And I think the leasing that we’re doing right now and underway are going to be direct benefits of that recent announcement.
Steve Sakwa: Great. Thanks.
Operator: Your next question comes from Nick Thillman from Baird. Please go ahead.
Nick Thillman: Hey, good morning. Richard, you touched on 500,000 square feet of signed leases yet to commence. I was wondering if we could get an update on like timing of when those leases are going to commence and is that inclusive of Domain 9 and for Domain 9, like sort of move-in timing? Does that kind of just be pro rata kind of equally weighted through 2025 first quarter stabilization?
Richard Hickson: Yes. So the 500,000 in 2024 is weighted mid 3Q of this year. But it does not include domain remaining phases because those both occur or commence in 2025.
Nick Thillman: That’s helpful. And then maybe just touching a little bit on new-to-market kind of requirements. You guys touched on it already a little bit, but what markets are you seeing the most activity for tenants kind of looking to enter these markets? And are there any that are a little more sluggish?
Colin Connolly: It really is, I’d say, consistent across the Sun Belt. We’re seeing examples really in all of our markets of companies moving from places like the West Coast minute — excuse me, the Northeast and in the Midwest into places like Texas and Arizona, Georgia, North Carolina. It is pretty consistent. I’d say it’s very encouraging. While there are announcements like Oracle moving a global headquarters, I’d say, what we’re seeing more predominantly are regional hubs like the Workday announcement here in Atlanta where they went from approximately 50,000 square feet to 100,000 square feet in very short order. And I’d say a lot of that is the same themes that we’ve been discussing here at Cousins for the last 10 years. It’s the quality of the workforce in the Sun Belt, the low cost, the ease of doing business. And after a little bit of a pause during the last 12 to 24 months, we’re starting to see that rebound.
Nick Thillman: Helpful. Thanks.
Operator: Your next question comes from Brendan Lynch from Barclays. Please go ahead.
Brendan Lynch: Great. Thanks for taking my question. Gregg, maybe you could go into a little bit more detail about the same-store expenses. They were, I think, down year-over-year where most of your peers are facing tax increases and insurance headwinds. So maybe you could just give us a little bit more detail on what you’re seeing in your portfolio.
Gregg Adzema: Sure. The largest driver to the same-property expense number this quarter was property taxes and inside of the property tax line item, the largest component was Texas property taxes. And if you recall, I think it happened in the third quarter of last year, they put on the ballots a reduction in the property tax rate in the state of Texas, and it passed overwhelmingly. And so we had up until that the time of that vote, been accruing at the old tax rate in Texas, as soon as that would happened, we accrued to the new tax rate in Texas. And so the year-over-year comps last year’s first quarter old tax rate, this year’s first quarter new tax rate. And so you had some adjustments. If you pulled out property taxes in total from our same property performance in the first quarter, that 6.6% cash number turns into a positive 5.4% cash on a year-over-year basis.
So it had an impact, but it was not the sole impact. And we still had a really good quarter even without that property tax adjustment.
Brendan Lynch: Great. That’s helpful. And should we think about any other potential tax adjustments in the second through fourth quarter of this year? Or is it just in the first?
Gregg Adzema: No. The biggest impact by far was in the first.
Brendan Lynch: Okay. Thanks. That’s helpful. And maybe could you also talk about tenant improvements per square foot. It looks like those increased fairly significant amount year-over-year. Just any color that you can share there would be helpful.
Richard Hickson: Sure. Yeah, the TIs did increase versus last quarter, certainly versus 2023. I’d say the context with that — in this particular quarter, we did accomplish a lot of leasing in first-generation kind of shelf space. And at Neuhoff, obviously, some of that new development activity showed up. And those tend to be higher per square foot per year TI packages. But otherwise, we view TIs and concessions is hopefully stabilizing at this point on a broader basis.
Brendan Lynch: Great. Thanks for the color.
Operator: Your next question comes from Dylan Burzinski from Green Street. Please go ahead.
Dylan Burzinski: Hi, guys. Thanks for taking the question. Just, I guess, on the acquisition pipeline today, are you starting to see more opportunities arise? And I guess, just as you sort of think about the near-term pipeline, I mean, did you guys expect to start to see capitulation on behalf of sellers? Or do you expect this to sort of be an elongated process?
Colin Connolly: Well, I think it’s already been an elongated process to date, and I’d say that’s fairly typical of most cycles. But we are starting to see, I think, more actionable opportunities. And as I said, the overall property sales market has remained a bit tepid, but we are starting to see some signs of life in the debt market, which I think is a catalyst. And I also think the recent pickup in leasing activity, which ultimately requires leasing capital to be another catalyst for transactions. And so they are becoming, I hope and believe more actionable in the near term. And again, at Cousins, we’re going to continue to apply our kind of creative skills to source and find opportunities that could be very traditional in nature as well as some that are a little less traditional but all again, with a focus on investing in Sun Belt lifestyle office and with a priority on kind of near-term accretion, if possible.
Dylan Burzinski: As you guys sort of think about markets, I mean, is there a potential to put capital to work in markets that you’re not currently in? And if so, how do you guys kind of think about that process, would it require higher going-in yield to sort of make that decision?
Colin Connolly: We’re going to stay focused on our Sun Belt markets. Again, I think the — we believe that there are long-term secular trends, in-migration trends that will continue to favor the markets that we’re invested in. So we’ll stay focused within the Sun Belt. There’s a market or two within the Sun Belt that we’re not invested in today that we continue to monitor. But I also think as we look at the company more broadly, we do want to continue to enhance our geographic diversification within the Sun Belt. And so certainly, there are some markets like Dallas and Charlotte and Nashville and Tampa and others that over time, we’d like to increase our exposure to those markets and are very constructive on them long term.
Dylan Burzinski: Thanks.
Operator: [Operator Instructions] Your next question comes from Upal Rana from KeyBanc. Please go ahead.
Upal Rana: Great. Thanks for taking the question. Richard, could you give us some color or detail on the leasing pipeline you mentioned in your prepared remarks, any numbers or any types of tenants or general demand commentary would be helpful. Thanks.
Richard Hickson: Sure. It continues to be healthy across the board, frankly. Atlanta has been a great outperformer for us for a while now, as you know, and it continues to be really solid. But the only thing I’d point out is that Austin continues to be slower, but we are seeing maybe not on a square footage basis, but certainly in the number of transactions in our pipeline late stage for certain in Austin is improving. So still soft there, but overall, broad-based, and there isn’t really one industry that I’d call out at this point that’s driving the lion’s share of our pipeline, it’s well diversified.
Upal Rana: Great. That was helpful. And Gregg, could you give us some color on will get you to the high end or low end of your guidance. Any moving pieces or timing in particular, that gets you to either in?
Gregg Adzema: Sure. We tightened the range. So now that we’re one quarter into the year, there are less moving pieces. But as we sit here and look at that, as is often the case, the two things that [Technical Difficulty] unique to our company at all are interest rates and leasing assumptions. And in both instances, we’ve got — I’ve already talked earlier in this call about our interest rate assumptions. And we obviously have some leasing assumptions as well. And I believe that they’re on the conservative end of our typical range of leasing assumptions. So we don’t see a lot of risk in the range that we’ve provided, but those are the two biggest moving pieces inside that range.
Upal Rana: Okay. Got it. That’s all for me. Thanks.
Richard Hickson: Thanks. Upal.
Operator: And there are no further questions. At this time, I will turn the conference back over to Colin Connolly for closing remarks.
Colin Connolly: Thank you for joining us on our first quarter earnings call. We appreciate your interest in Cousins Properties. If you have any follow-up questions, please do not hesitate to reach out to our team. Have a great weekend.
Operator: Ladies and gentlemen, this concludes your conference call for today. You may now disconnect your lines. Thank you.
