Reit Magazine - January/February 2021 - 23

" Ultimately, companies are searching
for a lower-cost, lower- tax, higher
quality of life in what are predominantly pro-business environments.
We believe that's a trend that has
certainly been accelerated and will
continue to accelerate. " Colin Connolly
acquisitions of rival companies to expand its Sun
Belt presence. In 2016, it merged with Orlandoheadquartered Parkway Properties (NYSE: PKY) in
an estimated $1.95 billion deal. The merger deepened
Cousins' portfolio in Atlanta, Austin, and Charlotte.
The merger also created a smaller spinoff of
Parkway, which was acquired in 2017 by the Canada
Pension Plan Investment Board. The spinoff was
composed of both Cousins' and Parkway's Houston
properties. This move eliminated the Houston exposure of both companies, but also provided investors
who wanted to invest in the Houston market the ability to do so. Connolly says the Houston office market
at that time was facing significant headwinds due to a
declining oil and gas market.
In 2019, Cousins merged with Dallas-based TIER
REIT, Inc. (NYSE: TIER) in a $5.9 billion all-stock
deal.
" We believe acquiring TIER was a positive investment for our shareholders, " Connolly explains. " It
enhanced the company's geographic mix by increasing our exposure in the dynamic Austin market. It
increased our footprint in the Charlotte market and
gave us a strategic entry into the Dallas market. At the
same time, it increased our growth profile as TIER had
several very attractive development projects under
construction. "
Additionally, the merger increased the efficiency of
Cousins, since there was more than an 81% geographic overlap in the two portfolios that allowed for

substantial synergies, Connolly notes.
" The TIER acquisition really did one big thing for
Cousins and that was expand their presence in Austin
and gave them control of The Domain, " notes David
Rodgers, senior research analyst at Baird. He says the
TIER merger continued Cousins' mission of acquiring
assets that are more tech-oriented.
" You see Cousins continuing that migration toward
tech by buying TIER and the exposure that it had in
Austin, and particularly, The Domain, where you have
tenants like Facebook and Amazon, " he says.
" Cousins has one of, if not the best, balance sheets
of the major office owners, " Rodgers adds. " They have
the development capacity and high-quality, young
assets in some of the best markets. When you roll it up,
we like all that about it. "

BEYOND THE CRISIS
Connolly says COVID-19 has brought a bit of a pause
into the office market, understandably so, and that will
likely weigh on fundamentals while Cousins works
though the pandemic and the market disruption it
caused.
" But on the other side of the health crisis, our
conviction around a Sun Belt trophy office strategy
has only grown, " he says. " We believe that the trends
that were underway, including a migration of talent
and employers to the Sun Belt, will only move faster,
and we'll continue to respond to that changing and
accelerating landscape. "
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
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