Cousins Properties Incorporated (NYSE: CUZ) announced robust fourth-quarter and full-year 2025 results on Friday, showcasing the enduring appeal of “lifestyle” office spaces in high-growth Sunbelt markets. Despite the broader office sector facing persistent headwinds, Cousins reported its second-highest quarterly leasing volume in four years, fueled by a flight to quality and strategic expansions in Charlotte and Austin.

While the company posted a GAAP net loss for the quarter due to non-cash impairment charges on non-core assets, its core performance metric, funds from operations (FFO), matched analyst expectations, underscoring the stability of its trophy portfolio.

Financial Performance: Stability in a Shifting Sector

Cousins demonstrated steady growth throughout 2025, culminating in a year where total signed leasing activity reached 2.1 million square feet, the highest since 2019.

Leasing & Portfolio Highlights: The Flight to Quality

The quarter was defined by aggressive leasing and portfolio recycling. Cousins completed 700,000 square feet of leases in Q4 alone, a signal that top-tier “lifestyle” office space remains in high demand.

Strategic Acquisition: During the quarter, Cousins acquired 300 South Tryon, a 638,000-square-foot trophy asset in Uptown Charlotte, for $317 million. The move solidifies its dominance in one of the Sunbelt’s most competitive submarkets.

Capital Recycling: To fund new growth, the company recognized impairments on Harbourview Plaza ($13.3 million) and 303 Tremont ($1 million), signaling a disciplined exit from older, non-core assets to maintain a “best-in-class” portfolio.

Rent Growth: Second-generation cash rents increased by 6.7% in Q4, proving that Cousins still possesses significant pricing power for premium space.

Conference Call: Focus on 2026 “Supply Shortage”

CEO Colin Connolly struck a confident tone during the conference call, emphasizing that the lack of new office construction starts will eventually lead to a “shortage of high-quality space.”

“Demand is actually accelerating,” Connolly noted. “We have a late-stage leasing pipeline that now totals over 1.1 million square feet. While the ramp will be weighted towards the back half of 2026, our goal of achieving 90% occupancy by year-end is well within reach.”

Key Strategic Takeaways:

2026 Guidance: Cousins introduced 2026 FFO guidance of $2.92 per share at the midpoint, implying 2.8% growth over 2025.

Development Pivot: Management is eyeing a new development start for late 2026 or 2027, targeting a yield of 8.5% to 9%, provided they can secure approximately 50% pre-leasing.

Balance Sheet: CFO Gregg Adzema highlighted the company’s “offensive” balance sheet, noting that with $99 million in cash and low leverage, Cousins is positioned to capitalize on distressed opportunities that competitors cannot afford.

Investor Takeaway

For investors, Cousins Properties continues to be the “gold standard” for office REITs, separating itself from the “zombie office” narrative through a strict focus on the Sunbelt and trophy assets.

Conclusion

Cousins is a “self-help” story with a superior product. The acquisition of 300 South Tryon at a 7.3% cash cap rate shows management can still find accretive deals in a frozen market. Investors should view the current stability as a platform for significant “net asset value” growth as the new supply of office space dries up nationwide.