Good morning, and welcome to the Cousins Properties third quarter 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, 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 note, 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 third 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 Regulation G requirements. 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, 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 statement, 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 risk 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. We had a very strong third quarter at Cousins. On the earnings front, the team delivered $0.69 per share in FFO and same property net operating income increased 1.5% on a cash basis. Importantly, we leased 431,000 sq ft during the quarter with a 4.8% cash rent rollout and 7.3% excluding our non-core asset in Houston. Additionally, we sold our 50% interest in Carolina Square, a mixed-use property in Chapel Hill, North Carolina, for $105 million, recognizing a gain of $56.3 million. These are terrific results. Before providing an update on our strategy at Cousins, I will share a few observations on the macro environment. Despite the current inflationary environment, the Federal Reserve and other central banks around the world have rapidly raised interest rates to slow economic growth. Financial conditions have tightened. Layoffs are growing. The probability of a recession has increased. This unwinding process will likely take some time to play out. What are the implications for real estate? First, leasing demand is likely to soften and/or slow across all product types. Second, the availability of capital, both debt and equity, has decreased while also becoming more expensive. As a result, the bid-ask spread between buyers and sellers has widened and the investment sales market has dramatically slowed. Amidst this challenging market, there are some real long-term silver linings taking shape for Cousins. First, our customers are returning in greater force. Within our portfolio, we have properties with a physical occupancy well above 70%, effectively pre-COVID levels. Remote work became widely accepted in an era of pandemic lockdowns and massive government stimulus. Understandably, many workers do not want to lose the convenience of a dining room commute. However, labor productivity has fallen to historic lows, attrition has increased, mentorship is down, and not surprising, cultures are fraying. Financially, profits are declining and many stock prices are back to 2019 levels or lower. Corporate leaders are now more clearly recognizing the shortcomings of a remote workforce. We anticipate more firm directives for teams to work physically together at least most of the time. Second, the flight to quality continues. Since the onset of COVID-19, properties built since 2010 have recorded 84 million sq ft of positive net absorption nationally. During the same period, properties built in the 1980s recorded 89 million sq ft of negative net absorption. This is a staggering bifurcation. Effectively, a growing percentage of leasing demand is now exclusively focused on trophy properties. The outperformance of these premier workplaces, which represent the top of the market, is becoming even more pronounced. At the same time, the obsolescence of commodity office is accelerating. At Cousins, we have a unique and compelling strategy, build the preeminent Sun Belt REIT. We have been executing on our plan for over 10 years. Most recently, we completed a transformational merger with the purchase of TIER REIT in 2019. During 2020 and 2021, we accelerated our asset recycling. We sold $1.2 billion of less relevant properties and reinvested the proceeds into the development and acquisition of the Railyard in Charlotte, 300 Colorado and Domain 9 in Austin, Neuhoff in Nashville, 725 Ponce in Atlanta, and Heights Union in Tampa. These are all highly differentiated properties in vibrant neighborhoods. Looking forward, market and financial conditions will likely become more challenging. 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 portfolio of premier workplaces in the best submarkets in Atlanta, Austin, Charlotte, Tampa, Phoenix, Dallas, and Nashville. With a third of our properties less than five years old or recently redeveloped, we believe that we will get more than our fair share of leasing demand as we benefit from both Sun Belt migration and the flight to quality trends. Encouragingly, our existing customers are growing. Looking at our 2022 renewals through the third quarter, we have had more customers expand than contract. Importantly, our lease expirations through 2024 total just 12% of our annual contractual rent, among the lowest in the office sector, and this positions us favorably to grow occupancy over time. Next, our $569 million development pipeline, with the office component approximately 70% pre-leased, is appropriately sized and positioned for the current climate. We will benefit from incremental NOI during 2023 and 2024 while we have only modest speculative risk. To date, we have approached 2022 with caution. Importantly, we have wisely prioritized our best-in-class balance sheet over new investments thus far. Our Net Debt to EBITDA at the end of the third quarter was 4.75 times. This compares to the Green Street sector average of 7.9 times. After quarter end, we closed a $400 million term loan and have locked rate on a $221 million mortgage at our Terminus property in Atlanta. Upon closing of the Terminus mortgage, we will have no significant loan maturities into 2024 and less than $100 million outstanding on our $1 billion revolving credit facility. In closing, we are mindful of the potential impacts of higher interest rates and a slowing economy on short-term results. However, over the long term, we are optimistic that premier workplaces will separate into its own asset class with improved sentiment. Cousins is uniquely strong positioned. We are in the right Sun Belt markets. We own a trophy portfolio. We have a fortress balance sheet. Importantly, we have significant liquidity and capacity to pursue new investments at a time when many of our competitors do not. Our talented and creative team will be ready. Before turning the call over to Richard Hickson, I want to thank all of our employees at Cousins who provide excellent service to our customers, as well as their skill and talent to their jobs every day. Their dedication, resilience, and hard work will continue to propel us ahead. Thank you. Richard Hickson? Thanks, Colin, and good morning, everyone. Similar to last quarter, our operations team produced solid results in the face of increasingly challenging macroeconomic conditions. Our team is intently focused during this complicated time, and our portfolio continues to resonate with users of high-quality office space. For the third quarter, our total office portfolio end-of-period leased percentage and weighted average occupancy were 90.1% and 87.3% respectively. Our leased percentage was unchanged, while our weighted average occupancy was virtually unchanged, down only 0.1%. It is encouraging to see stability in these important metrics. Leasing results this quarter were once again impressive. We executed 48 leases in the quarter, totaling 431,000 sq ft. Our transaction count was only 4 fewer than our record count last quarter, and our square footage volume was largely in line with our quarterly run rate in the first half of the year. Our third quarter activity also produced a weighted average lease term of 8.3 years, clear evidence that companies continue to make long-term commitments for office space. New and expansion leases represented 49% of total leasing activity this quarter, and activity was again balanced in terms of industry representation, with customers in the legal, financial services, and general professional services sectors accounting for most of our volume. Leasing concessions, defined as the sum of free rent and tenant improvements, came in at $7.66 per sq ft, compared to our previous 4-quarter average of $7.55. With the benefit of stable concessions, I'm pleased to note that Net Effective Rents this quarter moved higher to $24.97, a $1.47 increase relative to the first half of this year. Net Effective Rents this quarter were also the second highest we have recorded since the beginning of 2021. Second-Generation Net Rents increased 4.8% on a cash basis in the third quarter, representing lower growth than in recent quarters. You will recall that the past two quarters I mentioned we might see increased activity in Houston, and if that completed, it would likely not screen well relative to our stronger core markets. That proved out this quarter. When excluding a 25,000 sq ft renewal signed in Houston, our second-generation cash rent roll up this quarter was a stronger 7.3%. Looking forward, we remain encouraged by healthy volume in our late stage lease pipeline, as well as the level of inquiries and activity in our early stage pipeline. I would note once again, however, that our pipeline still includes sizable activity in Houston, and that activity is likely to have a dampening effect on our reported leasing metrics when completed. Despite our relative optimism about the leasing pipeline, we do continue to monitor the macroeconomic landscape and acknowledge that further weakening of the economy would likely have a negative impact on our leasing activity going forward. Regardless, we continue to see the positive impact of the flight to quality trend across our Sun Belt markets as office users gravitate toward amenity-rich submarkets and properties. For instance, in Atlanta, we are seeing a number of requirements focused on Midtown, a dynamic submarket where we have two fantastic existing projects with transformational redevelopments either at or near completion. One of the projects is Promenade Central, where Visa will soon commence occupancy, representing important new to market absorption. Our Buckhead portfolio continues to perform nicely as well, with 53% of our 144,000 sq ft of Atlanta leasing activity this quarter taking place in this in-town submarket. In Tampa, direct vacancy is now just under 12%, the lowest vacancy since pre-COVID, according to JLL Research. We signed an impressive 98,000 sq ft of leases in our high-quality Tampa portfolio this quarter, of which 55% were new and expansion leases. Similarly, in Phoenix, many companies are choosing to move into higher quality amenitized space in order to attract new talent and entice existing employees back to the office. Leasing at Class A properties made up 67% of total leasing volume in Phoenix this quarter, also according to JLL. We signed 40,000 sq ft of leases this quarter in Phoenix with an average cash rent roll up of 19.6%. Now I want to briefly highlight the strength of our portfolio in Austin, where we signed 79,000 sq ft of leases this quarter, including two new leases for the last two floors of direct vacancy at our recently developed 300 Colorado building in the Central Business District. Our Austin portfolio produced 31.7% of our total net operating income in the third quarter, and it includes 4.6 million sq ft in three distinct submarkets. The portfolio is very healthy, with nearly 95% leased and enjoys an in place weighted average lease term of over six years. Remarkably, the entirety of our 2.1 million sq ft at The Domain and Domain Point are currently 100% leased. Similar to the Austin market as a whole, we do have outsized exposure to the technology sector, which has clearly been an important driver of demand in Austin in the past. I would note that approximately 75% of our technology sector exposure in Austin is with high quality, publicly traded, large cap technology companies. We are very pleased with the quality of our customer base in Austin, technology or otherwise. On top of all that, only 8.9% of annual contractual rent in our Austin portfolio expires during 2023 and 2024. In short, our Austin portfolio sits in an enviable position of strength. Looking ahead, many of the compelling dynamics within our Austin portfolio are also present in our entire operating portfolio. Only 12.1% of our annual contractual rent expires through the end of 2024. We have only one customer greater than 100,000 sq ft expiring during 2023 at 135,000 sq ft and in the fourth quarter, and we are very encouraged about the status of that renewal. Further, the average size of our expiring customers in 2023 is approximately 11,000 sq ft, and the weighted average expiration date is in the third quarter. Last, we currently have 890,000 sq ft of new and expansion leases that are signed but not yet commenced. These have a weighted average commencement in the second quarter of 2023. We recognize the economic climate could remain complex for the foreseeable future. Yet, we continue to see firsthand that companies are seeking high quality office space in our markets. Cousins is incredibly well positioned for any opportunities ahead with a stable, high quality portfolio in the best Sun Belt markets. Before handing it off to Gregg, I want to thank the entire Cousins team. Your skill and hard work continue to drive our success. Gregg? Thanks, Richard. 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 2022. Overall, as Colin stated up front, third quarter numbers remained very solid despite the ongoing economic volatility and uncertainty. Focusing on same property performance. Cash net operating income during the third quarter increased 1.5% compared to last year. This is an improvement from the first two quarters of the year, which were essentially flat, with the increase largely driven by Amazon's lease commencement on July 1 for our entire Domain 2 property in Austin. For all of 2022, we are reaffirming our guidance that same-property cash NOI will be positive compared to 2021. As Colin mentioned earlier, physical occupancy at our properties has continued to increase, and our parking revenues have grown along with it. For all of 2022, we anticipate parking revenues will be up a little under 9% compared to 2021. Turning to transaction activity. During the third quarter, we sold our 50% interest in Carolina Square to our joint venture partner for $105 million, generating a gain on sale of just over $56 million. We sourced this development opportunity through our long-standing relationship with the University of North Carolina, and we brought our joint venture partner in to help us execute it due to the heavy mixed use nature of the project. Office represents only 34% of the total square footage at Carolina Square. It was a non-core asset from the start, and we believed that this was an opportune time to sell our interest, largely driven by our recent refinancing of the property with very attractive debt that was assumable at no cost by our partner. Overall, it was a terrific outcome for our shareholders. On the capital markets front, we were very busy and productive, both during the third quarter and subsequent to quarter end. We started by amending an outstanding $350 million term loan with the goal of changing the base interest rate from LIBOR to SOFR. This change allowed us to officially execute a floating to fixed interest rate swap, whereby we fixed the underlying SOFR rate at 4.23% through maturity. Next, we closed on a new $400 million term loan with our existing bank syndicate that matures in March 2025 and includes four six-month extensions. Both the pricing and covenants are consistent with our outstanding credit facility and term loan. We used a portion of these proceeds to pay off our maturing Promenade Tower and Legacy Union mortgages. Finally, we initiated the process of extending the existing mortgages on our two Terminus properties here in Atlanta with the current lender. Maturities will be extended from January 2023 to January 2031. The combined principal will increase to $221 million, and the interest rate has been locked at 6.34%. Rates have continued to move higher since we locked the rate at Terminus a while ago, and today the rate on this debt would be in the upper 6%. This extension is expected to close before the end of the year. The goal of all this activity was threefold. First, to refinance the $331 million in mortgages that were maturing during the fourth quarter of this year and the first quarter of next year. Second, to return our floating rate exposure to its historical level. Third, to create additional liquidity to take advantage of the potential investment opportunities created by the current dislocation in the commercial real estate debt markets. Overall, mission accomplished. The mortgages were taken care of. Floating rate debt is back to approximately 20% of total debt, and we have almost $1 billion in dry powder. Focusing on floating rate debt for a moment. We believe floating rate debt around 20% of total debt provides us with valuable flexibility as we recycle properties, which we have aggressively done over the past few years. Right now, we only have 3 pieces of floating rate debt on our total capital stack: our credit facility, our new term loan, and our new Neuhoff construction loan. This is consistent with our debt composition over the past decade. Looking forward, we only have about 1% of total debt maturing in 2023. Specifically, we have a mortgage tied to a medical office building adjacent to a hospital that is essentially 100% leased. We own 50% of this Midtown Atlanta property through a joint venture with Emory University. We feel very confident this asset can be successfully refinanced even in the most difficult of times. Turning to our development efforts, we have three projects in the pipeline. 100 Mill in Phoenix, Domain 9 in Austin, and our new Neuhoff joint venture in Nashville. Our remaining funding commitment for this pipeline is just under $200 million, which is more than covered by construction financing, the liquidity I just referenced, and future retained earnings. Looking at our balance sheet, we continued to reduce leverage during the third quarter. As Colin stated earlier, Net Debt to EBITDA is now just 4.75 times. Our financial position is rock solid as we navigate these challenging economic times. I'll close by updating our 2022 guidance. We currently anticipate full year 2022 FFO between $2.69 a share and $2.73 a share, with a midpoint of $2.71 per share. This is up a penny. This increase is driven by stronger than anticipated property NOI, partially offset by continued increases in interest rates. On the property side, the increase against our prior NOI assumptions is spread among many properties and categories. No single item is particularly noteworthy. Focusing on interest rates, as we have discussed on previous earnings calls, we use the forward LIBOR and SOFR curves to forecast short-term rates and the forward 10-year Treasury curve plus current credit spreads to forecast long-term rates. Based on these curves, rates have continued to move up. Looking forward, our debt schedule is very simple and clean, and we would encourage you to look at the forward curves and credit spreads as you update your 2023 earnings model for us. With that, I'll turn the call back over to the operator for your questions. 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 is from Blaine Heck with Wells Fargo. Please go ahead. Great. Thanks. Good morning. Colin, your comments suggest that you guys have been de-leveraging and building up dry powder for investment opportunities that you expect to emerge. Can you just provide some more color on what you guys are looking for, kinda how you think the current stress on the market is going to play out, and maybe where the best opportunities are likely to emerge? Yeah. Good morning, Blaine. You're right. As I mentioned earlier, we have prioritized the balance sheet over new investments year to date in anticipation of more attractive opportunities and better pricing. As we do look forward, we do think that there will be some opportunities as we move into 2023. For us, those opportunities and our approach are always gonna be singularly focused on high quality product premier workplaces that we think are gonna continue to attract the best and brightest in growing companies. In terms of how that plays out, you know, if the current liquidity environment and higher rates continue, I think that's gonna continue to apply pressure to some folks that have more leverage than perhaps they should. I think we'll likely focus on again, high quality trophy product that perhaps has broken capital structures. I think you can see that play out in some of the existing construction and new development that's underway. I think like in cycles past, we'll look at this environment, our low leverage and our liquidity, and try to take advantage of opportunities that could range anything from asset level opportunities to corporate opportunities like we've done with Parkway and TIER. Okay. Great. That's helpful. Second question. Obviously, the headlines would suggest that tech tenants are at best kinda stepping back from the leasing market and, at worst, you know, giving back a lot of space, whether that be through subleases or terminations. Can you guys just talk about your exposure to tech and whether you have any concerns around space givebacks in your portfolio? Blaine, it's Colin, and you're right. The technology customers have stepped back. I think if you kinda look back over the last couple of years, you know, many of those companies, I think staffed up and leased space in anticipation, in some ways of a remote world forever. Obviously, we're now starting to see things normalize, and I think that's having an impact on demand for product in the tech space. At the same time, the change in the interest rate environment and the lack of capital to continue to fund this business. You're seeing some of them step back, really driven by the capital markets. As we look forward, we are seeing now, you know, that the banking and finance and legal and other sectors kinda fill that void left by the tech customers who will ultimately right-size their businesses and be back. As it relates to us in terms of exposure, you know, as Richard laid out in his remarks, over 75% of our technology exposure is with large, well-capitalized, publicly traded companies, and you know, ultimately with pretty good lease term. If they were to give back, you know, space, I think we look at that as an opportunity. Sublease space, that's an opportunity for us to multi-tenant some of those buildings, you know, effectively a covered lease up as we did at 300 Colorado with the partially sublease. But at the moment, there's nothing significant that we're aware of within our portfolio. Okay. That's helpful. Last one for me. Colin, last quarter, you talked about potential share repurchases given where your share price was. I didn't hear you mention that this quarter, so I'm wondering where that option ranks at this point in your preference for capital deployment and whether your thoughts have kinda changed since last quarter. Absolutely, Blaine. We always evaluate our share price and repurchases and talk with our board about that regularly. Certainly at current prices, you know, it's something for us to absolutely consider. I think at the moment, we've continued to prioritize liquidity, low leverage, and the optionality that we have until we've got greater clarity on what the other potential investment opportunities might be. We certainly repurchased shares in the past and we'll always be open to it as we evaluate all the opportunities to invest capital. All right. Thanks, Colin. Absolutely. The next question is from David Rodgers with Baird. Please go ahead. Oh, yeah, good morning. Maybe first question for Richard. I wanted to try to bridge some of the gap between Colin. You're a little more negative, Richard, kind of maybe not as much in terms of what you're seeing currently. Maybe can you talk, Richard, about tours, the negotiations you're having, the lease pipeline today? I guess. I get, Colin, you're kind of saying the macro view. Richard, are you actually seeing the activity kind of shrinking in the pipeline itself that we'll start to see that in the next quarter or two? Or are those tours, negotiations, lease dialogues still at a consistent level? Yeah. That's a great question. I'd say that from a late-stage pipeline perspective, it's more of the same. We haven't seen significant changes. If anything, on the early stage activity on tours, and just trading early-stage proposals, there's probably a little bit of incremental softness there. Yeah, we're seeing some impact, but again, it's still at healthy levels. I wouldn't call it a large drop-off at this point. Okay, that's helpful. Colin, going back to your question, and I don't know if this will dovetail into Gregg as well. You know, you guys have built a great balance sheet, and I think part of getting credit, you know, for that is using it. Can you talk again about maybe now I know where the opportunities will end up being for you, but how you're willing to kind of use the balance sheet to take advantage of those. Perhaps that's levering up, perhaps I don't know if that's buying debt. You know, kind of talk about maybe where you're comfortable using your own asset as a balance sheet to go out and take advantage. Certainly, Dave. I think you've characterized that appropriately, that our balance sheet is a tremendous asset, but only if we use it. If you look at our history, certainly over the last 10 years, we have maintained a fortress balance sheet, you know, effectively in the good times by not pursuing investments when a lot of our competitors have capital, but being patient and really deploying a lot of capital and using additional leverage in periods of time when others don't have a lot of capital. We believe we're kind of embarking on one of those periods of time. Again, if we're able to identify attractive opportunities to create value for shareholders to add high quality premier properties to the portfolio, we're ready, willing, and able to seize on those opportunities. As in the past, if the opportunity is there, we would perhaps take our leverage up a bit. We have demonstrated our ability to do that in the past and then have brought leverage back down. I think we could have one of those periods of time in front of us. You know, as we look at some of your high-quality peers pushing 6x, 7x, 8x debt to EBITDA, do you have a comfort zone in the near term? It sounds like you wanna kind of get back to maybe a mid-4x, sub-5x number. I mean, in the near term, do you have a stress level you're willing to push? Well, I'd say as we look forward over the next year, if the investment opportunity plays out like we think it might, I think the probability of our leverage going up is higher than our leverage going down. That would be for us to take advantage of good investment opportunities, use the capital, use the balance sheet that we have. But that'll be determined by the quality of the opportunity. I wouldn't say that we've got a specific hard line in the sand as to how far we would take leverage. I think that will be driven by the quality of the opportunity in front of us. Thanks, Colin. Last one, Gregg, for you. Just in the supplemental, FFO was up, I think 20% sequentially, 500 basis point occupancy decline. Just curious, if there was some move in there or something unusual in those numbers. Yeah. Hey, Dave, good morning. So we had some TI that were completed during the quarter, and we recognized revenue once the TIs were completed. It was just a timing issue on TI completions. All right. Thanks, everyone. The next question is from Brian Spahn with Evercore ISI. Please go ahead. Hi. Thank you. Good to be on the call. I guess just building on, you know, some of your comments already, Colin, on external growth and, you know, potential distressed opportunities. Can you just talk about how you're thinking about underwriting today, how you're adjusting your return thresholds as you search for these new deals, and maybe just how you're evaluating development versus acquisitions? Do you think you favor acquisitions today just to the extent you can find some dislocated chances? Yeah. Good morning. You know, clearly with the rise in interest rates, I think clearly that drives the bar higher as it relates to our hurdle rates for new investments, whether that be an acquisition or a development. I think perhaps there will be some investment opportunities of high-quality assets that perhaps have compromised capital structures in this environment, and we'll certainly be on the lookout and searching for those opportunities. I think just the current realities of the environment with higher construction costs, higher yields, and potentially higher cap rates, I think that makes the bar for new development higher. As I said on the last quarter call, I think you're gonna see, you know, some of that normalize over the coming year. I do believe development in the not too distant future will again be a very viable opportunity. That's gonna be driven by High quality customers that want exceptional space and workplaces for their employees and have demonstrated a willingness to pay for exactly what they want. I think that's gonna create really interesting opportunities for some of our fantastic development sites in the south end of Charlotte or Midtown Atlanta or out in The Domain in Austin. We're gonna be patient. We're gonna be diligent and thoughtful about how we allocate capital into development relative to acquisitions and perhaps our own stock. We'll look at all the opportunities, and we'll deploy it when we think it's the right risk-adjusted return for shareholders. Okay. Gregg, I realize you're not providing guidance for next year, but just given where the implied fourth quarter run rate is and, you know, the interest expense headwinds for next year, could you just talk about some of the bigger moving pieces as, you know, we model and you're thinking about earnings growth for next year? Yes, sure. I think what you're alluding to is if you take the midpoint of our full year 2022 guidance and you subtract the first nine-month actual performance, it solves for a number, and that's a Q4 number in the fourth quarter that's below what we just reported in the third quarter. And that's accurate. There's two items that are really moving that. First, we recognized the last of our $50+ million in development fees from Norfolk Southern here in Atlanta during the third quarter. We recognized about $1 million in fees during the third quarter, recognized about $3 million, $3.5 million in fees for all of 2022 in the first nine months. That's done now. There's no fees from Norfolk Southern in the fourth quarter and beyond. The second piece of that would be interest rates, which you've heard on pretty much every call, I'm sure, that you've been participating in. You know, just as one example, I mean, the average SOFR rate during the third quarter of this year was just over 2%. Using the current forward curve, the average SOFR rate during the fourth quarter this year will be just over 4%. That's a dramatic difference. As we push that through our P&L, just like a lot of our peers, that has a negative impact on fourth quarter interest expense versus third quarter, and then obviously beyond into 2023. If you take a look at kind of the fourth quarter and you say, "Well, is that a good run rate going forward into 2023?" Now, a little premature on guidance from us. We typically provide it like most of our peers on the next earnings call. That being said, the fourth quarter will be a much better indicator of kind of future run rate than the third quarter was for the two items that I just described. Okay. That's it for me. Thank you. The next question is from Camille Bonnel with Bank of America. Please go ahead. Hi. Following up on your prepared remarks, can you speak to what you're seeing for customer expansion in your portfolio by industry and size that they're taking? You know, I think this is Richard. The industry, like we've talked about already, the mix has definitely shifted away from technology. I think we're seeing plenty of expansion, as Colin's mentioned, in our portfolio when we have customers that have renewed in the recent past, and that's fairly diversified. I wouldn't say there's any one industry that's driving that more than another. Collectively, it's like we said, legal, financial services, and professional services. They're very much kind of backfilling the outsized demand that we saw from the technology sector before. Okay. Nice job on selling Carolina Square in third quarter. Can you just give us an update on your latest thoughts on the disposition pipeline? Camille, it's Colin. Good afternoon. You know, as I mentioned in my prepared remarks, the investment sales market has, I'd say, dramatically slowed as a widening gap in the bid-ask spread between buyers and sellers as I think everyone looks for visibility on, you know, the terminal rate with interest rates and the Fed. At the moment, I'd say it's relatively that market is relatively slow. I would anticipate as we move into next year and there's more clarity, that will likely accelerate. I think fortunately for Cousins, as we've laid out, we have an exceptionally strong balance sheet. With the sale of Carolina Square, we really have no need at the moment to pursue additional dispositions until we feel like there's appropriate pricing. We'll continue to evaluate it, I think more in the sense of, you know, us as a buyer versus a seller. Finally from me, on NorthPark, it looks like 107,000 sq ft was given back this quarter. Given the elevated availability rates in the central perimeter of Atlanta and these assets being not too far away from where Home Depot is subleasing 600,000 sq ft, can you just update us on how the lease-up is going on the remaining vacancy? Camille, we did have a large move-out at Northpark. It is a more suburban Asset than the overwhelming majority of our portfolio. I think that likely will take us, you know, a little bit more time to backfill and release that than perhaps some of our availabilities down in midtown Atlanta as an example. It's a terrific property with MARTA on site, and it has been a really attractive destination for large Fortune 500 companies. You mentioned, you know, The Home Depot, which is really in the northwest sub-market, a little further away from the NorthPark project. I'd just highlight a kind of a recent, I think, good example of perhaps a normalization taking place in the market. There was a large Fortune 500 company in Atlanta that put a significant amount of space on the sublease market just this past summer. Interestingly enough, last week that space was quietly pulled back off the market as that customer kind of reevaluates their view and approach to work and work in a physical sense. Will be interesting to watch those trends and see if other companies make similar decisions as the world continues to normalize. Very interesting. Thank you for taking my question. The next question is from Vikram Malhotra with Mizuho. Please go ahead. Thanks for taking the question. Just, you know, on your comments around the interest rate, the forward curve, you know, just where fundamentals are shaking out, I was just trying to quickly run through some of those higher assumptions on rates, et cetera, through the model. You know, I know you're gonna give guidance next quarter, but, is it safe to say like the interest expense uptick could sort of on a run rate basis almost wipe out any gains or just limit the gains from the core portfolio on occupancy or rent spreads such that, you know, you probably see a flattish trajectory on FFO in 2023? Well, again, I don't wanna provide any guidance early here. The time will come for us to do that, as we have in years past. Interest rates remain a headwind for not just us, but for all office owners and for all real estate owners. As we enter 2023, it's gonna be something that everybody's dealing with, and it'll certainly reduce, you know, pretty much everybody's earnings growth. Even if they don't have any floating rate debt, if they've got any fixed rate debt that's maturing, I mean, you've got to roll it over, and fixed rate debt has gone up as well. It's gonna prove to be a headwind for everybody in the industry, including us. You know, I think I guess what surprised people in a few other peers that have pointed to 2023 guidance or at least alluded to it, you know, like, new development opportunities being financed with floating rate debt or other debt, all adds to, you know, the occupancy remaining flattish, all adds to it. I think, yeah, that's what I quickly ran through the curve and the higher expense, and it seemed that way. Yeah, we'll wait for you to give those numbers. I guess just, you know, it would be helpful if you can guide us to or, you know, even put some guardrails around the trajectory of rent spreads given what we've seen in the last, say, five quarters, where rent spreads have gone and the lease rate has gone. You know, is it fair to bake in lower renewal rates and just, you know, sort of move outs such that there's pressure on lease rates and mark-to-market near term from here on? Vikram, it's Colin. You know, again, I think that, you know, within our markets and within, you know, truly, buildings that represent premier workplaces, we continue to see demand. You know, thus far we've seen, you know, rents kind of continue to hold. As we look forward, you know, coming quarters, you know, we're hopeful that we'll continue to drive positive cash rent roll-ups. I'd add the only caveat to that is, as Richard mentioned, we are seeing increased activity from energy companies in Houston, and the market dynamics in Houston are much different than all of our other markets, and that could certainly weigh on those statistics. That being said, large leases in Houston that are in our portfolio, that's a terrific outcome. We're gonna pursue those opportunities. With respect to our core markets, you know, even as the market kind of retrenches and there's some recessionary forces, I do think it's important to remind everyone of some of the silver linings within the office space. As the technology companies perhaps are less active, we are seeing these other segments in the economy, the banks, financial services, law firms, et cetera, continue to pursue more space. Those are organizations that continued to grow throughout the last couple of years of COVID and really did not lease a lot of space. We do think there's some pent-up demand that can perhaps provide a buffer to some of the overall macro headwinds that, you know, that the entire sector is going to face. You know, that's fair. Yeah, as you know, provide guidance, it would be helpful just to provide more guardrails around, you know, the lease rate, occupancy, same-property NOI just given all this uncertainty and the rate environment, it would be helpful if you can consider providing some of that. Just, you know, last question, I guess you referenced the balance sheet a lot, utilizing that as opportunities may arise. But I'm wondering ultimately, like at the bottom of the cycle, the basis is gonna be really important, in terms of where you invest on a per foot basis. So can you maybe just give us your thoughts like what are you hearing or seeing today is the bid-ask for assets, where cap rates or where is the basis. Where do you anticipate the basis trending to for you to then get aggressive? Yeah, I, Vikram, I think it's gonna be for us specifically, it's going to be when we start to see higher quality properties become available. I think those typically come a little bit later. The lowest quality are typically the first to roll over. We are starting to see and hear of pressure on some of those types of assets. But I think we're gonna continue to be patient and thoughtful and wait for high-quality opportunities. However we get there, again, whether that's an asset-level transaction, a corporate-level transaction, we'll be patient. We'll be, you know, thoughtful about deploying capital. I think as you start to see some trades perhaps in the lower quality space, you know, that will start to create a market again and create a level of which other high-quality assets can trade off of. When that exactly happens, you know, is anybody's best guess. I do think some of the looming loan expirations are coming, and it's gonna force some transactions, and I think you'll start to see a market resume sometime next year. Got it. Thank you. The next question is from Anthony Powell with Barclays. Please go ahead. Hi. Good morning. Just a question on acquisitions and joint ventures. Some of your other peers are basically doing exclusive joint ventures, or they're doing acquisitions or doing more asset management. Is that something that you would consider, or could you actually do some deals that are wholly owned and consolidated, given your balance sheet strength? Yeah, great question, Anthony. We would certainly consider joint ventures if there was some strategic merit to doing that venture, perhaps an entry into a specific asset. So that there could be some opportunities to come into existing joint ventures. If the size of the transaction were too large, you know, we would absolutely consider a joint venture. Unlike some of our peers, with our leverage at 4.75x, we do have very significant capacity, if we're willing, again, for the right opportunity to incrementally move leverage higher. For the right opportunity and the right asset, we'll be willing to do that. All right. Thanks. Maybe just refresh us on when you think of the South Florida market, obviously, and there's a bit of a gap there when you look at your mapping, your supplement. It's a big market, and it seems like there's more financial firms and other firms moving to the market. When you start thinking about markets broadly, is that a market that you would show interest in over time on the acquisition side? Yeah, absolutely. We evaluate and monitor South Florida like we do a handful of other markets that we think could be interesting and have positive dynamics. I think certainly the last couple of years, you know, as you alluded to, you're seeing more interest from financial services and asset management firms look to South Florida as they, like a lot of other industries, including technology, more broadly distribute their workforces across the country. As that dynamic continues to play out and that market matures, and you start to see kind of a larger average, you know, customer in South Florida, that's certainly a market that again, we'll continue to evaluate. I would just note, we don't feel capacity-constrained or opportunity-constrained in any of our existing markets. I think it's a likely probability that we deploy capital within our existing markets versus pursue expansions in the current environment. Over time, we'll continue to look at markets like that and others and perhaps we'll expand in the future. Great. Maybe one more quick one. In terms of Houston, is the plan there to lease it up and to sell it? I know you called it non-core. Just curious what the timeline is for maybe looking to just to sell the asset. Yeah. By kind of definition, I think non-core for us means, you know, to sell at the appropriate time. The capital markets from our perspective just have not been, you know, pricing that to a price that we may have thought have made sense in the past. We do think there's some incremental leasing opportunities in the meantime that we can do that perhaps will drive value. In the future, I think as Houston again normalizes as an economy, I think you're starting to see the energy companies with the oil price where it is start to grow again. I think that could change investor perceptions around Houston and create a better exit point in the future. We don't have a specified timeline on when we would sell that asset. It would be a point in time where we feel like it's a fair price, and again, selling into a positive investor investment climate. All right. Thank you. Again, if you have a question, please press star then one. The next question is from Daniel Ismail with Green Street. Please go ahead. Great. Thank you. Maybe just going back to Carolina Square. Was that a negotiated put price or was that done at market? It sounded like the latter, but just wanted to confirm. Daniel, it was a combination of both. It was an asset that we had on the market with Eastdil that gave us, you know, good visibility into a market price and ultimately, for the reasons that Gregg alluded to around the debt, we elected to sell to a venture partner. Got it. Maybe Richard, you touched on this a bit throughout the call, but maybe leaving Houston aside, I mean, can you describe where you're seeing the best prospects for net effective rental rate gains across your markets? You know, any specific submarkets that seem to be outpacing or seeing higher demand than others? Sure. I think the ones that come to mind where we've seen an ability to push rents, consistently, not just this quarter, but over the last few quarters or year plus, you know, I alluded to Phoenix. We've seen on this quarter 19.6% roll up on the leasing activity that we did there. We've been very successful in pushing rents in Tempe. Tampa is really another standout in my mind. You know, all of our assets, or most of our assets are in the Westshore submarket, but we also have Heights Union, close to the CBD. Heights Union, we acquired essentially fully leased, but we've been again successful in pushing rents, more than I would have thought in Tampa. We continue to see good rent growth in the properties where we've reinvested, like a Buckhead Plaza here in Atlanta, but also in Midtown. Of course, I have to mention really where we've had just continued success over many years is Austin. It's just been a wonderful market in terms of rent growth for a long time. A little bit everywhere. It's certainly submarket-specific, but we've felt really good about our ability to push rents across the board. Got it. Then just last one. I know Houston's a small portion of the overall portfolio, but I am just curious, as you know, you mentioned it's the connection between oil prices and potentially better office demand there. I'm curious if that's you know, true net absorption or is it just musical chairs happening in that market? I'm just curious if you can maybe unpack that a bit more. That's a great question. I think it's probably a combination of both. One thing I would mention is that there are the same dynamics in Houston that we're talking about across the country about the need for creating exciting workplaces for that motivate employees to wanna come back to work, that have a good commute time. I think if there is kind of a musical chair dynamic happening in Houston, that's driving a lot of it, and that's what we're seeing right now relative to our activity. Great. Thanks, everyone. 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 for your time today and your continued interest in Cousins Properties. We look forward to seeing many of you at Nareit out in San Francisco in just a few weeks. Hope everybody has a great weekend. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.