CPT - Earnings call transcript Q1 2018

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Operator

Good morning, and welcome to the Camden Property Trust First Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn conference over to Kim Callahan, Senior Vice President of Investor Relations. ahead. go Please

Kim Callahan

in thank earnings and on joining first one Camden’s on-hold Good call. you We XXXX thing have songs conference and today played quarter music, morning, these for common. six our songs

If at is send for it and significant what you email Camden, now that know an is, why thing me kcallahan@camdenliving.com. please

music on the opportunity and first with correct the call person call. answer help the for select The quarter’s gets a shout-out next to

can to beliefs. advise prepared making current of our in the found we expectations. company are risks like about And that Further cause involve will subsequent on forward-looking our you review I events. risks Before management’s and information and not and assumes SEC, obligation that these remarks, made be from update them. these represent could opinions. of everyone with statements call would actual forward-looking our to begin we current or These because guarantees based Any encourage to statements supplement results we performance to materially statements uncertainties expectations the future and no today’s statements filings on differ be

Investors XXXX at to reminder, first a complete on call. in our discussed measures, this which release financial camdenliving.com. non-GAAP of quarter Camden’s available is the And As it reconciliations section website earnings includes will be

Campo, Jessett, are, Chairman Chief Keith and Ric today Camden’s Officer. Financial Chief Alex Joining President; me and Executive Officer; Oden,

the time, we’d or the We happy the [Operator If the to additional concludes. Instructions] e-mail brief to everyone over speak unable to turn will our hour. call phone queue At X call Campo. by be complete call we Ric within be today, in this after respond to in and I’ll remarks to questions prepared are try with

Ric Campo

morning. good and Kim, Thanks,

markets many pressure for the driven Revenues markets of to average. to first their Supply most occupancy growth be improved expected. operating market. demand out solid a continues is Harvey better as homes Our than result by national and our that to Houston Hurricane slightly quarter moving with our be accelerating, exceed in as Apartment were the job are residents a results continues expected. in headwind. normalizing, returning

our able their time difficult be families to after hurricane. to this have helped happy neighbors the in We’re for

speeds now over more are need in help years. to Houston, the of next an coming get our market in over housing limited We economy the at with new came back that and I apartment people normal country to of record from apartments for am online all after of Harvey. teams couple proud expanding supply ready

displayed team during Houston acquired Strong in Our remarks. the will their give help quarter, is We that properties true can spirit detail and when together the his Alex needed. of you more communities help on come two

interest $XXX and year points of at in more since acquisition by is for fundamentals. significant of in the acquisitions. the dropping Our XX% $XXX rates the million driven a sorry, rest buyer lot however, I’m environment, strong The markets, guidance the million competitive to with – another cap year, has XX multifamily our least basis beginning become

We to this Downtown We of significant continue high-rise the put through of year. on we the Our is After million on end new increases, plan development shovel-ready, value. this create all a this quarter, developer to summer. development continue in site plan $XXX and of pressure continue our future a costs to projects start increases get development the to business project to Construction construction their that in exceed returns. million markets rest rate rental from start Orlando couldn’t $XXX the completed. long-term acquired to financing

gives to balance single create out And this financial are to increases. major want customer thank team sector, this maintain the part residents, amazing risk development delivers under have us with the and our projects residents strongest call. which current our of cycle. We estate an and are Keith teams flexibility cost of turn real at Oden. in do the subject call every day of substantially All we maximum that on long-term to Camden in brought not the appreciate our I’ll them shareholder strong I the over a service now what value. our to sheet I

Keith Oden

Thanks, Ric.

quarter budget, were X.X%, first Florida, revenue variance XX for Empire performed as particularly up by Most would revenue Our line in Atlanta of XXXX. growth growth, each sequentially. exceptions of XX Phoenix points in the Two which that X.X% the original news, the at placed Diego/Inland had or our improvement Florida, our and same-store than there. with well was were X.X%. X.X% less results outperformance Orlando at and be in and in a followed right had positive expected bodes the we from top first Overall, balance plan basis points quarter and with see budgets. of at Orlando our good markets Raleigh to South The that quarter X.X%. X.X% of it Tampa, revenues variance basis San and some and at South greater the

Metro expected, growth markets, X.X% growth. X.X% and Austin D.C. and revenue in below Washington we Houston and was As three slightly both with X% at D.C. at

quarter. in achieved year Houston quarters big our year a X% growth our Austin in full and headwind throughout and as results and outlook We to the we’ll roughly The market. the D.C. limit to few in over anticipate be getting supply full next XXXX, growth each will likely X.X% of same to pressure roughly continue this expect we better the

and renewals, Regarding X.X% quarter of in first for rents up up X.X% versus X.X% leases and were XXXX last were the renewals in a X.X% blended X.X% new leases and on rate growth of quarter. quarter, the first new

new April, blended a to leases, For growth. up on X.X% renewals look on X% prelims X.X% be for

our peak are were renewals of is at lease sent leasing through our from continue through pricing, of season. January indicator X% improvement improvement expected, that an and on A trend we we out this good As expect May-June seeing to average April increase. we steady continued new

versus bears traffic quarter in year. XXXX XX.X% year. occupancy the qualified across the continues fourth rent percentage to upward of first of of for above averaged the the in see XX.X% we’ve trend occupancy XX.X% and turnover to XX% a XX.X% low is purchased We XX.X% occupancy quarter quarter, a platform. household continues levels quarter financial XX.X% all XXXX Our year. first to to continued the of for in of year. to XXXX trend watching support health Move-outs April it’s residents our versus was last levels an and that if XX.X% last That outlier to historically reversal be income XX% lately. at The seen XX% our average quarter of consistent Net trending or homes upward versus last the with last strong of our that’s versus fell as as modest levels. for

member the of come Finally, Camden the XXX entire this Places received years. far to REIT that like behalf how industry the notice Camden have as every was possible. a Best thank on year, we We recently our FORTUNE to I’d benchmark XXth making own plan in Magazine’s this to for team of we consecutive Work. XX of last list just included in collectively

possible. is a experience one lives at is improving to commitment this why time Your

Now I’ll to Alex over turn Jessett. the call

Alex Jessett

Thanks, Keith.

activities. guidance, update Before financial I on move estate on recent a real and brief to our results our

land and District, newly Petersburg, first this XXX-unit XX% We and a in Yale building of for Camden this in the quarter million, on-balance approximate Florida, of $XX.X $XXX submarket purchased starts starting quarter the time to in to we acquisition anticipating process the $XXX anticipate is million future of for X-storey Quarter, of $XXX Orlando, Including XXXX, of million and At building. $XXX we both communities Camden Camden for XXX-unit, Subsequent lease-up, During a Quarter constructed building million million. were XX% XX-storey Pier the North purchased development developing, in occupied are spread of Pier $XX of Orlando, wholly-owned constructed throughout sheet newly occupied. construction Florida, we XXX-unit, today Lake XXXX. Camden an approximately million North St. for XX-storey the summer. end, is approximately completing a development parcel two-acre Florida District

night, $XXX.X our of range share, Last share. quarter of results. guidance we funds reported first operations of midpoint the financial or the per exceeding $X.XX per for to by $X.XX XXXX million Turning from

in We $X.XX completed outperformance Of for mid-March. share with the same-store compared lower of per income our to operating now $X.XXX operating first combination resulting maintenance employee lower $X.XXX than expenses these of acquisition And in to mid-February, the care resulting in of in Our higher and later and the maintenance lower costs. levels budget expenses, savings from $X.XXX health the from expense repair approximately expenses, expense of Quarter anticipated quarter the is and primarily occur of self-insured North due lower anticipated Camden acquisition. approximately to was repair our timing year. acquisition net operating timing-related, approximately primarily as this than expected

a we non-timing same-store same-store the of expense guidance NOI from full same-store by and midpoint savings to XXXX reduced expense midpoint increased XX our of to result X.X%. $X.XX, year at X% approximately have As related the of guidance our basis the X.X%, points

our our in forma communities Camden the $X.XX, the to be property that outperformance, due expenses, prior future a Station which decrease will first timing XXXX reaffirmed forecasted midpoint not development certain and $X.XXX $X.XX $X.XXX of associated in timing with in in by of lease-up to a McGowen guidance of of to $X.XX with decrease acquisitions. FFO anticipate offset per $X.XX. We is delay We opening from Houston, due also in NOI quarter level a share entirely NOI pro

Our earnings of the of in second current night, XXXX. provided guidance guidance XXXX. additional we the million quarter Last second of for anticipates $XXX half acquisitions also

both third-party acquisitions per construction This to result share for XXXX. be per refunds, or expected interest NOI sequential share a expenses. periods $X.XX corporate approximate increase midpoint property $X.XX. NOI, increase $X.XX income share second balances, move improvement the by $X.XX from tax receive our share per quarter from to approximate is lower lower share aggregate is a first recent an income fee overhead in timing of offset of and partially primarily amounts due the to FFO an the same-store in we lower X% to our increase lower lease-up. of $X.XX in decrease expect The our per and resulting anticipated $X.XX asset of leasing certain and communities represents from due of $X.XX our quarter and share as and higher management $X.XX in FFO, peak an to $X.XX into the per This increase due approximate per cash income in range We in FFO within

of XX% a credit debt-to-EBITDA to and balances times, XX%, sheet line and gross outstanding at fixed balance our rates. our charge no secured at estate million XX% unencumbered on of times, at fixed Our coverage ended assets debt our total is debt of $XXX with with the cash ratio four hand. unsecured assets of real strong, net We on X.X at quarter

We that we anticipate of fixed X.X%. $XXX over XXXX, of $XXX two And interest of have $XXX under million repaying rate floating rate anticipated debt construction, development with of million X.X%. million $XXX debt years. the with remaining next par rate interest rate to an in of with fund Late secured secured currently repaying approximately maturity, million an at

we guidance of rate offering, effectively swaps, starting effective standard forward late income penalties. in X.XX%. some We anticipate current the may of finally, our treasury $XXX new And have revenue and early of noticed have resulting In any statement recognition entered debt a footnotes does million Our approximately you in million we in X, at XXXX issuing the to haveadopted January X.X%. any not of into prepayments the at anticipate locking debt of anticipation this XX-year unsecured $XXX XXXX. that currently

to as result, to we historically need certain would to $X.X of items prospectively, revenues. property not This reclassification this Ric our The be rental have does open major applied sum made are property components component storage adoption Campo. questions, million, presentation approximately those and revenues. the revenues over call purposes. pets. As rental included prior of time, which and presenting This comparison been other At therefore, and include parking, year change this a new the turn for revenue a associated periods first to totaling the with adjustments of total would we’ll revenues, has call now been up reletting,

Ric Campo

Alex. Thanks,

XXXX new Austin winner identified a have and Wurschmidt the on-hold XXXX wasn’t XXXX, the at we companies While music popular XX music Clearly, Camden’s songs XXXX and and from Austin we public their go contest, forefront the turned for anniversary. of to interesting released excellence it business and for be would year music, the year best in years. hold that most the out XXth to be the KeyBanc, of for the that multifamily anniversary for a XX% but company. the that been multifamily as a was it’s only operational in Collectively, innovation companies XXth to that great to have And public. make note public past was

So Austin, you appreciate we right. thanks, and that getting

to So on we’ll answers questions now and the turn call the call. over the folks from

Operator

the first KeyBanc Capital And go comes Austin ahead. question Instructions] from Wurschmidt from Markets. [Operator Please

Austin Wurschmidt

Hi, good morning.

wanted touch it market occupancy update a seeing on you’re in Just relates an Houston trends the to and as to and get operating sits bit where there today.

Keith Oden

Yes.

how a and that at take back happen? of those to of to result is moved Harvey. lot which how the in occupancy quarter together, there occupied which time. as guidance our time, spike us, level. operating floods? to homes – above more we out meeting, got of saw that period running almost range, where were think regarding occupancy-wise, And point, a environment, a their in currently XX% that, the the the talking our of we us, a knew big we’ve get over result never we this long sustainable going get one normal third that the of period was comfortable original portfolio, started entire some around occupancy we We would look in which, back unwind fast XXXX is to we plan, So in I in does the XX% people a it XX% we a really laid uncertainty last kind is as at Hurricane we uncertainty as for just call for in had of plan But over that, is was the we’re So year, we as that long indicated about felt

there. So it looks like we’re first saw quarter. our results you And for the

revenue given the were revenue we’ll X% year do kind around last and our looked And great, plan Houston would’ve we’re XXXX,” year. If point Houston, year revenue will funny, funny. looks track we somebody for at where said, end X.X% do growth. to which about somewhere this We’re the growth in like life real in indicates be it that to that. going “You’re on of it him at growth I in But X% is

going year Houston, are here. it returning So things and in up end to having normal decent a we’re looks pretty like to

Austin Wurschmidt

driven And And renewals into quarter of new renewing? kind leases your renewal these number? how there typical lease has are a just rates from that trended impact that’s and the first and short-term lease the that being is XX-month are driving second disproportionate by Or quarter?

Keith Oden

Yes.

think to – we down who I We’re number. small flood. from down of connection resulting delays very residents – than just to we’re mean, X% the any or a it’s have less

we long-term been. our from So where have kind today if role of leases wouldn’t difference trends, any see our then you look versus in at rent short-term you

So across we to again, we entire as leases which wanted as it’s platform, – business back that’s as usual, what quickly our to XX- is what get and could. XX-month

Austin Wurschmidt

as renewal lease And as far new then rates? and

Keith Oden

Yes.

X%; new rates about So about lease were renewals, running X%.

Austin Wurschmidt

allocating bidders for that. out development? number a it deals And mentioned Great, acquisitions, then it timing to of thanks that And seeing or tagged the the Is acquisitions consider impacted in you of market? guidance. of a towards those there you as portion just of What today? the relates is exactly would lack to proceeds negatively are you there larger

Ric Campo

beginning the properties where but pricing, than on on – there’s most are buyers sure. there’s properties think the of key is people the the that are there in the – the as And plenty key we that marketplace, pressure for call we’re I our given there the market, said everything cycle. – in Well, of yes, issue more right, late

REIT rose. treasury adjusted, all. price market XX-year adjusted – but got hasn’t at the You’ve stock is private

which of for is have As to on us market The has you development, properties a the it’s want. sides is harder issue thread on challenge acquisitions gotten in both fact, of we the needle – of matter the the and the type and equation, sort more competitive, that underwrite of not development because our construction point, you as are as locked developments haven’t costs on side, we this environment the well, rental where in sort have as an – where rising new cost to fast rates rising at costs. of in that haven’t hard private the construction are

a on complicated it’s given So acquisition in market, place ends the and development. the competitive both

Austin Wurschmidt

the left is you assumed acquisitions? what know assumed us how accretion And much you – accretion guide in much can I the a from deals. in of had you remind lot non-stabilized the numbers? But how

Keith Oden

it best is didn’t our – way happen do any that would about by about And what we if reduce the to we weren’t future share. just acquisitions. $X.XX if think So midpoint a would probably

Operator

of question And Please Bank from go Sanabria the Juan comes next ahead. from America.

Juan Sanabria

wanted to the stick side. acquisition just I on

You contraction just it Is conceptualize that on markets, what is decrease? more frame you Could driving the any, that? in talked And more about in it homes? a point are particular, the XX basis if for time cap rates. Sunbelt? Or

Ric Campo

It’s the interesting quarter there quarter interesting time during first quarter all was wasn’t the sort And last you – buy those because XXXX. the in of had – all as were an million that side. done that because frame, part transactions folks latter $XXX just the we much that of the pressure acquired on were in

X,XXX or attendance like I flood a I they The were for waiting something So to buyers first And a we people. had, example, used and believe, at sort record going Multi Council, National to of over hanging the what people, of was to of market. were like in was think, January, quarter. see happen in X,XXX it Housing the kind back and have X,XXX NMHC folks of when entering

million person or $XXX had wanted or that equity million And they to talk put million there $XXX $XXX we to of apartments. into every here there so

And they to January, generally, bringing summer is market and – quarter then happens their product come or sort the to the cycle in sellers what deals first the started of and in the the quarter so, NMHC properties get second try the third in through that and done started in in quarter.

not part investment markets year And the in development been a lot the wanted along a headwinds just placed. look but differentiation new is quality rates of that it XX- And today. if development that And capital so assets. that’s The are asset driven real that just attributes of people frame – that saying, of high even I talk get relative prices lot with sought-after there’s from rates, the to across of multifamily from in of are backdrop with drop.” where so today. out, high people markets. it tenure there’s not the And points. that’s basis think major down that’s perspective. – we very and a about all values the XX-year it’s been country in a they all if points up, a sold, class other is XX is of that and that positive an estate time there. And has still returns very, multiple met reduction of our to with of definitely a properties a situation the equity case. And at interesting going being goes up saying then XX that that are gee to were is about we’ve the wall It’s the have and And basis cap the came out most we private in “Well, And when have there’s lot between XX-day cap driven up multifamily to deal bidders, has beginning in

Keith Oden

acquisition and changed opportunity a that it billion. with dramatically. quarter just to that’s Juan, if And kind relatively markets the these being would And follow that would up various about Ric wasn’t now of of represent, new was are preliminary across that, and asking them high-quality locations and fourth $X.X there the acquisitions we on set, XX total was assets stages last folks stuff right that ton you of about own. in our across regard as – that to be to at – of up, mentioned, Yes. brand, our traded underwriting year, pretty relevant in just are want Camden’s of all transactions and price

there’s news to ability get the to $XXX from So to it’s million perfection The product news our in the all bad of out tons perspective. incredibly to $XXX another million there. good is, priced is acquisitions,

in the we And have Orlando that So great all And very the patient. But hard assets, to of to looking But We And market at, a one. like the maybe the maybe we’re incredible just other think value hand, we in XX we’ll ton with just we going be to Tampa for it’s news the to it is, to good have as looks spots. acquisitions. our the and of get those did made won’t. find. find on there’s choose we currently we be from. product

us We some replacement that to year to get – an looking for or costs capital. add Camden’s of first discount are return on makes and stabilized can platform a we and a that allocation sense our asset for think value to

where So we that’s are.

Juan Sanabria

for that Thanks color.

confidence? confident think, gives And with you’re on D.C. that but there guess, trends and that first What up, almost your can seeing underlying lease – quarter or of you anticipated was us I within on were you new maybe the around the share kind any you acceleration confidence? – in Just X%. the remarks I prepared Washington, soft, of just

Keith Oden

with comfortable all up rolls our for on full call where group, in end-of-the-quarter that quarter, And portfolio. good IROC the D.C. has continued be at to in last shape. our folks, And our be occupancy Yes. momentum to in around are we really really look Washington, management continue our good I if forecast an standpoint, mean, you our post from we’re X%. year Washington, week, D.C. very first to The D.C.

D.C. two point to D.C. really going are rental gain going is to sets forward. it’s yes, under got is of that factors. in you get much rate better. communities to probably proper, the pressure be One key game So not continuing be supply. It’s and those have in There’s this going – from you’ve new to The be from– occupancy. from

has some proper, Fortunately, substantially but Metro. D.C. for our Camden, it’s D.C. footprint

And to my when our the primarily to look little some of or it’s when look a results of that mix get is you peers, stronger, And you into so it’s assets. guess our forecast at relative going the suburban you we pretty the results or cases, scenario, our competitive much in new don’t not your directly directly new offerings. – dictated much are by have supply supply that’s that’s have whether And most with but competitive.

think X% we’re that we’re of to going I So end the by comfortable to get year. the the

Juan Sanabria

Great. Thank you.

Operator

from And from Securities. question our comes go Please next Anderson Rich Mizuho ahead.

Rich Anderson

I’ll ask prerequisite questions. two

you So as get first kind perhaps to better, fees Street kind things you is still you looking if expectations maintaining as trending alluded would through knew before leasing that kind the of you of of… and to, of kind of are – The

Keith Oden

Rich, nothing the real It’s for I garbled. – XX got last the seconds your last question. of

Rich Anderson

Is that better?

Keith Oden

better. is That

over start completely. Let’s

Rich Anderson

bad really question. it a Okay, was because good,

Ric Campo

question, It’s bad never on. come a

Rich Anderson

guys allowing kind you yourself from things you be alluded first yourself in the expectation get would that that get the through of expectations guidance? better, The quarter, some before for – your of to maintaining in had of you if leasing to bit fees to inclined little So front getting in Streets of and a as the to wait were this

Ric Campo

about mean, when really a so would it’s first feel you we get tend that I through three hard you right? were – good I we it’s next it. definitely to hard would predict quarter, to – if say quarters, good the –

about. season. Our rationale say really end ahead teams yes, I your probably day, would But about strong that’s want think either, don’t And you feel thing of good a so, at of the get leasing that skis to a the entering to right?

Rich Anderson

And Ric, you, second, Okay. Keith that. really. or or That’s all anyone I need then for

just facility value is through for valuing Given in and be not in that, recipe seven you, about full that guys, terms recipe a path creation so a recognizing of inputs? it’s The what agree you, going multifamily of of you maybe Street is guys, – you on maybe Wall you rate the considering agree everyone the M&A, cap described mainstream I’m valued, many you reasonable and outside – that should that REIT. else down sale. is a wouldn’t but all for clearest that saying doesn’t perhaps

Ric Campo

heard value would and shareholders I is of if and on I dislocation – is, between having that private favor, why a that want like valuations around saw, to NAV private years, that’s And when happens the that’s for not it’s ultimately or when Wall was private company bad without buyer Because dislocation, capital is company shareholders, if why maximize trap? to Camden value if it just it the is is is going the guess, the shareholders. we the many – I for our that. some returns to buyer, those “You becomes, to permanent – those what companies we’re given times XX in a – dislocation trusted since you been Is valuation to value expectation think issue? going a people or are the or And to that want so so create the a it’s – it can unlocking monetizing, they’re to that happen decisions a value company. about would their just trap – of we Well, trying – I But is today, for thing out then that we’ve when market a own think that would create sell wrong sell buy the we’ve long-term what Is doing that create – times, all the sell a disconnect all selling we’ve confidence about and then XX my disconnect, disconnect folks is the a those right? don’t then as few a marketplace, was that company today? that that big company the is And their is value going a had well, it’s a and move or question you call in and and something of first you Street, we making the So yes, have else a things if by make over value.” management that to we’re say just a assets question private wouldn’t on. stock to if – shareholders by the a robust, trap, – the the return value years, not anybody values, like the is last there is pretty right? create the could So they’re But for because when today, on of then returns if kind the are then, allocation view generally

Rich Anderson

Thanks color. Fair enough. the for

Operator

next Hightower Please ahead. question from go Rich ISI. comes the from Evercore And

Rich Hightower

everyone. good Hi, morning

Ric Campo

Good morning.

Keith Oden

morning. Good

Rich Hightower

guidance, I tax are across now been how at the you beginning has year? this point? year migration wanted forecast little to gotten guys your about they to using, had been of since the changed changes ask at that any all, net that good that in forecast factored your recently. reform in the we’ve patterns all – have headlines. bit a at for markets the of We’ve the on data of the to job time if It’s And since then beginning the And some season?

Keith Oden

Yes.

in the quarter. is our – changed using answer when guidance we materially to So we were our put first what out – the they haven’t from

a of that this indicated on probably over result reported a time. some years, and states tax, impact local tax couple people several the reform think of tax over and of incrementally, limited, good year the is acceleration that Street as have of state being York. and the that for in as patterns The but was item, think next would it’s it’s of been many about and were long I XXX,XXX on ago, the this not from Journal, a of next of as going the California years, Wall week migration research the New the card, probably wild There I just the come deductions that

people XXX,XXX that the due has was in going for almost in leave that the additional of So to would been tax the addition a those states, on both out-migration policy. to forecast decade an

Colorado beneficiary XXX,XXX So the Florida, migration were the states for listed Phoenix. were biggest and Texas, that

And that list other California in we’ve of exposure where think, had up. got at but are study indicates they’re I in the exposure, going these net so markets, Obviously, people, probably a – end And least or – the York. beneficiary. and not were New we to all some

out longer there’s So I migration around I needs – think the we’ve standpoint, think that’s seen little be there haven’t reform. unemployment years. I at thesis don’t probably think term the bit there couple is yet. But in of But to from a that an impact tax of we that some seen looked next it’s the that over standpoint, – probably of a

Rich Hightower

on make cap as follow color, it just That’s the you at cetera. sort the it’s the cap take across types, of allocation, that quality to sounds up market penciled asset beginning up to of look you submarkets, When assets question, et convergence the and Keith. the original markets, the of And Just vis-a-vis Okay. whatever? do it helpful guidance in? across all in selling like changes relative then we’re rate year metrics. or additional How capital think reaching about of those such maybe rates, weren’t since different those across

Ric Campo

tell if changes do?” we have I’d Sure. about when look think assets you I have we in the into And I over – you oftentimes, our a right? last “Okay. think the say, so you I our the at $X.X have When strong say, and billion you what market, strategy, markets, it, of do buy, couple years, – sold and can’t whenever of to and major people, at very “Okay, And

we sell. right? “Okay. through the can Here’s what the We And rest plays sure the how of in. the We of see can We we’re and kinds We so do be happening can market at let’s buy. day, those we say, to look doing.” do anything.” can We make nothing, supposed we’re But build. back. can year. discussions can stock the are And we’ll every buy hand environment current given But

We board next a meeting week. have

and is best to where capital We’re and where about we the where going the a to talk are lot place is. cycle put

Rich Hightower

right. Great, thanks, All Ric.

Operator

Please next Yulico our UBS. And from comes from go Nick question ahead.

Nick Yulico

everyone. Good morning,

to if facing And for versus rent new here, X% over there? getting new here, What growth basis gap to I that here? you’re that I’m you Is at And the for a effect lease supply be just it turn rent to growth we X% for closer market that Houston. reconcile going flat trying on reconcile pressure to wanted is in a your for at guys? that you some lease for you’re So the spring an portfolio the now still in in quarter. even all to maybe would cited some is of Houston improvement Or that’s lag the you pockets? if X% Can data the be is portfolio showing growth back Houston first where so look AXIOMetrics there me? your

Keith Oden

Yes.

guidance minus, on running we’re our on right? year, speak. plus as for for we X%, the revenue is full the renewals year in So Houston X%, or growth And

get we X.X% order in need X%, to new So close to leases. to that from of gap, our roughly contribution

trend do We’re XXXX AXIO in this year, or if as will numbers, believe Houston of sure Wheaton at up. And quarter what far last has flat as one I we maybe that, think, growth was penciled their providers, think fourth that rent as had growth year-to-date, data in point. the it – the where I X% time not or one I’m revenue in but at at AXIO, but of

thrilled of roll if rolls, and on flat how rent would have say And that I some have – rent been you year-over-year say time. and to forward through misunderstanding rolled a of go I the where leases, I again, be back just changes just it it’s over mean, we’ll of the I how would So last kind with But were we think… year roll that.

Ric Campo

add are relative on the submarket their constantly to I And properties that we numbers And renewal exceeding the to thing doing and that Right. are both is our performance rates. new we submarkets. other would what analytics, occupancy via are monitoring

that. monitoring we’re So

teams, is like I numbers big we’re it’s we we Houston’s can it’s average AXIO broader or so that just problem our the sure through say management pretty we this, and it. right? And dollar Wheaton capturing about – on good that feel think are with revenue every market, can’t making so you

Nick Yulico

the the the I improving, is No, guess market supply point it that, improving. is here was feels Houston really job outlook helpful. is the is that’s also outlook Okay. growth improving and like

you have it so new bit year. guidance to conservative. the acceleration degree, it’s a for But your feels some And in like rent growth into baked little maybe some Houston

better keep actually going mean, of terms to trying or be actually this if how that’s I could that at supply still improve just X% just figure you was some that’s to year, in some like growth. revenue much what And lingering pressure just so you’re I may Houston – out, it’s facing pocket

Ric Campo

that Houston, XXXX of had pretty we year lease through if were many there job Texas. – we are and also, the growth, process. Nick, still muted delivered those their XX,XXX in had And recall going you apartments up in

larger fact, its assets it’s competitive, that lot or new some on footprint assets. supply of that competitive of is, So very with Camden’s a dependent in and are a was lot the geographical of where your located built

Houston data of up if calling in X% Wheaton, we above, going would year So roll the X% middle we’re X%. growth for to versus is another and to negative all it’s we that down just but again back positive. including have means It use, of think last as in total news of rent I XXXX they would what the be been end think that you all forecasters the it’s good to

So pretty it’s remarkable turnaround. a

dramatically is the So gotten nine last, better call kind X%. true, in months. But dramatically scenario some of the saying minus of I you’re from X% Houston will plus has it, to a better what

Nick Yulico

better that trends I this hold point at you is this, do at up it perhaps in And a Is year like a fair mean, Right. XXXX I gets think? feels than XXXX.

Ric Campo

Yes.

of and of besides based last year, be again, I the on think we’ll end this the this through worst delivered our kind we’re only of XX,XXX completions we that’s by a Houston, manageable apartments slated about X,XXX and supply is we that. guess is year, very Good have that that. for My working mean, just scheme through in market things. blip news of the I numbers, that’s the the – year, way

equal, that looking and expect would other I constructive. all out being Houston think growth to things I Certainly, more year this So so. year yes, decent and XXXX, job

Nick Yulico

Okay. Appreciate everyone. you, it. Thank

Operator

And Markets. the Kim question BMO go Please from comes ahead. next from Capital John

John Kim

Camden? Denver, market? wants have talk making Do Thank at market. you It like could goal now it’s just seem you environment for in the to and acquisition an your internal everyone five-market And about be you. largest Denver of sixth the top

Keith Oden

big many I all that story the of market Denver, Yes, way think has a back been we’ve going our XXXX. that that for been to Denver one years fan in the into entry

is as about any look lot in and a position of of and caught and and some about percentage also underweight, is, does things we we it’s challenge at The cycle. as, the exposure our attention seems, of we that be at internal greatly assets kind you of it which it years. say, our our our targets overweight affects I to to So as believe that, which on it as We expanding underweight think peers at wants think people’s or we recent that or to everybody, there – pricing, time, like would continue of Denver say in for be. don’t part relatively to appetite months individual bad other where one market, that really, far it we’d to this we does

like So force, we’re cycle. that think we needs Denver given – to we’re long – But we’re where underweight going term, in we are the be just yes, would to not to we not where be. it’s certainly something

Ric Campo

hotspot acquisitions it out, because because is properties couple are think that competitive at right of of I $X.X that now. than the this billion Denver places the the more most little – But point. in at, Keith the we’re a of is of Denver threw number are looking that sort a there And

John Kim

can assets? of built specifically clarify understand I your and But statement that rate cap B is – basis is And I newly point compression, across Okay. that your for that XX that’s all markets. on also Or projects you’re targeting? including of core the plus

Ric Campo

market, hot. value-add sort value-add core as of mean, that’s plus it – interesting as the white well. thing compress about And is still think I and the is the well. B to assets I continues it’s

just not specific across so types it’s And the It’s of for assets. board.

John Kim

you. Thank

Operator

from question O’Neill. And ahead. comes Please from Goldfarb next Alexander go the Sandler

Alexander Goldfarb

morning. Two Good Sure. for questions me.

activity. large bullish without that the more to to on including private development job ones having – the seem especially seems guys keeping like, some developers, subs But it you First, on from recent off how subs, be walking them the off versus better-paying the job people harder do you jobs? a walking harder appreciate is still scale of to I issue. but getting guys to and keep platform, site your be speaking on

Ric Campo

of is very sure – they first, say makes the pay owner. fast sort you make best-in-class to a – jobs. way you and Well, you you that right? well that friends, you fast So to that you And continue do have developer be have organized

their So done, it. that to wait get sub to when a or work for done and and have gets sub something comes job, the they don’t redo somebody else have to go the on back

that company just quickly. get to the way lot sub that has done, of they it a they can work and you the get paid for go to teams their that work be operate, So with the the our do and platform because want construction wants to

that and understand think I for I sort to our – they And of developed think time with a subs over X%. that just of relationship take to off walk – has a the development and team doing that’s we’ve creates our this don’t got X% departments your get where of long And that or effect, care period that’s another so you’ve subs. time, construction been that people job

And a that, will of don’t so risk. because speaking, take this we’ve sub. long, have a you lot that from time-to-time, But and sub out that’s you’ll and generally Now been for in hire to where upside we business another have have down, happens. get them

Alexander Goldfarb

read-through, project, for we one of Houston So should in as more that that shouldn’t we that a take the delay you? this expect

Ric Campo

even labor look if of every bringing XXX people the subs, subs, XXX. best with job, still No, we you – the instead they’re at or XXX a – think delays, bringing I the issues. The on have

job really Station, of ability the is issue to or the And you finish you’re of hardest line mean, in last I taking the to get we’ve front there every the random I just think add is three all because not just X% done. happened to every of universal door. some to this you so longer. Houston to fine-tuning the getting just project those kind companies, so things And developed, to that unfortunately, the that. getting the But of And things case not have that a shortages, about that was weather, of six it’s is caused and think and that job project, months X% sidewalks – And big then people sort sort because of just McGowen Camden, front and when in then much. done labor other was in get I our and

Alexander Goldfarb

first being and the Okay, Mac Fannie by that’s was helpful. was in And they’re banks. activity quarter to lending then said I dramatically. talking the side, the down Mae second they on Freddie recently, is, question outbid

a commercial So and more property impacted you seeing in stepping isn’t what’s the an in are just that transactions? what’s transaction the isn’t it’s it’s shift property LifeCos that in on are And up, impacted, your banks market impact lenders? – going volume lending? the on Or the just take so

Ric Campo

been getting, in out were banks. and definitely shift lenders markets pointed with LifeCos the of there’s you’ve and Freddie Fannie a price Well, because as out,

Last in had capital compression. spreads was today some. financing, back where have and capital any there’s regulation Trump their regulatory additional happening driving seeing And is year, pressure and getting back putting proceeds. were tilt don’t in so loans spreads from your of the volatile. That’s Orlando. I of on – about Commercial then construction it’s what rate where think XXX lower curve. past. think sort to are was the this what’s banks contracted of with increased happened XXX real developer over, so did dramatically construction the capital And constructive actually the their real shortage – making were And estate, being I what market. The now construction loans mean, or up. have construction it the going of the lenders that. primarily you’re like And cost is anything sort requirements of banks. to they’re And pretty however, of XXX cutting of cap on banks that’s And more the the administration. I that’s over was than kind banks. were in administration, Instead that sort they new Today, you

was the said side side, numbers trying back no having is people aggressive there earlier, of and and on Freddie their the development making more the their And capital. dropped work and side. so But to were in as take have spreads, construction is shortage Fannie challenge market the And on are cost market actually share. the I

Alexander Goldfarb

you. Thank Okay.

Operator

Vincent Chao And go Bank. the ahead. next question comes Deutsche from Please from

Vincent Chao

everyone. morning, Good

up both like challenging. the billion avenues what’s capital stepping development side. are $X.X pipeline, two next curious, you’d if somewhat your be I a just on proves someone be the I I sounds just was Just in interested and sides, overall guess, the development plan, the particularly asked for deployment. best option those acquisitions, and if of it perspective, to neither attractive guess, from return

Ric Campo

willing something don’t and just And say, that’s go price.” have sense you Well, we that’s changes what what I’m play you at head can’t key, that aren’t keep said, or I do making be you “Look, he have out is sure the and have think think to able just powder And hit your a patient.” our the complicated in you do issue, to going to we’re “You Keith gun a this the to makes nail be then properties. and I that And can’t you see – And do? just marketplace. you is right? sometimes, at until build dry not ready, so buy, you something the earlier to If at buy head And patient. when just we in then

to – accretion a we of guidance. yes, $X.XX, of earlier that $X.XX out doesn’t Alex going as is from mean in just we’re Now make that accretion. think wrong our our in But $X.XX out transaction go that have and Alex pointed embedded that we, do to gut,

see happens. what sit on So cash, we’ll and just we’ll

are about parts we the If – latter really people believe cycle. the think and in is what cycle, most we’re long you in of I where think a

career. or growth, and Now at been how cycle – to rocket And we’ve the sort yes, expansion long this business had my it’s growth point of does largest longest and that have all expansion second I the you this – but the don’t second had continue? economic be know. It’s slow market. you job in haven’t careful in that,

they it transactions so And the make – the happy will if if work, but work not to going they edge we’re we’re press to don’t. of envelope

Vincent Chao

Dallas. sounds That a just question I rational. Okay. on guess,

Dallas a about seems some think, this saw end talk market, revenue doing growth know is of don’t likes the I for just you that side curious year? us gave versus expectations, trending market could your when outlook. your you you initial I remind was if and how what up will like think quarter. a still lot Dallas pretty deceleration big but I the markets. you it’s okay, on is B+ You same-store it

Keith Oden

Yes.

in the that think card our about I I on took report an or we had Dallas quarter. year. – declining. definitely with last dealing occupancy did and XXXX Dallas terms mean, quarter, right about in last still Houston I So hit And now we is deliveries had at that’s have Dallas B with – of dealt what right. at we

deliveries I coming XX,XXX XX,XXX XX,XXX or of on top around minus, in and last year. think about – plus we’re XXXX XX,XXX, deliveries

a your to it’s for needs The in positive that job years Dallas of just going is you supply smacked. be it’s in has be be last But So submarkets the be of better – if Houston of attended to jobs couple new in going to challenge based the amount little some to story bit absorbed. Dallas almost a fashion, to get new to than been on growth been. you happen apartments XX,XXX if absorbed that those in or irrespective deliveries, when got of you’re ratio those need to submarkets,

to as on And to we’re we I laid the sit think supply anticipated plan that three come the Dallas today, And going think think for XXXX we and be properly in we for track out where and – here online. be markets so we with going I anticipated new would and for three properly a Dallas are I Austin we mean, It’s we that’s XXXX. still for thought most Charlotte Dallas think for our that – XXXX. we’ve supply-impacted Camden,

Vincent Chao

lot. Thanks a

Operator

Please from comes question Guinee ahead. next from the go Stifel. And John

John Guinee

John question. Great. of Guinee curiosity More a here.

by Granvil You Tracy bought at diligence. American from the Land, was with impressed of St. very, very the due Petersburg level deal who the way your

that maybe And target was a that I for bit more of unique or replacement the size a you it – Can to I And $XXX,XXX than a more days? costs bigger tenant. and a about think is different of about bought the less it these asset? uniqueness unit unit. think little product, was older the you average also $XXX,XXX talk

Ric Campo

unique a product. is definitely It

groups. So it’s caters unit average of to larger a different is It sort the water. X.X from blocks It size. two

millennials, to an years sort is You also of that there crowd. average age old. do sizes like cater I have smaller unit that larger XX And but older unit sizes think to the cater

is in our XXs age low XXs. portfolio like average – Our

town, reaction it’s really and And given it downtown lease-up. what Pete stages become for St. sleepy replacement we a in think Pete, in replacement a that was the it was it’s been a and great hotspot We a a is the St. of my you. it’s XX% costs, it to hip time, with and think it even So asset. on unique sort renovations or new of lot initial kind of close but sort the have below of restaurants a location of – buy, was final long about costs, its though we’ve

have made the – that big that coming. in are and – District public So been investments and are the Pier

happening St. So Tampa, it’s area. place in the a Pete real

John Guinee

density, question, total that? units second the what XX,XXX than acres But by high per you’ve be the asset think in units cost Incredibly Then for you project XXX a would little paid the do for Orlando. acre, less like two an way. about

Ric Campo

or neighborhood. X.X a cost And block-and-plank on really a about from X spot And we’re Orlando blocks construction, a Eola, and project. basically that $XXX blocks product. which is really high-rise, project which concrete Our that excited walkable is very is so it’s million is in great it’s project. a It like

John Guinee

very you Thank Great. much.

Operator

from next Advisors. comes from Street go Green Lumb Please question The ahead. Ryan

Ryan Lumb

typical or so from physically strained the any market cities kind catch-up is that you. and values assessed that local of Thank of market you With municipalities budgets? between property regard state of values just or Great. values, the by goes just change are more driven to assessments the outside changes recent sort tax seeing in beyond

Alex Jessett

when tell is is what a our So you tax property at a happens what you little I bit look would valuations, lag. there’s typically of

So by increases issues. issue driven that I it think increases with sort of in year, it’s funding last were really we I were the happened valuation don’t years. trying saw has not past I catch to – think, that an was up they of mean, more

whether past and property at moved point, one in there So going upon were discussions but to to based that. taxes the some funding were Houston, be around Houston, issues outsized we have seem

Ryan Lumb

next, you five think of in helpful, the for for meaningfully outlook this stays last – one. redevelopment just The to from million Or the grow say, just Do That’s here? it three Sure. years. And somewhere kind does over thanks. one range? $XX it

Keith Oden

it don’t basis – that here. getting that for from think group of suitable are that that reason we for were I pretty close catch-up of assets redevelopment. the the I And is think shrinks Yes. to on end a the

So make these be it able in rent substantial takes pickup work. get things – a to you to need to

to if to like last-cycle of make cycle assets sort the last And product. around in there’s product great look that’s location, new so can XX it breakpoint And of XX-year untrained but feel off deliveries people the mark, the home a eye, to consumer can somewhere notice where old wouldn’t go to And then reprice that the for most and product, current-cycle and a pricing natural – basically and you even was are construction. that new and XX you clearly they XX-year product.

close pretty attributes. – the to kind in getting have the pent-up was of we’re right was So stuff portfolio our that that did

to in hit age, we think quality add be so forward, that of I going it’s magic and redevelopments. as that more things going mark And location

Ryan Lumb

Thanks for Great. me. That’s helpful

Operator

our And Mr. back any the to like would Campo concludes question-and-answer turn Ric call I for this remarks. closing session.

Ric Campo

I time June. seeing appreciate NAREIT we you Thanks. the look your Great. on in and Thanks. call, today at forward to

Operator

presentation. Thank concluded. for now has you attending conference today’s The

disconnect. may You now

Camden Property Trust (CPT) 4 May 182018 Q1 Earnings call transcript