CPT - Earnings call transcript Q2 2018

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Operator

Good day, and welcome to the Camden Property Trust Second Quarter 2018 Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Kim Callahan, Senior Vice President of Investor Relations. Please go ahead.

Kim Callahan

you Camden’s thank earnings quarter and call. conference morning, for second joining XXXX Good

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

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

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

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

Ric Campo

Callahan on in of That's in quarter's Industry call. X collaborations a pending. the next which team selecting honor XXXX for won artists hold of collaboration deals And and and for contest last on the you Kim variety. Thanks hold on with members our picked was featured REIT contest first this or either billion and be quarter's earnings led KeyBanc bands his results equity up solid Kim, $XX this of his music Thank Wurschmidt by team music selected good musical today's closed at theme Camden the delivered your the our M&A of e-mail and to Austin who earning music, totaling of lot in on pace have valuation call. morning. on famous eight Austin activity team. you'll accelerated and/or quarter. Austin Today's our

we'll on targets in believe at to We the the of end more call We've through of our the effect year. and year. buyer and our rates continue the demand still guidance for The create of the Oden. XXXX Rising demand prices held higher to at year, fourth rates Keith anticipated but discipline into now cap environment business the while the high our starts quarter. I'll $XXX over not our be business. beginning We have development multifamily growth our maintaining is challenging will lower moved any million and million $XXX turn in acquisition acquisition by the hit end the value interest acquisition with had rates guidance. driving we than high have modest

Keith Oden

thank that of another I'd our calls. good privilege call on one numbers always Ric. producing for world today. REIT to to Camden's in on discuss quarter team marks good the had Today that like has I've true earnings and one XX over every earnings for been Ric our quarterly last them. changed the lot the to Thanks years, for make XXXth good has members A and numbers but call of be is us Camden and thing acknowledge

in Corpus and mind for for healthy posted both Christi up growth discuss a keep result. year-to-date. of quarter year-to-date. Sequential this my X.X% market results. growth for the led importantly, with across We was than what a time was positive to X.X% with end revenue all in sequential same Overall routine other X.X% the and season, second allow which and more are remarks DC was indeed Every the better we're very quarter, remain and store conditions for Metro brief portfolio. interest And of our pleased X.X%. earnings to This about quarter. quarter was I'll place with were Camden results our by expectations you at across fact the Revenue Starting this that entire the at quarter X.X%. our

and revenue quarter X.X%, Orlando growth X.XX%, led Phoenix at at was by Tampa Corpus Houston by Second Raleigh at X.X% X.X%, X.X%. X.X%, at

compared largest two running revenue renewals and growth to our X.X%, up leases second quarter, X.X%. July continue leases a growth for renewals up blended at look leases, for encouraging In and in for % X.X% Metro versus first posted XXXX X.X% quarter X.X% renewals quarter X.X% original our better X.X% of expected, X.X% new were X.X%. that the are second last quarter. Rents the produced new up we As X.X blended to guidance. versus markets up were DC with Houston a rate for of rate new and prelims of on

new has leasing during our improvement expected, good pricing season. lease August, out are at September a X.X% offers peak about we seen on going increase. renewal As

the second year. was in quarter second in and XX.X% XX.X% averaged versus rate the quarter above occupancy the first quarter from last of Our XX.X%

actually slightly rate July. our than occupancy better last July reached XX.XX% Our XX%

turnover operating than XX% The outs of now somewhat our to turn number rate Alex Jessett, the to to in net year-to-date. and low Chief with homes I'll rate Our for Officer. tandem purchase quarter, lower strong to all-time continues over contribute call Camden's XX% turnover expected results. move Financial and historically see better the continues at to second our lows

Alex Jessett

and real a And Thanks to financial update our guidance, on move before I our results Keith. activities. recent brief on estate

on storey market the XXX million XX Lake in of Camden During story Florida. we construction Lake of a a quarter Eola Eola, began second unit XXXX, building $XXX sub Orlando,

McGowan Camden leasing our station second the development Houston. quarter, During at in began we also

upon our decision phases development significantly frame Camden for of building. supplement moving structures. Due Buckhead were phase two one irreplaceable we've Gaithersburg, Phoenix Camden construction development building. the and we four-story Previous this including quarter, consist development Paces on one Our of Camden enhance construction developments X third this to one existing wood Camden the second the and based development Maryland. and to our unit Camden in North phase our million, the made high-rise of estimates cost $XXX concrete X This projects our wrap concrete End of heart in of the the in and of location to storey Atlanta. In success will will in one Camden Buckhead high-rise, - and began Washingtonian these our community be XXX type

$X.XX results. Operations we share a second quarter midpoint for to of of range reported by Turning financial night Last of guidance million, Funds or XXXX $XXX.X exceeding the per our $X.XX From per the share.

expenses revenue the expenses non from resulted In higher operating health and all were lower care insured was our Our primarily than particularly driven expense $X.XX than almost expectations, property expected by tax tax our anticipated acquisitions, same-store $X was recent levels of with Atlanta in $X.XX due entirely in quarter higher This share variance approximately property than were other per for a anticipated line valuations. repair and negative same-store both categories, employee net results lower aggregate, costs. in million to better same-store operating the self higher by second from in communities. and and although $X.XX outperformance our income which taxes offset entirely primarily development lower maintenance

our for increase additional for XX% to in for XX% tax communities. will their assets. increase This Georgia raised was which taxes. valuations anticipated Fulton County Turning residential of The expense property Fulton result property XXXX. County, portfolio Metro Atlanta includes entire a increase valuation million not $X was valuation approximately significantly Atlanta Atlanta and in with

be of our remaining is quarter booked catch policy, this we increase the million $X months or million in of $X over the rest As The accrued XXXX. to up. six second will

already appeals on increases. filed have these valuation We

However, time due received. any appeals, of we their we XXXX. get this tax we'll it to the is Atlanta are offset refund will is the the in property which expense book end the successful unlikely contesting as will before If at refunds year, settlements our the owners with valuations be property the that in amount an of

property guidance Atlanta at operating savings based full in cost portfolio X%. property this increase We the have unexpected upon unchanged for our increase operating therefore to FFO We that future approximately year-to-date full-year left expense store other the the midpoint will of X.X%. our taxes of same-store same-store be in revised entirely and are categories anticipated our for We've and our and our anticipating and our revenue, offset remainder year. tax year believe expectations and now performance expense actual same by guidance updated XXXX

this of $.XXX occurred $X.XX increase months revenue guidance we NOI XXXX our operating FFO the offset the quarter acquisition outperformance. to six is we with increased our $X.XX performance is growth $X.XXX $X.XX of of for guidance from to Our results. in X% XXXX expectations trends Last same the X.X% result and to anticipated by $X.XX in XXXX third been guidance fourth Based store same-store has remainder the second of in additional and driven maintenance timing. the $X.XX or of levels guidance of This increase year, by the our our And our This expected also midpoint year, revenue of $X.XX increasing points increase first from aggregate higher share. store This of revenue remainder quarters. expense and primarily anticipated from per non the to $X.XX per over increased of increase the better second occurred quarter X.XX%. from occupancy. full our the anticipated increase for basis share the third the than the X%. delayed remainder in and night, results quarters. full-year the year fourth midpoint also of with the upon this same our $X.XX XX partially are increase same by over store

quarter. do now also net current share acquisitions fourth reduction. Our further guidance in of per not be we third of If the future XXXX. in acquisitions approximately XXXX, additional the night, all we quarter earnings any a $X.XX would guidance provided complete the $XXX Last assumes for result million

revenue results share of offset expenses. The typical of in midpoint in We within $X.XX. is the be are seasonality expected quarter by $X.XX $X.XX second sequential our range expect FFO the of quarter to with line per increases operating our the third to as for

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

years. rate approximately X.X%. At X.X%. of of issuing fixed two X.X%. par We locking in unsecured $XXX million time, million this currently Later million next a under the we maturity at questions. will XXXX with to have $XXX interest million floating In repay at with debt construction will into over up million open of secured we starting anticipation late fund in $XXX $XXX in rate and will current a anticipate interest call of the XX-year developments of secured rate entered swap treasury an rate approximately currently rate $XXX XXXX, $XXX We million forward with offering, effectively we at approximately debt debt remaining a a the four X.X% to of of repay at

Keith Oden

Yes.

first do Capital We Before we John the next question, we forward in you working get Markets have four to winner BMO of correct John artists. to look take with on contest. music. a quarter's first the Kim was our

it open we'll up Now Thank you. for questions.

Operator

Please Our Citi. of comes [Operator Nick ahead. first from go Joseph Instructions] question

Michael Griffin

Nick. Hi, there. a for This is Griffin in Michael

build meaningfully Houston dissipated Are seeing merchant question for leasing product. improved? you concessions has the on First environment or the vacancy still in

Ric Campo

in merchant environment. On of concessions, we and interesting market is the It's continue typical just this very very bifurcated because from to --we the have product, see perspective. it's that kind build

view an there two Camden our doing the months give a revenue is you operating and But to perspective. building, is they in the can, builders free so well from you velocity Houston, portfolio they have overall, it's --when rent empty as but as out the just on occupancy growth used merchants very when the as very focus about you free are in they very X,XXX leased their is plus after environment first our The that with in in on example thing an the marketplace. we think product. pushing operating hard is typical typical and up concession station project, XX% that our McGowan a fast is So basically apartments or start minus that and good, really gets that portfolio quarter opening we are in

supply the up the just hasn't only of concessions the the this the overall impact year. to the released next less the we the X,XXX are next units delivered end and the properties. burn once fact It market. by project's once hoped this development middle in market then there's free year, probably off new situation it of development And negatively basically year So obviously will rent expect given year being that dissipate maybe that

Michael Griffin

and Great, you thanks. million. start? other when here that expect Buckhead of the And the increased it pipeline does yield What's by that see one impact stabilized how I deal cost the driving question on would $XX that estimated the expected development and to

Alex Jessett

to four due story Paces including one that its significantly estimates decision Buckhead made structures. the frame enhance the So concrete previous that our cost to adjacent two and was type building, a success based the development location wrap as to development my I prepared and upon of wood that we Camden high-rise, high-rise for mentioned moving in remarks

Operator

comes question Bank Juan next Merrill Please Lynch. Our from go Sanabria of ahead. America of

Shirley Wu

is Hi, for on Shirley actually Sanabria. Wu this

So to more. I touch little bit Houston a want on

range what for for occupancy of second the guidance trajectory the do comp this year? built will of losses into half back the also be XXXX, think the For And occupancy half? path your you or what's

Keith Oden

that second I the didn't question, of part get Shirley.

So me and address first first which sort the of trajectory. part the on let Houston the is

one Harvey, in some point as will you quarter. as occupied we Houston hit difficult a aftermath hurricane recall, obviously in to the at the some that. actually of close occupancy XX% you very fourth year comps actually we We -- be of the last in fourth nowhere may have result quarter And of the we'll

we in basically while X% -- new we're And quarter. the up the had about to beginning our of make since we picked good leases So the continue gains, year. up second have

to that that will X% the occupied. in lease the now throughout getting through X% nowhere XX% --we're end of --from We rate that year, near on tick expect see offsetting renewals new we'll the running to continue do renewals Our but Houston. to end the be be up fact

out a close which typical, more in we think is out occupancy occupied that's at XX.X% July Houston, I closed typical more about rate.

to the -- didn't I to see second renewals. out akin better get the likely leases didn't we'll results more part questions. to of and roll we're as sorry So something your year. of the the that on through end we And new then this I'm And hear continue hear

Shirley Wu

into I on it were So well? focus occupancy was terms and as XQ your in mostly just is of saying a guidance wondering in I like you losses is bit that or XQ built as like

Keith Oden

just or time year. occupancy Well less much results our what than of occupancy quarter It's not it's have fourth obviously that XXX at our was a really we're year. but relative store It's be late the occupancy the basis to end to XXXX. comp projecting the the fourth but the same last into quarter year, about plus going less probably quarter, today last losses and we're points this third minus going than in of fourth we from tough losses are throughout not of occupancy where to

Shirley Wu

it, one your renewal. Got your XQ for the question new thanks different more a I get Could numbers color, across for and for portfolio also markets? the

Keith Oden

X.X%, second X.X%, renewals X.X%. quarter new for So the blended leases rates

Shirley Wu

you have a market Okay. Do breakup?

Keith Oden

you those that of give call, you if don't offline. are markets can don't it don't get operate in available XX on but you we would we I level detail But they --we but need offline - that get going the Yes. even them - through in -- me we'll take and

Operator

comes go ahead. KeyBanc Please Austin question Capital Markets. from Wurschmidt Our of next

Austin Wurschmidt

could next how shaping supply curious be just will had you similar supply if were XXXX you teens of Hi, is was if And as good outlook morning. was I down the a in on sense up your give decline. peers one I indicated year. curious seeing grows high

Keith Oden

Camden's completions have, forecast basically nationally that two XXX a XXX XXX. market, in a data bit Camden's that difference we RealPage only in we between nickels in XXXX. got look to for at drop our honestly at RealPage XXXX and drops XXXX. not only and XXX,XXX it's And little So a is that talking numbers worth XXXX-XXXX deliveries I'm he's than into but there's and XXXX and are in that and at Wheaton in Wheaton not markets. less their providers

So you're less that will and XXXX difference data X% XXXX. on than between what we we completions providers between the two be have think

have two they for our to into best within may of it capture both is their been in that least the what they but on going that think to XXXX. between that I completions would phenomenon completions years conversations line, been things they've finish So shift which them delay getting --projected roll has a now, in made attempted that's XXXX that think guess the over at

certainly good last the we'll XXXX made were continue delays planning, to it's that and our is the to think they and XXXX roughly they forecast across factoring their So see going how guess purposes tell of But from it's for My I XXXX. been able platform. they've are best equivalent our trend that us XXXX two in but of and guess years. we're assuming a our standpoint for

Ric Campo

XXXX. That's obviously. just is Houston edge of of of falling when off just in exception nature Houston the the given different earth the supply the XXXX a and animal With

Keith Oden

Yes. got drops that in X,XXX X,XXX that got They're about basically for Houston. --it XXXX we've XXXX to Wheaton so at apartments

Ric Campo

in crazy for those are Houston. So historically low numbers

Austin Wurschmidt

detail with it competitiveness the you're guidance. there. about in the comfortable separately, like but And transaction the pretty the acquisition acquisition then appreciate in your sounds talked Yes, you market,

today? just have curious under that confidence level you gives what of we're contract So anything you and

Ric Campo

hit hitting level the and target being the we'll not to we're markets under have that is really point sort said that like I a the hasn't the been case. in in are of is game. contract And us talk in don't people to about prices that replacement concessions. numbers in to for the but working we're below with that comments at it on where but less are little going, and -- their with there while beginning be our lowering where confidence feel get the of frothiness us able we box we specific or end gives IRR looking transactions, what what wasn't market, this by year. the they Well -- We year that that terminal my that somewhat to imbedded It was the X% of some construction XX is surprising lots with newer either cost my they're

multifamily. we and add. grow those forward, cash that out So a sort We're a find. for but to going looking And at value-add not --good us bid still is different value massive flows for for that can There's news is any for just a there of product, really we're it's looking that there huge harder bid still

I great the leases their the rolls day country. of or issue it X% of XXyears picking month. have think of roll over product much XX% because whole we three the from stems portfolio to of part inflation multifamily every growth whole and -- And you sort of pretty that it's every on this going in the up some the idea X.X% re-prices the on is have X% average

flow Some investors than therefore are cash higher is cap rates and rising. growing faster banking on inflation

rise. If you interest do longer-term have rates

which sort hedge of stagflation you're like as best the and multifamily the that's look on getting not sides inflation So doesn't having the hotels, on as that's it's growing them just long horizon. hump over economy

Operator

Sandler Our go comes Goldfarb question Please Alexander of ahead. next from O’Neill.

Alexander Goldfarb

there. good down morning Hey,

Just questions. two

of your there, Hawkins Keith you it's sense their if Costa or is what sense given any First if in portfolio. for Do California X% municipalities Ric about have is your pretty it repealed, markets your you markets will around rent on the you and face measures issues where vacancy or your revolves think of as that are control decontrol? communities good any now understanding the right with feel especially just

Keith Oden

Yes.

the you're you Orange going state sort level we So, state put Inland on that's two won at a not my lost in effort lot be fighting is Obviously, the are of or really San Empire the level of which the that out. the municipal in And a issue, and initiative California One comments. dynamic level --you I'm level. it's probably I'm participating repeal Diego, certainly then there's Alex actually different correct and sort the to that state thinking -- the through, initiative if on the at the in right got but you a two you they do where Northern than good would point County, game may fight this County. at have things, get attention LA now. are gun head on of

it by to a called by to So mention and there about to be would of was the holdings rent municipality good what it's a done some and value kind the of a of firms the Camden's portfolio going of control adoption only but risk assigns high or measure. of of REIT one I'm a well pretty risk piece our sort and fell in done in bucket analyst low name, all and assets level those XX% not into California municipal stratifies high risk

So --XX% our and XX% the now of that's our of XX% bucket. in NOI high-risk roughly of

all Costa sides exposure be We're plays the NAREIT thing. attention. of with So it'll the it's this a our out. other a lot to participating interesting in huge see and I But to lot there's energy issue and a MHC limited both REITs And think on Hawkins thing. is California. pretty obviously of how it of There's specific but

Alexander Goldfarb

happy then become based. you question everyone's Texas that Suddenly you're it's Okay. I makes it is second guess market. the Denver. And popular

there as time been I you on much never investment seen the left, a long but side there. haven't have recently guys You

than Denver you extend broader So on think footprint guys out. is then just property your what And are thoughts overall I your Denver? much

market market at or to more thinking concentrate you differently in. as Meaning you and So broad the you how there? a the about like infill invest invest any are maybe market

Ric Campo

a as market the like market We to broad invest in.

The Denver challenge a currently more in my with Area today. doing cap that RiNo it sort is River development which oriented and trying and new been they're tricking If our for right which the in -- we've at our we've you at We adjacent to transit- what North sub is have to head underway development seen is there, have that's paying developments, the for downtown. that development. urban is get rates have been hurts what of been look in developments

we So and and Denver, some where have so transit-oriented in between development, we nice our properties-- are like balance we then suburban. urban a new

that the A So you time liked generally a to a of we getting market balance and do some suburban lots if in good into, when definitely be you correction have a Denver properties long and and list have B between but everybody's Denver day of for a is and market. on urban continues and for reasons properties,

Operator

of from comes question ahead. go Please next Our Rob Stevenson Janney.

Rob Stevenson

morning, Good guys.

the sure? that development, to would communities half many stuff this the how second and point on of current this are the you for year? start start And you Beyond where in other you pipeline the stabilize are planning at then returns Buckhead of pipeline are think

Ric Campo

might next So but the start the of we've bucket of year beginning announced more, end the one that it starts at we maybe year. including the is right be would

we've And with million the and just announced pipeline close million $XXX so or $XXX plus ones guidance. were towards minus really our at

of development instead yields lofty yields, change at. from that clearly In today there our some and yields sort have of six and levels some terms some they are down come of were pretty seven change. And

XX% and some going are maybe in so markets, And X% to rents X%. continue costs construction rise X% up to

compressed that those So yields. has definitely

versus point spread other to perspective. still between in basis XXX going have XXX an in we hand, can positive what On we our acquisition buy going from yields yields the

So you a for taking development have still spread nice risk. a

Rob Stevenson

years taxes, given been when rate about winning conscious you're so successful of talked you the your how just guys of therefore ones making property so Alex, Are the you of to efforts and you do Camden's low. tax egregious there? sort sort what terms then, and percentage of in guys appeal mean last is everything over winning appeal appeal property appeals. three comments your I and about Okay you or contest win sort

Alex Jessett

Yes, absolutely.

So but some reduction thing typically we effective. of actually were a about do don't appeal single lot. we appeal getting every XX% in And form we

So rate. it's a winning pretty good

Rob Stevenson

just does I sort end --is mean mean mean how that that get a then negotiation a between paying its little you is wind mean it basis. it in And of is what I or up movement XX% assessed up annual an getting magnitude. I on bit. and lot significant at the I is what's what you that

Alex Jessett

Yes.

we single rates community target that rate, XX% to every And to it's we for that perfect So own. set pretty it. get to we we we're close when target never say get shooting but obviously,

Operator

go of Our John Capital Kim ahead. next BMO comes question from Markets. Please

John Kim

the I'm so contest. emotional still riding your high winning Thank you much.

Ric Campo

Oh you'll get over it.

John Kim

quarter? think far my rental it's growth same of achieve that lease higher you guidance? achieve made you X.X% in July. you to of And as midpoint week assuming in blended that for revenue as the sure. got are The rate is quarter, the Do store X.X% It's what the second trending something you your can the rest

Keith Oden

through is probably trailing as to Yes. Dallas, you've got a in year interesting you've year. got-- up you And because for The Austin July in the --into quarter. like the numbers end the the are third going comp which Houston go then Florida we the and being South that high-water and away real are markets mark be fourth got

So minus back my X% where that's is that now about half or all year year, the the in seems up any right me. X.X% is about July revenues, on and for implication that the you probably our the we're guess mark, and the X.XX being ends in think plus is we of of the -- guidance high-water so right to

John Kim

that as to $XXX of maturing expect far refinance part that next of million Alex It you the but mentioned remaining raise. is like expect as unsecured and the expiring, million Okay how the then do you debt to sounds debt $XXX that? repay to year,

Alex Jessett

Yes, absolutely.

Obviously, options to looking as we're dispositions it's we're and that. at appropriate at ability and to looking the do lot well. a going always do of how have we've So if got tenures, market unsecured we to the various then

rest the exactly that our to So of we're on strategy through still how working refinance we intend debt.

John Kim

you debt Could on versus unsecured? pricing levels the secured give

Alex Jessett

Yes.

so secured, unsecured Mae Mae easiest the that you are about basis to and on of it about out to going your a done XXX in if went try to the get a you Fannie point somewhere versus are you think we -- is for option Fannie right can basis be rates for spread. trying very unsecured your a sort to LifeCos us walk on spread LifeCos ten-year And actually way today instance, if don't to So LifeCos already build have in deal there. is the best business around probably XXX XXX points. which is over.

John Kim

thank Great, you.

Ric Campo

--even will going refinance we One generally are though get --unless during one going on unsecured of some something this unsecured will the can a borrower, things I secured debt we the borrower, financial that debt market an of and we're that to happens that thing in though really the stay secured unsecured is and we place you lot there's we rid put mention of an wacky with in is get we crisis.

getting that capital we sheet on And credit debt better now that our on going our money to balance will back recycle how remember secured this by are unsecured cycle Freddie our have or discount. debt, secured metrics debt from of and Fannie - a unsecured have where lot point. in even we If at the that take out new with borrowed unsecured debt of rid that with that bonds we we went you did and at we and a bought we're

Operator

of from comes Baird. question go Drew next Please Our ahead. Babin

Drew Babin

there, markets. sequentially Empire it wanted County, on result I to sort California San revenue Is Orange the both, Hey, Inland are like curious the LA And good of still pockets of while growth briefly. that? strong like decelerated of It urban of it effect driving bit is looked touch Southern a a was more looks in a Diego, that supply? the is result I just supply? tangential of dynamics What morning,

Keith Oden

Yes.

give for up new XXXX LA against this it XX,XXX County; about like and we're that's in going apartments. jobs in LA looks year. example I'll LA, So getting And around end you and to Orange XX,XXX

line, relatively that's of bit So implied. in little a pressure

to forecast pretty drop LA, XX,XXX drop XXXX XX,XXX to additional about into the out go the at are you about but jobs If unfortunately in supply constant -- apartments. maintains

getting the in absorb about that's ramp XXXX XXXX get just we'll have we it story like in similar XXXX. to it's pretty the looks in of in about math the X,XXX in jobs will apartments County, Similar LA. XX,XXXX marketplace and is Orange supply to So finally and

from is actually outperforming actually plan It's So what my doing our we're perspective our was. portfolio with well, original performance. pretty pleased the and

California platform. with by nearly And as are that not do just high location levels across some that the impacted has deliveries of of on going is Southern the our to

Drew Babin

one Great, on maybe then of concept more that And replacement conceptual cost. question helps. the more

tear you say that. I assets --if average a sides And with a cost and of replacement kind over benchmark buying is up replacement could and bit guess right labor cost time opportunities I rents things of acquisition like of you --you're to a discount moving think say cost kind with at why just argument of of kind would even might going that to target. maybe A of replacement time. as trend both since more bull replacement than I'm of ups elevated bear in a period fluctuates look inflation probably is artificially materials, it only the volatile to regard cost, now in is that more give long sort over a

Ric Campo

just buy can at of lower it at build and -- we a business, can buy build of it okay, is sort way a we said what if that But it it agree know a a for cost this build I in at me. that to cost sense what the build you me with it way what and higher if look since we it lot us then is that Right. development it saying, I that today it I will to sure. and have of robust look can prism cost I than what price we at to at then today makes can

across and costs. at but second look the I our rule --that across door I'd rather buy on get bear costly the I you the exactly at people high develop. street? from those from it more and to will than argument I buying property are per can going I at than build in we're properties when are or are me if ability gee, phase On the and, capital. want replacement to one Atlanta, what that our point side flip say, at Buckhead. more side, and that one costing buy price understand own above would than square buy my us street the about can And So develop of cheaper perspective you to a I ones why it commit a it's some commit it's capital I to foot cost Why build day, our bull the I develop properties to build can the I know if per

Operator

from of go Rich Our Mizuho ahead. Please Anderson Securities. comes next question

Rich Anderson

morning. good Thanks,

For won over squat. I XX and haven't years

here. I don't So what's going know on

a thing exceeded was way is and happen was see it you rent exceed chance but growth when multifamily there do point a of --when growth. rents could a So with next reason of healthy or renewal think if wondering I'm in why That couple years. rent rent there some there's a at renewals your a while one that systemic won't multiple new happened when new I back really market your you that growth in the signal cross do remember hasn't again --new

Keith Oden

certainly it's think I Rich possible.

the weird part about The renewals increasing if happened continue Some in you And rents odd last with been it been we see the years moved to -straight --renewal question, that person nine on is rents you an constantly of bit in ago but years at doesn't rate and growth, me for a the of which of unusual. growing what rents. the fact rents have little above XX it months lease. eight or have has that's signed part the greatly or or you've new it derivative renewal part in would straight although that a when second do is upwardly is is increasing increasing leases. eight when to eight for at a where The market, seven you're around the been surprise market a then look rent big new last constantly has

question So the what rents that at had downturn the the part some point think in were in with Houston you're have experience were cases no trying you rents going of And we what occupancy. renewing at. just oil markets about rents the actually in part you offering with we below -- we maintain when many and negative. that new had do to at There's to

cycle, again. on a you'll expect as but would in cycle, see and bit are next yes, little guess happen that you things unfolds continue to I moves where the depends it I this that the as So get cycle into is my

Rich Anderson

basic described. Denver currently is not great to of I on AvalonBay But incremental it. there optimistic is it topic knit many common fundamental right at correctly your am a suddenly that that to And interesting very EQR people I market just like maybe look but these a said of something the secondly Ric today. a heard at you what look that that's views are and that fair the suddenly way taking coming about are or Is peers then is from remembering all that a you Denver, it's stuff

Ric Campo

growth. is in population inside long companies other want true get everything New overshoot then development a rents the market of that the the Well term and grow and always argument that is allow just and more that allow has as that in is to the And true least investment that what broad table San it's forever not that is grow to And where Francisco, don't, than at as high-growth perspective, as go the or -- York. right. markets be byproduct right markets both development municipalities it growth constraint they we've allow and supply argued never happens pounding we the it's thesis today over will I and job down the been where to anymore and evidence a that Well, markets that one can't have we from really their isn't been. rents coastal know

going Denver our for And And if to renter I base. in I'd has think propensity change something I sort that so value markets those that kinds given things of look of there's I'd had cities go the real-- to really a got --then lot Denver really market as think and I about dynamics. that think really it's has are those I mean that's the for not growth you were classified lot look not when going recreation have of and there a Denver of a high things that. high long-term dynamics, of good on mountains, propositions, it's and Millennials those good dynamic are for

buy abandon Florida So supply with it at to it holds their with might markets. mean if say don't -- look Denver, South it of have low to I'm to thesis and going -- they and market doesn't-- a sort might I totally it that coastal couple non-coastal the a market of be those

Rich Anderson

saying. dice not on the HQX So rolling you're

Ric Campo

you're dice, we don't think is on a and dice the wild don't I rolling throw that. HQX card I can think

Operator

Please Stifel. go of Guinee John from comes question next Our ahead.

John Guinee

thank Great, you.

Just go a from up vertical unit. a about Is a wrap there $XXX,XXX a going about a with then curiosity question And as type unit product you're you total unit. a Camden Buckhead, when a quarter concrete? you to increase a to at have last one XXX cost development wrap the really XXX

Ric Campo

pieces. two there's Well,

about is you So --you space product differential a yes. when the high-rise between There's then of the the as a interior and the concrete a answer a do big a concrete, product property go second And it. and question wrap improve you quality no well. and start to amenity

than a product. would do to trying more you're in going finishes, put --then get in premium So wrap if to to you you're were have you premium a rent doing

wrap costs and was just and the between high-rise. is So the finishes of that probably both much. the continued and rise packages it's and third sort amenity wrap differential of --so of future since the sort it to Then product part because of tweak was and not placeholder then have between construction have those our a a great to very not numbers we development comp tried

some number. that number that wrap years definitely in So for ago. couple price was as put that the in was product you've put had in construction creep a And

part]. number base was probably that [lowest So

John Guinee

options via land you people you et and supplemental? on for show sense have control can a what you do that second, then doesn't up get cetera And might the

Ric Campo

we're now. transactions land supplemental very it's environment. what current on to control but in a right And information but hard get this working to for our period you try We on at is what time of do point, this long you see

Operator

Our of Golladay next comes ahead. question from Please RBC go Capital Markets. Wes

Wes Golladay

Can is Do rate? we municipality everyone. morning, they year this commercial good Yes, entering your case you to go tax budget a overshoot trying or Were real estate? their just County where is using below the target Fulton a well it increase? plug back to

Alex Jessett

actually not Fulton and what valuations this, can but a you to where of State alleging of sued their has way issue. responding a you this is about under County's Georgia is lot of are is it. so County will online happened really effectively the there's read that I unique articles Wes, interesting Camden market, this tell Fulton

actually there's all last register. the where courts fact, owners. there to over valuations In property has count threshold a over to County, in actually over their tax if appeals you Fulton property is get X% certify go And the tax of county that's XX,XXX X% in X% of fact, appeals, of an

that board get is to they've appeals if they all unlikely through, So clearly County a you we're work going think be that clearly issue. of that XXXX. I the but until appeals, of Fulton I going XX,XXX once overshot. any we to believe our it's you filed tell across have We've will sort have resolution this highly to again

Wes Golladay

you that Okay taking just figure and timing delay lease then pushed looking a up at to which a of maybe a the function quarter. to delivery acquisition getting a trying developments that out of of Or be is buy? want later? little Is bit one to fourth the it pushing guidance just build the acquisition to longer

Ric Campo

the And it's out not find which many-- to so trying transactions are too one. It's to more one delay and There we through trying buy. going a to right want figure deliveries. more much in we're more

Wes Golladay

say a lease? And I add, to for as just have lot buy people when of you're these? may is the into value a lot a Okay, core but trying people just I follow-up to of competition such competition at lease it get a that. quick when would you and it many how that a run look real you or spread chasing bit-ask do

Ric Campo

it's think both. I

value-adds. You cost have below a replacement of me in XX-XX a and in --you XX, there of on and type there's competition. value XX It we still might you but for is core --so , space, or have asset add you bidders XX --trust lot in have competition may sort that XX still have a just of or clearly have is less

Operator

This question-and-answer our back Campo concludes session. like I'd turn closing to over the for remarks. any conference Ric to

Ric Campo

time fall. And great today. Thank speak on Right. to you the of have We appreciate your you. we'll a rest And your summer.

Operator

conference for The today's attending is concluded. Thank now you presentation.

You may now disconnect.

Camden Property Trust (CPT) 4 Aug 182018 Q2 Earnings call transcript