Despite calling the past few weeks of bad economic news “discouraging,” the CEO of Cousins Properties was upbeat during an earnings call with analysts Thursday to discuss second-quarter earnings.
Larry Gellerstedt, the head of the Atlanta-based, publicly traded real estate investment trust, crowed about the start of construction on Emory Point, the $102 million apartment and retail project near the Centers for Disease Control and Prevention and Emory University.
He noted that Cousins and partner Gables Residential secured a $61 million construction loan from PNC Bank. He said an $80 million second phase of the project is already under consideration.
He also was gleeful over a lease extension and expansion with AGL Resources at 10 Peachtree Place in Midtown. AGL took 238,000 square feet, making it practically the sole tenant in the full building, Gellerstedt said.
Cousins also hopes to take advantage of rising prices for good properties when it sells off the rest of its industrial portfolio and other buildings.
One that is for sale is One Georgia Center in downtown Atlanta, which is 97 percent leased, he said. That building’s major tenant is the Georgia Department of Transportation.
One thing that didn’t happen last quarter was the finalization of a contract with the DOT to become the master planner of the multimodal transportation project slated for an area known as “The Gulch” in downtown Atlanta. But he said he was optimistic an agreement would be reached in a couple of months to start an “extensive, 12-month master planning effort.” Cousins is part of a team of contractors picked as the finalist for that project.
Still, Gellerstedt was grilled by an analyst about major vacancies at two downtown buildings: 191 Peachtree St., which is 80 percent leased, and the American Cancer Society Building, which is 91 percent leased.
Gellerstedt said he recently lost a lease deal with the federal government at the Cancer Society Building, but he’s still hopeful it will fill up because he said lease rates there are so favorable.
In its second-quarter earnings, Cousins’ funds from operations, a measure used by real estate investment trusts to define operating performance, were $10.9 million, up from $7.9 million in the second quarter last year. FFO was 11 cents a share for the second quarter, up from 8 cents a share in the quarter a year ago.
The company narrowed its losses for the quarter with a net loss available to common stockholders of $4.7 million compared with $8.6 million in the second quarter of last year.
