Covered — office concentration, flat dividend. A quarterly payer at $0.32 a share, $1.28 annualized, held flat since 2022 — and second-quarter 2026 funds from operations of $0.75 a share covered that quarter's dividend at a 43% payout, with full-year 2026 FFO guidance of $2.92–$2.98 a share implying about the same payout for the year. Leasing backs the coverage: 924,000 square feet leased in the second quarter took the 22.3-million-square-foot Sun Belt Class A office portfolio to 92.8% leased, the highest level since the first quarter of 2020, and net debt to EBITDAre of 5.6× is the lowest in the office sector on the company's September 2026 presentation. The warning is concentration and stagnation, not coverage: this is 100% office, so a Sun Belt office downturn reaches the dividend directly, and a dividend that has not risen since 2022 is flat income in nominal terms even as FFO grows. For a REIT, the House reads AFFO payout — never the EPS payout, which depreciation makes meaningless — and Cousins reports FFO rather than AFFO, so the FFO payout is the adapted check used here; it is before second-generation capital costs, so the true cash cushion is thinner than 43% suggests.
Key risk: Office concentration — the entire portfolio is Sun Belt Class A office, so remote-work shifts, a large tenant move-out, or a Sun Belt slowdown hits occupancy and the FFO that covers the dividend, with no other property type to offset it.
Changes if: The FFO payout pushes well past ~43% toward 60% or more, leasing falls from the 92.8% level, net debt to EBITDAre rises past 5.6×, or the dividend stays flat for another year while FFO stalls. Any of those turns a covered office payout into a growth question.
- ✓FFO coverage check: 43% of FFO paid out in Q2 2026 — $0.32 against $0.75 of FFO per share, up from $0.70 a year earlier — leaves a wide cushion on the FFO line, and 2026 guidance of $2.92–$2.98 a share implies about a 43% payout for the year. Adapted check: Cousins reports FFO, not AFFO, so this is before second-generation capital expenditures.
- !Dividend growth check: Flat at $0.32 a quarter since 2022 — no increase in four years despite FFO guidance growth of 3.9% for 2026 and a third consecutive year of FFO growth. The income is covered, but it is not compounding for the holder.
- !Leverage and concentration check: 5.6× net debt to EBITDAre at June 30, 2026, with $1.1 billion of liquidity, is the lowest leverage in the office sector — but it sits behind a single-sector portfolio: 22.3 million square feet, 100% Sun Belt, 100% Class A office, so the balance sheet cannot diversify away an office downturn.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.