Cousins Properties, one of Atlanta’s best-known developers and largest office landlords, on Monday announced it will merge with a Dallas-based rival in an all-stock deal set to create a nearly $6 billion real estate company by stock value.
The combined company will retain the Cousins name and be based in Atlanta. The merger with TIER REIT will give Cousins some 21 million square feet of top-end or Class A office space across the Sun Belt, including landmark towers in Atlanta, Austin, Charlotte, Dallas and Phoenix.
In an interview, Cousins President and CEO Colin Connolly, who will lead the combined company, said the deal bolsters Cousins’ position in Austin and gives the company a foothold in two of Dallas’ most popular office submarkets. It also increases Cousins’ development pipeline, though Connolly noted that the current development cycle is maturing, and new office development will be based on market demand.
» MORE | A timeline of Cousins Properties
“Clearly, we’re in a mature part of the economic cycle,” Connolly said. “That being said, as we look at our Sun Belt office markets, they continue to perform very well. Demand remains robust and I’d say in particular the Sun Belt continues to outperform as the migration continues to take hold where we see companies moving from the Northeast to the Southeast.”
Cousins’ Atlanta holdings include the Terminus office towers and 3344 Peachtree in Buckhead,as well as the Promenade in Midtown. Cousins also developed the NCR headquarters and recently started construction of the new Norfolk Southern headquarters in Midtown.
The deal values TIER at about $2.4 billion. Cousins shareholders will control about 72 percent of the combined company.
Once the deal is completed, which is expected in the third quarter, about 31 percent of Cousins’ portfolio will be in Atlanta, Austin will rank second at 24 percent and Charlotte will be third at 19 percent. TIER’s holdings in Houston and New Jersey are likely to be sold.
TIER recently announced plans to partner with Atlanta-based Regent Partners and Batson-Cook Development Company to build a new 44-story office and condo tower in Buckhead overlooking Ga. 400.
Cousins, founded by Tom Cousins in 1958, is one of Atlanta’s storied real estate firms. It started in residential development, but Cousins expanded into commercial, industrial, retail and apartments.
The company is now primarily focused on office developments in fast-growing Sun Belt metros.
The company has developed or been a partner in many well-known Atlanta landmarks, including CNN Center, 191 Peachtree, Bank of America Plaza, the Wildwood office park in Cobb and North Point Mall.