Cousins Properties Incorporated 2006 Annual Report - SNL Financial

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
1,088 acres of land during 2006, and has interests in approximately 6,682 remaining acres of land, which it intends
to develop or sell as undeveloped tracts or develop. Temco has a construction loan at one of its joint ventures with a
balance outstanding of $164,000, a maturity date of February 14, 2007 and an interest rate of Prime plus 0.25%.
Additionally, Temco has debt of $3.6 million secured by the golf course at one of its residential developments. This
debt matures January 2009 and carries a weighted average interest rate of 7.94%.
Crawford Long-CPI, LLC (“Crawford Long”) — Crawford Long is a 50-50 joint venture between the
Company and Emory University and owns the Emory Crawford Long Medical Office Tower, a 358,000 rentable
square foot medical office building located in Midtown Atlanta, Georgia. Crawford Long has a mortgage note
payable with an original principal of $55 million, a maturity of June 1, 2013 and an interest rate of 5.9%.
Ten Peachtree Place Associates (“TPPA”) — TPPA is 50-50 joint venture between the Company and a
wholly-owned subsidiary of The Coca-Cola Company, and owns Ten Peachtree Place, a 259,000 rentable square
foot office building located in midtown Atlanta, Georgia. TPPA has a mortgage note payable for an original
principal of $30 million with a maturity of April 1, 2015 and an interest rate of 5.39%.
TPPA pays cash flows from operating activities, net of note principal amortization, to repay additional capital
contributions made by the partners plus 8% interest on these contributions until July 1, 2011. After July 1, 2011, the
Company and its partner are entitled to receive 15% and 85% of the cash flows (including any sales proceeds),
respectively, until the two partners have received combined distributions of $15.3 million. Thereafter, each partner
is entitled to receive 50% of cash flows.
Palisades West, LLC (“Palisades”) — In 2006, the Company formed Palisades in which it holds a 50%
interest, with Dimensional Fund Advisors as a 25% partner and Forestar (USA) Real Estate Group as the other 25%
partner. Upon formation, the Company contributed land and the other partners contributed an equal amount in cash,
and Palisades commenced construction of two office buildings totaling 360,000 square feet in Austin, Texas. The
partnership intends to fund the development of the buildings through equity contributions.
Wildwood Associates (“Wildwood”) — Wildwood is a 50-50 joint venture between the Company and IBM,
that owns or has rights to own approximately 32 acres of undeveloped land in Wildwood Office Park, of which an
estimated 16 acres are committed to be contributed to Wildwood by the Company. The estimated 16 acres of land
which are committed to be contributed by the Company are not included in “Land Held for Investment or Future
Development” in the Company’s financial statements. In addition to undeveloped land as described above,
Wildwood owned six office buildings consisting of approximately 2.2 million square feet and approximately
15 acres of stand-alone retail sites ground leased to various users. Wildwood sold these office buildings and retail
sites in 2004 for $420 million to unrelated third parties, and recognized gains of approximately $200.8 million on
the transactions (see Note 9). The Company and IBM each leased office space from buildings owned by Wildwood
Associates during 2004 at rates comparable to those charged to third parties.
Through December 31, 2006, the Company had contributed $84,000 in cash plus properties having an
agreed-upon value of $54.5 million for its interest in Wildwood and is obligated to contribute the estimated 16 acres
of additional land discussed above with an agreed-upon value of $8.3 million. The Company’s investment in
Wildwood was a negative $1.3 million at December 31, 2006. This negative balance has resulted from the fact that
cumulative distributions from Wildwood Associates have exceeded the basis of its contributions. The Company’s
contributions were recorded at historical cost of the properties at the time they were contributed to Wildwood but it
was given equity credit by Wildwood for the fair value of the property at the time of the contribution, which
exceeded historical cost. In accordance with SOP 78-9, “Accounting for Investments in Real Estate Ventures,” this
basis differential is being reduced as the underlying land contributed is sold by the venture. As a result of the 2004
sale by Wildwood Associates of all its office buildings and retail sites, approximately $29.3 million of this basis
differential was recognized and included in Gain on Sale of Investment Properties in the accompanying 2004
Consolidated Statement of Income.
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