Cousins Properties, an Atlanta-based real estate investment and development firm, said Wednesday it plans to sell off certain residential and commercial property -- much of it at a loss -- as part of a strategy to direct cash to new ventures.
Cousins reported noncash charges totaling $133.9 million in fourth quarter 2011 as a result of its plan to liquidate most of its commercial and residential land and certain operating properties.
Cash recouped from the sale of property will be used to acquire “trophy” office and retail real estate and property for “opportunistic development,” the company said.
Cousins bought the Promenade II tower on Peachtree Street in Midtown during the fourth quarter for $134.7 million, about half the cost it would take to build today.
Still, Cousins Chief Executive Larry Gellerstedt reiterated his firm will diversify its holdings outside Atlanta and into higher growth areas across the Sun Belt.
Gellerstedt said the company evaluated its portfolio, including new appraisals, and decided to sell the land despite the loss from original purchase price rather than wait for values to return over time.
Cash reclaimed from property sales will be invested in income-producing assets, he said, to “unlock value for our shareholders.”
Cousins’ loss on a funds-from-operations basis was $110.2 million in the fourth quarter, or $1.06 per share, compared with a profit of $10 million, or 10 cents per share, in the final quarter of 2010.
Funds from operations, a measure used by real estate investment trusts to define operating performance, would have been in the black $16.1 million, or 16 cents per share, without the one-time charges.
The loss to common shareholders was $129 million, or $1.24 per share in the fourth quarter, compared with a loss of $8.9 million, or 9 cents per share, a year earlier.
Rental property revenue rose 6.7 percent for the quarter.
For the year, Cousins reported a loss on a funds-from-operations basis of $76.9 million, or 74 cents per share, compared with a profit of $32.8 million, or 32 cents per share, in 2010.
Retail properties were 89 percent leased at year end, compared with 86 percent at the end of 2010. Office property was flat at 90 percent leased.
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