COUSINS PROPERTIES INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1996 Commission file number 2-20111

COUSINS PROPERTIES INCORPORATED
A GEORGIA CORPORATION
I.R.S. EMPLOYER IDENTIFICATION NO. 58-0869052
2500 WINDY RIDGE PARKWAY
ATLANTA, GEORGIA 30339
TELEPHONE: 770-955-2200

Name of exchange on which registered: New York Stock Exchange

Securities registered pursuant to Section 12(b) of the Act: Common Stock ($1 Par
Value)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

As of March 11, 1997, 29,076,420 common shares were outstanding; and the
aggregate market value of the common shares of Cousins Properties Incorporated
held by nonaffiliates was $568,218,327.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents have been incorporated by reference into the
designated Part of this Form 10-K:

Registrant's Proxy Statement Part III, Items 10, 11, 12 and 13
dated March 28, 1997
Registrant's Annual Report to Part II, Items 5, 6, 7 and 8
Stockholders for the year
ended December 31, 1996

PART I
Item 1. Business
- --------------------
Corporate Profile
Cousins Properties Incorporated (the "Registrant" or "Cousins") is a
Georgia corporation, which since 1987 has elected to be taxed as a real estate
investment trust ("REIT"). Cousins Real Estate Corporation ("CREC"), a taxable
entity consolidated with the Registrant, owns, develops, and manages a portion
of the Company's real estate portfolio. Cousins MarketCenters, Inc. ("CMC") is a
subsidiary of CREC which develops retail shopping centers. The Registrant,
together with CREC, CMC and CREC's other consolidated entities, is hereafter
referred to as the "Company."
Cousins is an Atlanta-based, fully integrated, self administered equity
real estate investment trust. The Company has extensive experience in the real
estate industry, including the acquisition, financing, development, management
and leasing of properties. Cousins has been a public company since 1962, and its
common stock trades on the New York Stock Exchange. The Company owns a portfolio
of well-located, high-quality retail, office, medical office and residential
developments and holds several tracts of strategically located undeveloped land.
The Company's holdings are concentrated in the southeastern United States,
primarily in the Atlanta area. The strategies employed to achieve the Company's
investment goals include the development of properties which are substantially
precommitted to quality tenants; maintaining high levels of occupancy within
owned properties; the selective sale of assets and the acquisition of quality
income-producing properties at attractive prices. The Company also seeks to be
opportunistic and take advantage of normal real estate business cycles.
Unless otherwise indicated, the notes referenced in the discussion
below are the "Notes to Consolidated Financial Statements" included in the
financial section of the Registrant's 1996 Annual Report to Stockholders.
Brief Description of Company Investments
Office. As of March 15, 1997, the Company owns, directly and
indirectly, equity interests of at least 50% in the following seventeen
commercial office buildings:

Company's
Metropolitan Rentable Ownership
Property Description Area Square Feet Interest
-------------------- ---- ----------- --------

One Independence Center Charlotte, NC 522,000 100%
First Union Tower Greensboro, NC 319,000 100%
3100 Windy Hill Road Atlanta 188,000 100% (a)
615 Peachtree Street Atlanta 147,000 100%
200 North Point Center East Atlanta 129,000 100%
100 North Point Center East Atlanta 128,000 100%
333 North Point Center East Atlanta 128,000 100% (b)
3301 Windy Ridge Parkway Atlanta 106,000 100%
NationsBank Plaza Atlanta 1,260,000 50%
3200 Windy Hill Road Atlanta 685,000 50%
2300 Windy Ridge Parkway Atlanta 634,000 50%
2500 Windy Ridge Parkway Atlanta 313,000 50%
Ten Peachtree Place Atlanta 259,000 50%
4200 Wildwood Parkway Atlanta 250,000 50% (b)
John Marshall-II Washington, D.C. 224,000 50%
4300 Wildwood Parkway Atlanta 150,000 50%
4100 Wildwood Parkway Atlanta 100,000 50%
One Ninety One Peachtree Atlanta 1,215,000 9.8%
---------
6,757,000
=========

(a) See Item 2. Properties footnote (7) where ownership is discussed.
(b) Under construction or in early stages of leaseup.

The weighted average leased percentage of these office buildings
(excluding 333 North Point Center East and 4200 Wildwood Parkway both of which
are currently under construction and One Ninety One Peachtree Tower as it is
less than 50% owned by the Company) was approximately 96% as of March 15, 1997
and the leases expire as follows:

2006
&
1997 1998 1999 2000 2001 2002 2003 2004 2005 Thereafter Total
---- ---- ---- ---- ---- ---- ---- ---- ---- ---------- -----

OFFICE
Consolidated:
- -------------
Square Feet
Expiring (d) 71,380 302,697 61,652 267,068 205,583 30,419 80,256 96,477 0 342,389 1,457,921(b)
% of Leased Space 5% 21% 4% 18% 14% 2% 6% 7% 0% 23% 100%
Annual Base
Rent (a) 830,088 3,623,661 998,923 3,306,215 3,275,072 452,852 736,262 1,304,769 0 7,003,144 21,530,986
Annual Base Rent/
Sq. Ft. (a) 11.63 11.97 16.20 12.38 15.93 14.89 9.17 13.52 0 20.45 14.77

Joint Venture:
- --------------
Square Feet
Expiring (d) 113,117 287,584 47,514 162,293 450,062 289,180 70,726 65,019 353,539 1,675,539 3,514,573(c)
% of Leased Space 3% 8% 1% 5% 13% 8% 2% 2% 10% 48% 100%
Annual Base
Rent (a) 1,342,829 4,073,307 497,185 3,138,232 5,994,914 5,105,217 1,082,084 1,352,068 6,845,063 38,970,677 68,401,576
Annual Base Rent/
Sq. Ft. (a) 11.87 14.16 10.46 19.34 13.32 17.65 15.30 20.79 19.36 23.26 19.46

Total (including only Company's 50% share of Owned Properties):
- ----------------------------------------------------------------
Square Feet
Expiring (d) 127,939 446,489 85,409 348,215 430,614 175,009 115,619 128,987 176,770 1,180,159 3,215,210
% of Leased Space 4% 14% 3% 11% 13% 5% 3% 4% 6% 37% 100%
Annual Base
Rent (a) 1,501,503 5,660,315 1,247,516 4,875,331 6,272,529 3,005,461 1,277,304 1,980,803 3,422,532 26,488,483 55,731,777
Annual Base Rent/
Sq. Ft. (a) 11.74 12.68 14.61 14.00 14.57 17.17 11.05 15.36 19.36 22.44 17.33

(a) Annual base rent excludes the operating expense reimbursement portion of
the rent payable. If the lease does not provide for pass through of such
operating expense reimbursements, an estimate of operating expenses is
deducted from the rental rate shown. The base rental rate shown is the
estimated rate in the year of expiration. Amounts disclosed are in dollars.

(b) Rentable square feet leased as of March 15, 1997 out of 1,539,000 total
rentable square feet.

(c) Rentable square feet leased as of March 15, 1997 out of 3,625,000 total
rentable square feet.

(d) Except as follows, where a tenant has the option to cancel its lease
without penalty, the lease expiration date used in the table above reflects
the cancellation option date rather than the lease expiration date. One of
the joint venture leases (50,242 square feet) has the right to terminate
during 1998, if notice is given by April 1, 1997. As of March 23, 1997, no
notice had been received.

The weighted average remaining lease term of these fifteen office
buildings was approximately 8 years as of March 31, 1997. Most of the Company's
leases in these buildings provide for pass through of operating expenses, and
base rents which escalate over time.
Retail. As of March 15, 1997, the Company's retail portfolio includes
the following eleven properties:

Rentable Company's
Metropolitan Square Feet Ownership
Property Description Area (Company Owned) Interest
-------------------- ------------ --------------- --------

Colonial Plaza MarketCenter Orlando, FL 493,000 100% (a)
Greenbrier MarketCenter Chesapeake, VA 479,000 100%
North Point MarketCenter Atlanta 398,000 100%
Presidential MarketCenter Atlanta 362,000 100% (b)
Perimeter Expo Atlanta 171,000 100%
Los Altos MarketCenter Long Beach, CA 157,000 100%
Mansell Crossing Phase II Atlanta 103,000 100% (c)
Rivermont Station Atlanta 90,000 100%
Abbotts Bridge Station Atlanta 85,000 100% (d)
Lovejoy Station Atlanta 77,000 100%
Haywood Mall Greenville, SC 330,000 50%
---------
2,745,000
=========

(a) Includes 16,000 square feet not yet under construction.
(b) Includes 82,000 square feet currently under construction.
(c) Includes 32,000 square feet currently under construction.
(d) Under construction.

The weighted average leased percentage of these eleven retail
properties (excluding the properties under construction and Haywood Mall) was
approximately 99% as of March 15, 1997, and the leases of these eleven
properties (excluding only Haywood Mall) expire as follows:

2006
&
1997 1998 1999 2000 2001 2002 2003 2004 2005 Thereafter Total
---- ---- ---- ---- ---- ---- ---- ---- ---- ---------- -----

RETAIL
- ------
Square Feet
Expiring 2,195 13,780 60,322 33,981 108,743 88,799 9,300 85,267 46,097 1,770,227 2,218,711(b)
% of Leased Space 0% 1% 3% 2% 5% 4% 0% 4% 2% 79% 100%
Annual Base
Rent (a) 41,486 216,421 1,096,851 537,784 1,675,072 1,374,159 134,950 941,311 532,730 21,981,131 28,531,895
Annual Base Rent
/Sq. Ft. (a) 18.90 15.71 18.18 15.83 15.40 15.47 14.51 11.04 11.56 12.42 12.86

(a) Annual base rent excludes the operating expense reimbursement portion of
the rent payable and any percentage rents due. If the lease does not
provide for pass through of such operating expense reimbursements, an
estimate of operating expenses is deducted from the rental rate shown. The
base rental rate shown is the rate in the year of expiration. Amounts
disclosed are in dollars.

(b) Gross leasable area leased as of March 15, 1997 out of 2,414,000 total
gross leasable area.

The weighted average remaining lease term of these eleven retail
properties (excluding only Haywood Mall) was approximately 14 years as of March
15, 1997. All of the major tenant leases in these retail properties have lease
terms of 10 years or more from the date of initial occupancy and provide for
pass through of operating expenses and base rents which escalate over time.

Medical. As of March 15, 1997, the Company owned the following medical
office property:
Company's
Metropolitan Rentable Ownership
Property Description Area Square Feet Interest
- -------------------- ------------ ----------- ---------

Presbyterian Medical Center
at University Charlotte, NC 67,000 100% (a)

(a) Under construction and in early stages of lease-up.

Other. The Company's other real estate holdings include equity
interests in approximately 472 acres of strategically located land held for
investment and future development at North Point and Wildwood Office Park, the
option to acquire the fee simple interest in approximately 11,300 acres of land
through its Temco Associates joint venture, and two mortgage notes for $28
million which are secured by a 250,000 square foot office building in
Washington, D.C. The terms of these two notes have some of the characteristics
of an equity investment, and should provide a comparable return on investment
(see Note 3).
The Company's joint venture partners include IBM and affiliates of The
Coca-Cola Company ("Coca-Cola"), NationsBank Corporation ("NationsBank"),
Corporate Property Investors, Odyssey Partners, L.P., Temple-Inland Inc., Dutch
Institutional Holding Company ("DIHC"), American General Corporation, and
CarrAmerica Realty Corporation.
The success of the Company's operations is dependent upon such
unpredictable factors as the availability of satisfactory financing; general and
local economic conditions; the activity of others developing competitive
projects; the cyclical nature of the real estate industry; and zoning,
environmental impact, and other government regulations.
Refer to Item 2 hereof for a more detailed description of the Company's
real estate properties. Significant Changes in 1996 Significant changes
in the Company's business and properties during the year ended December
31, 1996
were as follows:

Retail Properties. In March 1996, Colonial Plaza MarketCenter, a
493,000 square foot retail power center in Orlando, Florida and Mansell Crossing
Phase II, a 103,000 square foot retail expansion adjacent to the Company's other
North Point properties, became partially operational for financial reporting
purposes. In June 1996, Presidential MarketCenter Phase II, an 82,000 square
foot retail power center expansion in northeast suburban Atlanta became
partially operational for financial reporting purposes. In October 1996,
Greenbrier MarketCenter, a 479,000 square foot retail power center in
Chesapeake, Virginia became partially operational for financial reporting
purposes. In November 1996, Los Altos MarketCenter, a 157,000 square foot retail
power center located in Long Beach, California became partially operational for
financial reporting purposes (construction commenced on this retail power center
in January 1996).
In November 1996, Lawrenceville MarketCenter, a 500,000 square foot
retail power center located in northeast suburban Atlanta was sold to Equitable
Real Estate Investment Management, Inc., acting on behalf of its client, a major
state pension fund for a purchase price of $34,605,000. The gain on the sale,
net of applicable income tax provision was approximately $10,651,000 (including
depreciation recapture of approximately $715,000). The net proceeds were swapped
in a tax-deferred exchange into the purchase of One Independence Center (see
discussion below).
Office Properties. Two office buildings, 100 and 200 North Point Center
East, consisting of 128,000 and 129,000 rentable square feet, respectively,
located adjacent to North Point Mall and the Company's retail properties in
north central suburban Atlanta became partially operational for financial
reporting purposes in April 1996 and November 1996, respectively. In March 1996,
4100 and 4300 Wildwood Parkway, two office buildings with a total of 250,000
rentable square feet owned by Wildwood Associates and located in Wildwood Office
Park became partially operational for financial reporting purposes.
In October 1996, Wildwood Associates commenced construction on 4200
Wildwood Parkway, a 250,000 square foot office building located adjacent to 4100
and 4300 Wildwood Parkway. In December 1996, the Company commenced construction
on 333 North Point Center East, a 128,000 rentable square foot office building,
adjacent to 100 and 200 North Point Center East.
In May 1996, pursuant to the third amendment to the North Greene
Associates partnership agreement, Weaver Downtown, L.P., the minority partner,
sold its partnership interest to Cousins for $999,000. As a result, Cousins owns
100% of the First Union Tower, a 319,000 rentable square foot office building in
Greensboro, North Carolina.
During 1996 Cousins acquired two office buildings. In August 1996,
Cousins acquired 615 Peachtree Street, a 147,000 rentable square foot downtown
Atlanta office building, located across from NationsBank Plaza. The 12-story
office building was purchased for $11.1 million plus a contingent future payment
of up to an additional $1 million. In December 1996, Cousins acquired One
Independence Center, a 522,000 rentable square foot office building (including
an underground parking garage and an adjacent parking deck) located at the
intersection of Trade and Tryon in the central business district of Charlotte,
North Carolina for a purchase price of approximately $70.6 million. Cousins
purchased the office building using approximately $34,612,000 of proceeds from
the tax-deferred exchanges of Lawrenceville MarketCenter and an outparcel at
North Point, $30,879,000 from the assumption of a mortgage note payable,
$18,621,000 from an additional amount drawn down on the mortgage note payable
(to bring the mortgage note payable to a total of $49,500,000) (see Note 4) and
$2,426,000 of cash. Cousins also assumed $1,300,000 of municipal bonds related
to the underground parking garage.
Medical Properties. In July 1996, Cousins acquired the medical office
building development and management operations of The Lea Richmond Company and
The Richmond Development Company. The purchase price for the acquisition was
$1.8 million plus contingent future payments of up to an additional $1 million
(of which $200,000 was paid through December 31, 1996), subject to commencement
of development of certain medical office projects. This new division of the
Company commenced construction in July 1996 on the Presbyterian Medical Center
at University, a 67,000 rentable square foot medical office building in
Charlotte, North Carolina.
Financings. On February 6, 1996, CSC Associates, L.P. ("CSC"), a joint
venture formed by the Company and a wholly owned subsidiary of NationsBank, each
as 50% partners, issued $80 million of 6.377% collateralized notes (the
"Notes"). The Notes amortize in equal monthly installments of $590,680 based on
a 20 year amortization schedule, and mature February 15, 2011. The Notes are
non-recourse obligations of CSC and are secured by a Deed to Secure Debt, an
Assignment of Rents and Security Agreement covering CSC's interest in the
NationsBank Plaza building and related leases and agreements.
CSC has loaned the $80 million proceeds of the Notes to the Company
under a non-recourse loan (the "Cousins Loan") secured by the Company's interest
in CSC under the same payment terms as those of the Notes. The Company paid all
costs of issuing the Notes and the Cousins Loan, including a $400,000 fee to an
affiliate of NationsBank Corporation. In addition, the Company pays a fee to an
affiliate of NationsBank Corporation of .3% per annum of the outstanding
principal balance of the Notes. Because CSC has loaned the $80 million proceeds
of the Notes to the Company, the Notes and their related interest expense and
maturities are disclosed as an obligation of the Company and are not included in
the share of unconsolidated joint venture balances as disclosed in Note 4 or in
Note 5. (The related note receivable and interest income are also not included
in Note 4.)
Effective July 1, 1996, the Company amended and extended its line of
credit. The line amount was $50 million through December 31, 1996, and increased
to $100 million on January 1, 1997. The line is unsecured, bears interest tied
to the Federal Funds rate and matures June 30, 1997.
On April 1, 1996, CC-JM II Associates completed a $24,675,000, 17 year
fully amortizing non-recourse mortgage note payable at a 7% interest rate. On
December 16, 1996, Wildwood Associates completed the financing of the 3200 Windy
Hill Road Building with a $70 million mortgage note payable at an 8.23% interest
rate and maturity of January 1, 2007. Concurrent with the financing, Wildwood
Associates paid down its line of credit to $0 and on January 16, 1997, made a
cash distribution of $10 million to each partner.
On January 7, 1997, WWA received a commitment for the financing of the
4100 and 4300 Wildwood Parkway Buildings which funded on March 20, 1997. The $30
million non-recourse mortgage note payable has an interest rate of 7.65% and
term of fifteen years.
Executive Offices
The Registrant's executive offices are located at 2500 Windy Ridge
Parkway, Suite 1600, Atlanta, Georgia 30339-5683. At December 31, 1996, the
Company employed 150 people.

Item 2. Properties

Table of Major Properties
The following tables set forth certain information relating to major
office and retail properties, stand alone retail lease sites, medical office
properties and land held for investment and future development in which the
Company has a 50% or greater ownership interest. All information presented is as
of December 31, 1996, except percentage leased which is as of March 15, 1997.
Dollars are stated in thousands.

Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 1996
Zip Code or Acquired Partner Interest as Noted 1997 Occupancy
- ------------ ----------- ------- --------- ----------- ---------- ---------

Office
- ------
Wildwood Office Park:
Suburban Atlanta, GA
2300 Windy
Ridge Parkway
30339-5671 1987 IBM 50% 634,000 98% 95%
12 Acres

2500 Windy
Ridge Parkway
30339-5683 1985 IBM 50% 313,000 97% 85%
8 Acres
3200 Windy
Hill Road
30339-5609 1991 IBM 50% 685,000 97% 96%
15 Acres

3301 Windy Ridge
Parkway
30339-5685 1984 N/A 100% 106,000 80% 80%
10 Acres
3100 Windy Hill
Road
30339-5605 1983 N/A (7) 188,000 100% 100%
13 Acres

Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------ ------- --------

Office
- ------
Wildwood Office Park:
Suburban Atlanta, GA
2300 Windy
Ridge Parkway
30339-5671 IBM (2002/2012) 240,430 $ 77,058 $ 71,078 12/1/05
Georgia-Pacific Corporation 63,006 $ 52,998 7.56%
(1997)
Electrolux (2000/2005) 62,576
Computer Associates 62,445
(2005/2010)
Financial Services Corporation
(2006/2011)(3) 55,604
Chevron USA (2005)(2) 50,242

2500 Windy
Ridge Parkway
30339-5683 Coca-Cola Enterprises Inc. 165,180 $ 28,378 $ 25,412 12/15/05
(1998/2008) $ 18,252 7.45%
3200 Windy
Hill Road
30339-5609 IBM (2001/2011)(4) 436,539 $ 80,463 $ 70,000 1/1/07
Equifax (5) (1998/2003) 68,402 $ 62,521 8.23%
W.H. Smith Inc. 41,858
(2002/2007)
3301 Windy Ridge
Parkway
30339-5685 TSW International, Inc. 84,104 $ 10,377 $ 0 N/A
(2003/2008) (6) $ 6,854
3100 Windy Hill
Road
30339-5605 IBM (1998/2003) 188,000 $17,416 (7) $ 0 N/A
$17,416 (7)

Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 1996
Zip Code or Acquired Partner Interest as Noted 1997 Occupancy
- ------------ ----------- ------- --------- ----------- ---------- ---------

Office (Continued)
- ------------------
4100 and 4300
Wildwood Parkway
30339-9999 1996 IBM 50% 250,000 100% 51%
13 Acres

4200 Wildwood Parkway
30339-9999 (10) IBM 50% 250,000 (10) (10)
8 Acres
NationsBank Plaza
Atlanta, GA
30308-2214 1992 NationsBank(5) 50% (11)1,260,000 92% 92%
4 Acres

First Union Tower
Greensboro, NC
27401-2167 1990 N/A 100% 319,000 94% 90%
1 Acre

Ten Peachtree Place
Atlanta, GA
30309-3814 1991 Coca-Cola (5) 50% (11) 259,000 100% 100%
5 Acres
John Marshall-II
Suburban
Washington, D.C.
22102-3802 1996 CarrAmerica Realty 50% 224,000 100% 92%
. Corporation (5) 3 Acres

100 North Point Center East
Suburban Atlanta, GA
30202-4885 1995 N/A 100% 128,000 100% 63%
7 Acres

Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------ ------- --------

Office (Continued)
- ------------------
4100 and 4300
Wildwood Parkway
30339-9999 Georgia-Pacific 250,000 $ 26,426 $ 0(9) N/A (9)
Corporation (2012/2017) $ 25,899
(6)(8)
4200 Wildwood Parkway
30339-9999 (10) (10) $ 19,670 $ 0 N/A
(10)
NationsBank Plaza
Atlanta, GA
30308-2214 NationsBank(5) 572,742 $223,393 $ 0(26) N/A (26)
(2012/2042) $189,440
Ernst & Young LLP 188,175
(2007/2017)
Troutman Sanders 178,459
(2007/2017)
Paul Hastings (2012/2017) 68,980
Hunton & Williams 56,560
(2004/2009)
First Union Tower
Greensboro, NC
27401-2167 Smith Helms Mullis & 70,360 $ 33,594 $ 0 N/A
Moore (2000/2015) $ 24,055
First Union Bank (5) 62,622
(2009/2019)
Halstead Industries 60,253
(2000/2005)
Ten Peachtree Place
Atlanta, GA
30309-3814 Coca-Cola (5) (2001/2006) 259,000 $ 23,474 $ 20,19611/30/01(12)
$ 20,290 8.00%
John Marshall-II
Suburban
Washington, D.C.
22102-3802 Booz-Allen & Hamilton 224,000 $ 29,917 $ 24,288 4/1/13
. (2011/2016) $ 28,889 7.00%

100 North Point Center East
Suburban Atlanta, GA
30202-4885 Schweitzer-Mauduit 30,728 $ 12,935 $ 0 N/A
International, Inc. $ 12,497
(2001/2007)
Green Tree Financial 21,914
(2006/2011)(6)

Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 1996
Zip Code or Acquired Partner Interest as Noted 1997 Occupancy
- ------------ ----------- ------- --------- ----------- ---------- ---------

Office (Continued)
- ------------------
200 North Point Center East
Suburban Atlanta, GA
30202-4885 1996 N/A 100% 129,000 93% 30%
7 Acres

333 North Point Center East
Suburban Atlanta, GA
30202-9999 (10) N/A 100% 128,000 (10) (10)
8 Acres
615 Peachtree Street
Atlanta, GA
30308-2312 1996 N/A 100% 147,000 89% 30% (13)
2 Acres
One Independence Center
Charlotte, NC
28246-1000 1996 N/A 100% 522,000 99% 8%(14)
2 Acres

Retail Centers and Malls
Haywood Mall
Greenville, SC
29607-2749 1977/1995 Corporate 50% 1,256,000 92% 86%
Property 86 acres overall of
Investors (5) of which 84% of owned
330,000 and owned
21 acres are
owned (16)
Perimeter Expo
Atlanta, GA
30338-1519 1993 N/A 100% 291,000 100% 95%
19 acres overall of
of which 100% of Company
171,000 and Company owned
10 acres are owned
owned by
the Company

Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------ ------- --------

Office (Continued)
- ------------------
200 North Point Center East
Suburban Atlanta, GA
30202-4885 Alltel Telecom Information 48,168 $ 10,868 $ 0 N/A
Services, Inc. (1999/2000) $ 10,802
Motorola, Inc. (2001/2011) 26,897
APAC Teleservices, Inc. 22,409
(2004/2009)
333 North Point Center East
Suburban Atlanta, GA
30202-9999 N/A N/A $ 1,233 $ 0 N/A
(10)
615 Peachtree Street
Atlanta, GA
30308-2312 Wachovia (5)(1998/2007) 44,881 $ 11,725 $ 0 N/A
McCann Erickson (1998) 28,967 $ 11,553
One Independence Center
Charlotte, NC
28246-1000 NationsBank (5)(2008/2028) 357,390 (15) $ 70,759 $ 49,500 11/1/07
Robinson Bradshaw & Hinson, 64,893 $ 70,538 8.22%
P.A. (2004/2009)
Ernst & Young LLP (2001/2006)33,962
Transamerica (5)(1997) 30,736
Retail Centers and Malls
Haywood Mall
Greenville, SC
29607-2749 Sears (17) N/A $ 49,716 $ 0 N/A
J.C. Penney (17) N/A $ 37,573
Rich's (17) N/A
Belk (17) N/A
Dillard's (17) N/A

Perimeter Expo
Atlanta, GA
30338-1519 The Home Depot Expo (17) N/A $ 19,772 $ 21,259 8/15/05
Marshalls (2014/2029) 36,598 $ 18,458 8.04%
Best Buy (2014/2029) 36,000
Linens `N Things (2014/2024) 30,351
Office Max (2013/2033) 23,500
The Sport Shoe (2004/2014) 14,348
Gap's Old Navy Store 13,939
(2002/2012)

Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 1996
Zip Code or Acquired Partner Interest as Noted 1997 Occupancy
- ------------ ----------- ------- --------- ----------- ---------- ---------

Retail Centers and Malls (Continued)
- ------------------------------------
North Point MarketCenter
Suburban
Atlanta, GA
30202-4889 1994/1995 N/A 100% 514,000 100% 93%
60 Acres (18)
of which
398,000 and
49 acres are
owned by
the Company

Presidential MarketCenter
Suburban
Atlanta, GA
30278-2149 1994/1996 N/A 100% 478,000 (19) 99% (19) 99% (19)
66 acres overall of
of which 99% (19) Company
362,000 (19) of Company owned
and 49 acres owned
are owned
by the
Company

Lovejoy Station
Suburban
Atlanta, GA
30228-0458 1995 N/A 100% 77,000 95% 89%
12 Acres
Colonial Plaza MarketCenter
Orlando, FL
32803-5029 1996 N/A 100% 493,000 97% 67%(20)
49 Acres

Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------ ------- --------

Retail Centers and Malls (Continued)
- ------------------------------------
North Point MarketCenter
Suburban
Atlanta, GA
30202-4889 Target (17) N/A $ 27,021 $ 29,477 7/15/05
Babies "R" Us (2011/2031) 50,275 $ 24,847 8.50%
Media Play (2010/2025) 48,884
Marshalls (2010/2025) 40,000
Rhodes (2011/2021) 40,000
Linens `N Things 35,000
(2005/2025)
United Artists (2014/2034) 34,733
Circuit City (2015/2030) 33,420
PETsMART (2009/2029) 25,465
Gap's Old Navy Store 17,000
(2001/2011)
Presidential MarketCenter
Suburban
Atlanta, GA
30278-2149 Target (17) N/A $ 19,588 $ 0 N/A
Publix Super Market 56,146 $ 18,634
(2019/2044)
Carmike Cinemas(5)(2002/2032)44,565
HomeGoods, Inc. (2004/2014) 35,000
T.J. Maxx (2004/2014) 32,000
Marshalls (2010/2025) 30,000
MJDesigns (5) (2011/2026) 37,957
Office Depot, Inc. 31,628
(2011/2026)
Lovejoy Station
Suburban
Atlanta, GA
30228-0458 Publix Super Market 47,955 $ 6,033 $ 0 N/A
(2016/2036) $ 5,837
Colonial Plaza MarketCenter
Orlando, FL
32803-5029 Circuit City (2017/2037) 43,936 $ 37,899 $ 0 N/A
Rhodes (2011/2026) 40,000 $ 37,299
Baby Superstore, Inc.
(2006/2021) 40,000
Stein Mart, Inc. (2007/2027) 36,000
Linens `N Things 35,458
(2012/2027)
Barnes & Noble Superstores 35,131
Inc. (2011/2021)
Luria's (2012/2027) 32,900

Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 1996
Zip Code or Acquired Partner Interest as Noted 1997 Occupancy
- ------------ ----------- ------- --------- ----------- ---------- ---------

Retail Centers and Malls (Continued)
- ------------------------------------
Colonial Plaza MarketCenter (Continued)

Mansell Crossing Phase II
Suburban
Atlanta, GA
30202-4822 1996 N/A 100% 103,000 100% 74% (21)
13 Acres

Greenbrier MarketCenter
Chesapeake, VA
23327-2840 1996 N/A 100% 479,000 99% 38% (22)
44 Acres

Los Altos MarketCenter
Long Beach, CA
90815-3126 1996 N/A 100% 258,000 100% 16% (23)
19 Acres of
which 157,000
and 17 Acres
are owned by
the Company

Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------ ------- --------

Retail Centers and Malls (Continued)
- ------------------------------------
Colonial Plaza MarketCenter (Continued) Marshalls (2011/2026) 30,400
Ross Stores (2011/2026) 28,000
Just For Feet,Inc.(2012/2027)26,667
Walgreen Co. (2017) 18,614
Gap's Old Navy Store 18,073
(2002/2012)
Mansell Crossing Phase II
Suburban
Atlanta, GA
30202-4822 Bed Bath & Beyond 40,787 $ 7,403 $ 0 N/A
(2012/2027) $ 7,286
Goody's Family Clothing,
Inc. (2009/2027) 32,144
Rooms To Go (2016/2036) 21,000
Greenbrier MarketCenter
Chesapeake, VA
23327-2840 Target (2016/2046) 117,220 $ 32,749 $ 0 N/A
Harris Teeter, Inc. 50,000 $ 32,558
(2016/2036)
Bed Bath & Beyond 40,484
(2012/2027)
Baby Superstore, Inc. 42,296
(2006/2021)
Stein Mart, Inc. (2006/2026) 36,000
Kinetex, Inc. (2012/2027) 33,000
Barnes & Noble Superstores, 29,974
Inc. (2012/2027)
PETsMART (2011/2031) 26,052
Office Max (2011/2026) 23,484
Gap's Old Navy Store 14,000
(2002/2012)
Los Altos MarketCenter
Long Beach, CA
90815-3126 Sears (17) N/A $ 19,413 $ 0 N/A
Circuit City (5)(2016/2036) 38,541 $ 19,282
Borders, Inc. (2017/2037) 30,000
Bristol Farms (5)(2012/2032) 28,200
CompUSA, Inc. (2011/2021) 25,620
Savon Drugs (5)(2016/2026) 16,914

Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 1996
Zip Code or Acquired Partner Interest as Noted 1997 Occupancy
- ------------ ----------- ------- --------- ----------- ---------- ---------

Retail Centers and Malls (Continued)
- ------------------------------------
Rivermont Station
Suburban
Atlanta, Ga.
30076-9999 (10) N/A 100% 90,000 100% (10)
19 Acres

Abbotts Bridge Station
Suburban Atlanta, GA
30155-9999 (24) N/A 100% 85,000 (24) (24)
17 Acres

Stand Alone Retail Sites Adjacent to Company's Office and Retail Projects
- -------------------------------------------------------------------------
Wildwood Office Park
Suburban Atlanta, GA
30339-5671 1985-1993 IBM 50% 15 Acres 100% 95%

North Point
Suburban Atlanta, GA
30202-4885 1993 N/A 100% 24 Acres 100% 100%

Medical Office
Presbyterian Medical Center
at University
Charlotte, NC
28233-3549 (10) N/A 100% 67,000 73%(10) (10)
1 Acre (25)

Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------ ------- --------

Retail Centers and Malls (Continued)
- ------------------------------------
Rivermont Station
Suburban
Atlanta, Ga.
30076-9999 Harris Teeter, Inc. 58,261 $ 10,116 $ 0 N/A
(2015/2035)(10) (10)
CVS Drug Store (5) 8,775
(2007/2022)(10)
Abbotts Bridge Station
Suburban Atlanta, GA
30155-9999 Harris Teeter, Inc. 41,813 (24) $ 0 N/A
(2018/2038)(24)
Eckerd Corporation 10,909
(2017/2037)(24)
Stand Alone Retail Sites Adjacent to Company's Office and Retail Projects
- -------------------------------------------------------------------------
Wildwood Office Park
Suburban Atlanta, GA
30339-5671 N/A N/A $ 8,763 $ 0 N/A
$ 7,673
North Point
Suburban Atlanta, GA
30202-4885 N/A N/A $ 3,819 $ 0 N/A
$ 3,769
Medical Office
Presbyterian Medical Center
at University
Charlotte, NC
28233-3549 Presbyterian Health Services 49,291 $ 1,949 $ 0 N/A
Corporation (2012)

(1) Cost as shown in the accompanying table includes deferred leasing and
financing costs and other related assets. For each of the following
projects: 2300 and 2500 Windy Ridge Parkway, 3200 Windy Hill Road, 4100 and
4300 Wildwood Parkway, 4200 Wildwood Parkway and Wildwood Stand Alone
Retail Lease Sites, the cost shown is what the cost would be if the
venture's land cost were adjusted downward to the Company's lower basis in
the land it contributed to the venture.

(2) Chevron USA has the right to terminate its lease during 1998 if notice is
given by April 1, 1997. As of March 23, 1997, no notice had been received.

(3) 1,556 square feet expires in 2001.

(4) 115,944 square feet expires in 2001, and the balance expires in 2006.

(5) Actual tenant or venture partner is affiliate of entity shown.

(6) TSW International, Inc., Green Tree Financial and Georgia-Pacific
Corporation have the right to terminate their leases in 1998, 2001 and
2007, respectively, upon payment of significant cancellation penalties.

(7) For 3100 Windy Hill Road, the cost shown is the Company's carrying value of
the land lease and first mortgage note from which it derives substantially
all of the economic benefits of the property.

(8) Tenant has the option to purchase the building on its lease expiration date
for a price of $33,750,000.

(9) On January 7, 1997, Wildwood Associates received a commitment for the
financing of the 4100 and 4300 Wildwood Parkway Buildings which funded on
March 20, 1997. The $30 million non-recourse mortgage note payable has an
interest rate of 7.65% and term of fifteen years.

(10) Project was under construction as of December 31, 1996. Lease expiration
dates are based upon estimated commencement dates, and square footage is
estimated.

(11) See "Major Properties" - "NationsBank Plaza" and "Ten
Peachtree Place" where the partnership's preferences are discussed.

(12) Maturity of the Ten Peachtree Place mortgage debt is extendible to December
31, 2008. Rate becomes floating after November 30, 2001.

(13) 615 Peachtree Street was acquired in July 1996. Thus, economic occupancy
for 615 Peachtree Street does not include a full year of operations.

(14) One Independence Center was acquired in December 1996. Thus, economic
occupancy for One Independence Center does not include a full year of
operations.

(15) 101,250 square feet expires in 2000.

(16) A portion of the Haywood Mall parking lot (3 acres) is subject to a
long-term ground lease expiring in 2017, with five 10-year renewal options.

(17) This anchor tenant owns its own space.

(18) North Point MarketCenter includes approximately 4 outparcels which are
ground leased to freestanding users.

(19) Includes 82,000 square feet under development as of March 15, 1997 which
were excluded from calculation of percentage leased and the average 1996
economic occupancy.

(20) Colonial Plaza MarketCenter became partially
operational in March 1996 for financial reporting purposes. Thus, economic
occupancy for Colonial Plaza MarketCenter does not include a full year of
operations.

(21) Mansell Crossing Phase II became partially operational in March 1996 for
financial reporting purposes. Thus, economic occupancy for Mansell Crossing
Phase II does not include a full year of operations.

(22) Greenbrier MarketCenter became partially operational in October 1996 for
financial reporting purposes. Thus, economic occupancy for Greenbrier
MarketCenter does not include a full year of operations.

(23) Los Altos MarketCenter became partially operational in November 1996 for
financial reporting purposes. Thus, economic occupancy for Los Altos
MarketCenter does not include a full year of operations.

(24) Land was acquired and construction commenced on Abbotts Bridge Station
subsequent to December 31, 1996. Lease expiration dates are based upon
estimated commencement dates, and square footage is estimated.

(25) Presbyterian Medical Center at University is located on 1 acre which is
subject to a ground lease expiring in 2057.

(26) See "Major Properties" - "NationsBank Plaza" where debt on NationsBank
Plaza is discussed.

Land Held for Investment and Future Development (excluding Retail Outparcels)

Adjusted
Cost
Less
Developable Company's Depreciation
Land Area Joint Venture Ownership and Debt
Description, Location and Zoned Use Year Acquired (Acres)(1) Partner Interest Amortization Balances
- ----------------------------------- ------------- ---------- ------------- --------- ------------ --------

Wildwood Office Park
Suburban Atlanta, Georgia
Office and Commercial 1971-1987 147 N/A 100% $ 7,005 $ 0
Office and Commercial 1971-1982 36 IBM 50% $ 10,610(2) $ 0

North Point Land
(Georgia Highway 400 & Haynes Bridge Road) (3)
Suburban Atlanta, Georgia
Office and Commercial - East 1970-1985 59 N/A 100% $ 1,853 $ 0
Office and Commercial - West 1970-1985 230 N/A 100% $ 4,511 $ 0

Midtown Atlanta
Office and Commercial 1984 2 N/A 100% $ 1,398 $ 0

Temco Associates
(Paulding County)
Suburban Atlanta, Georgia 1991 --(5) Temple-Inland 50% --(5) $ 0
Inc. (4)

Lawrenceville
Gwinnett County
Suburban Atlanta, Georgia
Single-Family Residential
and Commercial 1994 84 N/A 100% $ 1,487 $ 0

(1) Based upon management's estimates.
(2) For the portion of the Wildwood Office Park land owned by a joint venture,
the cost shown is what the cost would be if the venture's land cost were
adjusted downward to the Company's lower basis in the land it contributed
to the venture. The adjusted cost excludes building predevelopment costs of
$1,217,000.
(3) The North Point property is located both east and west of Georgia Highway
400. Currently, only the land which is located east of Georgia Highway 400
is being developed, but planning has begun for additional development on
the west side property. This land surrounds North Point Mall, a 1.3 million
square foot regional mall on a 100 acre site which the Company sold in
1988.
(4) Joint venture partner is an affiliate of the entity shown.
(5) Temco Associates has an option through March 2006, with no carrying costs,
to acquire the fee simple interest in approximately 11,300 acres in
Paulding County, Georgia (northwest of Atlanta, Georgia). The partnership
also has an option to acquire a timber rights interest only in
approximately 22,000 acres. The options may be exercised in whole or in
part over the option period. Temco Associates has engaged in certain sales
of land as to which it simultaneously exercised its purchase option. During
1994 and 1996, approximately 72 and 375 acres, respectively, of the option
related to the fee simple interest was exercised and simultaneously sold
for gross profits of $243,000 and $1,427,000, respectively. None of the
option was exercised in 1995.

Major Properties
- ----------------
General
- -------
This section describes the major operating properties in which the
Company has an interest either directly or indirectly through joint venture
arrangements. A "negative investment" in a joint venture results from
distributions of capital to the Company, if any, exceeding the sum of (i) the
Company's contributions of capital and (ii) reported earnings (losses) of the
joint venture allocated to the Company. "Investment" in a joint venture means
the book value of the Company's investment in the joint venture.

Wildwood Office Park
- --------------------
Wildwood Office Park is a 289 acre Class A commercial development in
suburban Atlanta master planned by I.M. Pei, including 8 office buildings (of
which 1 is under construction) containing 2,426,000 rentable square feet. The
property is zoned for office, institutional and commercial use. Approximately
109 acres in the park are owned by, or committed to be contributed to, Wildwood
Associates (see below), including approximately 36 acres of land held for future
development. The Company owns 100% of the 147 acre balance of the land available
for future development.
Located in Atlanta's northwest commercial district, just north of the
Interstate 285/Interstate 75 intersection, Wildwood features convenient access
to all of Atlanta's major office, commercial and residential districts. The
Wildwood complex overlooks the Chattahoochee River and borders 1,200 acres of
national forest, thus providing an urban office facility in a forest setting.
Wildwood Associates. Wildwood Associates is a joint venture formed in
1985 between the Company and IBM. The Company and IBM each have a 50% interest
in Wildwood Associates. At December 31, 1996, the Company's investment in
Wildwood Associates and a related partnership was approximately $2.5 million,
which included the cost of the land the Company is committed to contribute to
Wildwood Associates.
Wildwood Associates owns the 3200 Windy Hill Road Building (685,000
rentable square feet), the 2300 Windy Ridge Parkway Building (634,000 rentable
square feet), the 2500 Windy Ridge Parkway Building (313,000 rentable square
feet), the 4100 and 4300 Wildwood Parkway Buildings (250,000 rentable square
feet in total) and the 4200 Wildwood Parkway Building (250,000 rentable square
feet, which is under construction). At March 15, 1997, these buildings were 97%,
98%, 97%, 100% and 0% leased, respectively. Wildwood Associates also owns 15
acres leased to two banking facilities and five restaurants.
On December 16, 1996, Wildwood Associates completed the financing of
the 3200 Windy Hill Road Building with a $70 million mortgage note payable at an
8.23% interest rate and maturity of January 1, 2007. Concurrent with the
financing, Wildwood Associates paid down its line of credit to $0 and on January
16, 1997, made a cash distribution of $10 million to each partner.
On January 7, 1997, Wildwood Associates received a commitment for the
financing of the 4100 and 4300 Wildwood Parkway Buildings which funded on March
20, 1997. The $30 million non-recourse mortgage note payable has an interest
rate of 7.65% and term of fifteen years.
Wildwood Associates has a $10 million bank line of credit (the Company
severally guarantees one-half) under which $0 was drawn at December 31, 1996.
Other Buildings in Wildwood Office Park. Wildwood Office Park also contains
the 3301 Windy Ridge Parkway Building, a 106,000 rentable square foot office
building located on approximately 10 acres which is wholly owned by the Company.
Commencing January 1994, a single tenant, TSW International, Inc., leased the
building for a term of ten years. The lease was initially for 60% of the
building with options permitting the tenant to expand its occupancy to the
remainder of the building over the next several years. The first such option for
an additional 10% of the space was exercised in the fourth quarter of 1994 and
the second option for another 10% of the space was exercised effective December
15, 1996, bringing the building to 80% leased as of March 15, 1997. In addition,
the 3100 Windy Hill Road Building, a 188,000 rentable square foot corporate
training facility occupies a 13-acre parcel of land which is wholly owned by the
Company. The training facility improvements were sold in 1983 to a limited
partnership of private investors, at which time the Company received a leasehold
mortgage note. The training facility land was simultaneously leased to the
partnership for thirty years, along with certain equipment for varying periods.
The training facility was 100% leased by the partnership to IBM through November
1993. In January 1993, the IBM lease was extended through November 30, 1998.
Concurrently with the IBM extension, the mortgage note and related leases were
also modified (see Note 3).

North Point
- -----------
North Point is a mixed-use commercial development located in north
central suburban Atlanta, Georgia off of Georgia Highway 400, a six lane state
highway that runs from downtown Atlanta to the northern Atlanta suburbs. The
Company owns approximately 167 and 230 acres located on the east and west sides
of Georgia Highway 400, respectively. Currently, only the land which is located
east of Georgia Highway 400 is being developed, but planning has begun for
additional development on the west side property. This land surrounds North
Point Mall, a 1.3 million square foot regional mall on a 100 acre site which the
Company sold in 1988. The following describes the various components of North
Point.
North Point MarketCenter and Mansell Crossing Phase II. Through
December 31, 1995, these two retail properties were owned by North Point Market
Associates, L.P. ("NPMA") a limited partnership between Cousins (82.3%) and an
affiliate of Coca-Cola (17.7%). At December 31, 1995, Cousins also had a 50%
interest with an affiliate of Coca-Cola in another partnership, Spring/Haynes
Associates, which owned approximately 11 acres of land in midtown Atlanta.
Effective January 1, 1996, Cousins and Coca-Cola entered into a transaction to
exchange their interests in these two partnerships, which effectively resulted
in Coca-Cola receiving 100% of the Spring/Haynes Associates' property and
Cousins receiving $1,092,000 in cash and 100% of North Point Market Associates,
L.P.'s properties (North Point MarketCenter and Mansell Crossing Phase II). The
net amount of Coca-Cola's minority interest of $3,825,000 in North Point Market
Associates, L.P. and the Company's investment in Spring/Haynes Associates of
$1,688,000 as of December 31, 1995 were credited against the carrying values of
North Point Market Associates, L.P.'s properties.
North Point MarketCenter, which is 100% leased as of March 15, 1997, is
a 514,000 square foot retail power center (of which 398,000 square feet are
owned by Cousins) located adjacent to North Point Mall. Mansell Crossing Phase
II, which is 100% leased as of March 15, 1997, is an approximately 103,000
square foot expansion of an existing retail power center, previously developed
by the Company for a third party, which became partially operational for
financial reporting purposes in March 1996. These two centers are located on 49
(Company owned) and 13 acres of land, respectively, at North Point.
North Point Center East. The Company owns three office buildings
located adjacent to North Point Mall and the Company's retail properties. 100
North Point Center East and 200 North Point Center East, 128,000 and 129,000
rentable square feet, respectively, became partially operational for financial
reporting purposes in April 1996 and November 1996, respectively. Construction
commenced in December 1996 on the third office building, 333 North Point Center
East, a 128,000 square foot office building, adjacent to 100 and 200 North Point
Center East. These three office buildings are located on 22 acres of land at
North Point and are 100%, 93% and 0% leased as of March 15, 1997.
Other North Point Property. Approximately 24 acres of the North
Point land are ground leased in 1 to 5 acre sites to freestanding users. These
24 acres were 100% leased as of March 15, 1997.
The remaining approximately 289 developable acres at North Point are
100% owned by the Company. Approximately 59 acres of this land are located on
the east side of Georgia Highway 400 and are zoned for mixed-use development
including retail and office space. Approximately 230 acres of the land are
located on the west side of Georgia Highway 400 and are zoned for office,
institutional and light industrial use. Other Office Properties

NationsBank Plaza. NationsBank Plaza is a Class A, 55-story, 1.3
million rentable square foot office tower designed by Kevin Roche and is located
on approximately 4 acres of land between the midtown and downtown districts of
Atlanta, Georgia. The building, which was completed in 1992, was approximately
92% leased at March 15, 1997. An affiliate of NationsBank leases 46% of the
rentable square feet. NationsBank Plaza was developed by CSC, a joint venture
formed by the Company and a wholly owned subsidiary of NationsBank, each as 50%
partners.
In October 1993, CSC fully repaid all of its debt with equity
contributions of $86.7 million made by each partner. On February 6, 1996, CSC
issued $80 million of 6.377% collateralized notes and simultaneously loaned the
$80 million proceeds to the Company (see Note 4 where discussed). At December
31, 1996, the Company's investment in CSC was approximately $102,904,000.
CSC's net income or loss and cash distributions are allocated to the
partners based on their percentage interests (50% each), subject to a preference
to Cousins, which preference resulted in Cousins recognizing $451,000 and
$36,000 in income over what it would have otherwise recognized in the years
ended December 31, 1994 and 1995, respectively. No additional preference is due
to Cousins.
First Union Tower. First Union Tower is a Class A office building
containing approximately 319,000 rentable square feet. The property is located
on approximately one acre of land in downtown Greensboro, North Carolina. First
Union Tower opened in the first quarter of 1990 and at March 15, 1997 was
approximately 94% leased.
In May 1996, pursuant to the third amendment to the North Greene
Associates partnership agreement, Weaver Downtown, L.P., the minority partner,
sold its partnership interest to Cousins for $999,000. As a result, Cousins owns
100% of the First Union Tower.
615 Peachtree Street. In August 1996, the Company acquired 615
Peachtree Street, a 147,000 rentable square foot downtown Atlanta office
building, located across from NationsBank Plaza. The 12-story office building
was purchased for $11.1 million plus a contingent future payment of up to an
additional $1 million. 615 Peachtree Street was 89% leased as of March 15, 1997.
One Independence Center. In December 1996, the Company acquired One
Independence Center, a 522,000 rentable square foot office building (including
an underground parking garage and an adjacent parking deck) located at the
intersection of Trade and Tryon in the central business district of Charlotte,
North Carolina for a purchase price of approximately $70.6 million. The Company
purchased the office building using approximately $34,612,000 of proceeds from
the tax-deferred exchanges of Lawrenceville MarketCenter and an outparcel at
North Point, $30,879,000 from the assumption of a mortgage note payable,
$18,621,000 from an additional amount drawn down on the mortgage note payable
(to bring the mortgage note payable to a total of $49,500,000) (see Note 4) and
$2,426,000 of cash. The Company also assumed $1,300,000 of municipal bonds
related to the underground parking garage. One Independence Center was 99%
leased as of March 15, 1997.
One Ninety One Peachtree Tower. One Ninety One Peachtree Tower is a
50-story, Class A office tower located in downtown Atlanta, Georgia that was
completed in December 1990. One Ninety One Peachtree Tower, which contains 1.2
million rentable square feet, was designed by John Burgee Architects, with
Phillip Johnson as design consultant.
One Ninety One Peachtree Tower was developed on approximately 2 acres
of land, of which approximately 1.5 acres is owned and approximately one-half
acre under the parking facility is leased for a 99-year term expiring in 2088
with a 99-year renewal option. One Ninety One Peachtree Tower was approximately
92% leased at March 15, 1997.
C-H Associates, Ltd. ("C-H Associates"), a partnership formed in 1988
between CREC (49%), Hines Peachtree Associates Limited Partnership (49%) and
Peachtree Palace Hotel, Ltd. (2%), owns a 20% interest in the partnership that
owns One Ninety One Peachtree Tower. C-H Associates' 20% ownership of One Ninety
One Peachtree Tower results in an effective 9.8% ownership interest by CREC,
subject to a preference in favor of the majority partner, in the One Ninety One
Peachtree Tower project. The balance of the One Ninety One Peachtree Tower
project is owned by DIHC Peachtree Associates, an affiliate of DIHC.
Through C-H Associates, CREC received 50% of the development fees from
the One Ninety One Peachtree Tower project. In addition, CREC owns a 50%
interest in two general partnerships which receive fees from leasing and
managing the One Ninety One Peachtree Tower project.
The One Ninety One Peachtree Tower project was funded substantially by
debt until March 1993, at which time DIHC Peachtree Associates contributed
equity in the amount of $145,000,000 which repaid approximately one-half of the
debt. Subsequent to the equity contribution, C-H Associates is entitled to a
priority distribution of $250,000 per year (of which the Company is entitled to
receive $112,500) for seven years beginning in 1993. The equity contributed by
DIHC Peachtree Associates is entitled to a preferred return at a rate increasing
over the first 14 years from 5.5% to 11.5% (payable after the Company's priority
return); at December 31, 1996, the cumulative undistributed preferred return was
$10,325,065. The project is subject to long-term debt of $145,000,000 at
December 31, 1996. Thereafter, the partners will share in any cash flow
distributions in accordance with their percentage interests. At December 31,
1996, the Company had a negative investment of $90,000 in the One Ninety One
Peachtree Tower project.
Ten Peachtree Place. Ten Peachtree Place is a 20-story, 259,000
rentable square foot Class A office building located in midtown Atlanta,
Georgia. Completed in 1991, this structure was designed by Michael Graves and is
currently 100% leased to Coca-Cola. Approximately four acres of adjacent land,
currently used for surface parking, are available for future development.
Ten Peachtree Place is owned by Ten Peachtree Place Associates, a
general partnership between the Company (50%) and a wholly owned subsidiary of
Coca-Cola (50%). The partnership acquired the property in 1991 for a nominal
cash investment, subject to a ten-year purchase money note. This 8% purchase
money note had an outstanding balance of $20.2 million at December 31, 1996. If
the purchase money note is paid in accordance with its terms, it will amortize
to approximately $15.3 million ($59 per rentable square foot) over the ten-year
term of the Coca-Cola lease, at which time Coca-Cola is entitled to receive the
preferred return described below and the property may be sold, released, or
returned to the lender under the purchase money note for $1.00 without penalty
or any further liability to the Company for the indebtedness. At December 31,
1996, the Company had a negative investment in Ten Peachtree Place Associates of
$4,000.
The Company anticipates that Ten Peachtree Place Associates will
generate approximately $400,000 per year of cash flows from operating activities
net of note principal amortization during the ten-year lease. The partnership
agreement generally provides that each of the partners is entitled to receive
50% of cash flows from operating activities net of note principal amortization
(excluding any sale proceeds) for ten years, after which time the Company is
entitled to 15% of cash flows (including any sale proceeds) and its partner is
entitled to receive 85% of cash flows (including any sale proceeds), until the
two partners have received a combined distribution of $15.3 million, after which
time each partner is entitled to receive 50% of cash flows (including any sale
proceeds).
CC-JM II Associates. This joint venture was formed in 1994 between the
Company and an affiliate of CarrAmerica Realty Corporation, each as 50% general
partners, to develop and own a 224,000 square foot office building in suburban
Washington, D.C. The building is 100% leased for 15 years to Booz-Allen &
Hamilton, an international consulting firm, as a part of its corporate
headquarters campus. Rent commenced on January 21, 1996. In April 1996, the
venture completed the financing of the building with a $24,675,000, 17 year
fully amortizing non-recourse mortgage note at a 7% interest rate.

Other Retail Properties
- -----------------------
Haywood Mall. Haywood Mall is an enclosed regional shopping center
located 5 miles southeast of downtown Greenville, South Carolina, which was
developed and opened in 1980, and is owned by the Company and Bellwether
Properties of South Carolina, L.P. ("Bellwether"), an affiliate of Corporate
Properties Investors. Expansion of the mall from 956,000 gross leasable square
feet ("GLA") (of which ownership is approximately 272,000 GLA) to 1,256,000 GLA
(of which ownership is approximately 330,000) was substantially completed in
1995. The balance of the mall is owned by the mall's five major department
stores. The portion of Haywood Mall owned by the Company and Bellwether was
developed on approximately 21 acres of land, of which approximately 18 acres is
owned and approximately 3 acres (of parking area) is leased under a ground lease
expiring in 2017, with five 10-year renewal options. The portion of Haywood Mall
owned by the Company and Bellwether was approximately 84% leased as of March 15,
1997.
The Company has a 50% interest in Haywood Mall. The Company
contributed $5.8 million during 1995 to fund its share of the expansion of
the mall. At December 31, 1996, the Company's investment was $20,743,000.
Other Fully Operational Retail Properties. In addition to North Point
MarketCenter and Mansell Crossing Phase II which are discussed above, the
Company owns four other retail centers which were fully operational for
financial reporting purposes as of December 31, 1996. Perimeter Expo is a
291,000 square foot retail power center (of which the Company owns 171,000
square feet) which is located in Atlanta, Georgia and was 100% leased (Company
owned) as of March 15, 1997. Presidential MarketCenter is a 478,000 square foot
retail power center (of which the Company owns 362,000 square feet) which is
located in suburban Atlanta, Georgia and was 99% leased (Company owned) as of
March 15, 1997. Lovejoy Station is a 77,000 square foot neighborhood retail
center which is located in suburban Atlanta and was 95% leased as of March 15,
1997. Greenbrier MarketCenter is a 479,000 square foot retail power center which
is located in Chesapeake, Virginia and was 99% leased as of March 15, 1997.
Partially Operational Retail Properties. The Company owns two retail
properties which were partially operational for financial reporting purposes as
of December 31, 1996. Colonial Plaza MarketCenter is a 493,000 square foot
retail power center which is located in Orlando, Florida and was 97% leased as
of March 15, 1997. Los Altos MarketCenter is a 258,000 square foot retail power
center (of which the Company owns 157,000 square feet) which is located in Long
Beach, California and was 100% leased as of March 15, 1997.
Retail Projects Under Construction. The Company owns two neighborhood
retail centers one of which was under construction as of December 31, 1996; the
land was purchased and construction commenced in January 1997 for the other
center. Rivermont Station is a 90,000 square foot neighborhood retail center
which is located in suburban Atlanta, 100% leased as of March 15, 1997, and
expected to be completed in early 1997 at a total cost of approximately $10
million. The Company purchased the land for and commenced construction on
Abbotts Bridge Station, an 85,000 square foot neighborhood retail center which
is located in suburban Atlanta and is expected to be completed in early 1998 at
a total cost of approximately $11 million. Abbotts Bridge Station was 62% leased
as of March 15, 1997.

Medical Properties
- ------------------
In July 1996, Cousins acquired the medical office building development
and management operations of The Lea Richmond Company and The Richmond
Development Company. The purchase price for the acquisition was $1.8 million
plus contingent future payments of up to an additional $1 million (of which
$200,000 was paid through December 31, 1996), subject to commencement of
development of certain medical office projects. This new division of the Company
commenced construction in July 1996 on the Presbyterian Medical Center at
University, a 67,000 rentable square foot medical office building in Charlotte,
North Carolina, which was 73% leased as of March 15, 1997.

Residential Lot Developments

As of December 31, 1996, CREC owned the following parcels of land which
are being developed into residential communities ($ in thousands):

Estimated
Total Lots Purchase
Initial on Land Money
Year Currently Lots Remaining Carrying Debt
Description Acquired Owned (1) Sold to Date Lots Value Balances
----------- -------- --------- ------------ --------- --------- --------

Brown's Farm 1993 160 116 44 $ 2,298 $ 0
West Cobb County
Suburban Atlanta, GA
Apalachee River Club 1994 186 74 112 2,992 0
Gwinnett County
Suburban Atlanta, GA
Echo Mill 1994 542 137 405 4,912 423
West Cobb County
Suburban Atlanta, GA
Barrett Downs 1994 143 41 102 1,850 0
Forsyth County
Suburban Atlanta, GA
Bradshaw Farms 1994 230 157 73 1,856 0
Cherokee County
Suburban Atlanta, GA
Alcovy Woods
Gwinnett County
Suburban Atlanta, GA 1996 121 121 1,275 1,005
----- --- --- ------- ------
Total 1,382 525 857 $15,183 $1,428
===== === === ======= ======

(1) Includes lots sold to date. Additional lots may be developed on
adjacent land on which CREC holds purchase options.

Land Held for Investment and Future Development
- -----------------------------------------------
In addition to the various land parcels located adjacent to operating
properties or projects under construction discussed above, the Company owns the
following significant land holdings either directly or indirectly through joint
venture arrangements. The Company intends to convert its land holdings to
income-producing usage or to sell portions of land holdings as opportunities
present themselves over time.
Temco Associates. Temco Associates was formed in March 1991 as a
partnership between CREC (50%) and a subsidiary of Temple-Inland Inc. (50%).
Temco Associates has an option through March 2006, with no carrying costs, to
acquire the fee simple interest in approximately 11,300 acres in Paulding
County, Georgia (northwest of Atlanta, Georgia). The partnership also has an
option to acquire a timber rights interest only in approximately 22,000 acres.
The options may be exercised in whole or in part over the option period and the
option price of the fee simple land was $780 per acre at January 1, 1997,
escalating at 6% on January 1 of each succeeding year during the term of the
option. The Temco Associates property has the potential for future residential,
industrial and commercial development. Temco Associates has to date sold parcels
of land as to which it simultaneously exercised its purchase option. During 1994
and 1996, approximately 72 and 375 acres, respectively, of the option related to
the fee simple interest was exercised and simultaneously sold for gross profits
of $243,000 and $1,427,000, respectively. None of the option was exercised in
1995.

Other Real Property Investments
- -------------------------------
Omni Norfolk Hotel. Norfolk Hotel Associates ("NHA") is a general
partnership formed in 1978 between the Company and an affiliate of Odyssey
Partners, L.P. (an investment partnership), each as 50% partners, which held a
mortgage note on and owned the land under the 442-room Omni International Hotel
in downtown Norfolk, Virginia. In January 1992, NHA terminated the land lease
and became the owner of the hotel and a long-term parking agreement with an
adjacent building owner. In April 1993, the partnership sold the hotel, but
retained its interest in the parking agreement. The partnership received a
$8,325,000 mortgage note for a portion of the sales proceeds. In July 1994, NHA
distributed to each partner a 50% interest in the parking agreement held by NHA,
and in July 1996 the Company sold its 50% interest for $2 million, resulting in
a profit to the Company of approximately $408,000 which is included in Gain on
Sale of Investment Properties in the 1996 Consolidated Statement of Income.
At December 31, 1996, the Company had an investment of $2,091,000 in
NHA. The Company has also guaranteed a $2.1 million line of credit to NHA under
which $2.0 million had been drawn at December 31, 1996 and its partner has
guaranteed an equal line of credit under which $2.0 million had been drawn at
December 31, 1996.
On February 14, 1997, the mortgage note with a balance of $8,325,000
was repaid in full. A portion of the proceeds from the repayment were used to
pay off the partnership's lines of credit, with the balance distributed to the
partners. It is anticipated that this partnership will be liquidated in 1997.
Dusseldorf Joint Venture. In 1992, Cousins entered into a joint venture
agreement for the development of a 133,000 rentable square foot office building
in Dusseldorf, Germany which is 34% leased to IBM. Cousins' venture partners are
IBM and Multi Development Corporation International B.V. ("Multi"), a Dutch real
estate development company. In December 1993, the building was presold to an
affiliate of Deutsche Bank. CREC and Multi jointly developed the building. Due
to the release of certain completion guarantees related to the building,
approximately $2.6 million of development income was recognized in September
1995 ($931,000 of which had been deferred as of December 31, 1994). An
additional $777,000 of development income was received and recognized in 1996.
Kennesaw Crossings. The Company owns Kennesaw Crossings, a 116,000
square foot shopping center in suburban Atlanta, Georgia. The center was
constructed in 1974 on 14 acres of land leased from an unrelated party through
2068. The Company's net carrying value in Kennesaw Crossings as of December 31,
1996 was $993,000.
Air Rights Near the CNN Center. The Company owns a leasehold interest
in the air rights over the approximately 365,000 square foot CNN Center parking
facility in Atlanta, Georgia, adjoining the headquarters of Turner Broadcasting
System, Inc. and Cable News Network. The air rights are developable for
additional parking or office use. The Company's net carrying value of this
property is $0.

Supplemental Financial and Leasing Information

Depreciation and amortization expense include the following components for
the years ended December 31, 1995 and 1996 ($ in thousands):

1995 1996
-------------------------------------- ---------------------------------------
Share of Share of
Unconsolidated Unconsolidated
Consolidated Joint Ventures Total Consolidated Joint Ventures Total
------------ -------------- ------- ------------ -------------- -------

Furniture, fixtures and
equipment $ 389 $ 123 $ 512 $ 306 $ 40 $ 346
Deferred financing costs -- 80 80 -- 16 16
Goodwill and related business
acquisition costs 229 41 270 363 44 407
Real estate related:
Building (including tenant
first generation) 3,578 8,142 11,720 6,336 8,958 15,294
Tenant second generation 144 655 799 214 979 1,193
------- ------- ------- ------ -------- -------
$ 4,340 $ 9,041 $13,381 $7,219 $ 10,037 $17,256
======= ======= ======= ====== ======== =======

Exclusive of new developments and purchases of furniture, fixtures and
equipment, the Company had the following capital expenditures for the years
ended December 31, 1995 and 1996, including its share of unconsolidated joint
ventures ($ in thousands):

1995 1996
------------------------------- --------------------------------
Office Retail Total Office Retail Total
------ ------ ----- ------ ------ -----

Second generation related costs $1,316 $ -- $1,316 $1,892 $ -- $1,892
Building improvements 28 23 51 3 -- 3
------ ----- ------ ------ ----- ------
Total $1,344 $ 23 $1,367 $1,895 $ -- $1,895
====== ===== ====== ====== ===== ======

Item 3. Legal Proceedings

No material legal proceedings are presently pending by or against the
Company.
Item 4. Submission of Matters to a Vote of Security Holders

No matter was submitted to a vote of security holders during the fourth
quarter of the Registrant's fiscal year ended December 31, 1996.
Item X. Executive Officers of the Registrant

The Executive Officers of the Registrant as of the date hereof are as
follows:
Name Age Office Held
---- --- -----------

Thomas G. Cousins 65 Chairman of the Board of Directors
and Chief Executive Officer
Daniel M. DuPree 50 President and Chief Operating Officer
George J. Berry 59 Senior Vice President
Tom G. Charlesworth 47 Senior Vice President, Secretary and
General Counsel
Craig B. Jones 46 Senior Vice President
Joel T. Murphy 38 Senior Vice President and President of
the Retail Division (Cousins
MarketCenters, Inc.)
John L. Murphy 51 Senior Vice President - Marketing
W. James Overton 50 Senior Vice President - Development
Lea Richmond III 49 Senior Vice President and President of
the Medical Office Division (Cousins/
Richmond)
Peter A. Tartikoff 55 Senior Vice President and Chief
Financial Officer
Relationships:
- --------------

There are no family relationships among the Executive Officers or
Directors. Term of Office:

The term of office for all officers expires at the annual directors'
meeting, but the Board has the power to remove any officer at any time. Business
Experience:

Mr. Cousins has been the Chief Executive Officer of the Company since its
inception.

Mr. DuPree joined the Company in October 1992, became Senior Vice President
in April 1993, Senior Executive Vice President in April 1995 and President and
Chief Operating Officer in November 1995. Prior to that he was President of New
Market Companies, Inc. and affiliates since 1984.

Mr. Berry has been Senior Vice President since joining the Company in
September 1990. Prior to that he was Commissioner of the State of Georgia's
Department of Industry, Trade and Tourism from 1983 to 1990.

Mr. Charlesworth joined the Company in October 1992 and became Senior Vice
President, Secretary and General Counsel in November 1992. Prior to that he
worked for certain affiliates of Thomas G. Cousins as Chief Financial Officer
and Legal Counsel.

Mr. Jones joined the Company in October 1992 and became Senior Vice
President in November 1995. From 1987 until joining the Company, he was
Executive Vice President of New Market Companies, Inc. and affiliates.

Mr. Joel Murphy joined the Company in October 1992 and became Senior Vice
President of the Company and President of the Retail Division in November 1995.
From 1988 until joining the Company, he was Senior Vice President of New Market
Companies, Inc. and affiliates.

Mr. John Murphy has been Senior Vice President since joining the Company in
December 1987.

Mr. Overton has been Senior Vice President since joining the Company in
September 1989. Prior to that he was employed by Hardin Construction Group, Inc.
from 1972 to 1989, where he served as President from 1985 to 1989.

Mr. Richmond has been Senior Vice President and President of the
Medical Office Division since he joined the Company in July 1996. Prior to that
he was President of The Lea Richmond Company and The Richmond Development
Company from 1975 to 1996.

Mr. Tartikoff has been Senior Vice President and Chief Financial Officer of
the Company since February 1986.

PART II

Item 5. Market for Registrant's Common Stock and Related Security Holder Matters
- --------------------------------------------------------------------------------

The information concerning the market prices for the Registrant's common
stock and related stockholder matters appearing under the caption "Market and
Dividend Information" on page 44 of the Registrant's 1996 Annual Report to
Stockholders is incorporated herein by reference.

Item 6. Selected Financial Data
- -------------------------------

The information appearing under the caption "Five Year Summary of Selected
Financial Data" on page 38 of the Registrant's 1996 Annual Report to
Stockholders is incorporated herein by reference.

Item 7. Management's Discussion and Analysis of Financial Condition and
- ------------------------------------------------------------------------
Results of Operations
---------------------

Management's Discussion and Analysis of Financial Condition and Results of
Operations which appears on pages 39 through 43 of the Registrant's 1996 Annual
Report to Stockholders is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data
- ----------------------------------------------------

The Consolidated Financial Statements and Notes to Consolidated
Financial Statements of the Registrant and Report of Independent Public
Accountants which appear on pages 19 through 38 of the Registrant's 1996 Annual
Report to Stockholders are incorporated herein by reference.

The information appearing under the caption "Selected Quarterly Financial
Information (Unaudited)" on page 45 of the Registrant's 1996 Annual Report to
Stockholders is incorporated herein by reference.

Other financial statements and financial statement schedules required under
Regulation S-X are filed pursuant to Item 14 of Part IV of this report.

Item 9. Changes in and Disagreements with Accountants on Accounting and
- --------------------------------------------------------------------------------
Financial Disclosure
--------------------

Not applicable.

PART III

Item 10. Directors and Executive Officers of the Registrant
- --------------------------------------------------------------

The information concerning the Directors and Executive Officers of the
Registrant that is required by this Item 10, except that which is presented in
Item X in Part I above, is included under the captions "Directors and Executive
Officers of the Company" on pages 2 through 4 and "Compliance with Section 16(a)
of the Securities Exchange Act of 1934" on page 13 of the Proxy Statement dated
March 28, 1997 relating to the 1997 Annual Meeting of the Registrant's
Stockholders, and is incorporated herein by reference.

Item 11. Executive Compensation
- ----------------------------------

The information appearing under the caption "Executive Compensation" on
pages 7 through 9 and "Compensation of Directors" on page 12 of the Proxy
Statement dated March 28, 1997 relating to the 1997 Annual Meeting of the
Registrant's Stockholders is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management
- --------------------------------------------------------------------------

The information concerning security ownership of certain beneficial owners
and management required by this Item 12 is included under the captions
"Directors and Executive Officers of the Company" on pages 2 through 6 and
"Principal Stockholders" on pages 16 and 17 of the Proxy Statement dated March
28, 1997 relating to the 1997 Annual Meeting of the Registrant's Stockholders,
and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions
- -------------------------------------------------------

The information concerning certain transactions required by this Item
13 is included under the caption "Certain Transactions" on pages 13 and 14 of
the Proxy Statement dated March 28, 1997 relating to the 1997 Annual Meeting of
the Registrant's Stockholders, and is incorporated herein by reference.

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
- ----------------------------------------------------------------------------

(a) 1. Financial Statements

A. The following Consolidated Financial Statements of the
Registrant, together with the applicable Report of
Independent Public Accountants, are contained on pages 19
through 36 of the Registrant's 1996 Annual Report to
Stockholders and are incorporated herein by reference:

Page Number
in Annual Report
----------------

Consolidated Balance Sheets - December 31, 1995
and 1996 19
Consolidated Statements of Income for the Years Ended
December 31, 1994, 1995 and 1996 20
Consolidated Statements of Stockholders' Investment for the
Years Ended December 31, 1994, 1995 and 1996 21
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1994, 1995 and 1996 22
Notes to Consolidated Financial Statements
December 31, 1994, 1995 and 1996 23
Report of Independent Public Accountants 38

B. The following Combined Financial Statements, together with
the applicable Report of Independent Public Accountants, of
Wildwood Associates and Green Valley Associates II, joint
ventures of the Registrant meeting the criteria for
significant subsidiaries under the rules and regulations of
the Securities and Exchange Commission, are filed as a part
of this report.

Page Number
in Form l0-K
------------

Report of Independent Public Accountants F-1
Combined Balance Sheets - December 31, 1995 and 1996 F-2
Combined Statements of Income for the Years
Ended December 31, 1994, 1995 and 1996 F-3
Combined Statements of Partners' Capital for the Years
Ended December 31, 1994, 1995 and 1996 F-4
Combined Statements of Cash Flows for the Years Ended
December 31, 1994, 1995 and 1996 F-5
Notes to Combined Financial Statements
December 31, 1994, 1995 and 1996 F-6 through
F-12

Item 14. Continued
- ---------------------

C. The following Financial Statements, together with the
applicable Report of Independent Auditors, of CSC
Associates, L.P., a joint venture of the Registrant meeting
the criteria for a significant subsidiary under the rules
and regulations of the Securities and Exchange Commission,
are filed as a part of this report.

Page Number
in Form l0-K
------------

Report of Independent Auditors G-1
Balance Sheets - December 31, 1995 and 1996 G-2
Statements of Operations for the Years Ended
December 31, 1994, 1995 and 1996 G-3
Statements of Partners' Capital for the Years Ended
December 31, 1994, 1995 and 1996 G-4
Statements of Cash Flows for the Years Ended
December 31, 1994, 1995 and 1996 G-5
Notes to Financial Statements G-6 through
December 31, 1994, 1995 and 1996 G-9

D. The following Financial Statements, together with the
applicable Report of Independent Auditors, of Haywood Mall
Associates, a joint venture of the Registrant meeting the
criteria for a significant subsidiary under the rules and
regulations of the Securities and Exchange Commission, are
filed as part of this report.

Page Number
in Form l0-K
------------

Report of Independent Auditors H-1
Balance Sheets - December 31, 1996 and 1995 H-2
Statements of Income for the Years Ended
December 31, 1996, 1995 and 1994 H-3
Statements of Cash Flows for the Years Ended
December 31, 1996, 1995 and 1994 H-4
Statements of Venturers' Equity for the Three Years
Ended December 31, 1996 H-5
Notes to Financial Statements H-6 through
December 31, 1996, 1995 and 1994 H-7

2. Financial Statement Schedules
-----------------------------------

The following financial statement schedules, together with the
applicable report of independent public accountants are filed as a
part of this report.
Page Number
in Form l0-K
------------

A. Cousins Properties Incorporated and Consolidated Entities:
Report of Independent Public Accountants on Schedules S-1
Schedule III- Real Estate and Accumulated
Depreciation - December 31, 1996 S-2 through
S-6

B. Wildwood Associates and Green Valley Associates II
Schedule III - Real Estate and Accumulated
Depreciation - December 31, 1996 F-13

C. CSC Associates, L.P.
Schedule III- Real Estate and Accumulated
Depreciation - December 31, 1996 G-10

D. Haywood Mall Associates
Schedule III- Real Estate and Accumulated
Depreciation - December 31, 1996 H-8

NOTE:Other schedules are omitted because of the absence of conditions under
which they are required or because the required information is given in the
financial statements or notes thereto.

Item 14. Continued
- ---------------------

3. Exhibits
--------------

3(a)(i) Articles of Incorporation of Registrant, as
restated as of April 29, 1993, filed as Exhibit
4(a) to the Registrant's Form S-3 dated September
28, 1993, and incorporated herein by reference.

3(b) By-laws of Registrant, as amended and restated as
of November 30, 1989, as further amended by the
Stockholders on April 30, 1990, and as further
amended by the Stockholders on April 29, 1993,
filed as Exhibit 4(b) to the Registrant's Form S-3
dated September 28, 1993, and incorporated herein
by reference.

4(a) Dividend Reinvestment Plan as restated as of March
27, 1995, filed in the Registrant's Form S-3 dated
March 27, 1995, and incorporated herein by
reference.

10(a)(i) Cousins Properties Incorporated 1989 Stock Option
Plan, as amended on April 26, 1994, filed as
Exhibit 99.1 to the Registrant's Form S-8 dated
December 8, 1994, and incorporated herein by
reference, as further amended by the Stockholders
on May 6, 1996, filed as Exhibit A to the
Registrant's Proxy Statement dated May 6, 1996, and
incorporated herein by reference.

10(a)(ii) Cousins Real Estate Corporation Stock Appreciation
Right Plan, amended and restated as of March 15,
1993, filed as Exhibit 10(a)(ii) to the
Registrant's Form 10-K for the year ended December
31, 1992, and incorporated herein by reference.

10(a)(iii) Cousins Properties Incorporated Stock Appreciation
Right Plan, dated as of March 15, 1993, filed as
Exhibit 10(a)(iii) to the Registrant's Form 10-K
for the year ended December 31, 1992, and
incorporated herein by reference.

10(b)(i) Cousins Properties Incorporated Profit Sharing Plan
as amended and restated effective as of January 1,
1996.

10(b)(ii) Cousins Properties Incorporated Profit Sharing
Trust Agreement as effective as of January 1, 1991,
filed as Exhibit 10(b)(ii) to the Registrant's Form
10-K for the year ended December 31, 1991, and
incorporated herein by reference.

10(c) Land lease (Kennesaw) dated December 17, 1969, and
an amendment thereto dated December 15, 1977, filed
as Exhibit l0(d) to the Registrant's Form 10-K for
the year ended December 31, 1980, and incorporated
herein by reference.

10(d) Cousins Properties Incorporated Stock Plan for
Outside Directors, as amended by the Stockholders
on May 6, 1996, filed on page 24 of the
Registrant's Proxy Statement dated May 6, 1996, and
incorporated herein by reference.

Item 14. Continued
- ---------------------

11 Schedule showing computations of weighted average
number of shares of common stock outstanding as
used to compute primary and fully diluted income
per share for each of the five years ended December
31, 1996.

13 Annual Report to Stockholders for the year ended
December 31, 1996.

21 Subsidiaries of the Registrant.

23(a) Consent of Independent Public Accountants (Arthur
Andersen LLP).

23(b) Consent of Independent Auditors (Ernst & Young
LLP).

27 Financial Data Schedule.

(b) Reports on Form 8-K.
--------------------------

A Form 8-K was filed on December 20, 1996 and a Form 8-K/A was
filed on February 18, 1997.

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Cousins Properties Incorporated
(Registrant)

Dated: March 21, 1997

BY: /s/ Kelly H. Barret
Kelly H. Barrett
Vice President and Controller
(Authorized Officer)
(Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
Signature Capacity Date
- --------- -------- ----
Principal Executive Officer:
Chairman of the Board, March 21, 1997
Chief Executive Officer
/s/ T.G. Cousins and Director
- ----------------------------
T. G. Cousins

Principal Financial and Accounting Officer:

Senior Vice President and March 21, 1997
/s/ Peter A. Tartikoff Chief Financial Officer
- ----------------------------
Peter A. Tartikoff

Additional Directors:

/s/ Richard W. Courts Director March 21, 1997
- ----------------------------
Richard W. Courts, II

/s/ Boone A. Knox Director March 21, 1997
- ----------------------------
Boone A. Knox

/s/ William Porter Payne Director March 21, 1997
- ----------------------------
William Porter Payne

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE

To the Stockholders of Cousins Properties Incorporated:

We have audited in accordance with generally accepted auditing
standards, the financial statements included in the Cousins Properties
Incorporated annual report to stockholders incorporated by reference in this
Form l0-K, and have issued our report thereon dated February 14, 1997. Our audit
was made for the purpose of forming an opinion on those statements taken as a
whole. The schedule listed in Item 14, Part (a)2.A. is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.

ARTHUR ANDERSEN LLP

Atlanta, Georgia
February 14, 1997

SCHEDULE III
(Page 1 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
($ in thousands)

Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1996
------------------- ------------------------ -----------------------------------

Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------

LAND HELD FOR INVESTMENT OR FUTURE DEVELOPMENT
- ----------------------------------------------
Wildwood - Atlanta, GA $ -- $ 11,156 $ -- $ 4,737 $ (8,888) $ 7,005 $ -- $ 7,005
North Point Property -
Fulton Co., GA -- 10,294 -- 12,213 (16,521) 5,986 -- 5,986
Midtown - Atlanta, GA -- 2,949 -- 56 (1,607) 1,398 -- 1,398
McMurray - Cobb Co., GA. -- 1,015 -- 172 (1,092) 95 -- 95
Presidential MarketCenter
Outparcels - Gwinnett
Co., GA -- 2,939 -- 603 (2,629) 913 -- 913
Lawrenceville -
Gwinnett Co., GA -- 5,543 -- 536 (3,798) 2,281 -- 2,281
Colonial Plaza MarketCenter
Orlando, FL -- 1,649 -- 183 (186) 1,646 -- 1,646
Greenbrier MarketCenter
Outparcels
Chesapeake, VA -- 3,191 -- 194 (2,511) 874 -- 874
Lovejoy Station Outparcels
Clayton Co., GA -- 575 -- -- -- 575 -- 575
Rivermont Station Outparcels
Fulton Co., GA -- 794 -- -- (474) 320 -- 320
Miscellaneous Investments -
Atlanta, GA -- 120 -- -- -- 120 -- 120
-------- -------- ------- -------- -------- -------- -------- -------
-- 40,225 -- 18,694 (37,706) 21,213 -- 21,213
-------- -------- ------- -------- -------- -------- -------- -------

Column G Column G Column H Column I
-------- -------- -------- --------

Life on
Which De-
preciation
Accumu- In 1996
lated Date of Income
Deprecia- Construc- Date Statement
Description tion (a) tion Acquired Is Computed
- ----------- -------- --------- -------- -----------

LAND HELD FOR INVESTMENT OR FUTURE DEVELOPMENT
- ----------------------------------------------
Wildwood - Atlanta, GA $ -- -- 1971-1982,1989 --
North Point Property -
Fulton Co., GA -- -- 1970-1985 --
Midtown - Atlanta, GA -- -- 1984 --
McMurray - Cobb Co., GA. -- -- 1981 --
Presidential MarketCenter
Outparcels - Gwinnett
Co., GA -- -- 1993 --
Lawrenceville -
Gwinnett Co., GA -- -- 1994 --
Colonial Plaza MarketCenter
Orlando, FL -- -- 1995 --
Greenbrier MarketCenter
Outparcels
Chesapeake, VA -- -- 1995 --
Lovejoy Station Outparcels
Clayton Co., GA -- -- 1995 --
Rivermont Station Outparcels
Fulton Co., GA -- 1996 --
Miscellaneous Investments -
Atlanta, GA -- -- 1972-1984 --
-------
--
-------

SCHEDULE III
(Page 2 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
($ in thousands)

Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1996
------------------- ------------------------ -----------------------------------

Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------

OPERATING PROPERTIES
- --------------------
First Union Tower -
Greensboro, N.C. $ -- $ 1,394 $ -- $ 30,229 $ 1,971 $ 1,399 $ 32,195 $ 33,594
Wildwood - 3301 Windy
Ridge - Atlanta., GA -- 20 -- 8,838 1,519 1,237 9,140 10,377
Kennesaw - Cobb Co., GA -- -- -- 2,337 -- -- 2,337 2,337
615 Peachtree Street
Atlanta, GA -- 4,740 6,985 -- -- 4,740 6,985 11,725
100 North Point Center East
Fulton Co., GA -- 441 -- 11,990 504 441 12,494 12,935
One Independence Center
Charlotte, NC 50,800 11,096 59,663 -- -- 11,096 59,663 70,759
Perimeter Expo -
Atlanta, GA 21,259 8,564 -- 11,137 71 8,564 11,208 19,772
North Point
Stand Alone Retail Sites -
Fulton Co., GA -- 4,559 -- 164 (904) 3,819 -- 3,819
North Point MarketCenter
Fulton Co., GA 29,477 8,500 -- 18,015 506 8,500 18,521 27,021
Presidential MarketCenter
Gwinnett Co., GA -- 3,956 -- 11,363 599 3,956 11,962 15,918
Mansell Crossing Phase II
Fulton Co., GA -- 2,172 -- 2,994 348 2,172 3,342 5,514
Lovejoy Station
Clayton Co., GA -- 1,387 -- 4,315 332 812 5,222 6,034

Life on
Which De-
preciation
Accumu- In 1996
lated Date of Income
Deprecia- Construc- Date Statement
Description tion (a) tion Acquired Is Computed
- ----------- -------- --------- -------- -----------

OPERATING PROPERTIES
- --------------------
First Union Tower -
Greensboro, N.C. $ 9,539 1988-1990 1987 40 Years
Wildwood - 3301 Windy
Ridge - Atlanta., GA 3,523 1984 1984 30 Years
Kennesaw - Cobb Co., GA 1,344 1974 1973 30 Years
615 Peachtree Street
Atlanta, GA 172 -- 1996 15 Years
100 North Point Center East
Fulton Co., GA 438 1994 1994 40 Years
One Independence Center
Charlotte, NC 221 -- 1996 25 Years
Perimeter Expo -
Atlanta, GA 1,313 1993 1993 30 Years
North Point
Stand Alone Retail Sites -
Fulton Co., GA 50 -- 1970-1985 --
North Point MarketCenter
Fulton Co., GA 2,174 1993-1994 1970-1985 30 Years
Presidential MarketCenter
Gwinnett Co., GA 954 1993-1994 1993 30 Years
Mansell Crossing Phase II
Fulton Co., GA 117 1995 1995 30 Years
Lovejoy Station
Clayton Co., GA 196 1994 1994 30 Years

SCHEDULE III
(Page 3 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
($ in thousands)

Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1996
------------------- ------------------------ -----------------------------------

Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------

OPERATING PROPERTIES (Continued)
- --------------------------------
Greenbrier MarketCenter
Chesapeake, VA $ -- $ 5,500 $ -- $ 25,665 $ 1,584 $ 5,500 $ 27,249 $ 32,749
Miscellaneous -- 398 145 77 (475) -- 145 145
-------- -------- ------- -------- -------- -------- -------- -------
101,536 52,727 66,793 127,124 6,055 52,236 200,463 252,699
-------- -------- ------- -------- -------- -------- -------- -------

PROJECTS UNDER CONSTRUCTION
- ---------------------------
Mansell Crossing Phase II-Expansion
Fulton Co., GA $ -- 1,100 -- 725 64 1,100 789 1,889
200 North Point Center East
Fulton County, GA -- 441 -- 9,998 363 441 10,361 10,802
333 North Point Center East
Fulton County, GA -- 618 -- 605 10 618 615 1,233
Presbyterian Medical
Center at University
Charlotte, NC -- -- -- 1,935 14 -- 1,949 1,949
Colonial Plaza MarketCenter
Orlando, FL -- 8,500 -- 26,894 1,905 8,500 28,799 37,299
Presidential MarketCenter-Expansion
Gwinnett Co., GA -- 1,968 -- 1,579 123 1,968 1,702 3,670
Rivermont Station
Fulton Co., GA -- 2,050 -- 7,262 421 2,050 7,683 9,733
Los Altos MarketCenter
Long Beach, CA -- 4,900 -- 13,803 580 4,900 14,383 19,283
Other -- 2,578 -- 85 47 2,578 132 2,710
-- 22,155 -- 62,886 3,527 22,155 66,413 88,568

Life on
Which De-
preciation
Accumu- In 1996
lated Date of Income
Deprecia- Construc- Date Statement
Description tion (a) tion Acquired Is Computed
- ----------- -------- --------- -------- -----------

OPERATING PROPERTIES (Continued)
- --------------------------------
Greenbrier MarketCenter
Chesapeake, VA $ 191 1995 1995 30 Years
Miscellaneous 107 -- 1977-1984 Various
--------
20,339
--------
PROJECTS UNDER CONSTRUCTION
- ---------------------------
Mansell Crossing Phase II-Expansion
Fulton Co., GA -- 1995 1995 --
200 North Point Center East
Fulton County, GA -- 1995 1995 --
333 North Point Center East
Fulton County, GA -- 1996 1996 --
Presbyterian Medical
Center at University
Charlotte, NC -- 1996 1996 --
Colonial Plaza MarketCenter
Orlando, FL -- 1995 1995 --
Presidential MarketCenter-Expansion
Gwinnett Co., GA -- 1995 1995 --
Rivermont Station
Fulton Co., GA -- 1995 1995 --
Los Altos MarketCenter
Long Beach, CA -- 1996 1996 --
Other -- 1996 1996 --
-------
--
-------

SCHEDULE III
(Page 4 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
($ in thousands)

Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1996
------------------- ------------------------ -----------------------------------

Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------

RESIDENTIAL LOTS UNDER DEVELOPMENT
- ----------------------------------
Brown's Farm -
Cobb Co., GA -- 3,154 -- 3,883 (4,739) 2,298 -- 2,298
Apalachee River Club
Gwinnett Co., GA -- 1,820 -- 3,240 (2,068) 2,992 -- 2,992
Echo Mill
Cobb Co., GA 423 5,298 -- 3,907 (4,293) 4,912 -- 4,912
Barrett Downs
Forsyth Co., GA -- 1,489 -- 1,742 (1,381) 1,850 -- 1,850
Bradshaw Farms
Cherokee Co., GA -- 3,246 -- 5,887 (7,277) 1,856 -- 1,856
Alcovy Woods
Gwinnett Co., GA 1,005 1,142 -- 108 25 1,275 -- 1,275
1,428 16,149 -- 18,767 (19,733) 15,183 -- 15,183
-------- -------- ------- -------- -------- -------- --------
$102,964 $131,256 $66,793 $227,471 $(47,857) $110,787 $266,876 $377,663
======== ======== ======= ======== ======== ======== ======== ========

Life on
Which De-
preciation
Accumu- In 1996
lated Date of Income
Deprecia- Construc- Date Statement
Description tion (a) tion Acquired Is Computed
- ----------- -------- --------- -------- -----------

RESIDENTIAL LOTS UNDER DEVELOPMENT
Brown's Farm -
Cobb Co., GA -- 1993-1994 1993-1994 --
Apalachee River Club
Gwinnett Co., GA -- 1994 1994 --
Echo Mill
Cobb Co., GA -- 1994 1994 --
Barrett Downs
Forsyth Co., GA -- 1994 1994 --
Bradshaw Farms
Cherokee Co., GA -- 1994 1994 --
Alcovy Woods
Gwinnett Co., GA -- 1996 1996 --
-------
--
-------
$20,339
=======

SCHEDULE III
(Page 5 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
($ in thousands)

NOTES:
(a) Reconciliations of total real estate carrying value and accumulated
depreciation for the three years ended December 31, 1996 are as
follows:
Real Estate Accumulated Depreciation
------------------------------ --------------------------
1994 1995 1996 1994 1995 1996
---- ---- ---- ---- ---- ----

Balance at beginning of period $108,252 $149,242 $235,344 $ 9,418 $12,112 $15,483
Additions during the period:
Improvements and other
capitalized costs 53,580 97,036 181,682 -- -- --
Provision for depreciation -- -- -- 2,694 3,371 5,571
-------- -------- -------- ------- ------- -------
53,580 97,036 181,682 2,694 3,371 5,571
-------- -------- -------- ------- ------- -------

Deductions during the period:
Cost of real estate sold (12,590) (10,934) (39,363) -- -- (715)
-------- -------- -------- ------- ------- -------
(12,590) (10,934) (39,363) -- -- --
-------- -------- -------- ------- ------- -------

Balance at close of period $149,242 $235,344 $377,663 $12,112 $15,483 $20,339
======== ======== ======== ======= ======= =======

(b) Initial cost for Kennesaw was previously adjusted to reflect a write-
down of $1,430 to state the property at the then realizable value.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of Wildwood Associates and Green Valley Associates II:
We have audited the accompanying combined balance sheets of WILDWOOD ASSOCIATES
(a Georgia general partnership) and GREEN VALLEY ASSOCIATES II (a North Carolina
general partnership) as of December 31, 1995 and 1996, and the related combined
statements of income, partners' capital and cash flows for each of the three
years in the period ended December 31, 1996. These financial statements are the
responsibility of the management of the partnerships. Our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion. In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Wildwood Associates and Green
Valley Associates II as of December 31, 1995 and 1996, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedule listed in Item 14 is presented for
purposes of complying with the Securities and Exchange Commission's rules and is
not part of the basic financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.

ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 14, 1997

WILDWOOD ASSOCIATES AND GREEN VALLEY ASSOCIATES II
--------------------------------------------------
COMBINED BALANCE SHEETS
-----------------------
DECEMBER 31, 1995 AND 1996
--------------------------
($ in thousands)

1995 1996
------- --------
ASSETS
- ------

REAL ESTATE ASSETS:
Income producing properties, including land of
$37,677 and $44,366 in 1995 and 1996,
respectively (Note 7) $217,748 $239,647
Accumulated depreciation and amortization (44,900) (48,699)
-------------------
172,848 190,948
Projects under construction 15,378 19,670
Land committed to be contributed (Note 3) 13,903 9,405
Land and property predevelopment costs 12,399 11,862
-------------------
Total real estate assets 214,528 231,885
-------------------
CASH AND CASH EQUIVALENTS -- 16,511
-------------------
OTHER ASSETS:
Deferred expenses, net of accumulated amortization of
$6,078 and $6,365 in 1995 and 1996, respectively 5,641 7,249
Receivables (Note 6) 14,920 15,330
Allowance for possible losses (Note 1) (2,550) (2,550)
Furniture, fixtures and equipment, net of accumulated
depreciation of $1,276 and $1,153 in 1995 and 1996,
respectively 296 456
Other 31 29
-------------------
18,338 20,514
-------------------
$232,866 $268,910
===================
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------

NOTES PAYABLE (Note 7) $134,855 $166,490
RETAINAGE, ACCOUNTS PAYABLE AND
ACCRUED LIABILITIES 7,843 11,762
-------------------
Total liabilities 142,698 178,252
-------------------
PARTNERS' CAPITAL (Notes 3 and 4):
International Business Machines Corporation 45,084 45,329
Cousins Properties Incorporated 45,084 45,329
-------------------
Total partners' capital 90,168 90,658
-------------------
$232,866 $268,910
===================

The accompanying notes are an integral part of these combined balance sheets.

WILDWOOD ASSOCIATES AND GREEN VALLEY ASSOCIATES II
COMBINED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 and 1996

($ in thousand)

1994 1995 1996
---- ---- ----

REVENUES:
Rental income and recovery of expenses
charged directly to specific tenants $36,196 $37,589 $40,351
Interest 27 32 39
Other 82 146 115
---------------------------
Total revenues 36,305 37,767 40,505
---------------------------
EXPENSES:
Real estate taxes 2,516 3,032 3,579
Maintenance and repairs 1,991 2,207 2,622
Utilities 1,822 1,965 2,182
Management and personnel costs 1,794 1,892 2,217
Contract security 745 820 1,094
Grounds maintenance 588 646 776
Expenses charged directly to specific tenants 458 395 417
Insurance 100 98 93
Interest expense 11,790 11,478 9,712
Depreciation and amortization 8,648 8,353 8,372
Predevelopment, marketing and other expenses 342 345 293
Ground lease expense (Note 8) 322 322 295
Real estate taxes on undeveloped land (Note 3) 182 163 208
General and administrative expenses 163 167 155
---------------------------
Total expenses 31,461 31,883 32,015
---------------------------
GAIN ON SALE OF INVESTMENT
PROPERTIES (Note 8) -- -- --
---------------------------
NET INCOME $ 4,844 $ 5,884 $ 8,490
===========================

The accompanying notes are an integral part of these combined statements.

WILDWOOD ASSOCIATES AND GREEN VALLEY ASSOCIATES II
--------------------------------------------------
COMBINED STATEMENTS OF PARTNERS' CAPITAL
----------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
----------------------------------------------------

($ in thousands)

International
Business Cousins
Machines Properties
Corporation Incorporated Total
----------- ------------ -----

BALANCE, December 31, 1993 $47,720 $47,720 $95,440

Distributions (4,000) (4,000) (8,000)

Net income 2,422 2,422 4,844
-------------------------------------

BALANCE, December 31, 1994 46,142 46,142 92,284

Distributions (4,000) (4,000) (8,000)

Net income 2,942 2,942 5,884

-------------------------------------

BALANCE, December 31, 1995 45,084 45,084 90,168

Distributions (4,000) (4,000) (8,000)

Net income 4,245 4,245 8,490
-------------------------------------

BALANCE, December 31, 1996 $45,329 $45,329 $90,658
=====================================

The accompanying notes are an integral part of these combined statements.

WILDWOOD ASSOCIATES AND GREEN VALLEY ASSOCIATES II
--------------------------------------------------
COMBINED STATEMENTS OF CASH FLOWS (Note 9)
------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
----------------------------------------------------

($ in thousands)

1994 1995 1996
---- ---- ----

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 4,844 $ 5,884 $ 8,490
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 8,648 8,353 8,372
Effect of recognizing rental revenues
on a straight-line basis (349) (383) 421
Change in tenant rental receivables 51 (38) (562)
Change in accounts payable and accrued
liabilities related to operations (195) (1,004) 3,557
---------------------------
Net cash provided by operating activities 12,999 12,812 20,278
---------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property acquisition and development
expenditures (3,008) (4,940) (34,871)
Payment for deferred expenses; furniture,
fixtures and equipment; and other assets (661) (2,123) (2,978)
---------------------------
Net cash used in investing activities (3,669) (7,063) (37,849)
---------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of notes payable (630) (1,063) (1,610)
Repayment of long term financing -- (111,998) --
Proceeds from long term refinancing -- 98,000 70,000
Proceeds from line of credit 12,600 31,212 75,733
Repayments under line of credit (13,300) (13,904) (102,041)
Partnership distributions (8,000) (8,000) (8,000)
---------------------------
Net cash provided by (used in) financing activities (9,330) (5,753) 34,082
---------------------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS -- (4) 16,511

CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 4 4 --
---------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 4 $ -- $ 16,511
===========================

The accompanying notes are an integral part of these combined statements.

WILDWOOD ASSOCIATES AND GREEN VALLEY ASSOCIATES II
--------------------------------------------------
NOTES TO COMBINED FINANCIAL STATEMENTS
--------------------------------------
DECEMBER 31, 1994, 1995 AND 1996
--------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation:

The Combined Financial Statements include the accounts of Wildwood
Associates ("WWA") and Green Valley Associates II ("GVA II"), both of which are
general partnerships. Cousins Properties Incorporated (together with its other
consolidated entities hereinafter referred to as "Cousins") and International
Business Machines Corporation ("IBM") each have a 50% general partnership
interest in both partnerships. The financial statements of the partnerships have
been combined because of the common ownership. The combined entities are
hereinafter referred to as the "Partnerships." All transactions between WWA and
GVA II have been eliminated in the Combined Financial Statements.

Cost of Property Contributed by Cousins:

The cost of property contributed or committed to be contributed by
Cousins was recorded by WWA based upon the procedure described in Note 3. Such
cost was, in the opinion of the partners, at or below estimated fair market
value at the time of such contribution or commitment, but was in excess of
Cousins' historical cost basis.

Cost Capitalization:

All costs related to planning, development and construction of
buildings, and expenses of buildings prior to the date they become operational
for financial statement purposes, are capitalized. Interest and real estate
taxes are also capitalized to property under development.

Depreciation and Amortization:

Buildings are depreciated over 25 to 40 years. Furniture, fixtures, and
equipment are depreciated over 5 years. Leasehold improvements and tenant
improvements are amortized over the life of the leases or useful life of the
assets, whichever is shorter. Deferred expenses - which include organizational
costs, certain marketing and leasing costs, and loan acquisition costs - are
amortized over the period of estimated benefit. The straight-line method is used
for all depreciation and amortization.

Allowance for Possible Losses:

The allowance for possible losses provides for potential writeoffs of
certain tenant receivables and other tenant related assets on WWA's books. The
allowance reflects management's evaluation of the exposure to WWA based on a
specific review of its properties and the impact of current economic conditions
on those properties.

Allocation of Operating Expenses:

In accordance with certain lease agreements, certain management and
maintenance costs incurred by WWA are allocated to individual buildings or
tenants, including buildings not owned by WWA.

Income Taxes:

No provision has been made for federal or state income taxes because
each partner's proportionate share of income or loss from the Partnerships is
passed through to be included on each partner's separate tax return.

Cash and Cash Equivalents:

Cash and Cash Equivalents includes all cash and highly liquid money
market instruments. Highly liquid money market instruments include securities
and repurchase agreements with original maturities of three months or less,
money market mutual funds, and securities on which the interest rate is adjusted
to market rate at least every three months.

Rental Income:

In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 13, income on leases which include scheduled increases in rental rates over
the lease term (other than scheduled increases based on the Consumer Price
Index) is recognized on a straight-line basis.

Use of Estimates:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Impairment of Long-Lived Assets:

The Partnerships have adopted SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. SFAS No. 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. The adoption of SFAS No. 121 had no
effect on the financial results of the Partnerships and the Partnerships have
recognized no provision for real estate losses for any period presented.

2. FORMATION AND PURPOSE OF THE PARTNERSHIPS

WWA and GVA II were formed under the terms of partnership agreements
effective May 30, 1985 and March 31, 1988, respectively. The purpose of the
Partnerships is, among other things, to develop and operate selected property
within Wildwood Office Park ("Wildwood"), located in Atlanta, Georgia and the
Summit Green project located in Greensboro, North Carolina.

Wildwood is an office park containing a total of approximately 289
acres, of which approximately 94 acres are owned by WWA, and an estimated 15
acres are committed to be contributed to WWA by Cousins (see Note 3). Cousins
owns the balance of the developable acreage in the park. At December 31, 1996,
WWA's income producing real estate assets in Wildwood consisted of: five office
buildings totaling 1,882,000 rentable square feet, one office building of
250,000 rentable square feet which is under construction (including land under
such buildings totaling approximately 46 acres); land parcels totaling
approximately 15 acres leased to two banking facilities and five restaurants;
and a 2 acre site on which a child care facility is constructed. In addition,
WWA's assets include 36 acres of land held for future development, which is
composed of a 4 acre site with approximately 58,000 square feet of office space
which was purchased in 1986 for future development (classified with income
producing properties in the accompanying financial statements), and 32 acres of
other land to be developed (including additional land committed to be
contributed by Cousins) (see Note 3).

See Note 8 where the disposition of the Summit Green property is
discussed.

3. CONTRIBUTIONS TO THE PARTNERSHIPS

IBM and Cousins have each contributed or committed to contribute
$62,857,000 in cash or properties to the Partnerships. The value of property
contributed by IBM was agreed to by the partners at the time of formation of WWA
and was recorded at the cash amount IBM paid for the property just prior to
contributing it to the Partnership. The value of the property contributed and to
be contributed by Cousins was recorded on the Partnership's books at an amount
equal to the cash and property contributed by IBM for an equal (50%) partnership
interest.

The status of contributions at December 31, 1996, was as follows ($ in
thousands):

IBM COUSINS TOTAL
--- ------- -----

Cash contributed $46,590 $ 84 $ 46,674
Property contributed 16,267 53,853 70,120
Land committed to be contributed -- 8,920 8,920
--------------------------------
Total $62,857 $62,857 $125,714
================================

WWA has elected not to take title to the remaining land committed to be
contributed by Cousins until such land is needed for development. However,
Cousins' capital account was previously credited with the amount originally
required to bring it equal to IBM's, and a like amount, plus preacquisition
costs paid by WWA, were set up as an asset entitled "Land Committed To Be
Contributed." This asset account subsequently has been reduced as land actually
has been contributed, or as land yet to be contributed became associated with a
particular building.

At December 31, 1996, Cousins was committed to contribute land on which
an additional 678,051 GSF are developable, provided that regardless of planned
use or density, 38,333 GSF shall be the minimum GSF attributed to each
developable acre contributed. Cousins has also agreed to contribute
infrastructure land in Wildwood, as defined, at no cost to WWA, in order to
provide the necessary land for development of roads and utilities. The ultimate
acreage remaining to be contributed by Cousins will depend upon the actual
density achieved, but would be approximately 15 acres if the density were
similar to that achieved on land contributed to date.

WWA pays all of the expenses related to the Land Committed to be
Contributed which were $182,000, $163,000 and $208,000 in 1994, 1995 and
1996, respectively.

4. OTHER PROVISIONS OF THE PARTNERSHIP AGREEMENTS

Net income or loss and net cash flow, as defined, shall be allocated to
the partners based on their percentage interests (50% each, subject to
adjustment as provided in the partnership agreements).

In the event of dissolution of the Partnerships, the assets will be
distributed as follows:

First, to repay all debts to third parties, including any
secured loans with the partners.

Second, to each partner until each capital account is reduced
to zero.

The balance to each partner in accordance with its percentage
interest.

5. FEES TO RELATED PARTIES

The Partnerships engaged Cousins to manage, develop and lease the
Partnerships' property. Fees to Cousins incurred by the Partnerships during
1994, 1995 and 1996 were as follows ($ in thousands):

1994 1995 1996
---- ---- ----

Development and tenant
construction fees $ 57 $ 250 $ 604
Management fees 909 945 1,032
Leasing and procurement fees 189 235 1,105
----------------------------
$1,155 $1,430 $2,741
============================

6. RENTAL REVENUES

WWA leases property to the partners, as well as to unrelated third
parties. The leases with partners are at rates comparable to those quoted to
third parties. The leases typically contain escalation provisions and provisions
requiring tenants to pay a pro rata share of operating expenses. The leases
typically include renewal options and all are classified and accounted for as
operating leases.

At December 31, 1996, future minimum rentals to be received under
existing non-cancelable leases, including tenants' current pro rata share of
operating expenses are as follows ($ in thousands):

Leases
Leases With
With Third
Partners Parties Total
-------- ------- -----

1997 $ 16,371 $ 18,330 $ 34,701
1998 17,145 17,767 34,912
1999 16,896 11,937 28,833
2000 16,673 9,997 26,670
2001 12,719 7,687 20,406
Thereafter 31,829 35,902 67,731
--------------------------------
$111,633 $101,620 $213,253
================================

At December 31, 1995 and 1996, receivables which related to the
cumulative excess of revenues recognized in accordance with SFAS No. 13 over
revenues which accrued in accordance with the actual lease agreements totaled
$14,754,000 and $14,331,000, respectively. Of the 1996 amount, 57% was related
to leases with IBM.

7. NOTES PAYABLE

At December 31, 1996, notes payable consisted of the following ($ in
thousands):

Term/
Amortization Balance at
Period Final December 31,
Description Rate (Years) Maturity 1996
----------- ---- ------------ -------- ------------

Line of credit ($10 million maximum) Fed Funds + .75% 2/ N/A 9/1/97 $ --
2300 Windy Ridge Parkway Building mortgage note 7.56% 10/25 12/01/05 71,078
3200 Windy Hill Road Building mortgage note 8.23% 10/28 1/1/07 70,000
2500 Windy Ridge Parkway Building mortgage note 7.45% 10/20 12/15/05 25,412
--------
$166,490
========

On December 16, 1996, WWA completed the financing of the 3200 Windy
Hill Road Building with a $70 million mortgage note payable at an 8.23% interest
rate and maturity of January 1, 2007. Concurrent with the financing, WWA paid
down its line of credit to $0 and on January 16, 1997, made a cash distribution
of $10 million to each partner.

On January 7, 1997, WWA received a commitment for the financing of the
4100 and 4300 Wildwood Parkway Buildings which is scheduled to fund by April 1,
1997. The $30 million non-recourse mortgage note payable has an interest rate of
7.65% and a term of fifteen years.

The 2300 Windy Ridge Parkway Building and 3200 Windy Hill Road Building
mortgage notes, as well as the $30 million mortgage note on which WWA has
received a commitment, provide for additional amortization in the later years of
the notes (over that required by the amortization periods shown above)
concurrent with scheduled rent increases.

The line of credit matures September 1, 1997, but will automatically be
renewed from year to year unless the lender provides a notice of non-renewal at
least three months in advance of the annual renewal date. The line generally
prohibits new borrowings other than those under the line, or the pledging of any
assets not pledged as of August 1, 1990, without the Lender's prior approval.
The line bears a floating interest rate equal to the daily federal funds rate
plus 3/4%, and there are no fees or compensating balance arrangements required
under the line. Cousins and IBM have each severally guaranteed one-half of the
line of credit. Assets with net carrying values of $143,775,000 were pledged as
security on the Partnerships' debt.

The aggregate maturities of the indebtedness at December 31, 1996
summarized above are as follows ($ in thousands):

1997 $ 2,325
1998 3,513
1999 3,791
2000 4,093
2001 4,579
Thereafter 148,189
--------
$166,490
========

The Partnerships capitalize interest expense to property under
development as required by Statement of Financial Accounting Standards No. 34.
In the years ended December 31, 1995 and 1996, the Partnerships capitalized
interest totaling $236,000 and $1,053,000, respectively.

At December 31, 1995 and 1996, the carrying value of the Partnerships'
notes payable approximates fair value.

8. DISPOSITION OF SUMMIT GREEN

Effective December 1, 1996, WWA disposed of its interest in a 144,000
GSF office building at Summit Green in exchange for cancellation of the related
mortgage debt. In connection with this disposition, the Partnerships also may
dispose of their leasehold interest in land adjacent to the office building. The
Partnerships anticipate no material gain or loss will result from their
disposition of the Summit Green project.

The land adjacent to the formerly owned office building is subject to a
non-subordinated ground lease expiring October 31, 2084. Lease payments
effective December 1, 1996 are approximately $256,000 per year, and escalate at
ten year intervals based on the cumulative increase in the Consumer Price Index
("Index") over the prior ten year period (subject to a 5% annual cap on the
increase in such Index in any one year). The next escalation date is December 1,
2006.

9. COMBINED STATEMENTS OF CASH FLOWS-SUPPLEMENTAL INFORMATION

Interest (net of amounts capitalized) was as follows ($ in thousands):

1994 1995 1996
---- ---- ----

Interest paid $11,780 $12,011 $9,096

Significant non-cash financing and investing activities included the
following:

In 1994, the child care facility under construction with an aggregate cost
of $1,600,000 was transferred from Land and Property Predevelopment Costs to
Income Producing Properties.

In 1995 and 1996, land parcels with costs of $6,537,000 and $4,498,000,
respectively, were transferred from Land Committed To Be Contributed to Land and
Property Predevelopment Cost.

In 1996, the Partnerships recorded the disposition of the Summit Green
project (including the office building and the anticipated disposition of the
leasehold interest in the adjacent land) having a total cost of $10,447,000, and
the cancellation of $10,447,000 of related debt (see Note 8).

In 1996, two buildings with a total cost of $29,368,000 were transferred
from Projects Under Construction to Income Producing Properties.

SCHEDULE III
WILDWOOD ASSOCIATES AND GREEN VALLEY ASSOCIATES II
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
($ in thousands)

Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1996
------------------- ------------------------ -----------------------------------

Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------

Wildwood Office Park -
Cobb Co., GA
2500 Windy Ridge $ 25,413 $ 4,414 $ 14,814 $ 9,904 $ 141 $ 4,414 $ 24,859 $ 29,273
2300 Windy Ridge 71,077 8,927 -- 61,728 5,429 8,927 67,157 76,084
Parkside -- 4,274 2,553 (1,029) (45) 3,136 2,617 5,753
3200 Windy Hill 70,000 10,503 -- 67,571 5,470 10,503 73,041 83,544
4100/4300 Wildwood Parkway -- 6,689 -- 22,541 251 6,689 22,792 29,481
4200 Wildwood Parkway -- 4,347 -- 14,948 375 -- 19,670 19,670
Stand Alone Retail Sites -- 7,659 1,234 3,642 123 9,570 3,088 12,658
Land committed to
be contributed -- 9,023 -- -- 382 9,405 -- 9,405
Other land and
property -- 11,430 -- 3,459 (173) 11,575 3,141 14,716
-------- ------- -------- -------- ------- ------- -------- --------
$166,490 $67,266 $ 18,601 $182,764 $11,953 $64,219 $216,365 $280,584
======== ======= ======== ======== ======= ======= ======== ========

NOTE: (a) Reconciliations of total real estate carrying value and accumulated
depreciation for the three years ended December 31, 1996 are as
follows:
Real Estate Accumulated Depreciation
---------------------------------- --------------------------------
1994 1995 1996 1994 1995 1996
---- ---- ---- ---- ---- ----

Balance at beginning of period $249,714 $250,738 $259,428 $32,932 $40,009 $44,900
Additions during the period:
Improvements, and other
capitalized costs 1,058 8,690 32,361 -- -- --
Provisions for depreciation -- -- -- 7,111 4,891 7,296
Deductions during the period:
Retirement of fully depreciated
assets and writeoffs (34) -- -- (34) -- (16)
Disposition of Summit Green
Office Building -- -- (11,205) -- -- (3,481)
-------- -------- -------- ------- ------- -------
Balance at close of period $250,738 $259,428 $280,584 $40,009 $44,900 $48,699
======== ======== ======== ======= ======= =======

Life on
Which De-
preciation
Accumu- In 1996
lated Date of Income
Deprecia- Construc- Date Statement
Description tion (a) tion Acquired Is Computed
- ----------- -------- --------- -------- -----------

Wildwood Office Park -
Cobb Co., GA
2500 Windy Ridge $ 9,249 1985 1985 40 Years
2300 Windy Ridge 20,065 1986 1986 40 Years
Parkside 1,562 1980 1986 25 Years
3200 Windy Hill 15,813 1989 1989 40 Years
4100/4300 Wildwood Parkway 445 1995 1986 40 Years
4200 Wildwood Parkway -- 1996 1986 --
Stand Alone Retail Sites 1,027 Various 1985-1995 Various
Land committed to
be contributed -- -- 1985-1986 --
Other land and
property 538 Various 1985-1986 Various
-------
$48,699

=======

REPORT OF INDEPENDENT AUDITORS

To the Partners of
CSC Associates, L.P. (A Limited Partnership)

We have audited the accompanying balance sheets of CSC Associates, L.P. (the
Partnership) as of December 31, 1995 and 1996, and the related statements of
operations, partners' capital, and cash flows for each of the three years in the
period ended December 31, 1996. Our audits also included the financial statement
schedule of CSC Associates, L.P. listed in the Index at Item 14(a). These
financial statements and schedule are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits. We conducted our audits in
accordance with generally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion. In our opinion, the financial
statements referred to above present fairly, in all material respects, the
financial position of CSC Associates, L.P. as of December 31, 1995 and 1996, and
the results of its operations and its cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.

ERNST & YOUNG LLP

Atlanta, Georgia
January 31, 1997

CSC ASSOCIATES, L.P.
BALANCE SHEETS
DECEMBER 31, 1995 AND 1996
($ in thousands)

ASSETS
------
1995 1996
---- ----

REAL ESTATE ASSETS:

Building and improvements, including land and
land improvements of $22,818 in 1995 and 1996 $208,676 $209,141
Accumulated depreciation (21,232) (27,621)
---------------------
187,444 181,520
---------------------
CASH 97 31
---------------------
NOTE RECEIVABLE (Note 4) -- 78,304

OTHER ASSETS:

Deferred expenses, net of accumulated amortization
of $3,664 and $4,779 in 1995 and 1996, respectively 8,306 7,293
Other receivables (Note 3) 10,142 10,895
Furniture, fixtures and equipment, net of accumulated
depreciation of $1,218 and $ 1,553 in 1995 and 1996,
respectively 871 627
Other (Note 6) 29 1,021
---------------------
Total other assets 19,348 19,836
---------------------
$206,889 $279,691
=====================

LIABILITIES AND PARTNERS' CAPITAL
---------------------------------

NOTE PAYABLE (Note 4) $ -- $ 78,304

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 2,951 1,041
---------------------
Total liabilities 2,951 79,345
---------------------
PARTNERS' CAPITAL (Note 1) 203,938 200,346
---------------------
$206,889 $279,691
=====================

The accompanying notes are an integral part of these balance sheets.

CSC ASSOCIATES, L.P.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
($ in thousands)

1994 1995 1996
---- ---- ----

REVENUES:
Rental income and recovery of expenses
charged directly to specific tenants $28,931 $31,195 $33,312
Interest income (Note 4) -- -- 4,561
---------------------------
Total revenues 28,931 31,195 37,873
---------------------------
EXPENSES:
Real estate taxes 3,493 3,482 3,578
Utilities 1,198 1,103 967
Management and personnel costs 1,313 1,403 1,523
Cleaning 1,041 1,086 1,152
Contract security 412 434 640
Repairs and maintenance 352 349 408
Elevator 274 305 330
Parking 206 208 245
Insurance 111 116 112
Grounds maintenance 105 116 135
Interest expense (Note 4) -- -- 4,561
Depreciation and amortization 7,222 7,688 7,968
Marketing and other expenses 154 164 64
General and administrative expenses 41 44 82
---------------------------
Total expenses 15,922 16,498 21,765
---------------------------
NET INCOME $13,009 $14,697 $16,108
===========================
The accompanying notes are an integral part of these statements.

CSC ASSOCIATES, L.P.
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
($ in thousands)

BALANCE, December 31, 1993 $205,853

Net income 13,009
Distributions (14,150)
--------

BALANCE, December 31, 1994 204,712

Net income 14,697
Distributions (15,471)
--------

BALANCE, December 31, 1995 203,938

Net income 16,108
Distributions (19,700)
--------
BALANCE, December 31, 1996 $200,346
========

The accompanying notes are an integral part of these statements.

CSC ASSOCIATES, L.P.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
($ in thousands)

1994 1995 1996
---- ---- ----

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $13,009 $14,697 $16,108
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 7,222 7,688 7,968
Rental revenue recognized on straight-line
basis in excess of rental revenue
specified in the lease agreements (3,156) (1,148) (748)
Change in other receivables and
other assets (315) 7 (997)
Change in accounts payable and
accrued liabilities related to operations 17 1,122 (1,937)
--------------------------
Net cash provided by operating activities 16,777 22,366 20,394
--------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to building and improvements (1,120) (6,918) (571)
Payments for deferred expenses (1,060) (1,285) (143)
Investment in note receivable -- -- (80,000)
Collection of note receivable -- -- 1,696
Proceeds from (payments for) furniture, fixtures
and equipment (17) 10 (46)
--------------------------
Net cash used in investing activities (2,197) (8,193) (79,064)
--------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable -- -- 80,000
Repayment of note payable -- -- (1,696)
Partnership distributions (14,150) (15,471) (19,700)
--------------------------
Net cash provided by (used in) financing activities (14,150) (15,471) 58,604
--------------------------
NET INCREASE (DECREASE) IN CASH 430 (1,298) (66)

CASH AT BEGINNING OF YEAR 965 1,395 97
--------------------------
CASH AT END OF YEAR $ 1,395 $ 97 $ 31
==========================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the year for interest $ 15 $ -- $ 4,339
==========================

The accompanying notes are an integral part of these statements.

CSC ASSOCIATES, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1995 AND 1996

1. FORMATION OF THE PARTNERSHIP AND TERMS OF THE PARTNERSHIP AGREEMENT
-------------------------------------------------------------------

CSC Associates, L.P. ("CSC," or the "Partnership") was formed under the
terms of a Limited Partnership Agreement dated September 29, 1989 and by the
filing of its Certificate of Limited Partnership on October 27, 1989. C&S
Premises, Inc. ("Premises") and Cousins Properties Incorporated ("CPI") each own
a 1% general partnership and a 49% limited partnership interest in the
Partnership. Premises is a wholly owned subsidiary of NB Holdings Corporation
which is a wholly owned subsidiary of NationsBank Corporation. The Partnership
was formed for the purpose of developing and owning a 1.4 million gross square
foot office tower in downtown Atlanta, Georgia (the "Building"), which is the
Atlanta headquarters of NationsBank Corporation.

The Partnership Agreement and related documents (the "Agreements")
contain among other provisions, the following:

a. CPI is the Managing Partner.

b. CPI is obligated to contribute a total of $18.2 million cash to the
Partnership, all of which has been contributed. Premises is obligated to
contribute land parcels to the Partnership having an aggregate agreed upon value
of $18.2 million, all of which has been contributed, which property value, in
the opinion of the partners, was equal to the estimated fair market value of the
land at the time of formation of the Partnership. The value of the property
contributed by Premises was recorded on the Partnership's books at an amount
equal to the cash contributed by CPI for an equal (50%) partnership interest. In
October 1993, the partners each contributed an additional $86.7 million.

c. No interest is earned on partnership capital.

d. Net income or loss and cash distributions are allocated to the
partners based on their percentage interests (50% each), subject to a preference
to CPI. The CPI preference was $2.5 million, and accrued to CPI, with interest
at 9% to the extent unpaid, over the period February 1, 1992 through January 31,
1995. During the year ended December 31, 1994, CPI received distributions of the
preference and accrued interest of approximately $2.65 million. The remaining
preference amount of $71,000 was distributed to CPI in January 1995. Amounts
above the preference amount are allocated based on the partners' percentage
interests.

2. SIGNIFICANT ACCOUNTING POLICIES
-------------------------------

Capitalization Policies
- -----------------------

All costs related to planning, development and construction of the
Building, and expenditures for the Building prior to the date it became
operational for financial statement purposes, have been capitalized. Interest
expense, amortization of financing costs, and real estate taxes were also
capitalized while the Building was under development.

Depreciation and Amortization
- -----------------------------

Depreciation of the Building commenced the date the Building became
operational for financial statement purposes and the Building is being
depreciated over 40 years. Leasehold and tenant improvements are amortized over
the life of the leases or useful life of the assets, whichever is shorter.
Furniture, fixtures, and equipment are depreciated over 5 years. Deferred
expenses which include organizational costs, certain marketing and leasing
costs, and loan acquisition costs are amortized over the period of estimated
benefit. The straight line method is used for all depreciation and amortization.

Income Taxes
- ------------

No provision has been made for federal or state income taxes because
each partner's proportionate share of income or loss from the Partnership will
be passed through to be included on each partner's separate tax return.

Rental Income
- -------------

In accordance with Statement of Financial Accounting Standards No. 13
("SFAS No. 13"), income on leases which include increases in rental rates over
the lease term is recognized on a straight-line basis.

Allowance for Doubtful Accounts
- -------------------------------

From time to time, the Partnership evaluates the need to establish an
allowance for doubtful accounts based on a review of specific receivables. As of
December 31, 1995 and 1996, there is no allowance for doubtful accounts included
in the accompanying balance sheet.

Use of Estimates
- ----------------

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from these estimates.

Impairment of Long-Lived Assets
- -------------------------------

In 1995, the Partnership adopted SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. SFAS No. 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. The adoption of SFAS No. 121 had no
effect on the financial results of the Partnership.

3. LEASES
------
The Partnership has leased office space to NB Holdings Corporation, as
well as to unrelated third parties. The lease with NB Holdings Corporation was
at rates comparable to those quoted to third parties. The leases contain
escalation provisions and provisions requiring tenants to pay a pro rata share
of operating expenses. The leases typically include renewal options and all are
classified and accounted for as operating leases.

At December 31, 1996, future minimum rentals to be received under
existing non-cancelable leases, including tenants' current pro rata share of
operating expenses, are as follows ($ in thousands):

Lease Leases
With With
NB Holdings Third
Corporation Parties Total
----------- ------- -----

1997 $ 16,563 $ 16,324 $ 32,887
1998 16,762 16,563 33,325
1999 16,762 16,366 33,128
2000 16,762 16,358 33,120
2001 16,762 16,195 32,957
Subsequent to 2001 197,679 98,668 296,347
----------------------------------------
$281,290 $180,474 $461,764
========================================

In the years ended December 31, 1995 and 1996, income recognized on a
straight-line basis exceeded income which would have accrued in accordance with
the lease terms by $1,148,000 and $748,000, respectively. At December 31, 1995
and 1996, receivables which related to the cumulative excess of revenues
recognized in accordance with SFAS No. 13 over revenues which accrued in
accordance with the actual lease agreements totaled $9,684,000 and $10,432,000,
respectively. Of that amount, 20% was related to leases with NB Holdings
Corporation. At December 31, 1996, two professional services firms leased
approximately 15% and 14%, respectively, of the net rentable space of the
Building.

4. NOTE PAYABLE AND NOTE RECEIVABLE
--------------------------------

On February 6, 1996, the Partnership issued $80 million of 6.377%
collateralized notes (the "Notes"). The Notes amortize in equal monthly
installments of $590,680 based on a 20 year amortization schedule, and mature
February 15, 2011. The Notes are non-recourse obligations of the Partnership and
are secured by a Deed to Secure Debt, Assignment of Rents and Security Agreement
covering the Partnership's interest in the Building. In conjunction with this
financing, Premises transferred its 1% general partnership interest in the
partnership to C&S Premises-SPE, Inc., a wholly owned subsidiary of Premises.

The Partnership has loaned the $80 million proceeds of the Notes to CPI
under a non-recourse loan (the "CPI Loan") secured by CPI's Partnership
interests under the same payment terms as those of the Notes. CPI paid all costs
of issuing the Notes and the CPI Loan, including a $400,000 fee to an affiliate
of NationsBank Corporation. In addition, CPI pays a monthly fee to an affiliate
of NationsBank Corporation of .025% of the outstanding principal balance of the
Notes which totaled approximately $220,000 in 1996.

The estimated fair value of both the note payable and related note
receivable at December 31, 1996 was $74 million which was calculated by
discounting future cash flows under the notes at estimated rates at which
similar notes would be made currently.

The Partnership also has an unsecured $3 million line of credit
provided by an affiliate of Premises. Interest on the line is paid at a floating
rate (6.14% weighted average rate in December 1996) and interest only is payable
quarterly through July 31, 1997, at which time the entire outstanding balance is
due. There were no borrowings under the line as of December 31, 1995 and 1996.

The maturities of the Notes at December 31, 1996 are as follows (in
thousands):

1997 $ 2,157
1998 2,298
1999 2,450
2000 2,610
2001 2,782
Subsequent to 2001 66,007
-------
$78,304

=======
5. RELATED PARTIES
---------------

The Partnership engaged CPI and an affiliate of CPI to manage, develop and
lease the Building. During 1994, 1995 and 1996, fees to CPI and its affiliate
incurred by the Partnership were as follows ($ in thousands):

1994 1995 1996
---- ---- ----

Development and tenant construction fees $ 25 $ 88 $ 13
Leasing and procurement fees 230 229 101
Management fees 640 744 815
----------------------
$895 $1,061 $929
======================

6. PARKING AGREEMENT
-----------------

On February 7, 1996, CSC entered into a 25 year Cross Parking License
Agreement ("Parking Agreement") with the North Avenue Presbyterian Church
("NAPC") which allows CSC the use of 200 parking spaces in NAPC's parking deck
which is located adjacent to NAPC. The agreement commenced on October 1, 1996.
CSC paid a $1,000,000 contribution toward the construction cost of the parking
deck as consideration for the Parking Agreement. The $1,000,000 contribution is
included in Other Assets and is being amortized over the 25 year life of the
Parking Agreement. NAPC may reduce the number of parking spaces available to the
Partnership or may terminate the Parking Agreement under certain conditions
after the sixth year, at which time a partial refund of the $1,000,000 would be
due to CSC. In addition, CSC is responsible for the maintenance of the parking
deck and the payment of the related operating expenses.

SCHEDULE III

CSC ASSOCIATES, L.P.
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
($ in thousands)

Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1996
------------------- ------------------------ -----------------------------------

Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------

NationsBank Plaza
Atlanta, Georgia $ -- $18,200 $ -- $180,492 $10,449 $22,818 $186,323 $209,141
=================================================================================================

NOTE: (a) Reconciliations of total real estate carrying value and accumulated
depreciation for the three years ended December 31, 1996 are as
follows:

Real Estate Accumulated Depreciation
---------------------------------- --------------------------------
1994 1995 1996 1994 1995 1996
---- ---- ---- ---- ---- ----

Balance at beginning of period $200,781 $203,275 $208,676 $ 9,176 $14,980 $21,232
Improvements and other capitalized costs 2,494 5,401 465 -- -- --
Provision for depreciation -- -- -- 5,804 6,252 6,389
---------------------------------- --------------------------------
Balance at close of period $203,275 $208,676 $209,141 $14,980 $21,232 $27,621
================================== ================================

Life on
Which De-
preciation
Accumu- In 1996
lated Date of Income
Deprecia- Construc- Date Statement
Description tion (a) tion Acquired Is Computed
- ----------- -------- --------- -------- -----------

NationsBank Plaza
Atlanta, Georgia $27,621 1990-1992 1990 5-40
=======

REPORT OF INDEPENDENT AUDITORS

The Partners
Haywood Mall Associates
(A South Carolina Joint Venture)

We have audited the accompanying balance sheets of Haywood Mall Associates (A
South Carolina Joint Venture) as of December 31, 1996 and 1995, and the related
statements of income, cash flows and venturers' equity for each of the three
years in the period ended December 31, 1996. Our audits also included the
financial statement schedules of Haywood Mall Associates listed in the Index at
Item 14(a). These financial statements and schedules are the responsibility of
the Management of the Joint Venture. Our responsibility is to express an opinion
on these financial statements and schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Haywood Mall Associates (A
South Carolina Joint Venture) at December 31, 1996 and December 31, 1995, and
the results of its operations and its cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally accepted
accounting principles. Also, in our opinion the related financial statement
schedules, when considered in relation to the basic financial statements taken
as a whole, present fairly in all material respects the information set forth
therein.

ERNST & YOUNG LLP

New York, NY
February 6, 1997

HAYWOOD MALL ASSOCIATES
(A South Carolina Joint Venture)

BALANCE SHEETS
DECEMBER 31, 1996 AND 1995

1996 1995
----------- -----------
ASSETS
- ------

Shopping center:

Land $ 3,353,335 $ 3,353,335
Building and improvements 38,648,103 38,861,068
---------------------------
42,001,438 42,214,403
Less: accumulated depreciation 9,806,074 8,550,512
---------------------------
32,195,364 33,663,891
Cash 1,304,867 2,971,993
Receivables (principally rentals) less
allowance of $395,440 and $428,094 2,551,788 2,716,834
Other assets 5,477,821 5,178,154
---------------------------
$41,529,840 $44,530,872
===========================
LIABILITIES AND VENTURERS' EQUITY
- ---------------------------------

Accounts payable and
accrued liabilities $ 589,218 $ 1,237,422
Venturers' equity:
Cousins Properties Incorporated 19,895,026 21,268,088
Bellwether Properties of
South Carolina, L.P. 21,045,596 22,025,362
---------------------------
$41,529,840 $44,530,872
===========================

The accompanying notes are an integral part of these financial statements.

HAYWOOD MALL ASSOCIATES
(A South Carolina Joint Venture)

STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

1996 1995 1994
---- ---- ----
INCOME

Rental income:
Minimum $ 8,400,211 $ 6,667,505 $ 6,050,650
Overage 317,372 261,214 568,546
Real estate taxes 752,816 459,222 418,166
Utility charges and
other operating expense recoveries 3,935,100 3,776,482 3,287,614
-------------------------------------
Interest income 121,265 104,741 45,655
-------------------------------------
13,526,764 11,269,164 10,370,631
-------------------------------------

EXPENSES

Mortgage interest -- -- 598,389
Repairs and maintenance 1,030,119 1,014,931 882,580
Utilities 900,046 917,881 820,798
Managing agent's costs
(principally payroll) 1,096,696 924,208 840,149
Depreciation 1,539,387 1,137,513 597,732
Other 898,518 742,457 486,981
Real estate taxes 874,778 539,020 450,338
Leasehold rent 66,752 66,752 64,765
-------------------------------------
6,406,296 5,342,762 4,741,732
-------------------------------------
INCOME BEFORE
EXTRAORDINARY ITEM 7,120,468 5,926,402 5,628,899

Extraordinary loss from
prepayment of mortgage debt -- -- 680,277
-------------------------------------
NET INCOME $ 7,120,468 $ 5,926,402 $ 4,948,622
=====================================

The accompanying notes are an integral part of these financial statements.

HAYWOOD MALL ASSOCIATES
(A South Carolina Joint Venture)

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

1996 1995 1994
---- ---- ----
OPERATING ACTIVITIES

Net income $7,120,468 $ 5,926,402 $ 4,948,622
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,539,387 1,137,513 597,732
Amortization of deferred charges 632,203 482,746 363,230
Straight line adjustment for
step lease rentals (47,352) (209,567) (114,085)
Loss from prepayment of
mortgage debt -- -- 680,277
Change in operating assets and
liabilities:
Decrease/(increase) in receivables 212,398 (518,551) (134,841)
Increase in other assets, principally
deferred leasing costs (931,870) (3,596,952) (543,502)
(Decrease)/increase in accounts payable
and accrued liabilities (648,204) 280,869 58,522
------------------------------------
Net Cash Provided by
Operating Activities 7,877,030 3,502,460 5,855,955
------------------------------------
INVESTING ACTIVITIES
Investments in shopping center (70,860) (7,658,996) (11,864,544)
------------------------------------
Cash Used in Investing Activities (70,860) (7,658,996) (11,864,544)
------------------------------------
FINANCING ACTIVITIES
Principal payments on mortgages -- -- (92,492)
Prepayment of mortgage debt -- -- (20,116,762)
Cash distributions (9,530,000) (6,698,000) (5,758,268)
Partners' capital contributions 56,704 12,196,032 32,031,738
------------------------------------
Net Cash (Used in)/Provided by
Financing Activities (9,473,296) 5,498,032 6,064,216
------------------------------------
(Decrease)/increase in cash (1,667,126) 1,341,496 55,627
Cash at beginning of year 2,971,993 1,630,497 1,574,870
------------------------------------
Cash at end of year $1,304,867 $ 2,971,993 $ 1,630,497
====================================
SUPPLEMENTAL DISCLOSURE
Interest paid during the year $ -- $ -- $ 750,964
====================================

The accompanying notes are an integral part of these financial statements.

HAYWOOD MALL ASSOCIATES
(A South Carolina Joint Venture)

STATEMENTS OF VENTURERS' EQUITY
FOR THE THREE YEARS ENDED DECEMBER 31, 1996

Bellwether Cousins
Properties of Properties
South Carolina, L.P. Incorporated Total
-------------------- ------------ -----

Balance at December 31, 1993 $ 323,462 $ 323,462 $ 646,924

Net income 2,474,311 2,474,311 4,948,622
Cash distributions (2,879,134) (2,879,134) (5,758,268)
Capital contributions 16,058,382 15,973,356 32,031,738
----------------------------------------------
Balance at December 31, 1994 15,977,021 15,891,995 31,869,016
----------------------------------------------
Net income 2,963,201 2,963,201 5,926,402
Cash distributions (3,349,000) (3,349,000) (6,698,000)
Capital contributions 6,434,140 5,761,892 12,196,032
----------------------------------------------
Balance at December 31, 1995 22,025,362 21,268,088 43,293,450

Net income 3,560,234 3,560,234 7,120,468
Cash distributions (4,540,000) (4,990,000) (9,530,000)
Cash contributions -- 56,704 56,704
----------------------------------------------
Balance at December 31, 1996 $21,045,596 $19,895,026 $40,940,622
==============================================

The accompanying notes are an integral part of these financial statements.

HAYWOOD MALL ASSOCIATES
(A South Carolina Joint Venture)

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994

NOTE A - JOINT VENTURE AGREEMENT

Haywood Mall Associates (the "Venture") is a South Carolina Joint Venture
between Bellwether Properties of South Carolina, L.P., a South Carolina Limited
Partnership, and Cousins Properties Incorporated (hereinafter collectively
referred to as the "Venturers") formed for the purpose of owning and operating a
regional shopping center in Greenville, South Carolina.

Under the terms of the joint venture agreement, the Venturers share equally in
the cash flow and the profits and losses of the Venture.

NOTE B - SIGNIFICANT ACCOUNTING POLICIES

Shopping Center: Land and building and improvements are stated at cost.
Depreciation of the building and improvements is computed on the straight-line
method over an estimated useful life of 35 years. The tenants' alterations are
amortized over the life of the related leases.

On January 1, 1996, the Venture adopted Statement of Financial Accounting
Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" (the Statement). The Statement requires
impairment losses to be recognized for long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows are not
sufficient to recover the assets' carrying amount. The impairment loss is
measured by comparing the fair value of the asset to its carrying amount. The
adoption of the Statement had no effect on the Venture's 1996 financial
statements.

Taxes: No provision has been made for income taxes, since any taxes which may be
payable are the liability of the individual Venturers.

Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

NOTE C - MORTGAGES PAYABLE

The mortgage notes which bore interest at 9% and 10-1/2% and matured in 2000
were prepaid as of April 29. 1994. A prepayment fee equal to 3-1/2% of the
outstanding principal balance was paid in the amount of $680,277.

NOTE D - LEASES

The Venture has a land lease with a base period that extends through the year
2017. Future lease payments due under the lease, at December 31, 1996, are as
follows:

1997 - $ 67,000
1998 - 67,000
1999 - 70,000
2000 - 72,000
2001 - 72,000
Thereafter - 1,202,000

There are five l0-year renewal option periods available beginning in the year
2017. Annual payments during the renewal periods are based upon fair market
value as determined at each renewal date.

Space in the shopping center is leased to retail tenants. Leases generally
provide for minimum rentals plus overage rentals based on the tenants' sales
volume, and also require tenants to pay a portion of real estate taxes and other
property operating expenses. Lease periods generally range from 5 to 15 years
and contain various renewal options.

Future minimum rentals (excluding expenses billable to tenants) to be received
under leases, all of which are classified and accounted for as operating leases
at December 31, 1996 are as follows:

Year Ending December 31:
Amount*
-------

1997 $ 8,090,150
1998 8,154,996
1999 7,264,576
2000 6,446,833
2001 5,829,049
Thereafter 16,882,032
-----------
TOTAL $52,667,636
===========

*Does not include rentals applicable to renewal options.

At December 31, 1996 and 1995, receivables which related to the cumulative
excess of revenues recognized in accordance with Statement of Financial
Accounting Standards No. 13 "Accounting for Leases" over revenues which accrued
in accordance with the actual lease agreements aggregates $1,992,734 and
$1,945,382, respectively.

NOTE E - RELATED PARTY TRANSACTIONS

The Venture pays Corporate Property Investors, which has an ownership interest
in one of the Venturers, a leasing fee of 1% of gross rentals received, as
defined. During the years ended December 31, 1996, 1995 and 1994, the Venture
incurred leasing fees of $94,310, $61,601 and $62,405, respectively. Such
amounts are included in managing agent's costs on the statements of income.

SCHEDULE III
HAYWOOD MALL ASSOCIATES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
($ in thousands)

Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1996
------------------- ------------------------ -----------------------------------

Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------

Haywood Mall
Greenville, S.C. $ -- $ 3,598 $ 9,630 $ 10,669 $ 0 $ 3,353 $44,344 $47,697
=================================================================================================

NOTES: (1) Estimated useful life for Buildings and Improvements.
(2) Estimated useful life for Property Equipment.
(3) Amounts will not tie to Property totals on Balance Sheet as some
real estate assets are classified as Other Assets.
(4) Reconciliations of total real estate carrying value and accumulated
depreciation for the three years ended December 31, 1996 are as
follows:

Real Estate Accumulated Depreciation
---------------------------------- --------------------------------
1994 1995 1996 1994 1995 1996
---- ---- ---- ---- ---- ----

Balance at beginning of period $23,392 $23,897 $46,976 $7,017 $7,722 $ 9,108
Improvements and other capitalized costs 505 23,079 721 -- -- --
Provision for depreciation -- -- -- 705 1,386 1,670
--------------------------------- --------------------------------
Balance at close of period $23,897 $46,976 $47,697 $7,722 $9,108 $10,778
================================= ================================

Life on
Which De-
preciation
Accumu- In 1996
lated Date of Income
Deprecia- Construc- Date Statement
Description tion (a) tion Acquired Is Computed
- ----------- -------- --------- -------- -----------

Haywood Mall
Greenville, S.C. $10,778 1979-1980 1979 35 (1)

NOTES: (1) Estimated useful life for Buildings and Improvements.
(2) Estimated useful life for Property Equipment.
(3) Amounts will not tie to Property totals on Balance Sheet as some
real estate assets are classified as Other Assets.
(4) Reconciliations of total real estate carrying value and accumulated
depreciation for the three years ended December 31, 1996 are as
follows: