þ
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
GEORGIA
(State or other jurisdiction of
incorporation or organization)
|
58-0869052
(I.R.S. Employer
Identification No.)
|
3344 Peachtree Road NE, Suite 1800, Atlanta, Georgia
(Address of principal executive offices)
|
30326-4802
(Zip Code)
|
Former Address
(191 Peachtree Street, Suite 500, Atlanta, Georgia 30308-1740)
|
|
Large accelerated filer
þ
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
|
|
(Do not check if a smaller reporting company)
|
Emerging growth company
o
|
Class
|
|
Outstanding at July 20, 2017
|
Common Stock, $1 par value per share
|
|
419,992,589 shares
|
|
Page No.
|
|
|
•
|
our business and financial strategy;
|
•
|
the impact of the transaction involving us, Parkway Properties, Inc. ("Parkway"), and Parkway, Inc. ("New Parkway"), including future financial and operating results, plans, objectives, expectations, and intentions;
|
•
|
all statements that address operating performance, events, or developments that we expect or anticipate will occur in the future — including statements relating to creating value for stockholders;
|
•
|
impact of the transactions with Parkway and New Parkway on tenants, employees, stockholders, and other constituents of the combined companies; and
|
•
|
integrating Parkway with us.
|
•
|
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 failure to achieve benefits from the repurchase of common stock;
|
•
|
the availability of buyers and pricing with respect to the disposition of assets;
|
•
|
risks and uncertainties related to national and local economic conditions, the real estate industry, and the commercial real estate markets in which we operate, particularly in Atlanta, Charlotte, and Austin where we have high concentrations of our annualized lease revenue;
|
•
|
changes to our strategy with regard to land and other non-core holdings that may require impairment losses to be recognized;
|
•
|
leasing risks, including the ability to obtain new tenants or renew expiring tenants, the ability to lease newly developed and/or recently acquired space, and the risk of declining leasing rates;
|
•
|
the adverse change in the financial condition of one or more of our major tenants;
|
•
|
volatility in interest rates and insurance rates;
|
•
|
competition from other developers or investors;
|
•
|
the risks associated with real estate developments (such as zoning approval, receipt of required permits, construction delays, cost overruns, and leasing risk);
|
•
|
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 to meet regulatory requirements;
|
•
|
risks associated with litigation resulting from the transactions with Parkway and from liabilities or contingent liabilities assumed in the transactions with Parkway;
|
•
|
risks associated with any errors or omissions in financial or other information of Parkway that has been previously provided to the public;
|
•
|
the ability to successfully integrate our operations and employees in connection with the transactions with Parkway and New Parkway;
|
•
|
the ability to realize anticipated benefits and synergies of the transactions with Parkway and New Parkway;
|
•
|
potential changes to state, local, or federal regulations applicable to our business;
|
•
|
material changes in the dividend rates on securities 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;
|
•
|
significant costs related to uninsured losses, condemnation, or environmental issues; and
|
•
|
those additional risks and factors discussed in reports filed with the Securities and Exchange Commission by the Company.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Rental property revenues
|
$
|
114,007
|
|
|
$
|
46,454
|
|
|
$
|
226,524
|
|
|
$
|
91,807
|
|
Fee income
|
1,854
|
|
|
1,824
|
|
|
3,791
|
|
|
4,023
|
|
||||
Other
|
3,174
|
|
|
27
|
|
|
8,600
|
|
|
417
|
|
||||
|
119,035
|
|
|
48,305
|
|
|
238,915
|
|
|
96,247
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rental property operating expenses
|
41,501
|
|
|
19,526
|
|
|
83,026
|
|
|
37,330
|
|
||||
Reimbursed expenses
|
907
|
|
|
798
|
|
|
1,772
|
|
|
1,668
|
|
||||
General and administrative expenses
|
8,618
|
|
|
4,691
|
|
|
14,828
|
|
|
12,934
|
|
||||
Interest expense
|
8,523
|
|
|
5,369
|
|
|
18,264
|
|
|
10,808
|
|
||||
Depreciation and amortization
|
50,040
|
|
|
16,641
|
|
|
104,924
|
|
|
33,182
|
|
||||
Acquisition and transaction costs
|
246
|
|
|
2,424
|
|
|
2,177
|
|
|
2,443
|
|
||||
Other
|
236
|
|
|
152
|
|
|
612
|
|
|
507
|
|
||||
|
110,071
|
|
|
49,601
|
|
|
225,603
|
|
|
98,872
|
|
||||
Gain on extinguishment of debt
|
1,829
|
|
|
—
|
|
|
1,829
|
|
|
—
|
|
||||
Income (loss) from continuing operations before unconsolidated joint ventures and gain (loss) on sale of investment properties
|
10,793
|
|
|
(1,296
|
)
|
|
15,141
|
|
|
(2,625
|
)
|
||||
Income from unconsolidated joint ventures
|
40,320
|
|
|
1,784
|
|
|
40,901
|
|
|
3,618
|
|
||||
Income from continuing operations before gain (loss) on sale of investment properties
|
51,113
|
|
|
488
|
|
|
56,042
|
|
|
993
|
|
||||
Gain (loss) on sale of investment properties
|
119,832
|
|
|
(246
|
)
|
|
119,761
|
|
|
13,944
|
|
||||
Income from continuing operations
|
170,945
|
|
|
242
|
|
|
175,803
|
|
|
14,937
|
|
||||
Income from discontinued operations
|
—
|
|
|
7,523
|
|
|
—
|
|
|
15,624
|
|
||||
Net income
|
170,945
|
|
|
7,765
|
|
|
175,803
|
|
|
30,561
|
|
||||
Net income attributable to noncontrolling interests
|
(2,856
|
)
|
|
—
|
|
|
(2,963
|
)
|
|
—
|
|
||||
Net income available to common stockholders
|
$
|
168,089
|
|
|
$
|
7,765
|
|
|
$
|
172,840
|
|
|
$
|
30,561
|
|
Per common share information — basic and diluted:
|
|
|
|
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
0.40
|
|
|
$
|
—
|
|
|
$
|
0.42
|
|
|
$
|
0.07
|
|
Income from discontinued operations
|
—
|
|
|
0.04
|
|
|
—
|
|
|
0.08
|
|
||||
Net income
|
$
|
0.40
|
|
|
$
|
0.04
|
|
|
$
|
0.42
|
|
|
$
|
0.15
|
|
Weighted average shares — basic
|
419,402
|
|
|
210,129
|
|
|
411,137
|
|
|
210,516
|
|
||||
Weighted average shares — diluted
|
427,180
|
|
|
210,362
|
|
|
419,227
|
|
|
210,687
|
|
||||
Dividends declared per common share
|
$
|
0.06
|
|
|
$
|
0.08
|
|
|
$
|
0.18
|
|
|
$
|
0.16
|
|
|
|
Preferred
Stock |
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Distributions in
Excess of
Net Income
|
|
Stockholders’
Investment
|
|
Nonredeemable
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||||||
Balance December 31, 2016
|
|
$
|
6,867
|
|
|
$
|
403,747
|
|
|
$
|
3,407,430
|
|
|
$
|
(148,373
|
)
|
|
$
|
(1,214,114
|
)
|
|
$
|
2,455,557
|
|
|
$
|
58,683
|
|
|
$
|
2,514,240
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
172,840
|
|
|
172,840
|
|
|
2,963
|
|
|
175,803
|
|
||||||||
Common stock issued pursuant to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stock offering, net of
issuance costs |
|
—
|
|
|
25,000
|
|
|
186,820
|
|
|
—
|
|
|
—
|
|
|
211,820
|
|
|
—
|
|
|
211,820
|
|
||||||||
Director stock grants
|
|
—
|
|
|
121
|
|
|
889
|
|
|
—
|
|
|
—
|
|
|
1,010
|
|
|
—
|
|
|
1,010
|
|
||||||||
Stock based compensation
|
|
—
|
|
|
232
|
|
|
(943
|
)
|
|
—
|
|
|
—
|
|
|
(711
|
)
|
|
—
|
|
|
(711
|
)
|
||||||||
Spin-off of Parkway, Inc.
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
562
|
|
|
562
|
|
|
—
|
|
|
562
|
|
||||||||
Common stock redemption by unit holders
|
|
—
|
|
|
1,203
|
|
|
8,865
|
|
|
—
|
|
|
—
|
|
|
10,068
|
|
|
(10,068
|
)
|
|
—
|
|
||||||||
Amortization of stock options and restricted stock, net of forfeitures
|
|
—
|
|
|
(6
|
)
|
|
975
|
|
|
—
|
|
|
—
|
|
|
969
|
|
|
—
|
|
|
969
|
|
||||||||
Contributions from nonredeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
900
|
|
|
900
|
|
||||||||
Distributions to nonredeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(966
|
)
|
|
(966
|
)
|
||||||||
Common dividends ($0.18 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73,950
|
)
|
|
(73,950
|
)
|
|
—
|
|
|
(73,950
|
)
|
||||||||
Balance June 30, 2017
|
|
$
|
6,867
|
|
|
$
|
430,297
|
|
|
$
|
3,604,036
|
|
|
$
|
(148,373
|
)
|
|
$
|
(1,114,662
|
)
|
|
$
|
2,778,165
|
|
|
$
|
51,512
|
|
|
$
|
2,829,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance December 31, 2015
|
|
$
|
—
|
|
|
$
|
220,256
|
|
|
$
|
1,722,224
|
|
|
$
|
(134,630
|
)
|
|
$
|
(124,435
|
)
|
|
$
|
1,683,415
|
|
|
$
|
—
|
|
|
$
|
1,683,415
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,561
|
|
|
30,561
|
|
|
—
|
|
|
30,561
|
|
||||||||
Common stock issued pursuant to stock based compensation
|
|
—
|
|
|
258
|
|
|
81
|
|
|
—
|
|
|
—
|
|
|
339
|
|
|
—
|
|
|
339
|
|
||||||||
Amortization of stock options and restricted stock, net of forfeitures
|
|
—
|
|
|
(13
|
)
|
|
826
|
|
|
—
|
|
|
—
|
|
|
813
|
|
|
—
|
|
|
813
|
|
||||||||
Contributions from nonredeemable noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,473
|
|
|
1,473
|
|
||||||||
Repurchase of common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,743
|
)
|
|
—
|
|
|
(13,743
|
)
|
|
—
|
|
|
(13,743
|
)
|
||||||||
Common dividends ($0.16 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,728
|
)
|
|
(33,728
|
)
|
|
—
|
|
|
(33,728
|
)
|
||||||||
Balance June 30, 2016
|
|
$
|
—
|
|
|
$
|
220,501
|
|
|
$
|
1,723,131
|
|
|
$
|
(148,373
|
)
|
|
$
|
(127,602
|
)
|
|
$
|
1,667,657
|
|
|
$
|
1,473
|
|
|
$
|
1,669,130
|
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
175,803
|
|
|
$
|
30,561
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Gain on sale of investment properties
|
(119,761
|
)
|
|
(13,944
|
)
|
||
Depreciation and amortization, including discontinued operations
|
104,924
|
|
|
64,350
|
|
||
Amortization of deferred financing costs and premium/discount on notes payable
|
(2,948
|
)
|
|
699
|
|
||
Stock-based compensation expense, net of forfeitures
|
1,979
|
|
|
1,153
|
|
||
Effect of certain non-cash adjustments to rental revenues
|
(24,057
|
)
|
|
(9,656
|
)
|
||
Income from unconsolidated joint ventures
|
(40,901
|
)
|
|
(3,618
|
)
|
||
Operating distributions from unconsolidated joint ventures
|
39,982
|
|
|
4,209
|
|
||
Gain on extinguishment of debt
|
(1,829
|
)
|
|
—
|
|
||
Changes in other operating assets and liabilities:
|
|
|
|
||||
Change in other receivables and other assets, net
|
3,108
|
|
|
(5,188
|
)
|
||
Change in operating liabilities
|
(10,063
|
)
|
|
(8,472
|
)
|
||
Net cash provided by operating activities
|
126,237
|
|
|
60,094
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Proceeds from investment property sales
|
167,118
|
|
|
21,088
|
|
||
Property acquisition, development, and tenant asset expenditures
|
(151,150
|
)
|
|
(75,594
|
)
|
||
Purchase of tenant in common interest
|
(13,382
|
)
|
|
—
|
|
||
Collection of notes receivable
|
5,161
|
|
|
—
|
|
||
Investment in unconsolidated joint ventures
|
(8,266
|
)
|
|
(22,281
|
)
|
||
Distributions from unconsolidated joint ventures
|
40,939
|
|
|
4,099
|
|
||
Change in restricted cash
|
7,495
|
|
|
(876
|
)
|
||
Net cash provided by (used in) investing activities
|
47,915
|
|
|
(73,564
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from credit facility
|
457,000
|
|
|
163,700
|
|
||
Repayment of credit facility
|
(497,000
|
)
|
|
(100,700
|
)
|
||
Proceeds from issuance of notes payable
|
100,000
|
|
|
—
|
|
||
Repayment of notes payable
|
(413,726
|
)
|
|
(4,589
|
)
|
||
Payment of deferred financing costs
|
(2,030
|
)
|
|
—
|
|
||
Shares withheld for payment of taxes on restricted stock vesting
|
(701
|
)
|
|
—
|
|
||
Common stock issued, net of expenses
|
211,820
|
|
|
—
|
|
||
Contributions from noncontrolling interests
|
900
|
|
|
1,473
|
|
||
Distributions to nonredeemable noncontrolling interests
|
(966
|
)
|
|
—
|
|
||
Repurchase of common stock
|
—
|
|
|
(13,743
|
)
|
||
Common dividends paid
|
(48,815
|
)
|
|
(33,728
|
)
|
||
Other
|
99
|
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
(193,419
|
)
|
|
12,413
|
|
||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(19,267
|
)
|
|
(1,057
|
)
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
35,687
|
|
|
2,003
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
16,420
|
|
|
$
|
946
|
|
|
|
|
|
|
|||
Interest paid, net of amounts capitalized
|
$
|
22,721
|
|
|
$
|
14,131
|
|
|
|
|
|
||||
Significant non-cash transactions:
|
|
|
|
|
|||
Transfer from investment in unconsolidated joint ventures to operating properties
|
68,390
|
|
|
—
|
|
||
Transfer from projects under development to operating properties
|
58,928
|
|
|
—
|
|
||
Common stock dividends declared
|
25,212
|
|
|
—
|
|
||
Transfer from investment in unconsolidated joint ventures to projects under development
|
—
|
|
|
5,880
|
|
||
Change in accrued property acquisition, development, and tenant asset expenditures
|
(1,110
|
)
|
|
3,891
|
|
|
|
Three Months Ended June 30, 2016
|
|
Six Months Ended June 30, 2016
|
||||
|
|
|
||||||
Rental property revenues
|
|
$
|
44,281
|
|
|
$
|
87,404
|
|
Rental property operating expenses
|
|
(19,155
|
)
|
|
(36,960
|
)
|
||
Other revenues
|
|
102
|
|
|
288
|
|
||
Interest expense
|
|
(1,965
|
)
|
|
(3,940
|
)
|
||
Depreciation and amortization
|
|
(15,740
|
)
|
|
(31,168
|
)
|
||
Income from discontinued operations
|
|
$
|
7,523
|
|
|
$
|
15,624
|
|
|
|
|
|
|
||||
Cash provided by operating activities
|
|
$
|
23,253
|
|
|
$
|
17,012
|
|
Cash used in investing activities
|
|
$
|
(9,375
|
)
|
|
$
|
(18,112
|
)
|
|
Total Assets
|
|
Total Debt
|
|
Total Equity
|
|
Company’s Investment
|
|
||||||||||||||||||||||||
SUMMARY OF FINANCIAL POSITION:
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
||||||||||||||||
Terminus Office Holdings
|
$
|
267,747
|
|
|
$
|
268,242
|
|
|
$
|
205,454
|
|
|
$
|
207,545
|
|
|
$
|
51,112
|
|
|
$
|
49,476
|
|
|
$
|
25,384
|
|
|
$
|
25,686
|
|
|
EP I LLC
|
1,760
|
|
|
78,537
|
|
|
—
|
|
|
58,029
|
|
|
1,333
|
|
|
18,962
|
|
|
783
|
|
|
18,551
|
|
|
||||||||
EP II LLC
|
520
|
|
|
67,754
|
|
|
—
|
|
|
44,969
|
|
|
239
|
|
|
21,743
|
|
|
88
|
|
|
17,606
|
|
|
||||||||
Charlotte Gateway Village, LLC
|
125,819
|
|
|
119,054
|
|
|
—
|
|
|
—
|
|
|
121,544
|
|
|
116,809
|
|
|
14,163
|
|
|
11,796
|
|
|
||||||||
HICO Victory Center LP
|
14,145
|
|
|
14,124
|
|
|
—
|
|
|
—
|
|
|
14,141
|
|
|
13,869
|
|
|
9,632
|
|
|
9,506
|
|
|
||||||||
Carolina Square Holdings LP
|
88,571
|
|
|
66,922
|
|
|
50,529
|
|
|
23,741
|
|
|
34,087
|
|
|
34,173
|
|
|
18,752
|
|
|
18,325
|
|
|
||||||||
CL Realty, L.L.C.
|
7,989
|
|
|
8,047
|
|
|
—
|
|
|
—
|
|
|
7,915
|
|
|
7,899
|
|
|
2,874
|
|
|
3,644
|
|
|
||||||||
DC Charlotte Plaza LLLP
|
30,780
|
|
|
17,940
|
|
|
—
|
|
|
—
|
|
|
24,209
|
|
|
17,073
|
|
|
12,528
|
|
|
8,937
|
|
|
||||||||
Temco Associates, LLC
|
4,398
|
|
|
4,368
|
|
|
—
|
|
|
—
|
|
|
4,294
|
|
|
4,253
|
|
|
854
|
|
|
829
|
|
|
||||||||
Wildwood Associates
|
16,380
|
|
|
16,351
|
|
|
—
|
|
|
—
|
|
|
16,262
|
|
|
16,314
|
|
|
(1,169
|
)
|
(1)
|
(1,143
|
)
|
(1)
|
||||||||
Crawford Long - CPI, LLC
|
28,400
|
|
|
27,523
|
|
|
72,070
|
|
|
72,822
|
|
|
(45,106
|
)
|
|
(45,928
|
)
|
|
(21,455
|
)
|
(1)
|
(21,866
|
)
|
(1)
|
||||||||
111 West Rio Building
|
—
|
|
|
59,399
|
|
|
—
|
|
|
12,852
|
|
|
—
|
|
|
32,855
|
|
|
—
|
|
|
52,206
|
|
|
||||||||
Courvoisier Centre JV, LLC
|
181,633
|
|
|
172,197
|
|
|
106,500
|
|
|
106,500
|
|
|
68,400
|
|
|
69,479
|
|
|
11,588
|
|
|
11,782
|
|
|
||||||||
HICO Avalon II, LLC
|
5,237
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,237
|
|
|
—
|
|
|
3,928
|
|
|
—
|
|
|
||||||||
AMCO 120 WT Holdings, LLC
|
11,591
|
|
|
10,446
|
|
|
—
|
|
|
—
|
|
|
11,127
|
|
|
9,136
|
|
|
617
|
|
|
184
|
|
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
341
|
|
|
345
|
|
|
||||||||
|
$
|
784,970
|
|
|
$
|
930,904
|
|
|
$
|
434,553
|
|
|
$
|
526,458
|
|
|
$
|
314,794
|
|
|
$
|
366,113
|
|
|
$
|
78,908
|
|
|
$
|
156,388
|
|
|
|
Total Revenues
|
|
Net Income (Loss)
|
|
Company's Share of Income (Loss)
|
|
||||||||||||||||||
SUMMARY OF OPERATIONS:
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
||||||||||||
Terminus Office Holdings
|
$
|
21,908
|
|
|
$
|
20,978
|
|
|
$
|
3,178
|
|
|
$
|
2,597
|
|
|
$
|
1,769
|
|
|
$
|
1,298
|
|
|
EP I LLC
|
4,103
|
|
|
5,991
|
|
|
44,929
|
|
|
1,168
|
|
|
28,525
|
|
|
951
|
|
|
||||||
EP II LLC
|
2,643
|
|
|
2,044
|
|
|
12,967
|
|
|
(1,018
|
)
|
|
9,725
|
|
|
(823
|
)
|
|
||||||
Charlotte Gateway Village, LLC
|
13,380
|
|
|
17,477
|
|
|
4,734
|
|
|
7,263
|
|
|
2,367
|
|
|
987
|
|
|
||||||
HICO Victory Center LP
|
171
|
|
|
169
|
|
|
171
|
|
|
162
|
|
|
114
|
|
|
81
|
|
|
||||||
Carolina Square Holdings LP
|
40
|
|
|
—
|
|
|
(94
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
CL Realty, L.L.C.
|
2,599
|
|
|
246
|
|
|
2,415
|
|
|
64
|
|
|
430
|
|
|
44
|
|
|
||||||
DC Charlotte Plaza LLLP
|
2
|
|
|
—
|
|
|
2
|
|
|
33
|
|
|
2
|
|
|
18
|
|
|
||||||
Temco Associates, LLC
|
80
|
|
|
147
|
|
|
41
|
|
|
79
|
|
|
25
|
|
|
119
|
|
|
||||||
Wildwood Associates
|
—
|
|
|
—
|
|
|
(51
|
)
|
|
(56
|
)
|
|
(26
|
)
|
|
(28
|
)
|
|
||||||
Crawford Long - CPI, LLC
|
6,033
|
|
|
6,028
|
|
|
1,516
|
|
|
1,346
|
|
|
758
|
|
|
673
|
|
|
||||||
111 West Rio Building
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,593
|
)
|
|
—
|
|
|
||||||
Courvoisier Centre JV, LLC
|
6,554
|
|
|
—
|
|
|
(1,083
|
)
|
|
—
|
|
|
(195
|
)
|
|
—
|
|
|
||||||
HICO Avalon II, LLC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
AMCO 120 WT Holdings, LLC
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
298
|
|
|
||||||
|
$
|
57,513
|
|
|
$
|
53,080
|
|
|
$
|
68,713
|
|
|
$
|
11,638
|
|
|
$
|
40,901
|
|
|
$
|
3,618
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
In-place leases, net of accumulated amortization of $74,308 and $46,899 in 2017 and 2016, respectively
|
|
$
|
170,234
|
|
|
$
|
185,251
|
|
Above-market tenant leases, net of accumulated amortization of $10,826 and $6,515 in 2017 and 2016, respectively
|
|
35,746
|
|
|
40,260
|
|
||
Below-market ground lease, net of accumulated amortization of $207 and $69 in 2017 and 2016, respectively
|
|
18,206
|
|
|
18,344
|
|
||
Goodwill
|
|
1,674
|
|
|
1,674
|
|
||
|
|
$
|
225,860
|
|
|
$
|
245,529
|
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Beginning balance
|
$
|
1,674
|
|
|
$
|
3,647
|
|
Allocated to property sales
|
—
|
|
|
(21
|
)
|
||
Ending balance
|
$
|
1,674
|
|
|
$
|
3,626
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Furniture, fixtures and equipment, leasehold improvements, and other deferred costs, net of accumulated depreciation of $23,206 and $23,135 in 2017 and 2016, respectively
|
|
$
|
14,265
|
|
|
$
|
15,773
|
|
Lease inducements, net of accumulated amortization of $825 and $1,278 in 2017 and 2016, respectively
|
|
1,864
|
|
|
2,517
|
|
||
Prepaid expenses and other assets
|
|
11,291
|
|
|
8,432
|
|
||
Line of credit deferred financing costs, net of accumulated amortization of $2,691 and $2,264 in 2017 and 2016, respectively
|
|
1,780
|
|
|
2,182
|
|
||
Predevelopment costs and earnest money
|
|
80
|
|
|
179
|
|
||
|
|
$
|
29,280
|
|
|
$
|
29,083
|
|
Description
|
|
Interest Rate
|
|
Maturity
|
|
June 30, 2017
|
|
December 31, 2016
|
|||||
Term Loan, unsecured
|
|
2.42
|
%
|
|
2021
|
|
$
|
250,000
|
|
|
$
|
250,000
|
|
Fifth Third Center
|
|
3.37
|
%
|
|
2026
|
|
148,049
|
|
|
149,516
|
|
||
Colorado Tower
|
|
3.45
|
%
|
|
2026
|
|
120,000
|
|
|
120,000
|
|
||
Promenade
|
|
4.27
|
%
|
|
2022
|
|
103,864
|
|
|
105,342
|
|
||
Senior Note, unsecured
|
|
4.09
|
%
|
|
2027
|
|
100,000
|
|
|
—
|
|
||
Credit Facility, unsecured
|
|
2.32
|
%
|
|
2019
|
|
94,000
|
|
|
134,000
|
|
||
816 Congress
|
|
3.75
|
%
|
|
2024
|
|
84,095
|
|
|
84,872
|
|
||
3344 Peachtree
|
|
4.75
|
%
|
|
2017
|
|
77,928
|
|
|
78,971
|
|
||
Meridian Mark Plaza
|
|
6.00
|
%
|
|
2020
|
|
24,284
|
|
|
24,522
|
|
||
The Pointe
|
|
4.01
|
%
|
|
2019
|
|
22,730
|
|
|
22,945
|
|
||
One Eleven Congress
|
|
6.08
|
%
|
|
2017
|
|
—
|
|
|
128,000
|
|
||
The ACS Center
|
|
6.45
|
%
|
|
2017
|
|
—
|
|
|
127,508
|
|
||
San Jacinto Center
|
|
6.05
|
%
|
|
2017
|
|
—
|
|
|
101,000
|
|
||
Two Buckhead Plaza
|
|
6.43
|
%
|
|
2017
|
|
—
|
|
|
52,000
|
|
||
|
|
|
|
|
|
1,024,950
|
|
|
1,378,676
|
|
|||
Unamortized premium, net
|
|
|
|
|
|
750
|
|
|
6,792
|
|
|||
Unamortized loan costs
|
|
|
|
|
|
(6,081
|
)
|
|
(4,548
|
)
|
|||
Total Notes Payable
|
|
|
|
|
|
$
|
1,019,619
|
|
|
$
|
1,380,920
|
|
|
Three Months Ended June 30, 2017
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Total interest incurred
|
$
|
10,741
|
|
|
$
|
8,350
|
|
|
$
|
22,072
|
|
|
$
|
16,506
|
|
Less interest - discontinued operations
|
—
|
|
|
(1,965
|
)
|
|
—
|
|
|
(3,940
|
)
|
||||
Interest capitalized
|
(2,218
|
)
|
|
(1,016
|
)
|
|
(3,808
|
)
|
|
(1,758
|
)
|
||||
Total interest expense
|
$
|
8,523
|
|
|
$
|
5,369
|
|
|
$
|
18,264
|
|
|
$
|
10,808
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
||||||||
Earnings per Common Share - basic:
|
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
170,945
|
|
|
$
|
242
|
|
|
$
|
175,803
|
|
|
$
|
14,937
|
|
|
Net income attributable to noncontrolling interests in CPLP
from continuing operations |
(2,856
|
)
|
|
—
|
|
|
(2,957
|
)
|
|
—
|
|
|
||||
Net income attributable to other noncontrolling interests
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
||||
Income from continuing operations available for common stockholders
|
168,089
|
|
|
242
|
|
|
172,840
|
|
|
14,937
|
|
|
||||
Income from discontinued operations
|
—
|
|
|
7,523
|
|
|
—
|
|
|
15,624
|
|
|
||||
Net income available for common stockholders
|
$
|
168,089
|
|
|
$
|
7,765
|
|
|
$
|
172,840
|
|
|
$
|
30,561
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares - basic
|
419,402
|
|
|
210,129
|
|
|
411,137
|
|
|
210,516
|
|
|
||||
Earnings per common share - basic:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations available for common
stockholders
|
$
|
0.40
|
|
|
$
|
—
|
|
|
$
|
0.42
|
|
|
$
|
0.07
|
|
|
Income from discontinued operations available for common
stockholders
|
—
|
|
|
0.04
|
|
|
—
|
|
|
0.08
|
|
|
||||
Earnings per common share - basic
|
$
|
0.40
|
|
|
$
|
0.04
|
|
|
$
|
0.42
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share - diluted:
|
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
170,945
|
|
|
$
|
242
|
|
|
$
|
175,803
|
|
|
$
|
14,937
|
|
|
Net income attributable to other noncontrolling interests
from continuing operations
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
||||
Income from continuing operations available for common stockholders before net income attributable to noncontrolling interests in CPLP
|
170,945
|
|
|
242
|
|
|
175,797
|
|
|
14,937
|
|
|
||||
Income from discontinued operations available for common stockholders
|
—
|
|
|
7,523
|
|
|
—
|
|
|
15,624
|
|
|
||||
Net income available for common stockholders before
net income attributable to noncontrolling interests in
CPLP
|
$
|
170,945
|
|
|
$
|
7,765
|
|
|
$
|
175,797
|
|
|
$
|
30,561
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares - basic
|
419,402
|
|
|
210,129
|
|
|
411,137
|
|
|
210,516
|
|
|
||||
Add:
|
|
|
|
|
|
|
|
|
||||||||
Potential dilutive common shares - stock options
|
320
|
|
|
233
|
|
|
306
|
|
|
171
|
|
|
||||
Weighted average units of CPLP convertible into
common shares
|
7,458
|
|
|
—
|
|
|
7,784
|
|
|
—
|
|
|
||||
Weighted average common shares - diluted
|
427,180
|
|
|
210,362
|
|
|
419,227
|
|
|
210,687
|
|
|
||||
Earnings per common share - diluted:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations available for common stockholders before net income attributable to noncontrolling interests in CPLP
|
$
|
0.40
|
|
|
$
|
—
|
|
|
$
|
0.42
|
|
|
$
|
0.07
|
|
|
Income from discontinued operations available for common
stockholders
|
—
|
|
|
0.04
|
|
|
—
|
|
|
0.08
|
|
|
||||
Earnings per common share - diluted
|
$
|
0.40
|
|
|
$
|
0.04
|
|
|
$
|
0.42
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average anti-dilutive stock options outstanding
|
731
|
|
|
1,129
|
|
|
744
|
|
|
1,131
|
|
|
Three Months Ended June 30, 2017
|
|
Office
|
|
Mixed-Use
|
|
Total
|
||||||
Net Operating Income:
|
|
|
|
|
|
|
||||||
Atlanta
|
|
$
|
29,218
|
|
|
$
|
853
|
|
|
$
|
30,071
|
|
Austin
|
|
14,852
|
|
|
—
|
|
|
14,852
|
|
|||
Charlotte
|
|
15,202
|
|
|
—
|
|
|
15,202
|
|
|||
Orlando
|
|
3,318
|
|
|
—
|
|
|
3,318
|
|
|||
Tampa
|
|
7,451
|
|
|
—
|
|
|
7,451
|
|
|||
Phoenix
|
|
8,838
|
|
|
—
|
|
|
8,838
|
|
|||
Other
|
|
383
|
|
|
—
|
|
|
383
|
|
|||
Total Net Operating Income
|
|
$
|
79,262
|
|
|
$
|
853
|
|
|
$
|
80,115
|
|
Three Months Ended June 30, 2016
|
|
Office
|
|
Mixed-Use
|
|
Total
|
||||||
Net Operating Income:
|
|
|
|
|
|
|
||||||
Houston
|
|
$
|
25,125
|
|
|
$
|
—
|
|
|
$
|
25,125
|
|
Atlanta
|
|
21,572
|
|
|
1,742
|
|
|
23,314
|
|
|||
Austin
|
|
5,763
|
|
|
—
|
|
|
5,763
|
|
|||
Charlotte
|
|
4,819
|
|
|
—
|
|
|
4,819
|
|
|||
Other
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
|||
Total Net Operating Income
|
|
$
|
57,266
|
|
|
$
|
1,742
|
|
|
$
|
59,008
|
|
Six Months Ended June 30, 2017
|
|
Office
|
|
Mixed-Use
|
|
Total
|
||||||
Net Operating Income:
|
|
|
|
|
|
|
||||||
Atlanta
|
|
$
|
59,190
|
|
|
$
|
3,126
|
|
|
$
|
62,316
|
|
Austin
|
|
29,039
|
|
|
—
|
|
|
29,039
|
|
|||
Charlotte
|
|
30,627
|
|
|
—
|
|
|
30,627
|
|
|||
Orlando
|
|
7,108
|
|
|
—
|
|
|
7,108
|
|
|||
Tampa
|
|
14,287
|
|
|
—
|
|
|
14,287
|
|
|||
Phoenix
|
|
16,056
|
|
|
—
|
|
|
16,056
|
|
|||
Other
|
|
848
|
|
|
—
|
|
|
848
|
|
|||
Total Net Operating Income
|
|
$
|
157,155
|
|
|
$
|
3,126
|
|
|
$
|
160,281
|
|
Six Months Ended June 30, 2016
|
|
Office
|
|
Mixed-Use
|
|
Total
|
||||||
Net Operating Income:
|
|
|
|
|
|
|
||||||
Houston
|
|
$
|
50,443
|
|
|
$
|
—
|
|
|
$
|
50,443
|
|
Atlanta
|
|
44,178
|
|
|
3,348
|
|
|
47,526
|
|
|||
Austin
|
|
10,955
|
|
|
—
|
|
|
10,955
|
|
|||
Charlotte
|
|
9,574
|
|
|
—
|
|
|
9,574
|
|
|||
Other
|
|
23
|
|
|
—
|
|
|
23
|
|
|||
Total Net Operating Income
|
|
$
|
115,173
|
|
|
$
|
3,348
|
|
|
$
|
118,521
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Operating Income
|
$
|
80,115
|
|
|
$
|
59,008
|
|
|
$
|
160,281
|
|
|
$
|
118,521
|
|
Net operating income from unconsolidated joint
ventures |
(7,609
|
)
|
|
(6,954
|
)
|
|
(16,783
|
)
|
|
(13,600
|
)
|
||||
Net operating income from discontinued operations
|
—
|
|
|
(25,126
|
)
|
|
—
|
|
|
(50,444
|
)
|
||||
Fee income
|
1,854
|
|
|
1,824
|
|
|
3,791
|
|
|
4,023
|
|
||||
Other income
|
3,174
|
|
|
27
|
|
|
8,600
|
|
|
417
|
|
||||
Reimbursed expenses
|
(907
|
)
|
|
(798
|
)
|
|
(1,772
|
)
|
|
(1,668
|
)
|
||||
General and administrative expenses
|
(8,618
|
)
|
|
(4,691
|
)
|
|
(14,828
|
)
|
|
(12,934
|
)
|
||||
Interest expense
|
(8,523
|
)
|
|
(5,369
|
)
|
|
(18,264
|
)
|
|
(10,808
|
)
|
||||
Depreciation and amortization
|
(50,040
|
)
|
|
(16,641
|
)
|
|
(104,924
|
)
|
|
(33,182
|
)
|
||||
Acquisition and transaction costs
|
(246
|
)
|
|
(2,424
|
)
|
|
(2,177
|
)
|
|
(2,443
|
)
|
||||
Gain on extinguishment of debt
|
1,829
|
|
|
—
|
|
|
1,829
|
|
|
—
|
|
||||
Other expenses
|
(236
|
)
|
|
(152
|
)
|
|
(612
|
)
|
|
(507
|
)
|
||||
Income from unconsolidated joint ventures
|
40,320
|
|
|
1,784
|
|
|
40,901
|
|
|
3,618
|
|
||||
Gain (loss) on sale of investment properties
|
119,832
|
|
|
(246
|
)
|
|
119,761
|
|
|
13,944
|
|
||||
Income from discontinued operations
|
—
|
|
|
7,523
|
|
|
—
|
|
|
15,624
|
|
||||
Net Income
|
$
|
170,945
|
|
|
$
|
7,765
|
|
|
$
|
175,803
|
|
|
$
|
30,561
|
|
Three Months Ended June 30, 2017
|
|
Office
|
|
Mixed-Use
|
|
Total
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Atlanta
|
|
$
|
46,293
|
|
|
$
|
1,358
|
|
|
$
|
47,651
|
|
Austin
|
|
25,429
|
|
|
—
|
|
|
25,429
|
|
|||
Charlotte
|
|
22,599
|
|
|
—
|
|
|
22,599
|
|
|||
Orlando
|
|
6,331
|
|
|
—
|
|
|
6,331
|
|
|||
Tampa
|
|
11,795
|
|
|
—
|
|
|
11,795
|
|
|||
Phoenix
|
|
11,879
|
|
|
—
|
|
|
11,879
|
|
|||
Other
|
|
758
|
|
|
—
|
|
|
758
|
|
|||
Total segment revenues
|
|
125,084
|
|
|
1,358
|
|
|
126,442
|
|
|||
Less Company's share of rental property revenues from unconsolidated joint ventures
|
|
(11,077
|
)
|
|
(1,358
|
)
|
|
(12,435
|
)
|
|||
Total rental property revenues
|
|
$
|
114,007
|
|
|
$
|
—
|
|
|
$
|
114,007
|
|
Three Months Ended June 30, 2016
|
|
Office
|
|
Mixed-Use
|
|
Total
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Houston
|
|
$
|
44,281
|
|
|
|
|
$
|
44,281
|
|
||
Atlanta
|
|
36,779
|
|
|
3,026
|
|
|
39,805
|
|
|||
Austin
|
|
10,417
|
|
|
—
|
|
|
10,417
|
|
|||
Charlotte
|
|
6,388
|
|
|
—
|
|
|
6,388
|
|
|||
Other
|
|
91
|
|
|
—
|
|
|
91
|
|
|||
Total segment revenues
|
|
97,956
|
|
|
3,026
|
|
|
100,982
|
|
|||
Less discontinued operations
|
|
(44,281
|
)
|
|
—
|
|
|
(44,281
|
)
|
|||
Less Company's share of rental property revenues from unconsolidated joint ventures
|
|
(7,221
|
)
|
|
(3,026
|
)
|
|
(10,247
|
)
|
|||
Total rental property revenues
|
|
$
|
46,454
|
|
|
$
|
—
|
|
|
$
|
46,454
|
|
Six Months Ended June 30, 2017
|
|
Office
|
|
Mixed-Use
|
|
Total
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
Atlanta
|
|
$
|
93,814
|
|
|
$
|
5,049
|
|
|
$
|
98,863
|
|
Austin
|
|
49,963
|
|
|
—
|
|
|
49,963
|
|
|||
Charlotte
|
|
45,342
|
|
|
—
|
|
|
45,342
|
|
|||
Orlando
|
|
12,972
|
|
|
—
|
|
|
12,972
|
|
|||
Tampa
|
|
23,098
|
|
|
—
|
|
|
23,098
|
|
|||
Phoenix
|
|
21,997
|
|
|
—
|
|
|
21,997
|
|
|||
Other
|
|
1,575
|
|
|
—
|
|
|
1,575
|
|
|||
Total segment revenues
|
|
$
|
248,761
|
|
|
$
|
5,049
|
|
|
$
|
253,810
|
|
Less Company's share of rental property revenues from unconsolidated joint ventures
|
|
(22,237
|
)
|
|
(5,049
|
)
|
|
(27,286
|
)
|
|||
Total rental property revenues
|
|
$
|
226,524
|
|
|
$
|
—
|
|
|
$
|
226,524
|
|
Six Months Ended June 30, 2016
|
|
Office
|
|
Mixed-Use
|
|
Total
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Houston
|
|
$
|
87,403
|
|
|
$
|
—
|
|
|
$
|
87,403
|
|
Atlanta
|
|
73,995
|
|
|
6,003
|
|
|
$
|
79,998
|
|
||
Austin
|
|
19,356
|
|
|
—
|
|
|
$
|
19,356
|
|
||
Charlotte
|
|
12,734
|
|
|
—
|
|
|
$
|
12,734
|
|
||
Other
|
|
231
|
|
|
—
|
|
|
$
|
231
|
|
||
Total segment revenues
|
|
193,719
|
|
|
6,003
|
|
|
199,722
|
|
|||
Less discontinued operations
|
|
(87,403
|
)
|
|
—
|
|
|
(87,403
|
)
|
|||
Less Company's share of rental property revenues from unconsolidated joint ventures
|
|
(14,509
|
)
|
|
(6,003
|
)
|
|
(20,512
|
)
|
|||
Total rental property revenues
|
|
$
|
91,807
|
|
|
$
|
—
|
|
|
$
|
91,807
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Rental Property Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Same Property
|
$
|
35,535
|
|
|
$
|
33,373
|
|
|
$
|
2,162
|
|
|
6.5
|
%
|
|
$
|
71,228
|
|
|
$
|
67,203
|
|
|
$
|
4,025
|
|
|
6.0
|
%
|
Non-Same Property
|
78,472
|
|
|
13,081
|
|
|
65,391
|
|
|
499.9
|
%
|
|
155,296
|
|
|
24,604
|
|
|
130,692
|
|
|
531.2
|
%
|
||||||
Total Rental Property Revenues
|
$
|
114,007
|
|
|
$
|
46,454
|
|
|
$
|
67,553
|
|
|
145.4
|
%
|
|
$
|
226,524
|
|
|
$
|
91,807
|
|
|
$
|
134,717
|
|
|
146.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Rental Property Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Same Property
|
$
|
13,076
|
|
|
$
|
12,348
|
|
|
$
|
728
|
|
|
5.9
|
%
|
|
$
|
25,962
|
|
|
$
|
24,699
|
|
|
$
|
1,263
|
|
|
5.1
|
%
|
Non-Same Property
|
28,425
|
|
|
7,178
|
|
|
21,247
|
|
|
296.0
|
%
|
|
57,064
|
|
|
12,631
|
|
|
44,433
|
|
|
351.8
|
%
|
||||||
Total Rental Property Operating Expenses
|
$
|
41,501
|
|
|
$
|
19,526
|
|
|
$
|
21,975
|
|
|
112.5
|
%
|
|
$
|
83,026
|
|
|
$
|
37,330
|
|
|
$
|
45,696
|
|
|
122.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Same Property NOI
|
$
|
22,459
|
|
|
$
|
21,025
|
|
|
$
|
1,434
|
|
|
6.8
|
%
|
|
$
|
45,266
|
|
|
$
|
42,504
|
|
|
$
|
2,762
|
|
|
6.5
|
%
|
Non-Same Property NOI
|
50,047
|
|
|
5,903
|
|
|
44,144
|
|
|
747.8
|
%
|
|
98,232
|
|
|
11,973
|
|
|
86,259
|
|
|
720.4
|
%
|
||||||
Total NOI
|
$
|
72,506
|
|
|
$
|
26,928
|
|
|
$
|
45,578
|
|
|
169.3
|
%
|
|
$
|
143,498
|
|
|
$
|
54,477
|
|
|
$
|
89,021
|
|
|
163.4
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
2017
|
|
2016
|
|
$ Change
|
||||||||||||
Net operating income
|
$
|
7,609
|
|
|
$
|
6,954
|
|
|
$
|
655
|
|
|
$
|
16,783
|
|
|
$
|
13,600
|
|
|
$
|
3,183
|
|
Other income, net
|
240
|
|
|
87
|
|
|
153
|
|
|
1,705
|
|
|
541
|
|
|
1,164
|
|
||||||
Depreciation and amortization
|
(3,478
|
)
|
|
(3,231
|
)
|
|
(247
|
)
|
|
(7,673
|
)
|
|
(6,490
|
)
|
|
(1,183
|
)
|
||||||
Interest expense
|
(1,922
|
)
|
|
(2,026
|
)
|
|
104
|
|
|
(4,246
|
)
|
|
(4,033
|
)
|
|
(213
|
)
|
||||||
Net gain on sale of investment property
|
37,871
|
|
|
—
|
|
|
37,871
|
|
|
34,332
|
|
|
—
|
|
|
34,332
|
|
||||||
Income from unconsolidated joint ventures
|
$
|
40,320
|
|
|
$
|
1,784
|
|
|
$
|
38,536
|
|
|
$
|
40,901
|
|
|
$
|
3,618
|
|
|
$
|
37,283
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Income Available to Common Stockholders
|
$
|
168,089
|
|
|
$
|
7,765
|
|
|
$
|
172,840
|
|
|
$
|
30,561
|
|
Depreciation and amortization of real estate assets:
|
|
|
|
|
|
|
|
||||||||
Consolidated properties
|
49,575
|
|
|
16,306
|
|
|
104,009
|
|
|
32,470
|
|
||||
Share of unconsolidated joint ventures
|
3,478
|
|
|
3,231
|
|
|
7,673
|
|
|
6,490
|
|
||||
Discontinued Operations
|
—
|
|
|
15,740
|
|
|
—
|
|
|
31,168
|
|
||||
(Gain) loss on sale of depreciated properties:
|
|
|
|
|
|
|
|
||||||||
Consolidated properties
|
(119,767
|
)
|
|
246
|
|
|
(119,750
|
)
|
|
(13,944
|
)
|
||||
Share of unconsolidated joint ventures
|
(37,871
|
)
|
|
—
|
|
|
(34,332
|
)
|
|
—
|
|
||||
Non-controlling Interests related to unit holders
|
2,856
|
|
|
—
|
|
|
2,957
|
|
|
—
|
|
||||
Funds From Operations
|
$
|
66,360
|
|
|
$
|
43,288
|
|
|
$
|
133,397
|
|
|
$
|
86,745
|
|
Per Common Share — Diluted:
|
|
|
|
|
|
|
|
||||||||
Net Income Available Available to Common
Shareholders |
$
|
0.40
|
|
|
$
|
0.04
|
|
|
$
|
0.42
|
|
|
$
|
0.15
|
|
Funds from Operations
|
$
|
0.16
|
|
|
$
|
0.21
|
|
|
$
|
0.32
|
|
|
$
|
0.41
|
|
Weighted Average Shares — Basic
|
419,402
|
|
|
210,129
|
|
|
411,137
|
|
|
210,516
|
|
||||
Weighted Average Shares — Diluted
|
427,180
|
|
|
210,362
|
|
|
419,227
|
|
|
210,687
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Income
|
$
|
170,945
|
|
|
$
|
7,765
|
|
|
$
|
175,803
|
|
|
$
|
30,561
|
|
Fee income
|
(1,854
|
)
|
|
(1,824
|
)
|
|
(3,791
|
)
|
|
(4,023
|
)
|
||||
Other income
|
(3,174
|
)
|
|
(27
|
)
|
|
(8,600
|
)
|
|
(417
|
)
|
||||
Reimbursed expenses
|
907
|
|
|
798
|
|
|
1,772
|
|
|
1,668
|
|
||||
General and administrative expenses
|
8,618
|
|
|
4,691
|
|
|
14,828
|
|
|
12,934
|
|
||||
Interest expense
|
8,523
|
|
|
5,369
|
|
|
18,264
|
|
|
10,808
|
|
||||
Depreciation and amortization
|
50,040
|
|
|
16,641
|
|
|
104,924
|
|
|
33,182
|
|
||||
Acquisition and transaction costs
|
246
|
|
|
2,424
|
|
|
2,177
|
|
|
2,443
|
|
||||
Other expenses
|
236
|
|
|
152
|
|
|
612
|
|
|
507
|
|
||||
Income from unconsolidated joint ventures
|
(40,320
|
)
|
|
(1,784
|
)
|
|
(40,901
|
)
|
|
(3,618
|
)
|
||||
Gain (loss) on sale of investment properties
|
(119,832
|
)
|
|
246
|
|
|
(119,761
|
)
|
|
(13,944
|
)
|
||||
Gain on extinguishment of debt
|
(1,829
|
)
|
|
—
|
|
|
(1,829
|
)
|
|
—
|
|
||||
Income from discontinued operations
|
—
|
|
|
(7,523
|
)
|
|
—
|
|
|
(15,624
|
)
|
||||
Net Operating Income
|
$
|
72,506
|
|
|
$
|
26,928
|
|
|
$
|
143,498
|
|
|
$
|
54,477
|
|
•
|
property and land acquisitions;
|
•
|
expenditures on development projects;
|
•
|
building improvements, tenant improvements, and leasing costs;
|
•
|
principal and interest payments on indebtedness;
|
•
|
repurchase of our common stock; and
|
•
|
operating partnership distributions and common stock dividends.
|
•
|
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 debt or equity securities; and
|
•
|
joint venture formations.
|
|
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5 years
|
||||||||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Company debt:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Term Loan
|
|
$
|
250,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
250,000
|
|
|
$
|
—
|
|
Unsecured Senior Note
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|||||
Unsecured Credit Facility
|
|
94,000
|
|
|
—
|
|
|
94,000
|
|
|
—
|
|
|
—
|
|
|||||
Mortgage notes payable
|
|
580,950
|
|
|
86,532
|
|
|
43,710
|
|
|
45,213
|
|
|
405,495
|
|
|||||
Interest commitments (1)
|
|
204,645
|
|
|
31,876
|
|
|
61,359
|
|
|
51,588
|
|
|
59,822
|
|
|||||
Ground leases
|
|
208,610
|
|
|
2,321
|
|
|
4,642
|
|
|
4,713
|
|
|
196,934
|
|
|||||
Other operating leases
|
|
1,519
|
|
|
519
|
|
|
732
|
|
|
268
|
|
|
—
|
|
|||||
Total contractual obligations
|
|
$
|
1,439,724
|
|
|
$
|
121,248
|
|
|
$
|
204,443
|
|
|
$
|
351,782
|
|
|
$
|
762,251
|
|
Commitments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Unfunded tenant improvements and construction obligations
|
|
$
|
180,878
|
|
|
$
|
162,897
|
|
|
$
|
17,981
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Letters of credit
|
|
1,000
|
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Performance bonds
|
|
2,861
|
|
|
328
|
|
|
1,600
|
|
|
—
|
|
|
933
|
|
|||||
Total commitments
|
|
$
|
184,739
|
|
|
$
|
164,225
|
|
|
$
|
19,581
|
|
|
$
|
—
|
|
|
$
|
933
|
|
(1)
|
Interest on variable rate obligations is based on rates effective as of
June 30, 2017
.
|
|
Six Months Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Net cash provided by operating activities
|
$
|
126,237
|
|
|
$
|
60,094
|
|
|
$
|
66,143
|
|
Net cash provided by (used in) investing activities
|
47,915
|
|
|
(73,564
|
)
|
|
121,479
|
|
|||
Net cash provided by (used in) financing activities
|
(193,419
|
)
|
|
12,413
|
|
|
(205,832
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Development
|
$
|
102,544
|
|
|
$
|
29,100
|
|
Operating — leasing costs
|
24,224
|
|
|
14,764
|
|
||
Operating — building improvements
|
17,957
|
|
|
23,438
|
|
||
Capitalized interest
|
3,808
|
|
|
1,759
|
|
||
Capitalized personnel costs - leasing
|
1,053
|
|
|
948
|
|
||
Capitalized leasing commissions
|
1,668
|
|
|
885
|
|
||
Capitalized personnel costs - development
|
1,006
|
|
|
809
|
|
||
Change in accrued capital expenditures
|
(1,110
|
)
|
|
3,891
|
|
||
Total property acquisition and development expenditures
|
$
|
151,150
|
|
|
$
|
75,594
|
|
|
Total Number of Shares Purchased*
|
|
Average Price Paid per Share*
|
|||
April 1 - 30
|
585
|
|
|
$
|
8.49
|
|
May 1 - 31
|
—
|
|
|
—
|
|
|
June 1 - 30
|
—
|
|
|
—
|
|
|
|
585
|
|
|
$
|
8.49
|
|
|
|
|
2.1
|
|
Agreement and Plan of Merger, dated April 28, 2016, by and among Parkway Properties, Inc., Parkway Properties LP, the Registrant and Clinic Sub Inc, filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on April 29, 2016, 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 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 Cousins, as amended October 6, 2016 (incorporated by reference from Exhibit 3.1.1 to the Registrant's Current Form 8-K filed on October 7, 2016).
|
|
|
|
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.
|
|
|
|
10.1
|
†
|
Form of Amendment to Change in Control Severance Agreement for Named Executive Officers.
|
|
|
|
10.2
|
†
|
Amendment to Change in Control Severance Agreement for Ms. Roper.
|
|
|
|
10.3
|
†
|
Amendment to Change in Control Severance Agreement for Mr. Gellerstedt.
|
|
|
|
11.0
|
*
|
Computation of Per Share Earnings.
|
|
|
|
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 XBRL (Extensible Business Reporting Language): (i) the condensed consolidated balance sheets, (ii) the condensed consolidated statements of operations, (iii) the condensed consolidated statements of equity, (iv) the condensed consolidated statements of cash flows, and (v) the notes to condensed consolidated financial statements.
|
*
|
|
Data required by ASC 260, “Earnings per Share,” is provided in note 11 to the condensed consolidated financial statements included in this report.
|
†
|
|
Filed herewith.
|
|
COUSINS PROPERTIES INCORPORATED
|
||
|
/s/ Gregg D. Adzema
|
||
|
Gregg D. Adzema
|
||
|
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cousins Properties Incorporated (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
/s/ Lawrence L. Gellerstedt III
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cousins Properties Incorporated (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
/s/ Gregg D. Adzema
|
/s/ Lawrence L. Gellerstedt III
|
/s/ Gregg D. Adzema
|