Cousins Properties puts three Downtown Orlando office high-rises on market

Roughly 12 months after buying into Downtown Orlando's office market in a big way, Atlanta-based office REIT Cousins Properties wants to move that capital to a more profitable MSA.

The company hired real estate investment banking and brokerage firm Eastdil Secured in September to market for sale its local trio of towers, which total more than 1.03 million square feet. No call for offers date has been set. 

A spokeswoman for Cousins Properties confirmed for GrowthSpotter that Eastdil had been engaged, but declined further comment. Kennedy Hicks, director in Eastdil's Atlanta office who is managing the listing, also declined comment. 

Cousins reached a deal in April 2016 to acquire Orlando-based Parkway Properties, an acquisition valued at more than $2 billion that involved a portfolio of Parkway's Class A office buildings in major urban markets across the southeastern United States. The company closed a stock-for-stock merger in October 2016. 

That included a Downtown Orlando trio of buildings: the 28-story Bank of America Center (421,069 square feet), the 19-story One Orlando Centre better known as the Wells Fargo Building (355,783 square feet), and the 18-story Citrus Center (260,751 square feet).  

Eastdil claimed in a July report to be the top office real estate brokerage firm in the country through the first half of the year by sales value, coordinating 80 property sales worth more than $11.8 billion.

In listing the properties, Cousins is signaling an intent to refocus its capital on core assets in larger MSAs of the southeast, where average rents are generally higher than the $26 to $31 per square foot that Class A high-rises in Orlando's Central Business District are commanding now. 

The company currently manages a 15.2 million-square-foot office portfolio in the Sun Belt markets of Atlanta, Austin, Charlotte, Orlando, Tampa and Tempe, per its website. 

Cousins can also focus its proceeds from these sales on new office tower development, a focal point for its growth, in markets other than Orlando where demand is higher and average rents justify the investment. 

Orlando's CBD submarket has less than 8 million square feet of office space available for lease, relatively small compared to the other cities Cousins is established in. That makes it difficult for Cousins to grow its footprint any further in Downtown Orlando when other REITs it competes with own the remaining high-rises, and want to grow as well. 

Office brokerage sources in Orlando said Friday they expect demand for the trio of high-rise buildings to be strong, which together should command more than $300 million.

Piedmont Office Realty Trust paid $170.8 million in November 2015 to enter the Orlando market with the 35-story SunTrust Center tower, a Class A office building with 693,169 square feet of conditioned area across the tower and a second building, as well as a seven-story parking garage.

And in July 2016, Piedmont paid close to $168 million for the CNL Plaza I (14 stories), CNL Plaza II (12 stories) and related parking garages, which total more than 600,000 square feet of conditioned area. 

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