Office markets in most major cities are struggling to recover from increased remote work and economic uncertainty caused by the coronavirus pandemic. Cousins primarily operates in Sunbelt cities such as Atlanta, and company executives say several trends are helping the Southeast office market recover faster than other parts of the country. .
Several companies with large employee bases in Atlanta, including UPS, Truist, and NCR Voyix, recently announced return-to-office mandates that require employees to report to work from physical offices five days a week.
Leasing activity is also starting to pick up. More than 2.2 million square feet of office leases were signed in the Atlanta area in the first quarter of this year, the most activity started in a year since the start of the coronavirus pandemic in 2020, according to CBRE. It is said that Cousins & Co. reported similar numbers, with him signing a 404,000 square foot office lease during the first quarter of this year. This is an increase of 57% from the same period last year.
“We're seeing particularly large companies that have been sitting on the sidelines starting to look at their long-term real estate needs,” Connolly said. “And I think they do that with the idea that they're going to be in the office a lot.”
About a quarter of Cousins' leases in the first quarter were expansions, powered by systems software company Workday's more than doubling its office footprint at 3350 Peachtree in Buckhead. I did. The current 113,000-square-foot lease is “an important sign that Atlanta, and Buckhead in particular, is a great place to attract and retain top talent,” said Cousins, executive vice president. President Richard Hickson said.
But Cousins expects to lose some of the space it occupies as a result of co-working company WeWork's pending Chapter 11 bankruptcy proceedings.
The Cousins building currently houses four WeWork locations in Atlanta and Charlotte totaling approximately 169,000 square feet. The companies recently agreed to modify the lease at Terminal 100 in Buckhead by reducing the footprint by 24,000 square feet. But Hixson said Cousins ”chose not to negotiate with WeWork” for the lease of 725 Ponce, a trophy tower on the BeltLine's Eastside Trail near Ponce City Market, and instead filed for bankruptcy. He said he expected the lease to be denied.
Cousins reported first-quarter net income of $13.3 million, a 40% decrease from the same quarter in 2023. The company's stock price was flat on Friday, but down about 2% since the beginning of 2024.