SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to _________
Commission file number: 1-12110
CAMDEN PROPERTY TRUST
(Exact Name of Registrant as Specified in Its Charter)
TEXAS 76-6088377
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
3 Greenway Plaza, Suite 1300, Houston, Texas 77046
(Address of Principal Executive Offices) (Zip Code)
(713) 354-2500
(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
As of May 15, 2001, there were 40,588,875 shares of Common Shares of Beneficial
Interest, $0.01 par value outstanding.
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CAMDEN PROPERTY TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
March 31, December 31,
2001 2000
------------ ------------
(Unaudited)
Real estate assets, at cost:
Land $ 353,465 $ 350,248
Buildings and improvements 2,140,352 2,124,740
------------ ------------
2,493,817 2,474,988
Less: accumulated depreciation (350,520) (326,723)
------------ ------------
Net operating real estate assets 2,143,297 2,148,265
Properties under development, including land 143,525 148,741
Investment in joint ventures 22,380 22,612
------------ ------------
Total real estate assets 2,309,202 2,319,618
Accounts receivable - affiliates 3,368 3,236
Notes receivable:
Affiliates 1,800 1,800
Other 80,152 72,893
Other assets, net 25,192 23,923
Cash and cash equivalents 4,125 4,936
Restricted cash 4,538 4,475
------------ ------------
Total assets $ 2,428,377 $ 2,430,881
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Notes payable:
Unsecured $ 826,947 $ 799,026
Secured 325,748 339,091
Accounts payable 10,982 13,592
Accrued real estate taxes 12,503 26,781
Accrued expenses and other liabilities 41,029 36,981
Distributions payable 31,080 28,900
------------ ------------
Total liabilities 1,248,289 1,244,371
Minority Interests:
Units convertible into perpetual preferred shares 149,815 149,815
Units convertible into common shares 59,961 60,562
------------ ------------
Total minority interests 209,776 210,377
7.33% Convertible Subordinated Debentures 14 1,950
Shareholders' Equity:
Convertible preferred shares of beneficial interest 42 42
Common shares of beneficial interest 451 450
Additional paid-in capital 1,320,052 1,312,323
Distributions in excess of net income (161,469) (153,972)
Unearned restricted share awards (10,798) (6,680)
Less: treasury shares, at cost (177,980) (177,980)
------------ ------------
Total shareholders' equity 970,298 974,183
------------ ------------
Total liabilities and shareholders' equity $ 2,428,377 $ 2,430,881
============ ============
See Notes to Consolidated Financial Statements.
2
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
Three Months
Ended March 31,
------------------------
2001 2000
----------- -----------
Revenues
Rental income $ 92,210 $ 89,518
Other property income 6,951 6,363
----------- -----------
Total property income 99,161 95,881
Equity in income of joint ventures 2,696 257
Fee and asset management 1,543 1,709
Other income 1,954 867
----------- -----------
Total revenues 105,354 98,714
----------- -----------
Expenses
Property operating and maintenance 28,159 27,706
Real estate taxes 10,066 9,990
General and administrative 3,283 3,139
Impairment provision for technology investments 1,090
Interest 17,143 16,584
Depreciation and amortization 24,496 24,599
----------- -----------
Total expenses 84,237 82,018
----------- -----------
Income before gain on sales properties and
minority interests 21,117 16,696
Gain on sales of properties 1,716 1,933
----------- -----------
Income before minority interests 22,833 18,629
Income allocated to minority interests
Distributions on units convertible into
perpetual preferred shares (3,218) (3,218)
Income allocated to units convertible into
common shares (1,071) (392)
----------- -----------
Total income allocated to minority interests (4,289) (3,610)
----------- -----------
Net income 18,544 15,019
Preferred share dividends (2,343) (2,343)
----------- -----------
Net income to common shareholders $ 16,201 $ 12,676
=========== ===========
Basic earnings per share $ 0.43 $ 0.33
Diluted earnings per share $ 0.41 $ 0.31
Distributions declared per common share $ 0.610 $ 0.5625
Weighted average number of common shares
outstanding 37,975 38,492
Weighted average number of common and
common dilutive equivalent shares outstanding 39,570 41,575
See Notes to Consolidated Financial Statements.
3
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months
Ended March 31,
------------------------
2001 2000
----------- -----------
CASH FLOW FROM OPERATING ACTIVITIES
Net income $ 18,544 $ 15,019
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 24,496 24,599
Equity in income of joint ventures, net of cash received 791 501
Gain on sale of properties (1,716) (1,933)
Income allocated to units convertible into common shares 1,071 392
Accretion of discount on unsecured notes payable 119 98
Net change in operating accounts (7,741) (10,186)
----------- -----------
Net cash provided by operating activities 35,564 28,490
CASH FLOW FROM INVESTING ACTIVITIES
Increase in real estate assets (18,855) (38,484)
Net proceeds from sale of properties 6,549 20,056
Increase in investment in joint ventures (559)
Increase in notes receivable (7,259) (9,058)
Other (2,129) (377)
----------- -----------
Net cash used in investing activities (22,253) (27,863)
CASH FLOW FROM FINANCING ACTIVITIES
Net (decrease) increase in unsecured lines of credit and
short-term borrowings (70,000) 37,000
Proceeds from notes payable 197,802
Proceeds from issuance of preferred units, net 17,136
Repayment of notes payable (113,343) (1,242)
Distributions to shareholders and minority interests (28,544) (27,101)
Repurchase of common shares and units (26,306)
Other (37) 53
----------- -----------
Net cash used in financing activities (14,122) (460)
----------- -----------
Net (decrease) increase in cash and cash equivalents (811) 167
Cash and cash equivalents, beginning of period 4,936 5,517
----------- -----------
Cash and cash equivalents, end of period $ 4,125 $ 5,684
=========== ===========
SUPPLEMENTAL INFORMATION
Cash paid for interest, net of interest capitalized $ 11,722 $ 15,078
Interest capitalized 3,103 4,162
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES
Conversion of 7.33% subordinated debentures to common
shares, net $ 1,936 $ 629
Value of shares issued under benefit plans, net 5,039 4,759
Conversion of operating partnership units to common shares 90
See Notes to Consolidated Financial Statements.
4
CAMDEN PROPERTY TRUST
Notes to Consolidated Financial Statements
(Unaudited)
1. Interim Unaudited Financial Information
The accompanying interim unaudited financial information has been prepared
according to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted according to such rules and
regulations, although management believes that the disclosures are adequate to
make the information presented not misleading. In the opinion of management, all
adjustments and eliminations, consisting only of normal recurring adjustments,
necessary to present fairly the financial position of Camden Property Trust as
of March 31, 2001 and the results of operations and cash flows for the three
months ended March 31, 2001 and 2000 have been included. The results of
operations for such interim periods are not necessarily indicative of the
results for the full year.
Business
Camden Property Trust is a real estate company with activities related to
the ownership, development, construction and management of multifamily apartment
communities in the Southwest, Southeast, Midwest and Western regions of the
United States. At March 31, 2001, we owned interests in, operated or were
developing 146 multifamily properties containing 52,318 apartment homes located
in nine states. Three of our multifamily properties containing 1,538 apartment
homes were under development at March 31, 2001. One of our newly developed
multifamily properties containing 322 apartment homes was in lease-up at March
31, 2001. Additionally, we have several sites which we intend to develop into
multifamily apartment communities.
Property Update
During the first quarter of 2001, stabilization occurred at the following
two properties totaling 924 apartment homes: The Park at Oxmoor in Louisville
and The Park at Lee Vista in Orlando. We consider a property stabilized once it
reaches 90% occupancy, or generally one year from opening the leasing office,
with some allowances for larger than average properties. Additionally,
construction continued at three properties totaling 1,538 apartment homes: The
Park at Farmers Market, Phase I in Dallas, The Park at Crown Valley in Mission
Viejo and Camden Harbour View in Long Beach. We have begun leasing at the Dallas
and Mission Viejo properties, and are expected to begin leasing during the third
quarter of 2002 at the property in Long Beach.
Dispositions during the first quarter of 2001 included one parcel of land
totaling 15.2 acres located in Houston and two operating properties with a total
of 556 apartment homes located in North Carolina. The proceeds from the land
sale totaled $6.4 million and were used to reduce indebtedness outstanding under
our unsecured line of credit. The operating properties were held through a joint
venture and the gains from these dispositions, totaling $2.6 million, are
included in "Equity in income of joint ventures".
Real Estate Assets at Cost
We capitalized $4.1 million and $6.7 million in the three months ended
March 31, 2001 and 2000, respectively, of renovation and improvement costs which
we believe extended the economic lives and enhanced the earnings of our
multifamily properties.
5
Property Operating and Maintenance Expenses
Property operating and maintenance expenses included normal repairs and
maintenance totaling $6.9 million for the three months ended March 31, 2001,
compared to $7.0 million for the three months ended March 31, 2000.
Common Share Dividend Declaration
In March 2001, we announced that our Board of Trust Managers had declared a
dividend of $0.61 per share for the first quarter of 2001 which was paid on
April 17, 2001 to all common shareholders of record as of March 30, 2001. We
paid an equivalent amount per unit to holders of common operating partnership
units. This distribution to common shareholders and holders of common operating
partnership units equates to an annualized dividend rate of $2.44 per share or
unit.
Preferred Share Dividend Declaration
In March 2001, we announced that our Board of Trust Managers had declared a
quarterly dividend on our preferred shares of $0.5625 per share payable May 15,
2001 to all preferred shareholders of record as of March 30, 2001.
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities", which is effective for all
fiscal years beginning after June 15, 2000. SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities. Under SFAS No. 133, certain contracts that were not formerly
considered derivatives may now meet the definition of a derivative. We have
adopted SFAS No. 133 effective January 1, 2001. The adoption of SFAS No. 133 did
not have a material impact on our financial position, results of operations, or
cash flows.
6
Earnings Per Share
The following table presents information necessary to calculate basic and
diluted earnings per share for the three months ended March 31, 2001 and 2000:
Three Months
Ended March 31,
------------------------
2001 2000
----------- -----------
Basic earnings per share:
Weighted average common shares outstanding 37,975 38,492
=========== ===========
Basic earnings per share $ 0.43 $ 0.33
=========== ===========
Diluted earnings per share:
Weighted average common shares outstanding 37,975 38,492
Shares issuable from assumed conversion of:
Common share options and awards granted 1,022 533
Units convertible into common shares 573 2,550
----------- -----------
Weighted average common shares outstanding, as adjusted 39,570 41,575
=========== ===========
Diluted earnings per share $ 0.41 $ 0.31
=========== ===========
Earnings for basic and diluted computation:
Net income $ 18,544 $ 15,019
Less: Preferred share dividends (2,343) (2,343)
----------- -----------
Net income to common shareholders
(Basic diluted earnings per share computation) 16,201 12,676
Income allocated to operating partnership units 392
----------- -----------
Net income to common shareholders, as adjusted
(Diluted earnings per share computation) $ 16,201 $ 13,068
=========== ===========
2. Notes Receivable
We have entered into agreements with unaffiliated third parties to develop,
construct, and manage nine multifamily projects containing a total of 3,112
apartment homes. We are providing financing for a portion of each project in the
form of notes receivable which mature through 2005. These notes earn interest at
10% annually and are secured by second liens on the assets and partial
guarantees by the third party owners. We expect these notes to be repaid from
operating cash flow or proceeds from the sale of the individual properties. At
March 31, 2001 and 2000, these notes had principal balances totaling $78.0
million and $37.2 million, respectively, and we anticipate funding up to an
aggregate of $110 million in connection with these projects. We earn fees for
managing the development, construction and eventual operations of these
properties. The related fees we earned for these projects totaled $249,000 and
$829,000 million for the quarters ended March 31, 2001 and 2000, respectively.
We have begun construction on four of these projects, and initial occupancy has
begun on three of the projects. We have the option to purchase these properties
in the future at a price to be determined based upon the property's performance
and an agreed valuation model.
7
The following is a detail of our third party construction subject to notes
receivable.
Number of Estimated Estimated/ Estimated/
Apartment Cost Actual Date Actual Date of
Property and Location Homes ($ millions) of Completion Stabilization
- ----------------------------------------------- --------- ------------ ------------- --------------
Stabilized
Pecos Ranch
Phoenix, AZ 272 $ 21 4Q00 1Q01
In lease-up
Marina Pointe II
Tampa, FL 352 30 1Q01 3Q01
Creekside
Denver, CO 279 32 2Q01 4Q01
Under Construction
Ybor City
Tampa, FL 454 40 4Q01 3Q02
Pre-Development
Little Italy
San Diego, CA 160 32
Otay Ranch
San Diego, CA 422 57
California Oaks
Murietta, CA 264 35
Lee Vista II
Orlando, FL 366 31
Midtown West
Houston, TX 543 54
--------- ------------
Total Third Party Development 3,112 $ 332
========= ============
3. Technology Investments
During 2000, our Board of Trust Managers authorized us to invest in
non-real estate initiatives, including investments in e-commerce initiatives
with other multi-family real estate owners. These investments may be made in
companies that will provide our residents with a broad range of real estate
technology services including high-speed data, video and entertainment services,
as well as resident portals. These portals will provide our residents with a
variety of online services, including online rental payments and maintenance
requests, which we believe will improve their overall living experience.
As of March 31, 2001, we had $4.2 million invested into various e-commerce
companies that will provide a broad range of internet-based services to our
residents. These investments are being accounted for under the cost method and
are included in other assets in our consolidated financial statements. In
addition to our investments, we have $2.2 million in notes receivable from other
web-based companies.
During the first quarter of 2001, we expensed $1.1 million of e-commerce
investments relating to BroadBand Residential Inc. The $1.1 million included a
note receivable of approximately $600,000, and represented our total investment,
including notes receivable, in BroadBand Residential at the time of the
write-off.
8
4. Notes Payable
The following is a summary of our indebtedness:
(In millions)
March 31, December 31,
2001 2000
----------- ------------
Unsecured Line of Credit and Short Term Borrowings $ 126.0 $ 196.0
Senior Unsecured Notes
6.73% - 6.76% Notes, due 2001 50.0 150.0
7.03% Notes, due 2003 50.0 50.0
7.14% Notes, due 2004 199.3 199.2
7.16% - 7.28% Notes, due 2006 173.9 124.3
7.78% Notes, due 2011 148.3
----------- ------------
621.5 523.5
Medium Term Notes
6.68% - 6.74% Notes, due 2002 34.5 34.5
6.88% - 7.17% Notes, due 2004 30.0 30.0
7.64% Notes, due 2009 15.0 15.0
----------- ------------
79.5 79.5
Secured Notes
7.00% - 8.50% Conventional Mortgage Notes, due 2003 - 2009 224.4 237.6
5.20% - 7.29% Tax-exempt Mortgage Notes, due 2007 - 2028 101.3 101.5
----------- ------------
325.7 339.1
----------- ------------
Total Notes Payable $ 1,152.7 $ 1,138.1
=========== ============
We have a $400 million line of credit with a group of 14 banks which
matures August 2003. The scheduled interest rate is currently based on a spread
over LIBOR or Prime. The scheduled interest rates are subject to change as our
credit ratings change. Advances under the line of credit may be priced at the
scheduled rates, or we may enter into bid rate loans with participating banks at
rates below the scheduled rates. These bid rate loans have terms of six months
or less and may not exceed the lesser of $200 million or the remaining amount
available under the line of credit. The line of credit is subject to customary
financial covenants and limitations. At quarter end, we were in compliance with
all covenants and limitations.
On February 7, 2001, we issued from our $750 million shelf registration an
aggregate principal amount of $50 million of 7% five-year senior unsecured notes
maturing on February 15, 2006 and $150 million of 7.625% ten-year senior
unsecured notes maturing on February 15, 2011. Interest on the notes is payable
semiannually on February 15 and August 15, commencing on August 15, 2001. We may
redeem the notes at any time at a redemption price equal to the principal amount
and accrued interest, plus a make- whole provision. The notes are direct, senior
unsecured obligations and rank equally with all other unsecured and
unsubordinated indebtedness. The proceeds from the sale of the notes were $197.8
million, net of issuance costs. We used the net proceeds to reduce indebtedness
outstanding under the unsecured line of credit.
At March 31, 2001, the weighted average interest rate on floating rate debt
was 5.84%.
9
5. Net Change in Operating Accounts
The effect of changes in the operating accounts on cash flows from
operating activities is as follows:
(In thousands)
Three Months Ended
March 31,
----------------------
2001 2000
---------- ----------
Decrease (increase) in assets:
Accounts receivable - affiliates $ 208 $ 167
Other assets, net 4,634 (4,379)
Restricted cash (63) 318
Increase (decrease) in liabilities:
Accounts payable (2,610) 2,294
Accrued real estate taxes (13,980) (12,184)
Accrued expenses and other liabilities 4,070 3,598
---------- ----------
Net change in operating accounts $ (7,741) $ (10,186)
========== ==========
6. Convertible Subordinated Debentures
In April 1994, we issued $86.3 million aggregate principal amount of 7.33%
Convertible Subordinated Debentures which matured April 1, 2001. The debentures
were convertible at any time prior to maturity into our common shares, subject
to adjustments under certain circumstances. As of March 31, 2001, $86.2 million
in principal amount of the debentures had been converted to 3.6 million common
shares. In addition, $3.2 million of unamortized debenture issue costs have been
reclassified to additional paid-in- capital
7. Preferred Units
In 1999, our operating partnership issued $100 million of 8.5% Series B
Cumulative Redeemable Perpetual Preferred Units. Also during 1999 and 2000, our
operating partnership issued $53 million of 8.25% Series C Cumulative Redeemable
Perpetual Preferred Units. Distributions on the preferred units are payable
quarterly in arrears. The preferred units are redeemable for cash by the
operating partnership on or after the fifth anniversary of issuance at par plus
the amount of any accumulated and unpaid distributions. The preferred units are
convertible after 10 years by the holder into corresponding Cumulative
Redeemable Perpetual Preferred Shares. The preferred units are subordinate to
present and future debt.
8. Restricted Share and Option Awards
During the first three months of 2001, we granted 239,703 restricted shares
in lieu of cash compensation to certain key employees and non-employee trust
managers. The restricted shares were issued based on the market value of our
common shares at the date of grant and have vesting periods of up to five years.
We granted no options during the quarter ended March 31, 2001. During the three
month period ended March 31, 2001, previously granted options to purchase 77,041
shares became exercisable and 312,495 restricted shares vested.
10
9. Securities Repurchase Program
In 1998 and 1999, the Board of Trust Managers authorized us to repurchase
or redeem up to $200 million of our securities through open market purchases and
private transactions. As of March 31, 2001, we had repurchased 6,857,726 common
shares and redeemed 105,814 units convertible in to common shares for a total
cost of $178.0 million and $2.9 million, respectively.
10. Convertible Preferred Shares
The 4,165,000 preferred shares paid a cumulative dividend quarterly in
arrears in an amount equal to $2.25 per share per annum. The preferred shares
generally had no voting rights and had a liquidation preference of $25 per share
plus accrued and unpaid distributions. The preferred shares were convertible at
the option of the holder at any time into common shares at a conversion price of
$32.4638 per common share (equivalent to a conversion rate of 0.7701 per common
share for each preferred share), subject to adjustment in certain circumstances.
The preferred shares were not redeemable prior to April 30, 2001.
Subsequent to quarter end, we announced that we would redeem all of our
issued and outstanding preferred shares on April 30, 2001 at a redemption price
of $25.00 per share plus an amount equal to all accumulated, accrued and unpaid
dividends as of April 30, 2001. Prior to redemption, 3.1 million preferred
shares were converted into 2.4 million common shares. The remaining preferred
shares were redeemed for an aggregate of $27.1 million using funds available
under our unsecured line of credit.
11. Contingencies
Prior to our merger with Oasis Residential, Inc. in April 1998, Oasis had
been contacted by certain regulatory agencies with regards to alleged failures
to comply with the Fair Housing Amendments Act (the "Fair Housing Act") as it
pertained to nine properties (seven of which we currently own) constructed for
first occupancy after March 31, 1991. On February 1, 1999, the Justice
Department filed a lawsuit against us and several other defendants in the United
States District Court for the District of Nevada alleging (1) that the design
and construction of these properties violates the Fair Housing Act and (2) that
we, through the merger with Oasis, had discriminated in the rental of dwellings
to persons because of handicap. The complaint requests an order that (i)
declares that the defendant's policies and practices violate the Fair Housing
Act; (ii) enjoins us from (a) failing or refusing, to the extent possible, to
bring the dwelling units and public use and common use areas at these properties
and other covered units that Oasis has designed and/or constructed into
compliance with the Fair Housing Act, (b) failing or refusing to take such
affirmative steps as may be necessary to restore, as nearly as possible, the
alleged victims of the defendants alleged unlawful practices to positions they
would have been in but for the discriminatory conduct and (c) designing or
constructing any covered multi-family dwellings in the future that do not
contain the accessibility and adaptability features set forth in the Fair
Housing Act; and requires us to pay damages, including punitive damages, and a
civil penalty.
With any acquisition, we plan for and undertake renovations needed to
correct deferred maintenance, life/safety and Fair Housing matters. On January
30, 2001, a consent decree was ordered and executed in the above Justice
Department action. Under the terms of the decree, we were ordered to make
certain retrofits and implement certain educational programs and fair housing
advertising. These changes are to take place over the next five years. In
management's opinion, the costs associated with complying with the decree are
not expected to have a material impact on our financial statements.
11
We are subject to various legal proceedings and claims that arise in the
ordinary course of business. These matters are generally covered by insurance.
While the resolution of these matters cannot be predicted with certainty,
management believes that the final outcome of such matters will not have a
material adverse effect on our consolidated financial statements.
12. Subsequent Events
In the ordinary course of our business, we issue letters of intent
indicating a willingness to negotiate for the purchase or sale of multifamily
properties or development land. In accordance with the local real estate market
practice, such letters of intent are non-binding, and neither party to the
letter of intent is obligated to pursue the transaction unless and until a
definitive contract is entered into by the parties. The letters of intent and
any resulting definitive contracts provide the purchaser with time to evaluate
the properties and conduct due diligence and during which periods the purchaser
will have the ability to terminate the contracts without penalty or forfeiture
of any deposit or earnest money. There can be no assurance that definitive
contracts will be entered into with respect to any properties covered by letters
of intent or that we will acquire or sell any property as to which we may have
entered into a definitive contract. Further, due diligence periods are
frequently extended as needed. An acquisition or sale becomes probable at the
time that the due diligence period expires and the definitive contract has not
been terminated. We are then at risk under an acquisition contract, but only to
the extent of any earnest money deposits associated with the contract, and are
obligated to sell under a sales contract.
We are currently in the due diligence period on contracts for the purchase
of land for development and acquisition of a property. No assurance can be made
that we will complete the purchases or will be satisfied with the outcome of the
due diligence.
12
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Overview
The following discussion should be read in conjunction with all of the
financial statements and notes appearing elsewhere in this report as well as the
audited financial statements appearing in our 2000 Annual Report to
Shareholders. Where appropriate, comparisons are made on a dollars
per-weighted-average-unit basis in order to adjust for changes in the number of
apartment homes owned during each period. The statements contained in this
report that are not historical facts are forward-looking statements, and actual
results may differ materially from those included in the forward-looking
statements. These forward-looking statements involve risks and uncertainties
including, but not limited to, the following: changes in general economic
conditions, changes in financial markets and interest rates, our failure to
qualify as a real estate investment trust ("REIT") and environmental
uncertainties and natural disasters.
Business
Camden Property Trust is a real estate investment trust which reports as a
single business segment. At March 31, 2001, we owned interests in, operated or
were developing 146 multifamily properties containing 52,318 apartment homes
located in nine states. Three of our multifamily properties containing 1,538
apartment homes were under development at March 31, 2001. One of our newly
developed multifamily properties containing 332 apartment homes was in lease-up
at March 31, 2001. Additionally, we have several sites which we intend to
develop into multifamily apartment communities.
Property Update
During the first quarter of 2001, stabilization occurred at the following
two properties totaling 924 apartment homes: The Park at Oxmoor in Louisville
and The Park at Lee Vista in Orlando. We consider a property stabilized once it
reaches 90% occupancy, or generally one year from opening the leasing office,
with some allowances for larger than average properties. Additionally,
construction continued at three properties totaling 1,538 apartment homes: The
Park at Farmers Market, Phase I in Dallas, The Park at Crown Valley in Mission
Viejo and Camden Harbour View in Long Beach. We have begun leasing at the Dallas
and Mission Viejo properties, and are expected to begin leasing during the third
quarter of 2002 at the property in Long Beach.
Dispositions during the first quarter of 2001 included one parcel of land
totaling 15.2 acres located in Houston and two operating properties with a total
of 556 apartment homes located in North Carolina. The proceeds from the land
sale totaled $6.4 million and were used to reduce indebtedness outstanding under
our unsecured line of credit. The operating properties were held through a joint
venture and the gains from these dispositions, totaling $2.6 million, are
included in "Equity in income of joint ventures".
13
Property Portfolio
Our multifamily property portfolio, excluding land held for future
development is summarized as follows:
March 31, 2001 December 31, 2000
-------------------- ---------------------
Apartment Apartment
Homes Properties Homes Properties
--------- ---------- --------- ----------
Operating Properties
West
Las Vegas, Nevada (a) 10,653 37 10,653 37
Denver, Colorado (a) 2,529 8 2,529 8
Phoenix, Arizona 1,837 6 1,837 6
Southern California 1,272 3 1,272 3
Tucson, Arizona 821 2 821 2
Reno, Nevada 450 1 450 1
Central
Dallas, Texas (a) 8,447 23 8,447 23
Houston, Texas 7,190 16 7,190 16
St. Louis, Missouri 2,123 6 2,123 6
Austin, Texas 1,745 6 1,745 6
Corpus Christi, Texas 1,663 4 1,663 4
Kansas City, Missouri 596 1 596 1
East
Tampa, Florida 5,023 11 5,023 11
Orlando, Florida 2,804 6 2,804 6
Charlotte, North Carolina (a) 1,659 6 1,879 7
Louisville, Kentucky 1,448 5 1,448 5
Greensboro, North Carolina (a) 520 2 856 3
--------- ---------- --------- ----------
Total Operating Properties 50,780 143 51,336 145
--------- ---------- --------- ----------
Properties Under Development
West
Southern California 918 2 918 2
Central
Dallas, Texas 620 1 620 1
--------- ---------- --------- ----------
Total Properties Under Development 1,538 3 1,538 3
--------- ---------- --------- ----------
Total Properties 52,318 146 52,874 148
--------- ---------- --------- ----------
Less: Joint Venture Properties (a) 5,947 21 6,503 23
--------- ---------- --------- ----------
Total Properties Owned 100% 46,371 125 46,371 125
========= ========== ========= ==========
(a) The figures include properties held in joint ventures as follows: one
property with 708 apartment homes in Dallas (and two properties with 556
apartment homes in North Carolina at December 31, 2000) in which we own a
44% interest, the remaining interest is owned by unaffiliated private
investors; one property with 320 apartment homes in Colorado in which we
own a 50% interest, the remaining interest is owned by an unaffiliated
private investor; and 19 properties with 4,919 apartment homes in Nevada in
which we own a 20% interest, the remaining interest is owned by an
unaffiliated private pension fund
14
At March 31, 2001, we had one completed property under lease-up as follows:
Number of Estimated
Product Apartment % Leased Date of Date of
Property and Location Type Homes at 5/1/01 Completion Stabilization
- ------------------------------ ------- --------- --------- ---------- -------------
The Park at Arizona Center
Phoenix, AZ Urban 332 83% 1Q00 3Q01
At March 31, 2001, we had three development properties in various stages of
construction as follows:
Number of Estimated
Product Apartment % Leased Date of Date of
Property and Location Type Homes at 5/1/01 Completion Stabilization
- --------------------------------------------- ------- --------- --------- ---------- -------------
In Lease-Up
The Park at Farmers Market, Phase I
Dallas, TX Urban 620 $ 59.9 2Q01 4Q01
The Park at Crown Valley
Mission Viejo, CA Garden 380 58.5 3Q01 4Q01
Under Construction
Camden Harbour View
Long Beach, CA Urban 538 120.0 2Q03 2Q04
------- --------- --------- ---------- -------------
Total for three development properties 1,538 $ 238.4
========= =========
We stage our construction to allow leasing and occupancy during the
construction period which we believe minimizes the duration of the lease-up
period following completion of construction. Our accounting policy related to
properties in the development and leasing phase is that all operating expenses,
excluding depreciation, associated with occupied apartment homes are expensed
against revenues generated by those apartment homes as they become occupied. All
construction and carrying costs are capitalized and reported on the balance
sheet in "Properties under development, including land" until individual
buildings are completed. Upon completion of each building, the total cost of
that building and the associated land is transferred to "Land" and "Buildings
and improvements" and the assets are depreciated over their estimated useful
lives using the straight-line method of depreciation. Upon achieving 90%
occupancy, or generally one year from opening the leasing office (with some
allowances for larger than average properties), whichever occurs first, all
apartment homes are considered operating and we begin expensing all items that
were previously considered as carrying costs.
Properties under development in our consolidated financial statements
includes $90.7 million related to the development of three urban land projects
located in Dallas, Houston and Long Beach, California. Of this amount, $38.2
million relates to two of our current development projects - The Park at Farmers
Market in Dallas and Camden Harbour View in Long Beach. We have an additional
$24.0 million invested in Dallas, which we may use for the future development of
Farmers Market, Phase II, and we are also in the construction phase of for-sale
townhomes in this area. We have $28.5 million invested in additional land under
development in Houston and Long Beach. We are currently in the planning phase
with respect to these properties to determine whether to further develop
apartment homes in these areas. We may also sell certain parcels of all three
properties to third parties for commercial and retail development.
15
Comparison of the Quarter Ended March 31, 2001 and March 31, 2000
Earnings before interest, depreciation and amortization increased $4.9
million, or 8.4%, from $57.9 million to $62.8 million for the three months ended
March 31, 2000 and 2001, respectively. The weighted average number of apartment
homes for the first quarter of 2001 decreased by 1,877 apartment homes, or 4.2%,
from 46,915 to 45,038. Total operating properties were 122 and 133 at March 31,
2001 and 2000, respectively. The 45,038 weighted average apartment homes and the
122 operating properties exclude the impact of our ownership interest in
properties owned in joint ventures.
Our apartment communities generate rental revenue and other income through
the leasing of apartment homes. Revenues from our rental operations comprised
94% and 97% of our total revenues for the quarters ended March 31, 2001 and
2000, respectively. The decrease in rental revenue as a percent of total revenue
is due to the increase in Equity in income of joint ventures, which increased as
a result of gains recognized from the sale of two properties held in a joint
venture. Our primary financial focus for our apartment communities is net
operating income. Net operating income represents total property revenues less
property operating and maintenance expenses, including real estate taxes. Net
operating income increased $2.8 million, or 4.7%, from $58.2 million to $60.9
million for the quarters ended March 30, 2000 and 2001, respectively.
Rental income for the quarter ended March 31, 2001 increased $2.7 million,
or 3.0%, over the quarter ended March 31, 2000. Rental income per apartment home
per month increased $46 or 7.2%, from $636 to $682 for the first quarters of
2000 and 2001, respectively. The increase was primarily due to increased revenue
growth from the stabilized real estate portfolio and higher average rental rates
on the completed development properties. Additionally, properties sold in 2000
had average rental rates which were significantly lower than the portfolio
average. Overall average occupancy increased from 93.0% for the quarter ended
March 31, 2000 to 94.7% for the quarter ended March 31, 2001.
Other property income increased $588,000 from $6.4 million to $7.0 million
for the three months ended March 31, 2000 and 2001, respectively, which
represents a monthly increase of $6 per apartment home. The increase in other
property income was due primarily to increases from revenue sources such as
telephone, cable and water.
Equity in income of joint ventures increased $2.4 million over the first
quarter 2000, primarily from gains recognized in one of our joint ventures from
the sale of two properties totaling 556 apartment homes. Other income increased
$1.1 million for the quarter ended March 31, 2001 compared to the same period in
2000. This increase was due to interest earned on our third party construction
notes receivable.
Property operating and maintenance expenses increased $450,000, or 1.6%,
from $27.7 million for the quarter ended March 31, 2000 to $28.2 million for the
quarter ended March 31, 2001. On an annualized basis, property operating and
maintenance expenses increased $137 per unit, or 6.7%. This increase is
primarily due to increases in salary and benefit expenses per unit, as well as
an increase in property insurance costs. Property operating and maintenance
expenses as a percent of total property income decreased from 28.9% to 28.4% for
the quarters ended March 31, 2000 and 2001, respectively. Our operating expense
ratios decreased primarily as a result of operating efficiencies generated by
our newly developed properties. Also, the operating expense ratios for the
properties sold in 2000 were higher than the portfolio average.
Real estate taxes increased $75,000 from $10.0 million to $10.1 million for
the first quarters of 2000 and 2001, respectively, which represents an annual
increase of $42 per apartment home. The increase was primarily due to increases
in the valuations of renovated and developed properties and increases in
property tax rates.
16
General and administrative expenses increased $144,000 from $3.1 million to
$3.3 million, but decreased as a percent of revenues from 3.2% to 3.1% for the
quarters ended March 31, 2000 and 2001 respectively.
Interest expense increased from $16.6 million to $17.1 million primarily
due to interest on new development and funding of third party construction notes
receivable. Interest capitalized was $3.1 million and $4.2 million for the
quarters ended March 31, 2001 and 2000, respectively.
Depreciation and amortization decreased from $24.6 million to $24.5
million. This decrease was due primarily to the sale of eleven properties in the
third quarter of 2000, offset by new development and capital improvements.
During the first quarter of 2001, we expensed $1.1 million of e-commerce
investments relating to BroadBand Residential Inc. The $1.1 million included a
note receivable of approximately $600,000, and represented our total investment,
including notes receivable, in BroadBand Residential at the time of the
write-off.
Gains on sale of properties for the quarter ended March 31, 2001 totaled
$1.7 million due to the sale of 15.2 acres of undeveloped land located in
Houston. Gains on sales of properties of $1.9 million for the quarter ended
March 31, 2000 related to the sale of a mini-storage facility in Las Vegas and
the sale of approximately 61 acres of undeveloped land located in Las Vegas,
Dallas and Houston.
Liquidity and Capital Resources
Financial Structure
We intend to continue maintaining what management believes to be a
conservative capital structure by:
(i) using what management believes is a prudent combination of debt
and common and preferred equity;
(ii) extending and sequencing the maturity dates of our debt where
possible;
(iii) managing interest rate exposure using fixed rate debt and hedging
where management believes it is appropriate;
(iv) borrowing on an unsecured basis in order to maintain a
substantial number of unencumbered assets; and
(v) maintaining conservative coverage ratios.
The interest expense coverage ratio, net of capitalized interest, was 3.7
and 3.5 times for the three months ended March 31, 2001 and 2000, respectively.
At March 31, 2001 and 2000, 76.7% and 76.1%, respectively, of our properties
(based on invested capital) were unencumbered.
Liquidity
We intend to meet our short-term liquidity requirements through cash flows
provided by operations, our unsecured line of credit discussed in the financial
flexibility section and other short-term borrowings. We expect that our ability
to generate cash will be sufficient to meet our short-term liquidity needs,
which include:
(i) normal operating expenses;
(ii) current debt service requirements;
(iii) recurring capital expenditures;
(iv) property developments;
(v) common share repurchases; and
(vi) distributions on our common and preferred equity.
17
We consider our long-term liquidity requirements to be the repayment of
maturing secured debt and borrowings under our unsecured line of credit and
funding of acquisitions. We intend to meet our long-term liquidity requirements
through the use of common and preferred equity capital, senior unsecured debt
and property dispositions.
We intend to concentrate our growth efforts toward selective development
and acquisition opportunities in our current markets, and through the
acquisition of existing operating portfolios and the development of properties
in selected new markets. During the three months ended March 31, 2000, we
incurred $15.1 million in development costs and no acquisition costs. We are
developing three properties at an aggregate cost of approximately $238.4
million, $132.0 million of which was incurred through March 31, 2001. We intend
to fund our developments and acquisitions through a combination of equity
capital, partnership units, medium-term notes, construction loans, other debt
securities and the unsecured line of credit. We also seek to selectively dispose
of assets that management believes have a lower projected net operating income
growth rate than the overall portfolio, or no longer conform to our operating
and investment strategies. Additionally, over the next three years, we will
continue rebalancing our portfolio with the goal of limiting any one market to
no more than 12% of total real estate assets. We expect that any such sales
should generate capital for acquisitions and new developments or for debt
reduction.
During the first quarter of 2000 we sold 15.2 acres of undeveloped land
located in Houston. Net proceeds from these sales were approximately $6.4
million. We used the proceeds to reduce indebtedness outstanding under our
unsecured line of credit.
Net cash provided by operating activities totaled $35.6 million for the
quarter ended March 31, 2001, an increase of $7.1 million, or 24.8%, over the
same period in 2000. This increase was attributable to a $2.8 million increase
in net operating income from the real estate portfolio for the quarter ended
March 31, 2001 as compared to the same period in 2000, and an increase of
$680,000 in income allocated to units convertible into common shares due to the
sale of two properties held in a joint venture. Also, other assets increased
$1.3 million, primarily from increases in technology investments.
Net cash used in investing activities totaled $22.3 million for the quarter
ended March 31, 2001 compared to $27.9 million for the same period in 2000.
Total real estate assets, before accumulated depreciation, increased $13.6
million for the quarter ended March 31, 2001, compared to $18.5 million for the
quarter ended March 31, 2000. For the quarter ended March 31, 2001, net cash
flows provided by investing activities related to $6.5 million in net proceeds
received from property dispositions. This increase in cash was offset by
expenditures for property development and capital improvements totaling $15.1
million and $4.1 million, respectively for the quarter ended March 31, 2001. For
the quarter ended March 31, 2000, expenditures for property development and
capital improvements were $30.4 million and $6.7 million, respectively.
Additionally, we received $20.1 million in net proceeds for property
dispositions during the quarter ended March 31, 2000.
Net cash used in financing activities totaled $14.1 million for the quarter
ended March 31, 2001 compared to $460,000 for the quarter ended March 31, 2000.
During the quarter ended March 31, 2001, we paid distributions totaling $28.5
million. We also received proceeds totaling $197.8 million from the issuance of
senior unsecured notes. The proceeds from these issuances were used to pay down
borrowings under our line of credit and repay notes payable, which decreased
$70.0 million and $113.3 million, respectively, for the quarter ended March 31,
2001. During the quarter ended March 31, 2000, we paid $27.1 million for
distributions and repurchased $26.3 million common shares and units convertible
into common shares. These payments were funded by the increase in borrowings
18
under our line of credit of $37.0 million. Additionally, during the quarter
ended March 31, 2000, we received proceeds of $17.1 million from the issuance of
preferred units.
In 1998, we began repurchasing our securities under a program approved by
our Board of Trust Managers. The plan allows us to repurchase or redeem up to
$200 million of our securities through open market purchases and private
transactions. Management consummates these repurchases and redemptions at the
time when they believe that we can reinvest available cash flow into our own
securities at yields which exceed those currently available on direct real
estate investments. These repurchases were made and we expect that future
repurchases, if any, will be made without incurring additional debt and, in
management's opinion, without reducing our financial flexibility. At March 31,
2001, we had repurchased approximately 6.9 million common shares and redeemed
approximately 106,000 units at a total cost of $180.9 million.
In March 2001, we announced that our Board of Trust Managers had declared a
dividend in the amount of $0.61 per share for the first quarter of 2001 which
was paid on April 17, 2001 to all common shareholders of record as of March 30,
2001. We paid an equivalent amount per unit to holders of the common operating
partnership units. This distribution to common shareholders and holders of
common operating partnership units equates to an annualized dividend rate of
$2.44 per share or unit.
In March 2001, we declared a quarterly dividend on our preferred shares in
the amount of $0.5625 per share payable May 15, 2001 to all preferred
shareholders of record as of March 30, 2001.
Subsequent to quarter end, we announced that we would redeem all of our
issued and outstanding preferred shares on April 30, 2001 at a redemption price
of $25.00 per share plus an amount equal to all accumulated, accrued and unpaid
dividends as of April 30, 2001. Prior to redemption, 3.1 million preferred
shares were converted into 2.4 million common shares. The remaining preferred
shares were redeemed for an aggregate of $27.1 million using funds available
under our unsecured line of credit.
As of March 31, 2001, we had senior unsecured debt totaling $826.9 million
and secured mortgage loans totaling $325.8 million. Our indebtedness, excluding
our unsecured line of credit, has a weighted average maturity of 6.6 years as of
March 31, 2001. Scheduled principal repayments on all notes payable outstanding
at March 31, 2001 is as follows:
(In thousands)
Year Amount
---- -----------
2001 $ 54,056
2002 40,216
2003 251,247
2004 235,044
2005 61,677
2006 and thereafter 510,455
-----------
Total $ 1,152,695
===========
The scheduled principal repayments in 2001 include $50.0 million senior
unsecured notes, which were issued in November 1996 and which we expect to repay
from the unsecured line of credit.
Financial Flexibility
We have a $400 million line of credit with a group of 14 banks which
matures August 2003. The scheduled interest rate on the line of credit is
19
currently based on a spread over LIBOR or Prime. The scheduled interest rates
are subject to change as our credit ratings change. Advances under the line of
credit may be priced at the scheduled rates, or we may enter into bid rate loans
with participating banks at rates below the scheduled rates. These bid rate
loans have terms of nine months or less and may not exceed the lesser of $200
million or the remaining amount available under the line of credit. The line of
credit is subject to customary financial covenants and limitations.
As an alternative to our unsecured line of credit, we from time to time
borrow using competitively bid unsecured short-term notes with lenders who may
or may not be a part of the unsecured line of credit bank group. Such borrowings
vary in term and pricing and are typically priced at interest rates comparable
to or below those available under the unsecured line of credit.
As of March 31, 2001, we had $274 million available under the unsecured
line of credit and $550 million available under our universal shelf
registration. We have significant unencumbered real estate assets which could be
sold or used as collateral for financing purposes should other sources of
capital not be available.
On February 7, 2001, we issued from our $750 million shelf registration an
aggregate principal amount of $50 million of 7% five-year senior unsecured notes
maturing on February 15, 2006 and $150 million of 7.625% ten-year senior
unsecured notes maturing on February 15, 2011. Interest on the notes is payable
semiannually on February 15 and August 15, commencing on August 15, 2001. We may
redeem the notes at any time at a redemption price equal to the principal amount
and accrued interest, plus a make-whole provision. The notes are direct, senior
unsecured obligations and rank equally with all other unsecured and
unsubordinated indebtedness. The proceeds from the sale of the notes were $197.8
million, net of issuance costs. We used the net proceeds to reduce indebtedness
outstanding under the unsecured line of credit.
At March 31, 2001, the weighted average interest rate on floating rate debt
was 5.84%.
Funds from Operations
Management considers FFO to be an appropriate measure of performance of an
equity REIT. The National Association of Real Estate Investment Trusts currently
defines FFO as net income (computed in accordance with generally accepted
accounting principles), excluding gains (or losses) from debt restructuring and
sales of property, plus real estate depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures. Our definition
of diluted FFO assumes conversion at the beginning of the period of all dilutive
convertible securities, including minority interests, which are convertible into
common equity.
We believe that in order to facilitate a clear understanding of our
consolidated historical operating results, FFO should be examined in conjunction
with net income as presented in the consolidated financial statements and data
included elsewhere in this report. FFO is not defined by generally accepted
accounting principles. FFO should not be considered as an alternative to net
income as an indication of our operating performance or to net cash provided by
operating activities as a measure of our liquidity. Further, FFO as disclosed by
other REITs may not be comparable to our calculation. Our diluted FFO for the
quarter ended March 31, 2001 increased $2.0 million over the quarter ended March
31, 2000. On a per share basis, diluted FFO for the quarter ended March 31, 2001
increased approximately 5.9% over the same period in 2000. The increase in
diluted FFO was primarily due to a $2.8 million increase in net operating income
from our real estate portfolio for the quarter ended March 31, 2001 compared to
the same period in 2000.
20
The calculation of basic and diluted FFO for the three months ended March 31,
2001 and 2000 follows:
(In thousands)
Three Months Ended
March 31,
----------------------
2001 2000
---------- ----------
Funds from operations:
Net income to common shareholders $ 16,201 $ 12,676
Real estate depreciation 23,807 23,802
Adjustments for unconsolidated ventures 972 809
Gain on sales of properties held in unconsolidated ventures (2,567)
Gain on sales of properties (1,716) (1,933)
---------- ----------
Funds from operations - basic 36,697 35,354
Preferred share dividends 2,343 2,343
Income allocated to operating partnership units 1,071 392
Interest on convertible subordinated debentures 33 44
Amortization of deferred costs on convertible debentures 1 6
---------- ----------
Funds from operations - diluted $ 40,145 $ 38,139
========== ==========
Weighted average shares - basic 37,975 38,492
Common share options and awards granted 1,022 533
Preferred shares 3,207 3,207
Minority interest units 2,539 2,550
Convertible subordinated debentures 79 127
---------- ----------
Weighted average shares - diluted 44,822 44,909
========== ==========
Inflation
We lease apartments under lease terms generally ranging from six to
thirteen months. Management believes that such short-term lease contracts lessen
the impact of inflation due to our ability to adjust rental rates to market
levels as leases expire.
Impact of New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities", which is effective for all
fiscal years beginning after June 15, 2000. SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities. Under SFAS No. 133, certain contracts that were not formerly
considered derivatives may now meet the definition of a derivative. We have
adopted SFAS No. 133 effective January 1, 2001. The adoption of SFAS No. 133 did
not have a material impact on our financial position, results of operations, or
cash flows.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
No material changes have occurred since our Annual Report on Form 10-K for
the year ended December 31, 2000.
21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
Current report on Form 8-K dated February 12, 2001 and filed with
the Commission on February 20, 2001, contained information under
Item 5 (Other Events) and Item 7 (Financial Statements, Pro Forma
Financial Information and Exhibits).
22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on our behalf by the
undersigned thereunto duly authorized.
CAMDEN PROPERTY TRUST
/s/ G. Steven Dawson May 15, 2001
- ----------------------------------------- ------------------------
G. Steven Dawson Date
Sr. Vice President of Finance,
Chief Financial Officer and Treasurer
/s/ Dennis M. Steen May 15, 2001
- ----------------------------------------- ------------------------
Dennis M. Steen Date
Vice President - Controller and Chief
Accounting Officer