The fallout of last week’s failure of Silicon Valley Bank continues to ripple all the way to Georgia.
On Wednesday, Atlanta-based Cousins Properties said the bank’s parent company is a tenant in a Phoenix office building Cousins owns. SVB Financial Group leases 205,000 square feet at the Hayden Ferry complex, which is one of the banking company’s two largest offices. In Phoenix, SVB houses back-office functions like information technology, finance and corporate shared services, Cousins said.
The banking company remains current on its lease, Cousins said in a Securities and Exchange Commission filing.
A handful of Georgia public companies have disclosed having deposits at SVB, which failed Friday in what ranks as the second-biggest banking bust in U.S. history. Many non-publicly traded Atlanta-area startups were also SVB customers.
SVB collapsed Friday after concerns about its liquidity and finances triggered a digital bank run. The vast majority of SVB depositors held accounts at the bank more than the $250,000 threshold for Federal Deposit Insurance Corp. coverage.
Over the weekend in a bid to calm nervous markets, the FDIC, Treasury Department and Federal Reserve announced all deposits in SVB and Signature Bank of New York, which failed Sunday, would be guaranteed.
SVB customers feared being unable to access their cash, make payroll or pay other expenses as regulators attempted to grapple with its closure.
In its Wednesday SEC filing, Cousins said its lease with SVB’s parent company expires in 2026. The lease “is projected to generate approximately $700,000 in straight-line revenue, inclusive of parking revenue and reimbursed operating expenses, per month through expiration.”
Since SVB was taken into receivership by the FDIC, its future and that of its parent company are still to be determined. The FDIC is likely to sell the bank’s assets to another institution.
Cousins said it has $2 million in net assets on its balance sheet that it attributes to the SVB Financial lease. Those assets would be written off if SVB Financial were to “(enter) bankruptcy and it becomes probable they will reject their lease,” though Cousins could pursue damages in court.
Cousins said it does not hold any bank accounts with SVB, nor does the developer have loans with the bank. Some Cousins tenants, however, hold letters of credit with SVB, and Cousins said it would work with tenants to replace those with other letters of credit acceptable under terms of lease agreements.
As of Wednesday, Cousins said it held security deposits “in the form of letters of credit” from SVB to Cousins totaling about $11.7 million.
