COUSINS PROPERTIES INC - Quarter Report: 2020 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-11312

COUSINS PROPERTIES INCORPORATED

(Exact name of registrant as specified in its charter)

Georgia

58-0869052

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

3344 Peachtree Road NE

Suite 1800

Atlanta

Georgia

30326-4802

(Address of principal executive offices)

(Zip Code)

(404) 407-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1 par value per share

CUZ

New York Stock Exchange

("NYSE")

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding at October 21, 2020
Common Stock, $1 par value per share						148,564,356 shares

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			Page No.
PART I-FINANCIAL INFORMATION			4
Item 1. Financial Statements (Unaudited)			4
CONDENSED CONSOLIDATED BALANCE SHEETS			4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS			5
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY			6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS			8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3. Quantitative and Qualitative Disclosures About Market Risk			31
Item 4. Controls and Procedures			31

PART II. OTHER INFORMATION			33
Item 1. Legal Proceedings			33
Item 1A. Risk Factors			33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			34
Item 6. Exhibits			35
SIGNATURES			36

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FORWARD-LOOKING STATEMENTS

Certain matters contained in this report are “forward-looking statements” within the meaning of the federal securities laws and are subject to uncertainties and risks, as itemized in Item 1A included in the Annual Report on Form 10-K for the year ended December 31, 2019, and as itemized herein. These forward-looking statements include information about possible or assumed future results of the business and our financial condition, liquidity, results of operations, plans, and objectives. They also include, among other things, statements regarding subjects that are forward-looking by their nature, such as:

•guidance and underlying assumptions;

•business and financial strategy;

•future debt financings;

•future acquisitions and dispositions of operating assets or joint venture interests;

•future acquisitions and dispositions of land, including ground leases;

•future development and redevelopment opportunities, including fee development opportunities;

•future issuances and repurchases of common stock;

•future distributions;

•projected capital expenditures;

•market and industry trends;

•entry into new markets;

•future changes in interest rates; and

•all statements that address operating performance, events, or developments that we expect or anticipate will occur in the future — including statements relating to creating value for stockholders.

Any forward-looking statements are based upon management's beliefs, assumptions, and expectations of our future performance, taking into account information that is currently available. These beliefs, assumptions, and expectations may change as a result of possible events or factors, not all of which are known. If a change occurs, our business, financial condition, liquidity, and results of operations may vary materially from those expressed in forward-looking statements. Actual results may vary from forward-looking statements due to, but not limited to, the following:

•the availability and terms of capital;

•the ability to refinance or repay indebtedness as it matures;

•the failure of purchase, sale, or other contracts to ultimately close;

•the failure to achieve anticipated benefits from acquisitions, investments, or dispositions;

•the potential dilutive effect of common stock or operating partnership unit issuances;

•the availability of buyers and pricing with respect to the disposition of assets;

•changes in national and local economic conditions, the real estate industry, and the commercial real estate markets in which we operate, particularly in Atlanta, Austin, Charlotte, Phoenix, Tampa, and Dallas where we have high concentrations of our lease revenues, including the impact of high unemployment, volatility in the public equity and debt markets, and international economic and other conditions;

•the impact of a public health crisis, including the COVID-19 pandemic, and the governmental and third-party response to such a crisis, which may affect our key personnel, our tenants, and the costs of operating our assets;

•the impact of social distancing, shelter-in-place, border closings, travel restrictions, remote work requirements, and similar governmental and private measures taken to combat the spread of the COVID-19 pandemic on our operations and our tenants;

•changes to our strategy with regard to land and other non-core holdings that may require impairment losses to be recognized;

•leasing risks, including the ability to obtain new tenants or renew expiring tenants, the ability to lease newly developed and/or recently acquired space, the failure of a tenant to commence or complete tenant improvements on schedule or to occupy leased space, and the risk of declining leasing rates;

•changes in the needs of our tenants brought about by the desire for co-working arrangements, trends toward utilizing less office space per employee, and the effect of telecommuting;

•any adverse change in the financial condition of one or more of our tenants;

•volatility in interest rates and insurance rates;

•competition from other developers or investors;

•the risks associated with real estate developments (such as zoning approval, receipt of required permits, construction delays, cost overruns, and leasing risk);

•cyber security breaches;

•changes in senior management, changes in the Board of Directors, and the loss of key personnel;

•the potential liability for uninsured losses, condemnation, or environmental issues;

•the potential liability for a failure to meet regulatory requirements;

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•the financial condition and liquidity of, or disputes with, joint venture partners;

•any failure to comply with debt covenants under credit agreements;

•any failure to continue to qualify for taxation as a real estate investment trust and meet regulatory requirements;

•potential changes to state, local, or federal regulations applicable to our business;

•material changes in the rates, or the ability to pay, dividends on common shares or other securities;

•potential changes to the tax laws impacting REITs and real estate in general; and

•those additional risks and factors discussed in reports filed with the Securities and Exchange Commission (“SEC”) by the Company.

The words “believes,” “expects,” “anticipates,” “estimates,” “plans,” “may,” “intend,” “will,” or similar expressions are intended to identify forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in any forward-looking statements are reasonable, we can give no assurance that such plans, intentions, or expectations will be achieved. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information, or otherwise, except as required under U.S. federal securities laws.

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)


	September 30, 2020		December 31, 2019
	(unaudited)
Assets:
Real estate assets:
Operating properties, net of accumulated depreciation of $750,662 and $577,139 in 2020 and 2019, respectively	$	6,144,004	$	5,669,324
Projects under development	52,759		410,097
Land	108,213		116,860
	6,304,976		6,196,281
Real estate assets and other assets held for sale, net of accumulated depreciation and amortization of $61,093 in 2019	—		360,582

Cash and cash equivalents	36,872		15,603
Restricted cash	1,847		2,005
Notes and accounts receivable	18,561		23,680
Deferred rents receivable	132,689		102,314
Investment in unconsolidated joint ventures	129,814		133,884
Intangible assets, net	209,434		257,649
Other assets	52,403		59,449
Total assets	$	6,886,596	$	7,151,447
Liabilities:
Notes payable	$	1,934,905	$	2,222,975
Accounts payable and accrued expenses	183,023		209,904
Deferred income	58,404		52,269
Intangible liabilities, net of accumulated amortization of $70,894 and $55,798 in 2020 and 2019, respectively	68,009		83,105
Other liabilities	115,162		134,128
Liabilities of real estate assets held for sale, net of accumulated amortization of $7,771 in 2019	—		21,231
Total liabilities	2,359,503		2,723,612
Commitments and contingencies
Equity:
Stockholders' investment:
Preferred stock, $1 par value, 20,000,000 shares authorized, 1,716,837 shares issued and outstanding in 2019	—		1,717
Common stock, $1 par value, 300,000,000 shares authorized, 151,149,289 and 149,347,382 shares issued, and 148,564,356 and 146,762,449 shares outstanding in 2020 and 2019, respectively	151,149		149,347
Additional paid-in capital	5,541,879		5,493,883
Treasury stock at cost, 2,584,933 shares in 2020 and 2019	(148,473)		(148,473)
Distributions in excess of cumulative net income	(1,044,743)		(1,137,200)
Total stockholders' investment	4,499,812		4,359,274
Nonredeemable noncontrolling interests	27,281		68,561
Total equity	4,527,093		4,427,835
Total liabilities and equity	$	6,886,596	$	7,151,447

See accompanying notes.

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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in thousands, except per share amounts)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Revenues:
Rental property revenues	$	179,024	$	180,826	$	543,252	$	439,624
Fee income	4,350		7,494		13,772		23,298
Other	6		3		169		154
	183,380		188,323		557,193		463,076
Expenses:
Rental property operating expenses	62,844		65,646		189,003		155,838
Reimbursed expenses	373		1,290		1,216		3,269
General and administrative expenses	5,658		5,852		19,853		25,686
Interest expense	15,058		14,700		44,955		37,579
Depreciation and amortization	71,498		82,012		215,980		178,777
Transaction costs	—		1,048		428		50,878
Other	723		297		1,841		1,101
	156,154		170,845		473,276		453,128

Income from unconsolidated joint ventures	1,611		3,241		6,751		9,779
Gain (loss) on sales of investments in unconsolidated joint ventures	(59)		—		45,940		—
Gain (loss) on investment property transactions	(523)		(27)		90,192		14,388



Net income	28,255		20,692		226,800		34,115
Net income attributable to noncontrolling interests	(140)		(318)		(641)		(809)
Net income available to common stockholders	$	28,115	$	20,374	$	226,159	$	33,306

Net income per common share — basic	$	0.19	$	0.14	$	1.53	$	0.27
Net income per common share — diluted	$	0.19	$	0.14	$	1.52	$	0.27
Weighted average shares — basic	148,566		146,762		148,181		121,758
Weighted average shares — diluted	148,606		148,530		148,586		123,529

See accompanying notes.

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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in thousands except per share amounts)


Three Months Ended September 30, 2020
	Preferred Stock		Common Stock		Additional Paid-In Capital		Treasury Stock		Distributions in Excess of Net Income		Stockholders’ Investment		Nonredeemable Noncontrolling Interests		Total Equity
Balance June 30, 2020	$	—	$	151,153	$	5,540,945	$	(148,473)	$	(1,028,289)	$	4,515,336	$	24,993	$	4,540,329
Net income	—		—		—		—		28,115		28,115		140		28,255



Amortization of stock options, restricted stock, and restricted stock units, net of forfeitures	—		(4)		934		—		—		930		—		930

Contributions from nonredeemable noncontrolling interests	—		—		—		—		—		—		2,317		2,317
Distributions to nonredeemable noncontrolling interests	—		—		—		—		—		—		(169)		(169)
Common dividends ($0.30 per share)	—		—		—		—		(44,569)		(44,569)		—		(44,569)
Balance September 30, 2020	$	—	$	151,149	$	5,541,879	$	(148,473)	$	(1,044,743)	$	4,499,812	$	27,281	$	4,527,093

Three Months Ended September 30, 2019
	Preferred Stock		Common Stock		Additional Paid-In Capital		Treasury Stock		Distributions in Excess of Net Income		Stockholders’ Investment		Nonredeemable Noncontrolling Interests		Total Equity
Balance June 30, 2019	$	1,717	$	149,348	$	5,492,648	$	(148,473)	$	(1,189,567)	$	4,305,673	$	63,945	$	4,369,618
Net income	—		—		—		—		20,374		20,374		318		20,692


Amortization of stock options and restricted stock, net of forfeitures	—		(1)		617		—		—		616		—		616

Contributions from nonredeemable noncontrolling interests	—		—		—		—		—		—		1,191		1,191
Distributions to nonredeemable noncontrolling interests	—		—		—		—		—		—		(480)		(480)
Common dividends ($0.29 per share)	—		—		—		—		(42,559)		(42,559)		—		(42,559)
Balance September 30, 2019	$	1,717	$	149,347	$	5,493,265	$	(148,473)	$	(1,211,752)	$	4,284,104	$	64,974	$	4,349,078

See accompanying notes.

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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in thousands except per share amounts)


Nine Months Ended September 30, 2020
	Preferred Stock		Common Stock		Additional Paid-In Capital		Treasury Stock		Distributions in Excess of Net Income		Stockholders’ Investment		Nonredeemable Noncontrolling Interests		Total Equity
Balance December 31, 2019	$	1,717	$	149,347	$	5,493,883	$	(148,473)	$	(1,137,200)	$	4,359,274	$	68,561	$	4,427,835
Net income	—		—		—		—		226,159		226,159		641		226,800

Common stock issued pursuant to stock based compensation	—		90		(397)		—		—		(307)		—		(307)
Common stock issued pursuant to unitholder redemption	(1,717)		1,719		45,032		—		—		45,034		(45,034)		—
Amortization of stock options, restricted stock, and restricted stock units, net of forfeitures	—		(7)		3,361		—		—		3,354		—		3,354

Contributions from nonredeemable noncontrolling interests	—		—		—		—		—		—		4,133		4,133
Distributions to nonredeemable noncontrolling interests	—		—		—		—		—		—		(1,020)		(1,020)
Common dividends ($0.90 per share)	—		—		—		—		(133,702)		(133,702)		—		(133,702)
Balance September 30, 2020	$	—	$	151,149	$	5,541,879	$	(148,473)	$	(1,044,743)	$	4,499,812	$	27,281	$	4,527,093

Nine Months Ended September 30, 2019
	Preferred Stock		Common Stock		Additional Paid-In Capital		Treasury Stock		Distributions in Excess of Net Income		Stockholders’ Investment		Nonredeemable Noncontrolling Interests		Total Equity
Balance December 31, 2018	$	1,717	$	107,681	$	3,934,385	$	(148,473)	$	(1,129,445)	$	2,765,865	$	55,291	$	2,821,156
Net income	—		—		—		—		33,306		33,306		809		34,115
Common stock issued in merger	—		41,576		1,556,613		—		—		1,598,189		—		1,598,189
Common stock issued pursuant to stock based compensation	—		91		419		—		—		510		—		510
Amortization of stock options and restricted stock, net of forfeitures	—		(1)		1,848		—		—		1,847		—		1,847
Nonredeemable noncontrolling interests acquired in merger	—		—		—		—		—		—		5,348		5,348
Contributions from nonredeemable noncontrolling interests	—		—		—		—		—		—		5,271		5,271
Distributions to nonredeemable noncontrolling interests	—		—		—		—		—		—		(1,745)		(1,745)
Common dividends ($0.87 per share)	—		—		—		—		(115,613)		(115,613)		—		(115,613)
Balance September 30, 2019	$	1,717	$	149,347	$	5,493,265	$	(148,473)	$	(1,211,752)	$	4,284,104	$	64,974	$	4,349,078

See accompanying notes.

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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in thousands)


	Nine Months Ended September 30,
	2020		2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	226,800	$	34,115
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sales of investments in unconsolidated joint ventures	(45,940)		—
Gain on investment properties transactions	(90,192)		(14,388)
Depreciation and amortization	215,980		178,777
Amortization of deferred financing costs and premium/discount on notes payable	(671)		1,723
Stock-based compensation expense, net of forfeitures	4,415		3,209
Effect of non-cash adjustments to revenues	(41,614)		(31,166)
Income from unconsolidated joint ventures	(6,751)		(9,779)
Operating distributions from unconsolidated joint ventures	5,940		6,125

Changes in other operating assets and liabilities:
Change in other receivables and other assets, net	(715)		(13,638)
Change in operating liabilities, net	(8,245)		43,387
Net cash provided by operating activities	259,007		198,365
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from investment property sales	435,539		58,968
Proceeds from sales of investments in unconsolidated joint ventures	52,815		—
Property acquisition, development, and tenant asset expenditures	(306,102)		(252,034)
Investment in unconsolidated joint ventures	(3,752)		(21,476)


Distributions from unconsolidated joint ventures	—		11
Cash and restricted cash acquired in merger	—		85,989
Change in notes receivable and other assets	(167)		(71)

Net cash provided by (used in) investing activities	178,333		(128,613)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facility	319,500		904,000
Repayment of credit facility	(571,000)		(824,000)
Repayment of notes payable	(34,710)		(687,207)
Issuance of unsecured senior notes	—		650,000
Payment of deferred financing costs	(70)		(2,866)
Contributions from nonredeemable noncontrolling interests	4,133		5,271
Distributions to nonredeemable noncontrolling interests	(1,020)		(1,745)
Common dividends paid	(131,694)		(100,372)
Other	(1,368)		(864)
Net cash used in financing activities	(416,229)		(57,783)
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	21,111		11,969
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD	17,608		2,695
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	38,719	$	14,664

See accompanying notes.

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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

(Unaudited)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business: Cousins Properties Incorporated (“Cousins”), a Georgia corporation, is a self-administered and self-managed real estate investment trust (“REIT”). Cousins conducts substantially all of its operations through Cousins Properties LP ("CPLP"). Cousins owns over 99% of CPLP and consolidates CPLP. CPLP owns Cousins TRS Services LLC ("CTRS"), a taxable entity which owns and manages its own real estate portfolio and performs certain real estate related services for other parties.

Cousins, CPLP, CTRS, and their subsidiaries (collectively, the "Company") develop, acquire, lease, manage, and own Class A office and mixed-use properties in Sun Belt markets with a focus on Georgia, Texas, North Carolina, Arizona, and Florida. Cousins has elected to be taxed as a REIT and intends to, among other things, distribute 100% of its net taxable income to stockholders, thereby eliminating any liability for federal income taxes under current law. Therefore, the results included herein do not include a federal income tax provision for Cousins. As of September 30, 2020, the Company's portfolio of real estate assets consisted of interests in 19.0 million square feet of office space and 310,000 square feet of mixed-use space.

Basis of Presentation: The condensed consolidated financial statements are unaudited and were prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these financial statements reflect all adjustments necessary (which adjustments are of a normal and recurring nature) for the fair presentation of the Company's financial position as of September 30, 2020 and the results of operations for the three and nine months ended September 30, 2020 and 2019. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of results expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. The accounting policies employed are substantially the same as those shown in note 2 to the consolidated financial statements included therein.

On June 14, 2019, the Company restated and amended its articles of incorporation to effect a reverse stock split of the issued and outstanding shares of its common and preferred stock pursuant to which (1) each four shares of the Company's issued and outstanding common stock and preferred stock were combined into one share of the Company's common or preferred stock, respectively, and (2) the authorized number of the Company's common stock was proportionally reduced to 175 million shares. Fractional shares of common stock resulting from the reverse stock split were settled in cash. Fractional shares of preferred stock resulting from the reverse stock split were redeemed without payout. Immediately thereafter, the Company further amended its articles of incorporation to increase the number of authorized shares of its common stock from 175 million to 300 million shares. All shares of common stock, preferred stock, stock options, restricted stock units, and per share information presented in the condensed consolidated financial statements have been adjusted to reflect the reverse stock split on a retroactive basis for all periods presented.

For the three and nine months ended September 30, 2020 and 2019, there were no items of other comprehensive income. Therefore, no presentation of comprehensive income is required.

The Company evaluates all partnerships, joint ventures, and other arrangements with variable interests to determine if the entity or arrangement qualifies as a variable interest entity ("VIE"), as defined in the Financial Accounting Standard Board's ("FASB") Accounting Standards Codification ("ASC"). If the entity or arrangement qualifies as a VIE and the Company is determined to be the primary beneficiary, the Company is required to consolidate the assets, liabilities, and results of operations of the VIE. At September 30, 2020, the Company had no investments or interests in any VIEs.

2. MERGER WITH TIER REIT, INC.

On June 14, 2019, pursuant to the Agreement and Plan of Merger dated March 25, 2019 (the “Merger Agreement”), by and among the Company and TIER REIT, Inc. (“TIER”), TIER merged with and into a subsidiary of the Company (the “Merger”) with this subsidiary continuing as the surviving corporation of the Merger. In accordance with the terms and conditions of the Merger Agreement, each share of TIER common stock issued and outstanding immediately prior to the Merger was converted into 2.98 newly-issued pre-reverse split shares of the Company’s common stock with fractional shares being settled in cash. In the Merger, former TIER common stockholders received approximately 166 million pre-reverse split shares of common stock of the Company. As discussed in note 1 to the condensed consolidated financial statements, immediately following the Merger, the Company completed a 1-for-4 reverse stock split.

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The Merger has been accounted for as a business combination with the Company as the accounting acquirer, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their acquisition date fair value. The total value of the transaction is based on the closing stock price of the Company's common stock on June 13, 2019, the day immediately prior to the closing of the Merger. Based on the shares issued in the transaction, the total fair value of the assets acquired and liabilities assumed in the Merger was $1.6 billion. The Company incurred no expenses related to the Merger for the three months ended September 30, 2020 and $428,000 for the nine months ended September 30, 2020. For the three and nine months ended September 30, 2019, the Company incurred expenses related to the Merger of $1.0 million and $50.9 million, respectively.

Management engaged a third party valuation specialist to assist with valuing the real estate assets acquired and liabilities assumed in the Merger. The third party used cash flow analyses as well as an income approach and a cost approach to determine the fair value of real estate assets acquired.

The purchase price was allocated as follows (in thousands):


Real estate assets	$	2,201,773
Real estate assets held for sale	21,005
Cash and cash equivalents	84,042
Restricted cash	1,947
Notes and other receivables	6,586
Investment in unconsolidated joint ventures	292
Intangible assets	141,184
Other assets	9,954
	2,466,783

Notes payable	747,549
Accounts payable and accrued expenses	51,748
Deferred income	8,131
Intangible liabilities	47,988
Other liabilities	7,676
Nonredeemable noncontrolling interests	5,329
	868,421

Total purchase price	$	1,598,362

During the three and nine months ended September 30, 2020, the Company recorded revenues related to assets acquired in the Merger of $51.5 million and $154.1 million, respectively. During the three and nine months ended September 30, 2019, the Company recorded revenues related to assets acquired in the Merger of $52.1 million and $61.7 million, respectively. The following unaudited supplemental pro forma information is based upon the Company's historical condensed consolidated statements of operations, adjusted as if the Merger had occurred on January 1, 2018. The supplemental pro forma information is not necessarily indicative of future results, or of actual results, that would have been achieved had the Merger been consummated on January 1, 2018.


	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Revenues	$	188,323	$	555,324
Net income	21,740		110,188
Net income available to common stockholders	21,410		108,724

Supplemental pro forma earnings were adjusted to exclude $1.0 million and $50.9 million of transaction costs incurred in the three and nine months ended September 30, 2019.

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3. TRANSACTIONS WITH NORFOLK SOUTHERN RAILWAY COMPANY

On March 1, 2019, the Company entered into a series of agreements and executed related transactions with Norfolk Southern Railway Company (“NS”) as follows:

•Sold land to NS for $52.5 million.

•Executed a Development Agreement with NS whereby the Company will receive fees totaling $5 million in consideration for development services for NS’s corporate headquarters that is being constructed on the land sold to NS.

•Executed a Consulting Agreement with NS whereby the Company will receive fees totaling $32 million in consideration for consulting services for NS’s corporate headquarters. The Development Agreement and Consulting Agreement are collectively referred to below as the “Fee Agreements.”

•Purchased a building from NS (“1200 Peachtree”) for $82 million subject to a three-year market rate lease with NS that covers the entire building.

The Company sold the land to NS for $5.0 million above its carrying amount, which included $37.0 million of land purchased in 2018, $6.5 million of land purchased in 2019, and $4.0 million of site preparation work. The Company purchased 1200 Peachtree from NS for an amount it determined to be $10.3 million below the building’s fair value.

The Company determined that all contracts and transactions associated with NS should be combined for accounting purposes, and the amounts exchanged under the combined contracts should be allocated to the various components of the overall transaction at fair value or market value as discussed below. The Company determined that the purchase of 1200 Peachtree should be recorded at fair value of $92.3 million. The Company determined that the lease with NS at the 1200 Peachtree building was at market value under ASC 842. The land sale was accounted for under ASC 610-20 and no gain or loss was recorded on the derecognition of this non-financial asset as the fair value was determined to equal the carrying amount. Consideration related to various services provided to NS, and accounted for under ASC 606, was determined to be $52.3 million and represents the negotiated market value for the services agreed to by the Company and NS in the contracts. This amount included non-cash consideration of the $10.3 million discount on the purchase of 1200 Peachtree as well as cash consideration of $5 million from the land sale contract (difference between fair value and contract amount), $5 million from the Development Agreement, and $32 million from the Consulting Agreement. Since all of the agreements and contracts above were executed for the purpose of delivering and constructing a corporate headquarters for NS and all of the services and deliverables are highly interdependent, the Company determined that the services represent a single performance obligation under ASC 606.

The Company determined that control of the services to be provided is being transferred over time and, thus, the Company must recognize the $52.3 million contract price in revenue as it satisfies the performance obligation. The Company determined that the inputs method of measuring progress of satisfying the performance obligation was the most appropriate method of recognizing revenue for the services component. Therefore, the Company began recognizing revenue in the quarter ended March 31, 2019, and will continue to recognize revenue based upon the time spent by the Company’s employees in providing these services as compared to the total estimated time required to satisfy the performance obligation. During the three months ended September 30, 2020 and 2019, the Company recognized $3.7 million and $5.6 million, respectively, in fee income in its condensed consolidated statements of operations related to the services provided to NS. During the nine months ended September 30, 2020 and 2019, the Company recognized $11.2 million and $17.2 million, respectively, in fee income in its condensed consolidated statements of operations related to the services provided to NS. As of September 30, 2020 and December 31, 2019, the Company had deferred income included in the consolidated balance sheet of $4.4 million and $11.3 million, respectively, related to NS.

4. REAL ESTATE TRANSACTIONS

During May 2020, the Company purchased a 1,550 space parking garage in Charlotte, North Carolina for a gross purchase price of $85.0 million. This property is included in real estate assets on the condensed consolidated balance sheet and in the Company's Charlotte/Office operating segment.

During March 2020, the Company sold Hearst Tower, a 966,000 square foot office building in Charlotte, North Carolina, for a gross purchase price of $455.5 million. This property was included in the Company's Charlotte/Office operating segment. This transaction was triggered by the exercise of a purchase option by the building's primary lessee. The Company recognized a net gain of $90.4 million on the sale of Hearst Tower.

During February 2020, as part of the Company's strategy in regards to disposal of non-core assets, the Company sold Woodcrest, a 386,000 square foot office property in Cherry Hill, New Jersey, for a gross purchase price of $25.3 million. This property was included in the Company's Other/Office operating segment. The Company acquired Woodcrest in the Merger with TIER and did not record any gain or loss on the sale of Woodcrest.

During February 2019, the Company sold air rights that cover eight acres in Downtown Atlanta for a gross sales price of $13.3 million and recorded a gain of $13.1 million.

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5. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

The following information summarizes financial data and principal activities of the Company's unconsolidated joint ventures. The information included in the following table entitled summary of financial position is as of September 30, 2020 and December 31, 2019 (in thousands). The information included in the summary of operations table is for the nine months ended September 30, 2020 and 2019 (in thousands):


	Total Assets				Total Debt				Total Equity				Company’s Investment
SUMMARY OF FINANCIAL POSITION:	2020		2019		2020		2019		2020		2019		2020			2019

DC Charlotte Plaza LLLP	$	175,827	$	179,694	$	—	$	—	$	90,767	$	90,373	$	48,040		$	48,058
Austin 300 Colorado Project, LP	165,704		112,630		71,681		21,430		68,191		68,101		37,929			36,846
AMCO 120 WT Holdings, LLC	86,151		77,377		—		—		83,467		70,696		15,769			13,362
Carolina Square Holdings LP	111,240		114,483		76,108		75,662		22,606		25,184		13,514			14,414
HICO Victory Center LP	15,835		16,045		—		—		15,835		15,353		10,541			10,373

Charlotte Gateway Village, LLC	—		109,675		—		—		—		106,651		—			6,718
Wildwood Associates	—		11,061		—		—		—		10,978		—			(521)		(1)
Crawford Long - CPI, LLC	30,820		28,459		66,725		67,947		(37,483)		(40,250)		(17,877)		(1)	(19,205)		(1)
Other	6,952		8,879		—		—		6,760		7,318		4,021			4,113
	$	592,529	$	658,303	$	214,514	$	165,039	$	250,143	$	354,404	$	111,937		$	114,158


	Total Revenues				Net Income (Loss)				Company's Share of Income (Loss)
SUMMARY OF OPERATIONS:	2020		2019		2020		2019		2020		2019
Charlotte Gateway Village, LLC	$	6,692	$	20,368	$	3,352	$	7,510	$	1,674	$	3,755
DC Charlotte Plaza LLLP	15,476		10,716		5,597		4,196		2,583		2,098
Crawford Long - CPI, LLC	9,784		9,412		2,767		2,821		1,329		1,349
Carolina Square Holdings LP	10,792		8,757		1,936		191		950		5
HICO Victory Center LP	241		356		241		356		121		197
Austin 300 Colorado Project, LP	264		319		90		152		45		76

Terminus Office Holdings LLC	—		34,964		—		4,962		—		2,381
AMCO 120 WT Holdings, LLC	1,564		5		(2,106)		(81)		(383)		—




Other	228		132		125		(148)		432		(82)
	$	45,041	$	85,029	$	12,002	$	19,959	$	6,751	$	9,779

(1) Negative bases are included in deferred income on the condensed consolidated balance sheets.

In April 2020, the Carolina Square Holdings LP joint venture executed an amendment for its associated construction loan, extending the maturity date from May 2020 to May 2021 and reducing the spread over the London Interbank Offering Rate ("LIBOR") from 1.90% to 1.25%. This amendment also eliminated the Company's repayment guaranty.

In March 2020, the Company sold its interest in Charlotte Gateway Village, LLC ("Gateway"), which owned a 1.1 million square foot office building in Charlotte, North Carolina, to its partner for a gross purchase price of $52.2 million. The sale was triggered by the exercise of the partner's purchase option and the proceeds from this sale represent a 17% internal rate of return for the Company on its invested capital, as stipulated in the partnership agreement. The Company recognized a gain of $44.6 million on the sale of its interest in Gateway.

In February 2020, as part of its strategy in regards to disposal of non-core assets, the Company sold its remaining interest in the Wildwood Associates joint venture, which owned a 6.3 acre parcel of land in Atlanta, to its venture partner for a gross purchase price of $900,000. The Company recognized a gain of $1.3 million on the sale of its interest in Wildwood Associates, which included elimination of the remaining negative basis in the joint venture of $520,000.

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6. INTANGIBLE ASSETS

Intangible assets on the balance sheets as of September 30, 2020 and December 31, 2019 included the following (in thousands):


	2020		2019
In-place leases, net of accumulated amortization of $205,497 and $163,867 in 2020 and 2019, respectively	$	161,129	$	202,760
Above-market tenant leases, net of accumulated amortization of $32,865 and $26,487 in 2020 and 2019, respectively	29,322		35,699
Below-market ground lease, net of accumulated amortization of $1,104 and $897 in 2020 and 2019, respectively	17,309		17,516
Goodwill	1,674		1,674
	$	209,434	$	257,649

The carrying amount of goodwill did not change during the nine months ended September 30, 2020 and 2019.

Aggregate net amortization expense related to intangible assets and liabilities for the three and nine months ended September 30, 2020 was $10.2 million and $33.7 million, respectively. Aggregate net amortization expense related to intangible assets and liabilities for the three and nine months ended September 30, 2019 was $17.6 million and $30.7 million, respectively. Over the next five years and thereafter aggregate amortization of these intangible assets and liabilities is anticipated to be as follows (in thousands):


	Below Market Rents		Above Market Ground Lease		Below Market Ground Lease		Above Market Rents		In Place Leases
2020 (three months)	$	(4,193)	$	(12)	$	69	$	1,791	$	11,939
2021	(14,148)		(46)		276		6,578		39,902
2022	(11,076)		(46)		276		5,209		28,017
2023	(9,388)		(46)		276		4,160		22,858
2024	(8,172)		(46)		276		3,280		17,969
Thereafter	(19,394)		(1,442)		16,136		8,304		40,444
	$	(66,371)	$	(1,638)	$	17,309	$	29,322	$	161,129

7. OTHER ASSETS

Other assets on the condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019 included the following (in thousands):


	2020		2019
Predevelopment costs and earnest money	$	18,479	$	25,586
Furniture, fixtures and equipment, leasehold improvements, and other deferred costs, net of accumulated depreciation of $31,714 and $29,131 in 2020 and 2019, respectively	17,427		17,791
Prepaid expenses and other assets	7,713		5,924
Lease inducements, net of accumulated amortization of $3,051 and $2,333 in 2020 and 2019, respectively	5,387		5,632
Line of credit deferred financing costs, net of accumulated amortization of $4,082 and $2,952 in 2020 and 2019, respectively	3,397		4,516
	$	52,403	$	59,449

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8. NOTES PAYABLE

The following table summarizes the terms of notes payable outstanding at September 30, 2020 and December 31, 2019 ($ in thousands):


Description	Interest Rate (1)	Maturity (2)	2020		2019
Unsecured Notes:
Credit Facility, Unsecured	1.20%	2023	$	—	$	251,500
Term Loan, Unsecured	1.35%	2021	250,000		250,000
2019 Senior Notes, Unsecured	3.95%	2029	275,000		275,000
2017 Senior Notes, Unsecured	3.91%	2025	250,000		250,000
2019 Senior Notes, Unsecured	3.86%	2028	250,000		250,000
2019 Senior Notes, Unsecured	3.78%	2027	125,000		125,000
2017 Senior Notes, Unsecured	4.09%	2027	100,000		100,000
			1,250,000		1,501,500
Secured Mortgage Notes:
Fifth Third Center	3.37%	2026	137,886		140,332
Terminus 100	5.25%	2023	115,800		118,146
Colorado Tower	3.45%	2026	115,273		117,085
Promenade	4.27%	2022	93,455		95,986
816 Congress	3.75%	2024	78,678		79,987
Terminus 200	3.79%	2023	74,791		76,079
Legacy Union One	4.24%	2023	66,000		66,000
Meridian Mark Plaza	6.00%	2020	—		22,978
			681,883		716,593
			$	1,931,883	$	2,218,093

Unamortized premium			8,491		11,239
Unamortized loan costs			(5,469)		(6,357)
Total Notes Payable			$	1,934,905	$	2,222,975

(1) Interest rate as of September 30, 2020.

(2) Weighted average maturity of notes payable outstanding at September 30, 2020 was 5.2 years.

Credit Facility

The Company has a $1 billion senior unsecured line of credit (the "Credit Facility") that matures on January 3, 2023. The Credit Facility contains financial covenants that require, among other things, the maintenance of an unencumbered interest coverage ratio of at least 1.75; a fixed charge coverage ratio of at least 1.50; a secured leverage ratio of no more than 40%; and an overall leverage ratio of no more than 60%. The Credit Facility also contains customary representations and warranties and affirmative and negative covenants, as well as customary events of default. The amounts outstanding under the Credit Facility may be accelerated upon the occurrence of any events of default. The Company is in compliance with all covenants of the Credit Facility.

The interest rate applicable to the Credit Facility varies according to the Company's leverage ratio, and may, at the election of the Company, be determined based on either (1) the current London Interbank Offering Rate ("LIBOR") plus a spread of between 1.05% and 1.45%, or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50%, or the one-month LIBOR plus 1.0% (the "Base Rate"), plus a spread of between 0.10% or 0.45%, based on leverage.

At September 30, 2020, the Credit Facility's spread over LIBOR was 1.05%. The amount that the Company may draw under the Credit Facility is a defined calculation based on the Company's unencumbered assets and other factors. The total available borrowing capacity under the Credit Facility was $1.0 billion at September 30, 2020.

Term Loan

The Company has a $250 million unsecured term loan (the "Term Loan") that matures on December 2, 2021. The Term Loan has financial covenants consistent with those of the Credit Facility. The interest rate applicable to the Term Loan varies according to

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the Company’s leverage ratio and may, at the election of the Company, be determined based on either (1) the current LIBOR plus a spread of between 1.20% and 1.70%, based on leverage or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50%, or the one-month LIBOR plus 1.00% (the “Base Rate”), plus a spread of between 0.00% and 0.75%, based on leverage. At September 30, 2020, the Term Loan's spread over LIBOR was 1.20%. The Company is in compliance with all covenants of the Term Loan.

Unsecured Senior Notes

The Company has unsecured senior notes of $1.0 billion that were funded in five tranches. The first tranche of $100 million is due in 2027 and has a fixed annual interest rate of 4.09%. The second tranche of $250 million is due in 2025 and has a fixed annual interest rate of 3.91%. The third tranche of $125 million is due in 2027 and has a fixed annual interest rate of 3.78%. The fourth tranche of $250 million is due in 2028 and has a fixed annual interest rate of 3.86%. The fifth tranche of $275 million is due in 2029 and has a fixed annual interest rate of 3.95%.

The unsecured senior notes contain financial covenants that require, among other things, the maintenance of an unencumbered interest coverage ratio of at least 1.75; a fixed charge coverage ratio of at least 1.50; an overall leverage ratio of no more than 60%; and a secured leverage ratio of no more than 40%. The senior notes also contain customary representations and warranties and affirmative and negative covenants, as well as customary events of default. The Company is in compliance with all covenants of the unsecured senior notes.

Mortgage Notes

On February 3, 2020, the Company prepaid in full, without penalty, the $23.0 million Meridian Mark Plaza mortgage note.

Other Debt Information

At September 30, 2020 and December 31, 2019, the estimated fair value of the Company’s notes payable was $2.1 billion and $2.3 billion, respectively, calculated by discounting the debt's remaining contractual cash flows at estimated rates at which similar loans could have been obtained at September 30, 2020 and December 31, 2019. The estimate of the current market rate, which is the most significant input in the discounted cash flow calculation, is intended to replicate debt of similar maturity and loan-to-value relationship. These fair value calculations are considered to be Level 2 under the guidelines as set forth in ASC 820 as the Company utilizes market rates for similar type loans from third party brokers.

For the three and nine months ended September 30, 2020 and 2019, interest expense was recorded as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Total interest incurred	$	17,780	$	18,918	$	56,944	$	43,928
Interest capitalized	(2,722)		(4,218)		(11,989)		(6,349)
Total interest expense	$	15,058	$	14,700	$	44,955	$	37,579

9. OTHER LIABILITIES

Other liabilities on the condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019 included the following (in thousands):


	2020		2019
Ground lease liability	$	58,958	$	59,379
Prepaid rent	29,242		33,428
Security deposits	13,257		13,545
Restricted stock unit liability	8,393		16,592
Other liabilities	5,312		11,184
	$	115,162	$	134,128

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10. COMMITMENTS AND CONTINGENCIES

Commitments

At September 30, 2020, the Company had outstanding performance bonds totaling $1.2 million. As a lessor, the Company had $174.6 million in future obligations under leases to fund tenant improvements and other future construction obligations at September 30, 2020.

Litigation

The Company is subject to various legal proceedings, claims, and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, the Company discloses the nature and estimate of the possible loss of the litigation. The Company does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss would not be material. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business, or financial condition of the Company.

Contingencies

Recent events related to the COVID-19 pandemic and the actions taken to contain it have created substantial uncertainty for all businesses, including the Company. The Company’s condensed consolidated financial statements as of and for the three and nine months ended September 30, 2020 have been prepared in light of these circumstances. We have continued to follow the policies described in our footnotes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, including those related to impairment and estimates of the likelihood of collectibility of amounts due from tenants. While our current analysis did not result in any impairments or material valuation adjustments to amounts due from tenants as of September 30, 2020, circumstances related to the COVID-19 pandemic may result in recording impairments or material valuation adjustments to amounts due from tenants in future periods.

In limited circumstances to date, we have entered into lease amendments with certain tenants, a majority of which are small retail operators who have experienced disruptions in their business as a result of the pandemic. Some of these agreements forgive rents in 2020 and extend the lease term for the equivalent number of months at the end of the original lease. These rent forgiveness and extension agreements will be accounted for as lease modifications, and the Company will recognize the effects over time through straight-line rent. Other agreements provide for payment deferrals without extensions. The Company will also account for these deferral agreements as lease modifications and has included these deferred payments in deferred rents receivable on the accompanying condensed consolidated balance sheet.

11. STOCKHOLDERS' EQUITY

In the first quarter of 2020, the Company issued 1.7 million shares of common stock in connection with the redemption of 1.7 million limited partnership units in CPLP. Each of the redeemed limited partnership units in CPLP was "paired" with a share of limited voting preferred stock with a par value of $1 per share. The shares of limited voting preferred stock were automatically redeemed by Cousins without consideration when their paired limited partnership unit in CPLP was redeemed. Holders of limited voting preferred stock are entitled to one vote on the following matters only: the election of directors, any proposed amendment of the Company's Articles of Incorporation, any merger or other business combination of the Company, any sale of substantially all of the Company's assets, and any liquidation of the Company. Holders of limited voting preferred stock are not entitled to any dividends or distributions and the limited voting preferred stock is not convertible into or exchangeable for any other property or securities of the Company.

As of September 30, 2020, the Company had no preferred stock outstanding.

12. STOCK-BASED COMPENSATION

The Company has several types of stock-based compensation — stock options, restricted stock, and restricted stock units (“RSUs”).

The Company's compensation expense for the three and nine months ended September 30, 2020 relates to restricted stock and RSUs awarded in 2018, 2019, and 2020. Compensation expense for the nine months ended September 30, 2020 also includes expenses

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related to restricted stock and RSUs awarded in 2017. Restricted stock and the 2020 RSUs are equity-classified awards for which the compensation expense per share is fixed. The 2018 and 2019 RSUs are liability-classified awards for which the expense fluctuates from period to period dependent, in part, on both the Company's stock price and on the Company's stock performance relative to its peers. For the three and nine months ended September 30, 2020 and 2019, stock-based compensation expense, net of forfeitures, was recorded as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Equity-classified awards	$	930	$	616	$	3,354	$	1,847
Liability-classified awards	603		(549)		1,363		4,868
Total stock-based compensation expense, net of forfeitures	$	1,533	$	67	$	4,717	$	6,715

On April 23, 2019, the Company's stockholders approved the Cousins Properties Incorporated 2019 Omnibus Incentive Stock Plan (the "2019 Plan"). The Company also maintains the Cousins Properties Incorporated 2009 Incentive Stock Plan (the "2009 Plan") and the Cousins Properties Incorporated 2005 Restricted Stock Unit Plan (the “RSU Plan”), although no further awards are permitted under the 2009 plan or RSU Plan.

Under the 2019 Plan, during the nine months ended September 30, 2020, the Company made restricted stock grants of 71,421 shares to key employees, which vest ratably over a three-year period. Also under the 2019 Plan, during the nine months ended September 30, 2020, the Company awarded two types of RSUs to key employees based on the following metrics: (1) Total Stockholder Return of the Company, as defined in the 2019 Plan, as compared to the companies in the SNL US REIT Office index (“Market-based RSUs”), and (2) the ratio of cumulative funds from operations (“FFO”) per share to targeted cumulative FFO per share (“Performance-based RSUs”), as defined in the 2019 Plan. The measurement period for both awards is January 1, 2020 to December 31, 2022, and the targeted units awarded of Market-based RSUs and Performance-based RSUs was 71,038 and 30,447, respectively. The ultimate settlement of these awards can range from 0% to 200% of the targeted number of units depending on the achievement of the market and performance metrics described above. These RSU awards cliff vest on December 31, 2022 and are to be settled in the Company’s common stock with settlement dependent on attainment of required service, market, and performance criteria. The number of RSUs vesting will be determined by the Compensation Committee. The Company expenses an estimate of the fair value of the Market-based RSUs, calculated using a Monte Carlo valuation at grant date, ratably over the vesting period, adjusting for forfeitures when they occur. The Performance-based RSUs are expensed over the vesting period based on the Company’s share price on the grant date. The expense is recognized ratably over the vesting period and adjusted each quarter based on the number of shares expected to vest and for forfeitures when they occur. Dividend equivalents on the Market-based RSUs and the Performance-based RSUs will also be settled in shares of the Company’s common stock based upon the number of units vested.

Under the 2019 Plan, during the quarter ended June 30, 2020, the Company issued 34,059 shares of common stock to members of its board of directors, reflecting the regular equity component of the non-executive director annual compensation, along with the exercise by some directors to receive common stock in lieu of all or a portion of the cash component of their annual compensation. The Company recorded $1.1 million in general and administrative expense related to these issuances.

The Company’s stock compensation plan, including information on stock options, restricted stock, and RSUs granted in 2018 and 2019, is described in note 15 of the notes to consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

13. REVENUE RECOGNITION

The Company categorizes its primary sources of revenue into revenue from contracts with customers and other revenue accounted for as leases under ASC 842 as follows:

•Rental property revenues consist of (1) contractual revenues from leases recognized on a straight-line basis over the term of the respective lease; (2) percentage rents recognized once a specified sales target is achieved; (3) parking revenue; (4) termination fees; and (5) the reimbursement of the tenants' share of real estate taxes, insurance, and other operating expenses. The Company's leases typically include renewal options and are classified and accounted for as operating leases. Rental property revenues are accounted for in accordance with the guidance set forth in ASC 842.

•Fee income consists of development fees, management fees, and leasing fees earned from unconsolidated joint ventures and from third parties. Fee income is accounted for in accordance with the guidance set forth in ASC 606.

For the three and nine months ended September 30, 2020, the Company recognized rental property revenues of $179.0 million and $543.3 million, respectively, of which $47.1 million and $145.4 million, respectively, represented variable rental revenue. For the three and nine months ended September 30, 2019, the Company recognized rental property revenues of $180.8 million and $439.6 million, respectively, of which $53.9 million and $122.8 million, respectively, represented variable rental revenue.

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For the three and nine months ended September 30, 2020, the Company recognized fee and other revenue of $4.4 million and $13.9 million, respectively. For the three and nine months ended September 30, 2019, the Company recognized fee and other revenue of $7.5 million and $23.5 million, respectively.

14. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2020 and 2019 (in thousands, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Earnings per Common Share - basic:
Numerator:
Net income	$	28,255	$	20,692	$	226,800	$	34,115
Net income attributable to noncontrolling interests in CPLP from continuing operations	(5)		(241)		(312)		(564)
Net income attributable to other noncontrolling interests	(135)		(77)		(329)		(245)
Net income available to common stockholders	$	28,115	$	20,374	$	226,159	$	33,306

Denominator:
Weighted average common shares - basic	148,566		146,762		148,181		121,758


Net income per common share - basic	$	0.19	$	0.14	$	1.53	$	0.27

Earnings per common share - diluted:
Numerator:
Net income	$	28,255	$	20,692	$	226,800	$	34,115
Net income attributable to other noncontrolling interests	(135)		(77)		(329)		(245)
Net income available for common stockholders before allocation of net income attributable to noncontrolling interests in CPLP	$	28,120	$	20,615	$	226,471	$	33,870

Denominator:
Weighted average common shares - basic	148,566		146,762		148,181		121,758
Add:
Potential dilutive common shares - stock options	3		24		5		27
Potential dilutive common shares - restricted stock units, less shares assumed purchased at market price	12		—		12		—
Weighted average units of CPLP convertible into common shares	25		1,744		388		1,744
Weighted average common shares - diluted	148,606		148,530		148,586		123,529


Net income per common share - diluted	$	0.19	$	0.14	$	1.52	$	0.27

Antidilutive restricted stock units, less share assumed purchased at market price, and antidilutive stock options outstanding	1		—		—		—

For the three months ended September 30, 2020, 1,000 restricted stock units, less shares assumed purchased at market price, respectively, were not included in the diluted weighted average common shares because they would have been antidilutive for the period presented. These restricted stock units could be dilutive in the future.

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15. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL INFORMATION

Supplemental information related to the cash flows, including significant non-cash activity affecting the condensed consolidated statement of cash flows, for the nine months ended September 30, 2020 and 2019 is as follows (in thousands):


	2020		2019
Interest paid	$	56,761	$	39,592
Non-Cash Activity:
Transfers from projects under development to operating properties	443,932		—
Common stock dividends declared and accrued	44,569		42,567
Transfer from land held and other assets to projects under development	29,121		—
Change in accrued property, acquisition, development, and tenant expenditures	35,707		22,599
Non-cash assets and liabilities assumed in TIER transaction	—		1,512,373
Ground lease right-of-use assets and associated liabilities	—		56,294
Non-cash consideration for property acquisition	—		10,071

The following table provides a reconciliation of cash, cash equivalents, and restricted cash recorded on the condensed consolidated balance sheets to cash, cash equivalents, and restricted cash in the condensed consolidated statements of cash flows (in thousands):


	September 30, 2020		December 31, 2019
Cash and cash equivalents	$	36,872	$	15,603
Restricted cash	1,847		2,005
Total cash, cash equivalents, and restricted cash	$	38,719	$	17,608

16. REPORTABLE SEGMENTS

The Company's segments are based on its method of internal reporting, which classifies operations by property type and geographical area. The segments by property type are: Office and Mixed-Use. The segments by geographical region are: Atlanta, Austin, Charlotte, Dallas, Phoenix, Tampa, and Other. Included in Other is a property in Cherry Hill, New Jersey that was sold in February 2020 and properties located in Chapel Hill, Fort Worth, and Houston. These reportable segments represent an aggregation of operating segments reported to the Chief Operating Decision Maker based on similar economic characteristics that include the type of property and the geographical location. Each segment includes both consolidated operations and the Company's share of unconsolidated joint venture operations.

Company management evaluates the performance of its reportable segments in part based on net operating income (“NOI”). NOI represents rental property revenues, less termination fees, less rental property operating expenses. NOI is not a measure of cash flows or operating results as measured by GAAP, is not indicative of cash available to fund cash needs, and should not be considered an alternative to cash flows as a measure of liquidity. All companies may not calculate NOI in the same manner. The Company considers NOI to be an appropriate supplemental measure to net income as it helps both management and investors understand the core operations of the Company's operating assets. NOI excludes corporate general and administrative expenses, interest expense, depreciation and amortization, impairments, gains/loss on sales of real estate, and other non-operating items.

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Segment net income, amount of capital expenditures, and total assets are not presented in the following tables because management does not utilize these measures when analyzing its segments or when making resource allocation decisions. Information on the Company's segments along with a reconciliation of NOI to net income for the three and nine months ended September 30, 2020 and 2019 are as follows (in thousands):


Three Months Ended September 30, 2020	Office		Mixed-Use		Total
Revenues:
Atlanta	$	64,677	$	175	$	64,852
Austin	52,008		—		52,008

Charlotte	20,370		—		20,370
Dallas	4,601		—		4,601
Phoenix	12,689		—		12,689
Tampa	13,179		—		13,179
Other	16,354		1,193		17,547
Total segment revenues	183,878		1,368		185,246
Less: Company's share of rental property revenues from unconsolidated joint ventures	(4,854)		(1,368)		(6,222)
Total rental property revenues	$	179,024	$	—	$	179,024


Three Months Ended September 30, 2019	Office		Mixed-Use		Total
Revenues:
Atlanta	$	60,486	$	—	$	60,486
Austin	50,614		—		50,614
Charlotte	34,762		—		34,762
Dallas	4,274		—		4,274
Phoenix	12,754		—		12,754
Tampa	14,335		—		14,335
Other	17,290		1,101		18,391
Total segment revenues	194,515		1,101		195,616
Less: Company's share of rental property revenues from unconsolidated joint ventures	(13,689)		(1,101)		(14,790)
Total rental property revenues	$	180,826	$	—	$	180,826


Nine Months Ended September 30, 2020	Office		Mixed-Use		Total
Revenues
Atlanta	$	193,012	$	339	$	193,351
Austin	155,009		—		155,009

Charlotte	75,411		—		75,411
Dallas	13,559		—		13,559
Phoenix	37,932		—		37,932
Tampa	40,203		—		40,203
Other	46,092		3,631		49,723
Total segment revenues	561,218		3,970		565,188
Less: Company's share of rental property revenues from unconsolidated joint ventures	(17,966)		(3,970)		(21,936)
Total rental property revenues	$	543,252	$	—	$	543,252

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Nine Months Ended September 30, 2019	Office		Mixed-Use		Total
Revenues:
Atlanta	$	177,455	$	—	$	177,455
Austin	110,521		—		110,521
Charlotte	85,258		—		85,258
Dallas	5,078				5,078
Phoenix	38,562		—		38,562
Tampa	40,776		—		40,776
Other	21,416		3,378		24,794
Total segment revenues	479,066		3,378		482,444
Less: Company's share of rental property revenues from unconsolidated joint ventures	(39,442)		(3,378)		(42,820)
Total rental property revenues	$	439,624	$	—	$	439,624

NOI by reportable segment for the three and nine months ended September 30, 2020 and 2019 are as follows (in thousands):


Three Months Ended September 30, 2020	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	43,360	$	28	$	43,388
Austin	31,639		—		31,639

Charlotte	14,621		—		14,621
Dallas	3,688		—		3,688
Phoenix	9,205		—		9,205
Tampa	8,230		—		8,230
Other	8,483		762		9,245
Total Net Operating Income	$	119,226	$	790	$	120,016


Three Months Ended September 30, 2019	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	38,926	$	—	$	38,926
Austin	29,452		—		29,452
Charlotte	21,692		—		21,692
Dallas	3,416		—		3,416
Phoenix	8,913		—		8,913
Tampa	8,309		—		8,309
Other	9,266		668		9,934
Total Net Operating Income	$	119,974	$	668	$	120,642

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Nine Months Ended September 30, 2020	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	129,924	$	(45)	$	129,879
Austin	92,161		—		92,161

Charlotte	51,214		—		51,214
Dallas	10,907		—		10,907
Phoenix	27,920		—		27,920
Tampa	24,372		—		24,372
Other	26,008		2,469		28,477
Total Net Operating Income	$	362,506	$	2,424	$	364,930


Nine Months Ended September 30, 2019	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	115,692	$	—	$	115,692
Austin	63,977		—		63,977

Charlotte	55,550		—		55,550
Dallas	4,086		—		4,086
Phoenix	27,694		—		27,694
Tampa	24,869		—		24,869
Other	11,678		2,244		13,922
Total Net Operating Income	$	303,546	$	2,244	$	305,790

The following reconciles Net Operating Income to net income for each of the periods presented (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net Operating Income	$	120,016	$	120,642	$	364,930	$	305,790
Net operating income from unconsolidated joint ventures	(4,208)		(9,037)		(14,436)		(26,289)
Fee income	4,350		7,494		13,772		23,298
Termination fee income	372		3,575		3,755		4,285
Other income	6		3		169		154
Reimbursed expenses	(373)		(1,290)		(1,216)		(3,269)
General and administrative expenses	(5,658)		(5,852)		(19,853)		(25,686)
Interest expense	(15,058)		(14,700)		(44,955)		(37,579)
Depreciation and amortization	(71,498)		(82,012)		(215,980)		(178,777)
Acquisition and transaction costs	—		(1,048)		(428)		(50,878)
Other expenses	(723)		(297)		(1,841)		(1,101)
Income from unconsolidated joint ventures	1,611		3,241		6,751		9,779
Gain (loss) on sales of investments in unconsolidated joint ventures	(59)		—		45,940		—
Gain (loss) on investment property transactions	(523)		(27)		90,192		14,388

Net income	$	28,255	$	20,692	$	226,800	$	34,115

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview:

Cousins Properties Incorporated ("Cousins") (and collectively, with its subsidiaries, the "Company," "we," "our," or "us") is a publicly traded (NYSE: CUZ), self-administered, and self-managed real estate investment trust, or REIT. Cousins conducts substantially all of its business through Cousins Properties, LP ("CPLP"). Cousins owns over 99% of CPLP and consolidates CPLP. CPLP owns Cousins TRS Services LLC, a taxable entity which owns and manages its own real estate portfolio and performs certain real estate related services for other parties. Our strategy is to create value for our stockholders through ownership of the premier urban office portfolio in the Sun Belt markets, with a particular focus on Georgia, Texas, North Carolina, Arizona, and Florida. This strategy is based on a disciplined approach to capital allocation that includes strategic acquisitions, selective development projects, and timely dispositions of non-core assets. This strategy is also based on a simple, flexible, and low-leveraged balance sheet that allows us to pursue investment opportunities at the most advantageous points in the cycle. To implement this strategy, we leverage our strong local operating platforms within each of our major markets.

Consistent with this strategy, on June 14, 2019, we merged with TIER REIT, Inc. ("TIER") in a stock-for-stock transaction (the "Merger"). As a result, we acquired interests in nine operating properties containing 5.8 million square feet of space, two office properties under development that are expected to add 620,000 square feet of space upon completion, and seven strategically located land parcels on which up to 2 million square feet of additional space may be developed. As a part of this transaction, we issued $650 million in senior unsecured debt at a weighted average interest rate of 3.88%, which effectively replaced the majority of the TIER debt assumed in the Merger. We believe that this merger created a company with an attractive portfolio of trophy office assets balanced across the premier Sun Belt markets. We believe that the Merger has enhanced our position in our existing markets of Austin and Charlotte, provided a strategic entry into Dallas, and balanced our exposure in Atlanta. The Merger is also enhancing growth and providing value-add opportunities as a result of TIER's active and attractive development portfolio and land bank. As of September 30, 2020, our portfolio of real estate assets consisted of interests in 35 operating properties (34 office and one mixed-use), containing 19.4 million square feet of space, and six projects (five office and one mixed-use) under active development.

During the second quarter of 2020, we purchased a 1,550 space parking garage in Charlotte, North Carolina for a gross purchase price of $85.0 million.

During the quarter, we leased or renewed 255,000 square feet of office space. The weighted average net effective rent of these leases, representing base rent less operating expense reimbursements and leasing costs, was $21.46 per square foot. For those office spaces that were under lease within the past year, net effective rent increased 24.7%. Same property net operating income (defined below) for consolidated properties and our share of unconsolidated properties decreased by 0.4% between the three months ended September 30, 2020 and 2019. The decrease in same property net operating income is primarily driven by decreases in parking revenue resulting from decreased physical occupancy at our properties during the quarter. The change in same property net operating income, excluding parking, would have been an increase of 1.6%.

On a regular basis we review and, as appropriate, revise our corporate contingency plan, which addresses the steps necessary to respond to an unexpected interruption of business, including the unavailability of our corporate office space. Since March 2020, in accordance with the advice of the CDC due to the threat presented by the ongoing COVID-19 pandemic, our tenants widely adopted teleworking for their office employees, and we increased our janitorial cleaning protocols in our buildings. The rental obligations under our leases have not been materially affected by the COVID-19 pandemic to date, and any requests for rent adjustments are addressed on a case-by-case basis. We also have worked closely with essential vendors, including the contractors and others involved in our development projects, to assess potential impact of appropriate and necessary distancing measures upon our operations and our development delivery timelines.

Although the impact to our business of the COVID-19 pandemic has not been severe to date, the long-term impact of the pandemic on our tenants or prospective tenants and the world-wide economy is uncertain and will depend on the scope, severity, and duration of the pandemic. A prolonged economic downturn resulting from the pandemic could adversely affect many of our tenants or prospective tenants, which could, in turn, adversely impact our business, financial condition, and results of operations.

On June 14, 2019, we restated and amended our articles of incorporation to effect a reverse stock split of the issued and outstanding shares of its common stock pursuant to which, (1) each four shares of our issued and outstanding common stock and preferred stock were combined into one share of our common stock or preferred stock, as applicable, and (2) the authorized number of our common stock was proportionally reduced to 175 million shares. Fractional shares of common stock resulting from the reverse stock split were settled in cash. Fractional shares of preferred stock resulting from the reverse stock split were redeemed without payout. Immediately thereafter, we further amended our articles of incorporation to increase the number of authorized shares of our common stock from 175 million to 300 million shares.

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Results of Operations

General

Our financial results have been significantly affected by the Merger. Our results have also been affected by a series of transactions we entered into on March 1, 2019 with Norfolk Southern Railway Company ("NS") whereby we executed an agreement to develop NS's corporate headquarters in Midtown Atlanta and purchased 1200 Peachtree, a 370,000 square foot office building in Midtown Atlanta, from NS that is 100% leased by NS. Additionally our results have been affected by various property acquisitions and dispositions, including the sale of the Hearst Tower and Woodcrest operating properties and sale of our interest in the Gateway and Wildwood joint ventures that occurred in the first quarter of 2020 and purchase of a parking garage in Charlotte in the second quarter of 2020. Accordingly, our historical financial statements may not be indicative of future operating results.

Rental Property Revenue, Rental Property Operating Expenses, and Net Operating Income

The following table summarizes rental property revenues, rental property operating expenses, and net operating income ("NOI") for each of the periods presented, including our same property portfolio. NOI represents rental property revenue (excluding lease termination fees) less rental property operating expenses. Our same property portfolio is comprised of office properties that have been fully operational in each of the comparable reporting periods. A fully operational property is one that has achieved 90% economic occupancy or has been substantially completed and owned by us for the entirety of each of the periods presented. This information is presented for consolidated properties only and does not include net operating income from our unconsolidated joint ventures.


	Three Months Ended September 30,								Nine Months Ended September 30,
	2020		2019		$ Change		% Change		2020		2019		$ Change		% Change
Rental Property Revenues
Same Property	$	111,654	$	115,293	$	(3,639)	(3.2)	%	$	334,584	$	342,000	$	(7,416)	(2.2)	%
Legacy TIER Properties	51,469		52,095		(626)		(1.2)	%	154,148		61,746		92,402		149.6	%
Other Non-Same Properties	15,901		13,438		2,463		18.3	%	54,520		35,878		18,642		52.0	%
Total Rental Property Revenues	$	179,024	$	180,826	$	(1,802)	(1.0)	%	$	543,252	$	439,624	$	103,628	23.6	%

Rental Property Operating Expenses
Same Property	$	39,861	$	42,453	$	(2,592)	(6.1)	%	$	115,090	$	123,054	$	(7,964)	(6.5)	%
Legacy TIER Properties	18,424		20,012		(1,588)		(7.9)	%	57,462		23,245		34,217		147.2	%
Other Non-Same Properties	4,559		3,181		1,378		43.3	%	16,451		9,539		6,912		72.5	%
Total Rental Property Operating Expenses	$	62,844	$	65,646	$	(2,802)	(4.3)	%	$	189,003	$	155,838	$	33,165	21.3	%

Net Operating Income
Same Property NOI	$	71,462	$	71,843	$	(381)	(0.5)	%	$	217,229	$	217,223	$	6	—	%
Legacy TIER Properties	33,005		31,556		1,449		4.6	%	96,538		37,975		58,563		154.2	%
Other Non-Same Properties	11,341		8,206		3,135		38.2	%	36,727		24,303		12,424		51.1	%
Total NOI	$	115,808	$	111,605	$	4,203	3.8	%	$	350,494	$	279,501	$	70,993	25.4	%

Same property rental property revenues decreased in the three and nine month periods primarily due to a decrease in parking revenue earned at the properties.

Same property rental property operating expenses decreased in the three and nine month periods primarily due to a decrease in expenses at properties resulting from lower physical occupancy during the period. The decrease in the nine month period is also due to a settlement that resulted in the recovery of previously incurred legal expenses at 3344 Peachtree.

Revenues and expenses for Legacy TIER properties represent amounts recorded for the properties acquired in the Merger on June 14, 2019.

Revenues and expenses of Other Non-Same Properties increased in the three month and nine month periods primarily as a result of the addition of 1200 Peachtree in March 2019 and of Terminus, which was consolidated in October 2019 when we purchased our partner's interest in Terminus Office Holdings LLC ("TOH"), partially offset by the sale of Hearst Tower in March of 2020.

Fee Income

Fee income decreased $3.1 million (42%) and $9.5 million (40.9%) between the 2020 and 2019 three and nine month periods, respectively. The decrease is primarily driven by fee income related to the 2019 transactions with NS.

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General and Administrative Expenses

General and administrative expenses decreased $5.8 million (22.7%) between the 2020 and 2019 nine month period. This decrease is primarily driven by long-term compensation expense decreases as a result of fluctuations in our common stock price for our liability-classified awards.

Interest Expense

Interest expense, net of amounts capitalized, increased $7.4 million (19.6%) between the 2020 and 2019 nine month period. This increase is primarily due to interest incurred on the unsecured senior notes issued in June 2019 and an increase in the average outstanding balance on our $1 billion senior unsecured line of credit (the "Credit Facility) during the first two quarters of 2020.

Depreciation and Amortization


	Three Months Ended September 30,								Nine Months Ended September 30,
	2020		2019		$ Change		% Change		2020		2019		$ Change		% Change
Depreciation and Amortization
Same Property	$	38,834	$	41,763	$	(2,929)	(7.0)	%	$	119,471	$	123,451	$	(3,980)	(3.2)	%
Legacy TIER Properties	25,541		24,973		568		2.3	%	75,168		29,890		45,278		151.5	%
Other Non-Same Properties	6,969		14,832		(7,863)		(53.0)	%	20,807		24,083		(3,276)		(13.6)	%
Non-Real Estate Assets	154		444		(290)		(65.3)	%	534		1,353		(819)		(60.5)	%
Total Depreciation and Amortization	$	71,498	$	82,012	$	(10,514)	(12.8)	%	$	215,980	$	178,777	$	37,203	20.8	%

Depreciation and amortization for Legacy TIER properties represent amounts recorded on the properties acquired in the Merger on June 14, 2019.

Depreciation and amortization of Other Non-Same Properties decreased in the three and nine month period primarily as a result of the sale of Hearst Tower in March 2020 partially offset in the nine month period by the addition of 1200 Peachtree in March 2019 and of Terminus, which was consolidated in October 2019 when we purchased our partner's interest in TOH.

Transaction Costs

Transaction costs for the three and nine months ended September 30, 2020 and 2019 primarily relate to the Merger. These costs include financial advisory, legal, accounting, severance, and other costs of combining our operations with TIER.

Income from Unconsolidated Joint Ventures

Income from unconsolidated joint ventures consisted of the Company's share of the following (in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2020		2019		$ Change		% Change		2020		2019		$ Change		% Change
Net operating income	$	4,208	$	9,037	$	(4,829)	(53.4)	%	$	14,436	$	26,289	$	(11,853)	(45.1)	%
Termination fee income	5		9		(4)		(44.4)	%	8		16		(8)		(50.0)	%
Other income, net	(23)		20		(43)		(215.0)	%	53		99		(46)		(46.5)	%

Depreciation and amortization	(2,125)		(4,148)		2,023		(48.8)	%	(6,578)		(11,556)		4,978		(43.1)	%
Interest expense	(439)		(1,677)		1,238		(73.8)	%	(1,639)		(5,064)		3,425		(67.6)	%
Net gain (loss) on sale of investment property	(15)		—		(15)		(100.0)	%	471		(5)		476		(9,520.0)	%
Income from unconsolidated joint ventures	$	1,611	$	3,241	$	(1,630)	(50.3)	%	$	6,751	$	9,779	$	(3,028)	(31.0)	%

Net operating income, depreciation and amortization, and interest expense from unconsolidated joint ventures decreased between the three and nine month periods primarily due to the consolidation of Terminus in October 2019 when we purchased our partner's interest in TOH and the sale of our interest in Gateway Village in March of 2020.

Gain on Sales of Investments in Unconsolidated Joint Ventures

The gain on sales of investments in unconsolidated joint ventures for the nine months ended September 30, 2020 includes the sale of our interests in the Wildwood Associates and Gateway Village joint ventures. The capitalization rate of Gateway Village was not a determinant of the sales price as, per the joint venture agreement, our interest was valued at a 17% internal rate of return on our invested capital. There was no capitalization rate associated with the sale of our interest in the Wildwood Associates joint venture as the underlying asset was land.

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Gain on Investment Property Transactions

The gain on investment property transactions for the nine months ended September 30, 2020 includes the sale of Hearst Tower. The combined sales prices of the Hearst Tower and Woodcrest dispositions represented a weighted average capitalization rate of 5.1%. Capitalization rates are calculated by dividing projected annualized NOI by the sales price.

Funds From Operations

The table below shows Funds from Operations (“FFO”) and the related reconciliation to net income available to common stockholders. We calculate FFO in accordance with the National Association of Real Estate Investment Trusts’ (“NAREIT”) definition, which is net income available to common stockholders (computed in accordance with GAAP), excluding extraordinary items, cumulative effect of change in accounting principle, and gains on sale or impairment losses on depreciable property, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures to reflect FFO on the same basis.

FFO is used by industry analysts and investors as a supplemental measure of a REIT’s operating performance. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, NAREIT created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from GAAP net income. The use of FFO, combined with the required primary GAAP presentations, has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. Company management evaluates operating performance in part based on FFO. Additionally, we use FFO, along with other measures, to assess performance in connection with evaluating and granting incentive compensation to its officers and other key employees. The reconciliation of net income to FFO is as follows for the three and nine months ended September 30, 2020 and 2019 (in thousands, except per share information):


	Three Months Ended September 30,
	2020						2019
	Dollars		Weighted Average Common Shares		Per Share Amount		Dollars		Weighted Average Common Shares		Per Share Amount
Net Income Available to Common Stockholders	$	28,115	148,566		$	0.19	$	20,374	146,762		$	0.14
Noncontrolling interest related to unitholders	5		25		—		241		1,744		—
Conversion of stock options	—		3		—		—		24		—
Conversion of unvested restricted stock units	—		12		—		—		—		—

Net Income — Diluted	28,120		148,606		0.19		20,615		148,530		0.14
Depreciation and amortization of real estate assets:
Consolidated properties	71,345		—		0.48		81,569		—		0.55
Share of unconsolidated joint ventures	2,125		—		0.02		4,148		—		0.03
Partners' share of real estate depreciation	(209)		—		—		(171)		—		—
Loss on sale of depreciated properties:
Consolidated properties	523		—		—		48		—		—
Share of unconsolidated joint ventures	15		—		—		—		—		—
Investments in unconsolidated joint ventures	59		—		—		—		—		—
Funds From Operations	$	101,978	148,606		$	0.69	$	106,209	148,530		$	0.72
TIER transaction costs	—		—		—		1,048		—		—
Funds From Operations before TIER transaction costs	$	101,978	$	148,606	$	0.69	$	107,257	$	148,530	$	0.72

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	Nine Months Ended September 30,
	2020					2019
	Dollars		Weighted Average Common Shares	Per Share Amount		Dollars		Weighted Average Common Shares	Per Share Amount
Net Income Available to Common Stockholders	$	226,159	148,181	$	1.53	$	33,306	121,758	$	0.27
Noncontrolling interest related to unitholders	312		388	(0.01)		564		1,744	—
Conversion of stock options	—		5	—		—		27	—
Conversion of unvested restricted stock units	—		12	—		—		—	—

Net Income — Diluted	226,471		148,586	1.52		33,870		123,529	0.27
Depreciation and amortization of real estate assets:
Consolidated properties	215,445		—	1.45		177,424		—	1.44
Share of unconsolidated joint ventures	6,578		—	0.05		11,556		—	0.09
Partners' share of real estate depreciation	(570)		—	—		(366)		—	—
(Gain) loss on sale of depreciated properties:
Consolidated properties	(90,192)		—	(0.61)		102		—	—
Share of unconsolidated joint ventures	(471)		—	—		5		—	—
Investments in unconsolidated joint ventures	(44,603)		—	(0.31)		—		—	—
Funds From Operations	$	312,658	148,586	$	2.10	$	222,591	123,529	$	1.80
TIER transaction costs	428		—	0.01		50,878		—	0.41
Funds From Operations before TIER transaction costs	$	313,086	148,586	$	2.11	$	273,469	123,529	$	2.21

Net Operating Income

Company management evaluates the performance of its property portfolio in part based on NOI. NOI represents rental property revenues, less termination fees, less rental property operating expenses. NOI is not a measure of cash flows or operating results as measured by GAAP, is not indicative of cash available to fund cash needs, and should not be considered an alternative to cash flows as a measure of liquidity. All companies may not calculate NOI in the same manner. The Company considers NOI to be an appropriate supplemental measure to net income as it helps both management and investors understand the core operations of the Company's operating assets. NOI excludes corporate general and administrative expenses, interest expense, depreciation and amortization, impairments, gains/loss on sales of real estate, and other non-operating items.

The following table reconciles NOI for consolidated properties to net income (loss) for each of the periods presented (in thousands):

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	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net income	$	28,255	$	20,692	$	226,800	$	34,115
Fee income	(4,350)		(7,494)		(13,772)		(23,298)
Termination fee income	(372)		(3,575)		(3,755)		(4,285)
Other income	(6)		(3)		(169)		(154)
Reimbursed expenses	373		1,290		1,216		3,269
General and administrative expenses	5,658		5,852		19,853		25,686
Interest expense	15,058		14,700		44,955		37,579
Depreciation and amortization	71,498		82,012		215,980		178,777
Acquisition and transaction costs	—		1,048		428		50,878
Other expenses	723		297		1,841		1,101
Income from unconsolidated joint ventures	(1,611)		(3,241)		(6,751)		(9,779)
(Gain) loss on sale of investments in unconsolidated joint ventures	59		—		(45,940)		—
(Gain) loss on investment property transactions	523		27		(90,192)		(14,388)

Net Operating Income	$	115,808	$	111,605	$	350,494	$	279,501

Liquidity and Capital Resources

Our primary short-term and long-term liquidity needs include the following:

•property and land acquisitions;

•expenditures on development projects;

•building improvements, tenant improvements, and leasing costs;

•principal and interest payments on indebtedness;

•general and administrative costs; and

•common stock dividends.

We may satisfy these needs with one or more of the following:

•cash and cash equivalents on hand;

•net cash from operations;

•proceeds from the sale of assets;

•borrowings under our Credit Facility;

•proceeds from mortgage notes payable;

•proceeds from construction loans;

•proceeds from unsecured loans;

•proceeds from offerings of equity securities; and

•joint venture formations.

As of September 30, 2020, we had available to us the entire $1.0 billion borrowing capacity under our Credit Facility and $36.9 million of cash and cash equivalents. While we expect to have sufficient liquidity to meet our obligations for the foreseeable future, the COVID-19 pandemic and associated responses could adversely impact our future cash flows and financial condition.

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Contractual Obligations and Commitments

The following table sets forth information as of September 30, 2020 with respect to our outstanding contractual obligations and commitments (in thousands):


	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 years
Contractual Obligations:
Company debt:
Unsecured credit facility (1)	$	—	$	—	$	—	$	—	$	—
Unsecured senior notes	1,000,000		—		—		—		1,000,000
Term loan	250,000		—		250,000		—		—
Mortgage notes payable	681,883		3,989		118,770		332,242		226,881
Interest commitments (2)	362,578		60,736		108,951		96,941		95,950
Ground leases	216,107		3,154		5,726		5,323		201,904
Other operating leases	263		161		98		4		—
Total contractual obligations	$	2,510,831	$	68,040	$	483,545	$	434,510	$	1,524,735
Commitments:
Unfunded tenant improvements and construction obligations	$	174,559	$	120,584	$	53,975	$	—	$	—

Performance bonds	1,192		1,192		—		—		—
Total commitments	$	175,751	$	121,776	$	53,975	$	—	$	—

(1)As of September 30, 2020, the entire $1.0 billion borrowing capacity was available to us under our Credit Facility.

(2)Interest on variable rate obligations is based on rates effective as of September 30, 2020.

In addition, we have several standing or renewable service contracts mainly related to the operation of buildings. These contracts are in the ordinary course of business and are generally one year or less. These contracts are not included in the above table and are usually reimbursed in whole or in part by tenants.

Other Debt Information

Our existing mortgage debt is primarily non-recourse, fixed-rate mortgage notes secured by various real estate assets. Many of our non-recourse mortgages contain covenants which, if not satisfied, could result in acceleration of the maturity of the debt. We expect to either refinance the non-recourse mortgages at maturity or repay the mortgages with proceeds from asset sales, debt, or other capital sources. We are in compliance with all covenants of our existing non-recourse mortgages, Credit Facility, unsecured senior notes, and $250 million unsecured term loan (the "Term Loan").

84% of our debt bears interest at a fixed rate. Our variable-interest debt instruments, including our Credit Facility and Term Loan, may use London Interbank Offering Rate ("LIBOR") as a benchmark for establishing the rate. LIBOR has been the subject of recent regulatory guidance and proposals for reform and in July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. These reforms may cause LIBOR to no longer be provided or to perform differently than in the past. If LIBOR is no longer widely available, or otherwise at our option, our variable-interest debt instruments, including our Credit Facility and term loan facilities, provide for alternate interest rate calculations.

There can be no assurances as to what alternative interest rates may be and whether such interest rates will be more or less favorable than LIBOR and any other unforeseen impacts of the potential discontinuation of LIBOR. The Company intends to continue monitoring the developments with respect to the potential phasing out of LIBOR after 2021 and work with its lenders to ensure any transition away from LIBOR will have minimal impact on its financial condition, but can provide no assurances regarding the impact of the discontinuation of LIBOR.

Future Capital Requirements

To meet capital requirements for future investment activities over the long term, we intend to actively manage our portfolio of properties, generating internal cash flows, and strategically sell assets. We expect to continue to utilize indebtedness to fund future commitments, if available and under appropriate terms. We may also seek equity capital and capital from joint venture partners to implement our strategy.

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Our business model is dependent upon raising or recycling capital to meet obligations and to fund development and acquisition activity. If one or more sources of capital are not available when required, we may be forced to reduce the number of projects we acquire or develop and/or raise capital on potentially unfavorable terms, or we may be unable to raise capital, which could have an adverse effect on our financial position or results of operations.

Cash Flows Summary

We report and analyze our cash flows based on operating activities, investing activities, and financing activities. The following table sets forth the changes in cash flows (in thousands):


	Nine Months Ended September 30,
	2020		2019		Change
Net cash provided by operating activities	$	259,007	$	198,365	$	60,642
Net cash provided by (used in) investing activities	178,333		(128,613)		306,946
Net cash used in financing activities	(416,229)		(57,783)		(358,446)

The reasons for significant increases and decreases in cash flows between the periods are as follows:

Cash Flows from Operating Activities. Cash flows from operating activities increased $60.6 million between the 2020 and 2019 nine month periods primarily due to an increase in net cash received from operations of properties acquired in the Merger in June 2019, of 1200 Peachtree, which was acquired in March 2019, and of Terminus, which was consolidated in October 2019 when we purchased our partner's interest in TOH, partially offset by operations at Hearst Tower, Woodcrest, and the Gateway Village joint venture which were sold in the first quarter of 2020.

Cash Flows from Investing Activities. Cash flows from investing activities increased $306.9 million between the 2020 and 2019 nine month periods primarily due to cash received from the sales of the Hearst Tower and Woodcrest operating properties, combined with the sales of our interests in the Gateway Village and Wildwood Associates joint ventures.

Cash Flows from Financing Activities. Cash flows from financing activities decreased $358.4 million between the 2020 and 2019 nine month periods primarily due to a decrease in net borrowings on our Credit Facility in 2020, which has no outstanding balance as of September 30, 2020.

Capital Expenditures. We incur costs related to our real estate assets that include acquisition of properties, development of new properties, redevelopment of existing or newly purchased properties, leasing costs for new or replacement tenants, and ongoing property repairs and maintenance.

Capital expenditures for assets we develop or acquire and then hold and operate are included in the property acquisition, development, and tenant asset expenditures line item within investing activities on the condensed consolidated statements of cash flows. Amounts accrued are removed from the table below (accrued capital adjustment) to show the components of these costs on a cash basis. Components of costs included in this line item for the nine months ended September 30, 2020 and 2019 are as follows (in thousands):


	Nine Months Ended September 30,
	2020		2019
Acquisition of property	$	95,985	$	82,120
Development	37,142		98,331
Operating — leasing costs	36,240		31,991
Operating — building improvements	78,277		44,670
Purchase of land held for investment	6,092		6,548
Capitalized interest	11,989		6,349
Capitalized personnel costs	4,670		4,624
Change in accrued capital expenditures	35,707		(22,599)
Total property acquisition, development, and tenant asset expenditures	$	306,102	$	252,034

Capital expenditures increased $54.1 million between the 2020 and 2019 nine month periods primarily due to the continued building and tenant improvements at Domain 12, which began recognizing income in the second quarter of 2020, and due to tenant improvements at Terminus, Northpark, 10000 Avalon, and Corporate Center. These increases were partially offset by a decrease in development expenditures as 120 West Trinity, 1000 Avalon, Domain 10, and Domain 12 have begun preliminary operational activity and are in the final stages of development. Tenant improvements and leasing costs, as well as related capitalized personnel costs, are a function of the number and size of newly executed leases or renewals of existing leases. The amounts of tenant improvement and

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leasing costs for our office portfolio on a per square foot basis for the three months ended September 30, 2020 and 2019 were as follows:


	2020	2019
New leases	$10.03	$7.44
Renewal leases	$3.87	$5.28
Expansion leases	$5.05	$7.80

The amounts of tenant improvement and leasing costs on a per square foot basis vary by lease and by market. Average leasing costs during the third quarter of 2020 increased for new leases primarily due to a lease in Cherry Hill, New Jersey signed in the third quarter of 2019 with lower than average tenant improvements and leasing costs and due to a lease in Charlotte signed in the third quarter of 2020 with higher than average tenant improvements, filling the space of a previous long-term tenant.

Dividends. We paid common dividends of $131.7 million and $100.4 million in the 2020 and 2019 nine month periods, respectively. We expect to fund our future quarterly common dividends with cash provided by operating activities, also using proceeds from investment property sales, distributions from unconsolidated joint ventures, and indebtedness, if necessary.

On a quarterly basis, we review the amount of the common dividend in light of current and projected future cash flows from the sources noted above and also consider the requirements needed to maintain our REIT status. In addition, we have certain covenants under credit agreements which could limit the amount of common dividends paid. In general, common dividends of any amount can be paid as long as leverage, as defined in our credit agreements, is less than 60% and we are not in default. Certain conditions also apply in which we can still pay common dividends if leverage is above that amount. We routinely monitor the status of our common dividend payments in light of the covenants of our credit agreements.

Off Balance Sheet Arrangements

General. We have a number of off balance sheet joint ventures with varying structures, as described in note 8 of our 2019 Annual Report on Form 10-K and note 5 of this Form 10-Q. The joint ventures in which we have an interest are involved in the ownership, acquisition, and/or development of real estate. A venture will fund capital requirements or operational needs with cash from operations or financing proceeds, if possible. If additional capital is deemed necessary, a venture may request a contribution from the partners, and we will evaluate such request.

Debt. At September 30, 2020, our unconsolidated joint ventures had aggregate outstanding indebtedness to third parties of $214.5 million. These loans are generally mortgage or construction loans, most of which are non-recourse to us except as described in the paragraph below. In addition, in certain instances, we provide “non-recourse carve-out guarantees” on these non-recourse loans. Certain of these loans have variable interest rates, which creates exposure to the ventures in the form of market risk from interest rate changes.

Following the April 2020 amendment, we no longer guarantee 12.5% of the loan amount related to the Carolina Square construction loan, which has a lending capacity of $79.8 million and an outstanding balance of $76.1 million as of September 30, 2020.

Critical Accounting Policies

There have been no material changes in the critical accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in the market risk associated with our notes payable at September 30, 2020 compared to that as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019.

Item 4. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management’s control objectives.

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As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer along with the Chief Financial Officer, of the effectiveness, design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon the foregoing, the Chief Executive Officer along with the Chief Financial Officer concluded that our disclosure controls and procedures were effective. In addition, based on such evaluation we have identified no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Information regarding legal proceedings is described under the subheading "Litigation" in note 10 to the unaudited condensed consolidated financial statements set forth in this Form 10-Q.

Item 1A. Risk Factors

Risk factors that affect our business and financial results are discussed in Part I, "Item 1A. Risk Factors," of our Annual Report on Form 10-K for the year ended December 31, 2019. There have been no material changes in our risk factors from those previously disclosed in our Annual Report other than as set forth below. You should carefully consider the risks described in our Annual Report and below, which could materially affect our business, financial condition or future results. The risks described in our Annual Report and below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.

A pandemic, epidemic or outbreak of a contagious disease, such as the ongoing global pandemic of COVID-19, could adversely affect us.

Public health crises, pandemics, and epidemics, such as the ongoing COVID-19 pandemic, have had, and could continue to have, a material adverse effect on global, national, and local economies, as well as on our business and our tenants’ businesses. The potential impact of a pandemic, epidemic, or outbreak of a contagious disease on our tenants and our properties is difficult to predict or assess. The extent to which the ongoing COVID-19 pandemic, including the outbreaks in Atlanta, Austin, Charlotte, Phoenix, Tampa, and Dallas and actions taken to contain or slow them, continues to impact our operations and those of our tenants, will depend on future developments. These may include the scope, severity, and duration of the pandemic, and the actions taken to mitigate its impact, all of which are highly uncertain and unpredictable, but could be material. Considerable uncertainty surrounds the nature of COVID-19 and its potential effects, and the extent of and effectiveness of any responses taken on a national and local level to try to contain it. The long-term impact of COVID-19 on the U.S. and global economies is uncertain and could result in a world-wide economic downturn and recession that may lead to corporate bankruptcies among our tenants. Any of these developments, and other effects of the ongoing global pandemic of COVID-19 or any other pandemic, epidemic, or outbreak of contagious disease, could adversely affect us.

In addition to the general economic impact of a pandemic, epidemic, or outbreak of a contagious disease, if an outbreak of COVID-19 occurs within the workforce of our tenants or otherwise disrupts their management and other personnel, the business and operating results of our tenants could be negatively impacted. Large-scale “shelter in place”, “stay safe”, or "social distancing" executive orders in Atlanta, Austin, Charlotte, Phoenix, Tampa, or Dallas, where we have high concentrations of our lease revenues, have caused many of our tenants, including retailers and restaurants, to stay closed or operate at reduced capacity for an extended period of time. Although many (but not all) of these restrictions have been gradually lifted, it remains unclear whether an initial surge in the level of business activity is likely to be sustained, especially if the areas in which our properties are located experience a resurgence in COVID-19 cases and/or are subject to the reimposition of previously lifted business restrictions or the imposition of new business restrictions. The negative impact upon our tenants may include an immediate reduction in cash flow available to pay rent under our leases, and although various governmental financial programs may mitigate this, governmental assistance may not be available to all affected tenants or may be significantly delayed or discontinued. In turn, our tenants' inability to pay rent under our leases could adversely affect our own liquidity, and there can be no guarantee that additional liquidity will be readily available or available on favorable terms in the future. Large-scale executive orders and other measures taken to curb the spread of COVID-19 may also negatively impact the ability of our properties to continue to obtain necessary goods and services or provide adequate staffing, which may also adversely affect our operating results and reputation. Any increased costs or lost revenue as a result of tenant financial difficulty, or their need to comply with executive orders and other guidance from the Centers for Disease Control and Prevention, may not be fully recoverable under our leases or adequately covered by insurance, which could impact our profitability. In addition to the potential consequences listed above, these same factors may cause prospective tenants to delay their leasing decisions or to lease less space. Even after the pandemic has ceased to be active, the prevalence of work-from-home policies during the pandemic may alter tenant preferences in the long term with respect to the demand for leasing office space.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

For information on our equity compensation plans, see note 15 of our Annual Report on Form 10-K, and note 12 to the unaudited condensed consolidated financial statements set forth in this Form 10-Q. We did not make any sales of unregistered securities during the third quarter of 2020. We did not purchase any common shares during the third quarter 2020.

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Item 6. Exhibits.


2.1		Agreement and Plan of Merger, dated March 25, 2019, by and among the Registrant, Murphy Subsidiary Holdings Corporation, and TIER REIT, Inc., filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on March 25, 2019, and incorporated herein by reference.

3.1		Restated and Amended Articles of Incorporation of the Registrant, as amended August 9, 1999, filed as Exhibit 3.1 to the Registrant’s Form 10-Q for the quarter ended June 30, 2002, and incorporated herein by reference.

3.1.1		Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, as amended July 22, 2003, filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on July 23, 2003, and incorporated herein by reference.

3.1.2		Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, as amended December 15, 2004, filed as Exhibit 3(a)(i) to the Registrant’s Form 10-K for the year ended December 31, 2004, and incorporated herein by reference.

3.1.3		Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, as amended May 4, 2010, filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed May 10, 2010, and incorporated herein by reference.

3.1.4		Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, as amended May 9, 2014, filed as Exhibit 3.1.4 to the Registrant's Form 10-Q for the quarter ended June 30, 2014, and incorporated herein by reference.

3.1.5		Articles of Amendment to Restated and Amended Articles of Incorporation of Cousins, as amended October 6, 2016 (incorporated by reference from Exhibit 3.1 and Exhibit 3.1.1 to the Registrant's Current Form 8-K filed on October 7, 2016).

3.1.6		Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on June 14, 2019, and incorporated herein by reference.

3.1.7		Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, filed as Exhibit 3.2 to the Registrant's Current Report on Form 8-K filed on June 14, 2019, and incorporated herein by reference.

3.2		Bylaws of the Registrant, as amended and restated December 4, 2012, filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on December 7, 2012, and incorporated herein by reference.

4.1		Master Purchase Agreement, dated as of April 19, 2017, by and among the Registrant, Cousins Properties LP, and the purchasers of certain unsecured senior notes (the "Master Note Purchase Agreement"), filed as Exhibit 4.1 to the Registrant's 10-Q filed for the quarter ended June 30, 2019, and incorporated herein by reference.

4.2		Cousins Properties Incorporated, Cousins Properties LP, First Supplement to Master Note Purchase Agreement, dated as of June 12, 2019, filed as Exhibit 4.2 to the Registrant’s 10-Q filed for the quarter ended June 30, 2019, and incorporated herein by reference.

4.3		Guaranty Agreement, dated as of April 19, 2017, filed as Exhibit A to Exhibit 4.1 above, and incorporated herein by reference.

4.4		Form of Senior Forms of Senior Unsecured Notes incorporated by reference to Schedules 1-A and 1-B of Exhibit 4.1 above, filed as Exhibit 4.4 to the Registrant's 10-Q filed for the quarter ended June 30, 2019, and incorporated herein by reference. Notes incorporated by reference to Schedule 1-A and 1-B of Exhibit 4.1 above, incorporated herein by reference.

4.5		Forms of Senior Unsecured Notes incorporated by reference to Schedules 1-A, 1-B, and 1-C of Exhibit 4.2 above, filed as Exhibit 4.5 to the Registrant's 10-Q filed for the quarter ended June 30, 2019, and incorporated herein by reference.





31.1	†	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	†	Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	†	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	†	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101	†	The following financial information for the Registrant, formatted in inline XBRL (Extensible Business Reporting Language): (i) the condensed consolidated balance sheets, (ii) the condensed consolidated statements of operations, (iii) the condensed consolidated statements of equity, (iv) the condensed consolidated statements of cash flows, and (v) the notes to condensed consolidated financial statements.

104	†	Cover page interactive data file (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibit 101).


†						Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			COUSINS PROPERTIES INCORPORATED
			/s/ Gregg D. Adzema
			Gregg D. Adzema
			Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

Date: October 28, 2020