Good morning, and welcome to the Cousins Properties second quarter conference call. All participants will be in a listen-only mode. Should you need any assistance today, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please do note that this event is being recorded. I would now like to turn the conference over to Pamela Roper, General Counsel. Please go ahead. Thank you. Good morning and welcome to Cousins Properties second quarter earnings conference call. With me today are Colin Connolly, our President and Chief Executive Officer, Richard Hickson, our Executive Vice President of Operations, and Gregg Adzema, our Chief Financial Officer. The press release and supplemental package were distributed yesterday afternoon as well as furnished on Form 8-K. In the supplemental package, the company has reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. If you did not receive a copy, these documents are available through the quarterly disclosures and supplemental SEC information link on the investor relations page or website, cousins.com. Please be aware that certain matters discussed today may constitute forward-looking statements within the meaning of federal securities laws, and actual results may differ materially from these statements due to a variety of risks and uncertainties and other factors, including the risk factors set forth in our annual report on Form 10-K and our other SEC filings. The company does not undertake any duty to update any forward-looking statements, whether as a result of new information, future events, or otherwise. The full declaration regarding forward-looking statements is available in the supplemental package posted yesterday, and a detailed discussion of the potential risks is contained in our filings with the SEC. With that, I'll turn the call over to Colin Connolly. Thank you, Pam, and good morning, everyone. Before providing some observations on the macro environment and trends, I want to provide a quick overview of our second quarter financial highlights. On the earnings front, the team delivered $0.70 per share in FFO. Importantly, we leased 588,000 sq ft during the quarter with an 11.6% cash rent rollout. These are strong results, and we remain encouraged by the leasing pipeline in front of us. Looking at the macro environment, I'll highlight three important trends. First, as we all know, unprecedented fiscal and monetary stimulus, supply chain disruptions from COVID, war in Europe, and an extraordinarily tight labor market have created inflation levels not seen in decades. Accordingly, the Federal Reserve has begun tightening financial conditions. The result is higher interest rates and a slowing economy. Not surprisingly, many companies are announcing plans to slow hiring, and in some cases, layoffs. Second, the return to office, particularly premier office, continues and is likely to accelerate. CEOs are growing frustrated with remote work. Culture, camaraderie, collaboration are deteriorating. Financial results and stock prices have weakened and attrition is at record levels. At the same time, younger workers and recent college graduates are increasingly looking for an in-person experience. They want to build relationships. They want to be trained. They want to be mentored. They are the future, and their employers are listening. Encouragement to return to the office is growing from the tops of organizations to the bottom, and now from both sides as the job market softens. Let me paraphrase a recent statement from Shopify as they laid off approximately 1,000 employees. We placed a bet that the channel mix, the share of dollars that traveled through e-commerce rather than physical retail, would permanently leap ahead by five or even 10 years. It's now clear that bet didn't pay off. What we see now is the mix reverting to roughly where pre-COVID data would have suggested it should be at this point. I see parallels in this statement to the current narrative regarding the office market. Many have made similar new normal declarations regarding remote work. Will they be right? Or will the office market also eventually revert to the mean? While I can't speak for commodity or suburban office, we believe that Premier Office will remain critical for innovative companies to build culture, collaborate, solve problems, and grow talent. Lastly, the flight to quality is becoming even more pronounced. Trophy assets continue to experience greater resiliency and outperform the broader market. To illustrate, net absorption since 2020 for buildings built since 2015 is positive 181 million sq ft. On the contrary, net absorption since 2020 for buildings built prior to 2015 is negative 327 million sq ft. That is a staggering difference. The market is speaking loudly. What does this all mean for Cousins and our strategy? Market and financial conditions will likely become more challenging. We are not immune to the impact of rising interest rates or a weakening economy. However, we built Cousins to thrive during all phases of the economic cycle. We are exceptionally well-positioned today. Let me highlight why. First, we own the leading Sun Belt trophy office portfolio in the best submarkets of Atlanta, Austin, Charlotte, Tampa, Phoenix, Dallas, and Nashville. We believe that we will continue to get more than our fair share of leasing demand as we benefit from both Sun Belt migration and the flight to quality. Second, our $566 million development pipeline, with our share of the office component approximately 70% pre-leased, is appropriately positioned for the current climate. We will benefit from meaningful incremental NOI during 2023 and 2024 by only having a modest amount of speculative leasing risk. Next, the known move-outs by Norfolk Southern at Promenade and Anthem at 3350 Peachtree are behind us. While a recession, if it were to happen, could extend the timeline to complete the re-leasing of these attractive properties, our overall portfolio is on solid footing. Our lease expirations through 2024 total just 14.3%, among the lowest in the office sector. Lastly, our balance sheet is best in class. Our net debt to EBITDA at the end of the second quarter was 4.9x. This compares to the office sector average of approximately 7.3x. We have evaluated many deals over the course of 2022. In anticipation of a changing market, we have remained disciplined and kept our powder dry, notwithstanding the potential accretion to short-term earnings. Many recently announced deals in our markets, which were priced in the spring and have had cash cap rates in the high 4% range on our underwriting. Today, just a few months later, the pricing looks much more attractive. We believe compelling opportunities are on the way, and we will be ready. At Cousins, we have a unique and compelling strategy, build the preeminent Sun Belt office company. The key ingredients of this strategy include a pure play portfolio of premier, highly amenitized properties in dynamic Sun Belt markets. A leading development platform that creates value through the development of innovative office, residential, and mixed-use properties. A strong balance sheet with low leverage and ample liquidity, and local operating teams with a creative and entrepreneurial approach. We have been executing this strategy for over a decade, and we remain committed to it. Looking forward, we will continue to prioritize selling less relevant properties, which at this point is a modest percentage of our portfolio, and reinvest the capital into strategic acquisitions, unique developments, and our own stock if that is the most compelling use to accomplish our long-term goals. In the near term, the bar for new development will be higher. While demand is quite strong for new product, material escalations and construction costs have compressed development yields, so they look less attractive today compared to acquisition cap rates and the implied yield on our own stock. We expect construction costs will moderate, so we will be back in the development game soon enough with some exciting projects as development yields rebalance. In closing, we are mindful of the potential impacts of higher interest rates in a slowing economy on short-term results. However, over the long term, we are optimistic that premier office will separate into its own asset class with improved investor sentiment. Cousins is in a very strong position. We are in the right Sun Belt markets. We own a trophy portfolio. We have a dedicated and talented team, and our balance sheet is primed for opportunities. Before turning the call over to Richard, I wanna thank our entire Cousins team, who provide excellent service to our customers, as well as their skill and talents to their jobs every day. Their creativity, resilience, and hard work will continue to propel us ahead. Richard? Thanks, Colin, and good morning. Despite the current macroeconomic backdrop, our operations team was able to once again produce solid quarterly results. In particular, our leasing activity this quarter is a clear indication that the quality of our portfolio is resonating well with office users in our Sun Belt markets. Diving right into results, our total office portfolio leased percentage and weighted average occupancy were 90.1% and 87.5% respectively. Our weighted average occupancy was virtually unchanged quarter over quarter, increasing 10 basis points. We also saw physical utilization move incrementally higher during the quarter. With regard to leasing, the quarter was outstanding. We executed 52 leases for a total of 588,000 sq ft with a weighted average term of 7.9 years. Our volume in sq ft terms was up 82% over the first quarter and up 12% relative to our run rate in 2021. The signed lease count this quarter is especially notable and represents our highest quarterly transaction count ever, tied with the third quarter of 2016. New and expansion leases represented 45% of total leasing activity this quarter, and our activity was diverse in terms of industry mix, with traditional professional services leading the way. Only 18% of our activity this quarter was with customers in the technology sector. Rent growth in the quarter was strong, with second-generation net rents increasing 11.6% on a cash basis. Our portfolio's in-place gross rents also increased yet again to $44.40. In addition to strong rent growth, leasing concessions defined as the sum of free rent and tenant improvements were $6.32 per sq ft per year. More than $2 lower than what we posted last quarter and 60 cents lower than in 2021. Despite lower concessions, our net effective rents came in modestly lower compared to last quarter at $23.37. More in line with levels seen in the first half of 2021. This decrease relative to recent quarters was primarily due to our geographic leasing mix. Looking forward, I'm also pleased to say that we continue to have a healthy late-stage lease pipeline that to date has shown no signs of disruption. It's well-balanced among our markets and is anchored by a diverse group of traditional professional services companies. With oil prices remaining at an elevated level, we are seeing interesting activity, interesting market activity in Houston. A quick reminder that our 835,000 sq ft BriarLake project in Houston remains a non-core holding. While lease economics in Houston going forward will almost certainly not screen well relative to our stronger core markets, new activity in Houston would be a welcome net positive to our holding there and to our overall portfolio. Despite our strong recent activity and healthy pipeline, we are closely monitoring macroeconomic conditions and acknowledge that any further deterioration would almost certainly have some negative impact on leasing activity in the back half of this year. We simply are not seeing that in our portfolio yet. As Colin highlighted in his remarks, we do continue to see the impact of the flight to quality trend. There's probably no better market to look for an example of this trend than Tampa. According to JLL Research, the overall market has posted negative net absorption of 532,000 sq ft year to date. However, the Class A segment in the highest quality CBD and Wests hore submarkets, where our properties are located, has posted positive net absorption of 278,000 sq ft. Our same property portfolio in Tampa is currently 92.5% leased, and our lease pipeline has filled nicely during the past quarter. The migration and flight to quality trends are also clear in Atlanta, where we completed an impressive 323,000 sq ft of leasing this quarter, including over 48,000 sq ft of new and expansion leases at Promenade Central in Midtown, with a blended cash rent roll-up of 38%. According to JLL, Atlanta's office market leasing activity has surpassed the 2016-2019 three-year average leasing activity in three of the last four quarters. In the first part of 2022, great companies like Visa, Walmart, McKinsey, and Nike have all committed to creating new hubs in Atlanta. Broader rent growth has also resumed in Atlanta after remaining relatively stable since 2020, with eight out of Atlanta's 10 submarkets showing average asking rents above pre-pandemic peaks. Austin has also benefited greatly from these trends. Austin led the nation in return to office occupancy levels this quarter, according to Kastle Systems data, as the market continued to realize net occupancy gains with over 472,000 sq ft of positive absorption. Average rental rates in Austin were at a record high last quarter, according to CBRE, and they remained at those levels this quarter. Like Atlanta, our Austin leasing activity was strong this quarter, including a 94,000 sq ft early renewal and expansion of Cadence Design Systems at our Research Park Plaza property in the northwest submarket. This was a fantastic transaction that rolled up rents and stabilized that property's rent roll for many years to come. There's no doubt that rising interest rates and high inflation could put pressure on the economy and health of the office market. Nevertheless, we believe leading companies will continue to seek out high-quality office space in our core markets over the long term. It also bears repeating what Colin said earlier. We are incredibly encouraged that only 14.3% of our annual contractual rent expires through the end of 2024. The larger expirations of the past couple of years are behind us, and we are in an enviable position of stability as economic headwinds threaten. Before handing off to Gregg, I want to thank the entire Cousins team. As always, your hard work is the foundation of our success. Gregg? Thanks, Richard, and good morning, everyone. I'll begin my remarks by providing some detail on our same property performance and our parking revenues. Then I'll move on to our transaction activity, our capital markets activity, and our development pipeline, followed by a quick discussion of our balance sheet, before closing my remarks with updated information on our outlook for the balance of 2022. Overall, as Colin stated upfront, second quarter numbers were solid despite the economic volatility and uncertainty. Focusing on same property performance, cash net operating income decreased 0.2% compared to last year, driven by a 1.6% decrease in revenues and a 4.1% decrease in expenses. These numbers include two properties here in Atlanta, 3350 Peachtree in Buckhead and Promenade Tower in Midtown, that have each had large recent move-outs and are undergoing significant redevelopments as we take advantage of the temporary vacancy to update those properties. Despite this work, we've kept these buildings in our same property pool. Excluding these two buildings, same property cash NOI would have increased 1.9% during the second quarter, a better reflection of the current underlying fundamentals within our portfolio. For the first six months of 2022, same property cash NOI, including 3350 Peachtree and Promenade Tower, is flat compared to last year. We expect this to improve over the final six months of 2022, and we anticipate positive same property cash NOI growth for the full year. A large driver of this improvement is Amazon's lease commencement on July first for our entire Domain 2 property. As a quick reminder, this building's been empty and generating no revenues since the beginning of 2022 as Expedia moved out to consolidate their operations at our newly developed Domain 11 building. Prior to this move out, we signed a lease with Amazon that rolled up the rent and extended the term from Expedia's prior lease. However, we have had 6 months of downtime as the transition to Amazon takes place. As Richard mentioned earlier, physical occupancy at our properties has increased and our parking revenues have grown along with it. They're up 9% compared to the first quarter. For context, parking revenues comprise about 6% of our total property revenues, and despite the recent improvement, they remain about 11% below a stabilized run rate. Turning to transaction activity. Early in the second quarter, we acquired our partner's 10% interest in the two Avalon properties we developed that are located here in Atlanta for $43.4 million. This price included the payment of a promote to our partner who controlled the development sites originally and represented a negotiated value of $301.5 million. Later in the quarter, one of our joint ventures with Hines sold its interest in a parcel of land located in the Victory submarket of uptown Dallas for $23.1 million. This was a terrific piece of land in a Dallas submarket we had identified for growth. We bought it early, and we bought it well. However, since our purchase, this location has emerged as more of a residential and retail area rather than office, and the highest and best use of the site is now high-rise multifamily. We initiated a sales process, and we generated a great outcome. Our share of the gain from the sale was $4.5 million. On the capital markets front, we closed on a new unsecured credit facility during the first week of May. The maximum capacity remains $1 billion with improved pricing and similar financial covenants. It's a five-year commitment, and the new maturity date is April 30, 2027. It's a really terrific execution at this point in time. Near the end of the quarter, we settled 2.6 million shares of our common stock, sold on a forward basis during the third and fourth quarters of 2021 at a gross price of $39.32 per share. It's another terrific execution for our shareholders. The proceeds of this issuance funded our prior acquisition of Heights Union in Tampa on a leverage neutral basis. Turning to our development efforts, all three projects, 100 Mill in Phoenix, Domain 9 in Austin, and Neuhoff in Nashville, remain on budget. Our remaining funding commitment for this pipeline is approximately $240 million, which is more than covered by our construction financing, our existing liquidity, and future retained earnings. We enter this period of uncertainty with a relatively small, highly de-risked development pipeline. Looking at our balance sheet, we've purposefully reduced leverage during the second quarter. As Colin stated earlier, Net Debt to EBITDA is now just 4.9 times. Our financial position is rock solid as we navigate these challenging economic times. I'll close by updating our 2022 earnings guidance. We currently anticipate full year 2022 FFO between $2.67 and $2.73 per share with a midpoint of $2.70. This is down $0.04 Or 1.5% from the prior midpoint of $2.74 per share. This $0.04 Adjustment is driven by a negative variance of $0.08 Due to higher interest rates, partially offset by $0.03 From the Victory land I discussed earlier, as well as $0.01 Of improved property NOI. Focusing on interest rates, we use the forward LIBOR and SOFR curves to forecast short-term rates and the forward 10-year treasury curve plus credit spreads to forecast long-term rates. As I stated on our first quarter conference call, the guides we provided at that time already reflected increases in rates that had taken place earlier in the year. Since March, both short- and long-term actual and forecast rates have moved even higher. For example, the forward forward curve for 30-day LIBOR at year-end 2022 has moved from 1.5%- 3.5%, an increase of 200 basis points. The coupon on a fixed-rate 10-year issuance has moved from the high 3s to the low- to mid-5s, an increase of about 175 basis points. Applying these increases generates about $12 million more in interest expense during 2022 or $0.08 per share. Beyond 2022, I'd encourage you to look at the forward curves and credit spreads as you update your 2023 earnings models for us. Turning to property NOI, we're currently anticipating about $0.01 per share of improvements over our prior 2022 guidance. This is primarily driven by higher parking revenues and lower property operating expenses. With that, I'll turn the call back over to the operator. We will now begin the question-and-answer session. To ask a question, you may press Star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Anthony Powell with Barclays. Please go ahead. Hi. Good morning. Thanks for taking the question. So you mentioned that you had a pretty diverse set of, you know, tenants leasing this quarter. I wanted to focus a bit more on tech. What are you hearing from your, from your current, I guess, you know, and your tech, you know, companies in the pipeline? How are they reacting to the current environment? Kind of given a lot of the incremental demand in your markets was driven by tech, what do you think the source of incremental demand will be in your markets going forward? Good morning. Thanks for the question. You know, again, 18% of our activity this quarter was tech, and a large piece of that was the renewal and expansion that I called out in Austin with Cadence Design Systems. Really, you look at our first quarter activity and tech was a very small piece of our activity then. You have to really look back to 2021 to see significant levels of tech demand in our completed activity. I think it's very clear everybody is reading the headlines and is hearing what the big tech contingent is doing right now. I think the demand is certainly not showing up in 2022 like it was in 2021 for us. At the same time, I'm super encouraged by the fact that we completed close to 600,000 sq ft of activity this quarter with very little of that from the tech sector. So I think what we'll continue to see based on our completed activity and our pipeline that I look at today, that we'll continue to have strength in the professional services sector, just the good old-fashioned legal, accounting, consulting, and other miscellaneous business services companies. The demand is encouraging in that area. Anthony, I'd just add that as you look at our markets like Atlanta and Austin and Charlotte, you know, again, very dynamic cities with you know very diverse economies. While tech has been a large driver of growth over the last couple years, as Richard mentioned, a lot of the traditional users of office space, again, the accounting firms, financial firms, professional services really have not leased a lot of space over the last couple of years and are now returning to the office in greater numbers. I do believe there's some kind of pent-up demand in other sectors of the economy. Got it. Thanks. Given your comments in development, can you update us on Domain Central? It seems like, you know, you're being a bit more cautious here on development. Is that still potentially gonna be started later this year? Yeah, look, as I mentioned, the bar for new development is higher, and you know, as costs have gone up, those development yields relative to our other alternatives have become less attractive. I would include, you know, Domain Point in that commentary. I think over time we need to see costs come down and/or rents go up to, you know, for us to financially justify moving forward. I'm actually optimistic that that's gonna happen faster than many believe. Again, the flight to quality and the demand for new product, I do think there's an opportunity, even if the world becomes more recessionary, to see that rebalance, again, the flight to quality being so pronounced. I think it'll need a little bit of time for that to get to levels that are attractive. All right. Thank you. Our next question will come from Blaine Heck with Wells Fargo. Please go ahead. Great. Thanks. Good morning. So Colin, your comments suggest that you guys are delevering and building up dry powder for investment opportunities that you expect to emerge. Can you just provide a little bit more color on what you guys are looking for and how you think the current stress on the market's going to play out and, you know, maybe where the best opportunities are likely to emerge? Yeah, Blaine, great question. Again, the balance sheet now stands at about 4.9 times debt to EBITDA. That does give us, you know, pretty substantial capacity to take advantage of opportunities that we see. From our perspective, you know, from spring to here later in the summer, we do think that as debt has become less available and at the same time has repriced, there could be interesting opportunities to acquire high-quality assets in our targeted submarkets at, you know, hopefully, advantageous pricing. I think we'll continue to be on the hunt and the lookout for those opportunities which will likely come. Kind of related to that, you know, you guys have two multifamily properties in the portfolio, both currently in JVs. You know, recently we've seen a number of your peers diversify away from office into other property types, including multifamily. Is that something you guys would ever consider in the future, taking on multifamily exposure or exposure to any other property type? Yeah, Blaine, great question. As you pointed out, we do have quite a bit of experience in the residential sector in a mixed use context. You know, we are, as I mentioned, committed to premier office and think that that will differentiate itself over time. But as we continue to see opportunities in our urban sub-markets, you know, oftentimes, those opportunities are a mixed use of both office and residential. And so we've executed on those in the past and I'm confident we'll execute on some of those going forward. We've got a terrific land bank today that would support, you know, projects of that type out of Domain Central. That will be an office and residential project. We've got two sites in Charlotte that can accommodate both office and residential, Dallas, Midtown Atlanta. We've got a great land bank of mixed use land. When those opportunities arise, we'll no doubt take advantage of them. Great. That's helpful. Last one for me. You know, just around the decision to sell the Victory land in Dallas. Was that a mutual decision with you and your partner? I think it was Hines. Or was it driven more by the partner in the JV? Then just wanted to get your thoughts on the Dallas market as a whole, and kind of your level of commitment to that market, given that you only have two operating assets at the moment. Any thoughts on future development there if you are in fact still committed to Dallas? Yeah, we're still committed to Dallas, and it's a large, vibrant market in the Sun Belt. You know, we've remained focused and disciplined on finding the right opportunities for us in Dallas. As it relates to the transaction at Victory, you know, as Gregg pointed out, we came to the conclusion that the highest and best use of that site was what was multifamily. It was a joint collaborative decision and discussion with Hines, who ultimately was the buyer with a capital partner, as they do have a high-rise residential platform. I think for us, as I pointed out earlier, we're absolutely open and willing to invest in multifamily development, but I think it'll tend to be in conjunction with a larger mixed use site. We felt at that time it was appropriate, you know, Hines had interest to move forward with the multifamily at an attractive price. We felt like the right decision for us was to exit at attractive pricing. Makes sense. Thanks, Colin. Thank you, Blaine. Our next question will come from Jamie Feldman with Bank of America. Please go ahead. Great. Thank you. Good morning. I was just hoping to maybe get more color on just your floating rate debt philosophy or strategy. Can you just break out, you know, A, do you plan to take the number down in the future, to avoid these kind of moves in earnings from rates? And secondly, if you were to break out your debt balance by kind of like, development slash, you know, redevelopments in process versus kind of, you know, what you just longer term balance sheet debt, how do you think about that? Good morning, Jamie. It's Gregg. Currently, we've got about 30% floating rate debt as a percentage of total debt on our balance sheet. This is a little higher than it normally is. Typically, if you look over the last decade, we've maintained it closer to 20% of total debt. This was a purposeful decision that we made to provide us with some optionality. As you know, and as I stated earlier in the call, we've got about $300 million of debt that matures at the end of this year and the beginning of 2023. One of the options on the table to refinance that debt was for us to do an inaugural unsecured bond deal. To do it right, you need more than probably $300 million. We built up some balance on our credit facility over the last couple quarters so that we'd have a use of the full proceeds if we decided to go down that route. Well, clearly, the macroeconomics have gotten in the way of that, and we're probably not going to do an unsecured bond deal. So we'll do something else. There's liquidity in the market for other types of debt, bank term loans, insurance, private placements, and we'll get that refinanced in the next quarter or two. In the process, we'll lower our floating rate debt down closer to where it has historically been. Okay. What's that level? Your target level? Right around 20%. If you go back and look at our balance sheet over the last decade, it's been very close to about 20%, pretty much every quarter. Okay. You know, can you talk more about the guidance risk from asset sales? Like, do you think numbers may have to come down if you get anything done that you're thinking about? Well, Jamie, good morning. You know, certainly as we sit today, I'd say there's a lot less liquidity in the investment sales market. Over time, that could certainly change. If that does change and we see you know, opportunity to sell, you know, what we consider to be less relevant, and not core to us, you know, we'll take advantage of those opportunities. My hope would be, again, the balance sheet is very strong. My hope is if we were you know, executing such a sale, that we'd have an attractive use of those proceeds. Again, we can't always time everything perfect, the ins and the outs, but I think philosophically, we're focused on you know, trying to match up you know, sources and uses as best we can. Yeah. Jamie- Okay. I think it's important to note, Jamie, we don't need to sell anything at this point. It would be a choice to sell. As we've talked about with sub-five Net Debt to EBITDA, the balance sheet's in terrific shape. Yeah. Okay. We do think, as I said, we think interesting acquisitions opportunities are gonna come along. You know, there's also an alternative today. We could look at our own stock if, you know, if we felt like we had a source of capital from a non-core sale. All right. That makes sense. Then finally, you know, your comment on, you know, pausing on new development until, you know, you see better economic conditions. I mean, what are you watching for, given it's kind of a two-year lead time from start to finish on an office project? Yeah. Look, what we're looking for are, you know, development yields that are attractive relative to our other alternatives. I think at this point in time today, I wanna be very clear that there's good solid leasing demand for new development. At the same time, you know, we don't want to lock ourselves into escalated construction costs and therefore compress yields and, you know, just build a building to get it out of the ground. We wanna build the building to get it out of the ground and make an attractive return. I do think it's gonna rebalance c osts. We believe over the second half of the year are absolutely gonna moderate, and I think you'll see some customers push higher on rents to get into new product. When it does, at Cousins, we've got a great land bank and our hope will be that we're first outta the ground. Okay. Great. Thank you. Thanks, Jamie. Our next question will come from David Rodgers with Baird. Please go ahead. Yeah, good morning. Maybe Colin and Richard, this will go to both of you. You know, you guys usually build toward informed demand down in Austin, and so you're obviously a little bit more cautious there. You talked earlier about, you know, record number of leases, good volume, really encouraged by the leasing pipeline, yet the tone does come across as much more cautious. Obviously, there's a lot of uncertainty, but I guess the question directly is, are you guys seeing stuff from your tenants that makes you this much more cautious that this tone coming across that I feel like is much more cautious. Can you point to things that you're more worried about that you're seeing directly versus just maybe the macroeconomic view? Yeah. Again, our caution around development is not informed by leasing or demand. It is informed by, you know, construction costs that over, you know, really the last quarter or two, from our perspective, have, you know, materially escalated beyond, you know, what we just thought a few quarters ago. Any cautiousness is really us being disciplined allocators of capital and looking at what those development yields have compressed to with higher costs, and believing that there could be other opportunities. As I mentioned, those costs will moderate, we believe over the second half of this year and into next year. Then perhaps those development yields become more attractive. The last thing we wanna do is lock ourselves into a GMP at a price and costs that don't offer an attractive overall financial return. That's gonna change and we'll be ready to go. Maybe just purely on the leasing side, I don't know, are there any details you can share that make you cautious there, in terms of maybe length of time to close a deal, tour activity, anything along those lines that makes you more cautious if we separate out the development component? Yeah. Look, it is. We're not seeing anything certainly on the ground within our existing leasing pipeline at the moment or any feedback from any of our customers. It's obviously the summer. Tour activity typically slows a bit in the summer. There, you know, we're seeing, you know, positive signs again from some broader parts of the economy that had perhaps been on hold over the last couple years. You know, I would say our tone should be interpreted as very constructive on the market today, but also realistic as you read kind of headlines and see GDP numbers that, you know, if the market were to change, we wanna make sure we've positioned ourselves well. You know, as I always say at Cousins, you know, we are positioned to thrive during all phases of the economic cycle. No, I mean, nothing that has shown up today. We do read the same papers that you do every day. We're watching that broader headline and macroeconomic data. Great. Maybe last question, just maybe more specifically on the Anthem and, Peachtree Tower. Backlog of activity to kind of backfill that space, timing, any expectation on downtime before you're able to kind of finish up the leasing at those? We've got activity on both properties. Again, both you know sit you know effectively on top of MARTA stations in their respective submarkets, one right here in Buckhead and the other down in Midtown. I think kind of importantly, we are finishing up the renovation of the ground floor and outdoor and amenities space of both of those projects, so they're just kind of taking shape. So we believe our lease-ups should begin to accelerate now that we can bring customers into the project and they can experience firsthand as opposed to kind of renderings and drawings that we've been showing them during the first half of the year. All right. Thanks, Colin. Yeah. Thank you, Dave. Our next question will come from Vikram Malhotra with Mizuho. Please go ahead. Thanks for taking the questions. Maybe just first one, you talked a little about development deals and you pausing and waiting to see where things shake out. Can you maybe also talk about just where values are in trade you've seen and what that spread may look like between sort of the trophy asset that you called out versus the average product in your market? Well, again, as it relates to development, again, we're remaining constructive on demand, but cautious on pricing and again, waiting for those to hopefully quickly rebalance. You know, as it relates to pricing, again, there has not been yet a lot of price discovery kind of on the other side of a material change in the rate environment that really occurred, or that I should say, the debt capital markets for real estate in June. You haven't seen really any completed trades yet. I do think as it relates to kind of discussion of some deals that are out there, you know, today, you know, we're seeing, you know, people talk about a 10% change in asset values and could be higher for, you know, more value add type product. Again, the market is still kind of finding its pricing level. Okay. That's helpful. So comments on just the tech slowdown, and now, you're seeing an uptick or maybe more tilt towards financials and professional services. What does that mean for. If you could maybe just some of your top markets, what does that mean for market rent growth and incentives. Can you translate that into, for Cousins specifically, how should we think about the mark-to-market and TI trajectory over the next 12 months. This is Richard. You know, I think that from a mark-to-market and TI perspective and concessions perspective, I'm not sure I see that anything's really gonna change with a rotation from technology to more traditional customers. I think the demand levels, again, like we talked about earlier, are still there. I think that would be the primary driver of general lease economics. I'm not sure I see a real big sea change or change in the economics that we're gonna be able to accomplish in our markets. I meant like softening in demand. How does that translate into both those metrics at the market level versus, you know, for Cousins specifically? Well, Vikram, it's Colin. I would just add, again, we haven't really yet seen kind of that softening. You know, again, if the broader economy over the latter half of the year and next year does, you know, certainly that would have an impact. I don't wanna speculate, you know, today on, you know, what that would look like because we don't know the extent of the softening. But the, you know, as Richard said, the pipeline today looks, you know, pretty solid, and we haven't seen a material change in rents or in concessions. Okay. Thanks. Just last question. You mentioned look at the forward curve, in terms of thinking about interest rate impacts to 2023. Would it be fair to say the magnitude which you've adjusted the guide just from the rate impact, the $0.08 I think you mentioned, if we were to annualize that, would that be a reasonable way to think about how much 2023 numbers need to come down by just isolating for higher costs, debt costs? Vikram, it's Gregg. That's a terrific question. The 80 bps adjustment we made for 2022 was clearly not a full year annualized number. If you were looking at 2023, you would use a full year annualized number. However, the current forward LIBOR curve is assuming that short-term rates peak kind of in the first, second quarter of 2023 and then come downward. The increase over the last three months to short-term rates in 2022 of the 200 basis points I mentioned earlier is much lower in 2023. It's probably closer to 100 basis points. It's a smaller adjustment upward from what we previously had in, but applied to a longer time period. Got it. That's helpful. Thanks so much. Our next question will come from Daniel Ismail with Green Street. Please go ahead. Great. Thank you. Colin, maybe digging into the construction comments a bit more. The land you guys sold in Dallas was at pretty healthy pricing. Are you guys seeing any softening on the land side of the equation, when it comes to development? I wouldn't say we have not seen a change yet in land pricing. It tends to sometimes be a little bit sticky. I would say we have seen over the last quarter more land become available. We are starting to look at some of those opportunities. That we have not seen a change in that pricing. I would expect likely there to be some change in the price, but I'd say we've seen more of it, but not yet at different prices. Got it. You mentioned the ability to be opportunistic given a potential backup in pricing and your balance sheet. I'm just curious on the potential opportunities that you all are evaluating. Are those mostly coming up as a function of higher rates, or is there any specific tenant issues in those potential acquisition opportunities you guys are evaluating? I wouldn't say that any have been, you know, tenant driven. I think you've seen some instances where, for whatever reason, you know, different funds perhaps have queues and are trying to find liquidity. With less debt available, there are smaller buyer pools. I think that could create some interesting opportunities for us given we can be a cash buyer. I think we'll you know continue to you know focus our efforts on opportunities that of trophy quality premier office that we think over the long term will generate outsized demand. I think that will be our focus on that quality of properties. I do think there'll be some opportunities and then, you know, hopefully at some point down the road, you know, the development market will rebalance and we'll pivot to development opportunities like we have, you know, in the past. We continue to be kinda agnostic allocators of capital and willing to pivot between acquisitions and development and again, focus on whichever provides the most compelling return. Just last one for me. I asked about life science on the last call, but now there's confirmation that the largest life science owner in the country is developing in Austin. Just curious, you know, updated thoughts on potential expansion in that sub-markets, or excuse me, sub-sector, and any potential acquisition opportunities within the life science on the horizon for Cousins. Again, we're obviously taking note and seeing that life science activity in Austin. We're actually also seeing an uptick in that activity in Atlanta. Again, we're open to a mixed use. As I mentioned, have been active in the residential sector, and I think we'll be active in the residential sector going forward in the context of an urban mixed use projects. You know, we'll evaluate and understand the life science market. I think today we lack the expertise, but it's something that we'll get smart on over time, and perhaps there could be opportunities to partner with groups, and we could offer some local market experience. Given our lack of experience and history in life science, I think it's a lower priority for us. Makes sense. Thanks, Colin. Yeah. Thank you, Daniel. Our next question is a follow-up from Blaine Heck with Wells Fargo. Please go ahead. Great. Thanks. Colin, you've mentioned repurchases a few times as a potential investment given where your implied cap rate is. Can you just remind us if you have a repurchase program in place, and if so, what's your capacity for buybacks at this point? I guess, you know, where does that option rank at this point in your preference for capital deployment? Blaine, it's Gregg. I'll start with the first part of the question. I'll let Colin answer the second part. We do not have a share repurchase program in place, but as you know, it's a very simple program to put in place. Board approval and a few days of set up, and within a week you could have it in place. So it's not complicated. It's not time consuming. When we identify a potential source of capital and share repurchase emerges as the most compelling use of that capital, we can put it in place very quickly. Yeah. Blaine, I don't have a lot to add to Gregg's comments. Again, as we, you know, if we're able to generate, you know, sources of capital, we, along with our board, sit down and look at the strategic and financial merits of acquisitions, development and/or share repurchases. We have done that in the past. We have executed on all three. Again, I think today where our share price is, that's certainly gonna be part of the conversation, and it'll be dependent on, again, the source of capital at the time and what those uses are, in front of us. We'll try to be dispassionate, agnostic investors and focus on the right opportunities to drive value for shareholders. All right. That's helpful. Thanks, guys. All right. Thank you, Blaine. This concludes our question and answer session. I would like to turn the conference back over to Colin Connolly for any closing remarks. Thank you all for joining us today and your continued interest in Cousins Properties. Please feel free to reach out to myself, Gregg Adzema or Roni Imbeaux, if you have any further or follow-up questions. Thank you all very much. Have a great weekend. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.