Noted Atlanta real estate developer and property manager Cousins Properties said Friday it will merge with fellow real estate investment trust Parkway Properties in a move that will expand Cousins’ reach in the Sun Belt.
The stock-for-stock merger deal will involve a spinoff of properties in the Houston area going to a new firm called HoustonCo. The new Cousins will operate 41 properties totaling nearly 16 million square feet in Atlanta, Austin, Charlotte, Phoenix, Orlando, and Tampa, the company said in a news release.
Additional terms of the deal should be known after an 8:30 a.m. conference call.
“These creative transactions continue Cousins’ heritage as a proven ‘sharpshooter’ in the growing Sun Belt markets, deepening our presence in Atlanta, Austin and Charlotte and establishing a strong presence in Phoenix, Orlando and Tampa. We firmly believe our shareholders will benefit by having an expanded portfolio of office towers in key urban submarkets, greater tenant and geographic diversity and enhanced access to the capital markets,” Larry Gellerstedt, President and CEO of Cousins, said in the release. “At the same time, we believe that unlocking the value in our Houston portfolio allows us to capitalize on that market’s eventual resurgence through the creation of HoustonCo.”
Cousins, founded by legendary Atlanta developer Tom Cousins, is one of Atlanta’s best known real estate brands. The firm in recent years has shifted strategy to become a more urban-focused developer and property manager.
The firm owns notable Atlanta towers such as 191 Peachtree, Midtown’s Promenade and the Terminus towers in Buckhead. The company in its history also developed the CNN Center complex and Bank of America Plaza.
After the recession, Cousins focused much of its development and acquisition attention on what were then fast-growing markets of Austin and Houston. But of late, the company has been growing its portfolio in Atlanta and the Carolinas.
Its ownership of trophy office towers in the Houston area has been a headwind for the company’s stock in recent quarters as oil prices hurt the city’s energy-strong economy.
Cousins’ portfolio of Houston office towers has performed well despite the broader weakness in the Houston economy and commercial real estate market.
Gellerstedt will remain the company’s CEO and Cousins Chairman Taylor Glover will remain in his role with the combined company. The board will have five legacy Cousins board members and four from Parkway.
The deal is expected to close by the end of the year.
More as this story develops…
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