Cousins Properties Inc 10-Q for FY2025 Q2
Cousins Properties Inc (CUZ)
10-Q
2025-07-31
For: 2025-06-30
View Original
Added on
April 09, 2026
About this 10-Q
Cousins Properties Inc filed this 10-Q on July 31, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $240.13M
- up 12.7% from $212.98M a year earlier
- Net income
- $14.48M
- up 84.7% from net income of $7.84M a year earlier
- Diluted EPS
- $0.09
- up 80.0% from $0.05 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the quarterly period ended June 30, 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the transition period from to
Commission file number: 001-11312
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
(404 ) 407-1000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||||||||||||||
| ("NYSE") | |||||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☑ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☑
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at July 24, 2025 | |||||||
| Common Stock, $1 par value per share | ||||||||
| Page No. | |||||
FORWARD-LOOKING STATEMENTS
Certain matters contained in this report are “forward-looking statements” within the meaning of the federal securities laws and are subject to uncertainties and risks, as itemized in Item 1A included in the Annual Report on Form 10-K for the year ended December 31, 2024, and as itemized herein. These forward-looking statements include information about possible or assumed future results of the business and our financial condition, liquidity, results of operations, plans, and objectives. Examples of forward-looking statements in this Quarterly Report on Form 10-Q include the Company’s business and financial strategy; objectives of management; future debt financings; future acquisitions and dispositions of operating assets, joint venture interests, and land; future acquisitions of investments in real estate debt; future development and redevelopment opportunities; future issuances of common stock, limited partnership units, or preferred stock; future distributions; projected capital expenditures; market and industry trends; future occupancy or volume and velocity of leasing activity; entry into new markets or changes in existing market concentrations; future changes in interest rates and liquidity of capital markets; and all statements that address operating performance, events, investments, or developments that we expect or anticipate will occur in the future.
Any forward-looking statements are based upon management's beliefs, assumptions, and expectations of our future performance, taking into account information that is currently available. These beliefs, assumptions, and expectations may change as a result of possible events or factors, not all of which are known. If a change occurs, our business, financial condition, liquidity, and results of operations may vary materially from those expressed in forward-looking statements. Actual results may vary from forward-looking statements due to, but not limited to, the following: the risks and uncertainties related to the impact of changes in general economic and capital market conditions (on an international or national basis or within the markets in which we operate), including changes in inflation, changes in interest rates, supply chain disruptions, labor market disruptions (including changes in unemployment), dislocation and volatility in capital markets, and potential longer-term changes in consumer and customer behavior resulting from the severity and duration of any downturn, adverse conditions or uncertainty in the U.S. or global economy; risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases on favorable terms (and on anticipated schedules); any adverse change in the financial condition or liquidity of one or more of our tenants or borrowers under our real estate debt investments; changes in customer preferences regarding space utilization; changes in customers’ financial condition; the availability, cost, and adequacy of insurance coverage; competition from other developers, investors, owners, and operators of real estate; the failure to achieve anticipated benefits from intended or completed acquisitions, developments, investments, or dispositions; the cost and availability of financing, the effectiveness of any interest rate hedging contracts, and any failure to comply with debt covenants under credit agreements; the effect of common stock, debt, or operating partnership unit issuances; threatened terrorist attacks or sociopolitical unrest such as political instability, civil unrest, armed hostilities, or political activism and the potential impact of the same upon our day-to-day building operations; the immediate and long-term impact of the outbreak of a highly infectious or contagious disease on our and our customers’ financial condition; risks associated with security breaches through cyberattacks, cyber intrusions, or otherwise; changes in senior management, the Board of Directors, or key personnel; the potential liability for existing or future environmental or other applicable regulatory requirements, including the requirements to qualify for taxation as a real estate investment trust; the financial condition and liquidity of, or disputes with, joint venture partners; material changes in dividend rates on common shares or other securities or the ability to pay those dividends; the impact of changes to applicable laws, including the tax laws impacting REITs and the passage of the One Big Beautiful Bill Act, and the impact of newly adopted accounting principles on our accounting policies and on period to period comparison of financial results; risks associated with climate change and severe weather events; and those additional risks and factors discussed in reports filed with the Securities and Exchange Commission ("SEC") by the Company.
These forward-looking statements are not exhaustive, speak only as of the date of issuance of this report and are not guarantees of future results, performance, or achievements. The Annual Report on Form 10-K for the year ended December 31, 2024, including Part 1, Item 1A. Risk Factors, and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, including Part II, Item 1A, Risk Factors, include additional factors that could adversely affect our business and financial performance. The Company does not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events, or other matters, except as otherwise required by law.
1
PART I — FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements.
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
| June 30, 2025 | December 31, 2024 | ||||||||||
| (unaudited) | |||||||||||
| Assets: | |||||||||||
| Real estate assets: | |||||||||||
Operating properties, net of accumulated depreciation of $ | $ | $ | |||||||||
| Land | |||||||||||
| Cash and cash equivalents | |||||||||||
| Investments in real estate debt, at fair value | |||||||||||
| Accounts receivable | |||||||||||
| Deferred rents receivable | |||||||||||
| Investment in unconsolidated joint ventures | |||||||||||
| Intangible assets, net | |||||||||||
| Other assets, net | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities: | |||||||||||
| Notes payable | $ | $ | |||||||||
| Accounts payable and accrued expenses | |||||||||||
| Deferred income | |||||||||||
| Intangible liabilities, net | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Equity: | |||||||||||
| Stockholders' investment: | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Distributions in excess of cumulative net income | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ||||||||||
| Total stockholders' investment | |||||||||||
| Nonredeemable noncontrolling interests | |||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
| See accompanying notes. | |||||||||||
2
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per share amounts)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Rental property revenues | $ | $ | $ | $ | |||||||||||||||||||
| Fee income | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Rental property operating expenses | |||||||||||||||||||||||
| Reimbursed expenses | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Income (loss) from unconsolidated joint ventures | ( | ( | |||||||||||||||||||||
| Gain (loss) on investment property transactions | ( | ||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Net income attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
| Net income available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
| Net income per common share — basic and diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common shares — basic | |||||||||||||||||||||||
| Weighted average common shares — diluted | |||||||||||||||||||||||
| See accompanying notes. | |||||||||||||||||||||||
3
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited; in thousands)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Comprehensive Income: | |||||||||||||||||||||||
| Net income available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Unrealized gain on cash flow hedges | |||||||||||||||||||||||
| Amortization of cash flow hedges | ( | ( | |||||||||||||||||||||
| Total other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Total comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
| See accompanying notes. | |||||||||||||||||||||||
4
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited; in thousands except per share amounts)
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Distributions in Excess of Net Income | Stockholders' Investment | Nonredeemable Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance March 31, 2025 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued pursuant to stock-based compensation, net of tax withholding | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of stock-based compensation, net of forfeitures | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common dividends ($ | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance June 30, 2025 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Stockholders’ Investment | Nonredeemable Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance March 31, 2024 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued pursuant to stock-based compensation, net of tax withholding | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of stock-based compensation, net of forfeitures | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Common dividends ($ | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance June 30, 2024 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
5
| Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Stockholders' Investment | Nonredeemable Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued pursuant to stock-based compensation, net of tax withholding | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of stock-based compensation, net of forfeitures | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Common dividends ($ | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance June 30, 2025 | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Treasury Stock | Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Stockholders’ Investment | Nonredeemable Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2023 | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued pursuant to stock-based compensation, net of tax withholding | ( | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of stock-based compensation, net of forfeitures | ( | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement of Treasury Stock | ( | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Common dividends ($ | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Balance June 30, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes.
6
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited; in thousands)
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Gain on investment property transactions | ( | ||||||||||
| Acquisition costs of investments in real estate debt | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization of deferred financing costs, debt premiums, and debt discounts, net | |||||||||||
| Equity-classified stock-based compensation expense, net of forfeitures | |||||||||||
| Effect of non-cash adjustments to rental revenues | ( | ( | |||||||||
| Loss (income) from unconsolidated joint ventures | ( | ||||||||||
| Operating distributions from unconsolidated joint ventures | |||||||||||
| Changes in other operating assets and liabilities, net of acquisitions: | |||||||||||
| Change in receivables and other assets, net | ( | ( | |||||||||
| Change in operating liabilities, net | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Property acquisitions | ( | ||||||||||
| Proceeds from borrower repayment of investments in real estate debt | |||||||||||
| Investments in real estate debt, net | ( | ( | |||||||||
| Contributions to unconsolidated joint ventures | ( | ( | |||||||||
| Proceeds from investment property sales, net | ( | ||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Proceeds from credit facility | |||||||||||
| Repayment of credit facility | ( | ( | |||||||||
| Bond issuance, net of original issue discount | |||||||||||
| Repayment of mortgages | ( | ( | |||||||||
| Repurchase of shares withheld for taxes on restricted stock vestings | ( | ( | |||||||||
| Payment of deferred financing costs | ( | ||||||||||
| Payment of issuance of common stock costs | ( | ||||||||||
| Common dividends paid | ( | ( | |||||||||
| Contributions from noncontrolling interests | |||||||||||
| Distributions to noncontrolling interests | ( | ( | |||||||||
| Other | ( | ||||||||||
| Net cash provided by financing activities | |||||||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | ( | ||||||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | |||||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | $ | |||||||||
See accompanying notes.
7
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2025
(Unaudited)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Description of Business: Cousins Properties Incorporated (“Cousins”), a Georgia corporation, is a fully integrated, self-administered, and self-managed real estate investment trust (“REIT”). Cousins conducts substantially all of its business through Cousins Properties LP ("CPLP"). Cousins owns in excess of 99 % of CPLP and consolidates CPLP. CPLP wholly owns Cousins TRS Services LLC ("CTRS"), a taxable entity which owns and manages its own real estate portfolio and performs certain real estate-related services.
Cousins, CPLP, CTRS, and their subsidiaries (collectively, the “Company”) develop, acquire, lease, manage, and own primarily Class A office properties and opportunistic mixed-use developments in the Sun Belt markets of the United States with a focus on Austin, Atlanta, Charlotte, Tampa, Phoenix, Dallas, and Nashville. Cousins has elected to be taxed as a REIT and intends to, among other things, distribute at least 100 % of its net taxable income to stockholders, thereby eliminating any liability for federal income taxes under current law. Therefore, the results included herein do not include a federal income tax provision for Cousins. As of June 30, 2025, the Company's operating portfolio of real estate assets consisted of interests in 20.9 million square feet of office space and 467,000 square feet of other space.
Basis of Presentation: The condensed consolidated financial statements are unaudited and were prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these financial statements reflect all adjustments necessary (which adjustments are of a normal and recurring nature) for the fair presentation of the Company's financial position as of June 30, 2025 and December 31, 2024, and the results of operations for the three and six months ended June 30, 2025 and 2024. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of results expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes to consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The accounting policies employed are substantially the same as those shown in note 2 of the notes to consolidated financial statements included therein.
The Company evaluates all partnerships, joint ventures, and other arrangements with variable interests to determine if the entity or arrangement qualifies as a variable interest entity ("VIE"), as defined in the Financial Accounting Standard Board's ("FASB") Accounting Standards Codification ("ASC"). If the entity or arrangement qualifies as a VIE and the Company is determined to be the primary beneficiary, the Company is required to consolidate the assets, liabilities, and results of operations of the VIE. The Company had no investments or interests in any VIEs as of June 30, 2025 or December 31, 2024.
8
2. REAL ESTATE
For the three and six months ended June 30, 2025 and 2024, the Company had no consolidated real estate transactions.
3. INVESTMENTS IN REAL ESTATE DEBT
The details of the real estate debt investments are as follows ($ in thousands):
| Carrying Value and Fair Value at | ||||||||||||||||||||||||||||||||||||||
| Collateral | June 30, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||
110 East - Pledge of equity interests (1) Charlotte, NC, Office Building | $ | $ | ||||||||||||||||||||||||||||||||||||
Radius - Pledge of equity interests (1) Nashville, TN, Office Building | ||||||||||||||||||||||||||||||||||||||
Saint Ann - Pledge of asset Dallas, TX, Office Building | ||||||||||||||||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||||||||||||||
(1) The first priority lender of these mortgage loans had a combined balance of $89.0 million and $152.7 million as of June 30, 2025 and December 31, 2024, respectively.
| Interest Income for the Three Months Ended | Interest Income for the Six Months Ended | |||||||||||||||||||||||||||||||||||||
| Collateral | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||||||||||||||||
110 East - Pledge of equity interests Charlotte, NC, Office Building | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Radius - Pledge of equity interests Nashville, TN, Office Building | ||||||||||||||||||||||||||||||||||||||
Saint Ann - Pledge of asset Dallas, TX, Office Building | ||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
In the second quarter of 2024, the Company acquired the Radius and 110 East mezzanine real estate loans for $27.2 million, which were subordinated to the first priority mortgage loans. These loans had a weighted average spread in excess of Term Secured Overnight Financing Rate ("SOFR") of 8.68 %.
In the fourth quarter of 2024, the Company acquired one mortgage loan at par for $138.0 million. This mortgage was secured by Saint Ann Court, a 320,000 square foot office property in Dallas, had a maturity of December 7, 2024, and had a spread in excess of SOFR of 3.66 %, with an additional 5 % spread during any default period. One month after the loan went into default, on January 7, 2025, the Saint Ann borrower repaid the $138.0 million mortgage loan at par and paid the interest in full.
On January 10, 2025, the Company entered into the First Amendment to Mezzanine Loan Agreement on the Radius loan, which among other things, reduced the requirements for the borrower to qualify for an extension on the loan in exchange for a minimum payment of interest. On March 27, 2025, the Radius borrower repaid the $12.8 million mezzanine loan, and paid the interest in full, including a minimum interest guaranty of $858,000 . Interest income on investments in real estate debt, including this minimum interest guaranty, is included in other revenue in the Company's consolidated statement of operations.
The 110 East loan provides the borrower with an opportunity to extend the initial maturity date of February 2026 to February 2027, subject to certain conditions. The variable interest rate at June 30, 2025 was 13.31 %, including a SOFR base rate of 4.31 %. The borrower has additional borrowing capacity under this loan, for which the Company funded $2.3 million subsequent to the acquisition
9
of the loans through the period ended June 30, 2025. The Company's share of additional borrowing capacity commitment under this loan is $5.0 million as of June 30, 2025.
As of June 30, 2025, the Company believes the fair value of the remaining investment in real estate debt approximates its invested carrying value and, therefore, did not record any unrealized gain or loss on that investment. The acquisition of this loan was a recently executed market transaction (Level 2) and market instruments for similar debt have not changed significantly since acquisition. In subsequent periods, the Company may make adjustments to the carrying values of this loan investment if any are required through application of the fair value hierarchy provided for under GAAP. Interest income earned and any unrealized gain or loss associated with investments in real estate debt are recorded as a component of other revenue on the Company's consolidated statement of operations.
4. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
The following information summarizes financial data and principal activities of the Company's unconsolidated joint ventures. The information included in the Summary of Financial Position table is as of June 30, 2025 and December 31, 2024 ($ in thousands).
| SUMMARY OF FINANCIAL POSITION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Company's Ownership Interest | Total Assets | Total Liabilities | Total Equity (Deficit) | Company's Investment (Deferred Income) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Operating Properties: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AMCO 120 WT Holdings, LLC | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Crawford Long - CPI, LLC (1) | ( | ( | ( | (2) | ( | (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Neuhoff Holdings LLC (3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TL CO Proscenium JV, LLC | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Land: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 715 Ponce Holdings LLC | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
(1) Crawford Long - CPI, LLC has a mortgage loan for the Medical Offices at Emory Hospital property. This $83.0 million interest-only mortgage loan has a fixed interest rate of 4.80 % and matures on June 1, 2032. The Company provides a customary "non-recourse carve-out guaranty" for this loan.
(2) Negative balance is included in Deferred income on the consolidated balance sheets.
(3) The Neuhoff Holdings LLC properties have commenced initial operations but are not yet stabilized. Included in the total liabilities above is a construction loan with $285.6 million and $275.1 million outstanding at June 30, 2025 and December 31, 2024, respectively. The construction loan has a borrowing capacity up to $312.7 million of which the Company's share is $156.4 million, and matures on September 30, 2025. The interest rate applicable to the construction loan is based on SOFR plus 3.45 % with a minimum rate of 3.60 %. The joint venture has one option, subject to certain conditions, to extend the maturity date for an additional 12 months from the initial maturity date. The Company and its joint venture partner guarantee their respective halves of the borrower's obligations to pay certain required equity contributions and project carrying costs, as well as timely completion of project construction. The Company and its partner also provide a customary non-recourse carve-out guaranty.
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The information included in the Summary of Operations table below is for the six months ended June 30, 2025 and 2024 ($ in thousands).
| SUMMARY OF OPERATIONS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Revenues | Net Income (Loss) | Company's Income (Loss) from Investment | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Operating Properties: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| AMCO 120 WT Holdings, LLC | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Crawford Long - CPI, LLC | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Neuhoff Holdings LLC | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| TL CO Proscenium JV, LLC | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Land: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 715 Ponce Holdings LLC | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||
5. INTANGIBLE ASSETS AND LIABILITIES
| 2025 | 2024 | |||||||||||||
In-place leases, net of accumulated amortization of $ in 2025 and 2024, respectively | $ | $ | ||||||||||||
Below-market ground leases, net of accumulated amortization of $ $ | ||||||||||||||
Above-market leases, net of accumulated amortization of $ in 2025 and 2024, respectively | ||||||||||||||
| Goodwill | ||||||||||||||
| $ | $ | |||||||||||||
| 2025 | 2024 | |||||||||||||
Below-market leases, net of accumulated amortization of $ | $ | $ | ||||||||||||
The amortization of the above asset and liabilities are recorded as follows ($ in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Rental property revenues, net (Below-market and Above-market leases) | $ | $ | $ | $ | |||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Depreciation and amortization (In-place leases) | |||||||||||||||||||||||
| Rental property operating and other expenses (Below-market ground leases) | |||||||||||||||||||||||
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Over the next five years and thereafter, aggregate amortization of these intangible assets and liabilities is anticipated to be as follows ($ in thousands):
| In-Place Leases | Below-Market Ground Leases | Above-Market Leases | Below-Market Leases | ||||||||||||||||||||||||||
| 2025 (six months) | $ | $ | $ | $ | ( | ||||||||||||||||||||||||
| 2026 | ( | ||||||||||||||||||||||||||||
| 2027 | ( | ||||||||||||||||||||||||||||
| 2028 | ( | ||||||||||||||||||||||||||||
| 2029 | ( | ||||||||||||||||||||||||||||
| Thereafter | ( | ||||||||||||||||||||||||||||
| $ | $ | $ | $ | ( | |||||||||||||||||||||||||
6. OTHER ASSETS
Other assets on the consolidated balance sheets as of June 30, 2025 and December 31, 2024 included the following ($ in thousands):
| 2025 | 2024 | |||||||||||||
| Predevelopment costs and earnest money (1) | $ | $ | ||||||||||||
| Prepaid expenses and other assets | ||||||||||||||
Lease inducements, net of accumulated amortization of $ | ||||||||||||||
Furniture, fixtures and equipment and other deferred costs, net of accumulated depreciation of $ | ||||||||||||||
Credit Facility deferred financing costs, net of accumulated amortization of $ | ||||||||||||||
| $ | $ | |||||||||||||
(1) Predevelopment costs represent amounts that are capitalized related to predevelopment projects that the Company determined are probable of future development.
(2) Represents incentives paid to tenants in conjunction with leasing space, such as moving costs, sublease arrangements of prior space, and other costs. These amounts are amortized into rental revenues over the individual underlying lease terms.
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7. NOTES PAYABLE
The following table summarizes the terms of notes payable outstanding at June 30, 2025 and December 31, 2024 ($ in thousands):
| Description | Interest Rate (1) | Maturity (2) | 2025 | 2024 | ||||||||||||||||||||||
| Unsecured Notes: | ||||||||||||||||||||||||||
| Credit Facility | April 2027 | $ | $ | |||||||||||||||||||||||
| Public Senior Notes | October 2034 | |||||||||||||||||||||||||
| Public Senior Notes | July 2030 | |||||||||||||||||||||||||
| Public Senior Notes | February 2032 | |||||||||||||||||||||||||
| Term Loan (3) | March 2026 | |||||||||||||||||||||||||
| Privately Placed Senior Notes | July 2029 | |||||||||||||||||||||||||
| Term Loan (4) | February 2026 | |||||||||||||||||||||||||
| Privately Placed Senior Notes (5) | July 2025 | |||||||||||||||||||||||||
| Privately Placed Senior Notes | July 2028 | |||||||||||||||||||||||||
| Privately Placed Senior Notes | July 2027 | |||||||||||||||||||||||||
| Privately Placed Senior Notes | July 2027 | |||||||||||||||||||||||||
| Secured Mortgage Notes: | ||||||||||||||||||||||||||
| Terminus (6) | January 2031 | |||||||||||||||||||||||||
| 201 N. Tryon (fka Fifth Third Center) | October 2026 | |||||||||||||||||||||||||
| Colorado Tower | September 2026 | |||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||
| Unamortized original issue discount | ( | ( | ||||||||||||||||||||||||
| Unamortized loan costs | ( | ( | ||||||||||||||||||||||||
| Total Notes Payable | $ | $ | ||||||||||||||||||||||||
(1) Interest rate as of June 30, 2025.
(2) Weighted average maturity of notes payable outstanding at June 30, 2025 was 4.0 years, exclusive of unexercised extension options.
(3) The Company exercised the second of four available six-month extension options, which becomes effective on September 3, 2025, and extends the maturity to March 3, 2026.
(4) The Company exercised the third of four available 180-day extension options, which becomes effective on August 25, 2025, and extends the maturity to February 20, 2026.
(5) Subsequent to June 30, 2025, in July, the Company repaid these notes in full.
Credit Facility
On May 2, 2022, the Company entered into a Fifth Amended and Restated Credit Agreement (the "Credit Facility") under which the Company may borrow up to $1 billion if certain conditions are satisfied. The Credit Facility contains financial covenants that require, among other things, the maintenance of unencumbered interest coverage ratio of at least 1.75 x; a fixed charge coverage ratio of at least 1.50 x; a secured leverage ratio of no more than 50 %; and an overall leverage ratio of no more than 60 %. The Credit Facility matures on April 30, 2027.
The interest rate applicable to the Credit Facility varies according to the Company's credit rating and leverage ratio and may, at the election of the Company, be determined based on either (1) the Daily SOFR or Term SOFR, plus a SOFR adjustment of 0.10 % ("Adjusted SOFR") and a spread of between 0.725 % and 1.40 %, or (2) the greater of (i) Bank of America's prime rate, (ii) the federal funds rate plus 0.50 %, (iii) Term SOFR, plus a SOFR adjustment of 0.10 %, and 1.00 %, or (iv) 1.00 %, plus a spread of between 0.00 %
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and 0.40 %, based on leverage. In addition to the interest rate, the Credit Facility is also subject to an annual facility fee of 0.125 % to 0.30 %, depending on the Company's credit rating and leverage ratio, on the entire $1 billion capacity.
In April 2024, the Company notified the administrative agent of the Credit Facility of the Company's receipt of corporate investment grade ratings. These ratings reduced the Credit Facility's Adjusted SOFR spread and facility fee range effective April 17, 2024. Changes in the Company's investment grade ratings may result in additional adjustments to the applicable spread and facility fee. Prior to April 17, 2024, the applicable spread was between 0.90 % and 1.40 % and the facility fee range was 0.15 % to 0.30 %, depending on leverage.
At June 30, 2025, the Credit Facility's interest rate spread over Adjusted SOFR was 0.775 %, and the facility fee was 0.15 %. The amount that the Company may draw under the Credit Facility is a defined calculation based on the Company's unencumbered assets and other factors. The total available borrowing capacity under the Credit Facility was $1.0 billion at June 30, 2025. Any amounts outstanding under the Credit Facility may be accelerated upon the occurrence of any events of default.
Term Loans
On October 3, 2022, the Company entered into a Delayed Draw Term Loan Agreement (the "2022 Term Loan") and borrowed the full $400 million available under the loan. The loan had an initial maturity of March 3, 2025 with four consecutive options to extend the maturity date for an additional six months each. The Company has exercised the second of the four six-month extension options, which becomes effective September 3, 2025, extending the maturity date to March 3, 2026. The final maturity date, assuming the Company exercises the two remaining extensions would be March 3, 2027. Under the 2022 Term Loan, the applicable interest rate varies according to the Company's credit rating and leverage ratio and may, at the election of the Company, be determined based on either (1) the Daily SOFR or Term SOFR, plus a SOFR adjustment of 0.10 % ("Adjusted SOFR") and a spread of between 0.80 % and 1.60 %, or (2) the greater of (i) Bank of America's prime rate, (ii) the federal funds rate plus 0.50 %, (iii) Term SOFR, plus a SOFR adjustment of 0.10 %, and 1.00 %, or (iv) 1.00 %, plus a spread of between 0.00 % and 0.65 %, based on leverage. The covenants under the 2022 Term Loan are the same as the Credit Facility. At June 30, 2025, the spread over the underlying SOFR rates was 0.85 % for the 2022 Term Loan.
On April 19, 2023, the Company entered into a floating-to-fixed rate swap with respect to $200 million of the $400 million 2022 Term Loan through the initial maturity date of March 3, 2025. This swap fixed the underlying SOFR rate at 4.298 %. On January 26, 2024, the Company entered into a floating-to-fixed rate swap with respect to remaining $200 million of the $400 million 2022 Term Loan through the initial maturity date of March 3, 2025. This swap fixed the underlying SOFR rate at 4.6675 % (see note 8). These two swaps fixed the underlying SOFR rate for the full $400 million at a weighted average of 4.483 %. These swaps expired on March 3, 2025 at which time the Company, under the terms of the 2022 Term Loan, elected six-month Term SOFR fixing the underlying SOFR rate at 4.2618 % through September 3, 2025.
On June 28, 2021, the Company entered into an Amended and Restated Term Loan Agreement (the "2021 Term Loan") that amended a former term loan agreement. Under the 2021 Term Loan, the Company has borrowed $350 million with an initial maturity of August 30, 2024 and four consecutive options to extend the maturity date for an additional 180 days each. In August 2024, the Company repaid $100 million of the $350 million outstanding. The Company has exercised the third of four 180 day extension options, which becomes effective August 25, 2025, extending the maturity date on the remaining $250 million to February 20, 2026. The final maturity date, assuming the Company exercises the one remaining extension, would be August 20, 2026. On September 19, 2022, the Company entered into the First Amendment to the 2021 Term Loan. This amendment aligns covenants and available interest rates, including the addition of SOFR, to that of the Credit Facility. Under the terms of this First. Amendment the interest rate applicable to the 2021 Term Loan varies according to the Company's credit rating and leverage ratio and may, at the election of the Company, be determined based on either (1) the Daily SOFR or Term SOFR, plus a SOFR adjustment of 0.10 % ("Adjusted SOFR") and a spread of between 0.85 % and 1.65 %, or (2) the greater of (i) Bank of America's prime rate, (ii) the federal funds rate plus 0.50 %, (iii) Term SOFR, plus a SOFR adjustment of 0.10 %, and 1.00 %, or (iv) 1.00 %, plus a spread of between 0.00 % and 0.65 %, based on leverage. At June 30, 2025, the spread over the underlying SOFR rates was 1.00 % for the 2021 Term Loan.
On September 27, 2022, the Company entered into a floating-to-fixed interest rate swap with respect to the $350 million 2021 Term Loan through the initial maturity date of August 30, 2024. This swap effectively fixed the underlying SOFR rate at 4.234 % (see note 8). This swap expired on August 30, 2024, and the loan has reverted to the elected underlying Daily SOFR rate.
In April 2024, the Company received a new corporate investment grade rating. Effective April 17, 2024, the Adjusted SOFR spread range of the 2022 Term Loan and the 2021 Term Loan were reduced to reflect the investment grade rating. Changes in the Company's investment grade ratings may result in additional adjustments to the applicable spread in the future. Prior to April 17, 2024, the applicable spread was between 1.05 1.65
14
Unsecured Senior Notes
At June 30, 2025, the Company had $2.4 billion aggregate principal amount of senior unsecured notes outstanding.
In June 2025, CPLP issued $500.0 million in aggregate principal amount of 5.250 % public senior notes. Upon issuance of these notes, CPLP received proceeds of $499.9 million dollars, net of the original issue discount of $65,000 , resulting in an effective interest rate of 5.251 %. These public senior notes are fully and unconditionally guaranteed by the Company. These public senior notes had issuance costs of $4.2 million and mature on July 15, 2030. Subsequent to June 30, 2025, $250.0 million of the proceeds were used to repay, at maturity, the outstanding amount of the Privately Placed Senior Notes that matured on July 7, 2025; to partially fund the acquisition of The Link on July 28, 2025 (see note 2); and for general corporate purposes.
In December 2024, CPLP issued $400.0 million in aggregate principal amount of 5.375 % public senior notes. Upon issuance of these notes, CPLP received proceeds of $397.9 million dollars, net of the original issue discount of $2.1 million, resulting in an effective interest rate of 5.464 %. These public senior notes are fully and unconditionally guaranteed by the Company. The proceeds were used to partially fund the acquisitions of the Sail Tower and Vantage South End properties in December 2024. These public senior notes had issuance costs of $3.6 million and mature on February 15, 2032.
In August 2024, CPLP issued $500.0 million in aggregate principal amount of 5.875 % public senior notes. Upon issuance of these public senior notes, CPLP received proceeds of $498.5 million dollars, net of the original issue discount of $1.5 million, resulting in an effective interest rate of 5.912 %. These public senior notes are fully and unconditionally guaranteed by the Company. The proceeds were used primarily to repay $373.8 million outstanding on the Credit Facility and repay $100 million of the $350 million outstanding on the 2021 Term Loan. These public senior notes had issuance costs of $5.3 million and mature on October 1, 2034.
The Company's public senior notes are subject to certain customary covenants that, subject to certain exceptions, include (a) a limitation on the ability of the Company and CPLP to, among other things, incur additional secured and unsecured indebtedness; (b) a limitation on the ability of the Company and CPLP to merge, consolidate, sell, lease, or otherwise dispose of their properties and assets substantially as an entirety; and (c) a requirement that the Company maintain a pool of unencumbered assets. To avoid any such limitations, these covenants require, among other things, maintaining the following financial metrics as defined in the agreement: unencumbered debt ratio of at least 150 %; an EBITDA to debt service ratio of at least 1.50 x; a secured leverage ratio of no more than 40 %; and an overall leverage ratio of no more than 60 %.
The Company also has privately placed unsecured senior notes of $1.0 billion that were funded in five tranches. The first tranche of $100 million is due in 2027 and has a fixed annual interest rate of 4.09 %. The second tranche of $250 million is due in July 2025 and has a fixed annual interest rate of 3.91 %. Subsequent to June 30, 2025, the second tranche was repaid in full at maturity. The third tranche of $125 million is due in 2027 and has a fixed annual interest rate of 3.78 %. The fourth tranche of $250 million is due in 2028 and has a fixed annual interest rate of 3.86 %. The fifth tranche of $275 million is due in 2029 and has a fixed annual interest rate of 3.95 %.
The privately placed unsecured senior notes contain financial covenants that are consistent with those of our Credit Facility, with the exception of a secured leverage ratio of no more than 40 %. The senior notes also contain customary representations and warranties, both affirmative and negative covenants, and customary events of default.
Secured Mortgage Notes
In November 2024, the Company repaid, in full, its Domain 10 mortgage with remaining principal balance of $70.9 million. The mortgage had an interest rate of 3.75 %.
As of June 30, 2025, the Company had $444.5 million outstanding on four non-recourse mortgage notes with a weighted average interest rate of 4.87 %. All interest rates on the secured mortgage notes are fixed. Assets with depreciated carrying values of $697.1 million were pledged as security on these mortgage notes payable. In addition, the Company provides a customary “non-recourse carve-out guaranty” on each non-recourse loan, along with a guarantee of certain re-leasing expenses for a future vacancy at 201 N. Tryon.
Other Debt Information
The Company is in compliance with all of the covenants related to its unsecured and secured debt.
At June 30, 2025 and December 31, 2024, the estimated fair value of the Company’s notes payable was $3.6
15
value calculations are considered to be Level 2 under the guidelines as set forth in ASC 820, as the Company utilizes market rates for similar type loans from third party brokers.
For the three and six months ended June 30, 2025 and 2024, interest expense was recorded as follows ($ in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Total interest incurred | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Interest capitalized | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Total interest expense | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
8. DERIVATIVE FINANCIAL INSTRUMENTS
The Company has no outstanding derivative financial instruments as of June 30, 2025.
On April 19, 2023, the Company entered into a floating-to-fixed interest rate swap ("2023 Swap") with respect to $200 million principal amount of the $400 million 2022 Term Loan through the initial loan maturity date of March 3, 2025, fixing the underlying SOFR rate for this portion of the loan at 4.298 %. On January 26, 2024, the Company entered into a floating-to-fixed interest rate swap ("2024 Swap") with respect to the remaining $200 million of the $400 million 2022 Term Loan through the initial maturity date of March 3, 2025, fixing the underlying SOFR rate for this portion of the loan at 4.6675 %. These swaps effectively fixed the underlying SOFR rate at a weighted average of 4.483 % for the entire $400 million principal amount through the initial maturity date. The 2023 and 2024 Swaps expired upon their March 3, 2025 maturity. As of December 31, 2024, the fair values of the 2023 Swap and 2024 Swap on the 2022 Term Loan resulted in a $10,000 asset and a $115,000 liability, respectively.
On September 27, 2022, the Company entered into a floating-to-fixed interest rate swap ("2022 Swap") with respect to the $350 million 2021 Term Loan through the initial loan maturity date of August 30, 2024. This swap effectively fixed the underlying SOFR rate at 4.234 %. The 2022 Swap expired upon its August 30, 2024 maturity.
The Company's objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Such derivatives were used to hedge the variable cash flows associated with the 2021 and 2022 Term Loans (referred to herein as "cash flow hedges").
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest expense in the same periods during which the hedged transaction affects earnings.
The counterparties under these swaps are major financial institutions, and the swaps contain provisions whereby if the Company defaults on certain of its indebtedness, and such default results in repayment of such indebtedness being, or becoming capable of being, accelerated by the lender, then the Company could also be declared in default under the swaps. There are no collateral requirements related to these swaps.
The table below presents the effect of the Company's derivative financial instruments on the consolidated statements of operations for the three months ended June 30, 2025 and 2024 ($ in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| Cash Flow Hedges: | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Amount of income recognized in accumulated other comprehensive income on interest rate derivatives | $ | $ | $ | $ | |||||||||||||||||||
| Amount of loss (income) reclassified from accumulated other comprehensive income into income as an increase (reduction) of interest expense | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Total amount of interest expense presented in the consolidated statements of operations | $ | $ | $ | $ | |||||||||||||||||||
Fair value of cash flow hedges is determined using observable inputs other than quoted prices in active markets, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be
16
corroborated by observable market data for substantially the full term of the related assets or liabilities. These inputs are considered Level 2 inputs in the fair value hierarchy and the Company engages a third-party expert to determine these inputs. These fair values are determined using the conventional industry methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts made between the Company and its counterparties to the cash flow hedges. These variable cash receipts are based on the expectation of future interest rates which are derived from observed market interest rate curves. In addition, any credit valuation adjustments are considered in the fair values to account for potential nonperformance risk to the extent they would be significant inputs to the calculation. For the periods presented, credit valuation adjustments were not considered to be significant inputs.
9. OTHER LIABILITIES
Other liabilities on the consolidated balance sheets as of June 30, 2025 and December 31, 2024 included the following ($ in thousands):
| 2025 | 2024 | |||||||||||||
| Ground lease liability | $ | $ | ||||||||||||
| Prepaid rent | ||||||||||||||
| Security deposits | ||||||||||||||
| Other liabilities | ||||||||||||||
| $ | $ | |||||||||||||
10. COMMITMENTS AND CONTINGENCIES
Commitments
As a lessor, the Company had $109.5 million in future obligations under leases to fund tenant improvements and other future construction obligations at June 30, 2025. Additionally, the Company had $5.0 million of future funding commitments related to investments in real estate debt at June 30, 2025 as discussed in note 3.
Litigation
The Company is subject to various legal proceedings, claims, and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, the Company discloses the nature and estimate of the possible loss of the litigation. The Company does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss would not be material. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business, or financial condition of the Company.
11. STOCKHOLDERS' EQUITY
In 2021, the Company entered into an Equity Distribution Agreement ("EDA") with six financial institutions known as an at-the-market stock offering program ("ATM Program"), under which the Company may offer and sell shares of its common stock from time to time in "at-the-market" offerings with an aggregate gross sales price of up to $500 million. In connection with the ATM Program, Cousins may, at its discretion, enter into forward equity sale agreements. The use of a forward equity sale agreement ("Forward Sales") would allow the Company to lock in a share price on the sale of shares of its common stock at the time the agreement is executed but defer receiving the proceeds from the sale of shares until a later date, allowing the Company to better align such funding with its capital needs. Sales of shares of Cousins' stock through its banking relationships, if any, are made in amounts and at times to be determined by Cousins from time to time, but the Company has no obligation to sell any of the shares in the offering and may suspend sales in connection with the offering at any time. Sales of Cousins' common stock under Forward Sales, if undertaken, meet the derivatives and hedging guidance scope exception as the contracts are related to the Company's own stock. In 2024, the Company filed a Form S-3 to renew the registration of its authorized shares. In conjunction with that Form S-3 filing, the Company entered into a Second Amendment to allow for the continued issuance of shares under this ATM Program.
17
During the three and six months ended June 30, 2025, the Company sold 803,000 and 2.9 million shares under Forward Sales contracts at an average price of $30.47 and $30.44 per share, respectively. These Forward Sales contracts have an initial maturity date of December 31, 2025, which can be extended by mutual agreement of each party. The future settlement proceeds, as of June 30, 2025, net of $894,000 of commissions, will be $88.5 million. Prior to the Forward Sales executed during the six months ended June 30, 2025, the Company had issued 2.6 million shares under the ATM Program and generated cash proceeds of $101.4 million, net of $1.1 million of commissions, $1.7 million of dividends owed during the period the Forward Sales were outstanding, and $900,000 of other transaction related costs. Of the aggregate gross sales price of up to $500 million available to be sold under the EDA for the current ATM program, the Company has $305.6 million remaining as of June 30, 2025.
To the extent, prior to settlement, shares sold under Forward Sales were potentially dilutive during the period under the treasury stock method, the impact of such dilution is disclosed in the calculation included in note 14. The Company did not issue any shares under the ATM Program during the three and six months ended June 30, 2025 and did not have any outstanding Forward Sales contracts as of December 31, 2024.
On February 6, 2024, the Company retired all 2,536,583 shares of Treasury Stock outstanding. These treasury shares had an average cost basis of $57.44 per share.
12. REVENUE RECOGNITION
The Company categorizes its primary sources of revenue into revenue from contracts with customers and other revenue accounted for as leases under ASC 842 as follows:
•Rental property revenues consist of (1) contractual revenues from leases recognized on a straight-line basis over the term of the respective lease; (2) percentage rents recognized once a specified sales target is achieved; (3) parking revenue; (4) termination fees; and (5) the reimbursement of the tenants' share of real estate taxes, insurance, and other operating expenses. The Company's leases typically include renewal options and are classified and accounted for as operating leases. Rental property revenues are accounted for using practical expedients included in accordance with the guidance set forth in ASC 842.
•Fee income consists of development fees, management fees, and leasing fees earned from unconsolidated joint ventures and from third parties. Fee income is accounted for in accordance with the guidance set forth in ASC 606.
For the three and six months ended June 30, 2025, the Company recognized rental property revenues of $237.7 million and $480.7 million, respectively, of which $63.2 million and $132.1 million, respectively, represented variable rental revenue. For the three and six months ended June 30, 2024, the Company recognized rental property revenues of $211.5 million and $420.3 million, respectively, of which $61.3 million and $122.0 million, respectively, represented variable rental revenue.
For the three and six months ended June 30, 2025, the Company recognized fee and other revenue of $2.4 million and $9.7 million, respectively. Included in 2025 other revenue is interest income from investments in real estate debt (see note 3) and the proceeds from the sale of the Company's SVB bankruptcy claim discussed below. For the three and six months ended June 30, 2024, the Company recognized fee and other revenue of $1.5 million and $1.9 million, respectively.
The Company had a lease with SVB Financial Group ("SVB Financial") at its Hayden Ferry 1 property in Phoenix, Arizona. SVB Financial’s primary subsidiary, Silicon Valley Bank ("SVB"), was placed in receivership by the Federal Deposit Insurance Corporation ("FDIC") on March 10, 2023. On March 17, 2023, SVB Financial filed a voluntary petition for a court-supervised reorganization under Chapter 11 of the US Bankruptcy Code. On March 27, 2023, First Citizen's BancShares, Inc. ("FCB") announced it had purchased SVB Financial's subsidiary, SVB, the primary user of the leased space. In June 2023, the Bankruptcy court approved SVB Financial's request for an order rejecting the lease, with an effective date no later than September 30, 2023. In June 2023, the Company recorded a reduction of revenue of $1.6 million related to the write-down of net assets associated with this lease at the time that the collection of rents for the term of the lease no longer remained probable. In February 2025, the Company sold its bankruptcy claim, related primarily to the lease rejection, to a third party for $4.6 million in cash, which is included in other revenue in the Company's consolidated statement of operations for the six months ended June 30, 2025. The Company has no additional claims under these bankruptcy proceedings as of June 30, 2025.
13. STOCK-BASED COMPENSATION
The Company currently has several types of employee stock-based compensation, including restricted stock and restricted stock units ("RSUs"), issued under the Cousins Properties Incorporated 2019 Omnibus Incentive Stock Plan (the "2019 Plan") and the Employee Stock Purchase Plan ("ESPP"). While the Company's 2019 Plan also allows for the issuance of stock options, none have been issued or exercised or were outstanding as of or during any of the periods presented. A portion of the Company's independent directors' compensation is also provided in the form of Company stock issued under the 2019 Plan.
The Company's compensation expense for the three and six months ended June 30, 2025 relates to restricted stock, stock-settled RSUs, and the ESPP. Restricted stock and the stock-settled RSUs are equity-classified awards for which compensation expense per
18
share is fixed. For the three and six months ended June 30, 2025 and 2024, stock-based compensation expense, net of forfeitures, was recorded as follows ($ in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Equity-classified awards: | ||||||||||||||||||||||||||
| Restricted stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Market-based RSUs | ||||||||||||||||||||||||||
| Performance-based RSUs | ||||||||||||||||||||||||||
| Director grants | ||||||||||||||||||||||||||
| Employee Stock Purchase Plan | ||||||||||||||||||||||||||
| Total equity-classified award expense, net of forfeitures | $ | $ | $ | $ | ||||||||||||||||||||||
Information on the Company's stock compensation plan, including information on the Company's equity-classified awards is discussed in note 15 of the notes to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.
Grants of Equity-Classified Awards
Under the 2019 Plan, in the second quarter of 2025, the Company granted 60,121 shares of stock with a grant date value of $1.7 million to independent members of the Company's board of directors (the "Board") for their service as members of the Board. These shares vested on the issuance date, and the Company records the related expense over the director's one year service period.
Under the 2019 Plan, in 2025 and 2024, the Company granted three types of equity-classified awards to key employees under the 2019 Plan: (1) RSUs based on the Total Stockholder Return ("TSR") of the Company, as defined in the award documents, relative to that of office peers included in the Nareit Office Index (the "Market-based RSUs"), (2) RSUs based on the ratio of cumulative funds from operations per share to targeted cumulative funds from operations per share (the “Performance-based RSUs”), and (3) restricted stock.
The RSU awards are equity-classified awards to be settled in common stock with issuance dependent upon the attainment of required service, market, and performance criteria. For the Market-based RSUs the Company expenses an estimate of the fair value of the awards on the grant date, calculated using a Monte Carlo valuation at grant date, ratably over the vesting period, adjusting only for forfeitures when they occur. The expense of these Market-based RSUs is not adjusted for the number of awards that actually vest. For the Performance-based RSUs, the Company expenses the awards over the vesting period using the fair market value of the Company's stock on the grant date. The expense is recognized ratably over the vesting period and adjusted each quarter based on the number of shares expected to vest and for forfeitures when they occur. The performance period for the Performance-based RSUs and TSR measurement period for the Market-based RSUs awarded is three years starting on January 1 of the year of issuance and ending on December 31. The ultimate settlement of these awards can range from zero percent to 200 % of the targeted number of units depending on the achievement of the market and performance metrics described above.
The restricted stock vests ratably over three years from the grant date. The Company records restricted stock in common stock and additional paid-in capital at fair value on the grant date, with the offsetting deferred compensation also recorded in additional paid-in capital. The Company records compensation expense over the vesting period.
The following table summarizes the grants of equity-classified awards made to employees by the Company during the six months ended June 30, 2025 and 2024, respectively, (in thousands):
| Shares and Targeted Units Granted in | |||||||||||
| 2025 | 2024 | ||||||||||
| Market-based RSUs | |||||||||||
| Performance-based RSUs | |||||||||||
| Restricted stock | |||||||||||
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The Monte Carlo valuation used to determine the grant date fair value of the equity-classified Market-based RSUs included the following assumptions for those RSUs granted during six months ended June 30, 2025 and 2024:
| Assumptions for RSUs Granted in | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Volatility | (1) | % | % | |||||||||||
| Risk-free rate | (2) | % | % | |||||||||||
| Stock beta | (3) | % | % | |||||||||||
(1) Based on historical volatility over three years using daily stock price.
(2) Reflects the yield on three-year Treasury bonds.
(3) Betas are calculated with up to three years of daily stock price data.
14. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2025 and 2024 ($ in thousands, except per share amounts):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Earnings per common share - basic: | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
Net income attributable to noncontrolling interests in CPLP from continuing operations | ( | ( | ( | ( | |||||||||||||||||||
| Net income attributable to other noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
| Net income available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average common shares - basic | |||||||||||||||||||||||
| Net income per common share - basic | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per common share - diluted: | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Net income attributable to other noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
| Net income available for common stockholders before allocation of net income attributable to noncontrolling interests in CPLP | $ | $ | $ | $ | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average common shares - basic | |||||||||||||||||||||||
| Add: | |||||||||||||||||||||||
| Potential dilutive common shares - ESPP | |||||||||||||||||||||||
Potential dilutive common shares - restricted stock units, less shares assumed purchased at market price | |||||||||||||||||||||||
Weighted average units of CPLP convertible into common shares | |||||||||||||||||||||||
| Weighted average common shares - diluted | |||||||||||||||||||||||
| Net income per common share - diluted | $ | $ | $ | $ | |||||||||||||||||||
The treasury stock method resulted in no dilution from shares expected to be issued under forward contracts for the future sales of common stock under the Company's ATM Program during the respective periods presented.
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15. CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL INFORMATION
Supplemental information related to the cash flows, including significant non-cash activity affecting the consolidated statements of cash flows, for the six months ended June 30, 2025 and 2024 is as follows ($ in thousands):
| 2025 | 2024 | ||||||||||
| Interest paid, net of amounts capitalized | $ | $ | |||||||||
| Income taxes paid | |||||||||||
| Non-Cash Investing and Financing Activities: | |||||||||||
| Common stock dividends declared and accrued | |||||||||||
| Tenant improvements funded by tenants | |||||||||||
| Change in real estate included in accounts payable and accrued expenses | ( | ( | |||||||||
| Retirement of treasury stock | |||||||||||
16. REPORTABLE SEGMENTS
The Company's segments are based on the method of internal reporting with operating segments being each of the operating office properties. These operating segments are aggregated for reporting by geographical area, with these geographical regions being: Austin, Atlanta, Charlotte, Dallas, Phoenix, Tampa, and other markets. Included in other markets for the periods presented are properties located in Houston and Nashville.
Company management evaluates the performance of its operating segments in part based on Net Operating Income ("NOI"). Office Property NOI is regularly reported to the Chief Operating Decision Maker ("CODM") by operating segment. The CODM is the Company's President and Chief Executive Officer. Each segment includes both consolidated operations and the Company's share of unconsolidated joint venture operations.
Segment net income, individually significant components of rental property operating expenses, amount of capital expenditures, and total assets are not presented in this note because the CODM does not utilize these measures when analyzing segments or when making resource allocation decisions. The below presentation has been recast for all years presented to comply with updates to ASC 280 required by Accounting Standards Update 2023-07 "ASU 2023-07," "Segment Reporting" issued by the Financial Accounting Standards Board in November 2023. Information on the Company's segments along with a reconciliation of NOI to net income for the three and six months ended June 30, 2025 and 2024 are as follows ($ in thousands):
| Three Months Ended June 30, 2025 | Rental Property Revenues | Rental Property Operating Expenses | NOI | |||||||||||||||||
| Austin | $ | $ | $ | |||||||||||||||||
| Atlanta | ||||||||||||||||||||
| Charlotte | ||||||||||||||||||||
| Tampa | ||||||||||||||||||||
| Phoenix | ||||||||||||||||||||
| Dallas | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Segment Totals | $ | $ | $ | |||||||||||||||||
| Other Non - Office Properties | ||||||||||||||||||||
| Portfolio Totals | $ | $ | $ | |||||||||||||||||
| Less: Company's share from unconsolidated joint ventures | $ | ( | $ | ( | ||||||||||||||||
| Consolidated Totals | $ | $ | ||||||||||||||||||
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| Three Months Ended June 30, 2024 | Rental Property Revenues | Rental Property Operating Expenses | NOI | |||||||||||||||||
| Atlanta | $ | $ | $ | |||||||||||||||||
| Austin | ||||||||||||||||||||
| Tampa | ||||||||||||||||||||
| Phoenix | ||||||||||||||||||||
| Charlotte | ||||||||||||||||||||
| Dallas | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Segment Totals | $ | $ | $ | |||||||||||||||||
| Other Non - Office Properties | $ | $ | $ | |||||||||||||||||
| Portfolio Totals | $ | $ | $ | |||||||||||||||||
| Less: Company's share from unconsolidated joint ventures | $ | ( | $ | ( | ||||||||||||||||
| Termination Fees | — | |||||||||||||||||||
| Consolidated Totals | $ | $ | ||||||||||||||||||
| Six Months Ended June 30, 2025 | Rental Property Revenues | Rental Property Operating Expenses | NOI | |||||||||||||||||
| Austin | $ | $ | $ | |||||||||||||||||
| Atlanta | ||||||||||||||||||||
| Charlotte | ||||||||||||||||||||
| Tampa | ||||||||||||||||||||
| Phoenix | ||||||||||||||||||||
| Dallas | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Segment Totals | $ | $ | $ | |||||||||||||||||
| Other Non - Office Properties | ||||||||||||||||||||
| Portfolio Totals | $ | $ | $ | |||||||||||||||||
| Less: Company's share from unconsolidated joint ventures | $ | ( | $ | ( | ||||||||||||||||
| Termination Fees | — | |||||||||||||||||||
| Consolidated Totals | $ | $ | ||||||||||||||||||
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| Six Months Ended June 30, 2024 | Rental Property Revenues | Rental Property Operating Expenses | NOI | |||||||||||||||||
| Atlanta | $ | $ | $ | |||||||||||||||||
| Austin | ||||||||||||||||||||
| Tampa | ||||||||||||||||||||
| Phoenix | ||||||||||||||||||||
| Charlotte | ||||||||||||||||||||
| Dallas | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Segment Totals | $ | $ | $ | |||||||||||||||||
| Other Non - Office Properties | $ | $ | $ | |||||||||||||||||
| Portfolio Totals | $ | $ | $ | |||||||||||||||||
| Less: Company's share from unconsolidated joint ventures | $ | ( | $ | ( | ||||||||||||||||
| Termination Fees | — | |||||||||||||||||||
| Consolidated Totals | $ | $ | ||||||||||||||||||
The following reconciles Net Operating Income from net income for each of the periods presented ($ in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net Income | $ | $ | $ | $ | |||||||||||||||||||
| Fee income | ( | ( | ( | ( | |||||||||||||||||||
| Termination fee income | ( | ( | ( | ||||||||||||||||||||
| Other income | ( | ( | ( | ( | |||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Reimbursed expenses | |||||||||||||||||||||||
| Other expenses | |||||||||||||||||||||||
| Loss (income) from unconsolidated joint ventures | ( | ( | |||||||||||||||||||||
| Net operating income from unconsolidated joint ventures | |||||||||||||||||||||||
| Gain (loss) on investment property transactions | ( | ||||||||||||||||||||||
| Net Operating Income | $ | $ | $ | $ | |||||||||||||||||||
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Overview of 2025 Performance and Company and Industry Trends
Cousins Properties Incorporated ("Cousins") (and collectively, with its subsidiaries, the "Company," "we," "our," or "us") is a publicly traded (NYSE: CUZ), self-administered, and self-managed real estate investment trust, or REIT. Cousins conducts substantially all of its business through Cousins Properties LP ("CPLP"). Cousins owns in excess of 99% of CPLP and consolidates CPLP. CPLP owns Cousins TRS Services LLC, a taxable entity that owns and manages its own real estate portfolio and performs certain real estate related services for other parties. Our strategy is to create value for our stockholders through ownership of a lifestyle office portfolio (described in further detail below) in the Sun Belt markets, with a particular focus on the core markets of Austin, Atlanta, Charlotte, Tampa, Phoenix, Dallas, and Nashville. This strategy is based on a disciplined approach to capital allocation that includes opportunistic acquisitions, selective developments, and timely dispositions of non-core assets with a goal of maintaining a portfolio of newer and more efficient properties with lower capital expenditure requirements. This strategy is also based on a simple, flexible, and low-leverage balance sheet that allows us to pursue compelling growth opportunities at the most advantageous points in the cycle. To implement this strategy, we strive to have strong local operating platforms within each of our major markets.
During the quarter, we leased 334,000 square feet of office space, including 268,000 of new and expansion leases representing 80% of total leasing activity. Straight-line basis net rent per square foot increased 27.2% for those office spaces that were under lease within the past year. Same property net operating income (defined below) for consolidated properties and our share of unconsolidated properties increased 3.2% between the three months ended June 30, 2025 and 2024.
For the six months ended June 30, 2025, we have leased or renewed 873,000 square feet of office space, including 473,000 of new and expansion leases representing 54% of the total leasing activity. Straight-line basis net rent per square foot increased by 20.8% for those office spaces that were under lease within the past year. Same property net operating income for consolidated properties and our share of unconsolidated properties increased 3.6% between the six months ended June 30, 2025 and 2024.
We believe the Sun Belt, and in particular the seven core Sun Belt markets in which we own properties, will continue to outperform the broader office sector as evidenced by clear long-term migration trends to our markets. In addition, as the flight to quality trend accelerates among office users, we believe our lifestyle portfolio is well positioned to benefit from, and ultimately outperform in, the current real estate environment.
We consider “lifestyle offices” to be well-located buildings that are modern structures or have been modernized to compete with newer buildings, are professionally managed and maintained, and offer a number and type of amenities that are in high demand by customers that are focused on the importance of the physical work environment in recruiting and retaining employees. We believe our “lifestyle office” portfolio improves our ability to renew leases and obtain new customers which results in consistently higher occupancy than the remainder of the office buildings in our markets. We do not consider the expression “lifestyle office” a classification of our properties in accordance with any standard listing criteria in the real estate industry. We, therefore, caution investors that our use and definition of “lifestyle office” may be different than the use and definition of similar expressions and traditional classifications that may be used by other companies.
Results of Operations For The Three and Six Months Ended June 30, 2025
General
Net income available to common stockholders for the three and six months ended June 30, 2025 was $14.5 million and $35.4 million, respectively. We detail below material changes in the components of net income available to common stockholders for the three and six months ended June 30, 2025 compared to 2024.
Rental Property Revenue, Rental Property Operating Expenses, and Net Operating Income
The following results include the performance of our Same Property portfolio. Our Same Property portfolio includes office properties that were stabilized and owned by us for the entirety of each comparable reporting period presented. Same Property amounts for the 2025 versus 2024 comparison period are from properties that were stabilized and owned as of January 1, 2024 through June 30, 2025. We consider many factors in determining whether a property has stabilized, including the property’s occupancy (independently and relative to its submarket) and current leasing pipeline, as well as time since the cessation of major construction activity.
Company management evaluates the performance of its property portfolio, in part, based on Net Operating Income ("NOI"). NOI represents rental property revenues, less termination fees, less rental property operating expenses. NOI is not a measure of cash flows or operating results as measured by GAAP, is not indicative of cash available to fund cash needs, and should not be considered an alternative to cash flows as a measure of liquidity. All companies may not calculate NOI in the same manner. We consider NOI to be an appropriate supplemental measure to net income as it helps both management and investors understand the core operations of
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our operating assets. NOI excludes corporate general and administrative expenses, interest expense, depreciation and amortization, impairments, gains/losses on sales of real estate, and other non-operating items. As a result, we use only those income and expense items that are incurred at the property level to evaluate a property's performance.
The following table reconciles net income to consolidated NOI for each of the periods presented ($ in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net Income | $ | 14,658 | $ | 7,961 | $ | 35,751 | $ | 21,412 | |||||||||||||||
| Fee income | (494) | (406) | (990) | (785) | |||||||||||||||||||
| Termination fee income | — | (1,086) | (2,866) | (1,556) | |||||||||||||||||||
| Other income | (1,919) | (1,098) | (8,724) | (1,142) | |||||||||||||||||||
| General and administrative expenses | 9,738 | 8,907 | 20,447 | 18,121 | |||||||||||||||||||
| Interest expense | 38,514 | 29,743 | 75,288 | 58,651 | |||||||||||||||||||
| Depreciation and amortization | 100,890 | 95,415 | 203,004 | 181,645 | |||||||||||||||||||
| Reimbursed expenses | 119 | 151 | 296 | 291 | |||||||||||||||||||
| Other expenses | 443 | 603 | 865 | 1,275 | |||||||||||||||||||
| Loss (income) from unconsolidated joint ventures | 1,587 | (439) | 3,470 | (787) | |||||||||||||||||||
| Loss (gain) on investment property transactions | — | 3 | — | (98) | |||||||||||||||||||
| Net Operating Income | $ | 163,536 | $ | 139,754 | $ | 326,541 | $ | 277,027 | |||||||||||||||
Consolidated rental property revenues, rental property operating expenses, and NOI changed between the 2025 and 2024 periods as follows ($ in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| Rental Property Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Same Property | $ | 205,135 | $ | 203,435 | $ | 1,700 | 0.8 | % | $ | 414,117 | $ | 407,223 | $ | 6,894 | 1.7 | % | |||||||||||||||||||||||||||||||
| Non-Same Property | 32,580 | 6,953 | 25,627 | 368.6 | % | 63,759 | 11,513 | 52,246 | 453.8 | % | |||||||||||||||||||||||||||||||||||||
| 237,715 | 210,388 | 27,327 | 13.0 | % | 477,876 | 418,736 | 59,140 | 14.1 | % | ||||||||||||||||||||||||||||||||||||||
| Termination fee income | — | 1,086 | (1,086) | 2,866 | 1,556 | 1,310 | |||||||||||||||||||||||||||||||||||||||||
| Total Rental Property Revenues | $ | 237,715 | $ | 211,474 | $ | 26,241 | $ | 480,742 | $ | 420,292 | $ | 60,450 | |||||||||||||||||||||||||||||||||||
| Rental Property Operating Expenses | |||||||||||||||||||||||||||||||||||||||||||||||
| Same Property | $ | 66,013 | $ | 68,683 | $ | (2,670) | (3.9) | % | $ | 135,477 | $ | 138,367 | $ | (2,890) | (2.1) | % | |||||||||||||||||||||||||||||||
| Non-Same Property | 8,166 | 1,951 | 6,215 | 318.6 | % | 15,858 | 3,342 | 12,516 | 374.5 | % | |||||||||||||||||||||||||||||||||||||
| Total Rental Property Operating Expenses | $ | 74,179 | $ | 70,634 | $ | 3,545 | 5.0 | % | $ | 151,335 | $ | 141,709 | $ | 9,626 | 6.8 | % | |||||||||||||||||||||||||||||||
| Net Operating Income | |||||||||||||||||||||||||||||||||||||||||||||||
| Same Property NOI | $ | 139,122 | $ | 134,752 | $ | 4,370 | 3.2 | % | $ | 278,640 | $ | 268,856 | $ | 9,784 | 3.6 | % | |||||||||||||||||||||||||||||||
| Non-Same Property NOI | 24,414 | 5,002 | 19,412 | 388.1 | % | 47,901 | 8,171 | 39,730 | 486.2 | % | |||||||||||||||||||||||||||||||||||||
| Total NOI | $ | 163,536 | $ | 139,754 | $ | 23,782 | 17.0 | % | $ | 326,541 | $ | 277,027 | $ | 49,514 | 17.9 | % | |||||||||||||||||||||||||||||||
Same Property NOI represents Net Operating Income for those office properties that were stabilized and owned by us for the entirety of the 2025 and 2024 reporting periods presented. Same Property NOI allows analysts, investors, and management to analyze continuing operations and evaluate the growth trend of the Company's portfolio.
Same Property Rental Property Revenues and NOI increased for the three and six months ended June 30, 2025 compared to the same periods in the prior year primarily due to an increase in economic occupancy at our Promenade Tower, Corporate Center, and 3350 Peachtree office properties and increases in revenues recognized from tenant funded improvements owned by us. In addition, parking revenue from our Same Property portfolio increased for the three and six months ended June 30, 2025 compared to the same
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periods in the prior year. Same Property Rental Property Operating Expenses decreased for the three and six months ended June 30, 2025 primarily due to successful appeals of property tax assessments.
Non-Same Property Rental Property Revenues, operating expenses, and NOI increased for the three and six months ended June 30, 2025 compared to the same periods in the prior year primarily due to the acquisitions of our Vantage South End and Sail Tower office properties in December 2024.
The following table details consolidated NOI from properties aggregated by market ($ in thousands):
| Three Months Ended June 30, | |||||||||||||||||||||||
| Market | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| Austin | $ | 60,712 | $ | 48,034 | $ | 12,678 | 26.4 | % | |||||||||||||||
| Atlanta | 50,443 | 48,476 | 1,967 | 4.1 | % | ||||||||||||||||||
| Charlotte | 16,932 | 9,783 | 7,149 | 73.1 | % | ||||||||||||||||||
| Tampa | 13,209 | 12,337 | 872 | 7.1 | % | ||||||||||||||||||
| Phoenix | 11,910 | 10,874 | 1,036 | 9.5 | % | ||||||||||||||||||
| Dallas | 3,642 | 3,410 | 232 | 6.8 | % | ||||||||||||||||||
| Other (1) | 5,533 | 5,656 | (123) | (2.2) | % | ||||||||||||||||||
| Office NOI | 162,381 | 138,570 | 23,811 | 17.2 | % | ||||||||||||||||||
| Other Non-Office (2) | 1,155 | 1,184 | (29) | ||||||||||||||||||||
| Total NOI | $ | 163,536 | $ | 139,754 | $ | 23,782 | |||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||
| Market | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| Austin | $ | 120,550 | $ | 93,804 | $ | 26,746 | 28.5 | % | |||||||||||||||
| Atlanta | 100,961 | 96,451 | 4,510 | 4.7 | % | ||||||||||||||||||
| Charlotte | 33,764 | 20,149 | 13,615 | 67.6 | % | ||||||||||||||||||
| Tampa | 26,385 | 24,282 | 2,103 | 8.7 | % | ||||||||||||||||||
| Phoenix | 24,002 | 21,985 | 2,017 | 9.2 | % | ||||||||||||||||||
| Dallas | 7,259 | 6,869 | 390 | 5.7 | % | ||||||||||||||||||
| Other (1) | 11,219 | 11,235 | (16) | (0.1) | % | ||||||||||||||||||
| Office NOI | 324,140 | 274,775 | 49,365 | 18.0 | % | ||||||||||||||||||
| Other Non-Office (2) | 2,401 | 2,252 | 149 | ||||||||||||||||||||
| Total NOI | $ | 326,541 | $ | 277,027 | $ | 49,514 | |||||||||||||||||
| (1) Represents a non-core office property in Houston. | |||||||||||||||||||||||
| (2) Includes operations at land sites held for future development as well as a parking garage in Charlotte. | |||||||||||||||||||||||
NOI for the Austin market increased $12.7 million, or 26.4%, and $26.7 million, or 28.5%, respectively, for the three and six months ended June 30, 2025 and 2024 primarily due to the acquisition of Sail Tower in December 2024. NOI from the Charlotte market increased $7.1 million, or 73.1%, and $13.6 million, or 67.6%, respectively, for the three and six months ended June 30, 2025 and 2024, primarily due to the acquisition of Vantage South End in December 2024.
Other Income
Other income increased $821,000 between the three month periods ended June 30, 2025 and 2024 primarily due to interest income earned on the cash proceeds from our $500 million public bond offering in June 2025. Other income increased $7.6 million between the six month periods ended June 30, 2025 and 2024 primarily due to the sale of our Silicon Valley Bank ("SVB") bankruptcy claim in the first quarter of 2025 and interest income from the two mezzanine loans acquired in the second quarter of 2024
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and the Saint Ann Court mortgage loan acquired in the fourth quarter of 2024. These transactions are described in further detail in note 3 and note 12 to the consolidated financial statements in this Form 10-Q.
General and Administrative Expenses
General and administrative expenses increased $831,000, or 9.3%, and $2.3 million, or 12.8%, between the three and six month periods ended June 30, 2025 and 2024, respectively, primarily due to increases in stock compensation expense.
Interest Expense
Interest expense, net of amounts capitalized, increased $8.8 million, or 29.5%, and $16.6 million, or 28.4%, respectively, between the three and six months ended June 30, 2025 and 2024, primarily due to the issuances of the $500 million and $400 million public unsecured senior notes in August and December of 2024, respectively, as well as the issuance of the $500 million public unsecured senior notes in June of 2025.
Depreciation and Amortization
Depreciation and amortization changed between the 2025 and 2024 periods as follows ($ in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| Depreciation and Amortization | |||||||||||||||||||||||||||||||||||||||||||||||
| Same Property | $ | 83,194 | $ | 87,610 | $ | (4,416) | (5.0) | % | $ | 168,133 | $ | 166,960 | $ | 1,173 | 0.7 | % | |||||||||||||||||||||||||||||||
| Non-Same Property | 17,575 | 7,690 | 9,885 | 128.5 | % | 34,633 | 14,454 | 20,179 | 139.6 | % | |||||||||||||||||||||||||||||||||||||
| Non-Real Estate Assets | 121 | 115 | 6 | 5.2 | % | 238 | 231 | 7 | 3.0 | % | |||||||||||||||||||||||||||||||||||||
| Total Depreciation and Amortization | $ | 100,890 | $ | 95,415 | $ | 5,475 | 5.7 | % | $ | 203,004 | $ | 181,645 | $ | 21,359 | 11.8 | % | |||||||||||||||||||||||||||||||
Same Property depreciation and amortization decreased between the three months ended June 30, 2025 and 2024, primarily driven by early terminations in the second quarter of 2024 at our Terminus, 725 Ponce, and Avalon properties, which resulted in accelerated depreciation and amortization of our assets related to these leases.
Non-Same Property depreciation and amortization increased between the three and six months ended June 30, 2025 and 2024, primarily due to the acquisitions of Sail Tower and Vantage South End in December 2024 and the completion of development at Domain 9, and changes in the estimated useful lives of buildings and improvements at some of our operating properties.
Income and Net Operating Income from Unconsolidated Joint Ventures
Income from unconsolidated joint ventures consisted of the Company's share of the following ($ in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| Income (loss) from unconsolidated joint ventures | $ | (1,587) | $ | 439 | $ | (2,026) | (461.5) | % | $ | (3,470) | $ | 787 | $ | (4,257) | (540.9) | % | |||||||||||||||||||||||||||||||
| Depreciation and amortization | 2,489 | 513 | 1,976 | 385.2 | % | 4,701 | 972 | 3,729 | 383.6 | % | |||||||||||||||||||||||||||||||||||||
| Interest expense | 2,239 | 635 | 1,604 | 252.6 | % | 4,228 | 1,163 | 3,065 | 263.5 | % | |||||||||||||||||||||||||||||||||||||
| Other expense | 62 | 15 | 47 | 313.3 | % | (17) | 46 | (63) | (137.0) | % | |||||||||||||||||||||||||||||||||||||
| Other income | (38) | (41) | 3 | (7.3) | % | (54) | (55) | 1 | (1.8) | % | |||||||||||||||||||||||||||||||||||||
| Net operating income from unconsolidated joint ventures | $ | 3,165 | $ | 1,561 | $ | 1,604 | 102.8 | % | $ | 5,388 | $ | 2,913 | $ | 2,475 | 85.0 | % | |||||||||||||||||||||||||||||||
| Net operating income: | |||||||||||||||||||||||||||||||||||||||||||||||
| Same Property | 1,187 | 1,240 | (53) | (4.3) | % | 2,378 | 2,422 | (44) | (1.8) | % | |||||||||||||||||||||||||||||||||||||
| Non-Same Property | 1,978 | 321 | 1,657 | 516.2 | % | 3,010 | 491 | 2,519 | 513.0 | % | |||||||||||||||||||||||||||||||||||||
| Net operating income from unconsolidated joint ventures | $ | 3,165 | $ | 1,561 | $ | 1,604 | 102.8 | % | $ | 5,388 | $ | 2,913 | $ | 2,475 | 85.0 | % | |||||||||||||||||||||||||||||||
The change in income (loss) from unconsolidated joint ventures was driven by increases in unconsolidated depreciation and amortization as well as unconsolidated interest expense. Unconsolidated depreciation and amortization expense increased between the three and six months ended June 30, 2025 and 2024, primarily due to: (i) assets being placed in service as portions of the development were completed and initial operations started at our joint venture's Neuhoff property in the fourth quarter of 2023 and (ii) the
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acquisition of Proscenium in August 2024. Unconsolidated interest expense increased between the three and six months ended June 30, 2025 and 2024, primarily due to a reduction in capitalized interest at our Neuhoff joint venture as portions of its development project were completed in 2024.
Non-Same Property NOI from unconsolidated joint ventures increased between the three and six months ended June 30, 2025 and 2024, primarily due to operations at Neuhoff as the property continues to increase occupancy and to the acquisition of Proscenium in August 2024.
Funds From Operations
The table below shows Funds from Operations (“FFO”) and the related reconciliation from net income available to common stockholders. We calculate FFO as defined by the National Association of Real Estate Investment Trusts ("Nareit"), which is net income available to common stockholders (computed in accordance with GAAP), excluding extraordinary items, cumulative effect of change in accounting principle, and gains on sale or impairment losses on depreciable property, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures to reflect FFO on the same basis.
FFO is used by industry analysts and investors as a supplemental measure of a REIT’s operating performance. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, Nareit created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from GAAP net income. The use of FFO, combined with the required primary GAAP presentations, has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. Company management evaluates operating performance, in part, based on FFO. Additionally, we use FFO, along with other measures, to assess performance in connection with evaluating and granting incentive compensation to our officers and other key employees.
The reconciliation of net income to FFO is as follows for the three and six months ended June 30, 2025 and 2024 (in thousands, except per share amounts):
| Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||
| Dollars | Weighted Average Common Shares | Per Share Amount | Dollars | Weighted Average Common Shares | Per Share Amount | |||||||||||||||||||||||||||||||||
| Net Income Available to Common Stockholders | $ | 14,483 | 167,930 | $ | 0.09 | $ | 7,840 | 152,095 | $ | 0.05 | ||||||||||||||||||||||||||||
| Noncontrolling interest related to unitholders | 3 | 25 | — | 2 | 25 | — | ||||||||||||||||||||||||||||||||
| Potentially dilutive common shares - ESPP | — | — | — | — | 2 | — | ||||||||||||||||||||||||||||||||
| Conversion of unvested restricted stock units | — | 810 | — | — | 492 | — | ||||||||||||||||||||||||||||||||
| Net Income — Diluted | 14,486 | 168,765 | 0.09 | 7,842 | 152,614 | 0.05 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization of real estate assets: | ||||||||||||||||||||||||||||||||||||||
| Consolidated properties | 100,769 | — | 0.60 | 95,299 | — | 0.63 | ||||||||||||||||||||||||||||||||
| Share of unconsolidated joint ventures | 2,489 | — | 0.01 | 513 | — | — | ||||||||||||||||||||||||||||||||
| Partners' share of real estate depreciation | (250) | — | — | (308) | — | — | ||||||||||||||||||||||||||||||||
| Gain on sale of depreciated properties: | ||||||||||||||||||||||||||||||||||||||
| Consolidated properties | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Funds From Operations | $ | 117,494 | 168,765 | $ | 0.70 | $ | 103,346 | 152,614 | $ | 0.68 | ||||||||||||||||||||||||||||
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| Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||
| Dollars | Weighted Average Common Shares | Per Share Amount | Dollars | Weighted Average Common Shares | Per Share Amount | |||||||||||||||||||||||||||||||||
| Net Income Available to Common Stockholders | $ | 35,380 | 167,870 | $ | 0.21 | $ | 21,128 | 152,020 | $ | 0.14 | ||||||||||||||||||||||||||||
| Noncontrolling interest related to unitholders | 6 | 25 | — | 4 | 25 | — | ||||||||||||||||||||||||||||||||
| Potentially dilutive common shares - ESPP | — | — | — | — | 1 | — | ||||||||||||||||||||||||||||||||
| Conversion of unvested restricted stock units | — | 784 | — | — | 454 | — | ||||||||||||||||||||||||||||||||
| Net Income — Diluted | 35,386 | 168,679 | 0.21 | 21,132 | 152,500 | 0.14 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization of real estate assets: | ||||||||||||||||||||||||||||||||||||||
| Consolidated properties | 202,765 | — | 1.20 | 181,415 | — | 1.18 | ||||||||||||||||||||||||||||||||
| Share of unconsolidated joint ventures | 4,701 | — | 0.03 | 972 | — | 0.01 | ||||||||||||||||||||||||||||||||
| Partners' share of real estate depreciation | (524) | — | — | (576) | — | — | ||||||||||||||||||||||||||||||||
| Gain on sale of depreciated properties: | ||||||||||||||||||||||||||||||||||||||
| Consolidated properties | — | — | — | (101) | — | — | ||||||||||||||||||||||||||||||||
| Funds From Operations | $ | 242,328 | 168,679 | $ | 1.44 | $ | 202,842 | 152,500 | $ | 1.33 | ||||||||||||||||||||||||||||
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Liquidity and Capital Resources
Our primary short-term and long-term liquidity needs include the following:
•property operating expenses;
•property, land, and other real estate related acquisitions;
•expenditures on development and redevelopment projects;
•building improvements, tenant improvements, and leasing costs;
•principal and interest payments on indebtedness;
•general and administrative costs; and
•common stock dividends and distributions to outside unitholders of CPLP.
We may satisfy these needs with one or more of the following:
•cash and cash equivalents on hand;
•net cash from operations;
•proceeds from the sale of assets;
•borrowings under our Credit Facility;
•proceeds from mortgage notes payable;
•proceeds from construction loans;
•proceeds from unsecured loans;
•proceeds from offerings of debt and equity securities; and
•joint venture formations.
Our material capital expenditure commitments as of June 30, 2025 include $109.5 million of unfunded tenant improvements and construction costs. As of June 30, 2025, we had no amounts drawn under our credit facility with the ability to borrow the full $1.0 billion, as well as $416.8 million of cash and cash equivalents. We expect to have sufficient liquidity to meet our obligations for the foreseeable future.
Other Debt Information
In addition to our $1 billion unsecured Credit Facility (with no amounts outstanding as of June 30, 2025), we also have unsecured debt from three public unsecured senior notes totaling $1.4 billion, two term loans totaling $650 million, and five tranches of privately placed unsecured senior notes totaling $1 billion (one of which was repaid in full at maturity, subsequent to June 30, 2025). Our existing consolidated mortgage debt is comprised of non-recourse, fixed-rate mortgage notes secured by various real estate assets. We expect to either refinance our non-recourse mortgage loans at maturity or repay the mortgage loans with other capital resources, including our credit facility, unsecured debt, non-recourse mortgages, construction loans, the sale of assets, joint venture equity, the issuance of common stock, the issuance of preferred stock, or the issuance of units of CPLP. Many of our non-recourse mortgages contain covenants that, if not satisfied, could result in acceleration of the maturity of the debt. 93% of our consolidated debt bears interest at a fixed rate. The 7% of consolidated debt that bears interest at a floating rate is based on SOFR.
We are in compliance with all covenants of our existing unsecured and secured debt.
Future Capital Requirements
To meet capital requirements for future investment activities, we intend to actively manage our portfolio of properties and strategically sell assets to exit our non-core holdings and reposition our portfolio of income-producing assets. We also expect to continue to utilize cash retained from operations, as well as third-party sources of capital such as indebtedness, to fund future commitments and to utilize construction financing facilities for some development assets, if available and under appropriate terms. We may also generate capital through the issuance of securities that include common or preferred stock, warrants, debt securities, or the issuance of CPLP limited partnership units. The Company and CPLP have filed a registration statement on Form S-3 with the SEC registering, among other securities, debt securities of CPLP, which are fully and unconditionally guaranteed by the Company. Separate Consolidated Financial Statements of CPLP have not been presented in accordance with the amendments to Rule 3-10 of Regulation S-X. Furthermore, as permitted under Rule 13-01(a)(4)(vi), the Company has excluded the summarized financial information for CPLP as the assets, liabilities, and results of operations of the Company and CPLP are not materially different than the corresponding amounts presented in the Consolidated Financial Statements of the Company, and management believes such summarized financial information would be repetitive and not provide incremental value to investors.
Our business model also includes raising or recycling capital, which can assist in meeting obligations and funding development and acquisition activity. If one or more sources of capital are not available when required, we may be forced to reduce the number of projects we acquire or develop and/or raise capital on potentially unfavorable terms, or we may be unable to raise capital, which could have an adverse effect on our financial position or results of operations.
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Cash Flows
We report and analyze our cash flows based on operating activities, investing activities, and financing activities. The following table sets forth the changes in cash flows ($ in thousands):
| Six Months Ended June 30, | |||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||
| Net cash provided by operating activities | $ | 167,312 | $ | 153,807 | $ | 13,505 | |||||||||||
| Net cash used in investing activities | (25,411) | (181,275) | 155,864 | ||||||||||||||
| Net cash provided by financing activities | 267,590 | 27,375 | 240,215 | ||||||||||||||
The reasons for significant increases and decreases in cash flows between the periods are as follows:
Cash Flows from Operating Activities. Cash flows provided by operating activities increased $13.5 million between the 2025 and 2024 six month periods primarily due to increased economic occupancy and the end of rent abatement periods at our Promenade Central, Domain 9, and Buckhead Plaza office properties; and the acquisitions of our Vantage South End and Sail Tower office properties in December 2024.
Cash Flows from Investing Activities. Cash flows used in investing activities for the 2025 six month period were $25.4 million compared to cash flows used in investing activities of $181.3 million for the same period in 2024 primarily due to the borrowers' repayment of our investments in real estate debt on the Radius mezzanine loan and Saint Ann Court mortgage loan in the first quarter of 2025.
Cash Flows from Financing Activities. Cash flows provided by financing activities for the 2025 six month period were $267.6 million compared to cash flows provided by financing activities of $27.4 million for the same period in 2024 primarily due the proceeds from the issuance of the 5.250% public senior notes in June 2025, partially offset by an increase in net repayments on our credit facility.
Capital Expenditures. We incur capital expenditures for the development of new properties, the redevelopment of existing or newly purchased properties, building improvements, direct leasing costs for new or replacement tenants, and capitalized interest and salaries. Components of expenditures included in this line item for the three months ended June 30, 2025 and 2024 are as follows ($ in thousands):
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Projects under development (1) | $ | 2,088 | $ | 21,586 | |||||||
| Operating properties—redevelopment | 19,086 | 18,799 | |||||||||
| Operating properties—building improvements | 17,242 | 11,804 | |||||||||
| Operating properties—leasing costs | 82,421 | 76,314 | |||||||||
| Capitalized interest and other | 5,436 | 7,603 | |||||||||
| Total capital expenditures | $ | 126,273 | $ | 136,106 | |||||||
| (1) Includes initial leasing costs. | |||||||||||
Capital expenditures decreased $9.8 million between the 2025 and 2024 six month periods primarily due to decreases in spending for projects under development for core construction costs at Domain 9, which commenced its initial operations in the first quarter 2024, and initial leasing costs for other properties we have developed. This decrease is partially offset by increased spending on operating property leasing costs related to our Sail Tower property.
The above leasing costs include leasing commissions and tenant improvements, which are both capitalized as a component of our real estate assets as they are incurred. Commitments towards those costs are calculated on square foot basis and are included in our leasing activity as leases are executed.
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Leasing activity details, including the components of net effective rent per square foot, for our office portfolio on leases executed during the six months ended June 30, 2025 and 2024 are as follows:
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||
| New | Renewal | Expansion | Total | ||||||||||||||||||||
| Net leased square feet (1) | 342,165 | 400,488 | 130,778 | 873,431 | |||||||||||||||||||
| Number of transactions | 40 | 34 | 14 | 88 | |||||||||||||||||||
| Lease term in years (2) | 7.9 | 5.6 | 8.3 | 6.9 | |||||||||||||||||||
| Net effective rent calculation (per square foot per year) (2) | |||||||||||||||||||||||
| Net annualized rent (3) | $ | 40.12 | $ | 35.02 | $ | 40.34 | $ | 37.81 | |||||||||||||||
| Net free rent | (2.35) | (1.53) | (1.81) | (1.89) | |||||||||||||||||||
| Leasing commissions | (3.29) | (2.59) | (3.17) | (2.95) | |||||||||||||||||||
| Tenant improvements | (8.65) | (4.43) | (8.23) | (6.65) | |||||||||||||||||||
| Total leasing costs | (14.29) | (8.55) | (13.21) | (11.49) | |||||||||||||||||||
| Net effective rent | $ | 25.83 | $ | 26.47 | $ | 27.13 | $ | 26.32 | |||||||||||||||
| Second generation leased square footage (4) | 632,489 | ||||||||||||||||||||||
| Increase in straight-line basis second generation net rent per square foot (5) | 20.8 | % | |||||||||||||||||||||
| Increase in cash-basis second generation net rent per square foot (6) | 5.4 | % | |||||||||||||||||||||
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| Six Months Ended June 30, 2024 | |||||||||||||||||||||||
| New | Renewal | Expansion | Total | ||||||||||||||||||||
| Net leased square feet (1) | 404,011 | 268,210 | 122,019 | 794,240 | |||||||||||||||||||
| Number of transactions | 38 | 28 | 11 | 77 | |||||||||||||||||||
| Lease term in years (2) | 8.4 | 6.4 | 9.2 | 7.8 | |||||||||||||||||||
| Net effective rent calculation (per square foot per year) (2) | |||||||||||||||||||||||
| Net annualized rent (3) | $ | 38.88 | $ | 34.86 | $ | 34.40 | $ | 36.83 | |||||||||||||||
| Net free rent | (2.49) | (2.08) | (2.14) | (2.30) | |||||||||||||||||||
| Leasing commissions | (3.10) | (2.20) | (2.85) | (2.75) | |||||||||||||||||||
| Tenant improvements | (7.97) | (5.50) | (8.76) | (7.26) | |||||||||||||||||||
| Total leasing costs | (13.56) | (9.78) | (13.75) | (12.31) | |||||||||||||||||||
| Net effective rent | $ | 25.32 | $ | 25.08 | $ | 20.65 | $ | 24.52 | |||||||||||||||
| Second generation leased square footage (4) | 427,324 | ||||||||||||||||||||||
| Increase in straight-line basis second generation net rent per square foot (5) | 28.8 | % | |||||||||||||||||||||
| Increase in cash-basis second generation net rent per square foot (6) | 11.7 | % | |||||||||||||||||||||
| (1) | Comprised of total square feet leased, unadjusted for ownership share. Excludes leases approximately one year or less, along with apartment, retail, amenity, storage, and intercompany space leases. | ||||
| (2) | Weighted average of net leased square feet. | ||||
| (3) | Straight-line net rent per square foot (operating expense reimbursements deducted from gross leases) over the lease term, prior to any deductions for leasing costs. Excludes percent rent leases. | ||||
| (4) | Excludes leases executed for spaces that were vacant upon acquisition, new leases in development properties, percentage rent leases, and leases for spaces that have been vacant for one year or more. | ||||
| (5) | Increase in second generation straight-line basis net annualized rent on a weighted average basis. | ||||
| (6) | Increase in second generation net cash rent at the end of the term paid by the prior tenant compared to net cash rent at the beginning of the term (after any free rent period) paid by the current tenant on a weighted average basis. For early renewals, the final net cash rent paid under the original lease is compared to the first net cash rent paid under the terms of the renewal. Net cash rent is net of any recovery of operating expenses but prior to any deductions for leasing costs. | ||||
The amounts of tenant improvement and leasing costs on a per square foot basis vary by lease and by market.
Dividends. We paid common dividends of $108.3 million and $98.0 million in the six months ended June 30, 2025 and 2024, respectively. We expect to fund our future quarterly common dividends with cash provided by operating activities, also using proceeds from investment property sales, distributions from unconsolidated joint ventures, indebtedness, and proceeds from offerings of equity and other securities, if necessary.
On a quarterly basis, we review the amount of the common dividend in light of current and projected future cash flows from the sources noted above and also consider the requirements needed to maintain our REIT status. In addition, we have certain covenants under credit agreements that could limit the amount of common dividends paid. In general, common dividends of any amount can be paid as long as leverage, as defined in our credit agreements, is less than 60% and we are not in default. Certain conditions also apply in which we can still pay common dividends if leverage is above that amount. We routinely monitor the status of our common dividend payments in light of the covenants of our credit agreements.
Off Balance Sheet Arrangements
General. We have a number of off balance sheet joint ventures with varying structures, as described in note 6 of the notes to consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024 and in note 4 of the notes to condensed consolidated financial statements included in this filing. The joint ventures in which we have an interest are involved in the ownership, acquisition, and/or development of real estate. A venture will fund capital requirements or operational needs with cash from operations or financing proceeds, if possible. If additional capital is deemed necessary, a venture may request a contribution from the partners, and we will evaluate such request.
Debt. At June 30, 2025, our unconsolidated joint ventures had aggregate outstanding indebtedness to third parties of $368.6 million. These loans are generally mortgage or construction loans, which are non-recourse to us. In certain instances, we provide “non-recourse carve-out guarantees” on these non-recourse loans. In addition, along with our Neuhoff Holdings LLC joint venture partner,
33
we guarantee our respective halves of the borrower's obligations to pay certain required equity contributions and project carrying costs, as well as timely completion of project construction. Certain of these loans have variable interest rates, which creates exposure to the ventures in the form of market risk from interest rate changes.
Critical Accounting Policies
There have been no material changes in the critical accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There have been no material changes in the market risk associated with our notes payable at June 30, 2025 compared to that as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 4. Controls and Procedures.
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applies judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding our control objectives.
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer along with the Chief Financial Officer, of the effectiveness, design, and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon the foregoing, the Chief Executive Officer along with the Chief Financial Officer concluded that our disclosure controls and procedures were effective. In addition, based on such evaluation, we have identified no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Information regarding legal proceedings is described under the subheading "Litigation" in note 10 of the notes to condensed consolidated financial statements.
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Item 1A. Risk Factors.
Risk factors that affect our business and financial results are discussed in Part I, "Item 1A. Risk Factors," of our Annual Report on Form 10-K for the year ended December 31, 2024 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. There have been no material changes in our risk factors from those previously disclosed in our Annual Report and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. You should carefully consider the risks disclosed in our Annual Report for the year ended December 31, 2024 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, which could materially affect our business, financial condition, or future results. The risks described therein are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
We did not make any sales of unregistered securities common shares during the second quarter of 2025.
The table below reflects purchases of common stock made during the three month period ended June 30, 2025.
| Period | Total Number of Shares of Stock Purchased (1) | Average Price Paid per Share (2) | Total Number of Shares Purchased Under Announced Programs | Approximate Dollar value of Shares That May Yet be Purchased Under Announced Programs | ||||||||||||||||||||||||||||
| May 1 - 31, 2025 | 67 | $ | 27.60 | — | — | |||||||||||||||||||||||||||
| Total | 67 | $ | 27.60 | — | $ | — | ||||||||||||||||||||||||||
| (1) Represents shares of common stock remitted to the Company to satisfy tax withholding requirements related to the vesting of restricted stock awards. | ||||||||||||||||||||||||||||||||
| (2) The value of the shares of common stock is based on the closing price of the Company's common stock on the applicable withholding date. | ||||||||||||||||||||||||||||||||
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Item 6. Exhibits.
| † | ||||||||
| † | ||||||||
| † | ||||||||
| † | ||||||||
| † | ||||||||
| 101 | † | The following financial information for the Registrant, formatted in inline XBRL (Extensible Business Reporting Language): (i) the consolidated balance sheets, (ii) the consolidated statements of operations, (iii) the consolidated statements of equity, (iv) the consolidated statements of cash flows, and (v) the notes to condensed consolidated financial statements. | ||||||
| 104 | † | Cover page interactive data file (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibit 101). | ||||||
| † | Filed herewith. | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| COUSINS PROPERTIES INCORPORATED | |||||||||||
| /s/ Gregg D. Adzema | |||||||||||
| Gregg D. Adzema | |||||||||||
| Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) | |||||||||||
Date: July 31, 2025
37
Exhibit 10.1
COUSINS PROPERTIES INCORPORATED
EXECUTIVE SEVERANCE PLAN
Effective April 28, 2025
1.Establishment; Purpose.
a. Establishment. Cousins Properties Incorporated, a Georgia corporation, hereby establishes this Cousins Properties Incorporated Executive Severance Plan (the “Plan”), effective April 28, 2025 (the “Effective Date”). The Plan shall apply to each Participant who incurs a Qualified Termination on or after the Effective Date.
(b) Purpose. The purposes of the Plan include (i) providing certain executives of the Company and/or any Affiliate who become Participants with severance pay benefits in the event of the termination of their employment (whether before or in connection with a Change in Control of the Company), (ii) better enabling the Company and its Affiliates to attract and retain highly qualified executives, and (iii) providing Participants with individual financial security in the event of a Change in Control of the Company so that such individuals are focused on pursuing transaction opportunities that are beneficial to shareholders. The Plan is not intended to constitute an “employee pension benefit plan” within the meaning of Section 3 of ERISA and the corresponding Department of Labor regulations and other guidance.
2.Definitions. For purposes of the Plan, the following terms have the meanings set forth below:
“Accrued Compensation” means the sum of the following: (a) any accrued but unpaid payments of the Participant’s Annual Base Salary through the Termination Date; (b) a payment in respect of all unpaid, but accrued and unused vacation or paid time off through the Termination Date, but only to the extent required by Company policy and/or applicable law; (c) any annual bonus earned but unpaid as of the Termination Date for any previously completed fiscal year (i.e., not the Termination Year); (d) reimbursement for any unreimbursed business expenses properly incurred by the Participant in accordance with Company policy through the Termination Date; and (e) such rights, if any, under any award granted to the Participant pursuant to the Incentive Plan and other compensation programs and employee benefits to which the Participant may be entitled upon termination of employment according to the documents governing such benefits.
“Administrator” means the Compensation Committee, which shall be responsible for the general administration and management of this Plan.
“Affiliate” means any entity that is affiliated with the Company through stock or equity ownership or otherwise.
“Annual Base Salary” means Participant’s annual base salary in effect on the day before Participant’s employment with the Company terminates.
“Average Bonus” shall mean (i) the sum of the annual bonuses that were paid by the Company to Participant with respect to the three (3) years immediately prior to the year in
Exhibit 10.1
which Participant’s employment with the Company terminates; divided by (ii) the number of annual bonuses Participant was eligible to receive during such period; provided, however, that if the Participant has not completed three annual bonus periods in such Participant’s then current position, Participant’s Average Bonus shall equal the Target Annual Bonus.
“Board” means the Board of Directors of the Company.
“Cause” means the occurrence of any of the following, as determined by the Compensation Committee in its reasonable discretion:
a.any material act or material omission by Participant that constitutes intentional misconduct in connection with the Company’s or any Affiliate’s business or relating to Participant’s duties as reasonably assigned by Participant’s supervisor;
b.Participant’s willful violation of law in connection with the Company’s or any Affiliate’s business or relating to Participant’s duties as reasonably assigned by Participant’s supervisor;
c.an act of fraud or embezzlement by Participant with respect to the Company’s or any Affiliate’s assets or business or assets in the possession or control of the Company or any Affiliate;
d.Participant’s conviction of, indictment for (or its procedural equivalent) or entering a guilty plea or plea of no contest with respect to a felony;
e.Participant’s willful and material failure to perform material duties of Participant (as reasonably assigned by Participant’s supervisor);
f.a Participant’s material violation of any of the Company’s material, written policies, relating to sexual harassment, insider trading, confidentiality, non-disclosure, non-competition, non-disparagement or conflicts of interest; or
g.any material breach by Participant of a material agreement with the Company.
any of which continues without cure, if curable, reasonably satisfactory to the Board within ten (10) days following written notice from the Company or any Affiliate (except in the case of clauses (b) and (e) or for acts, omissions or breaches that in the good faith opinion of the Board are incurable). For purposes of this definition, no act, or failure to act, on Participant’s part shall be considered “willful” unless the Participant acted, or failed to act, in bad faith or without reasonable belief that Participant’s act or failure to act was in the best interest of the Company or any Affiliate. During the Change in Control Period, a Participant shall not be deemed to be terminated for Cause unless and until there shall have been delivered to the Participant a copy of a resolution duly adopted by at least two-thirds of the independent members of the Board (or, if the Company is controlled by another corporation or entity, by the independent members of the board of directors of the ultimate parent of the Company) (after reasonable notice is provided to the Participant and the Participant is given an opportunity, together with counsel, to be heard before the Board (or the board of directors of the ultimate parent, if applicable), finding that, in the good faith opinion of the Board (or the board of directors of the ultimate parent, if applicable), the Participant is guilty of the conduct described in one or more of clauses (a) through (g) above and that such conduct has been materially injurious to the Company and specifying the particulars thereof in detail; and any such finding shall be subject to de novo review by a court of law.
Exhibit 10.1
“Change in Control Period” shall mean the two (2) year period which begins upon the date of a Change in Control; provided, however, a resignation by Participant shall be treated under this Plan as if made during Participant’s Change in Control Period if:
(a) Participant gives the Compensation Committee the statement described in the “Good Reason” definition prior to the end of the thirty (30) day period that immediately follows the end of the Change in Control Period and Participant thereafter resigns within the period described in such “Good Reason” definition; or
(b) Company provides the statement to Participant described in the “Good Reason” definition prior to the end of the thirty (30) day period that immediately follows the end of the Change in Control Period and Participant thereafter resigns within the period described the “Good Reason” definition.
“Change in Control” has the meaning set forth in the Incentive Plan.
“CIC Severance Multiplier” means (a) in the case of the Company’s Chief Executive Officer, three (3); and (b) in the case of each Executive Officer, two (2). In each case, the CIC Severance Multiplier shall be based upon the title held by the Participant as of the date of the Change in Control; provided, however, that a title reduction pursuant to Section (b) of the “Good Reason” definition shall not be considered for purposes of determining the CIC Severance Multiplier.
“Code” means the Internal Revenue Code of 1986, as amended from time to time. Any reference to a section of the Code shall include such section and any comparable section or sections of any future legislation that amends, supplements or supersedes such section.
“Company” means Cousins Properties Incorporated, and any successor thereto.
“Compensation Committee” means the Compensation Committee of the Company’s Board.
“Disability” means that Participant, as a result of a mental or physical condition or illness, is unable to perform the essential functions of the Participant’s position at the Company for any consecutive 180-day period, even with reasonable accommodation, all as reasonably determined by the Compensation Committee, in accordance with Section 409A of the Code.
“Eligible Executive” means: (a) the Company’s Chief Executive Officer; or (b) an Executive Officer.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Executive Officer” means an executive who (a) is employed by the Company or its Subsidiaries, (b) is designated by the Company as an “executive officer” of the Company consistent with 17 CFR 240.3b-7, and (c) is not the Company’s Chief Executive Officer.
Exhibit 10.1
“General Severance Multiplier” means (a) in the case of the Company’s Chief Executive Officer, two (2); and (b) in the case of an Executive Officer, one (1).
“Good Reason” means the occurrence of any of the following events, without the express written consent of the Participant:
(a) the failure of the Company to pay or cause to be paid scheduled installments of the Participant’s Annual Base Salary or other compensation when due;
(b) a material diminution in the Participant’s status, including, title, position, duties, authority or responsibility;
(c) outside of a Change in Control Period, and except with respect to any reduction applicable to similarly situated Executive Officers, a material reduction in the Participant’s Annual Base Salary or Target Annual Bonus, in each case, as in effect for the Participant as of immediately prior to the Effective Date (or as thereafter increased from time to time) or (ii) during a Change in Control Period, any reduction in the Participant’s Base Salary or Target Annual Bonus, in each case, as in effect for the Participant as of immediately prior to the Termination Date or as of immediately prior to the Change in Control Period (whichever is greater);
(d) relocation of a Participant’s principal office location to a location more than thirty-five (35) miles from its location as of immediately prior to such relocation; or
(e) during a Change in Control Period, a reduction in the Participant’s annual equity incentive opportunity as in effect for the Participant as of immediately prior to the Termination Date or as of immediately prior to the Change in Control Period (whichever is greater).
Notwithstanding the foregoing, (1) Good Reason shall not be deemed to exist unless the Participant gives to the Company a written notice identifying the event or condition purportedly giving rise to Good Reason expressly referencing the applicable clause of this definition within ninety (90) days after the time at which the Participant first becomes aware of the event or condition; and (2) if there exists an event or condition that constitutes Good Reason, the Company shall have thirty (30) days from the date notice of Good Reason is given to cure such event or condition and, if the Company does so, such event or condition shall not constitute Good Reason hereunder; and if the Company does not cure such event or condition within such thirty (30) day period, the Participant shall have thirty (30) days thereafter to give Notice of Termination of employment on account thereof to the Company (with such Notice of Termination specifying a termination date no later than ten (10) days from the date of such Notice of Termination).
“Incentive Plan” means the Cousins Properties Incorporated 2019 Omnibus Incentive Stock Plan, as amended and/or restated from time to time, or any successor shareholder-approved equity incentive plan maintained by the Company.
“Notice of Termination” means a written notice that (a) indicates the specific termination provision in the Plan relied upon, (b) to the extent applicable, sets forth in
Exhibit 10.1
reasonable detail the facts and circumstances claimed to provide a basis for termination of the Participant’s employment under the provision so indicated, and (c) if the Termination Date is other than the date of receipt of such notice, specifies the Termination Date (which date shall be not more than thirty (30) calendar days after the giving of such notice).
“Other Benefits” has the meaning given to that term in Section 4(g) hereof.
“Participant” has the meaning given to that term in Section 3(a) hereof.
“Participation Agreement” means the latest participation agreement signed by the Company and an Eligible Executive providing for the Eligible Executive’s participation in the Plan.
“Plan” has the meaning given to that term in Section 1(a) hereof.
“Qualified Termination” means any termination of a Participant’s employment: (i) by the Company other than for Cause, Disability or death; or (ii) by a Participant for Good Reason.
“Release” has the meaning given to that term in Section 6 hereof.
“Section 409A” has the meaning give to that term in Section 23(a) hereof.
“Subsidiary” means any corporation or other entity, whether domestic or foreign, in which the Company has or obtains, directly or indirectly, ownership of more than 50% of the total combined voting power of all classes of stock or comparable interests.
“Target Annual Bonus” means (a) with respect to a Participant whose target annual bonus is expressed as a percentage of Annual Base Salary, the Participant’s target annual bonus under the Company’s annual bonus program in which the Participant is covered; and (b) with respect to a Participant whose target annual bonus is expressed as a fixed target value, the Participant’s fixed target value under the Company’s annual bonus program in which the Participant is covered.
“Termination Date” means: (a) if the Participant’s employment is terminated by the Company or any Affiliate for Cause or due to Disability, or by the Participant for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein within thirty (30) calendar days after such notice, as the case may be; (b) if the Participant’s employment is terminated by the Company or an Affiliate other than for Cause or Disability, or if the Participant voluntarily resigns without Good Reason, the date on which the terminating party notifies the other party that such termination shall be effective, provided that on a voluntary resignation without Good Reason, the Company may, in its sole discretion, make such termination effective on any date it elects in writing between the date of the notice and the proposed date of termination specified in the notice; or (c) if the Participant’s employment is terminated by reason of death, the date of death of Participant.
“Termination Year” means the fiscal year of the Company in which the Termination Date occurs.
Exhibit 10.1
3.Participation.
a.Designation of Participants. Each Eligible Executive who (i) receives a Participation Agreement from the Company, and (ii) executes and returns such Participation Agreement to the Company in accordance with the terms of the Participation Agreement shall be a “Participant” in the Plan. For purposes of this Section 3(a), a Participation Agreement shall be deemed delivered by the Eligible Executive and/or the Company by any of the following methods: (A) upon personal delivery, (B) upon being sent by email or posting to a Company portal to which the Eligible Executive has unrestricted access, (C) on the third (3rd) business day after having been mailed, if sent by first class mail, return receipt requested, or (D) upon delivery by email with receipt acknowledged. Notwithstanding the foregoing, an Eligible Executive who is a party to an employment agreement, offer letter or other agreement with the Company and/or any Affiliate that provides for severance benefits (the “Other Severance Rights”) shall not be become a Participant, unless and until (1) such Eligible Executive is designated as a Participant by the Administrator, and (2) the applicable Participation Agreement includes a waiver of all rights to the Other Severance Rights under such employment agreement or offer letter.
b.Duration of Participation. A Participant shall cease to be a Participant in the Plan if: (i) the Participant ceases to be employed by the Company or an Affiliate, unless such Participant is then entitled to a severance benefit as provided in Section 4(a) hereof; or (ii) subject to Section 18 hereof and except as otherwise provided in a Participant’s Participation Agreement, the Administrator removes the Participant from the Plan by providing notice to the Participant in accordance with Section 17 hereof. Further, except as otherwise provided in a Participant’s Participation Agreement, participation in the Plan is subject to the unilateral right of the Administrator to terminate or amend the Plan in whole or in part as provided in Section 18 hereof. Notwithstanding anything herein to the contrary, a Participant who is then entitled to a severance benefit as provided in Section 4(a) hereof shall remain a Participant in the Plan until the amounts and benefits payable under the Plan have been paid or provided to the Participant in full. Any severance benefits to be provided to a Participant under the Plan are subject to all of the terms and conditions of the Plan, including Sections 4(i), 6 and 7 hereof.
c.No Employment Rights. To the extent permitted by applicable law, participation in the Plan does not alter the status of a Participant as an at-will employee, and nothing in the Plan will limit or affect in any manner the right of the Company or any Affiliate to terminate the employment or adjust the compensation of a Participant at any time and for any reason (with or without Cause).
4.Severance Benefits.
a.Qualified Termination. Subject to compliance with Sections 4(i), 6 and 7 hereof, in the event that a Participant incurs a Qualified Termination or a termination due to death or Disability on or after the Effective Date, the Participant shall be entitled to the compensation and benefits set forth in Sections 4(b), 4(c) and 4(d) hereof (as applicable).
Exhibit 10.1
b.Termination due to Death or Disability. Subject to Sections 4(i), 6 and 7 hereof, if the Participant’s employment is terminated due to the Participant’s death or Disability, the Participant shall be entitled to the following benefits.
i.Accrued Compensation. The Company shall pay or provide the Accrued Compensation to the Participant or the Participant’s estate. The Accrued Compensation shall be paid in a single lump sum within thirty (30) calendar days after the Termination Date, or on such earlier date as may be required by the applicable Company plan or policy or by applicable law; provided, however, that if any portion of the Accrued Compensation constitutes “nonqualified deferred compensation” within the meaning of Section 409A, such portion of the Accrued Compensation payment shall be paid (A) if such portion corresponds to an annual bonus, at the time that bonuses with respect to such previously completed fiscal year(s) are or otherwise would be paid in accordance with the terms of the applicable plan, and/or (B) if the Participant has made an irrevocable election under any deferred compensation arrangement subject to Section 409A to defer any portion of such Accrued Compensation, then in accordance with such election.
ii.Pro-Rated Target Annual Bonus. The Company shall pay to the Participant or the Participant’s estate a pro-rata portion of the Participant’s Target Annual Bonus for the Termination Year. Such pro-rata bonus payout will be equal to (x) the amount of the Target Annual Bonus for the Termination Year multiplied by (y) the percentage of the Termination Year that shall have elapsed through the Termination Date.
iii.Equity Awards. Notwithstanding anything in the Incentive Plan, any sub-plan, or any award agreement to the contrary, each equity award held by the Participant pursuant to the Incentive Plan that (a) is subject solely to a time-based vesting condition, shall accelerate and become 100% vested and exercisable (as applicable); and (b) is subject to performance conditions shall accelerate and become 100% vested in an amount equal to the target number of performance-based restricted stock units. The Participant or the Participant’s estate shall have the greater of (A) ninety (90) days or (B) the period specified in the grant or award, in which to exercise (if applicable) any vested awards; provided, that in no event shall such exercise period be extended past the date the grant or award expires by its terms.
iv.Health Continuation. The Company shall pay to the Participant or the Participant’s estate a cash payment in an amount equal to (x) the full monthly premium charged for coverage under the Company’s group medical plan at Participant’s then current level of coverage as of the date of termination of employment, multiplied by (y) twelve (12), multiplied by (z) 170%, to account for any applicable federal, state and other taxes payable by the Participant or the Participant’s estate with respect to the payment or distribution pursuant to this Section 4(b)(iv). For the avoidance of doubt, such payment is not required to be used by the Participant to purchase medical coverage.
c.Qualified Termination not in Connection with Change in Control. Subject to Sections 4(i), 6 and 7 hereof, if the Participant’s Qualified Termination occurs outside of the Change in Control Period, the Participant shall be entitled to the following benefits.
Exhibit 10.1
i.Accrued Compensation. The Company shall pay or provide the Accrued Compensation to the Participant. The Accrued Compensation shall be paid in a single lump sum within thirty (30) calendar days after the Termination Date, or on such earlier date as may be required by the applicable Company plan or policy or by applicable law; provided, however, that if any portion of the Accrued Compensation constitutes “nonqualified deferred compensation” within the meaning of Section 409A, such portion of the Accrued Compensation payment shall be paid (A) if such portion corresponds to an annual bonus, at the time that bonuses with respect to such previously completed fiscal year(s) are or otherwise would be paid in accordance with the terms of the applicable plan, and/or (B) if the Participant has made an irrevocable election under any deferred compensation arrangement subject to Section 409A to defer any portion of such Accrued Compensation, then in accordance with such election.
ii.Severance Payment. The Company shall pay to the Participant the amount of severance pay equal to (x) the General Severance Multiplier, multiplied by (y) the sum of Participant’s (A) Annual Base Salary, and (B) the Participant’s Average Bonus.
iii.Pro-Rated Target Annual Bonus. The Company shall pay to the Participant a pro-rata portion of the Participant’s Target Annual Bonus for the Termination Year. Such pro-rata bonus payout will be equal to (x) the amount of the Target Annual Bonus for the Termination Year (disregarding any reduction thereto that constitutes Good Reason) multiplied by (y) the percentage of the Termination Year that shall have elapsed through the Termination Date.
iv.Equity Awards. Notwithstanding anything in the Incentive Plan, any sub-plan, or any award agreement to the contrary, each equity award held by the Participant pursuant to the Incentive Plan that (a) is subject solely to a time-based vesting condition, shall accelerate and become 100% vested and exercisable (as applicable); and (b) is subject to performance conditions and Participant had completed at least three years of consecutive service with the Company, a Subsidiary, or an Affiliate, shall become 100% vested in an amount equal to the number of performance-based restricted stock units actually earned based on actual performance for the full applicable performance period, as determined by the Committee at the end of the applicable performance period, and (c) is subject to performance conditions and Participant had completed less than three years of consecutive service with the Company, a Subsidiary, or an Affiliate, a pro-rata portion of the performance-based restricted stock units actually earned shall become vested equal to (x) the amount of performance-based restricted stock units actually earned based on actual performance for the full applicable performance period, as determined by the Committee at the end of the applicable performance period multiplied by (y) the percentage of the vesting period under the award agreement completed through the Termination Date. The Participant shall have the greater of (1) ninety (90) days or (2) the period specified in the grant or award, in which to exercise (if applicable) any vested awards; provided, that in no event shall such exercise period be extended past the date the grant or award expires by its terms.
v.Health Continuation. The Company shall pay to the Participant a cash payment in an amount equal to (w) the full monthly premium charged for coverage under the
Exhibit 10.1
Company’s group medical plan at Participant’s then current level of coverage as of the Qualified Termination, multiplied by (x) twelve (12), multiplied by (y) the General Severance Multiplier, multiplied by (z) 170%, to account for any applicable federal, state and other taxes payable by the Participant or the Participant’s estate with respect to the payment or distribution pursuant to this Section 4(c)(v). For the avoidance of doubt, such payment is not required to be used by the Participant to purchase medical coverage.
(d) Qualified Termination in Connection with Change in Control. Subject to Sections 4(i), 6 and 7 hereof, if the Participant’s Qualified Termination occurs during the Change in Control Period (provided, that each of the Qualified Termination and Change in Control occur on or after the Effective Date), the Participant shall be entitled to the following benefits:
(i) Accrued Compensation. The Company shall pay or provide the Accrued Compensation to the Participant. The Accrued Compensation shall be paid in a single lump sum within thirty (30) calendar days after the Termination Date, or on such earlier date as may be required by the applicable Company plan or policy or by applicable law; provided, however, that if any portion of the Accrued Compensation constitutes “nonqualified deferred compensation” within the meaning of Section 409A, such portion of the Accrued Compensation payment shall be paid (A) if such portion corresponds to an Annual Bonus, at the time that bonuses with respect to such previously completed fiscal year(s) are or otherwise would be paid in accordance with the terms of the applicable plan, and/or (B) if the Participant has made an irrevocable election under any deferred compensation arrangement subject to Section 409A to defer any portion of such Accrued Compensation, then in accordance with such election.
(ii) Severance Payment. The Company shall pay to the Participant the amount of severance pay equal to (x) the CIC Severance Multiplier, multiplied by (y) the sum of Participant’s (A) Annual Base Salary, and (B) the Participant’s Average Bonus.
(iii) Pro-Rated Target Annual Bonus. The Company shall pay to the Participant a pro-rata portion of the Participant’s Target Annual Bonus for the Termination Year. Such pro-rata bonus payout will be equal to (x) the amount of Target Annual Bonus for the Termination Year or, if greater, as in effect immediately prior to the Change in Control Period (in each case, disregarding any reduction thereto that constitutes Good Reason) multiplied by (y) the percentage of the Termination Year that shall have elapsed through the Termination Date.
(iv) Equity Awards. Notwithstanding anything in the Incentive Plan, any sub-plan, or any award agreement to the contrary, each equity award held by the Participant pursuant to the Incentive Plan that (a) is subject solely to a time-based vesting condition (including any performance-based vesting equity award that is converted into a time-based vesting equity award upon the occurrence of a Change in Control in accordance with Section 5) shall accelerate and become 100% vested and exercisable (as applicable) and (b) vests based on the attainment of performance goals which remain applicable as of the Termination Date (because such award was granted after the Change in Control such that Section 5 does not apply) shall remain outstanding and shall vest or be forfeited in
Exhibit 10.1
accordance with the terms of the applicable award agreement. The Participant shall have the greater of (1) ninety (90) days or (2) the period specified in the grant or award, in which to exercise (if applicable) any vested awards; provided, that in no event shall such exercise period be extended past the date the grant or award expires by its terms.
(v) Health Continuation. The Company shall pay to the Participant a cash payment in an amount equal to (w) the full monthly premium charged for coverage under the Company’s group medical plan at Participant’s then current level of coverage as of the Qualified Termination, multiplied by (x) twelve (12), multiplied by (y) the CIC Severance Multiplier, multiplied by (z) 170%, to account for any applicable federal, state and other taxes payable by the Participant or the Participant’s estate with respect to the payment or distribution pursuant to this Section 4(d)(v). For the avoidance of doubt, such payment is not required to be used by the Participant to purchase medical coverage.
(e) Termination in Anticipation of a Change in Control. Subject to Sections 4(i), 6 and 7 hereof, Participant shall be treated under this Section 4 as if the Participant experienced Qualified Termination during the Change in Control Period if:
(i) Participant’s employment is terminated in a Qualified Termination; and
(ii) Such termination is effected or such resignation is effective at any time during the sixty (60) day period which ends on the date of a Change in Control.
(f) Severance Payment Date. Any severance and benefits payable pursuant to Sections 4(b)(ii) and (iv) and Sections 4(c)(ii), (iii) and (v) hereof will be paid in a lump sum cash payment on the first payroll date following the date on which the Release has become effective and irrevocable, less all applicable taxes and withholdings; provided, however, that the Release has become effective and irrevocable in accordance with its terms by the sixtieth (60th) day following the Termination Date.
(g) Other Benefits. To the extent not theretofore paid or provided, the Company shall pay or provide, or cause to be paid or provided, to the Participant (or his or her beneficiary or estate) any other amounts or benefits required to be paid or provided or which the Participant is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company, including any benefits to which the Participant is entitled under Part 6 of Subtitle B of Title I of ERISA (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”) in accordance with the terms and normal procedures of each such plan, program, policy or practice or contract or agreement, based on accrued and vested benefits through the Termination Date.
(h) Other Terminations. If a Participant’s employment is terminated for Cause or as a result of Participant’s voluntarily resignation without Good Reason, then the Company shall pay or provide to the Participant only: (i) the Other Benefits, and (ii) the Accrued Compensation, paid in a single lump sum within thirty (30) calendar days after the Termination Date, or on such earlier date as may be required by the applicable Company plan or policy or by applicable law, provided, that, any portion of the Accrued Compensation that constitutes “nonqualified deferred compensation” within the meaning of Section 409A shall be paid (A)
Exhibit 10.1
if such portion corresponds to an annual bonus, at the time that bonuses with respect to such previously completed fiscal year(s) are or otherwise would be paid in accordance with the terms of the applicable plan, and/or (B) if the Participant has made an irrevocable election under any deferred compensation arrangement subject to Section 409A to defer any portion of such Accrued Compensation, then in accordance with such election.
(i) Notice of Termination. Any termination by the Company for Cause or by Participant for Good Reason shall be communicated by Notice of Termination to the Participant or to the Company, as applicable, in accordance with Section 17 hereof. The failure by the Company or the Participant to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason, as applicable, shall not waive any right of the Company or the Participant hereunder or preclude the Company or the Participant from asserting such fact or circumstance in enforcing the Company’s or the Participant’s rights hereunder.
(j) Resignation from All Positions. Notwithstanding any other provision of the Plan, upon the termination of a Participant’s employment for any reason, unless otherwise requested by the Company, the Participant shall immediately resign from all officer and director positions that he or she may hold with the Company and its Affiliates. As a condition of receiving any severance benefits under the Plan, each Participant shall execute any and all documentation to effectuate such resignations upon request by the Company, but he or she shall be treated for all purposes as having so resigned upon termination of his or her employment, regardless of when or whether he or she executes any such documentation.
5. Performance-Based Awards. Notwithstanding anything in the Incentive Plan, any sub-plan, or any award agreement to the contrary, upon the occurrence of a Change in Control, each performance-based vesting equity award held by a Participant pursuant to the Incentive Plan shall automatically convert to a time-based vesting equity award relating to a number of shares of Company common stock equal to (a) the target number of shares underlying such award immediately prior to the Change in Control, multiplied by (b) the greater of (i) the actual level of achievement of the applicable performance goals as of the most recent practicable date prior to the Change in Control, extrapolated through the end of the performance period, as determined by the Administrator prior to the Change in Control and (ii) the target level of achievement of the applicable performance goals. Such converted time-based vesting equity award shall remain subject to the time-based vesting conditions applicable to such award under the applicable award agreement, except as otherwise provided in Section 4(d)(iv).
6. Release. Notwithstanding anything contained herein to the contrary, the Company shall not be obligated to provide any severance payment or benefit under Sections 4(b)(ii)-(iv), Sections 4(c)(ii)-(v) or Sections 4(d)(ii)-(v) hereof, unless: (a) the Participant first executes and timely delivers to the Company after the Termination Date a fully executed general release of claims in favor of the Company, its Affiliates and their respective officers and directors, including a covenant not to compete, substantially in the form attached hereto as Annex A (the “Release”); (b) the Participant does not timely revoke the Release; and (c) the Release becomes effective and irrevocable in accordance with its terms on or before the sixtieth (60th) day following the Termination Date; provided, however, that to the extent that any severance payment or benefit is deferred compensation under Section 409A, and is not otherwise exempt from the application of Section 409A, then, if the period during which the Participant may consider and sign the Release
Exhibit 10.1
spans two (2) calendar years, the severance payment or benefit will not begin until the second (2nd) calendar year. In addition, if a Participant materially breaches any of the material terms of the Release, then the Participant shall not be eligible for any further severance payment or benefits and may be required to repay any severance payments or benefits already paid to the Participant pursuant to the Plan.
7. Protective Covenants. As a condition to becoming a Participant hereunder and in consideration of opportunity to receive the severance payments and benefits payable to a Participant under Sections 4(b)(ii)-(iv), Sections 4(c)(ii)-(v) or Sections 4(d)(ii)-(v) hereof, which the Participant acknowledges, in combination with the Participant’s access to the Company’s goodwill and trade secrets, are good and valuable consideration, the Participant shall be required to agree to the protective covenants set forth in the Participation Agreement. If a Participant materially violates any of the material provisions of the Participation Agreement, such Participant shall immediately forfeit his right to receive any severance payment or benefits, the Company shall have no further obligation to make any payment of severance payments or benefits to such Participant, and such Participant shall be obligated to repay severance payments or benefits already paid to the Participant pursuant to the Plan to the maximum extent permitted by applicable law.
8. No Mitigation. In no event shall a Participant be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Participant under any of the provisions of the Plan and such amounts shall not be reduced whether or not the Participant obtains other employment.
9. Effect on Other Plans, Agreements and Benefits.
a.Relation to Other Benefits. Unless otherwise provided herein, nothing in the Plan shall prevent or limit a Participant’s continuing or future participation in any plan, program, policy or practice provided by the Company and/or its Affiliates for which the Participant may qualify, nor, except as explicitly set forth in the Plan, shall anything herein limit or otherwise affect such rights as a Participant may have under any other contract or agreement with the Company and/or its Affiliates. Any economic or other benefit to a Participant under the Plan will not be taken into account in determining any benefits to which the Participant may be entitled under any profit-sharing, retirement, workers compensation or other benefit or compensation plan maintained by the Company and/or its Affiliates (except to the extent provided otherwise in any such plan with respect to Accrued Compensation).
b.Non-Duplication. Notwithstanding the foregoing provisions of Section 9(a) hereof, any severance benefits received by a Participant pursuant to the Plan shall be in lieu of any general severance policy or other severance plan maintained by the Company and/or its Affiliates (other than a stock option, restricted stock, share or unit, performance share or unit, long-term transition incentive award, supplemental retirement, deferred compensation or similar plan or agreement which may contain provisions operative on a termination of the Participant’s employment or may incidentally refer to accelerated vesting or accelerated payment upon a termination of employment). Further, as a condition of participating in the Plan, each Participant who is a party to an offer letter, employment agreement or other contract that otherwise would provide for severance benefits acknowledges and agrees that the severance benefits payable under the Plan shall be in lieu of and in full substitution for (and not in duplication of), any right to severance benefits under any such employment
Exhibit 10.1
agreement or offer letter with the Company and/or its Affiliates. In addition, while no Participant shall be entitled to receive severance payments under both Sections 4(b) and 4(c) of the Plan for the same Qualified Termination and in the event a Participant’s Qualified Termination occurs within the Change in Control Period, such Participant shall be entitled to the higher severance payments provided for in Section 4(d) of the Plan.
10. Certain Tax Matters. In the event it shall be determined that any payment or distribution by the Company and/or its Affiliates to or for the benefit of a Participant (whether paid or payable or distributed or distributable pursuant to the terms of the Plan or otherwise) (the “Total Payments”), is or will be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Total Payments shall be reduced to the maximum amount that could be paid to the Participant without giving rise to the Excise Tax (the “Safe Harbor Cap”), if the net after-tax benefit to the Participant after reducing the Participant’s Total Payments to the Safe Harbor Cap is greater than the net after-tax (including the Excise Tax) benefit to the Participant without such reduction. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments made pursuant to Section 4(d)(ii) of the Plan, then to the payments made pursuant to Section 4(d)(iii) of the Plan, then to the payments made pursuant to Section 4(d)(iv) of the Plan and then to any other payment that triggers such Excise Tax in the following order: (a) reduction of cash payments, (b) cancellation of accelerated vesting of equity awards (based on the reverse order of the date of grant), and (c) reduction of any other payments due to the Participant (with benefits or payments in any group having different payment terms being reduced on a pro-rata basis). All mathematical determinations, and all determinations as to whether any of the Total Payments are “parachute payments” (within the meaning of Section 280G of the Code), that are required to be made under this paragraph, including determinations as to whether the Total Payments to Participant shall be reduced to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made at the Company’s expense by a nationally recognized accounting or valuation firm selected by the Administrator prior to the relevant Change in Control.
11. Administration.
a.The Administrator shall have all powers and duties reasonably necessary to fulfill its responsibilities, including, but not limited to, the reasonable discretion to interpret, construe, and apply the provisions of this Plan, to determine all questions relating to eligibility for benefits under this Plan, and to make any findings of fact needed in the administration of this Plan. Following a Change in Control, the validity of any such interpretation, construction, decision, or finding of fact shall be given de novo review if challenged in court, by arbitration, or in any other forum, and such de novo standard shall apply notwithstanding the grant of discretion hereunder to the Administrator.
12. Claims for Benefits.
a.Filing a Claim. Any Participant or beneficiary who wishes to file a claim for benefits under the Plan must file his or her claim in writing with the Administrator.
b.Review of a Claim. The Administrator shall, within ninety (90) calendar days after receipt of such written claim (unless special circumstances require an extension of time, but in no event more than one hundred eighty (180) calendar days after such receipt), send a written
Exhibit 10.1
notification to the Participant or beneficiary as to its disposition. If the claim is wholly or partially denied, such written notification shall (i) state the specific reason or reasons for the denial, (ii) make specific reference to pertinent Plan provisions on which the denial is based, (iii) provide a description of any additional material or information necessary for the Participant or beneficiary to perfect the claim and an explanation of why such material or information is necessary, and (iv) set forth the procedure by which the Participant or beneficiary may appeal the denial of his or her claim, including, without limitation, a statement of the claimant’s right to bring an action under Section 502(a) of ERISA following an adverse determination on appeal.
c.Appeal of a Denied Claim. If a Participant or beneficiary wishes to appeal the denial of his or her claim, he or she must request a review of such denial by making application in writing to the Administrator within sixty (60) calendar days after receipt of such denial. Such Participant or beneficiary (or his or her duly authorized legal representative) may, upon written request to the Administrator, (i) review any documents pertinent to his or her claim, and (ii) submit, in writing, issues and comments in support of his or her position. A Participant or beneficiary who fails to file an appeal within the 60-day period set forth in this Section 12(c) shall be prohibited from doing so at a later date or from bringing an action under ERISA.
d.Review of a Claim on Appeal. Within sixty (60) calendar days after receipt of a written appeal (unless the Administrator determines that special circumstances, such as the need to hold a hearing, require an extension of time, but in no event more than one hundred twenty (120) calendar days after such receipt), the Administrator shall notify the Participant or beneficiary of the final decision. The final decision shall be in writing and shall include: (i) specific reasons for the decision, written in a manner calculated to be understood by the claimant, (ii) specific references to the pertinent Plan provisions on which the decision is based, (iii) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents relevant to the claim for benefits, and (iv) a statement describing the claimant’s right to bring an action under Section 502(a) of ERISA.
e.Time for Filing an Action. A Participant must bring any action under Section 502(a) of ERISA within one-year of the date the Participant’s claim is denied on appeal under Section 12(d).
13. Participants Deemed to Accept Plan. By accepting any payment or benefit under the Plan, each Participant and each person claiming under or through any such Participant shall be conclusively deemed to have indicated his or her acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by the Administrator, the Company and/or its Affiliates, in any case in accordance with the terms and conditions of the Plan.
14. Successors.
a.Company Successors. The Plan shall bind any successor of the Company, its assets or its businesses (whether direct or indirect, by purchase, merger, consolidation or otherwise), in the same manner and to the same extent that the Company would be obligated under the
Exhibit 10.1
Plan if no succession had taken place. The Company shall require any such successor to expressly assume and agree to perform the Plan in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
b.Participant Successors. The rights of a Participant to receive any benefits hereunder shall not be assignable, transferable or delegable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by his or her will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 14(b), the Company shall have no liability or obligation to pay any amount so attempted to be assigned, transferred or delegated.
15. Unfunded Status. All payments pursuant to the Plan shall be made from the general funds of the Company, and no special or separate fund shall be established or other segregation of assets made to assure payment. No Participant or other person shall have under any circumstances any interest in any particular property or assets of the Company as a result of participating in the Plan.
16. Withholding. The Company and/or its Affiliates may withhold from any amounts payable under the Plan all federal, state, city or other taxes as the Company and/or its Affiliates are required to withhold pursuant to any law or government regulation or ruling.
17. Notices. Any notice provided for in the Plan shall be in writing and shall be either personally delivered, sent by reputable overnight carrier or mailed by first class mail, return receipt requested, to the recipient. Notices to Participant shall be sent to the address of Participant most recently provided to the Company. Notices to the Company should be sent to Cousins Properties Incorporated Attn: Corporate Secretary 3344 Peachtree Road NE, Suite 1800, Atlanta, Georgia 30326-4802 with copy to Cousins Properties Incorporated Attn: Human Resources 3344 Peachtree Road NE, Suite 1800, Atlanta, Georgia 30326-4802. Notice and communications shall be effective (a) on the date of delivery, if delivered by hand, (b) on the first business day following the date of dispatch, if delivered utilizing overnight courier, or (c) three (3) business days after having been mailed, if sent by first class mail.
18. Amendments; Termination. The Administrator expressly reserves the universal right to amend, modify, terminate or discontinue the Plan at any time; provided, however, that (a) no amendment or termination of, or discontinuance of participation in, the Plan will decrease the amount of any severance pay or benefits awarded but not yet fully paid to a Participant prior to the date of such amendment or termination without the written consent of the Participant, (b) no such amendment, modification, termination or discontinuation that would impair the rights of a Participant shall be effective unless: (i) such amendment, modification, termination or discontinuance is approved by at least two-thirds of the independent members of the Board; (ii) the Participant is provided no less than ten (10) days’ notice prior to such approval; and (iii) such amendment, modification, termination or discontinuance does not become effective until the twelve (12) month anniversary of the date approved by two-thirds of the independent members of the Board, unless the affected Participant provides advance written consent to such amendment, modification, termination or discontinuance. In addition, during a Change in Control Period or otherwise in connection with or in anticipation of a Change in Control, the Company may not amend, modify, terminate or discontinue the Plan in any manner that would adversely affect the
Exhibit 10.1
rights of any Participant under the Plan, unless the Participant provides advance written consent to such amendment modification, termination or discontinuance.
19. Governing Law. The Plan shall be governed, construed, interpreted and enforced in accordance with the substantive laws of the state of Georgia, without regard to conflicts of law principles.
20. Legal Fee Reimbursement during a Change in Control Period. Solely during, or with respect to, a Change in Control Period, the Company agrees to pay as incurred (within ten business days following the Company’s receipt of an invoice from the Participant), to the full extent permitted by law, all legal fees and expenses that the Participant may reasonably incur as a result of any contest by the Company, the Participant, the Participant’s estate or others during, or with respect to, a Change in Control Period of the validity or enforceability of, or liability under, any provision of this Plan or any guarantee of performance thereof (including as a result of any contest (regardless of the outcome) by the Participant about the amount of any payment pursuant to this Plan), plus, in each case, interest on any delayed payment to which the Participant or the Participant’s estate is ultimately determined to be entitled at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code based on the rate in effect for the month in which such legal fees and expenses were incurred.
21. Severability. Whenever possible, each provision of the Plan shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Plan is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but the Plan shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
22. Headings. Headings in the Plan are inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof.
23. Section 409A.
a.In General. Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) imposes payment restrictions on “nonqualified deferred compensation” (i.e., potentially including payments owed to a Participant upon termination of employment). Failure to comply with these restrictions could result in negative tax consequences to a Participant, including immediate taxation, interest and a twenty percent (20%) additional income tax. It is the Company’s intent that the Plan be exempt from the application of, or otherwise comply with, the requirements of Section 409A. Specifically, any taxable benefits or payments provided under the Plan are intended to qualify for the “short-term deferral” exception to Section 409A to the maximum extent possible, and to the extent they do not so qualify, are intended to qualify for the involuntary separation pay exceptions to Section 409A to the maximum extent possible. Each installment of any taxable benefits or payments provided under the Plan is intended to be treated as a separate payment for purposes of Section 409A. To the extent that Section 409A is applicable to any taxable benefit or payment, and if a Participant is a “specified employee” as determined by the Company in accordance with Section 409A, then notwithstanding any provision in the Plan to the contrary and to the extent required to
Exhibit 10.1
comply with Section 409A, all such amounts that would otherwise be paid or provided to such Participant during the first six (6) months following the Termination Date shall instead be accumulated through and paid or provided (without interest) on the first (1st) business day following the six (6)-month anniversary of the Termination Date. With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; and (iii) such payments shall be made on or before the last day of the Participant’s taxable year following the taxable year in which the expense occurred, or such earlier date as required hereunder.
b.Separation from Service. A termination of employment shall not be deemed to have occurred for purposes of any provision of the Plan providing for the payment of any amounts or benefits that are deferred compensation subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and the Participant is no longer providing services (at a level that would preclude the occurrence of a “separation from service” within the meaning of Section 409A) to the Company and/or its Affiliates as an employee or consultant, and for purposes of any such provision of the Plan, references to a “termination,” “termination of employment” or like terms shall mean “separation from service” within the meaning of Section 409A.
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Exhibit 10.1
COUSINS PROPERTIES INCORPORATED EXECUTIVE SEVERANCE PLAN
PARTICIPATION AGREEMENT
This Participation Agreement (this “Agreement”) under the Cousins Properties Incorporated Executive Severance Plan (the “Plan”) is made on _______, by and between Cousins Properties Incorporated (the “Company”) and _______ (the “Executive”). Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Plan.
WHEREAS, the Company adopted the Plan to attract and retain qualified executives and to provide severance benefits to executives on certain terminations of employment.
WHEREAS, Executive has been designated by the Administrator as an Eligible Executive for purposes of the Plan.
NOW, THEREFORE, the parties agree as follows:
1. Eligibility. Upon Executive signature below, Executive is hereby designated as a Participant in the Plan. In consideration of Executive’s designation as a Participant in the Plan, Executive agrees to the promises and covenants contained in this Agreement and the Plan, including but not limited to, that the Plan’s benefits and Executive’s access to the Company’s goodwill and trade secrets are good and valuable consideration in exchange for the covenants provided herein.
2. Definitions. For the purposes of this Agreement, the following terms shall have the following meanings:
(a) “Confidential Information” shall mean any confidential and proprietary non-public information concerning the business of the Company that is or has been disclosed to Executive or of which Executive became aware as a consequence of Executive’s relationship with the Company and which has value to the Company and is not generally known to the Company’s competitors, including its financial performance, results or prospects, and any non-public information provided by a third party with the expectation that the information will be kept confidential and used solely for the business purpose for which it was conveyed. “Confidential Information” may include, but is not limited to: (i) information about the Company’s employees, customers, clients, tenants, buyers and/or sellers; and (ii) the terms and conditions of this Agreement and the Plan. Confidential Information shall not include any data or information that has been voluntarily disclosed to the public by the Company (except where such public disclosure was made by the Executive without authorization) or that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means.
(b) “Protective Covenants” shall mean those covenants set forth in Paragraphs 3, 4 and 5 of this Agreement.
(c)“Trade Secrets” shall mean any technical or non-technical data, formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, financial plan, product plan, list of actual or potential customers or suppliers or other information similar to any of the foregoing, which (i) derives economic value, actual or potential, from
Exhibit 10.1
not being generally known to, and not being readily ascertainable by proper means by, other persons who can derive economic value from its disclosure or use and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
3. Confidentiality.
Executive agrees that Executive will not (without the prior written consent of the Company) directly or indirectly use, copy, disclose or otherwise distribute to any other person or entity: (i) any Confidential Information for so long as such information remains Confidential Information, or (ii) any Trade Secret at any time such information constitutes a trade secret under applicable law. Executive shall promptly return to the Company all documents and items in Executive’s possession or control which contain any Confidential Information or Trade Secrets. Executive further agrees that if Executive is questioned about information subject to this Agreement by anyone not authorized to receive such information, Executive will promptly notify Executive’s former supervisor or an officer of the Company.
Nothing contained in this Agreement limits Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board (the “NLRB”), the Securities Exchange Commission or any other federal, state or local governmental agency or commission (collectively, “Government Agencies”) or to make other disclosures or engage in activities that are protected under the whistleblower provisions of federal, state or local law, rule or regulation. Executive further understands that this Agreement does not limit Executive’s ability to communicate with any Governmental Agencies or otherwise participate, testify, or fully cooperate in any investigation or proceeding that may be conducted by any Governmental Agencies, including providing documents or other information, without notice to or approval from the Company or any Affiliate thereof and without risk of being held liable by the Company for liquidated damages or other financial penalties. This Agreement does not impact or limit Executive’s eligibility to receive or accept an award by the U.S. Securities and Exchange Commission or other relief in connection with protected whistleblower activity, including for information provided to any Governmental Agencies.
4. Non-Solicitation.
(a) Executive agrees and covenants that during Executive’s employment with the Company or any Affiliate and for one year after the termination of Executive’s employment, Executive shall not solicit or attempt to solicit, directly or by assisting others, any business from any of the Company’s customers with whom Executive has material contact during Executive’s employment for purposes of providing development, acquisition, financing, management, leasing and sale of commercial office properties.
(b) For purposes of this Agreement, the term “material contact” shall mean contact between Executive and each customer or potential customer (1) with whom Executive dealt on behalf of the Company, (2) whose dealings with the Company were coordinated or supervised by Executive, (3) about whom the Executive obtained Confidential Information in the ordinary course of business as a result of Executive’s association with the Company or (4) who receives products or services authorized by the Company, the sale or possession of which results or resulted in compensation, commissions, or earnings for Executive, in the case of
Exhibit 10.1
each of clauses (1) through (4), within two (2) years prior to the termination date of Executive’s employment.
5. Non-Recruitment of Employees.
Executive covenants and agrees during Executive’s employment with the Company or any Affiliate and for one year after the termination of Executive’s employment, Executive will not (without the prior written consent of the Company) directly or indirectly solicit or attempt to solicit any employee of the Company with whom Executive had direct personal contact during Executive’s employment with the Company to terminate or lessen that party’s affiliation with the Company or to violate the terms of any agreement or understanding between such employee and the Company.
6. Acknowledgments.
(a) Executive hereby acknowledges and agrees that the Protective Covenants are reasonable as to time, scope and territory given the Company’s need to protect its business, personnel, Trade Secrets and Confidential Information. Executive acknowledges and represents that Executive has substantial experience and knowledge and that Executive can readily obtain subsequent employment without violating the Protective Covenants. In the event any of the Protective Covenants shall be determined by any court having proper jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it shall be interpreted to extend only over the maximum period of time for which it may be enforceable and/or over the maximum geographical area as to which it may be enforceable and/or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action.
(b) Executive acknowledges and agrees that during Executive’s employment with the Company Executive has and will continue to have access to Confidential Information and Trade Secrets and that unauthorized or improper use or disclosure by Executive of such Confidential Information or Trade Secrets will cause serious and irreparable harm to the Company. Executive acknowledges that an important part of Executive’s duties have been and will continue to be to advance the business of the Company by directly or through the supervision of others, developing and maintaining substantial relationships with prospective or existing customers, patients, vendors or clients of the Company and/or developing and maintaining the goodwill of the Company associated with an (1) ongoing business, commercial or professional practice, including but not limited to a trade name, trademarks, service marks, or trade dues, or (2) a specific geographic location, or (3) a specific marketing or trade area. Executive acknowledges that Executive has and will continue to be provided extensive/specialized training as a part of Executive’s employment.
(c) Executive acknowledges and agrees that during Executive’s employment with the Company, Executive has and will continue to in the course of Executive’s employment customarily and regularly solicit for the Company customers or prospective customers and/or customarily and regularly engage in making sales or obtaining orders or contracts for products or services to be performed by others, and/or perform each of the following duties: (1) have the primary duty of managing the business in which the Executive is employed or of a
Exhibit 10.1
customarily recognized department of subdivision thereof; (2) customarily and regularly direct the work of two or more employees; and (3) have the authority to hire or fire other employees or have particular weight given to Executive’s suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees and/or by reason of the Company’s investment of time, training, money, trust, exposure to the public, or exposure to customers, vendors, or other business relationships, (1) gain a high level of notoriety, fame, reputation, or public persona as the Company’s representative or spokesperson or (2) a high level of influence or credibility with the Company’s customers, vendors, or other business relationships and/or be intimately involved in the planning for or direction of the business of the Company or a defined unit of the business of the Company and/or obtain selective or specialized skills, knowledge, abilities, or customer contacts or information. Executive and the Company recognize, acknowledge and agree that Executive’s primary duties for the Company have and will continue to be the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction or requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.
7. Specific Performance.
Executive acknowledges and agrees that any breach of the Protective Covenants by Executive will cause irreparable damage to the Company, the exact amount of which will be difficult to determine, and that the remedies at law for any such breach will be inadequate. Accordingly, Executive agrees that, in addition to any other remedy that may be available at law, in equity, under the Plan, or hereunder, the Company shall be entitled to specific performance and injunctive relief, without posting bond or other security, to enforce or prevent any violation of any of the Protective Covenants by Executive. The existence of any claim or cause of action by Executive against the Company, including any dispute relating to the termination of the Plan, shall not constitute a defense to enforcement of any of the Protective Covenants by injunction.
8. Indemnification.
Executive hereby indemnifies and agrees to defend and hold harmless the Company and its employees, officers, directors, agents, representatives, affiliates and independent contractors from and against any and all damages, losses, costs (including, without limitation, court costs and attorneys’ fees), settlements, suits, actions, expenses, liabilities and claims of any kind caused by or resulting from any breach of this Agreement by Executive.
9. Construction.
The Protective Covenants shall be presumed to be enforceable, and any reading causing unenforceability shall yield to a construction permitting enforcement. If any one of the Protective Covenants shall be found unenforceable, it shall be severed and the remaining Protective Covenants enforced in accordance with the tenor thereof.
Exhibit 10.1
10. Miscellaneous.
(a) Assignment. Executive shall not assign this Agreement, in whole or in part, without the prior written consent of the Company, and any attempted assignment not in accordance herewith shall be null and void and of no force or effect. The Company may assign this Protective Covenant Agreement to any of its subsidiaries or affiliates or to its successor following a Change in Control.
(b) Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and assigns.
(c) Survival. This Agreement and all covenants and agreements made herein shall survive the execution and delivery hereof.
(d) Amendment and Termination. This Agreement, including all exhibits, may be amended or terminated only by a writing executed by the parties hereto.
(e) Construction. This Agreement shall be construed in accordance with and governed by the laws of the State of Georgia, to the extent not preempted by federal law, disregarding any provision of law which would require the application of the law of another state. No provision of this Agreement or any related document shall be construed against or interpreted to the disadvantage of any party by reason of such party having, or having deemed to have, structured or drafted such provision.
(f) Headings. The section and paragraph headings contained herein are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
(g) Notices. Except as otherwise expressly provided herein, all notices, requests, comments and other communications under this Agreement shall be in writing and shall be deemed to be given when delivered personally or mailed first class, registered or certified mail, postage prepaid, in any case, addressed as follows:
(i) If to Executive:
_________________________
_________________________
_________________________
(ii) If to the Company:
Cousins Properties Incorporated
3344 Peachtree Road, Suite 1800
Atlanta, GA 30326
Attention: Corporate Secretary
Exhibit 10.1
With a copy to:
Cousins Properties Incorporated
3344 Peachtree Road, Suite 1800
Atlanta, GA 30326
Attention: Human Resources
(h) Counterparts. This Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which together shall constitute one and the same instrument.
(i) Severability. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions hereof shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law.
(j) No Waiver. No waiver by any party hereto of any breach by any party of any condition or provision contained herein shall be deemed a waiver of any other condition or provision hereof. Any waiver must be in writing and signed by Executive or an authorized officer of the Company, as the case may be.
(k) Attorneys’ Fees and Costs. Should Executive or the Company be required to commence an action in any court of competent jurisdiction to enforce this Agreement, such party shall be entitled to recover its attorneys’ fees and costs, to the extent that such party is the prevailing party.
[Remainder of page intentionally left blank]
Exhibit 10.1
IN WITNESS WHEREOF the parties hereto have executed this Agreement to be effective as of the day and year first above written.
“Company”
COUSINS PROPERTIES INCORPORATED
By:
Name:
Title:
“Executive”
____________________________________
Name:
Exhibit 22
SUBSIDIARY ISSUER OF GUARANTEED SECURITIES
Cousins Properties LP (“CPLP”), the primary operating subsidiary of Cousins Properties Incorporated, is the issuer of (i) $500 million aggregate principal amount of 5.875% senior notes due 2034 (the “2034 Senior Notes”) (ii) $400 million aggregate principal amount of 5.375% senior notes due 2032 (the "2032 Senior Notes") and (iii) $500 million aggregate principal amount of 5.250% senior notes due 2030 (the “2030 Senior Notes” and, together with the 2034 Senior Notes and 2032 Senior Notes, the "Senior Notes”). The Senior Notes are fully and unconditionally guaranteed by the registrant, who consolidates CPLP.
Exhibit 31.1
CERTIFICATION PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, M. Colin Connolly, certify that:
1.I have reviewed this annual report on Form 10-K of Cousins Properties Incorporated (the “Registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
| /s/ M. Colin Connolly | ||
M. Colin Connolly
Chief Executive Officer, President, and Director
Date: July 31, 2025
Exhibit 31.2
CERTIFICATION PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Gregg D. Adzema, certify that:
1.I have reviewed this annual report on Form 10-K of Cousins Properties Incorporated (the “Registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
| /s/ Gregg D. Adzema | ||
Gregg D. Adzema
Executive Vice President and Chief Financial Officer
Date: July 31, 2025
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Annual Report on Form 10-K of Cousins Properties Incorporated (the “Registrant”) for the year ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the President and Chief Executive Officer of the Registrant, certifies that to his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
| /s/ M. Colin Connolly | ||
M. Colin Connolly
Chief Executive Officer, President, and Director
Date: July 31, 2025
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Annual Report on Form 10-K of Cousins Properties Incorporated (the “Registrant”) for the year ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Executive Vice President and Chief Financial Officer of the Registrant, certifies that to his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
| /s/ Gregg D. Adzema | ||
Gregg D. Adzema
Executive Vice President and Chief Financial Officer
Date: July 31, 2025