Cousins Prepares for 2009 Leasing Challenge

ATLANTA-After weathering a rough 2008 without significant losses, locally based Cousins Properties Inc. says it is preparing for a challenging 2009 in terms of retail and office leasing. This year the REIT will see 10% of its office portfolio expire and expects rising vacancies with its retail properties.

The REIT’s retail portfolio vacancies rose 3% year over year, much of which was a result of Circuit City and Linens ‘N Things closings at several shopping centers. Retail accounts for 25% of the company’s portfolio, and same property results were down over 11% for the fourth quarter, and ended the year down 2%. Much of the decrease was chalked up to conservative reserves on tenant receivables by Jim Fleming, executive vice president and CFO, during this week’s earnings call. “While we hope we can recover some of these amounts in the future, they are indicative of the difficult economic environment in which we live today,” he said.

Despite the waning retail market, the REIT’s chairman and CEO Tom Bell called 2008 a “decent” year for Cousins. Overall, funds from operations totaled $61 million for the year ended Dec. 31, compared to $48.4 million for the same period in 2007, according to the REIT’s latest results. “We were able to sell a significant number of our assets during the boom and restructure our debt and credit facilities in early 2007,” said Bell. “As a result…we’re in a much better position than many real estate companies to deal with today’s downturn.”