Larry Gellerstedt III
Cousins Properties president and CEO
Cousins, founded in Atlanta by real estate icon Tom Cousins, is a publicly traded company that develops and manages office towers and retail centers throughout the Sunbelt.
On new office towers:
We’re building one in downtown Austin, Texas. There are new office buildings being done in Houston. You are starting to see the cycle get back to where you’re seeing some new office product being added. I think those markets didn’t dip behind as much as Atlanta. Atlanta has been slower coming out, but I think you are beginning to see the inventory of space go down and you have to see (rental) rates recover a little bit.
But you are beginning to see tightening (of available space) due to (job) growth. I believe across most of our markets, the financing markets will require (substantial pre-leasing) before you start new product. But I do believe you’ll see in the next 12 to 24 months select new product starting in certain submarkets.
On opportunities in Atlanta:
We are certainly very aggressively out looking for more opportunities to grow our business in Atlanta.
The reason for that is we continue to see very strong positive trends for Atlanta, both in the short term and in the longer term. The city has really reclaimed all the office jobs that it lost during the downturn. It grew just under 4 percent in office jobs in the last 12 months. We look at job growth as the main thing we watch for. And the services that we really pay attention to, like Moody’s, (last week) predicted 2.6 percent job growth for Atlanta through 2017. That’s compared to 1.8 percent for the country. So Atlanta is still projected to grow at a 50 percent higher rate than the country overall.
On changing office preferences:
You are seeing the employers really having to be thoughtful and sensitive about where their workforce, the talented workforce they’re competing for, wants to be. It’s the availability of transportation. We’ve talked for years about MARTA, but you’re really beginning to see businesses consistently say, ‘How close are we to a MARTA line?’ Does it have amenities, whether it’s retail amenities or fitness amenities or residential availability?
On housing and apartment development:
The apartments in town are providing options for the live-work-play (lifestyle) near our properties or as a part of our properties. I’ve seen the housing market tighten significantly, but it’s still very location sensitive. But for us, whether it’s multifamily or single family, it’s an important component for healthy communities so employers have multiple choices for options for their employee base.
On how Cousins has changed since the recession:
If we didn’t learn lessons going through that recession, then shame on us. To us, it’s sticking to our core principles of making sure our balance sheet is conservative, and getting pre-leasing in buildings before we start, and being somewhat conservative. One thing that certainly changed for us was not being too geographically concentrated in any community because it’s not prudent.
Editor’s note: These comments are edited, condensed and organized to highlight important points.
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