Cousins Properties CEO Reviews Strategic Repositioning of Office Portfolio
Larry Gellerstedt, president and CEO of Cousins Properties (NYSE: CUZ), joined REIT.com for a CEO Spotlight video interview at REITWorld 2014: NAREIT's Annual Convention for All Things REIT at the Atlanta Marriott Marquis.
Atlanta-based Cousins Properties primarily invests in class-A office towers and mixed-use developments in high-growth Sun Belt markets, including Atlanta, Austin, Dallas, Houston and Charlotte, N.C. Gellerstedt reviewed the strategic repositioning of the company's portfolio that has been underway since he became CEO in June 2009.
At that time, Cousins was active in five different product types, with about 17 percent of its portfolio concentrated in land and almost 70 percent of the portfolio based in Atlanta. The balance sheet at that time was more than 70 percent levered, and the company's market capitalization was about $400 million, Gellerstedt noted.
Today, about 97 percent of the company's income comes from properties in the office sector, with 65 percent of assets in Texas and about 35 percent in Atlanta. The company's market capitalization is just under $3 billion, while leverage is about 24 percent, according to Gellerstedt.
Gellerstedt said the company maintains an active development pipeline, with about $260 million of active development underway currently. The company has already announced another $170 million in development to start in 2015. He noted that the company is scheduled to open a new high-rise office property in downtown Austin at the end of the year, and occupancy is already at 100 percent.
With REITWorld taking place in Cousins' hometown, Gellerstedt discussed the positive attributes of the Atlanta market. He pointed to the fact that the city's airport is the busiest in the world, making Atlanta an important transportation hub. At the same time, Atlanta has the fourth-highest number of college students of any city in the country, and the city has been adding about 60,000 jobs a year, he noted.
Gellerstedt mentioned that Atlanta is also consistently ranked as one of the friendliest cities in the country and also offers one of the lowest costs of doing business. Furthermore, the city has the fourth-highest number of Fortune 500 companies headquartered in the country, Gellerstedt said.