CUZ 10-Q Quarterly Report Sept. 30, 2022

COUSINS PROPERTIES INC

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cuz-20220930

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, 2022


☐						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 INC ORPORATED

(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, 2022
Common Stock, $1 par value per share						151,434,281 shares


			Page No.
PART I-FINANCIAL INFORMATION			3
Item 1. Condensed Consolidated Financial Statements (Unaudited)			3
CONSOLIDATED BALANCE SHEETS			3
CONSOLIDATED STATEMENTS OF OPERATIONS			4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME			5
CONSOLIDATED STATEMENTS OF EQUITY			6
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			26
Item 3. Quantitative and Qualitative Disclosures About Market Risk			33
Item 4. Controls and Procedures			34

PART II. OTHER INFORMATION			35
Item 1. Legal Proceedings			35
Item 1A. Risk Factors			35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			35

Item 6. Exhibits			36
SIGNATURES			37

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, 2021, and as itemized herein. These forward-looking statements include information about the Company's possible or assumed future results of the business and the Company's 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, limited partnership units, or preferred stock;

• future distributions;

• projected capital expenditures;

• market and industry trends;

• entry into new markets or changes in existing market concentrations;

• future changes in interest rates; and

• all statements that address operating performance, events, or developments that the Company expects or anticipates 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 the Company's 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, the Company's 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 the Company operates (including supply and demand changes), particularly in Atlanta, Austin, Charlotte, Phoenix, Tampa, Dallas, and Nashville, 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 the Company's key personnel, the Company's tenants, and the costs of operating the Company's assets;

• sociopolitical unrest such as political instability, civil unrest, armed hostilities, or political activism, which may result in a disruption of day-to-day building operations;

• changes to the Company's strategy in regard to the Company's real estate assets, which may require impairment 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 the Company's tenants brought about by the desire for co-working arrangements, trends toward utilizing less office space per employee, and the effect of employees working remotely;

• any adverse change in the financial condition of one or more of the Company's tenants;

• volatility in interest rates and insurance rates;

• inflation and continuing increases in the inflation rate;

• 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, 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;

• 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 the Company's 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 the Company believes that the plans, intentions, and expectations reflected in any forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, or expectations will be achieved. The Company undertakes 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.

PART I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements.

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)


	September 30, 2022		December 31, 2021
	(unaudited)
Assets:
Real estate assets:
Operating properties, net of accumulated depreciation of $ 1,030,125 a nd $ 874,988 in 2022 and 2021, respectively	$	6,731,159	$	6,506,910
Projects under development	102,007		174,803
Land	158,431		157,681
	6,991,597		6,839,394


Cash and cash equivalents	5,507		8,937
Restricted cash	1,231		1,231
Accounts receivable	7,195		12,553
Deferred rents receivable	175,511		154,866
Investment in unconsolidated joint ventures	106,389		77,811
Intangible assets, net	143,121		168,553
Other assets, net	65,521		48,689
Total assets	$	7,496,072	$	7,312,034
Liabilities:
Notes payable	$	2,295,989	$	2,237,509
Accounts payable and accrued expenses	268,153		224,523
Deferred income	108,316		74,515
Intangible liabilities, net	54,734		63,223
Other liabilities	103,164		111,864

Total liabilities	2,830,356		2,711,634
Commitments and contingencies
Equity:
Stockholders' investment:

Common stock, $ 1 par value per share, 300,000,000 shares authorized, 154,019,214 a nd 151,272,969 shares issued and outstanding in 2022 and 2021, respectively	154,019		151,273
Additional paid-in capital	5,628,951		5,549,308
Treasury stock at cost, 2,584,933 shares in 2022 and 2021	( 148,473 )		( 148,473 )
Distributions in excess of cumulative net income	( 988,488 )		( 985,338 )
Accumulated other comprehensive loss	( 652 )		—
Total stockholders' investment	4,645,357		4,566,770
Nonredeemable noncontrolling interests	20,359		33,630
Total equity	4,665,716		4,600,400
Total liabilities and equity	$	7,496,072	$	7,312,034

See accompanying notes.

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in thousands, except per share amounts)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenues:
Rental property revenues	$	193,455	$	185,515	$	559,856	$	552,088
Fee income	1,677		3,094		5,370		12,426
Other	38		123		2,522		405
	195,170		188,732		567,748		564,919
Expenses:
Rental property operating expenses	66,632		65,354		193,725		195,465
Reimbursed expenses	418		383		1,455		1,149
General and administrative expenses	6,498		7,968		21,557		22,014
Interest expense	18,380		16,709		50,454		50,573
Depreciation and amortization	79,116		72,073		219,721		214,399

Other	231		421		877		1,835
	171,275		162,908		487,789		485,435

Income from unconsolidated joint ventures	634		2,128		7,038		5,826
Gain on sales of investments in unconsolidated joint ventures	56,260		13,121		56,260		13,160
Gain (loss) on investment property transactions	( 20 )		13,063		( 61 )		13,037
Loss on extinguishment of debt	—		—		( 100 )		—


Net income	80,769		54,136		143,096		111,507
Net income attributable to noncontrolling interests	( 130 )		( 118 )		( 421 )		( 226 )
Net income available to common stockholders	$	80,639	$	54,018	$	142,675	$	111,281



Net income per common share — basic and diluted	$	0.53	$	0.36	$	0.95	$	0.75
Weighted average shares — basic	151,435		148,688		149,670		148,659
Weighted average shares — diluted	151,695		148,772		149,946		148,743

See accompanying notes.

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited; in thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Comprehensive Income:
Net income available to common stockholders	$	80,639	$	54,018	$	142,675	$	111,281
Other comprehensive loss:
Unrealized loss on cash flow hedge	( 715 )		—		( 715 )		—
Accumulated other comprehensive loss reclassified to interest expense	63		—		63		—
Total other comprehensive loss	( 652 )		—		( 652 )		—
Total comprehensive income	$	79,987	$	54,018	$	142,023	$	111,281
























See accompanying notes.

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in thousands except per share amounts)


Three Months Ended September 30, 2022
	Common Stock		Additional Paid-In Capital		Treasury Stock		Distributions in Excess of Net Income		Accumulated Other Comprehensive Loss		Stockholders’ Investment		Nonredeemable Noncontrolling Interests		Total Equity
Balance June 30, 2022	$	154,025	$	5,627,133	$	( 148,473 )	$	( 1,020,590 )	$	—	$	4,612,095	$	20,600	$	4,632,695
Comprehensive Income:
Net income	—		—		—		80,639		—		80,639		130		80,769
Other comprehensive loss	—		—		—		—		( 652 )		( 652 )		—		( 652 )
Common stock issued under the ATM, net of issuance costs	—		13		—		—		—		13		—		13

Amortization of stock-based compensation, net of forfeitures	( 6 )		1,805		—		4		—		1,803		—		1,803

Contributions from nonredeemable noncontrolling interests	—		—		—		—		—		—		( 356 )		( 356 )
Distributions to nonredeemable noncontrolling interests	—		—		—		—		—		—		( 15 )		( 15 )

Common dividends ($ 0.32 per share)	—		—		—		( 48,541 )		—		( 48,541 )		—		( 48,541 )
Balance September 30, 2022	$	154,019	$	5,628,951	$	( 148,473 )	$	( 988,488 )	$	( 652 )	$	4,645,357	$	20,359	$	4,665,716

Three Months Ended September 30, 2021
			Common Stock		Additional Paid-In Capital		Treasury Stock		Distributions in Excess of Net Income		Stockholders’ Investment		Nonredeemable Noncontrolling Interests		Total Equity
Balance June 30, 2021			$	151,273	$	5,546,336	$	( 148,473 )	$	( 1,113,273 )	$	4,435,863	$	31,541	$	4,467,404
Net income	—		—		—		54,018		54,018		118		54,136

Amortization of stock-based compensation, net of forfeitures	—		1,472		—		—		1,472		—		1,472
Contributions from nonredeemable noncontrolling interests	—		—		—		—		—		1,635		1,635
Distributions to nonredeemable noncontrolling interests	—		—		—		—		—		( 844 )		( 844 )
Common dividends ($ 0.31 per share)	—		—		—		( 46,261 )		( 46,261 )		—		( 46,261 )
Balance September 30, 2021			$	151,273	$	5,547,808	$	( 148,473 )	$	( 1,105,516 )	$	4,445,092	$	32,450	$	4,477,542

See accompanying notes.

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in thousands except per share amounts)


Nine Months Ended September 30, 2022
	Common Stock		Additional Paid-In Capital		Treasury Stock		Distributions in Excess of Net Income		Accumulated Other Comprehensive Loss		Stockholders’ Investment		Nonredeemable Noncontrolling Interests		Total Equity
Balance December 31, 2021	$	151,273	$	5,549,308	$	( 148,473 )	$	( 985,338 )	$	—	$	4,566,770	$	33,630	$	4,600,400
Comprehensive Income:
Net income	—		—		—		142,675		—		142,675		421		143,096
Other comprehensive loss	—		—		—		—		( 652 )		( 652 )		—		( 652 )
Common stock issued under the ATM, net of issuance costs	2,632		100,488		—		—		—		103,120		—		103,120
Common stock issued pursuant to stock-based compensation	120		490		—		—		—		610		—		610
Amortization of stock-based compensation, net of forfeitures	( 6 )		6,303		—		8		—		6,305		—		6,305
Acquisition of partners' noncontrolling interest	—		( 27,638 )		—		—		—		( 27,638 )		( 15,749 )		( 43,387 )
Contributions from nonredeemable noncontrolling interests	—		—		—				—		—		2,164		2,164
Distributions to nonredeemable noncontrolling interests	—		—		—				—		—		( 107 )		( 107 )
Common dividends ($ 0.96 per share)	—		—		—		( 145,833 )		—		( 145,833 )		—		( 145,833 )
Balance September 30, 2022	$	154,019	$	5,628,951	$	( 148,473 )	$	( 988,488 )	$	( 652 )	$	4,645,357	$	20,359	$	4,665,716

Nine Months Ended September 30, 2021
			Common Stock		Additional Paid-In Capital		Treasury Stock		Distributions in Excess of Net Income		Stockholders’ Investment		Nonredeemable Noncontrolling Interests		Total Equity
Balance December 31, 2020			$	151,149	$	5,542,762	$	( 148,473 )	$	( 1,078,304 )	$	4,467,134	$	28,404	$	4,495,538
Net income			—		—		—		111,281		111,281		226		111,507

Common stock issued pursuant to stock-based compensation	126		426		—		—		552		—		552

Amortization of stock options, restricted stock, and restricted stock units, net of forfeitures	( 2 )		4,620		—		—		4,618		—		4,618

Contributions from nonredeemable noncontrolling interests	—		—		—		—		—		5,017		5,017
Distributions to nonredeemable noncontrolling interests	—		—		—		—		—		( 1,197 )		( 1,197 )
Common dividends ($ 0.93 per share)	—		—		—		( 138,493 )		( 138,493 )		—		( 138,493 )
Balance September 30, 2021			$	151,273	$	5,547,808	$	( 148,473 )	$	( 1,105,516 )	$	4,445,092	$	32,450	$	4,477,542

See accompanying notes.

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in thousands)


	Nine Months Ended September 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	143,096	$	111,507
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sales of investment in unconsolidated joint ventures	( 56,260 )		( 13,160 )
Loss (gain) on investment property transactions	61		( 13,037 )

Depreciation and amortization	219,721		214,399
Amortization of deferred financing costs and premium on notes payable	( 317 )		( 356 )
Equity-classified stock-based compensation expense, net of forfeitures	7,526		5,959
Effect of non-cash adjustments to rental revenues	( 29,524 )		( 27,838 )
Income from unconsolidated joint ventures	( 7,038 )		( 5,826 )
Operating distributions from unconsolidated joint ventures	4,584		9,085
Loss on extinguishment of debt	100		—

Changes in other operating assets and liabilities:
Change in receivables and other assets, net	487		3,178
Change in operating liabilities, net	( 10,088 )		14,676
Net cash provided by operating activities	272,348		298,587
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from investment property sales, net	—		389,777
Proceeds from sale of interest in unconsolidated joint ventures, net	38,831		67,143
Property acquisition, development, and tenant asset expenditures	( 262,822 )		( 488,243 )

Return of capital distributions from unconsolidated joint venture	10,752		25,955
Contributions to unconsolidated joint ventures	( 35,193 )		( 46,038 )




Net cash used in investing activities	( 248,432 )		( 51,406 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facility	340,000		329,000
Repayment of credit facility	( 267,300 )		( 527,400 )
Repayment of notes payable	( 12,719 )		( 12,214 )
Common stock issued under the ATM	103,120		—
Payment of deferred financing costs	( 5,299 )		( 3,014 )
Contributions from nonredeemable noncontrolling interests	2,164		5,017
Distributions to nonredeemable noncontrolling interests	( 107 )		( 1,197 )
Common dividends paid	( 143,818 )		( 136,743 )
Acquisition of partner's noncontrolling interest	( 43,387 )		—
Issuance of term loans	—		350,000
Repayment of term loans	—		( 250,000 )
Net cash used in financing activities	( 27,346 )		( 246,551 )
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	( 3,430 )		630
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD	10,168		6,138
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	6,738	$	6,768

See accompanying notes.

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022

(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 in excess of 99 % of CPLP, and CPLP is consolidated with Cousins for financial reporting purposes. CPLP also owns Cousins TRS Services LLC ("CTRS"), a taxable entity that 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 primarily Class A office properties and mixed-use developments in the Sun Belt markets of the United States with a focus on Atlanta, Austin, Charlotte, Phoenix, Tampa, Dallas, and Nashville. Cousins has elected to be taxed as a REIT and intends to, among other things, distribute at least 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, 2022, the Company's portfolio of real estate assets consisted of interests in 18.5 million square feet of office space and 310,000 square feet of other 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, 2022 and the results of operations for the three and nine months ended September 30, 2022 and 2021. The results of operations for the three and nine months ended September 30, 2022 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 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, 2021. The accounting policies employed are substantially the same as those shown in note 2 to the consolidated financial statements included therein.

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, 2022, the Company had no investments or interests in any VIEs.

2. 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 received fees totaling $ 5.0 million in consideration for development services for NS’s corporate headquarters that has been constructed on the land sold to NS.

• Executed a Consulting Agreement with NS whereby the Company received fees totaling $ 32.0 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 (“Promenade Central”) for $ 82.0 million subject to a three-year market rate lease with NS that covered the entire building and expired December 31, 2021.

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 Promenade Central 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 Promenade Central should be recorded at fair value of $ 92.3 million. The Company determined that the lease with NS at the Promenade Central 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 Promenade Central as well as cash consideration of $ 5.0 million from the land sale contract (difference between fair value and contract amount), $ 5.0 million from the Development Agreement, and $ 32.0 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 provided were transferred over time and, thus, the Company recognized the $ 52.3 million contract price in revenue as it satisfied 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 continued 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, 2022 and 2021, respectively, the Company recognized $ 1.0 million and $ 2.5 million in fee income in its consolidated statements of operations related to the services provided to NS. During the nine months ended September 30, 2022 and 2021, respectively, the Company recognized $ 3.2 million and $ 10.4 million in fee income in its consolidated statements of operations related to the services provided to NS. As of December 31, 2021, the Company had deferred income of $ 1.8 million related to NS included in the consolidated balance sheet. As of September 30, 2022, the Company had no deferred income related to NS included in the consolidated balance sheet, and all revenue related to this performance obligation had been recognized.

3. REAL ESTATE

Acquisitions

On April 21, 2022, the Company purchased its partner's 10 % joint venture interest in HICO Avalon, LLC and HICO Avalon II, LLC, which own the 8000 and 10000 Avalon office properties. This transaction did not result in a change in control and any difference between the purchase price of $ 43.4 million, which included a promote to our partner related to increases in fair value in excess of cost, and the $ 15.7 million book value of the outside partner's non-controlling interest is recorded as additional paid in capital in the equity section of the Company's consolidated balance sheet. The Company's consolidated basis in Avalon's assets and liabilities was unchanged by this transaction.

On September 27, 2021, the Company acquired a 0.15 acre land parcel in Atlanta for a gross purchase price of $ 3.1 million related to a potential future development in Midtown Atlanta.

On July 28, 2021, the Company acquired 725 Ponce, a 372,000 square foot office building in Midtown Atlanta, for $ 300.8 million, including acquisition costs. The Company accounted for this transaction as an acquisition of an asset, and the following table summarizes the allocation of the purchase price of this property (in thousands):


	725 Ponce
Tangible assets:
Operating properties	$	292,946
Tangible assets	292,946

Intangible assets:
In-place leases	12,788
Above market leases	1,770
Intangible assets	14,558

Intangible liabilities:
Above market leases	( 6,739 )
Intangible liabilities	( 6,739 )
Total net assets acquired	$	300,765

On March 12, 2021, a 95 % owned consolidated joint venture acquired a 0.24 acre land parcel in Atlanta for a gross purchase price of $ 8.0 million.

Dispositions

On July 23, 2021, the Company sold One South at the Plaza in Charlotte for a gross sales price of $ 271.5 million and recorded a gain of $ 12.7 million.

On July 1, 2021, the Company sold 0.7 acres of land in Phoenix, adjacent to our 100 Mill development, to a hotel developer for $ 6.4 million. Net proceeds approximated our book value.

On April 7, 2021, the Company sold Burnett Plaza in Fort Worth for a gross sales price of $ 137.5 million and recorded a gain of $ 80,000 .

Impairment

The Company tests buildings held for investment, by disposal groups, for impairment whenever changes in circumstances indicate a disposal group’s carrying value may not be recoverable. The test is conducted using undiscounted cash flows for the shorter of the building’s estimated hold period or its remaining useful life. When testing for recoverability of value of buildings held for investment, projected cash flows are used over its expected hold period. If the expected hold period includes some likelihood of shorter-term hold period from a potential sale, the probability of a sale is layered into the analysis. If any building's held-for-investment analysis were to fail the impairment test, its book value would be written down to its then current estimated fair value, before any selling expense, and that building would continue to depreciate over its remaining useful life. None of the Company’s held-for-investment buildings were impaired during any periods presented in the accompanying statement of operations while under the held-for-investment classification.

The Company also reviews held-for-sale buildings, if any, for impairments. If book value is in excess of estimated fair value less estimated selling costs, we impair those assets to fair value less estimated selling costs. There were no held-for-sale buildings impaired during any periods presented in the accompanying statements of operations.

The Company also reviews land and projects under development for impairment whenever changes in circumstances indicate the assets' carrying value may not be recoverable. None of the Company's investments in land or projects under development were impaired during any periods presented in the accompanying statement of operations.

The Company may record impairment charges in future periods if the economy and the office industry weakens, the operating results of individual buildings are materially different from our forecasts, or we shorten our contemplated hold period for any operating buildings.

4. 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, 2022 and December 31, 2021 (in thousands).


SUMMARY OF FINANCIAL POSITION
	Total Assets				Total Debt				Total Equity (Deficit)				Company's Investment
	2022		2021		2022		2021		2022		2021		2022			2021
Operating Properties:
AMCO 120 WT Holdings, LLC	$	82,207	$	83,546	$	—	$	—	$	81,254	$	82,739	$	14,987		$	15,347
Carolina Square Holdings LP	—		113,011		—		132,654		—		( 34,066 )		—			( 15,786 )		(1)
Crawford Long - CPI, LLC	25,932		24,709		63,302		64,566		( 39,802 )		( 40,221 )		( 19,208 )		(1)	( 19,356 )		(1)
Under Development:
Neuhoff Holdings LLC	297,800		133,691		90,582		28,390		166,877		93,218		87,080			47,529
Land:
715 Ponce Holdings LLC	8,402		8,150		—		—		8,306		8,150		4,247			4,165
HICO Victory Center LP	161		16,421		—		—		136		15,962		75			10,723
Other:




Other	—		518		—		—		—		11		—			47
	$	414,502	$	380,046	$	153,884	$	225,610	$	216,771	$	125,793	$	87,181		$	42,669

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

The information included in the summary of operations table is for the nine months ended September 30, 2022 and 2021 (in thousands).


SUMMARY OF OPERATIONS
	Total Revenues				Net Income (Loss)			Company's Income (Loss) from Investment
	2022		2021			2022		2021		2022		2021
Operating Properties:
AMCO 120 WT Holdings, LLC	$	8,005	$	6,385		$	2,335	$	234	$	454	$	38
Carolina Square Holdings LP	12,140		12,478			600		1,713		215		776
Crawford Long - CPI, LLC	9,811		9,743			3,419		3,049		1,603		1,412
Under Development:
Neuhoff Holdings LLC	107		—			79		—		39		—
Land:
715 Ponce Holdings LLC	220		25			156		11		78		7
HICO Victory Center LP	6,873		199			6,871		199		4,546		111
Other:




Other	28		21,975			( 12 )		7,365		103		3,482
	$	37,184	$	50,805		$	13,448	$	12,571	$	7,038	$	5,826

On September 29, 2022, the Company sold its 50 % joint venture interest in Carolina Square Holdings LP ("Carolina Square"), which owned a mixed-use property in Chapel Hill, to its partner for a gross sales price of $ 105.0 million. The Company recognized a gain of $ 56.3 million on the sale of its interest in Carolina Square.

On June 30, 2022, HICO Victory Center LP sold a 3.0 acre land parcel in Uptown Dallas for a gross price of $ 23.1 million. The Company's share of the gain from the transaction was $ 4.5 million and is included in income from unconsolidated joint ventures on the statements of operations.

On September 30, 2021, the Company sold its 50 % joint venture interest in DC Charlotte Plaza, LLLP ("DCCP"), which owned a 281,000 square foot office building in Charlotte, to its partner for a gross sales price of $ 60.8 million. The sale was triggered by the exercise of the partners' purchase option as stipulated in the partnership agreement. The Company recognized a gain of $ 13.1 million on the sale of its interest in DCCP.

On July 28, 2021, Neuhoff Holdings LLC ("Neuhoff"), a 50 - 50 joint venture, was formed for the purpose of developing a mixed-use property in Nashville. The Company made an initial contribution of $ 35.1 million for its interest in the land and development costs incurred to date. In addition to the existing assets of the joint venture, Neuhoff also has rights to adjacent parcels for future development. On September 30, 2021, the joint venture closed on a construction loan with a borrowing capacity up to $ 312.7 million. The mortgage loan bears interest at the London Interbank Offering Rate ("LIBOR") plus 3.45 % and matures on September 30, 2025. The mortgage loan provides for use of alternative interest rates should LIBOR not be available to us. There can be no assurances as to what alternative rates may be and whether such interest rates will be more or less favorable than LIBOR.

On July 28, 2021, 715 Ponce Holdings LLC ("715 Ponce"), a 50 - 50 joint venture, was formed for the purpose of developing a property in Midtown Atlanta in the future. The Company made an initial contribution of $ 4.0 million for its interest in the land held by the joint venture.

5. INTANGIBLE ASSETS AND LIABILITIES

At September 30, 2022 and December 31, 2021, intangible assets included the following (in thousands):


	2022		2021
In-place leases, net of accumulated amortization of $ 129,771 and $ 134,930 in 2022 and 2021, respectively	$	107,874	$	129,538
Below-market ground lease, net of accumulated amortization of $ 1,760 and $ 1,449 in 2022 and 2021, respectively	17,493		17,804
Above-market rents, net of accumulated amortization of $ 24,644 and $ 25,423 in 2022 and 2021, respectively	16,080		19,537
Goodwill	1,674		1,674
	$	143,121	$	168,553

At September 30, 2022 and December 31, 2021, intangible liabilities included the following (in thousands):


	2022		2021
Below-market rents, net of accumulated amortization of $ 47,468 and $ 55,079 in 2022 and 2021, respectively	$	54,734	$	63,223

Aggregate net amortization expense related to intangible assets and liabilities for the three and nine months ended September 30, 2022 was $ 5.8 million and $ 16.9 million, respectively. Aggregate net amortization expense related to intangible assets and liabilities for the three and nine months ended September 30, 2021 was $ 8.2 million and $ 24.6 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):


	In-Place Leases		Below-Market Ground Lease		Above-Market Rents		Below-Market Rents
2022 (three months)	$	5,813	$	100	$	1,025	$	( 2,435 )
2023	21,652		400		3,742		( 9,355 )
2024	19,203		400		3,045		( 8,947 )
2025	15,499		400		2,050		( 8,393 )
2026	12,212		400		1,626		( 6,640 )
Thereafter	33,495		15,793		4,592		( 18,964 )
	$	107,874	$	17,493	$	16,080	$	( 54,734 )

6. OTHER ASSETS

Other assets on the consolidated balance sheets as of September 30, 2022 and December 31, 2021 included the following (in thousands):


	2022		2021

Predevelopment costs	$	31,510	$	20,677
Furniture, fixtures and equipment and other deferred costs, net of accumulated depreciation of $ 20,815 and $ 18,560 in 2022 and 2021, respectively	12,158		13,772
Lease inducements, net of accumulated amortization of $ 4,770 and $ 3,721 in 2022 and 2021, respectively	8,183		5,735
Prepaid expenses and other assets	7,970		6,998
Credit Facility deferred financing costs, net of accumulated amortization of $ 7,112 and $ 5,976 in 2022 and 2021, respectively	5,700		1,507
	$	65,521	$	48,689

Predevelopment costs represent amounts that are capitalized related to predevelopment projects that the Company determined are probable of future development.

Lease inducements are incentives paid to tenants in conjunction with leasing space, such as moving costs, sublease arrangements of prior space, and other costs. These amounts are amortized into rental revenues over the individual underlying lease terms.

7. NOTES PAYABLE

The following table summarizes the terms of notes payable outstanding at September 30, 2022 and December 31, 2021 ($ in thousands):


Description	Interest Rate (1)	Maturity (2)	2022		2021
Unsecured Notes:

Term Loan	5.38 %	2024	$	350,000	$	350,000
Credit Facility	3.98 %	2027	301,200		228,500
Senior Note	3.95 %	2029	275,000		275,000
Senior Note	3.91 %	2025	250,000		250,000
Senior Note	3.86 %	2028	250,000		250,000
Senior Note	3.78 %	2027	125,000		125,000
Senior Note	4.09 %	2027	100,000		100,000
			1,651,200		1,578,500
Secured Mortgage Notes:
Fifth Third Center	3.37 %	2026	131,055		133,672
Colorado Tower	3.45 %	2026	110,210		112,150
Terminus 100	5.25 %	2023	109,073		111,678
Promenade Tower	4.27 %	2022	86,295		89,052
Domain 10	3.75 %	2024	75,000		76,412
Terminus 200	3.79 %	2023	71,172		72,561
Legacy Union One	4.24 %	2023	66,000		66,000

			648,805		661,525
			$	2,300,005	$	2,240,025

Unamortized premium			998		3,910
Unamortized loan costs			( 5,014 )		( 6,426 )
Total Notes Payable			$	2,295,989	$	2,237,509

(1) Interest rate as of September 30, 2022.

(2) Weighted average maturity of notes payable outstanding at September 30, 2022 was 3.6 years.

Credit Facility

Through May 2, 2022, the Company had a $ 1 billion senior unsecured line of credit (the "Prior Facility") that was scheduled to mature on January 3, 2023. The Prior Facility contained financial covenants that required, among other things, the maintenance of unencumbered interest coverage ratio of at least 1.75 x; a fixed charge coverage ratio of at least 1.50 x; a secured leverage ratio of no more than 40 %; and an overall leverage ratio of no more than 60 %. The Prior Facility also contained customary representations and warranties and affirmative and negative covenants, as well as customary events of default.

The interest rate applicable to the Prior Facility varied according to the Company's leverage ratio and was, at the election of the Company, determined based on either (1) 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 % and 0.45 %, based on leverage.

On May 2, 2022, the Company entered into a Fifth Amended and Restated Credit Agreement (the "Credit Facility") under which the Company may borrow up to $ 1 billion if certain conditions are satisfied. The Credit Facility recasts the Prior Facility by, among other things, extending the maturity date from January 3, 2023, to April 30, 2027, and reducing certain per annum variable interest rate spreads and other fees. The Credit Facility contains financial covenants consistent with those of the Prior Facility, with the exception of an increase in the secured leverage ratio to no more than 50 %.

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 Daily SOFR or Term SOFR, plus a SOFR adjustment of 0.10 % ("Adjusted SOFR") and a spread of between 0.90 % and 1.40 %, or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50 %, Term SOFR, plus a SOFR adjustment of 0.10 % and 1.00 %, or 1.00 %, plus a spread of between 0.00 % and 0.40 %, based on leverage. In addition to the interest rate, the Credit Facility is also subject to a facility fee of 0.15 % to 0.30 %, depending on leverage, on the entire $ 1 billion capacity.

At September 30, 2022, the Credit Facility's interest rate spread over Adjusted SOFR was 0.90 % and the facility fee spread was 0.15 %. The amount that the Company may draw under the New 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 $ 698.8 million at September 30, 2022. The amounts outstanding under the Credit Facility may be accelerated upon the occurrence of any events of default.

2021 Term Loan

On June 28, 2021, the Company entered into an Amended and Restated Term Loan Agreement (the "2021 Term Loan") that amended the former term loan agreement. Under the 2021 Term Loan, the Company has borrowed $ 350 million that matures on August 30, 2024 with four consecutive options to extend the maturity date for an additional 180 days. On September 19, 2022, the Company entered into the First Amendment to the 2021 Term Loan. This amendment aligns covenants and available interest rates, including the addition of SOFR, to that of the Credit Facility. Under the terms of this First Amendment the interest rate applicable to the 2021 Term Loan varies according to the Company's leverage ratio and may, at the election of the Company, be determined based on either (1) the Daily SOFR or Term SOFR, plus a SOFR adjustment of 0.10 % ("Adjusted SOFR") and a spread of between 1.05 % and 1.65 %, or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50 %, Term SOFR, plus a SOFR adjustment of 0.10 % and 1.00 %, or 1.00 %, plus a spread of between 0.05 % and 0.65 %, based on leverage. On September 19, 2022, the Company provided notice of our election of the Daily SOFR Rate Loan provisions.

On September 27, 2022, the Company entered into a floating-to-fixed interest rate swap with respect to the $ 350 million 2021 Term Loan through the maturity date of August 30, 2024. This swap effectively fixed the underlying SOFR rate at 4.23 %. Please see Note 8 for more information on this cash flow hedge.

At September 30, 2022, the 2021 Term Loan's spread over the Adjusted SOFR rate was 1.05 %.

2022 Term Loan

Subsequent to quarter end, on October 3, 2022, the Company entered into a Delayed Draw Term Loan Agreement (the "2022 Term Loan") and borrowed the full $ 400 million available under the loan. The loan matures on March 3, 2025 with four consecutive options to extend the maturity date for an additional six months . The interest rate provisions are the same as the 2021 Term Loan, and the covenants are the same as the Credit Facility.

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 are consistent with those of our Credit Facility. The senior notes also contain customary representations and warranties and affirmative and negative covenants, as well as customary events of default.

Secured Mortgage Notes

As of September 30, 2022, the Company had $ 648.8 million outstanding on seven non-recourse mortgage notes. All interest rates on the secured mortgage notes are fixed. Assets with depreciated carrying values of $ 1.2 billion were pledged as security, respectively, on these mortgage notes payable.

Subsequent to quarter end, the Company paid off in full its Legacy Union One and Promenade Tower mortgages, without penalty.

Subsequent to quarter end, the Company completed the application process, including paying a deposit to the lender, to extend the existing mortgages on the Company's two Terminus properties in Atlanta with the current lender. The maturities will be extended from January 2023 to January 2031, the combined principal will increase to $ 221.0 million, and the interest rate is 6.34 %. This extension is expected to close before December 31, 2022.

Other Debt Information

The Company is in compliance with all of the covenants related to its unsecured and secured debt.

At September 30, 2022 and December 31, 2021, the estimated fair value of the Company’s notes payable was $ 2.2 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, 2022 and December 31, 2021. 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, 2022 and 2021, interest expense was recorded as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Total interest incurred	$	22,406	$	18,181	$	61,522	$	54,775
Interest capitalized	( 4,026 )		( 1,472 )		( 11,068 )		( 4,202 )
Total interest expense	$	18,380	$	16,709	$	50,454	$	50,573

8. DERIVATIVE FINANCIAL INSTRUMENTS

On the date the Company entered into this derivative contract, the Company designated the derivative as a hedge to the exposure to variable cash flows of a forecasted transaction (referred to as a "cash flow hedge"). For a cash flow hedge determined to be highly effective, the derivative's gain or loss is initially reported as a component of other comprehensive income or loss and subsequently reclassified into net income when the forecasted transaction affects earnings.

The cash flow hedge is measured at fair value using observable inputs other than quoted prices in active markets, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. These inputs are considered Level 2 inputs in the Fair Value Hierarchy and the Company engages a third party expert to determine these inputs. The fair value of the cash flow hedge is determined using the conventional industry methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts made between the Company and its counterparty to the cash flow hedge. These variable cash receipts are based on the expectation of future interest rates which are derived from observed market interest rate curves. In addition, any credit valuation adjustments are considered in the fair values to account for potential nonperformance risk to the

extent they would be significant inputs to the calculation. For the period presented, it was determined that credit valuation adjustments were not considered to be significant inputs.

As of September 30, 2022, the fair value of this swap was $ 652,000 , which approximates the amount the Company would owe the counter-party under the swap in the event of early termination. This $ 652,000 is included in other liabilities in the Company's consolidated balance sheet and it is entirely offset in accumulated other comprehensive loss within equity. For the three and nine months ended September 30, 2022, $ 63,000 of incremental interest expense is included in the Company's consolidated statement of operations related to current net cash settlements under the swap. We estimate an additional expense of $ 375,000 will be reclassified to interest expense over the next twelve months, due to expected settlements on this cash flow hedge.

The counterparty under this swap is a major financial institution and the swap contains provisions whereby if we default on certain of our indebtedness, and such default results in repayment of such indebtedness being, or becoming capable of being, accelerated by the lender, then we could also be declared in default under the swap. There are no collateral requirements related to this swap.

9. OTHER LIABILITIES

Other liabilities on the consolidated balance sheets as of September 30, 2022 and December 31, 2021 included the following (in thousands):


	2022		2021
Ground lease liability	$	49,431	$	49,470
Prepaid rent	32,288		37,174
Security deposits	14,432		12,875
Restricted stock unit liability	1,058		7,314
Other liabilities	5,955		5,031
	$	103,164	$	111,864

10. COMMITMENTS AND CONTINGENCIES

Commitments

The Company had outstanding performance bonds totaling $ 692,000 at September 30, 2022. As a lessor, the Company had $ 161.7 million in future obligations under leases to fund tenant improvements and other future construction obligations at September 30, 2022.

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.

11. STOCKHOLDERS' EQUITY

In the third quarter of 2021, the Company entered into an Equity Distribution Agreement with six financial institutions known as an at-the-market stock offering program ("ATM program"), under which the Company may offer and sell shares of its common stock from time to time in "at-the-market" offerings with an aggregate gross sales price of up to $ 500 million. In connection with the ATM program, Cousins may, at its discretion, enter into forward equity sale agreements. The use of a forward equity sale agreement ("Forward Sales") would allow the Company to lock in a share price on the sale of shares of its common stock at the time the agreement is executed, but defer receiving the proceeds from the sale of shares until a later date, allowing the Company to better align such funding with its capital needs. Sales of shares of Cousins' stock through its banking relationships, if any, are made in amounts

and at times to be determined by Cousins from time to time, but the Company has no obligation to sell any of the shares in the offering and may suspend sales in connection with the offering at any time. Sales of Cousins' common stock under Forward Sales, if undertaken, meet the derivatives and hedging guidance scope exception as the contracts are related to the Company's own stock.

On June 29, 2022, the Company issued 2.6 million shares of common stock that had been executed under Forward Sales at an average price of $ 39.92 per share for gross proceeds of $ 105.1 million. To date the Company has issued 2.6 million shares under the ATM program and has generated cash proceeds of $ 101.4 million, net of $ 1.1 million of compensation to be paid with respect to such Forward Sales, $ 1.7 million of dividends owed during the period the Forward Sales were outstanding, and $ 900,000 of other transaction related costs. To the extent, prior to settlement, shares sold under Forward Sales were potentially dilutive during the period under the treasury stock method, the impact of such dilution is disclosed in the calculation included in Note 14. The Company did not have any outstanding Forward Sales for the sale of its common stock as of September 30, 2022.

12. 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 revenues; (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, 2022, the Company recognized rental property revenues of $ 193.5 million and $ 559.9 million, respectively, of which $ 54.7 million and $ 157.7 million, respectively, represented variable rental revenue. For the three and nine months ended September 30, 2021, the Company recognized rental property revenues of $ 185.5 million and $ 552.1 million, respectively, of which $ 52.3 million and $ 148.3 million, respectively, represented variable rental revenue.

For the three and nine months ended September 30, 2022, the Company recognized fee and other revenue of $ 1.7 million and $ 7.9 million, respectively. For the three and nine months ended September 30, 2021, the Company recognized fee and other revenue of $ 3.2 million and $ 12.8 million, respectively.

13. STOCK-BASED COMPENSATION

The Company maintains the Cousins Properties Incorporated 2019 Omnibus Incentive Stock Plan (the "2019 Plan") and the 2021 Employee Stock Purchase Plan ("ESPP") under which the Company has several types of stock-based compensation — restricted stock and restricted stock units ("RSUs") for key employees, and the opportunity for all employees to purchase Company stock through the ESPP.

The Company's compensation expense for the three and nine months ended September 30, 2022 relates to restricted stock and RSUs awarded in 2022, 2021, 2020, and 2019 and the ESPP. Compensation expense for the three and nine months ended September 30, 2021 relates to restricted stock and RSUs awarded in 2021, 2020, 2019, and 2018. Restricted stock, the 2022 RSUs, 2021 RSUs, and the 2020 RSUs are equity-classified awards (settled in shares of the Company) for which compensation expense per share is fixed. The 2019 and 2018 RSUs are liability-classified awards (settled in cash) for which the expense fluctuates from period to period dependent, in part, on the Company's stock price. For the three and nine months ended September 30, 2022 and 2021, stock-based compensation expense, net of forfeitures, was recorded as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Equity-classified awards:
Restricted stock	$	779	$	682	$	2,348	$	1,995
Market-based RSUs	917		587		3,065		1,946
Performance-based RSUs	179		203		863		677
Director grants	385		334		1,086		890
Employee Stock Purchase Plan	39		—		133		—
Total equity-classified award expense, net of forfeitures	2,299		1,806		7,495		5,508

Liability-classified awards
Time-vested RSUs	( 116 )		149		( 136 )		522
Dividend equivalent units	34		24		53		76
Market-based RSUs	—		827		—		1,597
Performance-based RSUs	—		83		—		340
Total liability-classified award expense, net of forfeitures	( 82 )		1,083		( 83 )		2,535
Total stock-based compensation expense, net of forfeitures	$	2,217	$	2,889	$	7,412	$	8,043

Information on the Company's stock compensation plan, including information on the Company's equity-classified and liability-classified awards is discussed 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, 2021.

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, 2022 and 2021 (in thousands, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Earnings per common share - basic:
Numerator:
Net income	$	80,769	$	54,136	$	143,096	$	111,507
Net income attributable to noncontrolling interests in CPLP from continuing operations	( 26 )		( 9 )		( 38 )		( 20 )
Net income attributable to other noncontrolling interests	( 104 )		( 109 )		( 383 )		( 206 )
Net income available to common stockholders	$	80,639	$	54,018	$	142,675	$	111,281

Denominator:
Weighted average common shares - basic	151,435		148,688		149,670		148,659


Net income per common share - basic	$	0.53	$	0.36	$	0.95	$	0.75

Earnings per common share - diluted:
Numerator:
Net income	$	80,769	$	54,136	$	143,096	$	111,507
Net income attributable to other noncontrolling interests	( 104 )		( 109 )		( 383 )		( 206 )
Net income available for common stockholders before allocation of net income attributable to noncontrolling interests in CPLP	$	80,665	$	54,027	$	142,713	$	111,301

Denominator:
Weighted average common shares - basic	151,435		148,688		149,670		148,659
Add:
Potential dilutive common shares - stock options	—		—		—		1
Potential dilutive common shares - restricted stock units, less shares assumed purchased at market price	235		59		251		58
Weighted average units of CPLP convertible into common shares	25		25		25		25
Weighted average common shares - diluted	151,695		148,772		149,946		148,743


Net income per common share - diluted	$	0.53	$	0.36	$	0.95	$	0.75

Anti-dilutive stock options represent stock options whose exercise price exceeds the average market value of the Company's stock and are excluded from the calculation of diluted earnings per share. There were no anti-dilutive stock options for the three and nine months ended September 30, 2022 and 2021. The treasury stock method resulted in no dilution related to the Forward Sales outstanding during the three and nine months ended September 30, 2022 under the Company's ATM program or from shares expected to be issued under the ESPP.

15. CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL INFORMATION

Supplemental information related to the cash flows, including significant non-cash activity affecting the consolidated statement of cash flows, for the nine months ended September 30, 2022 and 2021 is as follows (in thousands):


	2022		2021
Interest paid	$	58,865	$	61,235
Income taxes paid (1)	—		155
Non-Cash Activity:
Transfers from projects under development to operating properties	141,349		—
Transfer from operating properties and related assets and liabilities to assets and liabilities of real estate assets held for sale	—		249,365
Tenant improvements recorded in deferred income	56,727		2,247
Common stock dividends declared and accrued	48,459		46,319




(1) This represents state income taxes paid in conjunction with gains from sales transactions.

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


	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	5,507	$	8,937
Restricted cash	1,231		1,231
Total cash, cash equivalents, and restricted cash	$	6,738	$	10,168

16. REPORTABLE SEGMENTS

The Company's segments are based on the method of internal reporting, which classifies operations by property type and geographical region. The segments by property type are Office and Non-Office. The segments by geographical region are Atlanta, Austin, Charlotte, Dallas, Phoenix, Tampa, and other markets. Included in other markets are properties located in Chapel Hill (sold in September 2022), Houston, Nashville, and Fort Worth (sold in April 2021). Included in Non-Office are retail and apartments in Chapel Hill (sold in September 2022) and Atlanta, as well as the College Street Garage in Charlotte. In the third quarter of 2021, with the sale of the Company's One South at the Plaza office property, the Company reassessed the segment for the College Street Garage and began to treat it as Non-Office for all periods presented. 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 joint venture operations.

Company management evaluates the performance of its reportable segments based in part 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 fee income, other revenue, corporate general and administrative expenses, reimbursed expenses, interest expense, depreciation and amortization, impairments, gains/loss on sales of real estate, gain/loss on extinguishment of debt, transaction costs, and other non-operating items.

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, 2022 and 2021 are as follows (in thousands):


Three Months Ended September 30, 2022	Office		Non-Office		Total
Revenues:
Atlanta	$	70,708	$	461	$	71,169
Austin	64,522		—		64,522
Charlotte	14,343		1,316		15,659
Dallas	4,240		—		4,240
Phoenix	15,135		—		15,135
Tampa	18,229		—		18,229
Other markets	7,476		1,419		8,895
Total segment revenues	194,653		3,196		197,849
Less: Company's share of rental property revenues from unconsolidated joint ventures	( 2,514 )		( 1,880 )		( 4,394 )
Total rental property revenues	$	192,139	$	1,316	$	193,455


Three Months Ended September 30, 2021	Office		Non-Office		Total
Revenues:
Atlanta	$	67,959	$	369	$	68,328
Austin	65,448		—		65,448
Charlotte	17,527		721		18,248
Dallas	4,337		—		4,337
Phoenix	12,847		—		12,847
Tampa	14,444		—		14,444
Other markets	8,702		1,155		9,857
Total segment revenues	191,264		2,245		193,509
Less: Company's share of rental property revenues from unconsolidated joint ventures	( 6,470 )		( 1,524 )		( 7,994 )
Total rental property revenues	$	184,794	$	721	$	185,515


Nine Months Ended September 30, 2022	Office		Non-Office		Total
Revenues:
Atlanta	$	207,582	$	1,323	$	208,905
Austin	184,800		—		184,800
Charlotte	41,776		3,604		45,380
Dallas	12,568		—		12,568
Phoenix	42,098		—		42,098
Tampa	52,369		—		52,369
Other markets	22,423		3,957		26,380
Total segment revenues	563,616		8,884		572,500
Less: Company's share of rental property revenues from unconsolidated joint ventures	( 7,364 )		( 5,280 )		( 12,644 )
Total rental property revenues	$	556,252	$	3,604	$	559,856


Nine Months Ended September 30, 2021	Office		Non-Office		Total
Revenues:
Atlanta	$	198,461	$	1,039	$	199,500
Austin	183,158		—		183,158
Charlotte	60,578		1,873		62,451
Dallas	13,351		—		13,351
Phoenix	38,067		—		38,067
Tampa	43,180		—		43,180
Other markets	31,825		3,930		35,755
Total segment revenues	568,620		6,842		575,462
Less: Company's share of rental property revenues from unconsolidated joint ventures	( 18,405 )		( 4,969 )		( 23,374 )
Total rental property revenues	$	550,215	$	1,873	$	552,088

NOI by reportable segment for the three and nine months ended September 30, 2022 and 2021 are as follows (in thousands):


Three Months Ended September 30, 2022	Office		Non-Office		Total
Net Operating Income:
Atlanta	$	46,678	$	280	$	46,958
Austin	39,564		—		39,564
Charlotte	10,587		935		11,522
Dallas	3,197		—		3,197
Phoenix	11,145		—		11,145
Tampa	11,254		—		11,254
Other markets	4,879		881		5,760
Total Net Operating Income	$	127,304	$	2,096	$	129,400


Three Months Ended September 30, 2021	Office		Non-Office		Total
Net Operating Income:
Atlanta	$	44,333	$	180	$	44,513
Austin	38,532		—		38,532
Charlotte	12,491		361		12,852
Dallas	3,424		—		3,424
Phoenix	9,299		—		9,299
Tampa	9,434		—		9,434
Other markets	5,347		747		6,094
Total Net Operating Income	$	122,860	$	1,288	$	124,148


Nine Months Ended September 30, 2022	Office		Non-Office		Total
Net Operating Income:
Atlanta	$	137,357	$	765	$	138,122
Austin	112,496		—		112,496
Charlotte	30,845		2,549		33,394
Dallas	9,696		—		9,696
Phoenix	29,988		—		29,988
Tampa	32,588		—		32,588
Other markets	13,319		2,455		15,774
Total Net Operating Income	$	366,289	$	5,769	$	372,058


Nine Months Ended September 30, 2021	Office		Non-Office		Total
Net Operating Income:
Atlanta	$	130,551	$	433	$	130,984
Austin	108,764		—		108,764
Charlotte	43,176		796		43,972
Dallas	10,546		—		10,546
Phoenix	27,252		—		27,252
Tampa	27,755		—		27,755
Other markets	18,142		2,562		20,704
Total Net Operating Income	$	366,186	$	3,791	$	369,977

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,
	2022		2021		2022		2021
Net Operating Income	$	129,400	$	124,148	$	372,058	$	369,977
Net operating income from unconsolidated joint ventures	( 2,819 )		( 5,762 )		( 8,080 )		( 15,953 )
Fee income	1,677		3,094		5,370		12,426
Termination fees	242		1,775		2,153		2,599
Other income	38		123		2,522		405
Reimbursed expenses	( 418 )		( 383 )		( 1,455 )		( 1,149 )
General and administrative expenses	( 6,498 )		( 7,968 )		( 21,557 )		( 22,014 )
Interest expense	( 18,380 )		( 16,709 )		( 50,454 )		( 50,573 )
Depreciation and amortization	( 79,116 )		( 72,073 )		( 219,721 )		( 214,399 )

Other expenses	( 231 )		( 421 )		( 877 )		( 1,835 )
Income from unconsolidated joint ventures	634		2,128		7,038		5,826
Gain on sales of investments in unconsolidated joint ventures	56,260		13,121		56,260		13,160
Gain (loss) on investment property transactions	( 20 )		13,063		( 61 )		13,037
Loss on extinguishment of debt	—		—		( 100 )		—
Net income	$	80,769	$	54,136	$	143,096	$	111,507

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

Overview of 2022 Performance and Company and Industry Trends

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 in excess of 99% of CPLP and consolidates CPLP. CPLP owns Cousins TRS Services LLC, a taxable entity that 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 Atlanta, Austin, Charlotte, Phoenix, Tampa, Dallas, and Nashville. This strategy is based on a disciplined approach to capital allocation that includes asset 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 compelling growth 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.

During the quarter, we leased or renewed 431,000 square feet of office space. Straight-line basis net rent per square foot increased 20.4% for those office spaces that were under lease within the past year. Same property net operating income (defined below) for consolidated properties and our share of unconsolidated properties increased 1.8% between the three months ended September 30, 2022 and 2021.

On September 29, 2022, we sold our 50% owned joint venture interest in Carolina Square Holdings LP ("Carolina Square") to our partner for a gross sales price of $105.0 million. We recognized a gain of $56.3 million on this sale.

Subsequent to quarter end, on October 3, 2022, we entered into a Delayed Draw Term Loan Agreement (the "2022 Term Loan") and borrowed the full $400.0 million available under the loan. The 2022 Term Loan matures on March 3, 2025 with four consecutive options to extend the maturity date for an additional six months. The 2022 Term Loan has a floating interest rate tied to the Secured Overnight Financing Rate ("SOFR").

As noted above, we continue to execute new, renewal, and expansion leases with net rent increases during this current period of several socio-economic challenges. As it relates to the lingering COVID-19 pandemic specifically, our buildings and parking facilities have remained open for business, while the usage of our assets remains lower than pre-pandemic levels. Ongoing usage of our assets could also be negatively impacted by customer behavior, such as the social acceptance and perceived economic benefits of hybrid work arrangements. Policies and practices of employers regarding these arrangements continue to evolve, but we believe our customers will prioritize a culture that fosters collaboration, innovation, and productivity and that our customers will accordingly expect their employees to be present in person on a more consistent basis within our high-quality and well-amenitized properties. Although difficult to estimate, we currently expect usage will gradually increase throughout the remainder of 2022, and this is expected to result in increases in parking revenue as well as increases in certain operating expenses. Factors that could cause actual results to differ materially from our current expectations are set forth under "Disclosure Regarding Forward Looking Statements."

Results of Operations For The Three and Nine Months Ended September 30, 2022

General

Net income available to common stockholders for the three and nine months ended September 30, 2022 was $80.6 million and $142.7 million, respectively. For the three and nine months ended September 30, 2021, the net income available to common stockholders was $54.0 million and $111.3 million, respectively. We detail below material changes in the components of net income available to common stockholders for the three and nine months ended September 30, 2022 compared to 2021.

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

The following results include the performance of our Same Property portfolio. Our Same Property portfolio includes office properties that were stabilized and owned by us for the entirety of each comparable reporting period presented. A stabilized property is one that has achieved 90% economic occupancy or has been substantially complete and owned by us for one year. Same Property amounts for the 2022 versus 2021 comparison are from properties that were stabilized and owned as of January 1, 2021 through September 30, 2022.

We use Net Operating Income ("NOI"), a non-GAAP financial measure, to assess the operating performance of our properties. NOI is also widely used by industry analysts and investors to evaluate performance. NOI, which is rental property revenues (excluding termination fees) less rental property operating expenses, excludes certain components from net income in order to provide results that are more closely related to a property's results of operations. Certain items, such as interest expense, while included in net income, do not affect the operating performance of a real estate asset and are often incurred at the corporate level as opposed to the property level. As a result, we use only those income and expense items that are incurred at the property level to evaluate a property's performance.

Depreciation, amortization, as well as gains or losses on sales of depreciated investment assets and impairment are also excluded from NOI. Same Property NOI allows analysts, investors, and management to analyze continuing operations and evaluate the growth trend of our portfolio.

Rental property revenues, rental property operating expenses, and NOI changed between the 2022 and 2021 periods as follows ($ in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Rental Property Revenues
Same Property	$	167,140	$	163,493	$	3,647	2.2	%	$	486,251	$	488,109	$	(1,858)	(0.4)	%
Non-Same Property	26,073		20,247		5,826		28.8	%	71,452		61,380		10,072		16.4	%
	193,213		183,740		9,473		5.2	%	557,703		549,489		8,214		1.5	%

Termination Fee Income	242		1,775		(1,533)				2,153		2,599		(446)
Total Rental Property Revenues	$	193,455	$	185,515	$	7,940			$	559,856	$	552,088	$	7,768

Rental Property Operating Expenses
Same Property	$	59,731	$	58,013	$	1,718	3.0	%	$	172,748	$	172,121	$	627	0.4	%
Non-Same Property	6,901		7,341		(440)		(6.0)	%	20,977		23,344		(2,367)		(10.1)	%

Total Rental Property Operating Expenses	$	66,632	$	65,354	$	1,278	2.0	%	$	193,725	$	195,465	$	(1,740)	(0.9)	%

Net Operating Income
Same Property NOI	$	107,409	$	105,480	$	1,929	1.8	%	$	313,503	$	315,988	$	(2,485)	(0.8)	%
Non-Same Property NOI	19,172		12,906		6,266		48.6	%	50,475		38,036		12,439		32.7	%

Total NOI	$	126,581	$	118,386	$	8,195	6.9	%	$	363,978	$	354,024	$	9,954	2.8	%

Same Property Rental Property Revenues increased for the three months ended September 30, 2022 compared to the same period in the prior year primarily due to an increase in economic occupancy at our Terminus and Domain office properties and related increases in revenues recognized from tenant funded improvements, partially offset by a decrease in economic occupancy at our Promenade Tower office property while under partial redevelopment.

Same Property Operating Expenses increased for the three months ended September 30, 2022 compared to the same period in the prior year primarily due to an increase in expenses related to higher physical occupancy at our properties, partially offset by a decrease in real estate taxes as well as expenses at our 3350 Peachtree office property while under partial redevelopment.

Non-Same Property Rental Property Revenues increased for the three and nine months ended September 30, 2022 compared to the same period in the prior year primarily due to the following: the 2021 acquisitions of 725 Ponce and Heights Union, and the consolidation of 300 Colorado upon purchase of our partners' interests in the venture in the fourth quarter of 2021, which were partially offset by the 2021 sales of Burnett Plaza, 816 Congress, and One South at the Plaza, and the 2022 commencement of a full building redevelopment project at Promenade Central. Non-Same Property Operating Expenses decreased for the three and nine month periods primarily due to refunds of real estate taxes for two previously sold properties.

Termination Fee income decreased $1.5 million for the three months ended September 30, 2022 compared to the same period in the prior year due to the timing of termination notices and expected move outs.

Fee Income

Fee income decreased $1.4 million, or 45.8%, and $7.1 million, or 56.8%, for the three and nine months ended September 30, 2022 compared to the same periods in the prior year. The decreases are due to declining development activities as we reached the completion of the Norfolk Southern transactions during the third quarter of 2022. The Norfolk Southern transactions are described in further detail in note 2 to the unaudited condensed consolidated financial statements in this Form 10-Q.

General and Administrative Expenses

General and administrative expenses decreased $1.5 million, or 18.4%, for the three months ended September 30, 2022 compared to the same period in the prior year. This decrease is primarily driven by changes in stock compensation expense and decreases in other employee compensation expense.

Interest Expense

Interest expense, net of amounts capitalized, increased $1.7 million, or 10.0%, for the three months ended September 30, 2022, compared to the same period in the prior year. This increase is primarily due to increases in interest rates on our variable rate debt and increase in average outstanding balance on our line of credit, partially offset by an increase in capitalized expense as a result of development and redevelopment activities.

Depreciation and Amortization

Depreciation and amortization changed between the 2022 and 2021 periods as follows ($ in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Depreciation and Amortization
Same Property	$	67,171	$	65,010	$	2,161	3.3	%	$	189,818	$	192,123	$	(2,305)	(1.2)	%
Non-Same Property	11,807		6,907		4,900		70.9	%	29,452		21,805		7,647		35.1	%
Non-Real Estate Assets	138		156		(18)		(11.5)	%	451		471		(20)		(4.2)	%
Total Depreciation and Amortization	$	79,116	$	72,073	$	7,043	9.8	%	$	219,721	$	214,399	$	5,322	2.5	%

Same Property depreciation and amortization increased between the 2022 and 2021 three month periods primarily due to an increase in tenant improvements placed into service during the third quarter of 2022, partially offset by a decrease related to intangible in-place lease assets recognized upon the acquisition of properties. Same Property depreciation and amortization decreased between the 2022 and 2021 nine month periods primarily due to a decrease related to the intangible in-place lease assets recognized upon the acquisition of properties, partially offset by an increase in tenant improvements placed into service during the third quarter of 2022. Intangible in-place lease assets are amortized over the remainder of the lease term as of the date of acquisition, and an increasing number of those leases have reached their expiration.

Non-Same Property depreciation and amortization increased between the 2022 and 2021 three and nine month periods primarily due to the following: the 2021 acquisitions of 725 Ponce and Heights Union, and the consolidated of 300 Colorado upon purchase of our partners' interests in the venture in the fourth quarter of 2021, partially offset by the 2021 sales of 816 Congress and One South at the Plaza, and the suspension of depreciation during the full building redevelopment project at our Promenade Central operating property which commenced in 2022.

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,
	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Net operating income	$	2,819	$	5,762	$	(2,943)	(51.1)	%	$	8,080	$	15,953	$	(7,873)	(49.4)	%

Other income, net	36		110		(74)		(67.3)	%	136		173		(37)		(21.4)	%
Gain on sale of undepreciated property	(22)		—		(22)		N/A		4,478		—		4,478		N/A
Depreciation and amortization	(1,189)		(2,917)		1,728		(59.2)	%	(3,424)		(8,092)		4,668		(57.7)	%
Interest expense	(1,010)		(804)		(206)		25.6	%	(2,316)		(2,182)		(134)		6.1	%
Net gain (loss) on sale of investment property	—		(23)		23		(100.0)	%	84		(26)		110		(423.1)	%
Income from unconsolidated joint ventures	$	634	$	2,128	$	(1,494)	(70.2)	%	$	7,038	$	5,826	$	1,212	20.8	%

Income from unconsolidated joint ventures decreased between the 2022 and 2021 three month periods primarily due to the decrease in net operating income and decrease in depreciation and amortization, due to the sale of our interest in the Dimensional Place joint venture in September 2021. Income from unconsolidated joint ventures increased between the 2022 and 2021 nine month periods primarily due to the gain from the sale of a 3.0 acre land parcel in Uptown Dallas in June 2022, partially offset by a decrease in net operating income and decrease in depreciation and amortization due to the sale of our interest in the Dimensional Place joint venture in September 2021.

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 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 our officers and other key employees.

The reconciliation of net income to FFO is as follows for the three and nine months ended September 30, 2022 and 2021 (in thousands, except per share information):


	Three Months Ended September 30,
	2022					2021
	Dollars		Weighted Average Common Shares	Per Share Amount		Dollars		Weighted Average Common Shares	Per Share Amount
Net Income Available to Common Stockholders	$	80,639	151,435	$	0.53	$	54,018	148,688	$	0.36
Noncontrolling interest related to unitholders	26		25	—		9		25	—

Conversion of unvested restricted stock units	—		235	—		—		59	—

Net Income — Diluted	80,665		151,695	0.53		54,027		148,772	0.36
Depreciation and amortization of real estate assets:
Consolidated properties	78,978		—	0.52		71,918		—	0.49
Share of unconsolidated joint ventures	1,189		—	0.01		2,917		—	0.02
Partners' share of real estate depreciation	(182)		—	—		(231)		—	—
Loss (gain) on sale of depreciated properties:
Consolidated properties	20		—	—		(13,127)		—	(0.09)
Share of unconsolidated joint ventures	—		—	—		23		—	—
Investments in unconsolidated joint ventures	(56,260)		—	(0.37)		(13,121)		—	(0.09)

Funds From Operations	$	104,410	151,695	$	0.69	$	102,406	148,772	$	0.69



	Nine Months Ended September 30,
	2022					2021
	Dollars		Weighted Average Common Shares	Per Share Amount		Dollars		Weighted Average Common Shares	Per Share Amount
Net Income Available to Common Stockholders	$	142,675	149,670	$	0.95	$	111,281	148,659	$	0.75
Noncontrolling interest related to unitholders	38		25	—		20		25	—
Conversion of stock options	—		—	—		—		1	—
Conversion of unvested restricted stock units	—		251	—		—		58	—

Net Income — Diluted	142,713		149,946	0.95		111,301		148,743	0.75
Depreciation and amortization of real estate assets:
Consolidated properties	219,270		—	1.46		213,929		—	1.44
Share of unconsolidated joint ventures	3,424		—	0.02		8,092		—	0.05
Partners' share of real estate depreciation	(558)		—	—		(670)		—	—
Loss (gain) on sale of depreciated properties:
Consolidated properties	61		—	—		(13,101)		—	(0.09)
Share of unconsolidated joint ventures	(84)		—	—		26		—	—
Investments in unconsolidated joint ventures	(56,260)		—	(0.37)		(13,160)		—	(0.09)

Funds From Operations	$	308,566	149,946	$	2.06	$	306,417	148,743	$	2.06

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. We consider NOI to be an appropriate supplemental measure to net income as it helps both management and investors understand the core operations of our 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 for each of the periods presented (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	80,769	$	54,136	$	143,096	$	111,507
Net operating income from unconsolidated joint ventures	2,819		5,762		8,080		15,953
Fee income	(1,677)		(3,094)		(5,370)		(12,426)
Termination fees	(242)		(1,775)		(2,153)		(2,599)
Other income	(38)		(123)		(2,522)		(405)
Reimbursed expenses	418		383		1,455		1,149
General and administrative expenses	6,498		7,968		21,557		22,014
Interest expense	18,380		16,709		50,454		50,573

Depreciation and amortization	79,116		72,073		219,721		214,399

Other expenses	231		421		877		1,835
Income from unconsolidated joint ventures	(634)		(2,128)		(7,038)		(5,826)
Gain on sale of investment in unconsolidated joint ventures	(56,260)		(13,121)		(56,260)		(13,160)
Loss (gain) on investment property transactions	20		(13,063)		61		(13,037)
Loss on extinguishment of debt	—		—		100		—
Net Operating Income	$	129,400	$	124,148	$	372,058	$	369,977

Liquidity and Capital Resources

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

• property and land acquisitions;

• expenditures on development and redevelopment projects;

• building improvements, tenant improvements, and leasing costs;

• principal and interest payments on indebtedness;

• general and administrative costs; and

• common stock dividends and distributions to outside unitholders of CPLP.

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, 2022, we had $301.2 million drawn under our credit facility with the ability to borrow the remaining $698.8 million, as well as $5.5 million of cash and cash equivalents. We expect to have sufficient liquidity to meet our obligations for the foreseeable future.

Other Debt Information

On May 2, 2022, we entered into a Fifth Amended and Restated Credit Agreement (the "Credit Facility") under which we may borrow up to $1.0 billion if certain conditions are satisfied. The Credit Facility recast the previous credit facility by, among other things, extending the maturity date to April 30, 2027 and reducing certain variable interest rate spreads and other fees. See note 7 of Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for additional information.

In June 2021, we entered into an Amended and Restated Term Loan Agreement (the "2021 Term Loan") that amended the former term loan agreement. Under the 2021 Term Loan, we have borrowed $350 million that matures on August 30, 2024, with options to, on up to four successive occasions, extend the maturity date for an additional 180 days. See note 7 of Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for additional information. On September 19, 2022, we entered into the First Amendment to the 2021 Term Loan. This amendment aligns covenants and available interest rates, including the addition of the SOFR, to that of the Credit Facility. On September 19, 2022, we provided notice of our election to use the Daily SOFR Rate Loan provisions.

On September 27, 2022, the Company entered into a floating-to-fixed interest rate swap with respect to the $350 million 2021 Term Loan through the maturity date of August 30, 2024. This swap effectively fixed the underlying SOFR rate at 4.23%. Please see note 8 for more information on this cash flow hedge.

Our existing mortgage debt is comprised of non-recourse, fixed-rate mortgage notes secured by various real estate assets. We expect to either refinance our non-recourse mortgage loans at maturity or repay the mortgage loans with other capital resources, including our credit facility, unsecured debt, non-recourse mortgages, construction loans, the sale of assets, joint venture equity, the issuance of common stock, the issuance of preferred stock, or the issuance of units of CPLP. Many of our non-recourse mortgages contain covenants that, 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 resources. We are in compliance with all covenants of our existing unsecured and secured debt.

87% of our consolidated debt bears interest at a fixed rate. One debt instrument held by an unconsolidated joint venture has an interest rate based on the London Interbank Offered Rate ("LIBOR"). LIBOR has been the subject of regulatory guidance and proposals for reform, and in July 2017, the United Kingdom's Financial Conduct Authority ("FCA") (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. In March 2021, the FCA announced that it now intends to cease the US dollar LIBOR setting on June 30, 2023. Provisions exist in this unconsolidated debt to convert its variable interest rate to an alternative rate. It is anticipated that the variable rate on the joint ventures debt will be converted to SOFR prior to June 20, 2023 under this provision.

Future Capital Requirements

To meet capital requirements for future investment activities over the long-term, we intend to actively manage our portfolio of properties and strategically sell assets to exit our non-core holdings and reposition our portfolio. We expect to continue to utilize cash retained from operations, as well as third-party sources of capital such as indebtedness, to fund future commitments as well as utilize construction facilities for some development assets, if available and under appropriate terms.

We may also generate capital through the issuance of securities that include common or preferred stock, warrants, debt securities, depository shares, or the issuance of CPLP limited partnership units.

Our business model also includes raising or recycling capital, which can assist in meeting obligations and funding 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

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,
	2022		2021		Change
Net cash provided by operating activities	$	272,348	$	298,587	$	(26,239)
Net cash used in investing activities	(248,432)		(51,406)		(197,026)
Net cash used in financing activities	(27,346)		(246,551)		219,205

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

Cash Flows from Operating Activities. Cash flows provided by operating activities decreased $26.2 million between the 2022 and 2021 nine month periods primarily due to timing of receipt of prepaid rents from tenants and a decrease in cash provided by operating distributions from unconsolidated joint ventures driven by the sale of our interest in the Dimensional Fund Advisors joint venture in July 2021.

Cash Flows from Investing Activities. Cash flows used in investing activities increased $197.0 million between the 2022 and 2021 nine month periods primarily due to the 2021 sale of Burnett Plaza; 2022 redevelopment activity at two of our operating properties, including a full building redevelopment of Promenade Central; pro-rata contributions to the Neuhoff Holdings LLC joint venture to fund the development of the Neuhoff mixed use project that commenced in third quarter 2021; the purchase of our partner's 10% interest in the Avalon office properties in April 2022; and a first quarter 2021 pro-rata distribution of proceeds from a mortgage note issuance from our Carolina Square Holdings LP joint venture. These were partially offset by proceeds from the sale of our 50% interest in the Carolina Square Holdings LP joint venture in September 2022.

Cash Flows from Financing Activities. Cash flows used in financing activities decreased $219.2 million between the 2022 and 2021 nine month periods primarily due to the settlement of forward contracts sold under our Equity Distribution Agreement known as at-the-market stock offering program and an increase in net borrowings on our Credit Facility, partially offset by cash flows provided from the amended 2021 Term Loan issued in June 2021.

Non-Cash Activities. Our tenants are increasingly spending amounts in excess of the tenant improvement allowance in their leases. These tenant funded improvements, which have been determined to be owned by us, are recorded as an asset within operating properties and deferred income on our balance sheet. The increase in non-cash activity related to tenant improvements recorded in deferred income during the period is primarily due to a significant amount of such tenant funded improvements being placed into service during the period.

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 (including tenant improvements) 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 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 three and nine months ended September 30, 2022 and 2021 are as follows (in thousands):


	Nine Months Ended September 30,
	2022		2021
Operating — building improvements	$	72,549	$	37,330
Development	68,553		62,383
Operating — leasing costs	153,321		60,639
Acquisition of property	—		299,347
Capitalized interest	11,068		4,202
Capitalized personnel costs	6,352		5,332
Change in accrued capital expenditures	(49,021)		7,658
Purchase of land held-for-investment	—		11,352
Total property acquisition, development, and tenant asset expenditures	$	262,822	$	488,243

Capital expenditures decreased $225.4 million between the 2022 and 2021 periods primarily due to the acquisition of 725 Ponce in the third quarter of 2021 and a land purchase in the first quarter of 2021, partially offset by the commencement of redevelopment activities at two of our operating properties in the first quarter of 2022, the start of the Domain 9 development project in the second quarter 2021, and an increase in building improvements and leasing costs.

Capital expenditures related to operating leasing costs increased primarily due to a significant amount of tenant improvements being placed into service during the nine months ended September 30, 2022 compared to the same period in the prior year. The amount we owe our tenants for reimbursement of tenants' allowances has increased as of September 30, 2022 compared to September 30, 2021. This results in a partially offsetting decrease in cash used for capital expenditures for the nine months ended September 30, 2022.

The amounts of tenant improvement and leasing costs for our office portfolio on a per square foot basis for the three months ended September 30, 2022 and 2021 were as follows:


	2022	2021
New leases	$12.33	$11.83
Renewal leases	$8.74	$6.61
Expansion leases	$12.63	$11.48

The amounts of tenant improvement and leasing costs on a per square foot basis vary by lease and by market.

Dividends. We paid common dividends of $143.8 million and $136.7 million in the nine months ended September 30, 2022 and 2021, 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, indebtedness, and proceeds from offerings of equity securities, 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 that 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 2021 Annual Report on Form 10-K and note 4 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, 2022, our unconsolidated joint ventures had aggregate outstanding indebtedness to third parties of $153.9 million. These loans are generally mortgage or construction loans, which are non-recourse to us. 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.

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, 2021.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in t he market risk associated with our notes payable at September 30, 2022 compared to that as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

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 applies judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding our control objectives.

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 controls over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Information regarding legal proceedings is described under the subheading "Litigation" in note 9 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, 2021. There have been no material changes in our risk factors from those previously disclosed in our Annual Report. You should carefully consider the risks described in our Annual Report, which could materially affect our business, financial condition, or future results. The risks described in our Annual Report 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.

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

For information on our equity compensation plans, see note 16 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 or purchase any common shares during the third quarter of 2022.

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.

3.2.1		Bylaws of the Registrant, as amended and restated July 26, 2022, filed as Exhibit 3.2.1 to the Registrant's Form 10-Q for the quarter ended June 30, 2022, and incorporated herein by reference.


10(h)	†	First Amendment to Amended and Restated Term Loan Agreement, dated as of September 19, 2022, among Cousins Properties LP, as the Borrower; Cousins Properties Incorporated, as the Parent and a Guarantor; JPMorgan Chase Bank, N.A., as Syndication Agent; Bank of America, N.A., as the Administrative Agent; PNC Bank, National Association and Truist Bank, as Co-Documentation Agents; JPMorgan Chase Bank, N.A., BofA Securities, Inc., PNC Capital Markets, LLC, and Truist Securities, Inc., as Joint Lead Arrangers and Joint Bookrunners.

10(i)	†	Delayed Draw Term Loan Agreement, dated as of October 3, 2022, among Cousins Properties LP, as the Borrower; Cousins Properties Incorporated, as the Parent and a Guarantor; JPMorgan Chase Bank, N.A., as Syndication Agent; Bank of America, N.A., as Administrative Agent; Truist Bank, PNC Bank, National Association, Morgan Stanley Senior Funding, Inc., and U.S. Bank National Association, as Documentation Agents; J.P. Morgan Chase Bank, N.A., BofA Securities, Inc., Truist Securities, Inc. and PNC Capital Markets, LLC, as Joint Lead Arrangers and Joint Bookrunners.

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 consolidated balance sheets, (ii) the consolidated statements of operations, (iii) the consolidated statements of equity, (iv) the 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.

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 hereunto 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 27, 2022

TABLE OF CONTENTS

Part I Financial Information Item 1. Condensed Consolidated Financial Statements Item 2. Management's Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II. Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 6. Exhibits

Exhibits

CUZ 10-Q Quarter ended Sept. 30, 2022

Exhibits