Good morning ladies and gentlemen and welcome to the Cousins Properties Incorporated first quarter 2008 conference call. (Operator Instructions) I would now like to turn the conference over to Tom Bell, Chairman and CEO; please go ahead sir.

Good morning everyone. Thanks for joining us for the first quarter conference call of Cousins Properties. I’m Tom Bell, Chairman and CEO of the company. With me today are Dan DuPree, our President and Chief Operating Officer, Jim Fleming, our Chief Financial Officer and Craig Jones, our Chief Investment Officer. At this time I’ll call on Jim to review the financial results for the quarter.

Thank you Tom. Good morning everyone and thanks everyone for your interest in Cousins. Certain matters we’ll be discussing today are forward-looking statements within the meaning of Federal Securities Laws. Actual results may differ materially from these statements. Please refer to our filings with the SEC including our Annual Report on Form 10-K for the year ended December 31, 2007 for a discussion of the factors that may cause such material differences. Also certain items we may refer to today are considered non-GAAP financial measures with the meaning of Regulation G as propagated by the SEC. For these items, the comparable GAAP measures and the related reconciliations may be found through the quarterly disclosures and supplemental SEC information links on the Investor Relations page of our website at www.cousinsproperties.com. This quarter we reported FFO of $0.27 per share compared with $0.14 last quarter. I’d like to highlight the factors that contributed to this increase in FFO. You can follow by looking at our supplemental package beginning on page eight. Revenues from our operating properties are increasing as development projects become operational and recently signed leases commence on our existing properties. Rental property revenues less rental property operating expenses for consolidate properties increased $1.5 million between the fourth quarter of 2007 and the first quarter of 2008. The amount of $960,000 of this increase came from the continued lease-up of Terminus 100 and $103,000 came from the lease-up of One Ninety One Peachtree. The American Cancer Society Center also improved $164,000 as a result of an increase in parking revenue in the first quarter. The Avenue Webb Gin and San Jose MarketCenter increased a combined $258,000 as a result of increased occupancy. In addition our joint venture FFO increased $671,000 partly as a result of improved operations at the Avenue Murfreesboro.…

Thank you Jim. Today I’ll start with a few comments on the real estate markets and then review where we stand with our overall business and properties and what we’re doing as a company to take advantage of possible opportunities which might result from these difficult markets. While the state of the real estate markets vary by product and geography it’s clear we’re in the midst of a significant and on-going real estate slowdown. Our residential lot sales business dropped off sharply last year and lot sales at most of our projects have continued to decline in Q1. Likewise the condominium business has also slowed and with one exception we don’t expect to begin any new condo projects in the near term. Our retail customers are generally honoring their existing commitments but they are very reluctant to make new commitments which will almost certainly slow down most of the projects in our shadow pipeline. And although our office leasing to-date has been quite good, we expect leasing decisions to begin to slow as well. As Jim pointed out we sold very few lots in the first quarter and based on the current momentum and supply of undeveloped lots in our markets, we’re not forecasting that we’ll sell somewhere between 200 and 250 lots this year. And as a result, we’re not anticipating any significant profits from lot sales in 2008. We are also not planning to develop any additional lots this year except in a couple of selective projects. Fortunately our investment in this business is only about 7% of our overall capital base. On the bright side even though its tough to sell lots in this market we are continuing to sell dirt by the yard in Florida and as Jim pointed out we’re making money off of oil…

(Operator Instructions) Your first question comes from the line of Jay Habermann – Goldman Sachs Jay Habermann – Goldman Sachs: Tom just in light of your comments and obviously the decision to sort of scale back the development sort of shadow pipeline if you will, you’re exiting industrial, scaling back retail to some degree given the current environment, and obviously you mentioned office continues to be soft, just curious where you continue to see the best investment opportunities? You mentioned perhaps something in the latter half of this year. I think that’s consistent with your sort of views on the prior call, but I’m just wondering in fact where are you seeing land prices, how much of a change thus far, are you seeing Cap rates move at all in your markets? But I guess sort of where are you seeing best returns today?

We do believe that Cap rates have been reduced significantly in most of the markets we operate in but there’s so little activity in terms of sales that you can’t be certain. We’ve seen a lot of properties go on the market and end up not being sold because the owners have not yet come to the conclusion that they either paid too much or they can’t get what they might have been able to get in 2006, early 2007. So with regard to opportunities we’re seeing a lot of residential opportunities. So far most of these opportunities are being presented by developers and home builders as opposed to financial institutions. We believe that when they begin to be presented by financial institutions the opportunities will improve. We are seeing many development opportunities both in the retail and office side. These are opportunities that are fully entitled but the developer is unable to get financing in these credit markets. We have not seen one yet that we want to pursue but we’ve looked at several and come pretty close a couple of times. Once again we think that those opportunities will probably become more prevalent as the year goes on and the pricing will become better. Like I said, we’re seeing fewer Greenfield development opportunities in our classic product types that would be two or three years in the future. The ones that we have in our shadow pipeline we are by and large delaying but we do expect to see these distressed opportunities become available by the end of the year. Jay Habermann – Goldman Sachs: Obviously you did make a change there to much more of a functional structure and I’m just wondering you mentioned the change in G&A, the run rate for the year, should we expect to see some charges as well, severance payments?

I commented on our G&A, said it would be – we expect it’ll be $1 million to $2 million lower this year than last year. That factors in all of that severance and all the other things. Jay Habermann – Goldman Sachs: Okay also in terms of major financial instructions, B of A for example, are you seeing any sort of indication there that they might look to scale back obviously given that they’re a pretty significant percentage of overall revenues?

Well B of A is our partner in the building in Charlotte, the big building which makes it look like it’s a big contributor but actually if you understand the structure of that agreement; it’s not a big contributor. So we really don’t have any B of A risk in our portfolio. Jay Habermann – Goldman Sachs: It was more broadly toward the financial institutions in general.

Haven’t seen anything yet. Most of our financial tenants are in the wealth management and brokerage side of the businesses as opposed to the lending side of the businesses. We haven’t seen any reduction there to-date. Jay Habermann – Goldman Sachs: Could you give us a sense of what your leasing spreads in your office and retail portfolios were in the quarter?

What are you looking at, spreads over -- Jay Habermann – Goldman Sachs: The leases over expiring? Just trying to get a sense as to your same-store growth, how much of it was new leases that are being commenced versus what’s being signed over, what was expiring.

For the most part what we saw when the sequential quarters was continued to lease-up at we had some at Inform which is now American Cancer Society Center as that continued to come on line. We had some at three or four retail projects which I mentioned. I’ll let Dan comment on the roll-up roll-down question but really the sequential improvements you’re seeing are from leasing up what had been vacant.

In the first quarter we leased 406,000 square feet of office space, 304,000 feet of that was in development projects and for that we count 191 as a development deal, 102,000 square feet were in operating centers or renewals. So a pretty robust first quarter. We kicked around the question about roll-up or roll-down while there has been some deterioration in overall or some increase in vacancy in the overall market, in the trophy projects which is largely where we operate we’re not seeing it. Over the entire portfolio I don’t think we have any roll-down. We have in a couple of isolated cases some pretty good roll-up. Part of that is because we sold all of our assets that were fully leased at very high lease rates that would have been vulnerable to roll-down. And we retained those assets where we had the greatest opportunity for roll-up and that’s what we’re seeing. In our retail we leased net of 103,000 feet in the first quarter. We had 18,000 square feet of reduction in operating centers, 122,000 square feet of new leases and development deals. So I think we’re on track for a solid if not spectacular year in leasing on the retail side as well.

And remember our leases, our office leases are generally ten years and generally include on average 3% per year bumps.

Your next question comes from the line of [David Toddy] – Lehman Brothers [David Toddy] – Lehman Brothers: Your leverage has been creeping up obviously as your developments are placed into service, how comfortable are you at current levels and what’s the sort of maximum target you would be comfortable with and also what types of activities might you engage in to reduce that at some point?

Our leverage would have been the same this quarter as last quarter except we had a little more cash on hand at the end of the quarter, in other words if we’d used that cash to pay down the credit facility so it – you’re right, based on the market cap analysis we do, its in the high 30s. That was with a stock price of between $24.00 and $25.00 and the stock is a little higher than that at this point. Really what we do in analyzing this question is to look at our financial model as we project things out into the future and make sure we’re comfortable that we’re going to be safely within our bank covenants and that we’re going to be at a level we think we’re comfortable with and the market will be comfortable with and I can tell you we’ve modeled it with a lot of different assumptions about development levels, about acquisitions and we are comfortable. We’ve run it out five years. We could do a high level of development if we saw the opportunities and still not run into problems with our financial covenants. So we really don’t see an issue as we project things forward. It will depend on what number you see in that supplemental, it will depend on what the stock price does and how, what happens when things come online but we feel very comfortable as we move ahead. [David Toddy] – Lehman Brothers: You mentioned that you expect some softness in office leasing demand going forward, is that due a little bit more to the supply or do you actually think its more related to pull-back in some of your local industries?

Office leasing to date, in our office leasing to date, it’s been very good. But we saw in the overall market and Atlanta declined a little bit for instance in the first quarter of the year. We don’t have much space to lease, additional space to lease. We’ve got some space in One Ninety One obviously. We’ve got a new building at Terminus but the rest of our properties are pretty much leased up. We’re seeing plenty of activity at One Ninety One, surprising level of activity. And at Terminus 200 we’ve got a real good start on some anchor leasing there but we think that’s going to be a tough market. We have three out of town developers who come behind us and they’re building speculative Class A buildings and I would guess they’ll regret that. [David Toddy] – Lehman Brothers: Did you provide any guidance in terms of the scope of the land sales gain that will be booked in the second quarter?

If we knew exactly when land would sell we would definitely give you guidance. But we just don’t know. We’re constantly buying and titling land. As you know we have significant land positions. We’re constantly looking for opportunities to sell the land when we see a good return for our shareholders. And it’s very opportunistic. The west side of 400 where we made the sale in the first quarter of the year, we’ve been selling that land off now for almost four years and now we’re about done. We have two or three parcels left there and another significant one across the street. So it’s very frustrating for us just as it is for you. We really can’t predict this land business. All we can say is for 40 years we’ve been buying and titling and selling land and we’ve made a very nice return for our shareholders doing it and it’s a core part of our business. But it’s not very predictable.

Your next question comes from the line of Chris Haley - Wachovia Capital Markets

Could you give us a sense Jim on second generation capital expenditures, what would be driving that number up in the first quarter and then what we should be looking at for the rest of the year or give us your best guess?

The first quarter was primarily from the build-out of One Georgia Center for the Georgia DOT about $5.1 million of that number was for the DOT. We do expect the level is going to be higher for the rest, at a higher level for the rest of this year. I can’t really tell you because it’s going to be lumpy. I can’t tell you exactly how it’s going to fall but we think it will be at a more elevated level this year than last year because we have leased-up a number of properties and while we’ve got the American Cancer Society situated now we’ve got to finish the build-out for the DOT and their lease at that building. And then we’ve got a number of tenants that we’re building out space for at One Ninety One. It’s going to be a net positive in terms of FFO. We think that this will, we’ve analyzed this and we’ve taken into account the tenant improvement dollars that we have to expend and what we think the debt service on those tenant improvement dollars will be and then looking at what we would expect to get in FFO or NOI from the properties, we’re going to have a net gain this year we think of about $0.09 to $0.10 and then that will continue for the next two years based on the leases we signed in 2007. So that for the leases we signed in 2007 we would expect a $0.09 to $0.10 FFO improvement for calendar year 2008, about double that for 2009 and about triple that for 2010 so it’s a process that’s working as we work through spending the money. But it is going to involve significant dollars going out to do this tenant improvement work.

These spaces, some companies take the liberty of saying if the space was vacant for six to 12 months even though they owned it for years, that they characterize it as a first generation capital expenditure and do not disclose it. Is that to say, that’s just their treatment, your treatment here is though in certain assets that you are saying that all space, all re-tenanting space, re-tenanting dollars are second generation?

You will see all of our tenant improvement and leasing commission dollars either in the second generation number or in the development pipeline number. One Ninety One for instance we have in the development pipeline but we’ve estimated the build-out and leasing commission number in our total dollar number you see in the pipeline. So you’ll see all of our numbers in one of those two places.

So the difference between an asset that is the capital expenditure that’s in this line item versus the development page, the delineation is just scale of amount of redevelopment?

It’s really, we decided with One Ninety One we would show that as a development project in our pipeline because it was really bought in a way where we were going to treat it comparably to a development. We underwrote it like a development. It was going to involve a long period of time. That one is unique. That’s the only one we’ve done that with. We thought it would be better disclosure to do it that way. Every other building we have, if its not a new development project its going to be in the existing pipeline and any TI dollars you’ll see will be in this second generation.

Okay so beyond the DOT deal and the other ACS are there any other assets that you look at over the next 12 to 24 months where you’re going to be doing significant interior work or tenant [inaudible] work?

Well One Ninety One which will show up in the development pipeline because there will be, because really the rest of the projects as far as I’m aware are going to be in the development.

If as in when we lease up 3100 Wildwood you would expect that that would fall into that category. That will be a happy day.

Are there any data points, they’re few and far between nowadays versus a couple of years ago but there are some assets that might be on the market, say the Tishman deal, are there any other assets that you would have us keep an eye on for pricing metrics in Atlanta?

That are directly related to what we’re doing I can’t think of any right now.

Nothing in terms of asset trades or any higher quality asset trades that are on the market that we should keep an eye on?

We’ve had some that have been on and taken back off again but I don’t think there’s much on right now.

Your next question is a follow-up from the line of Jay Habermann – Goldman Sachs Jay Habermann – Goldman Sachs: With regards to the credit facility you drew another $110 million in the quarter; can you just give us a breakdown of what that’s backing?

There were two things on that. One is we continued to fund development projects and the other is because of some timing we ended the quarter with a little over $50 million in cash on hand so that number you see is higher than what really went into funding development projects. What went into funding development projects was pretty much consistent with what you’d seen in previous couple of quarters. Jay Habermann – Goldman Sachs: And then along the same lines how do you think about capital for those potential investments, distressed assets in the latter half of the year?

If we run the model out in what we consider to be the most likely scenario, and we fully fund all our existing development projects, the pipeline, I think we’ve got somewhere between $250 million and $300 million that we can spend on opportunities and we have a host of partners, financial partners, who are anxious to pursue opportunities with us, many of whom Craig has sort of pre-negotiated a structure with and some of whom we’ve done these deals with before so I don’t think we’d have any problem financing good opportunities and distressed opportunities when we find them. Jay Habermann – Goldman Sachs: With regard to those investment opportunities I’m just curious, what sort of is the quality of the pipeline that you’re looking at and you mentioned sort of only the best positioned, best located properties are getting the leasing at this point in the cycle, obviously financing has been a major concern as well, but I’m just getting a sense of how are you going to price in the risk, what sort of returns are you going to look for in these opportunities?

We have a very conservative underwriting process here and we would have to put it through that, or [inaudible] release process with probably extended lease-up as you would expect given these circumstances using our historic cost of capital, not today’s cost of capital etc. etc. and we’d expect to get a plus nine going in yield and a 12 to 13 unleveraged IRR off those transactions and I have to say in terms of stabilized commercial assets we’ve not seen those types of opportunities yet. In fact we’ve not seen many distress commercial assets come back to the market at all. Though we are aware of a lot of lending that we done in 2005 and 2006 some of which was done on properties which we sold and we would be surprised if those assets did not come back at the market at some point in time. Most of them we’d be delighted to have back.

Your final question comes from the line of Unidentified Analyst – Merrill Lynch Unidentified Analyst – Merrill Lynch: I believe you mentioned that your average office lease contains a 3% rent bump, is that consistent in the retail portfolio as well?

It operates a little differently in retail because typically the bumps are every five years particularly on the bigger tenants, but on the smaller tenants it would run between 2% and 3%. Unidentified Analyst – Merrill Lynch: And the bumps on the larger tenants, what would the average be?

Ten to 12% every five years.

There are no further questions at this time; I’ll turn the call back over to Mr. Bell for closing comments. Please go ahead sir.

Well as always we thank you for your support of and interest in Cousins Properties. If you come up with additional questions after the call, don’t hesitate to call any of us or Mark Russell and we’ll be glad to answer them if we can. We’ll talk to you next quarter. Thanks so much.