COUSINS PROPERTIES INC (CUZ)

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

Overview of 2026 Performance and Company and Industry Trends

Cousins Properties Incorporated ("Cousins") (and collectively, with its subsidiaries, the "Company," "we," "our," or "us") is a publicly traded (NYSE: CUZ), self-administered, and self-managed real estate investment trust, or REIT. Cousins conducts substantially all of its business through Cousins Properties LP ("CPLP"). Cousins owns in excess of 99% of CPLP and consolidates CPLP. CPLP owns Cousins TRS Services LLC, a taxable entity that owns and manages its own real estate portfolio and performs certain real estate related services for other parties. Our strategy is to create stockholder value by owning a lifestyle office portfolio (described in further detail below) in the Sun Belt markets, with a particular focus on the core markets of Austin, Atlanta, Charlotte, Tampa, Phoenix, Dallas, and Nashville. We execute this strategy through disciplined capital allocation, including opportunistic acquisitions, selective developments, and timely dispositions of non-core assets while maintaining a portfolio of newer, more efficient properties with lower capital expenditure requirements. This strategy is also based on a simple, flexible, and low-leverage balance sheet that allows us to pursue compelling growth opportunities at the most advantageous points in the cycle. To implement this strategy, we strive to have strong local operating platforms in each major market.

During the quarter, we leased 924,000 square feet of office space, including 395,000 of new and expansion leases representing 43% of total leasing activity. Straight-line basis net rent per square foot increased 26.8% for those office spaces that were under lease within the past year. Same property Net Operating Income ("NOI", defined below) for consolidated properties and our share of unconsolidated properties increased 2.0% for the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

For the six months ended June 30, 2026, we leased 1,856,000 square feet of office space, including 878,000 of new and expansion leases representing 47% of total leasing activity. Straight-line basis net rent per square foot increased 27.8% for those office spaces that were under lease within the past year. Same property net operating income for consolidated properties and our share of unconsolidated properties increased 1.8% for the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

On April 1, 2026, we entered into a new five-year $1.2 billion unsecured credit facility which replaced the prior $1.0 billion facility that was scheduled to mature in April 2027, added two six-month extensions to each of our existing $400 million and $100 million unsecured term loans, and improved the borrowing spread by fifteen basis points on both the credit facility and the $400 million term loan and by thirty basis points on the $100 million term loan.

On April 30, 2026, we purchased our partner's 10% interest in 100 Mill, in Phoenix, for $18.5 million. The purchase price included a promote to our partner in excess of its partnership interest and represented a negotiated fair value for the property of $158.7 million.

On June 26, 2026, we sold our Research Park V, a 173,000 square foot office property in Austin, for a gross sales price of $42.0 million, resulting in a gain of $9.2 million on June 26, 2026.

Subsequent to quarter end, on July 17, 2026, we acquired a preferred equity interest in 5th & Walsh, a 199,000 square foot office development in Austin. Our funding commitment of $31.5 million is expected to be invested in 2027.

Subsequent to quarter end, on July 29, 2026, we sold One Eleven Congress, a 519,000 square foot office property in Austin, for a gross sales price of $208.0 million.

We believe the Sun Belt, and in particular the seven core Sun Belt markets in which we own properties, will continue to outperform the broader office sector as evidenced by clear bifurcation between Sun Belt and Gateway market fundamentals. In addition, as the flight to quality trend accelerates among office users, we believe our lifestyle office portfolio is well positioned to benefit from, and ultimately outperform in, the current real estate environment.

We consider “lifestyle offices” to be well-located buildings that are modern structures or have been modernized to compete with newer buildings, are professionally managed and maintained, and offer a number and type of amenities that are in high demand by customers that are focused on the importance of the physical work environment in recruiting and retaining employees. We believe our “lifestyle office” portfolio improves our ability to renew leases and obtain new customers which results in consistently higher occupancy than the remainder of the office buildings in our markets. We do not consider the expression “lifestyle office” a classification of our properties in accordance with any standard listing criteria in the real estate industry. We, therefore, caution investors that our use and definition of “lifestyle office” may be different than the use and definition of similar expressions and traditional classifications that may be used by other companies.

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Results of Operations For The Three and Six Months Ended June 30, 2026

General

Net income available to common stockholders for the three and six months ended June 30, 2026, was $26.2 million and $1.3 million, respectively. Net income available to common stockholders for the three and six months ended June 30, 2025, was $14.5 million and $35.4 million, respectively. During the three months ended June 30, 2026, we recorded a gain of $9.2 million upon sale of Research Park V in June 2026. During the six months ended June 30, 2026, we recorded a $36.6 million of impairment related to One Eleven Congress, which [was sold subsequent to quarter end on July 29, 2026]. We detail below other material changes in the components of net income and loss available to common stockholders for the three and six months ended June 30, 2026, compared to the same periods in 2025.

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

The following results include the performance of our Same Property portfolio. Our Same Property portfolio includes office properties that were stabilized and owned by us for the entirety of each comparable reporting period presented and excludes any office properties held for sale. Same Property amounts for the 2026 versus 2025 comparison period are for office properties that were stabilized and owned as of January 1, 2025, through June 30, 2026. We consider many factors in determining whether a property has stabilized, including the property’s occupancy (independently and relative to its submarket) and current leasing pipeline, as well as time since the cessation of major construction activity.

Company management evaluates the performance of its property portfolio, in part, based on NOI. NOI represents rental property revenues, excluding termination fee income, less rental property operating expenses. NOI is not a measure of cash flows or operating results as measured by GAAP, is not indicative of cash available to fund cash needs, and should not be considered an alternative to cash flows as a measure of liquidity. All companies may not calculate NOI in the same manner. We consider NOI to be an appropriate supplemental measure to net income as it helps both management and investors understand the core operations of our operating assets. NOI excludes corporate general and administrative expenses, interest expense, depreciation and amortization, impairments, gains/losses on sales of real estate, and other non-operating items. As a result, we use only those income and expense items that are incurred at the property level to evaluate a property's performance.

The following table reconciles net income to consolidated NOI for each of the periods presented ($ in thousands):

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Consolidated rental property revenues, rental property operating expenses, and NOI changed between the 2026 and 2025 periods as follows ($ in thousands):

Same Property NOI represents Net Operating Income for those office properties that were stabilized and owned by us for the entirety of the 2026 and 2025 reporting periods presented, excluding any office properties held for sale. Same Property NOI allows analysts, investors, and management to analyze continuing operations and evaluate the growth trend of the Company's portfolio.

Same Property Rental Property Revenues, Operating Expenses, and NOI increased for the three months ended June 30, 2026, compared to the same period in the prior year primarily due to an increase in occup

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Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the selected financial data and the consolidated financial statements and notes.

Overview of 2025 Performance and Company and Industry Trends

Our strategy is to create value for our stockholders through ownership of the premier office portfolio in Sun Belt markets of the United States, with a particular focus on Austin, Atlanta, Charlotte, Tampa, Phoenix, Dallas, and Nashville. This strategy is based on a disciplined approach to capital allocation that includes opportunistic acquisitions, selective development, and timely dispositions of non-core assets, with a goal of maintaining a portfolio of newer and more efficient properties with lower capital expenditure requirements. To implement this disciplined approach, we maintain a simple, flexible, and low-leveraged balance sheet, which allows us to pursue compelling growth opportunities at the most advantageous points in the cycle. We utilize our strong local operating platforms within each of our major markets to implement this strategy.

During 2025, we completed the strategic acquisition of an operating property, The Link, a 292,000 square foot lifestyle office property in Uptown Dallas, for a purchase price of $218.0 million. We also received repayment at par for two investments in real estate debt, secured by interests, respectively in Saint Ann Court in Dallas and Radius in Nashville of $138.0 million and $12.8 million, respectively, as well as loaned our Neuhoff joint venture partner $19.6 million at an interest rate of SOFR plus 625 basis points which the partner used to fund their portion of the joint venture loan repayment. Finally, we sold our bankruptcy claim with SVB Financial group for $4.6 million.

During 2025, we completed an offering of the public senior notes maturing in 2030 generating net proceeds of $496.9 million to fund the acquisition of the Link and to pay off $250 million of privately placed senior notes. In conjunction with our loan to our joint venture partner mentioned above, the joint venture amended its existing Neuhoff construction loan, repaying $39.2 million of the outstanding principal, extending the maturity date to September 2026, and lowering the spread over SOFR to 300 basis points from 345 basis points. The joint venture has an option to extend the maturity date an additional 12 months, subject to conditions. Additionally, we sold 2.9 million shares under Forward Sales contracts at an average price of $30.44 per share. The future net settlement proceeds will be $88.5 million.

During 2025, we leased a total of 2.1 million square feet of office space. Our office operating portfolio was 90.7% percent leased as of December 31, 2025 and the weighted average economic occupancy during the fourth quarter of 2025 was 88.3%. In 2025, the weighted average net effective rent per square foot, representing base rent excluding operating expense reimbursements and leasing costs, for leases with a term greater than one year, was $25.86 per square foot. Cash-basis net effective rent per square foot increased 3.5% on spaces that had been previously occupied in the past year. Cash-basis net effective rent represents net rent at the end of the term paid under the prior lease compared to the net rent at the beginning of the term paid under the current lease. Our same property net operating income for the year increased 2.4% on a straight-line basis and increased 0.9% on a cash-basis.

We believe the Sun Belt, and in particular the seven Sun Belt markets listed above, will continue to outperform the broader office sector evidenced by a clear bifurcation between Sun Belt and Gateway market fundamentals. In addition, as the flight to quality trend accelerates among office users, we believe our trophy portfolio is well positioned to benefit from, and ultimately outperform in, the current real estate environment.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with GAAP as outlined in the Financial Accounting Standards Board’s ("FASB") Accounting Standards Codification ("ASC"), and the notes to consolidated financial statements include a summary of the significant accounting policies for the Company. The preparation of financial statements in accordance with GAAP requires the use of certain estimates, a change in which could materially affect revenues, expenses, assets, or liabilities. Some of our accounting policies are considered to be critical accounting policies, which are ones that are both important to the portrayal of our financial condition, results of operations, and cash flows, and ones that also require significant judgment or complex estimation processes. Our critical accounting policies are as follows:

Revenue Recognition

Most of our revenues are derived from operating leases and are reflected as rental property revenues on the accompanying consolidated statements of operations. Several judgments and estimates are included in the rental property revenue recognition process including the determination of lease term, ownership of tenant improvements, lease modifications, and lease terminations.

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Revenues derived from fixed lease payments, which exclude certain rental property revenue such as percentage rent and revenue related to the recovery of certain operating expenses from our tenants, are recognized on a straight-line basis over the term of the lease. We make significant assumptions and judgments in determining the lease term, including the judgments involved as to when a tenant has the right to use an underlying asset and assumptions when the lease provides the tenant with an extension or early termination option.

Most of our leases involve some form of improvements to leased space. We make significant judgments in reviewing various factors to assist in determining whether we or our tenants own the improvements. Those factors include, but are not limited to, whether or not the:

•Lease agreement’s terms obligate the tenant to construct or install specifically-identified assets (i.e., the leasehold improvements);

•Tenant’s failure to make specified improvements is an event of default under which the landlord can require the lessee to make those improvements or otherwise enforce the landlord’s rights to those assets (or a monetary equivalent);

•Landlord must approve the plans prior to construction;

•Tenant is permitted to alter or remove the leasehold improvements without the landlord’s consent or without compensating the landlord for any lost utility or diminution in fair value;

•Tenant is required to provide the landlord with evidence supporting the cost of tenant improvements before the landlord pays the tenant for the tenant improvements;

•Landlord is obligated to fund cost overruns for the construction of leasehold improvements;

•Leasehold improvements are unique to the tenant or could reasonably be used by the lessor to lease to other parties; and,

•Economic life of the leasehold improvements is such that a significant residual value of the assets is expected to accrue to the benefit of the landlord at the end of the lease term.

If we determine the improvements are our assets, we capitalize the cost of the improvements and recognize depreciation expense associated with such improvements generally over the shorter of the estimated useful life or the term of the lease. Any portion of our asset funded by a tenant is recorded as deferred revenue to be recognized in rental revenue over the term of the lease on a straight-line basis. If the improvements are tenant assets, we defer the cost of improvements funded by us as a lease incentive asset and amortize it as a reduction of rental revenue over the term of the lease. Our determination of whether improvements are our assets or tenants' assets also affects when we commence revenue recognition in connection with a lease.

We periodically enter into amendments to our leases. When a lease is amended, we need to determine whether (i) an additional right of use not included in the original lease is being granted as a result of the modification and (ii) there is an increase in the lease payments that is commensurate with the standalone price for the additional right of use. If both of those conditions are met, the amendment is accounted for as a separate contract. If both of those conditions are not met, the amendment is accounted for as a lease modification. Most of our lease amendments result in a lease modification of our operating leases which will likely require us to reassess both the lease term and fixed lease payments, including considering any prepaid or accrued lease rentals relating to the original lease as a part of the lease payments for the modified lease.

Tenants sometimes terminate their lease prior to the end of the lease term, as allowed under negotiated termination options included in the lease or through separate negotiations with us. Such negotiations generally require payment of a termination fee that reimburses us for a portion of the remaining rent under the original lease term and the undepreciated lease inception costs such as commissions, tenant improvements, and lease incentives. Termination fee income, included in rental property revenue, is recognized on a straight-line basis from the date the termination is executed through lease expiration when the amount of the fee is determinable and collectability of the fee is reasonably assured. This fee income is adjusted on a straight-line basis by any accrued straight-line rent receivable and any above- or below-market lease intangible assets or liabilities related to the lease projected at the date of tenant vacancy.

Leases representing 35% and 32% of the square footage of our occupied portfolio as of December 31, 2025 and 2024, respectively, had early termination options at some point in their lease terms, all of which require a fee for early termination. During the years ended December 31, 2025 and 2024, five and three tenants representing 391,000 and 170,000 square feet, respectively, exercised early termination options in their leases. The early termination fee recognized in rental property revenues on these leases during the years ended December 31, 2025 and 2024 was $2.9 million and $2.5 million, respectively.

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Real Estate Carrying Value

The carrying values of our real estate assets are subject to several processes that involve a significant use of judgments and estimates. Those processes primarily include (i) purchase price allocations for acquired assets, (ii) depreciation and amortization, and (iii) impairment. The judgments and estimates used in each of these processes have a material impact on our financial condition, results of operations, and cash flows.

Purchase Price Allocations for Acquired Assets

We evaluate all real estate acquisitions to determine if the transactions qualify as an acquisition of assets or of a business, including cases in which we acquire a pool of properties of varying property types in different markets. For purposes of this review, we separate the assets acquired based on their unique and different risk characteristics, which may be by property type, geographic concentration, or other factors. If we determine that substantially all of the fair value is concentrated in a single identifiable asset or group of similar assets, generally 90% of total fair value of assets acquired, we account for the acquisition as an acquisition of assets. If we determine that there is no single asset or group of assets that make up substantially all of the fair value of gross assets acquired, we then evaluate whether the acquired set of assets includes an input and substantial process which create an output. If we determine that an input and a substantive process that significantly

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