Metro Atlanta has regained all the office jobs it lost during the great recession and job growth is expected to exceed the national average, Cousins Properties, Inc. states in its annual financial report to the federal SEC.
In other Cousins news, Billy Payne – credited with helping to bring the 1996 Olympic Games to Atlanta – is to leave the Cousins board of directors after its annual board meeting May 6. Payne, 66, was elected to the board in 2006 and will remain chairman of the Augusta National Golf Club.
This is Cousins’ assessment of the metro Atlanta market, as stated in the 10-K Form the company filed Feb.13 with the federal Securities and Exchange Commission:
Cousins outlook is an outlier when compared to others forecasts of office job growth, and even in the actual market.
For example: No significant office projects have been started in five years; the deal in 2013 to get Carters Inc. to move to Buckhead involved at least $30 million in sweeteners, according to terms outlined in the $350,000 incentive grant provided by Atlanta; the region’s office vacancy rate is at 20.4 percent, which is more than a third higher than the national average vacancy rate of 14.9 percent at the end of 2013, according to real estate services company CBRE, Inc.
Last month, the Atlanta Fed’s beige book reported that job growth in the southeast was “muted” to “modest,” depending on the sector: “Rather than adding to payrolls, businesses reportedly continued to rely on technology to enhance output.” CBRE cautioned that tenants may need less space in the future if they require employees to work less frequently in the office.
Cousins has cut its staff, as well – by half since 2007. The company listed 470 employees at the close of 2007 and 237 at the end of 2013, according to the 10-K forms.
The views expressed by the Atlanta-based real estate firm certainly warrant attention. Cousins has beaten the odds since the great recession.
In the 6.5 years since Lehman Brothers downgraded Cousins stock, in December 2007, the investment bank has declared bankruptcy. In the four years since Larry Gellerstedt III has been president/CEO, the company increased its equity market value from $422 million to over $2 billion.
Cousins has sought to diversity its risk by selling non-core assets and acquiring developments in other markets, particularly in Texas. Cousins has boosted its footprint in Texas eightfold in just the past year.
At the end of 2012, Cousins listed its total rentable office footprint in Texas as 1 million square feet. The figure had leapt to 8.1 million square feet as of Dec. 31, 2013, according to the 10-K forms.
The only office construction Cousins listed in its most recent 10-K is in Texas, the Colorado Tower in downtown Austin. This space is being absorbed: A quarter of the 372,000 had been leased by the end of 2013, an additional quarter has been leased this year, and the building is to open at the end of 2014.
Just last year, Cousins invested more than $1.3 billion to purchase two developments in Texas.
Cousins paid $230.9 million for Post Oak Central, a Class A office complex in the Galleria area. The seller was an affiliate of J.P. Morgan Asset Management.
Cousins paid a total of $1.1 billion to acquire properties in Houston and Fort Worth – Greenway Plaza in Houston, a 10-building development with 4.3 million square feet; and 777 Main, an office tower in Fort Worth with 980,000 square feet.
Houston has become Cousins cash cow.
Metro Houston provided 49 percent of Cousins’ net operating income in the final quarter of 2013. Metro Atlanta provided 32 percent, according to the 10-K.
To succeed Billy Payne on the Cousins board, Cousins CEO Larry Gellerstedt III has nominated Donna Hyland, 53, president/CEO of Children’s Healthcare of Atlanta. If elected, she’s to serve on the Audit Committee. A proxy statement that announced Hyland’s nomination states:
