Office REITs Shift into Recovery Mode: Why Cousins Properties and Its Peers Matter in Q4

The office real estate market just turned a corner. After years of battling oversupply and weak demand, four major REITs—BXP Inc., Cousins Properties, SL Green, and Highwoods Properties—are positioned differently to capitalize on this shift. As these companies prepare to report Q4 2025 earnings, investors need to understand which markets are bouncing back and which firms are best equipped to win.

The Office Market Is Finally Finding Its Footing

The latest data from Cushman & Wakefield paints an optimistic picture. National net absorption went positive in the final six months of 2025—a major turning point after years of negative trends. Class A office spaces saw particularly strong activity, as tenants increasingly prefer high-quality workplaces with modern amenities.

Vacancy rates have stabilized near 20.5%, with only a 5 basis point increase from the previous quarter. Annualized, that’s just 30 basis points—the smallest uptick since 2020. Asking rents climbed to about $38.37 per square foot, signaling that landlords are finally gaining pricing power again.

What’s driving this recovery? Several factors. Sublease inventories are down significantly, meaning there’s genuinely less office space available than before. Construction pipelines have collapsed—less than 20 million square feet remains under development, the smallest amount in the current cycle. The pipeline itself shrank roughly 35% throughout 2025, with older properties being demolished or converted rather than renovated.

The result: supply is tightening just as demand picks up. This dynamic is supporting firmer rental rates, especially in gateway markets (New York, Boston, San Francisco) and high-growth Sun Belt cities (Atlanta, Dallas, Nashville, Raleigh).

Cousins Properties: Poised for Sun Belt Strength

Cousins Properties stands out among the four. The company’s portfolio consists almost entirely of Class A office assets across the fastest-growing Sun Belt markets—exactly where tenants want to be right now.

Here’s the compelling part: as firms embrace return-to-office mandates and seek premium spaces with superior amenities, Cousins is positioned to benefit from the “flight to quality” trend. The company has kept its new development starts limited and is carefully managing construction, which aligns perfectly with the tightening market conditions. This disciplined approach protects margins while supply constraints push rents higher.

Cousins’ financial health supports this positioning. A diverse tenant base ensures steady cash flows, and the company has been actively recycling capital to improve its portfolio quality. The balance sheet remains healthy, giving management flexibility to invest or return capital to shareholders.

The market is watching. Zacks’ consensus estimate for Cousins Properties’ Q4 2025 revenue is $248.65 million, representing 12.91% year-over-year growth. More importantly, the quarterly funds from operations (FFO)—the metric that matters most for REITs—is estimated at 71 cents per share, implying 2.9% annual growth. Cousins Properties is scheduled to report on February 5 after market close, and investors should pay close attention to these figures and management guidance on rent growth and leasing spreads.

Currently, Cousins Properties carries a Zacks Rank #3 (Hold), reflecting a balanced risk-reward profile.

Three Other Giants Face Different Challenges

BXP Inc., the largest U.S. office REIT by market cap, operates a 54.6-million-square-foot portfolio across six gateway markets. The firm just achieved a major milestone: it completed asset dispositions totaling more than $1 billion in proceeds as of January 14, 2026—well ahead of its $1.9 billion multi-year sales plan (only $845 million was sold through 2025).

This portfolio pruning positions BXP to own primarily prime properties in the best markets, but it also comes with execution risk. The company reports Q4 2025 earnings on January 27. The Zacks consensus projects $814.66 million in quarterly revenue (up 2.06% year-over-year) and core FFO per share of $1.80 (up just 0.6%). These modest growth rates reflect the transition, and BXP currently holds a Zacks Rank #3 (Hold).

SL Green, focused on Manhattan office properties, faces headwinds despite strong underlying demand. The company manages 30.7 million square feet across 53 buildings, giving it massive exposure to New York’s office market. However, intense competitive pressure is forcing the firm to offer rent concessions to retain tenants, which pressures near-term FFO growth.

SL Green reports on January 28. Revenue is estimated at $147.03 million (up 5.32% year-over-year), but FFO per share is forecast to decline 24.14% to $1.10. The market has taken notice—SL Green carries a Zacks Rank #5 (Strong Sell), making it the weakest of the four.

Highwoods Properties operates a portfolio of premier office assets across Atlanta, Charlotte, Dallas, Nashville, Raleigh, and Tampa. Like Cousins Properties, Highwoods has strong Sun Belt exposure, benefiting from long-term regional growth trends. Competition from developers and other operators, however, may limit pricing power.

Highwoods is set to report on February 10. Revenue consensus is $208.23 million (up 1.31% year-over-year), while FFO per share is expected to remain flat at 85 cents. The Zacks Rank #4 (Sell) suggests caution, though the company’s Sun Belt positioning offers long-term appeal.

What Investors Should Watch

As these four REITs report earnings in late January and early February, focus on three metrics:

1. Leasing velocity: Are landlords signing tenants faster than before? Check new lease signings and lease renewal rates.

2. Rent growth and spreads: On re-leased space, are rents growing? This signals real pricing power, not just lower concessions.

3. Capital plans: How are these firms planning to deploy or return capital as conditions improve? Dispositions, developments, and dividends all matter.

Cousins Properties enters this earnings season with perhaps the best combination of favorable market positioning and financial flexibility, making it worth monitoring closely alongside its peers.