Reit Magazine - January/February 2021 - 21

" In a normalized environment, these would
be solid results, " Connelly told investors during
Cousins' October earnings call. " In a global
pandemic, these are terrific results and reinforce
the quality of our markets, our portfolio, and our
customers. "
While leasing slowed in the third quarter due
to a summer spike in Sun Belt COVID-19 cases,
since Labor Day Cousins has seen an uptick in
leasing tours and discussions across its portfolio.
Cousins notes that economic development agencies in Atlanta, Austin, Charlotte, Dallas, Phoenix,
and Tampa are active with prospective companies
looking to relocate employees out of the Northeast,
Midwest, and California to the Sun Belt.
Those results and activity have impressed analysts.
" We've had a 'buy' rating on Cousins for a while, "
says Michael Lewis, managing director of REIT
equity research for Truist Securities. " They're obviously a Sun Belt-focused REIT benefitting from the
migration of population and jobs into their markets. "
Lewis notes that the company is also a large
developer with a development pipeline that's highly
pre-leased. " As those projects deliver, they will start
cash flowing, so that will support some earnings
growth over the next few years, " he continues.
" The third piece is the balance sheet, which is the
lowest-levered balance sheet of the office REITs that
we cover. " Adzema adds that Cousins' balance sheet
strategy " has been intentional and a core principal of
our strategic plan. "

" Our customers want their teams to be together
and value their culture and collaboration when
their teams are together, " he says. " As you look at the
current environment, our customers aren't working
from home by choice. They're working from home by
necessity, because they're prioritizing the health and
wellness of their employees, which is appropriate. "
In a post-vaccine era, companies and corporate
leaders, as well as their teams, will want to come back
to the office to benefit from the powerful differentiators of being together, Connolly continues.
" Currently, their employees aren't benefitting from
that in-person experience where there's collaboration
and on-boarding and mentoring of new talent. "
Cousins' portfolio is approximately 20% occupied
as it works to bring tenants back. " There really was
no playbook, so we quickly learned that we had to
adapt and innovate in real time on a daily basis to
what was a changing landscape, " Connolly notes.
" We realized very quickly that the most important
thing we needed to do was communicate with our
stakeholders. "
Across its portfolio, Cousins is following Centers
for Disease Control and Prevention guidelines and
putting in policies and procedures to help keep
tenants safe as they return. The focus is on communication, signage, cleaning, air quality and ventilation,
water quality, elevator use, common areas and amenities, and access and visitors.

Austin's " Second Downtown "
Cousins is developing The
Domain in Northwest Austin, featuring retail, restaurants, hotels,
apartments, and office space all
within a walkable neighborhood.

PREVAILING TRENDS EMERGE
To get to where they are, Connolly says Cousins
identified two powerful trends and positioned itself
at their intersection. First, the ongoing war for talent
and the migration of that talent to the Southeast and
Southwest.
" Ultimately, companies are searching for a
lower-cost, lower-tax, higher quality of life in what
are predominantly pro-business environments, "
Connolly explains. " We believe that's a trend that
has certainly been accelerated and will continue to
accelerate. "
Secondly, Connolly says companies and talent
will continue gravitating toward a flight to quality in
these highly amenitized office submarkets.
" The customer and their employees want a
high-quality office environment with a diverse set
of amenities in an urban area and a focus on health
and wellness in their buildings, " Connolly notes. " It's
experiential office, which will be even more powerful
on the other side of the pandemic and this workfrom-home trial. "
Despite the challenges of the COVID-19 crisis,
Connolly believes tenants will return to experiential
offices.
Nareit: Real estate working for you |

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Reit Magazine - January/February 2021

Table of Contents for the Digital Edition of Reit Magazine - January/February 2021

Contents
Reit Magazine - January/February 2021 - Cover1
Reit Magazine - January/February 2021 - Contents
Reit Magazine - January/February 2021 - 1
Reit Magazine - January/February 2021 - 2
Reit Magazine - January/February 2021 - 3
Reit Magazine - January/February 2021 - 4
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