Cousins Properties Inc. (CUZ), a real estate investment trust (REIT), has recently left behind rival bidders in the race to successfully win the ‘Gulch’ project in Atlanta, Georgia. The Gulch is a 15.7-acre property site and represents the largest contiguous piece of land in downtown.
The Georgia Department of Transportation (DOT) has chosen Cousins ahead of local developers, such as Jacoby Development Inc. and H.J. Russell & Co., to carry out the project through a public-private ownership. The DOT intends to create a transportation hub similar to that of the Atlantic Station that could encourage a thriving commercial area, attracting city dwellers, professional offices, shops and restaurants.
With the deal, Cousins would finance and manage construction of the terminal and would transform a collection of parking lots and rail-lines into a transit hub. Thereafter, the company is expected to recover its investment from revenue generated by a transit-friendly commercial, retail and residential complex supposed to be built atop the bus-and-rail station.
The development is expected to change the demographics of the region, creating more employment opportunities and redefining the communication facilities. The deal would also strengthen Cousins’ position as one of the leading master-developers of the country and create a future revenue stream for the company.
Cousins acquires, develops, manages, and leases office, retail and industrial properties throughout the U.S., including Atlanta, Charlotte, Austin, San Francisco, Los Angeles and Washington DC. Cousins also provide leasing and asset management services to third-party investors. It operates a group of subsidiaries – Cousins Real Estate Corporation (CREC) and CREC II, which are both taxable real estate entities.
The portfolio of the company is primarily concentrated in high-growth Sun Belt markets, which due to its long-term demographic trends, should exhibit above-average job growth. Over the years, Cousins has maintained a conservative and flexible balance sheet with ample liquidity and minimal debt maturities that enable it to capitalize on potential acquisition opportunities to fuel its top-line growth.
We maintain our Neutral recommendation on Cousins, which presently has a Zacks #3 Rank translating into a short-term Hold rating. We also have a ‘Neutral’ recommendation and a Zacks #3 Rank for Duke Realty Corp. (DRE), one of the competitors of Cousins.
COUSIN PROP INC (CUZ): Free Stock Analysis Report
DUKE REALTY CP (DRE): Free Stock Analysis Report
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