Cousins Properties bearish on residential outlook

By KEVIN DUFFY
The Atlanta Journal-Constitution
Published on: 05/06/08

To those optimists who argue the housing market is about to turn around, one of Atlanta's top developers begs to differ.

"We believe it will be some time — at least the second quarter next year — before we see any substantial recovery in the residential markets," Tom Bell, chief executive officer of Cousins Properties, told shareholders Tuesday at the company's annual meeting.

"We've stopped producing lots in almost all of our projects and are now watching the market closely for the opportunities that inevitably show themselves during tough times," he said.

A Cousins condominium building in Buckhead, 10 Terminus Place, is scheduled to open in three months. Only 25 percent of the 137 units have sold thus far, Bell said.

Two other condo projects — CityPlace at Buckhead and the Premiere at Fox Plaza — were put off because of the soft market. CityPlace was a joint venture with The Related Cos.

Residential development represents 7 percent of Cousins activity. The company focuses more on office and retail projects. But all sectors are hurting in the current economy, Bell told the audience, gathered on the 50th floor of the company's downtown headquarters, the 191 Peachtree building.

"We're seeing office users that are slower to commit or expand, retailers that have significantly pulled back on new locations and residential buyers that are still waiting to see if we've hit bottom," he said.

Terminus 200, the second office building in Cousins' mixed-use development on Piedmont Road, is scheduled to open in August 2009.

It's one of four Buckhead office buildings under construction that is still seeking a first tenant. Those buildings total approximately 2 million square feet.

"Competition in Buckhead's office market — especially among under-construction buildings — is fierce, but Terminus' combination of location, amenities and connectivity to its surroundings should give it the edge," Bell said.

Cousins last week opened The Avenue Forsyth, a retail complex that includes a Barnes & Noble bookstore and AMC Theatres. It's the company's fifth and largest Avenue shopping center in metro Atlanta. The first phase is 70 percent leased.

"Forsyth County has been one of the country's fastest-growing counties for eight years now," Bell said, "and this multi-phase project's long-term future looks to be very bright."

Bell became CEO in 2002, succeeding company founder Tom Cousins. Cousins Properties turned 50 this year. Shareholders were given annual reports that resemble Life magazine, featuring a photo of a young Tom Cousins and a logo that says CUZ, the company's New York Stock Exchange symbol.

Cousins is scheduled to release its quarterly earnings Monday and meet with analysts Tuesday.

Earlier this year Cousins laid off 18 employees, almost 4 percent of its workforce. In its last quarterly statement, Cousins reported a net loss of $1.16 million.