The impairment charge does not impact the Company’s ownership interest in the venture, and the Company continues as property manager and leasing agent.
The Company owns a 50% joint venture interest in Terminus 200, which was substantially completed in August 2009. During the second quarter of 2009, the venture executed a 50,000-square-foot lease for the property and is in ongoing negotiations with several potential tenants, but no additional leases have been executed.
Based on the Company’s current expectations of the amount and timing of cash flows from Terminus 200 and other considerations, the Company has determined that the estimated fair value of the investment is lower than the book value.
Pursuant to Accounting Principles Board Opinion No. 18, this difference must be recorded as an impairment because the Company deems it to be other than temporary.
The impairment charge includes the Company’s full investment in the venture (approximately $21 million as of June 30, 2009), a $17.25 million loan repayment guarantee under the project construction loan, and obligations under the existing lease.
In addition, the Company today filed with the Securities and Exchange Commission a current report on Form 8-K containing additional information regarding the Terminus 200 project, information regarding an anticipated impairment from the sale of its corporate airplane and information regarding anticipated outparcel and tract sales in the third quarter of 2009. This filing is available on the investor relations page of the Company’s website.
Contact: Cameron Golden, 404-407-1984, camerongolden@cousinsproperties.com
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