Good day, and welcome to the Cousins Properties’ Third Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Pam Roper, General Counsel. Please go ahead.

Good morning, and welcome to Cousins Properties' third quarter earnings conference call. The press release and supplemental package were distributed last night as well as furnished on Form 8-K. If you did not receive a copy, these documents are available through the quarterly disclosures and supplemental SEC information links on the Investor Relations page of our website at www.cousinsproperties.com. An audio webcast of this call will be available for 60 days through a link in the Investor Relations section on our website. At this time we would like to inform you that certain matters we will be discussing today are forward-looking statements within the meaning of Federal Securities Laws. Examples of such statements include estimates about expected ranges of FFO per share and operating income from properties, as well as certain categories of expenses and other income, along with our expectations regarding leasing activity, rental rates, including above and below market rental income, leasing expenses, development, acquisition, financing and disposition opportunities and expectations regarding the demographic and economic trends in markets in which the company is active. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations. The company does not undertake a duty to update any forward-looking statements. Please refer to our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2014, and our Quarterly Report on Form 10-Q filed on October 27, 2015 for information regarding certain risks and uncertainties. Also, certain items we 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 Investors Relations page of our website at www.cousinsproperties.com. With that, I'll turn the call over to our Chief Executive Officer, Larry Gellerstedt.

Thanks, Pam. Good morning, everyone, and thank you for joining us for Cousins Properties’ third quarter conference call. With me today are, Gregg Adzema, our Chief Financial Officer; and Colin Connolly, our Chief Investment Officer. 2015 continues to be a very eventful and productive year for our company. In the third quarter, we leased or renewed approximately 770,000 square feet of office space for a total of 1,732,000 square feet year-to-date. This is an increase of 40% compared to year-to-date period in 2014. Second generation office rents were up 14.1% on a cash basis for the quarter and our same-property office portfolio finished 92% leased. In late August, we signed our final lease at Colorado Tower located in the Austin CBD, bringing the asset to a 100% leased just eight months after we completed construction. Also in the third quarter, we executed a 15-year build-to-suit lease with NCR Corporation for the technology company’s approximately 485,000 square foot world headquarters building in midtown Atlanta. We also closed on the sale of 2100 Ross at Dallas for a gross sales price of $131 million during the third quarter. 2100 Ross was an outstanding investment for Cousins’ shareholders. We purchased this tower in August of 2012 for $59 million by buying a B-note and subsequently acquiring the tower in foreclosure. During Cousins’ three-year ownership, we completed a substantial renovation and signed approximately 390,000 square feet of new leases and renewals, increasing occupancy from 67% to 86%. The net result was a fantastic value creation of that as we executed our business plan with discipline and ultimately achieved a double-digit unlevered IRR. Overall, Cousins platform is performing exceptionally well at this point in the real estate cycle. We are executing in our core markets, where fundamentals are strongest, while remaining diligent in our effort…

Thanks, Larry, and good morning, everyone. I will begin my comments today by briefly highlighting some of our key operational and leasing metrics, and then I'll provide more detailed updates on recent activity within the existing portfolio and our transaction activity. The team delivered another terrific leasing quarter signing approximately 770,000 square feet of office leases with strong economics. Excluding NCR and short-term leases, our weighted average net effective rent for the quarter was $17.59 per square foot, which represents an 8.5% increase over the second quarter, as base rents increased and leasing costs well lower. As Larry mentioned earlier, our second-generation re-leasing spread was up 28% on a GAAP basis and 14% on a cash basis. Year-over-year same-store NOI growth for the quarter was relatively modest compared to previous quarters at 1.1% on a GAAP basis and 1.2% on a cash basis. But this was not unexpected as Exxon’s known move-out resulted in a 4% declined on our GAAP basis - GAAP NOI at Greenway Plaza, which is the largest asset in the same-store pool. Excluding Greenway Plaza, NOI growth for the remainder of the same-store pool was 5.2%. In addition, I think it's important to note that we had a fantastic leasing success in recent quarters at Fifth Third Center, 816 Congress and Colorado Tower. Although these properties are not yet included in our same-store pool, this leasing will nonetheless translate into strong future NOI growth for the company as a whole. Switching gears to the portfolio. Despite softening market conditions, we've had a very strong quarter in Houston. In aggregate, we leased approximately 106,000 square feet with a second-generation re-leasing spread increase of 35% on a GAAP basis and 28% on a cash basis. We kicked off the re-leasing of the former Exxon space at 3 Greenway…

Thanks, Colin. Good morning everyone. As you could tell from Larry and Colin’s comments, it was a terrific quarter on many fronts. At $0.24 per share, FFO was up 20% over last year. And the important internal operating metrics that, both you and we focus on, were also up significantly. Leasing velocity during the quarter was the strongest it’s been this cycle. Second generation net rent growth was up double-digits and same property cash NOI growth was positive for the 15th straight quarter. And as I said, it was a very good quarter. It's also a busy quarter. This is the part of the real estate cycle, where we can typical thrive so the activity isn't a surprise, in fact, it's a critical ingredient for our success. As Larry and Colin discussed, we sold one operating asset, 2100 Ross, and several non-core land assets during the quarter. We also moved two additional operating assets North Point Center East and The Points at Waterview into assets held-for-sale on our balance sheet. As Colin said, we expect to generate approximately $250 million in gross proceeds from these operating asset sales, adding an additional $17 million of proceeds from land sales that will be completed in 2015, generates a total of $267 million in sales proceeds. We’ll use these proceeds to generally fund our development pipeline on a leverage neutral basis. This trade, recycling proceeds from asset sales into development, is not rich shattering but it is very profitable for our shareholders and we have a 50-year history of doing it successfully. The new announcement of this cycle is our recent launch of a share repurchase program. Larry explained the rationale, so I'll move onto the results. We announced the share repurchase program on September 8, and only had six trading days before…

Great. Thank you, and good morning. I was hoping you could talk a little bit more about the different submarkets in Atlanta. Just looking at your third quarter results, it looks like occupancy was down slightly at Northpark Town Center and North Point Center East. And I know those aren’t your main submarkets. So can you just talk about what you're seeing - I know Atlanta is doing well, but just maybe talk about how it’s playing out across the different submarkets?

Sure, Jamie. It’s Colin. And I would say across the market as a whole, it's very strong. As you touched on, specifically Northpark and North Point there were some very, very specific things here related to leases at North Point that did tick down - that was a function of - as part of the MedAssets’ long-term extension. They were able to get back a little bit of space and so that's what you’re seeing show up here. And a very similar event at Northpark, we did sign an early renewal 10-year extension with an existing customer, and as a part of that they gave back about 15,000 square feet. I think that's really driving that. But as a whole, Buckhead midtown, certainly at Central Perimeter and now downtown, we’re seeing very robust activity. And as Larry touched on, we’ve seen net effective rents move accordingly.

Okay. And then thinking about your 2016 expirations, I know you touched on Bank of America and some of the others, but just kind of general, where you think rents are versus market, and any other large move-outs you might see?

Sure. So in 2016, Jamie, we have a little over million square feet, approximately 1.1 million square feet of expirations. Our pro-rata share of Bank of America is almost 50% of that, about 550,000 square feet. Aside from BofA, we actually don't have a single customer with an expiration in ‘16 greater than 50,000 square feet. So it's very diverse throughout the portfolio in our various markets without any really specific concentration. And in terms of where those rents are relative to market, it obviously depends on the geography in the building. But I think across the portfolio, we continue to believe that our rents in all markets at this point are below market.

Okay. Do you have a percentage basis?

We don't provide specific guidance on an exact percentage across the portfolio.

Okay. Well, I guess if you look at your year-to-date leasing spreads, you've been kind of mid-to-high teens and sometimes even higher, actually mostly little higher. So do you think you can sustain that?

Yes. Again I think the key driver of that has been Houston. And we've continued to see Houston outperform as we roll rents up to market and seen double-digit increases just about every quarter. And so despite market conditions, I think we are confident that we can continue to still drive very positive results in Houston. I think in terms of Atlanta, with that market strengthening, we do see an opportunity, as I mentioned, at Northpark specifically, to continue to roll rents up to market. And I think over the last couple of years, Atlanta has been closer to flat with Houston, as I said, really what was driving performance but we think we’ll start to see Atlanta - it’s where we have an opportunity to drive those and really contribute as well.

Okay. And then finally, Larry had mentioned some supply on the horizon in Austin. What are your long-term thoughts on Colorado Tower? I know you still [indiscernible] couple of cycles ago very well. Is that long-term hold or is that something we could actually see market?

We don't have any plans to market Colorado Tower. We certainly love the market dynamics in Austin. We are all in for below $350 a foot at Colorado Tower. It’s a fabulous asset as is in ‘16 and we are big believers in Austin long-term, so there are no plans for that on the horizon, Jamie.

Okay, thank you.

You bet. Operator: The next question is from Michael Lewis with SunTrust.

Hi, thank you. I actually wasn't going to ask about Apache and keep pounding you on this but you could correct me if I’m wrong. But I think this is the first time I heard you specifically mention discussions on a short-term renewal and I realized, they could still built now, but are there only really two options now, not moving to another building, not letting you do a built-to-suit on their land, not a long-term lease but either kind of a short-term renewal or they go ahead and build. I guess the question is, had something changed in your discussions with Apache?

Not really, Michael. We're just continuing to have constructive discussions with them, and I think we are confident that they'll make a decision on which are those paths they'll take by the end of the year.

Fair enough. And following up on Jamie's question about rollover, I realize you have all small spaces next year, but I was wondering if you had anything material in Houston scheduled for either 4Q or 2016, and kind of the expectations for renewal or re-leasing of those spaces specifically?

Yes. Again, in terms of 2016 in Houston, it is very diverse in terms of what our expirations are and again there is not anything that even - I think our largest exploration in ‘16 would be about 35,000 square feet. And actually the vast majority of what we have in Houston in ‘16 is non-energy-related. So as I mentioned earlier, what we are seeing in this current downtown in Houston is our customers have become stickier and our retention ratio upwards at 80% I think reflects that. And so I think we're confident in our assets and the discussions we are having with our customers now about some of those expirations but there is really nothing in isolation. That is material.

Okay, great. And then, just one last one. With the 2100 Ross sale and The Points at Waterview, does that change how you look at Victory Center? Do you want to be in Dallas over the long-term, or does it not make sense for you to - obviously that assets down the road, but to actually maybe just on one asset there. Does that make sense for you?

Well, we've been in Dallas for 20 years and we've always been very opportunistic in Dallas. And so we've come into Dallas where we see opportunities and then we tried to harvest at the right point. But we've had a continual presence in Dallas for many, many years and we like the Dallas market. It’s just a market you have to show a lot of discipline in. And relative to the Victory opportunity, we made a tremendous land purchase there and we continue to market the building. And I just would remind you that our partner there, Hines, has a full-time team on the ground in Houston - I mean, in Dallas every day as well as our leasing team. And so we’re very active in the market trying to find an opportunity for a lead tenant at Victory but we're going to be very disciplined. So I would say Dallas will continue to be opportunistic market for us and a market in which we’ll stay connected but stay very disciplined.

Great, thank you. Operator: Our next question comes from Jed Reagan with Green Street Advisors. Please go ahead Mr. Reagan your line is open, perhaps it's muted.

Can you hear me? Operator: Yes, we can hear you now. Please go ahead.

Good morning guys. Just in terms of Houston activity, can you talk about the magnitude or year-over-year sort of net effect or rent changes you’ve seeing on some of the deals you’ve signed recently, and also maybe just - can you talk about your expectations for where sublease space might be headed in your submarkets, and is there are any known corporate consolidations that could impact your portfolio?

Hi Jed, it’s Colin.

Jed, I thought you were asleep.

I should be.

I know. Although maybe the West Coast thing, and your alarm didn’t go off. Go ahead Colin.

So Jed, in Houston, we obviously track activity year-over-year, and I think in terms of what we see in our portfolio is certainly it's performed much better than I think the market as a whole and certainly the news out of the suburbs which take a lot of the headlines. But as we look at our leases, I mentioned the large lease we just did in 3 Greenway and 24-Net [ph], if we look backwards of the year and say, where we have leased that space and kind of similar comps, maybe we were down $0.50 or so. And I think where you’re starting to see some impact more so than base rent is additional concessions. And for us, there is a ticked up by a month or two for lease and I think TIs have moved up five bucks or so on certain leases, maybe $10 on the 10-year lease.

Okay, that's helpful. And just as far as the outlook for sublease space and any corporate consolidations, you anticipating anything there?

It’s impossible for us to predict in terms of - as it relates to where sublease is headed. In our markets, we continue to believe that the Galleria and Greenway will be much more muted than other markets. And again, that's really driven by - you don't have as much as speculative supply and you don't have the energy concentration. I think as we look across our portfolio, our energy customers, they are some of the largest companies in the world. And so we don't have any insider view as to consolidation that might happen, but as we look at our customer base think they could potentially be on the acquirers and take advantage of the current market downturn which will be helpful. But we obviously monitor it. We read the news. We talk to bankers et cetera, but we don't have any particular insight today as to any consolidation that would impact our portfolio.

Okay, fair enough. And can you guys just talk about what sort of run-bumps you're seeing in your portfolio today and maybe what the average is overall in your portfolio today?

Yes, are you referring to the escalations?

Yes, the annual escalators.

Again, it really varies by - it varies by market. And certainly also has impacted whether it's a net lease or gross lease. But I would say, in general, kind of 2.5% to 3% would be the range.

For deals being signed today or that would be sort of an average in place across your portfolio?

That would be an average.

Probably both.

Okay. Great. Thanks very much.

Thanks.

The next question is from Brendan Maiorana with Wells Fargo.

Thanks. Good morning. So Larry, I appreciate the commentary on share buybacks, makes a lot of sense in terms of how you guys things about it. When I think about the evolution of the company, I think you guys have done a really great job of simplifying the business and getting to a scale where, from a G&A perspective the business is running pretty efficiently. When you think about buybacks and maybe which reduced the size of the company, is there a point where you'd get to the scale of the company where it’d be a little bit too small, you would sort of lose some of that efficiency that you’ve gained over the past few years?

Well, that's up in the - we certainly - keep in mind as during today, during this cycle, we've been able to grow the company and grow the company in an extraordinarily profitable way to the shareholders, but I think at the level that we are talking about, I just believe in sort of sticking to a quarter-by-quarter view of the capital allocation and at the $100 million level with the variation we are seeing on all the inputs, whether it's our asset prices or share price or returns, just trying to stay focused on. Certainly the $100 million does not create any concerns with us relative to size, and I’m more focused on good capital allocation for the shareholders than trying to have a theoretical size limit that we operate under. I think that's just a right way to do it, Brendan, than - but we’re going to remain very disciplined in watching all those inputs and looking at the best return on capital.

Okay, great. And then, maybe for Colin, just appreciate sort of the comments on Houston. Is there - for Galleria, is there any updated view on what may happen with - I think there is a couple of large blocks in sublet space that could come to the market. I wonder if you could maybe give updated thoughts with BHP - Williams has got the pending merger with Energy Transfer Partners. I think Schlumberger was a potential to put some sublet space on that market. So is that a submarket where we could see a lot of sublet space come back over the next year or two?

Brendan, the three that you just point out, we're obviously watching those closely. BHP does have the right to get back couple of hundred thousand square feet when their new building delivers, and that's something that like everybody in the market is watching is to what they do. I don't think they've declared one way or another, but it's something that we're certainly watching really and is obviously a large customer over at Williams. Energy Transfer, they do own a building down in the CBD of Houston. It’s an older vintage building. And so we'll just have to watch as that transaction plays out, what they decide to do with their long-term space needs. I don't think [indiscernible] probably far enough along in that transaction that really made any determination but certainly I think they'll be focused on keeping a certain size threshold that their lease requires at Williams to kind of keep those naming rights. So that's something that we’ll continue to watch.

Okay, thanks. And then, just lastly for Gregg. Is there anything - so your implied guidance for Q4 is $0.20 from FFO line at the midpoint. Anything meaningful in terms of fee income or other income included in there or land sale gains? And then you commented on the G&A, but it does seems like even at the low-end of your revised G&A guidance at the very big ramp in Q4 and higher than where you’ve been in any quarter thus far year-to-date?

You're right. It's actually reasonably difficult to get to the midpoint of our new range. And what we're trying to do there is just be a little bit conservative because the volatility in our LTI accrual. Our share price has been jumpy in the last 12 to 18 months and it's hard to predict. And so there is some room in there to make sure that we can accommodate relative movement in our share price. On the land gain side, as I said in my prepared remarks, I told - we had indicated at the very beginning of the year that we thought we have some land gains in 2015, and in fact we have and it's been very nice. They’ve actually come quicker than we thought. So I think we've realized more earlier than we thought we would. I don't think there is much left in 2015 in terms of land gains and that's reflected in the guidance.

Okay. And then just point of clarification. Anything with like the fee income or other income? I think you guys are at the lower end of your original guidance now, but is that expected to be meaningful in Q4?

Well, the large part of that’s term fees or its historical term fees and we don't provide guidance on term fees. They've actually been running very low this year. The average termination fee number for 2012 ‘13 and ‘14 was just under $4 million on an annual basis. This year year-to-date we've only recognized $700,000. So the quality of our FFO has actually gone up because we've reduced the non-recurring nature of these term fees and they've been running little low. So again our guidance does not take into account any incremental term fees in the fourth quarter.

Okay, great. Thanks.

Thanks Brendan. Operator: The next question comes from John Guinee with Stifel.

Great. Thank you. Larry, what's your target on - this is a moving target. What's your target on yield on development cost? When you're looking at new development yield, are you shooting for a 6, 7, 8, 9, 10?

John, we look at it from a standpoint of looking it in a conservative cap rat exit number and feel that that spread, depending on the credit that we have pre-leasing or the speculative nature that that's where our variation will take place. But we think we need to have 150 to 200 basis points spread on top of, not a spot cap rate number but sort of a 10-year cap rate number, and we'll get to sort of the lower end of that if we've got a fair amount of pre-leasing in credit. And then if we’re the speculative part, we think we need to stay disciplined with that kind of spread opportunity.

Okay. Colin or may be Gregg, any tax project action or gain issues on your $250 million worth of sales, and have you figured out a way to 1031 that into development or what's the magic sauce that?

Hey John, it's Gregg. No magic sauce. We’ll be able to absorb any gains recognized in that $250 million without any tax consequences at all.

Okay. Then a couple of asset questions. On the NCR deal, did you own the land in advance or was that the determining factor on the build-to-suit? Second, whatever to Blalock Lakes? And then third, what you're thinking on American Cancer Society, generating an amazing amount of cash flow with almost more than you would expect it to be?

John, we'll start with NCR. NCR actually had put the land under contract in advance of picking who their development partner was going to be. They wanted to be next to Georgia Tech, and had put that land under contract. And then once we were selected, then we ended up purchasing the land and it became part of the deal. Blalock Lakes is sold. We sold that in the last quarter to a group of private individuals that have home-sites down there and we are pleased that it seems to doing well and pleased that they own it and not us anymore. In terms of American Cancer Society, we continue to - the big thing we are watching on American Cancer Society is we are getting a nice return on it, but the debt is up in a couple of years and it's kind of fairly significant prepayment penalty. And so we are continuing to lease it. We actually have some good prospects on the data side to generate some more income and value there, but long-term that's not a long-term core asset for Cousins.

Great. Thank you very much.

Thanks John. Operator: Our next question comes from David Rodgers of Robert W. Baird.

Larry, just want to follow quickly on your question or your comment earlier regarding Dallas as kind of an opportunistic market and then wondering how you would characterize Austin and Charlotte in that mix as well?

We really view Austin and Charlotte as more core markets. We've had operating teams in those markets also for several decades. And so we view those as more core long-term hold markets for us, and we view Dallas as more opportunistic at this time.

Okay, that's fair. And then I didn't hear if you commented on this, but you’ve had a number of development wins obviously in Atlanta, you’re working on one in Austin and the one that you just announced in Charlotte. So I guess with those announcements, should we expect to see maybe that pipeline getting forward in the next several quarters, maybe you're drawing more attention to yourself or the developer. Do you feel like that pipeline is getting richer? If you commented on it earlier, I didn't hear it, so any additional color would be helpful? Thanks.

I think we're at a point in the cycle where we think the development opportunities in Texas are pretty - is pretty late in the game in Texas. And so that's why you see us on Victory being delighted that we got a great site with a very, very low basis and a great partner, but it's going to take a significant pre-leasing commitment to get us to move there. Atlanta and Charlotte are a little bit further behind in terms of where we are in the development cycle. But, Dave, as I look at it, the key thing to us at this point is protecting the balance sheet and being very disciplined on the capital allocation side and we have seen some talk of some folks getting a little bit more aggressive on the spec side and the markets will see if those things happen, but that's just not going to be us unless we find a very unique opportunity. So we are delighted at this point in the cycle to have the development pipeline we do and the value creation opportunity in it, while at the same time it being conservative. And we are not going to aggressively trying to force ourselves to find additional development deals. We do have some opportunities and we're looking at those, but I just want to underscore the discipline part.

All right, thank you.

You bet. Operator: The next question is from Tom Lesnick with Capital One Securities.

Good morning. I'm sorry if I missed it earlier, but just kind of given some of the local press on the Decatur development. I was wondering if you guys could provide an update on where that is in the planning stage?

The whole kickoff of that deal in Decatur, Georgia, which is just outside of Atlanta is when the county moves out of the building that has to be demolished to let the project proceed and that's not going to happen until the second quarter of next year. We are confident with our partner in Decatur that when the site is ready to be developed that they’ll be compelling to development an opportunity there to do. We've been going through your typical type of zoning discussions with them on some of the aspects of the development, but I think those discussions are very constructive and we'll get to the right place by the time the development is ready to start.

Okay, thank you. Operator: [Operator Instructions] our next question is a follow-up from Jed Reagan with Green Street Advisors.

Hi guys. Just on Apache, you mentioned the possibility of a short-term extension. Just order of magnitude, should we think of that and sort of one to two year range, or is that more like three to five years or is it just too early to tell at this point?

I think it's too early to talk about but I'm confident that the market will have clarity on it by the end of the year.

Fair enough. Okay, great. Thanks.

Thanks. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

We appreciate everybody joining us today. I am excited about where we are and the prospects for the balance of the year. We'll see a lot of you all at NAREIT at Las Vegas and we’ll look forward to talking then. Thank you. Operator: Thank you sir. The conference is now concluded. Thank you for attending. You may now disconnect.