ATLANTA-Cousins Properties Inc. is reporting a strong first quarter performance with net income and funds from operations both up. Net income was $8.4 million, or 16 cents per share, compared with $5.5 million or 11 cents per share. FFO totaled $19.1 million, or 37 cents per share, versus $16.3 million or 32 cents last year.
"The increase in net income available and FFO is primarily attributable to the recognition of revenues on the company's two multifamily projects; revenues on development projects that have become fully or partially operational; and increases in income from joint ventures, offset by a decrease in gains on sale of investment properties," Cousins CEO and president Tom Bell says in a prepared statement.
He adds, "As a development-oriented business, our FFO will vary from quarter to quarter, depending upon the stabilization of new development projects and the sale of mature assets." Bell says Cousins "has communicated this fundamental difference in our strategy to investors for many years. This quarter, for instance, our FFO was higher than in the first three quarters of last year but lower than the fourth quarter."
Bell says 2006 is "starting out on a great note with positive news coming from every division." The company's office building portfolio was 86% leased at March 31 compared with 88% at Dec. 31, 2005. Cousins' operational retail centers were 95% leased at year-end 2005 and at March 31, 2006.
Among the company's production highlights in the first quarter was the sale of seven acres at its North Point Westside project for $1.3 million, generating GAAP gains and FFO of about $740,000. A lease termination fee on 62,000 sf in the 3301 Windy Ridge Parkway office building brought in another $2.3 million of revenue. Through its Temco joint venture, the company sold 855 acres in its Seven Hills project. The company's share of pre-tax GAAP gains and FFO from this sale was $3.2 million.
Cousins anticipates starting new projects this year on the residential front. "We will continue to monitor market and interest rate conditions to closely assess whether we are delivering the right amount of residential product at the right time," Bell says. He expects new development opportunities for the firm will come from single-family residences and intown condominiums.
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