
Colin Connolly: You know, even in Buckhead, where I'm sitting today, there's not a single block of space over 100,000 sq ft today in a Class A building. So I do think you're gonna start to see some increases in rental rates that will justify new construction for some large users that have no other alternatives, and we want to be ready to capitalize it. And it ultimately could be, you know, land that we own today. It could be, you know, some discussions that we're having about various ventures with folks that own parcels that we currently do not own. So, it's gonna be—we're gonna be flexible, but we're laser focused on identifying and converting one of these opportunities, hopefully by year-end.
Colin Connolly: You know, even in Buckhead, where I'm sitting today, there's not a single block of space over 100,000 sq ft today in a Class A building. So I do think you're gonna start to see some increases in rental rates that will justify new construction for some large users that have no other alternatives, and we want to be ready to capitalize it. And it ultimately could be, you know, land that we own today. It could be, you know, some discussions that we're having about various ventures with folks that own parcels that we currently do not own. So, it's gonna be—we're gonna be flexible, but we're laser focused on identifying and converting one of these opportunities, hopefully by year-end.
Speaker #4: So I do think you're going to start to see some will justify new construction increases in rental rates. for some large users that have no That other alternatives.
Speaker #4: And we want to be ready to capitalize it and it ultimately could be land that we own today. It could be some discussions that we're having about various ventures with folks that own parcels that we currently do not own.
Speaker #4: So, it's going to be—we're going to be flexible. But we're laser-focused on identifying and converting one of these opportunities, hopefully by year-end.
Speaker #3: Okay, great. That's helpful. You've got a robust late-stage pipeline, as you've alluded to, and a good idea of where rent spreads might be—1.1 million square feet.
Blaine Heck: Okay, great. That's helpful. You've got a robust late stage pipeline, as you guys have alluded to, at one point 1 million sq ft, so I'm sure you guys have a good idea of where rent spreads might be on that activity. Is there any color you can provide there? Just general thoughts on 2026 rent spreads on a cash basis.
Blaine Heck: Okay, great. That's helpful. You've got a robust late stage pipeline, as you guys have alluded to, at one point 1 million sq ft, so I'm sure you guys have a good idea of where rent spreads might be on that activity. Is there any color you can provide there? Just general thoughts on 2026 rent spreads on a cash basis.
Speaker #3: Be on that activity. Is there—so I'm sure you guys have—any color you can provide there, and just general thoughts on '26 rent spreads on a cash basis?
Speaker #3: basis? Sure.
Richard Hickson: ... Sure, this is Richard. Yeah, I mean, we definitely have visibility into that in the late-stage pipeline. And what I'll say is that it's looking certainly more in line with our activity this past quarter, net of Northpark. So we feel good about the near term on continuing to be able to roll up cash rents.
Richard Hickson: ... Sure, this is Richard. Yeah, I mean, we definitely have visibility into that in the late-stage pipeline. And what I'll say is that it's looking certainly more in line with our activity this past quarter, net of Northpark. So we feel good about the near term on continuing to be able to roll up cash rents.
Speaker #4: This is Richard. Yeah, I mean, we definitely have visibility into that in the late-stage pipeline and what I'll say is that it's looking certainly more in line with our activity this past quarter net of North Park.
Speaker #4: So we feel good about the near term on continuing to be able to roll
Speaker #4: up cash rents. And Blaine, I
Colin Connolly: Blaine, I highlighted if we're successful in delivering another positive cash rent roll-up in the first quarter, that will be our 48th consecutive quarter with a positive second-generation rent roll-up. That's for those that don't want to do the math, that's 12 years.
Colin Connolly: Blaine, I highlighted if we're successful in delivering another positive cash rent roll-up in the first quarter, that will be our 48th consecutive quarter with a positive second-generation rent roll-up. That's for those that don't want to do the math, that's 12 years.
Speaker #3: If we're successful in delivering another positive cash rent roll-up in the first quarter, that will be our 48th consecutive quarter with a positive second-generation rent roll-up.
Speaker #3: That's for those that don't want to do the math—that's 12 years. Very impressive. Yep. Last one from me: can you just talk a little bit more, I guess, about the optionality you guys have for funding the 300 South Tryon acquisition, and how you're thinking about sales versus debt or equity issuance from both a strategic and also economic perspective?
Blaine Heck: Very impressive. Yep. Last one from me. Can you just talk a little bit more, I guess, about the optionality you guys have for funding the 300 South Tryon acquisition, and how you're thinking about sales versus debt or equity issuance from a strategic and also economic perspective? I guess, are there certain target costs of capital or yields on each option that would make you kind of lean one way or the other?
Blaine Heck: Very impressive. Yep. Last one from me. Can you just talk a little bit more, I guess, about the optionality you guys have for funding the 300 South Tryon acquisition, and how you're thinking about sales versus debt or equity issuance from a strategic and also economic perspective? I guess, are there certain target costs of capital or yields on each option that would make you kind of lean one way or the other?
Speaker #3: I guess, are there certain target costs of capital or yields on each option that would make you kind of lean one way or the other?
Speaker #3: other? Yeah, great question,
Colin Connolly: Yeah, great question, Blaine. It is, we have a lot of optionality and the reason for that optionality is the low-levered balance sheet we have and the trophy quality of the portfolio. You know, you hit it right on the head. We're trying to balance both the financial aspects with the strategic aspects, and so, you know, we will continue to look at various opportunities to fund that. And, you know, I'd say we think about dispositions and the alternative dispositions really with a basket approach. So you can see we've got Harborview and a piece of land under contract to sell. We perhaps could pair that with an older vintage, higher CapEx disposition that might be at a higher cap rate.
Colin Connolly: Yeah, great question, Blaine. It is, we have a lot of optionality and the reason for that optionality is the low-levered balance sheet we have and the trophy quality of the portfolio. You know, you hit it right on the head. We're trying to balance both the financial aspects with the strategic aspects, and so, you know, we will continue to look at various opportunities to fund that. And, you know, I'd say we think about dispositions and the alternative dispositions really with a basket approach. So you can see we've got Harborview and a piece of land under contract to sell. We perhaps could pair that with an older vintage, higher CapEx disposition that might be at a higher cap rate.
Speaker #4: Blaine. It is we have a lot of optionality and the reason for that optionality is the low-leverage balance sheet we have and the of the portfolio.
Speaker #4: Trophy quality—you hit it right on the head. We're trying to balance both the financial aspects with the strategic aspects, and so we will continue to look at various opportunities to fund that. And I'd say we think about dispositions, and the alternative dispositions, really with a basket approach.
Speaker #4: So you can see we've got Harborview and a piece of land under contract to sale to sell. We perhaps could pair that with a older vintage higher CapEx disposition that might be at a higher cap rate, but ultimately what we're trying to balance with any disposition or basket of dispositions is a disposition yield that is comparable to where we could reinvest that.
Colin Connolly: But ultimately, what we're trying to balance with any disposition or basket of dispositions is a disposition yield that is comparable to where we could reinvest that. So we've been buying at GAAP cap rates, you know, in the eights. I would expect us to any sales that we execute, the weighted average cap rate of those sales to be at least at that cap rate, if not lower, because ultimately, driving accretion is the priority.
Colin Connolly: But ultimately, what we're trying to balance with any disposition or basket of dispositions is a disposition yield that is comparable to where we could reinvest that. So we've been buying at GAAP cap rates, you know, in the eights. I would expect us to any sales that we execute, the weighted average cap rate of those sales to be at least at that cap rate, if not lower, because ultimately, driving accretion is the priority.
Speaker #4: So we've been buying at gap cap rates in the eights. I would like any sales that we execute, the weighted average cap rate of those sales to be at least at that cap rate, if not lower, because ultimately, driving accretion is the expectation.
Speaker #4: priority.
Speaker #3: Great. Thank you,
Blaine Heck: Great. Thank you, guys.
Blaine Heck: Great. Thank you, guys.
Speaker #3: guys.
Speaker #2: Your next question comes from the line of Andrew Berger from Bank of America. Please go ahead.
Speaker #2: Your next question comes from the line of Andrew Berger from Bank of America. Please go ahead. Great.
Operator: Your next question comes from the line of Andrew Berger from Bank of America. Please go ahead.
Operator: Your next question comes from the line of Andrew Berger from Bank of America. Please go ahead.
Andrew Berger: Great, thank you. Maybe just piggybacking on Blaine's first question on developments. Could you give us a sense of the type of underwriting criteria you would look for, whether that's yields and maybe the percent pre-lease that would give you enough confidence to start the project, and also whether this is something you would look to do yourself or potentially bring in a joint venture partner?
Andrew Berger: Great, thank you. Maybe just piggybacking on Blaine's first question on developments. Could you give us a sense of the type of underwriting criteria you would look for, whether that's yields and maybe the percent pre-lease that would give you enough confidence to start the project, and also whether this is something you would look to do yourself or potentially bring in a joint venture partner?
Speaker #3: Thank you. Maybe just piggybacking on Blaine's first question on developments, could you give us a sense of the type of underwriting criteria you would look for, whether that's yields and maybe the percent pre-lease that would give you enough confidence to start the project and also whether this is something you would look to do yourself or potentially bring in a joint venture partner?
Speaker #4: Yeah, I'd say we're targeting plus or minus 50% on a pre-lease basis, and I would expect cap rates—or, excuse me, development yields—to be at least 150 basis points, if not 200 basis points, higher than stabilized cap rates today.
Colin Connolly: Yeah, I would say we're targeting ±50% on a pre-lease basis, and I would expect cap rates, or excuse me, development yields to be, you know, at least 150 basis points, if not 200 basis points higher than stabilized cap rates today. So that would put you in the, call it, 8.5 to 9% range today on a development yield. And we're flexible in terms of whether we do it ourselves or we ultimately have a joint venture partner. We're always evaluating lots of different opportunities.
Colin Connolly: Yeah, I would say we're targeting ±50% on a pre-lease basis, and I would expect cap rates, or excuse me, development yields to be, you know, at least 150 basis points, if not 200 basis points higher than stabilized cap rates today. So that would put you in the, call it, 8.5 to 9% range today on a development yield. And we're flexible in terms of whether we do it ourselves or we ultimately have a joint venture partner. We're always evaluating lots of different opportunities.
Speaker #4: So that would put you in the 8.5% to 9% range today on a development yield, and we're flexible in terms of whether we do it ourselves or we ultimately have a joint venture partner. We're always evaluating lots of different opportunities.
Speaker #3: Great. Thank you. And as my follow-up, you mentioned some activity from companies primarily located on the West Coast and New York City. Can you just talk about which of your markets you're seeing the most of that activity
Andrew Berger: Great, thank you. As my follow-up, you mentioned some activity from companies primarily located on the West Coast and New York City. Can you just talk about which of your markets you're seeing the most of that activity in?
Andrew Berger: Great, thank you. As my follow-up, you mentioned some activity from companies primarily located on the West Coast and New York City. Can you just talk about which of your markets you're seeing the most of that activity in?
Speaker #3: in? than
Colin Connolly: Sure. We're seeing a significant amount of activity in Austin from West Coast companies. We're also seeing some of that in Nashville with various tech users. And then I'd say there's been a real significant pickup in financial services firms out of New York looking at Charlotte in particular.
Colin Connolly: Sure. We're seeing a significant amount of activity in Austin from West Coast companies. We're also seeing some of that in Nashville with various tech users. And then I'd say there's been a real significant pickup in financial services firms out of New York looking at Charlotte in particular.
Speaker #4: Sure. We're seeing a significant amount of activity in Austin from West Coast companies. We're also seeing some of that in Nashville with various tech users.
Speaker #4: And then I'd say there's been a real significant pickup in financial services firms out of New York looking at Charlotte in particular.
Speaker #3: Great. Thank you very
Andrew Berger: Great. Thank you very much.
Andrew Berger: Great. Thank you very much.
Speaker #3: Much. Your next question is from the...
Operator: Your next question is from the line of John Kim from BMO Capital Markets. Please go ahead.
Operator: Your next question is from the line of John Kim from BMO Capital Markets. Please go ahead.
Speaker #2: Line of John Kim from VMO Capital Markets. Please go ahead.
Speaker #2: ahead. Thank
John Kim: Thank you. Colin, it sounds like from your occupancy target this year, you have a little bit less conviction than last quarter, yet leasing activity was very strong this quarter. The investment activity with the 300 South Tryon and selling Harborview should help your occupancy figure overall. So I'm wondering what has changed in the last few months for you to maybe walk that back a little bit?
John Kim: Thank you. Colin, it sounds like from your occupancy target this year, you have a little bit less conviction than last quarter, yet leasing activity was very strong this quarter. The investment activity with the 300 South Tryon and selling Harborview should help your occupancy figure overall. So I'm wondering what has changed in the last few months for you to maybe walk that back a little bit?
Speaker #3: Colin, it sounds like, from you, your occupancy target this year has a little bit less conviction than last quarter. Yet, leasing activity was very strong this quarter.
Speaker #3: The investment activity with the 300 South Tryon and selling Harborview should help your occupancy figure overall. So I'm wondering what has changed in the last few months for you to maybe walk that back a little bit.
Speaker #4: No, John, I don't think anything has changed. And we still, as we sit here today, believe that that is an achievable goal. Again, it's a goal not guidance, but we do think that it is achievable given the low levels of expirations and, as you touched on, the leasing that we're doing as I mentioned, timing of commencement is a risk, and I'll just give you an example that we had a decision between a $100,000 square foot lease.
Colin Connolly: No, John, I don't think anything has changed. And we still, as we sit here today, believe that that is an achievable goal. Again, it's a goal, not guidance, but we do think that it is achievable given the low levels of expirations, and as you touched on, the leasing that we're doing. As I mentioned, the timing of commencement is a risk, and I'll just give you an example that, you know, if we had a decision between a, you know, a 100,000sq ft lease that could commence in 2026 in Charlotte, or a 200,000sq ft lease in that same block that would commence in 2027, we would likely pursue the larger lease if the economics were strong.
Colin Connolly: No, John, I don't think anything has changed. And we still, as we sit here today, believe that that is an achievable goal. Again, it's a goal, not guidance, but we do think that it is achievable given the low levels of expirations, and as you touched on, the leasing that we're doing. As I mentioned, the timing of commencement is a risk, and I'll just give you an example that, you know, if we had a decision between a, you know, a 100,000sq ft lease that could commence in 2026 in Charlotte, or a 200,000sq ft lease in that same block that would commence in 2027, we would likely pursue the larger lease if the economics were strong.
Speaker #4: That could commence in 2026 in Charlotte, or a 200,000-square-foot lease in that same block that would commence in 2027. We would likely pursue the larger lease if the economics were strong.
Speaker #4: So there's a little bit of timing from a quarter-to-quarter perspective, but we still think that it's highly achievable and, again, I think you're going to continue to see progress on our percent leased over the year. Perhaps that spread between percent leased and percent occupied could continue to grow, but again, I think there's just some variability with timing of the commencement of a lease that's beyond our control.
Colin Connolly: So there's just-- there's a little bit of timing from a quarter to quarter perspective, but, but we still think that it, that it's highly achievable. And, and again, I think you're gonna continue to see progress on our percent leased-... over the year, and perhaps that spread between percent leased and percent occupied could continue to grow. But, but again, I think there's just some variability with, with timing of the, of commencement of a, of a lease that's, that's beyond our control.
Colin Connolly: So there's just-- there's a little bit of timing from a quarter to quarter perspective, but, but we still think that it, that it's highly achievable. And, and again, I think you're gonna continue to see progress on our percent leased-... over the year, and perhaps that spread between percent leased and percent occupied could continue to grow. But, but again, I think there's just some variability with, with timing of the, of commencement of a, of a lease that's, that's beyond our control.
Speaker #3: Yeah, that makes sense. I'm just wondering if you feel comfortable maybe not now or going forward on providing a leased target rather than occupancy just given those dynamics.
Speaker #3: Yeah, that makes sense. I'm just wondering if you feel comfortable maybe not now or going forward on providing a leased target rather than occupancy just given those
Anthony Paolone: Yeah, that makes sense. I'm just wondering if you feel comfortable, maybe not now, but or going forward, on providing a leased target rather than occupancy, just given those dynamics.
Anthony Paolone: Yeah, that makes sense. I'm just wondering if you feel comfortable, maybe not now, but or going forward, on providing a leased target rather than occupancy, just given those dynamics.
Speaker #4: That's certainly. That we would consider. Absolutely, we would consider that. It's easier to forecast.
Colin Connolly: That's-
Colin Connolly: That's-
Anthony Paolone: But, um-
Anthony Paolone: But, um-
Colin Connolly: Certainly that we would consider. I absolutely we would consider that. It's easier to forecast.
Colin Connolly: Certainly that we would consider. I absolutely we would consider that. It's easier to forecast.
Speaker #3: You mentioned in your prepared remarks the return to office just providing a demand boost currently. Today, we're about four years removed from COVID restrictions ending.
Anthony Paolone: You mentioned in your prepared remarks, the return to office just providing a demand boost currently. Today, we're about four years removed from COVID restrictions ending, but I know the return to office has been various or varied across your markets. How much runway do you think we have left on the RTO demand?
Anthony Paolone: You mentioned in your prepared remarks, the return to office just providing a demand boost currently. Today, we're about four years removed from COVID restrictions ending, but I know the return to office has been various or varied across your markets. How much runway do you think we have left on the RTO demand?
Speaker #3: But I know the return to office has been various or varied across your markets. How much runway do you think we have left on the RTO?
Speaker #3: demand? Hard to
Colin Connolly: Hard to say, John. There are, as I mentioned, there are companies like Home Depot that just kind of made this announcement and shift, just a few weeks ago. What we can say is that, you know, demand is continuing to accelerate. Our pipeline continues to grow. And I also think there's, you know, some other trends that will likely kick in, in the not-too-distant future that I think could increase renewal activity, and that being the shortage that I indicated is coming in 2028 and 2029. We're starting to see some of the tenant reps and better-informed customers recognize that they probably need to address those lease expirations sooner than later, so as to not be boxed out of space at expiration time.
Colin Connolly: Hard to say, John. There are, as I mentioned, there are companies like Home Depot that just kind of made this announcement and shift, just a few weeks ago. What we can say is that, you know, demand is continuing to accelerate. Our pipeline continues to grow. And I also think there's, you know, some other trends that will likely kick in, in the not-too-distant future that I think could increase renewal activity, and that being the shortage that I indicated is coming in 2028 and 2029. We're starting to see some of the tenant reps and better-informed customers recognize that they probably need to address those lease expirations sooner than later, so as to not be boxed out of space at expiration time.
Speaker #4: say. John, there are as I mentioned, there are companies like Home Depot that just kind of made this amount announcement and shift. Just a few weeks ago, what we can't say is that demand is continuing to accelerate.
Speaker #4: Our pipeline continues to grow. And I also think there's some other trends that will likely kick in in the not-too-distant future that I think could increase renewal activity, and that being the shortage that I indicated is coming in '28 and '29.
Speaker #4: We're starting to see some of the tenant reps and better informed customers. Recognize that they probably need to address those lease expirations sooner than later.
Speaker #4: So as to not be boxed out of space at expiration
Speaker #4: time. Okay.
Anthony Paolone: Okay, great. Thank you.
Anthony Paolone: Okay, great. Thank you.
Speaker #3: Great. Thank
Speaker #3: you. Next question comes
Operator: Next question comes from the line of Manish Dabu from Evercore ISI. Please go ahead.
Operator: Next question comes from the line of Manish Dabu from Evercore ISI. Please go ahead.
Speaker #2: From the line of managed debit here, from Everett Quarter, ISI. Please go ahead.
Speaker #2: Go ahead. Yeah, thanks for taking the question.
Manish Dabu: Yeah, thanks for taking the question. You talked about good traction on the former Bank of America space, and also the commentary sounded positive on the new 300 South Tryon commercial property. So I was wondering if you could share some more color on just the specifics on what type of tenants, and how far along you are with those prospects in terms of, like, leasing discussions on those two like, projects or spaces?
Manish Dabu: Yeah, thanks for taking the question. You talked about good traction on the former Bank of America space, and also the commentary sounded positive on the new 300 South Tryon commercial property. So I was wondering if you could share some more color on just the specifics on what type of tenants, and how far along you are with those prospects in terms of, like, leasing discussions on those two like, projects or spaces?
Speaker #3: You talked about good traction on the former Bank of America space, and also the commentary sounded positive on New Hope's commercial property.
Speaker #3: So I was wondering if you could share some more color on just the specifics on what type of tenants and how far along you are with those prospects in terms of lease discussions.
Speaker #3: On those two projects of spaces.
Speaker #4: Sure, I can start with that. This is Richard. Specifically, on 201 North Tryon, we really continue to see a lot of encouraging demand from large users.
Richard Hickson: Sure. I can start with that. This is Richard. Specifically on 201 North Tryon, we really continue to see a lot of encouraging demand from large users. Colin already alluded to this, but we all know that Charlotte has traditionally been a hub for financial services. That's... Nothing has changed there. I think it's evolved to some extent to include some level of fintech and technology embedded within large traditional financial services firms. But we're seeing very encouraging looks from that industry and also from large users looking to relocate significant operations out of other markets and into Charlotte. So, again, we don't have anything specific to report to you on 201 North Tryon, but we're very optimistic that we will have something very near term.
Richard Hickson: Sure. I can start with that. This is Richard. Specifically on 201 North Tryon, we really continue to see a lot of encouraging demand from large users. Colin already alluded to this, but we all know that Charlotte has traditionally been a hub for financial services. That's... Nothing has changed there. I think it's evolved to some extent to include some level of fintech and technology embedded within large traditional financial services firms. But we're seeing very encouraging looks from that industry and also from large users looking to relocate significant operations out of other markets and into Charlotte. So, again, we don't have anything specific to report to you on 201 North Tryon, but we're very optimistic that we will have something very near term.
Speaker #4: Colin already alluded to this, but we all know that Charlotte has traditionally been a hub for financial services. Nothing has changed there. I think it's evolved to some extent to include some level of fintech and technology embedded within large traditional financial services firms.
Speaker #4: But we're seeing very encouraging looks, industry-wide, and also from large users looking to, from that, relocate significant operations out of other markets and into Charlotte.
Speaker #4: So again, we don't have anything specific to report to you on 201 North Tryon, but we're very optimistic that we will have something very near term.
Richard Hickson: In Nashville, again, technology seems to be a really healthy driver of activity and sort of add on to new to market activity. So continue to be very optimistic about, about the demand there, both, both in market and from out of market.
Richard Hickson: In Nashville, again, technology seems to be a really healthy driver of activity and sort of add on to new to market activity. So continue to be very optimistic about, about the demand there, both, both in market and from out of market.
Speaker #4: Nashville, again, technology seems to be a really healthy driver of activity and sort of an add-on to new-to-market activity. So, continue to be very optimistic about the demand there, both in-market and from out-of-market.
Speaker #3: Gotcha. And maybe one follow-up question. Obviously, the market, there is some fear in the market baked in about just software companies and any space in your portfolio of tenants—just the outlook for those.
Manish Dabu: Gotcha, and maybe one follow-up question. Obviously, the market, there is some fear in the market baked in about just software companies and their outlook for those. Is there any space in your portfolio or tenants that you have a closer eye on just to, like, follow them if there's any, like, type of underutilization of space? Again, I don't mean to sound too negative, and your commentary is obviously very positive, so I just wanted to check on that since that's a current theme.
Manish Dabu: Gotcha, and maybe one follow-up question. Obviously, the market, there is some fear in the market baked in about just software companies and their outlook for those. Is there any space in your portfolio or tenants that you have a closer eye on just to, like, follow them if there's any, like, type of underutilization of space? Again, I don't mean to sound too negative, and your commentary is obviously very positive, so I just wanted to check on that since that's a current theme.
Speaker #3: You have a closer eye on, just to follow them if there's any type of underutilization of space? Again, I don't mean to sound too negative in your commentaries—obviously, very positive.
Speaker #3: So I just wanted to check on it since that's a current theme.
Speaker #4: No. The tech component of our customer base is made up primarily of very
Colin Connolly: No, you know, the tech component of our customer base is made up of, you know, primarily very large, well-capitalized technology companies, Amazon and Google being our two largest customers. But there's nothing that we've seen or identified any software companies within our portfolio that are now, you know, underutilizing their space or would, you know, be showing any signals of any negative impact to their business. It's far too premature for that.
Colin Connolly: No, you know, the tech component of our customer base is made up of, you know, primarily very large, well-capitalized technology companies, Amazon and Google being our two largest customers. But there's nothing that we've seen or identified any software companies within our portfolio that are now, you know, underutilizing their space or would, you know, be showing any signals of any negative impact to their business. It's far too premature for that.
Speaker #4: Large, well-capitalized technology companies—Amazon and Google—are our two largest customers, but there's nothing that we've seen or identified, and any software companies within our portfolio or that are in the space would not be showing any signals of any negative impact to their business.
Speaker #4: Say it's far premature for
Speaker #3: Okay. Much
Manish Dabu: Okay, much appreciated. Thank you.
Manish Dabu: Okay, much appreciated. Thank you.
Speaker #3: appreciated. Thank that.
Speaker #3: you. Your next question comes
Operator: The next question comes from the line of Anthony Paolone from JPMorgan. Please go ahead.
Operator: The next question comes from the line of Anthony Paolone from JPMorgan. Please go ahead.
Speaker #2: From the line of Anthony Paolone from JP Morgan. Please go ahead.
Speaker #5: Yeah, thanks. Good morning. You mentioned the activity in Austin and financial services in Charlotte, but can you talk a bit more about Atlanta? I think the narrative around really strong growth plans for firms like Microsoft and Google were pretty prominent over the last few years, but maybe give us an update on where they are in that hiring and how the anticipated ecosystem around those employers has or has not developed.
Anthony Paolone: Yeah, thanks. Good morning. You mentioned the activity in Austin and financial services in Charlotte, but can you talk a bit more about Atlanta? I think the narrative around really strong growth plans for firms like Microsoft and Google were pretty prominent over the last few years, but maybe give us an update on maybe where they are in that hiring, and whether or not sort of the anticipated ecosystem around those employers has developed.
Anthony Paolone: Yeah, thanks. Good morning. You mentioned the activity in Austin and financial services in Charlotte, but can you talk a bit more about Atlanta? I think the narrative around really strong growth plans for firms like Microsoft and Google were pretty prominent over the last few years, but maybe give us an update on maybe where they are in that hiring, and whether or not sort of the anticipated ecosystem around those employers has developed.
Speaker #4: I think specifically you referenced Microsoft, that has bought a significant amount of land in Midtown West. I'd say they have scaled back those plans specifically for their new development.
Colin Connolly: I think specifically, you referenced Microsoft that has bought, you know, a significant amount of land in West Midtown. I'd say they have scaled back those plans specifically for their new development. That being said, they did anchor to a large office development project in Midtown. So I'd say they've accomplished probably half of what their announced plans were. But overall, Richard could touch on Atlanta. We're seeing really positive activity, leasing activity across all of our markets, and it continues to represent a significant amount of our leasing activity. So Richard can give a little bit of color on that.
Colin Connolly: I think specifically, you referenced Microsoft that has bought, you know, a significant amount of land in West Midtown. I'd say they have scaled back those plans specifically for their new development. That being said, they did anchor to a large office development project in Midtown. So I'd say they've accomplished probably half of what their announced plans were. But overall, Richard could touch on Atlanta. We're seeing really positive activity, leasing activity across all of our markets, and it continues to represent a significant amount of our leasing activity. So Richard can give a little bit of color on that.
Speaker #4: They did anchor to a large office development project in, that being Midtown. So, I’d say they accomplished probably half of what their announced plans were, but overall, Richard could touch on Atlanta.
Speaker #4: We're seeing really positive leasing activity across all of our markets, and it continues to represent a significant amount of our leasing activity. So Richard can give a little bit of color on that.
Richard Hickson: But that's absolutely right. You know, if you look at what we've completed recently, again, the volume has been phenomenal. Looking out in both the late and early stage pipelines for Atlanta, the new and expansion activity is roughly half of our demand. Looking at the industry mix, financial services are very much focused on Atlanta. But it's also tended to be a more diversified demand mix in Atlanta, too. So we're seeing a little bit of everything. But, you know, plenty of professional services. There is the tech component, and so it's very healthy from a diversification standpoint.
Richard Hickson: But that's absolutely right. You know, if you look at what we've completed recently, again, the volume has been phenomenal. Looking out in both the late and early stage pipelines for Atlanta, the new and expansion activity is roughly half of our demand. Looking at the industry mix, financial services are very much focused on Atlanta. But it's also tended to be a more diversified demand mix in Atlanta, too. So we're seeing a little bit of everything. But, you know, plenty of professional services. There is the tech component, and so it's very healthy from a diversification standpoint.
Speaker #5: right. If you look at what we've completed recently, again, the volume has been That's absolutely phenomenal. Looking out in both the late and early-stage pipelines, for Atlanta, the new and expansion activity is roughly half of our demand looking at the industry mix.
Speaker #5: Financial services are very much focused on be a more diversified demand mix in Atlanta too. So we're seeing a little bit of Atlanta. everything: plenty of professional But it's also tended to services, there is the tech and so it's very healthy from component, a diversification standpoint.
Speaker #5: Okay. And then just back on the occupancy side, and thinking about that over the course of this year, can you quantify maybe how many leases are signed?
Anthony Paolone: Okay. And then, just back on the occupancy side and thinking about that over the course of this year. Is there like, can you quantify maybe like how many leases are signed, or just waiting to commence throughout the course of 2026? And also maybe even as it relates to your expirations, what you think tenant retention might look like. And I guess the goal of those two, just trying to understand what the bridge or, you know, might need to be on the leasing side to get occupancy higher.
Anthony Paolone: Okay. And then, just back on the occupancy side and thinking about that over the course of this year. Is there like, can you quantify maybe like how many leases are signed, or just waiting to commence throughout the course of 2026? And also maybe even as it relates to your expirations, what you think tenant retention might look like. And I guess the goal of those two, just trying to understand what the bridge or, you know, might need to be on the leasing side to get occupancy higher.
Speaker #5: just waiting to commence throughout the course of They're '26. And also maybe even as it relates to your expirations, what guess the goal of those two, just trying to understand what the bridge or might need to be on the leasing side to get occupancy you think 10 of retention might look like.
Speaker #5: And I
Speaker #5: higher.
Speaker #4: Sure. I'd say, just at a high level,
Richard Hickson: Sure. I'd say just at a high level, we've always indicated that retention is likely, over time, gonna be in the 50% range. We only have, I think, 1 million sq ft expiring in 2026. To your question about what's signed but not yet commenced, what I'd say is that virtually all of our Q4 2025 new and expansion leasing, which is 490-something thousand sq ft, is going to be commencing in 2026. So I think the exact number is 460,000 sq ft. That weighted average commencement is going to be in Q3, kind of mid-Q3.
Richard Hickson: Sure. I'd say just at a high level, we've always indicated that retention is likely, over time, gonna be in the 50% range. We only have, I think, 1 million sq ft expiring in 2026. To your question about what's signed but not yet commenced, what I'd say is that virtually all of our Q4 2025 new and expansion leasing, which is 490-something thousand sq ft, is going to be commencing in 2026. So I think the exact number is 460,000 sq ft. That weighted average commencement is going to be in Q3, kind of mid-Q3.
Speaker #4: retention is likely over time going to be in the 50% we've always indicated that range. And we only have I think a million square feet of square feet expiring in 2026.
Speaker #4: To your question about what's signed but not yet commenced, what I'd say is that virtually all of our Q4 '25 new and expansion leasing, which is 490-something thousand square feet, is— the number is 460,000 square feet.
Speaker #4: That weighted average commencement is going to be mid-third quarter. What I'd caution is that, though those actually report occupancy on a weighted average basis, we won't see the impact of those commencements flow through until the fourth quarter.
Richard Hickson: What I'd caution is that though those actual commencements are in Q3, the way we report occupancy on a weighted average basis, we won't see the impact of those commencements flow through until Q4, in its entirety. So, but again, we - a lot of the heavy lifting that we've done on leasing recently is going to show up in 2026. Now, if you look out to the late-stage pipeline and the early-stage pipeline, we're still seeing plenty of 2026 commencements on our uncompleted or unsigned activity, but we are fighting the calendar. And Colin gave a good example of situations where we might make decisions to choose a later commencement if that's the right long-term and strategic decision for the company, and may not help occupancy in 2026, but still be the right decision for the long term.
Richard Hickson: What I'd caution is that though those actual commencements are in Q3, the way we report occupancy on a weighted average basis, we won't see the impact of those commencements flow through until Q4, in its entirety. So, but again, we - a lot of the heavy lifting that we've done on leasing recently is going to show up in 2026. Now, if you look out to the late-stage pipeline and the early-stage pipeline, we're still seeing plenty of 2026 commencements on our uncompleted or unsigned activity, but we are fighting the calendar. And Colin gave a good example of situations where we might make decisions to choose a later commencement if that's the right long-term and strategic decision for the company, and may not help occupancy in 2026, but still be the right decision for the long term.
Speaker #4: And its entirety. But again, a lot of the heavy lifting that we've done on leasing recently is going to show up in '26.
Speaker #4: Now, if you look out to the late-stage pipeline and the early-stage pipeline, we're still seeing plenty of '26 commencements on our uncompleted or unsigned activity.
Speaker #4: But we are fighting the calendar, and Colin gave a good example of a situation where we might make decisions to choose a later commencement if it's the right long-term and strategic decision for the company, and it may not help occupancy in '26.
Speaker #4: But still be the right decision for the long term. So, activity that we've completed will have an impact on '26, but we're starting to, again, get into that time of the year where '27 commencements are going to become more and more common.
Richard Hickson: So again, plenty of activity that we completed will have an impact on 2026, but we're starting to get into that time of the year where 2027 commencements are going to become more and more common.
Richard Hickson: So again, plenty of activity that we completed will have an impact on 2026, but we're starting to get into that time of the year where 2027 commencements are going to become more and more common.
Speaker #5: Okay. So if I could just kind of make sure I understand all that, if you keep half your tenants expiring this year, that's almost a half a million square feet, then you've got another almost half a million square feet that's just scheduled to commence.
Anthony Paolone: Okay. So if I could just kind of make sure I understand all that. You, if you keep half your tenants expiring this year, that's almost half a million sq ft, then you've got another almost half a million sq ft that's just scheduled to commence. So that kind of gets you to flat as a starting point, that everything that gets done at this point, that you can get commenced in 2026 becomes the pickup. Is that kind of a fair summary then?
Anthony Paolone: Okay. So if I could just kind of make sure I understand all that. You, if you keep half your tenants expiring this year, that's almost half a million sq ft, then you've got another almost half a million sq ft that's just scheduled to commence. So that kind of gets you to flat as a starting point, that everything that gets done at this point, that you can get commenced in 2026 becomes the pickup. Is that kind of a fair summary then?
Speaker #5: So that kind of gets you to flat as a starting point, that everything that gets done at this point, that you can get commenced in '26, becomes the summary pickup.
Speaker #5: then?
Speaker #4: Yeah. And also, what Richard referenced was just the signed leases in the fourth quarter. There were also leases signed before the fourth quarter that will have an impact on 2026, Tony, to ultimately drive the—
Colin Connolly: Yeah, and also what Richard referenced was just the signed leases in Q4. There were also leases signed before Q4 that will have an impact on 2026, Tony, to ultimately drive the occupancy as well as any other new speculative leasing that we do, that we're working on now, that will have a positive impact on 2026.
Colin Connolly: Yeah, and also what Richard referenced was just the signed leases in Q4. There were also leases signed before Q4 that will have an impact on 2026, Tony, to ultimately drive the occupancy as well as any other new speculative leasing that we do, that we're working on now, that will have a positive impact on 2026.
Speaker #4: occupancy, as well as any other new—Is that kind of a fair speculative leasing that we do, that we're working on now, that will have a positive impact on—
Speaker #4: 2026. Okay.
Anthony Paolone: Okay. Got it. I get the visibility then. Thank you for that. It's helpful.
Anthony Paolone: Okay. Got it. I get the visibility then. Thank you for that. It's helpful.
Speaker #5: Got it. I get the visibility then. Thank you for that. It's helpful.
Speaker #4: Yep. Your next question comes from Michael Connolly.
Colin Connolly: Yep.
Colin Connolly: Yep.
Operator: Your next question comes from the line of Brandon Lynch from Barclays. Please go ahead.
Operator: Your next question comes from the line of Brandon Lynch from Barclays. Please go ahead.
Speaker #1: The line of Brendan Lynch from Marklace. Please go ahead.
Speaker #1: ahead.
Speaker #5: Great. Thank you for taking my question.
Brendan Lynch: Great. Thank you for taking my question. A couple on Harborview in Tampa. Was this asset sale more considered a consideration of asset, it being asset specific relative to being a consideration for the Tampa market? And also, how many assets do you have that have similar characteristics to Harborview, that are older, lower occupancy, and need redevelopments that you would be interested in potentially recycling?
Brendan Lynch: Great. Thank you for taking my question. A couple on Harborview in Tampa. Was this asset sale more considered a consideration of asset, it being asset specific relative to being a consideration for the Tampa market? And also, how many assets do you have that have similar characteristics to Harborview, that are older, lower occupancy, and need redevelopments that you would be interested in potentially recycling?
Speaker #5: A couple on Harborview and Tampa. This asset sale, more consideration of asset, it being a consideration for the Tampa market. And also, how many assets do you have that have similar characteristics to Harborview that are older, lower occupancy, and need redevelopments that you would be interested in potentially recycling?
Speaker #6: Hey, Brendan, it's Kennedy. I would say this was asset-specific. So we are certainly very encouraged by what we're seeing in the Tampa market in general, and across the rest of our portfolio. Relating to the other assets, I mean, as we've said in the past, it's a very small percentage.
Kennedy Hicks: Hey, Brandon, it's Kennedy. I would say this was asset specific. So we are certainly very encouraged by what we're seeing in the Tampa market in general and across the rest of our portfolio there. And as it relates to the other assets, I mean, as we've said in the past, it's a very small percentage. And so we kind of look at it relative to the, where we think investor demand is, and again, where the best use of our capital is going to be going forward. So it's certainly, you know, sub 10% of the portfolio, if not much less than that.
Kennedy Hicks: Hey, Brandon, it's Kennedy. I would say this was asset specific. So we are certainly very encouraged by what we're seeing in the Tampa market in general and across the rest of our portfolio there. And as it relates to the other assets, I mean, as we've said in the past, it's a very small percentage. And so we kind of look at it relative to the, where we think investor demand is, and again, where the best use of our capital is going to be going forward. So it's certainly, you know, sub 10% of the portfolio, if not much less than that.
Speaker #6: There. And so we kind of look at it relative to where we think investor demand is and, again, where the best use of our capital is going to be going forward.
Speaker #6: It's certainly sub-10% of the SO portfolio, if not much less than that.
Speaker #5: Okay, thanks. That's helpful. And maybe you could also give an update on Fresenius, as you've made progress with the repositioning, and how demand has been for the space in that.
Brendan Lynch: Okay, thanks. That's helpful. And maybe you could also give an update on Proscenium as you've made progress with the repositioning and how demand has been for the space in that asset.
Brendan Lynch: Okay, thanks. That's helpful. And maybe you could also give an update on Proscenium as you've made progress with the repositioning and how demand has been for the space in that asset.
Speaker #5: asset. Sure.
Kennedy Hicks: Sure, good question. We are just now opening up the repositioning, so it's, I'd say two-thirds of the way done. And as we've seen with some of our other assets, that's generally been a good indicator of when the leasing activity starts to pick up. So-
Kennedy Hicks: Sure, good question. We are just now opening up the repositioning, so it's, I'd say two-thirds of the way done. And as we've seen with some of our other assets, that's generally been a good indicator of when the leasing activity starts to pick up. So-
Speaker #6: Good question. We are just now opening up the repositioning, so I'd say it's about two-thirds of the way done. As we've seen with some of our other assets, that's generally been a good indicator of when the leasing activity starts to pick up.
Speaker #6: So we're in good discussions with several prospects there, by the response that we've gotten, and really encouraged by the renovation.
Colin Connolly: ... We're in good discussions with several prospects there and really encouraged by the response that we've gotten to the renovation work.
Colin Connolly: ... We're in good discussions with several prospects there and really encouraged by the response that we've gotten to the renovation work.
Speaker #6: work.
Speaker #5: Great. Thank
Dylan Burzinski: Great. Thank you.
Dylan Burzinski: Great. Thank you.
Speaker #1: Next question comes to you from the line of Nick Stillman from Baird. Please go ahead.
Operator: Next question comes from the line of Nick Silman from Baird. Please go ahead.
Operator: Next question comes from the line of Nick Silman from Baird. Please go ahead.
Speaker #1: ahead. Hey, good morning down
Nick Thillman: Hey, good morning down there. Maybe, Richard, following up on just the late-stage leasing pipeline and the 1.1 million sq ft. As we think of just larger tenants within that pipeline, say above 100,000 sq ft, are there any big chunkier deals within that number? And just remind us what the actual close rate historically has been for signed deals on that pipeline.
Nick Thillman: Hey, good morning down there. Maybe, Richard, following up on just the late-stage leasing pipeline and the 1.1 million sq ft. As we think of just larger tenants within that pipeline, say above 100,000 sq ft, are there any big chunkier deals within that number? And just remind us what the actual close rate historically has been for signed deals on that pipeline.
Speaker #7: There. Maybe, Richard, following up on just the late-stage leasing pipeline and the 1.1 million square feet—as we think of just larger tenants within that pipeline, say above 100,000 square feet—are there any big, chunkier deals within that number?
Speaker #7: And just remind us what the actual close rate historically has been for signed deals on that.
Speaker #7: pipeline. Yeah.
Richard Hickson: Yeah, the late stage pipeline is generally very reliable, so it's 95% to 100%, usually conversion rate. I can think of a couple of instances in the last couple of years, we've had someone fall out of that pipeline, and it's usually highly specific to a business decision or approval process in a particular tenant. So, very good conversion rate there. There is a little bit of chunkiness in the late stage pipeline. Some of it's in Atlanta, some really positive new activity. We have some renewal activity that's of size, that's in the pipeline as well. But it really is fairly evenly spread across all of our markets.
Richard Hickson: Yeah, the late stage pipeline is generally very reliable, so it's 95% to 100%, usually conversion rate. I can think of a couple of instances in the last couple of years, we've had someone fall out of that pipeline, and it's usually highly specific to a business decision or approval process in a particular tenant. So, very good conversion rate there. There is a little bit of chunkiness in the late stage pipeline. Some of it's in Atlanta, some really positive new activity. We have some renewal activity that's of size, that's in the pipeline as well. But it really is fairly evenly spread across all of our markets.
Speaker #4: Generally very reliable. The late-stage pipeline is—so it's 95 to 100 percent, usually, conversion rate. I can think of a couple of instances in the last couple of years we've had someone fall out of that pipeline, and it's usually highly specific to a business decision or approval process in a particular tenant.
Speaker #4: So, very good conversion rate there. There is a little bit of chunkiness in the late-stage pipeline. Some really positive new activity—we have some renewal. Some of it's in Atlanta.
Speaker #4: the pipeline as well. But it activity that's of size that's in—really, it's fairly evenly spread across all of our
Speaker #4: markets. And on that
Nick Thillman: On that Atlanta number, is that new, is that related to renewal or new? Just wanted to clarify that.
Nick Thillman: On that Atlanta number, is that new, is that related to renewal or new? Just wanted to clarify that.
Speaker #7: Atlanta number, is that related to renewal or new? I just wanted to clarify that.
Richard Hickson: They're both actually, but the largest-
Richard Hickson: They're both actually, but the largest-
Speaker #4: They’re both, actually. But the largest is a new deal.
Nick Thillman: Okay.
Nick Thillman: Okay.
Richard Hickson: Is new deal.
Richard Hickson: Is new deal.
Speaker #7: Okay, and then maybe just touching on a couple of the larger blocks that are coming up—just an update overall in Houston with Samsung. And then, also, can you remind us what the plans are with the Ovintiv space that's currently a sublet, that's expiring next year, with 88% of the subtenants in the space?
Nick Thillman: Okay. And then maybe just touching on a couple of the larger blocks that are coming up. Just an update on overall in Houston with Samsung, and then also, can you remind us what the plans are with Ovintiv's space that's currently a sublet, that's expiring next year, with 88% of the subtenants in the space? Is the plan to go direct with subtenants, or is there some larger users looking at that space? Maybe some more commentary there. So those two spaces.
Nick Thillman: Okay. And then maybe just touching on a couple of the larger blocks that are coming up. Just an update on overall in Houston with Samsung, and then also, can you remind us what the plans are with Ovintiv's space that's currently a sublet, that's expiring next year, with 88% of the subtenants in the space? Is the plan to go direct with subtenants, or is there some larger users looking at that space? Maybe some more commentary there. So those two spaces.
Speaker #7: Is the plan to go direct with subtenants, or are there some larger users looking at that space? Maybe some more commentary there on those two.
Speaker #7: spaces? Sure
Richard Hickson: Sure thing. Maybe I'll start with Legacy Union in Plano and the Ovintiv building. Again, as a reminder, what we did last quarter was we entered into an agreement with Ovintiv as the prime tenant to take over management for one, get control of the building, because we did not have that, and then terminate them early in the middle of 2026, at which time we will go direct with the subtenant base, which is extensive at the project. So you look at that square footage, that will still expire out in 2027. We're having very positive, constructive discussions with four different subtenants currently at the project, so we feel good about our prospects of potentially taking those direct.
Richard Hickson: Sure thing. Maybe I'll start with Legacy Union in Plano and the Ovintiv building. Again, as a reminder, what we did last quarter was we entered into an agreement with Ovintiv as the prime tenant to take over management for one, get control of the building, because we did not have that, and then terminate them early in the middle of 2026, at which time we will go direct with the subtenant base, which is extensive at the project. So you look at that square footage, that will still expire out in 2027. We're having very positive, constructive discussions with four different subtenants currently at the project, so we feel good about our prospects of potentially taking those direct.
Speaker #4: Thing. Maybe I'll start with Legacy Union and Plano and the Ovintiv building. Again, as a reminder, what we did last quarter was we entered into an agreement with Ovintiv as the prime tenant to take over management, for one, get control of the building, because we did not have that.
Speaker #4: And then terminate them early in the middle of ’26, at which time we will go direct with the subtenant base, which is extensive at the project.
Speaker #4: So you look at that square footage that will still expire out in '27. We're having very positive, constructive discussions with four different subtenants currently at the project.
Speaker #4: So we feel good about our prospects of potentially taking those direct. When the opportunity is to go do new leases with new tenants and continue to kind of back those out and look at what the multi-tenant—the building—that's roughly 150,000 to 175,000 square feet.
Richard Hickson: When you kind of back those out and look at what the opportunity is to go do new leases with new tenants and continue to multi-tenant the building, that's roughly 150,000 to 175,000 sq ft out in 2027. And the pipeline in Plano and North Dallas in particular, it's extremely robust. And we're seeing, just in the last month, probably at least three or four different tours of the building, greater than 150,000 sq ft. But we also have plenty of inquiries of a single floor, two floors, three floors. So, very positive demand backdrop there. At Briarlake in Houston, with the Samsung expiration, as a reminder, that expiration is in November at the end of November of this year, so really minimal impact either way on 2026.
Richard Hickson: When you kind of back those out and look at what the opportunity is to go do new leases with new tenants and continue to multi-tenant the building, that's roughly 150,000 to 175,000 sq ft out in 2027. And the pipeline in Plano and North Dallas in particular, it's extremely robust. And we're seeing, just in the last month, probably at least three or four different tours of the building, greater than 150,000 sq ft. But we also have plenty of inquiries of a single floor, two floors, three floors. So, very positive demand backdrop there. At Briarlake in Houston, with the Samsung expiration, as a reminder, that expiration is in November at the end of November of this year, so really minimal impact either way on 2026.
Speaker #4: Out in '27. And the pipeline in Plano and North Dallas in particular, it's extremely robust. And we're seeing, just in the last month, probably at least three or four different tours of the building, greater than 150,000 square feet.
Speaker #4: But we also have plenty of inquiries for a single floor, two floors, three floors. So, very positive demand backdrop there. At Briar Lake in Houston, with the Samsung expiration—as a reminder, that expiration is at the end of November of this year.
Speaker #4: So, really minimal impact either way on 2026. It's 123,000 square feet. I'd say that, at this moment in time, only about 70,000 of that is exposure.
Richard Hickson: It's 123,000sq ft. I'd say that at this moment in time, only about 70,000 of that is exposure. We're having very positive discussions with a number of subtenants there as well, and also some new deals, and very similar demand backdrop to North Dallas.
Richard Hickson: It's 123,000sq ft. I'd say that at this moment in time, only about 70,000 of that is exposure. We're having very positive discussions with a number of subtenants there as well, and also some new deals, and very similar demand backdrop to North Dallas.
Speaker #4: We're having very positive discussions with a number of subtenants there as well, and also some new deals. And very similar demand backdrop to North.
Nick Thillman: Well, that's very helpful. Thank you.
Nick Thillman: Well, that's very helpful. Thank you.
Speaker #5: That's very helpful. Thank
Speaker #5: you. Dallas.
Speaker #1: The
Operator: Your next question is from the line of Dylan Brzezinski from Green Street. Please go ahead.
Operator: Your next question is from the line of Dylan Brzezinski from Green Street. Please go ahead.
Speaker #1: Next question is from the line of Dylan Brzezinski from Green Street. Go ahead.
Speaker #1: Please go Good morning, guys.
Dylan Burzinski: Morning, guys. Thanks for taking the question. Colin, you mentioned obviously the strong demand backdrop, which is accelerating because the portfolio is likely to be sort of 90% leased, call it towards the end of this year, it sounds like. And then you mentioned new development, not likely coming for the next 4 to 5 years, and obviously, replacement rents are sort of well above market rents today. So just sort of wondering, can you sort of give us an outlook for where you guys sort of see the growth in net effective rents shaking out over the next 1, 2, 3 years?
Dylan Burzinski: Morning, guys. Thanks for taking the question. Colin, you mentioned obviously the strong demand backdrop, which is accelerating because the portfolio is likely to be sort of 90% leased, call it towards the end of this year, it sounds like. And then you mentioned new development, not likely coming for the next 4 to 5 years, and obviously, replacement rents are sort of well above market rents today. So just sort of wondering, can you sort of give us an outlook for where you guys sort of see the growth in net effective rents shaking out over the next 1, 2, 3 years?
Speaker #8: Thanks for taking the question. Colin, you mentioned, obviously, the strong demand backdrop, which is accelerating. Cousins' portfolio is likely to be sort of 90% leased, call it towards the end of this year, it sounds like.
Speaker #8: And then you mentioned new development not likely coming for the next four to five years. And obviously, replacement rents are well above market rents today.
Speaker #8: So, just sort of wondering, can you sort of give us an outlook for where you guys sort of see the growth and net effective rent shaking out over the next one, two, three years?
Speaker #4: Yeah, good morning, Dylan. As you just described, positive. Demand is de minimis. You're actually seeing approximately 20 million square feet a year being taken out of inventory, and so we do see a shortage of premier space starting to take shape.
Colin Connolly: Yeah. Good morning, Dylan. It, you know, as you just described, the backdrop is really, really positive. Demand is accelerating, construction is de minimis. You're actually seeing approximately 20 million sq ft a year being taken out of inventory. And so we do see a shortage of premier space starting to take shape in 2028 and beyond. And so that, we believe we're close to an inflection point where it will very much become a landlord's market. And, as I alluded to, tenant reps are-
Colin Connolly: Yeah. Good morning, Dylan. It, you know, as you just described, the backdrop is really, really positive. Demand is accelerating, construction is de minimis. You're actually seeing approximately 20 million sq ft a year being taken out of inventory. And so we do see a shortage of premier space starting to take shape in 2028 and beyond. And so that, we believe we're close to an inflection point where it will very much become a landlord's market. And, as I alluded to, tenant reps are-
Speaker #4: In 2028 and beyond—and so, to an inflection point where it will very much become that we believe we're close to a landlord's market. And as I alluded to, tenant reps are starting to recognize that by approaching us early on those type of renewals and those time periods.
Richard Hickson: ... are starting to recognize that by approaching us early on, on those type of, renewals in those time periods. You know, I can't say specifically what, you know, what the change in net effect of rents will be, but I do think rents will go higher and concessions will come down. You're already starting to see in certain submarkets where that shortage is showing up sooner and will be a good proxy. And you know, Dallas would be a good example, where over the last four years, rents have arguably doubled within trophy properties in Uptown Dallas, and again, concessions have come down.
Richard Hickson: ... are starting to recognize that by approaching us early on, on those type of, renewals in those time periods. You know, I can't say specifically what, you know, what the change in net effect of rents will be, but I do think rents will go higher and concessions will come down. You're already starting to see in certain submarkets where that shortage is showing up sooner and will be a good proxy. And you know, Dallas would be a good example, where over the last four years, rents have arguably doubled within trophy properties in Uptown Dallas, and again, concessions have come down.
Speaker #4: I can't say specifically what the change in net effective rents will be, but I do think rents will go higher and concessions will come down.
Speaker #4: You're already starting to see, in certain submarkets, where that shortage is showing up sooner. And we'll be a good proxy—Dallas would be a good example—where, over the last four years, rents have arguably doubled within trophy properties in Uptown Dallas, and again, concessions have come down.
Speaker #4: So, rent growth in the office world rarely moves in a single-digit linear way, whether up or down. It's usually a bit chunkier, and we are seeing, again, some specific markets today where we've seen double-digit year, at our Hayden Ferry project, as in rent growth.
Richard Hickson: So, you know, rent, rent growth in the office world, you know, rarely moves in a single-digit linear way, whether up or down. It's usually a bit chunkier. We are seeing, again, some specific markets today where we've seen double-digit rent growth over the last year. At our Hayden Ferry project, as an example, rents have grown, you know, 10 to 20% over the last 12 to 18 months alone. So I think it's a very, very favorable backdrop in environment for owners of trophy lifestyle office, and I'd say particularly in the Sun Belt, where the population continues to grow and migration continues to be very favorable.
Richard Hickson: So, you know, rent, rent growth in the office world, you know, rarely moves in a single-digit linear way, whether up or down. It's usually a bit chunkier. We are seeing, again, some specific markets today where we've seen double-digit rent growth over the last year. At our Hayden Ferry project, as an example, rents have grown, you know, 10 to 20% over the last 12 to 18 months alone. So I think it's a very, very favorable backdrop in environment for owners of trophy lifestyle office, and I'd say particularly in the Sun Belt, where the population continues to grow and migration continues to be very favorable.
Speaker #4: Rents have grown 10 to 20 percent over the last 12 to 18 months alone. So, I think it's a very, very favorable backdrop and environment for owners of trophy Sunbelt, where the population, lifestyle, office—and I'd say particularly in the office—continues to grow, and migration continues to be very strong.
Speaker #4: favorable. Great.
Operator: Great. Appreciate that answer. That's all. That's it for me.
Operator: Great. Appreciate that answer. That's all. That's it for me.
Speaker #5: Appreciate that answer. That's it for me.
Speaker #4: Thanks, Dylan.
Richard Hickson: Thanks, Dylan.
Richard Hickson: Thanks, Dylan.
Speaker #1: The next question comes from the line of Opal Rana from KeyBank. Please go ahead.
Operator: Your next question comes from the line of Upal Rana from KeyBanc. Please go ahead.
Operator: Your next question comes from the line of Upal Rana from KeyBanc. Please go ahead.
Speaker #5: Great, thank you. Colin, you mentioned in the past an increased interest in private capital in your markets. Could you give us an update on how that looks today, and how that is impacting how you're thinking about deploying capital on external growth opportunities?
Upal Rana: Great, thank you. Colin, you mentioned in the past of an increased interest in private capital in your markets. You know, could you give us an update on how that looks today and how that is impacting how you're thinking about deploying capital on external growth opportunities?
Upal Rana: Great, thank you. Colin, you mentioned in the past of an increased interest in private capital in your markets. You know, could you give us an update on how that looks today and how that is impacting how you're thinking about deploying capital on external growth opportunities?
Speaker #6: Hey, this is Kennedy. I'll jump in on that. Yeah, I mean, as I mentioned, certainly seeing more private capital generally, and family offices, kind of high-net-worth capital, has been leading the way.
Kennedy Hicks: Hey, this is Kennedy. I'll jump in on that. Yeah, I mean, as I mentioned, you know, certainly seeing more, more private capital, generally, you know, family offices, kind of high net worth capital has been, been leading the way. There's certainly a lot of, a lot of debt capital out there now that's being much more constructive around office. But those types of, capital sources generally are more, focused on the smaller deals. So that's where we're, you know, again, trying to align some of our, our disposition thoughts as well. So we really haven't seen the-- that capital start to compete with us on, on acquisitions. We think it's, it's probably coming, but, still feel like we've got a good window and a competitive advantage when it comes to investing in some of the, the larger assets.
Kennedy Hicks: Hey, this is Kennedy. I'll jump in on that. Yeah, I mean, as I mentioned, you know, certainly seeing more, more private capital, generally, you know, family offices, kind of high net worth capital has been, been leading the way. There's certainly a lot of, a lot of debt capital out there now that's being much more constructive around office. But those types of, capital sources generally are more, focused on the smaller deals. So that's where we're, you know, again, trying to align some of our, our disposition thoughts as well. So we really haven't seen the-- that capital start to compete with us on, on acquisitions. We think it's, it's probably coming, but, still feel like we've got a good window and a competitive advantage when it comes to investing in some of the, the larger assets.
Speaker #6: There's certainly a lot of debt capital out there now that's being much more constructive around office. But those types of capital sources generally are deal-specific.
Speaker #6: So that's where we're, again, trying to align some of our disposition thoughts as well. Really haven't seen the capital start to compete, with more focused on the smaller—us on acquisitions.
Speaker #6: We think it's probably coming, but still feel like we've got a good window and a competitive advantage when it comes to investing in some of the larger assets.
Speaker #1: Okay, great. That was helpful. And then, Gregg, on your four-year guidance, it assumes the refinancing on the term loan, Colorado Tower, and 201 North Tryon.
Upal Rana: Okay, great. That was helpful. And then, Greg, on your full year guidance, assumes the refinancing on the term loan, you know, Colorado Tower and 201 North Tryon. You know, what do you have currently baked into your guidance on where pricing could potentially shake out?
Upal Rana: Okay, great. That was helpful. And then, Greg, on your full year guidance, assumes the refinancing on the term loan, you know, Colorado Tower and 201 North Tryon. You know, what do you have currently baked into your guidance on where pricing could potentially shake out?
Speaker #1: Currently baked into guidance on where pricing could potentially shake, what do you have out?
Richard Hickson: Hey, Upal, good morning. We're committed to an unsecured borrowing strategy, so we will likely refinance all of those 3 maturities with unsecured debt. And, I'm not saying I'm going to do it right now, but if I did it right now, we have a hole in our maturity schedule in 7 years and 10 years, so we have some flexibility in what we do. And the seven-year debt would probably get priced, if I did it today, somewhere, give or take, around 5%, and the ten-year debt would be priced somewhere around probably 5.35, 5.40.
Richard Hickson: Hey, Upal, good morning. We're committed to an unsecured borrowing strategy, so we will likely refinance all of those 3 maturities with unsecured debt. And, I'm not saying I'm going to do it right now, but if I did it right now, we have a hole in our maturity schedule in 7 years and 10 years, so we have some flexibility in what we do. And the seven-year debt would probably get priced, if I did it today, somewhere, give or take, around 5%, and the ten-year debt would be priced somewhere around probably 5.35, 5.40.
Speaker #4: To an unsecured borrowing—Hey, Opal, good morning. We're committed to that strategy, so we will likely refinance all of those three maturities with unsecured debt. And I'm not saying I'm going to do it right now—years and ten years.
Speaker #4: We have a hole in our maturity schedule in seven, so we have some flexibility in what we do. And the seven-year debt would probably get priced if I did it, but if I did it right now, we have today somewhere, give or take, around 5%.
Speaker #4: And the ten-year debt would be priced somewhere around, probably, 5.35%,
Speaker #4: 540. Okay, great.
Upal Rana: Okay, great. That was helpful. Thank you.
Upal Rana: Okay, great. That was helpful. Thank you.
Speaker #1: That was helpful. Thank you. The last question comes from the line of Sarav from Mizzou. Please go ahead.
Operator: Your last question comes from the line of Shashank Sarav from Mizuho. Please go ahead.
Operator: Your last question comes from the line of Shashank Sarav from Mizuho. Please go ahead.
Speaker #5: Hi, this is Shashank. I'm from Vikramar Lahotra, from Mizzou. Thanks for taking my question. It appears that Austin, as a market, has inflected positively.
Shashank Sarav: Hi, this is Shashank Sarav from Mizuho. Thanks for taking my question. It appears that Austin, as a market, has inflected positively. Any more color on bigger requirements there?
Shashank Saurav: Hi, this is Shashank Sarav from Mizuho. Thanks for taking my question. It appears that Austin, as a market, has inflected positively. Any more color on bigger requirements there?
Speaker #5: Any more color on bigger requirements there?
Richard Hickson: I think we are definitely seeing some level of positive... I don't want to say green shoots, a little overused term, but some positive activity that I alluded to in the tech sector. Obviously, a lot of Austin's success in the past has been driven by tech demand, and we see that starting to percolate, certainly in our pipeline, in our own specific activity. So I would say, yes, we're seeing some positive movement there.
Speaker #4: I think we are definitely seeing some level of positive—I don't want to say 'green shoots,' that’s a little overused term—but some positive activity that I alluded to in the tech sector.
Richard Hickson: I think we are definitely seeing some level of positive... I don't want to say green shoots, a little overused term, but some positive activity that I alluded to in the tech sector. Obviously, a lot of Austin's success in the past has been driven by tech demand, and we see that starting to percolate, certainly in our pipeline, in our own specific activity. So I would say, yes, we're seeing some positive movement there.
Speaker #4: Obviously, a lot of Austin's success in the past has been driven by tech demand, and we see that starting to percolate. It's certainly in our pipeline.
Speaker #4: In our own specific activity, so I would say, yes, we're seeing some positive movement.
Speaker #5: The question is, how should we think, then, about TI spend in '26 and as we go into '27?
Shashank Sarav: Thank you. My next question is: How should we think about TI spend in 2026 and as we go into 2027?
Shashank Saurav: Thank you. My next question is: How should we think about TI spend in 2026 and as we go into 2027?
Speaker #5: you. My next
Speaker #4: Well, obviously, TIs drove some elevation in concessions this past quarter. I would point you back toward my comments about X North Park and looking at lease economics in that context.
Richard Hickson: Well, you know, obviously, the TIs drove some elevation in concessions this past quarter. I would point you back toward my comments about ex-Northpark and looking at lease economics in that context. You're going to continue to see, with the elevation of TIs, our prioritization of occupancy, and driving occupancy. And so that could continue. But what I'd like to stress, and this has been a theme over, frankly, many years, as we've talked about, different points of time where we see pressure in TIs or concessions in general, that we have been able to successfully maintain net effective rents. And I think that was the case this past quarter, even with elevated TIs.
Richard Hickson: Well, you know, obviously, the TIs drove some elevation in concessions this past quarter. I would point you back toward my comments about ex-Northpark and looking at lease economics in that context. You're going to continue to see, with the elevation of TIs, our prioritization of occupancy, and driving occupancy. And so that could continue. But what I'd like to stress, and this has been a theme over, frankly, many years, as we've talked about, different points of time where we see pressure in TIs or concessions in general, that we have been able to successfully maintain net effective rents. And I think that was the case this past quarter, even with elevated TIs.
Speaker #4: You're going to continue to see, with the elevation of TIs, our prioritization of occupancy and driving occupancy, and so that could continue. But what I'd like to stress—and this has been a theme over, frankly, many years as we've talked about different points of time where we see pressure in TIs or concessions in general—is that we have been able to successfully maintain that effective rents.
Speaker #4: And I think that was the case this past quarter, even with elevated TIs. And it's important to note, given the conditions that we see—with the tightening ahead, certainly in the medium term—that we're going to be able to back off of that over time.
Richard Hickson: And it's important to note that with the tightening conditions that we see ahead, you know, certainly in the medium term, that we're going to be able to back off of that over time. I think it's going to become a more constructive market for owners and landlords. So I would call that a more near-term dynamic as we prioritize occupancy.
Richard Hickson: And it's important to note that with the tightening conditions that we see ahead, you know, certainly in the medium term, that we're going to be able to back off of that over time. I think it's going to become a more constructive market for owners and landlords. So I would call that a more near-term dynamic as we prioritize occupancy.
Speaker #4: I think it's going to become a more constructive market for owners and landlords. So, I would call that a more near-term dynamic as we prioritize occupancy.
Speaker #5: Thank you.
Shashank Sarav: Thank you.
Shashank Saurav: Thank you.
Speaker #1: Thank you. There are no further questions at this time. I would like to turn the call back to Colleen Connolly for closing comments. Sir, please go ahead.
Operator: Thank you. There are no further questions at this time. I would like to turn the call back to Colin Connolly for closing comments. Sir, please go ahead.
Operator: Thank you. There are no further questions at this time. I would like to turn the call back to Colin Connolly for closing comments. Sir, please go ahead.
Speaker #7: Thank you for joining us this morning, and we appreciate your continued interest in Cousins Properties. If you have follow-up questions, please feel free to reach out to Gregg Adzema.
Richard Hickson: Thank you for joining us this morning, and we appreciate your continued interest in Cousins Properties. If you have follow-up questions, please feel free to reach out to Gregg Adzema or Roni Imbeaux. Have a great day and a great weekend.
Richard Hickson: Thank you for joining us this morning, and we appreciate your continued interest in Cousins Properties. If you have follow-up questions, please feel free to reach out to Gregg Adzema or Roni Imbeaux. Have a great day and a great weekend.
Speaker #7: We're Ronnie and Beau. Have a great day and a great...
Speaker #7: weekend.
Speaker #1: Ladies and
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.
