Ladies and gentlemen, thank you for standing by. Welcome to the Cousins Properties Incorporated second quarter 2009 conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions) As a remainder, this conference is being recorded Tuesday, August 11, 2009. Before we begin certain matters the company will be discussing today are forward-looking statements within the meaning of the federal securities laws. Actual results may differ materially from these statements. Please refer to the company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2008 for discussion of the factors that may cause such material differences. Also certain items the company may refer to today are considered non-GAAP financial measures within the meaning of Regulation G as promulgated by the SEC. For these items, the comparable GAAP measures and 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. I would now like to turn the conference over to Mr. Larry Gellerstedt, President and Chief Executive Officer. Please go ahead sir.

Good afternoon, everyone. I’m Larry Gellerstedt, President and Chief Executive Officer of Cousins Properties. On the phone with me today are Jim Fleming, our Chief Financial Officer; Craig Jones, our Chief Investment officer; and Steve Yenser, our Executive Vice President of Leasing and Asset Management. Welcome to our second quarter conference call. At this time, I’ll call Jim to review the financial results for the quarter. Jim.

Thanks Larry and thank everyone else for your interest in Cousins. This quarter we reported FFO before special charges of $0.45 per share, compared with $0.15 per share last quarter. The primary reason for the increases is the gain on the repurchase of the San Jose mortgage debt that we told you about last quarter, which resulted in a gain of $12.5 million or $0.24 per share. In addition to this we did a bit better in several areas, which I’ll touch on in a minute. As described in the earnings release, we reported an $88.3 million in impairment valuation and retirement charges during the second quarter. These charges were largely associated with our residential lot and condominium businesses and reflect the challenges we’re seeing in today’s housing markets. Except for a portion of the retirement charges these were all non-cash charges. The largest impairment was a $34.9 million charge on our 10 Terminus condominium project. Since this project is held for sale, we required to rerecord a fair value for accounting purposes. Condominium sales continue to struggle in Atlanta, as they have across the nation and sales activity at 10 Terminus has been slower than we projected. Our updated analysis reflects the longer sellout period together with a high discount rate on the anticipated cash flows from a project. In spite of the impairment for accounting purposes, we continue to believe 10 Terminus is a high quality project that provide exceptional value to condominium buyers. Going forward, we will continue to implement innovative sales strategies and an effort to distinguish this project from the rest of the market. Additionally, we took a $28.1 million impairment charge on our investments in residential joint ventures. Accounting standards require that we like investments in joint ventures down to fair value, if the…

Thank you, Jim. As most of you know, I became CEO of Cousins on July 1, when Tom Bell retired. I’ve had the pleasure of meeting a number of you in person and many others I’ve been able to speak to on the phone. The rest of you, I look forward to spending sometime with you at NAREIT meetings in November, or whenever we have a chance to get together before that. Since this is my our first conference call, I want to let you know that, I’m both excited and honored to have an opportunity to lead this extraordinary company. Cousins have an incredible history of performance driven by great assets and exceptional people from the Board and Senior Management throughout the company’s ranks. In the 1970s, Tom Cousins developed a set of core principles to guide our decision-making. These are listed in our 2001 Annual Report and they still are available on our website and they include basically focusing on value creation, total shareholder return, recycling capital and managing risk. These long held principles have remained relevant throughout the years in both good markets and bad and our strategy will continue to follow these in future years. We have a strong board and a very talented dedicated team of people at Cousins, rest assured everyone is working with dedication and focus to deliver superior results for our customers and shareholders. Some of you have asked me, what changes my leadership will do to our strategy. My response generally has been that I’ve been a part of this leadership team for several years and I believe in our overall strategy. We’ll continue to be an opportunistic company focused on value creation. In the current environment we’ll remain very vigorous in our underwriting process for capital deployment. To the next…

(Operator Instructions) Your first question comes from Dave AuBuchon - Robert W. Baird.

I want to ask whether or not you feel like we should assume that you really scrubbed the portfolio here and you’ve done with most of the impairments going forward?

I wish I could give you a definitive answer. I’m sure everybody that goes through the process as wish as they could. I will tell you, we’ve been very thorough. We worked with our auditors at Deloitte. We’ve done a lot work internally and we think we’ve been conservative as we gone through the stuff. Some of these things kept over this quarter for instance, the residential joint ventures we determined are other than temporary impairment. So we had to record in this quarter, but this is an ongoing process for the joint ventures, for the condominium products those now have to be mark to fair value and we have to do that analysis every quarter. So the answer really is as the market gets materially worse, we would have to do this again we hopefully gotten at all and we’ve really tried, but you just can have any absolute assurance on that.

I might just add to what Jim had said, that as I mentioned briefly before there are very specific accounting rules and guidelines that we have to follow and more than 50 REITs have taken impairments in the last three quarters. We certainly value having our outside auditors, Deloitte come in every quarter and we really on them to provide guidance, so that we’re making every effort to be very transparent, very conservative than what we’re showing on the books. As Jim said, this is just some we have to look at on a quarter-by-quarter basis.

Then Larry you mentioned the Brownstone example, as an example of an opportunity that you guys have pursued in and let’s say you’ve been successful. Did you mention the profits perhaps that you’ve made in selling 11 out of the 14 units in the five home sites?

You can generally see the expectations that we’ve had from the sales price versus the average price that we bought them. We underwrote the project with IRR and excess of 25% and we certainly think we’re on board to hit that. I would comment on the residential side, one of the things we found particularly attractive about this project was not just the location and the track record that the first stage it had. The fact that at the right price we could make an acquisition and see the benefits of that acquisition and relatively short order, we have found that type of acquisition. This is the only one that we’ve actually done, but as we look that type of residential acquisition is generally more attractive to us than either they’re buying undeveloped lots, because of the uncertainty over the time period that it may take to get a return.

Should we read your comments about the multifamily segments perhaps responding quicker than others Larry, to that’s a property class that Cousins will pursue?

I think Cousins is one of the strengths that we have is, we’ve always been driven by value and a lot of flexibility, but I would not rate that to say that we’re going to become one of your major multifamily apartment developers. We do have several developments were in the future, particularly our development out at Emory that has a significant apartment component where we have Gables as our partners. So, we certainly are following that, but really just mentioned that more for our guidance on where we think you might see some recovery first.

On the industrial side, do you believe that leasing is sustainable? Can you kind of give some more detail behind the space that you leased in the quarter?

I wouldn’t, I wish I can tell you that the space we had leased in the quarter was the start of the trend. We are seeing a lot of activity, but so far that activity has been slow to commit and so we’re pleased to get that list, but I wouldn’t read any momentum trends into that.

My last question Jim, I think when you went through the property by property changes from Q1, you mentioned in Terminus 100 there was a bad debt reversal can you talk about that again?

There were three tenants that we reserved rent on, Dave and we reverse those reserves, we worked out the issues with those three tenants to where those reserves have come off. We’ve also had that with a few other properties, we had that with some retail properties I think I commented it a couple of quarters ago, that we had put in some bad debt reserves, where we weren’t sure whether we can collect the rents. We did that in the fourth quarter, we did in the first quarter. We are going to continue to be conservative as we go forward on those, and then as we’re able to collect them, we’ll reverse the reserves.

The tenants are still in the building? Have they taken less space?

No, they’re still on the building.

Your next question comes from John Stewart - Green Street Advisors Incorporated.

Jim, just a follow up on that point so, was it not a credit issue I don’t understand why would have taken the reserve and then reversed it. Can you help us understand it?

It was a concern about credit, which we no longer have and these fall in two categories we either will workout situation where we’ll collect rent. Where we’ll work our situation where the rent will be payable in later period and this was some of both in the current quarter, but we no longer have the credit concern about whether the rents going to be paid.

Looking at the land schedule, it looks like Handy Road moved from outdated to consolidated and also look like the basis and 615 Peachtree went up a couple of million bucks. Can you shed some light on some of the major changes on the land schedule?

I can’t on that. John the 615, we had some pre-development cost, which were shown in other assets. Previously, we’ve rolled that into the land schedule. So that’s really a not a change on our balance sheet, it’s just a reclassification on our supplemental of where we’re showing that. The Handy Road we have had a partner and we still have a partner in that deal. There is a debt on that property that Cousins has no liability on, but the partner has seized making payments on that debt. We’ve really stepped into control of that and I think the likely outcome is going to be that will just be the come out property and we are not committed to this, but it’s likely that we will ultimately pay that debt off. So we’re now showing that on the property schedule as a consolidated property rather than it’s a joint venture investment.

Larry you referenced towards the tail end of your comments that, you think you’re better off leasing space just taking the market clearing rent in this environment. How does the impairment at 10 Terminus give you the flexibility you think to reduce the condos to a price that’s going to clear the market? Or how do you put your philosophy there?

We certainly have priced it at a level that we think would clear the market. As know, we did and I think this was a innovative type of thing that we did on the value assurance program that we’ve been offer in the last couple of quarters, which we saw a lot of increase in traffic. We have actually had a couple of contracts under that program, but what we and other folks are seeing is that the main drivers in this market for the condos are priced right now. Although, our product, we are very, very confident in. We can’t set the market. We have to respond to the market, and we think we’ll get better than the market clearing price, but we still have to react to that price. So, we have been, I think prudent as the accounting standard would have us be in pricing those and to this impairment at a level that we believe we clear the market. That doesn’t mean that we will have a sales strategy. As a matter of fact that’s not going to be our sales strategy to try to instantaneously drop price and sell this on a bulk basis. You’ll see is coming out in the next few months, as we have in past months, with I think some innovative sales approach. Some price change will be a part of that thing. We still plan to sale these out over a period of time in a prudent way and hopefully we will be able to see some improvement from the current level of impairment that we have taken today.

It just seems a little bit that adds with the experience that you had on the Brownstones?

That’s a good question John. I would point to this, I think that what we seen on the Brownstones is in today’s markets, both from the buyer’s perspective and from the mortgage perspective its, when you get above the confirming mortgage standard, finding mortgages particularly in condos is a challenging thing to do. If you look at absolute price with this impairment, we began to get about the same in terms of square foot sales per square foot as the Brownstones. So, it gets to be an absolute price that these things began to clear in today’s market. So, I think the Brownstone thing really supports what we are doing on 10 Terminus, if we wanted to try to clear the market right now with those units.

Just one more point, you referenced three ways of de-leveraging with asset sales, retained earnings and issuing equity. Can you talk specifically about asset sales and equity? With that process, there is specifically what may be in the market today? You also touched on joint ventures, 191 Peachtree and American Cancer Society are those at the point were you’d look to do the joint venture today?

Well that’s good about five questions rolled into one. So, can I just pick the one that’s easiest to answer and do that, I think in terms of asset sales, we absolutely are looking at asset sales. We mentioned before, with the when we purchased the debt on San Jose that we would go to the market and both look at what type of debt, third-party debt that we might be able to put on that asset, as well as what type of sales price we might be able to get. That asset is currently being marketed and we expect to get some feedback on it this month. We’ve got some other debt. We’ve been looking at the debt on the Meridian Mark, our medical office build in here in Atlanta, that’s been a real positive owner for us and has a relatively low level of debt of these would be the value. We’re similar to San Jose. We’ve gotten some feedback on what the debt extension may be to role that debt over and push it out for two or three years, which is certainly an option that we have. We’re also looking at the, what it might bring in terms of sales. So, it’s great to have the flexibility to look at that. Currently, we don’t want to do that on a wholesale basis, because this is certain a good market to Augustine. I think in terms of the equity markets, we certainly have followed with a lot of interest, would a lot of our peers have done, in that regard and I certainly want us to remain focused on deleveraging our balance sheet, and not just from the leverage that we currently have, but to make sure we’ve got the capital in place to go after what I think it will be unprecedented opportunities on the distress. So we’re being in a very thoughtful right now going through of the company’s model as we looking and go forward years and really studying the fact that were fortunate enough not to have maturities driving us to a quick decision, but we certainly want to deliver the balance sheet to position ourselves better. I think an equity rise is something that you’ll see is given a lot of consideration to and probably be ready to talk about on the next quarter or two. So we’re really looking at all of those options and being very serious about that look and we’re just not pressured to have to do some right at the moment other than the couple of asset sales and there are few other outparcel sales and some other things that we’re looking at.

Our next question comes from Sloan Bohlen - Goldman Sachs.

First, Larry that I just had follow-on on John’s plan about, how we should think about framing what the correct level of leverages going forward and what the correct amount of capital on hand for opportunistic acquisitions? Could you maybe give us a though on how to think about that and as a follow-on to that would you consider using joint ventures as a source for potentially fund for being opportunistic going forward?

I let that out in my response to the questions that John asked me. Joint venture is certainly avenue and we’ve got discussions going with several parties. I expect we’ll have them with were actually looking at how the structure those might be in terms of the equity contributions splits etc. I think that I feel confident you’ll see both some activity of the asset sales side, we’ll see it on. I think we’ll seriously consider the equity side. I’m sure that joint ventures just based on discussions we’ll have will find attractive for a certain opportunities as well. I think that our current level of leverage is higher than we wanted to be. I’ve heard on these calls, other calls where folks have talked about where that the new going forward right level of leverage is. I don’t really have the crystal ball on that. As I look at Cousins we generally operated in that 30% to 45% leverage and that’s probably the right range on a go forward basis. It’s not something that we have to do in an emergency way to get there, but we’re going to look at all of these avenues and both in terms of the timing and how much of each one we pick and try to drive those ratios down in that regard. The thing about the distressed opportunities and the 191s of the future that we find, I think the key thing there is we don’t have to time the market perfectly there, what we’re seeing is the depth of these problems and it’s still probably 2010. We’re seeing the spread between the bid and as narrowed, but the sellers I think are figuring out, what they’re willing to pay. The buyers are figured out, what they’re willing to pay the sellers are not quite come to match that. So we’ve got some time to address that. I want to make sure we have the capital there, but we don’t need to be a market timer and being perfect on that. So I hope that gives you some guidance on that Sloan.

Just a couple of quick ones for Jim, the lease up in the retail developments had. Are those leases have they commenced that didn’t see quite the pickup in the NOI quarter-over-quarter?

Sloan, that’s always a difficult one for us because our schedule that shows leasing percentages. The NOI that you look at for our properties is going to be based on the occupancy, in other words for us to get an NOI pickup from a tenant, we’re going to have them actually in place and there’s generally going to be a lag, it will vary from property-to-property, but it can be from ninety days to nine months. So I’d say on average there’s probably a quarter or may be 120 days of lag between those two. So, where we’ve got some good pick in places like Murfreesboro and Carriage Crossing it’s going to be probably next quarter and may be even the quarter after that before you will see that.

Along those lines maybe there’s a question for Steve, which is on that retail leasing in the quarter was it a lot, it seems like there is better activity from the retailers themselves, but have that terms changed from maybe beginning of the year or what you guys are giving up in terms of concessions?

I think we’re seeing it be very similar as it was in the beginning of the year. Our retailers are clearly being opportunistic, but we’re also finding opportunity in doing shorter term leases with them as we kind of deal with the market conditions and the rent. So, I think we’re pleased with the increase in activity and are happy to see the retailers in the market place for quality improvement centers, such as our portfolio.

Then one last one, just on that few lease term fees at Terminus 100, I think it was the Avenue Carriage Crossing. Do you guys have a sense of what the perspective kind of mark-to-market on those rents would be going out again in the market?

I think your question Sloan is when we really space that we terminated or we’re going to have a roll down, and the answer is yes. If we lease it in today’s market which is what our game plan is and I think that roll down level will depend on a number of things whether we go to a national retailer that’s being that’s really trying to expand aggressively and has got good credit and there you are going to have a significant roll down. Steve can comment on that. We also might do some deals with more of local or regional tenants. We’re seeing some of those and those generally involve somewhat of a roll down, but much less of the roll down.

The cost plus specifically encourage Carriage being a box rent was a lower rent to begin with. So, we will see some roll down to that. We’ve seen anywhere from a 15% to 25% specific to that case, but over the portfolio is we’re having rents rollout.

There are no further questions at this time. I’ll now turn the call back over to you. Please continue with your presentation or your closing remarks.

Well, I know its August and vacation time. So, those that have been on the call, we appreciate your continued interest at Cousins. This is a period of time for your, I have a lot of confidence in the team we have and the folks that are supported this company in the past, and we have some opportunities to work through, but I think they are manageable and the opportunities that we look forward to we think are significant and we think we are well positioned to take advantage of those. I appreciate your interest in Cousins and anything that we can do in terms of being available to talk or answer any other questions, as always just give us a call and we will make ourselves available. Thank you very much.

Ladies and gentlemen that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.