CPT - Earnings call transcript Q4 2018

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Operator

Good morning, and welcome to the Camden Property Trust Fourth Quarter 2018 Earnings Conference Call. [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.

Kimberly Callahan

you Camden's thank Earnings Quarter and Call. Conference morning, for Fourth 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 fourth 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 email speak to be Campo. with we queue Instructions]. our we'd I'll by questions this

Richard Campo

Good morning.

guidance our at entire markets, outperforming I'd suggests, driving champions of the scores another at outperformed year a to purpose our of out for slightly we tax maybe employees, along XXXX. We guidance, which beginning hard we a ultimately new As and for a world growth not the XXXX in primarily well, our revenue team worked expenses our and lives the a was ended We like better company, the a XXXX sector. management customer team operating the gave one and care year. of were net least, property as expense give to we by Camden's with with major like sheet to They, really shout music XXXX. keeping supported year are property the be than slightly the bit, should our world begin our attack-the-run-rate year that Camden projected, -- balance solid of to lot their costs holding similar increasing improve levels the a my highs. competition as original sentiment artist Camden but income and an Revenues health members growth with our experience result lower and team our their a at Queen customers our XXXX, time. above the is a initiative operating -- surely the way, increasing shareholders adept that in XXXX. great multifamily Camden. in at strongest

provide contribution. FFO to NAV continues pipeline development Our increasing and

now us an competitive acquisition pursue give appreciate on to call very continued development continue to Oden continues while to to in turn apartments Keith relatively strong to environment. and of support, revenue as a supply be is that supply our to while We demand New our same We'll allow your to over in I'll same-store update enough opportunities markets. the growth. the continuing markets absorb XXXX, produce us

Keith Oden

encounter we expect going with the to market use Consistent prior in time review Ric. today's during my Thanks, years, in XXXX. to I'll the we markets view year likely one or to as improving, letter that a as well the in conditions Camden's best to address to whether the call on on stable markets be all declining of grade is order assigning believe each our worst market by ahead. I'm to

markets, Following I'll and -- property X.X% guidance anticipate additional a and X% XXXX range, property same with our at guidance. grade between We revenue details X% same revenue weighted growth on of year operations some the of market this received quarter of overview, our our of of property growth growth provide fourth or midpoint rate higher average will the each and markets our B- this in year. our a all be

Orlando growth spots similar As movement Ric how said, in we XXXX X that's reflected have XXXX Only XXXX and projected #X moved in in market revenue for of California rankings to #X to this XX vice for XX our bottom Further, our markets. growth versa. stable XX and XXXX from the #X. portfolio. year. rated Southern are All markets little #X more among is or than should revenue to from X look to top very our comparing our half no from Camden, as markets moved XXXX. moved this for unusual Camden's pretty moved to And half

So here go. we

with XXXX A stable for outlook. Denver, we which ranking a rate to goes Our top an

Our averaging the scheduled Denver portfolio X% XX,XXX over XXXX, XX,XXX jobs new this delivery for expected same year. X Approximately property are growth a revenue and has performer, annual new during remains supply units been years. with strong last steady

Phoenix metrics estimates We earned rating with X.X% improving Supply XX,XXX look jobs with outlook. outlook. give expect nearly for for rating with stable Southern meet We X,XXX our this with year. units demand calling the XXXX or and strong an Denver in an will revenue an coming A- growth online assets we California XXXX. a new that also achieved exceed A

stable #X our property XXXX it again again and each should an operating rating be balanced revenue year. expected Our XXX,XXX was outlooks same from received should this be and of XXXX. portfolio region with Hollywood growth around demand face and XX,XXX X units with And to Job Orlando San metrics. there over in Raleigh on XXXX. A- with our growth, completions aggregate, in down in spans our this supply was X.X% top this Orlando the healthy markets performer Diego. year. California conditions

also year. In are same X,XXX with new XXXX results XXXX. jobs levels growth again XX,XXX ranked rating in Another we a outlook projected XX,XXX XXXX. with since been been with XX,XXX a keeps as have new of for this and coming with with XXXX, steady has in and X,XXX X,XXX also over has apartments Atlanta B which is next jobs delivery completions. developments XXXX. approximately have B+ Up and stable expected new and steadily year, for stable XXXX and property X,XXX in growth online remained its last units after only delivered employment negative for this new are Atlanta, in year. expected new line XXXX Job Raleigh, during strong jobs growth projected new Job more year scheduled improving this Houston been Completions 'XX.

revenue X.X% Our Houston XXXX in rebounded achieve to portfolio a growth.

slightly anticipated year. slightly are year XX,XXX X,XXX better taking XX,XXX of with conditions and jobs-to-completion a units currently D.C., completions in as with stable see and level new outlooks. healthy this this new come to projected jobs expect Washington, at with to B Xx. are should around results XXXX projected, Houston around X,XXX over Tampa's remain job supply jobs new down new growth in In We XXx that roughly estimates Tampa the ratio

reflect year, same to portfolio. to growth D.C. lot revenue XXXX slight and Last improvement we in our XXXX expect growth achieved a from regards look with our Metro, in for X.X% property a We like projected XXXX year. firmed completions D.C. estimated in to seem a a XX,XXX demand of with this units B- new and currently Supply XX,XXX metrics Conditions there. bit outlook. Charlotte we up with an reflect and improving rate jobs have projections

expect this are Charlotte, been persistent the level another in supply XX,XXX anticipated portfolio's our to above slightly sub-X% remain units and growth XXXX. and New we improve year. achieved year, X,XXX in revenue growth should has Job from this

all completions three and But solid last job with amount In during challenging coming with growth apartment has will year Southeast in XX,XXX online XX,XXX similar created year XX,XXX Our B- rating and outlook. Dallas, a stable year, expected markets, Dallas, more this the market and XXXX. over jobs with nearly remain XXXX. last Austin, units over Dallas a Florida last earned been

With revenue for new jobs portfolio year. of see and revenue Florida apartments XXXX, expect to again growth Southeast and we projections limited this online competition and In growth expect in new we new to our resale XX,XXX XX,XXX from year. power this limited has additional more rental units Austin, faces and remain pricing condominiums. coming

start decline anticipated growth revenue for again similar are This in units should XXXX markets XXXX year pricing midpoint X.X% expected around be new with we power this market. XXXX. X% year rating our same this than at slightly markets XX,XXX a as to Approximately supply all level. of see revenue compares but B+ total new New is achieve mentioned of to I high jobs, to And remains revenue guidance And Austin most should in XX,XXX XXXX. Overall, a our room portfolio with for range. to earlier, our very our of better the little at X.X% of expect growth same between property our X% portfolio property and results growth. the in to leaving

property few quarter X.X% was X%, XXXX Same operating Now the our revenue XXXX. and results. year for growth a full fourth on even details for

D.C. Our top an and Phoenix performers at improved Metro X.X%, San Empire at X.X% for the at Diego/Inland at X%. quarter X.X%, at Orlando were X.X%, Denver

year in turnover an to last we're Chief points this in a compared in with -- all-time lower this down XX.X% for to fourth the averaged and last roughly of levels. basis range. on year. offers year. the Move-outs good XXXX, a teams our fourth XX% results quarter January versus up renewals negative turn game in Jessett, leases low X% in XXXX. and full the At our of off Financial Florida quarter occupancy from XX% for was post-Hurricane 'XX to for quarter XXXX net quarter the XX.X% during full growth plan Dallas, a we accomplish were from and All quarter our year. XX.X% compared good XX%. XXXX, the averaged XXX great all, start range. XX.X% out year the purchased XXXX. in going XXX January minimal XX have XX has new so Officer. Houston we Rental Harvey Houston, rate was expect March quarter flat February preliminary and of expected negative growth fourth rate fourth And under versus forward Charlotte, similar including were X% expected, the revenue X.X%. renewal also this markets, with occupancy currently as point being Southeast in out are in are Occupancy With in trends the for our XXXX, over XX.X% Camden's for faced some homes execution a XX.X% at than XX% points we occupancy to to are sent over Annual As comparison in XXXX fourth comps Alex I'll X% looks supply-challenged of laid both blended to XXXX point, like and basis occupancy where impact occupancy those of call basis

Alexander Jessett

Thanks, Keith.

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

million During of deliver at dispositions estate Camden Gaithersburg, a Camden $XXX no to at D.C. $XX Also fourth NoMa new and of million the development $XX reached development $XXX net million development of community million million McGowen we Station, stabilized an over yield million for X.XX%, This transactions. in during Washingtonian, Camden $XXX XXXX, $XXX In a with of quarter, quarter, creating real expected in our and we $XX the Washington, Maryland; acquisitions we approximately value million Phase completed shareholders. development, Houston. for construction is stabilization in X of started completed

The After X, effective the after fourth repaid million billion. of X. floating offering. to proceeds completed unsecured debt, communities settlement average unsecured rate X.X%. and blended approximately and our XX-year interest transactions, million deducting our XX% financing debt X.XX% to unencumbered unsecured approximately interest consisting X.XX% a debt giving We we rate XX issuance a on October debt of approximately repaid $XXX estimated interest $XXX in-place secured at for the par was assets underwriter at and October from debt $XXX XX% at this discounts secured debt fixed $X.X offering, activities. and these of repayment rate the of our $XXX rate secured expenses million of into new we on effect of rate of swaps bond million of were which taking unencumbered. X.XX% valued On effect is other using of Turning The quarter this of year-end,

X.Xx outstanding at of sheet coverage is fixed of net balance ended total X.Xx. Our strong credit. debt-to-EBITDA We charge with million the on with $XXX of and quarter no a our lines unsecured ratio balances

of dividend, after an the in million of repayment our approximately X.X% today the fourth rate payment balance of debt are of with property of credit interest quarter and due which payment $XXX million. January disproportionately is line of current Our secured XXXX January $XXX the taxes,

early $XXX We This the have of average can repaid in X.X%. quarter additional par. of weighted debt due rate second currently million secured at with debt be interest a

have under next the We $XXX million construction, development years. X with $XXX remaining million fund currently over of to

measures. Moving costs XXXX our from share, financial we of lower operations $X.XX self-insured due care Last funds range exceeding expenses of turnover for the to guidance prior to quarter continued amounts results. health midpoint or reported almost the control lower $X.XX This $X.XX. per fourth cost on night, operating resulted of of costs, $XXX.X million by entirely outperformance lower and same-store from

earnings to guidance. XXXX Turning

on the outlook. assumptions refer to of can our Page financial supplemental our details You fourth for XXXX key driving quarter package XX

per share to of unit of our per share in diluted midpoint a $X.XX, the XX,XXX $X.XX from at the in related share increase a portfolio. increase X.X% or components in be increase same-store per this with performance The approximate of to FFO FFO major results. assumptions of to of XXXX our An $X.XX range $X.XX range as expect our our midpoint $X.XX XXXX follows: per $X.XX and the share are FFO representing We guidance

spread borrowing and income general the per and administrative cash X% depreciation corporate of due combination share of in in of maturing approximately per net and properties are to driven same-store share higher the during expense, from of primarily from year; $X.XXX resulting property development related by: anticipate an interest and the pro of of per net share projected is Camden net in and higher decrease per approximate a store increase in currently X.X% acquisition $X.XX X.X% per per approximate FFO income million forma FFO store and X partially of completed approximate revenue pro throughout net year activities. from an and X.X% from the share stabilized share an and acquisition our management to to by and approximately net to increase $X.XX NoMa offset million $XXX rate decrease from latter nonsame corporate of secured of maturing X increase recently and activity, the This in all-in forma partially FFO and cloud-based assumed Each growth X.XX% primarily lower be debt X% our refinance an in actual $XXX and of These implementation X an FFO expenses; $X.XX new and XXXX and assumed refinancing due is an fund from growth an by approximate accretive resources early in the $X.XX unsecured share balances; FFO development assumed FFO. We growth system; amortization of development X.XX%. accounting expense and $XXX at combined dispositions increase both to expecting lease-up acquisitions spread and Phase resulting XXXX; NOI to debt. part XXXX between of in in and We cumulative same acquisitions yield approximately $X.XX offset X.X% incremental finally, year to XXXX FFO X%. decrease income in in resulting the our $X.XX approximate development An secured will operating XXXX our contribution million X.X%. used increase XXXX; an in new human debt per share midyear in proceeds lower to communities due to operating due approximate interest an

early In line of upsizing part unsecured we XXXX. in of credit the our existing recasting and anticipate addition,

to Our and increases total by XXXX and just growth for of our expected is to over X.XX% represent same-store primarily taxes. benefits X.XX% in salaries due to and increase anticipated range are and benefits operating X%. expense property of expenses Salaries XX%

XXXX and general benefits self-insured where experienced made discussed effects XXXX, of X.X% and XXXX, salary low labor As expenses, in X%, original our well increase of estimate. we health approximately adjustments in amounts appropriate. we care tightening increases, in Despite unusually resulting in be on calls, were to salaries the responsive our to below these market-driven wage prior

primarily revaluation will by of Denver. year And X% our for in XXXX, every an only driven not represent in increase expenses projected Denver. is X/X other years, We anticipating Charlotte amounts care operating revals X are are XXXX. every health total that approximately and be taxes and expenses and these of low purposes Charlotte to is Property XXXX property year. tax for XXXX the repeated

valuations protesting outsized the based discussed property XXXX previously upon in property Atlanta. are if necessary, litigating, and tax assumptions us successfully XXXX Our tax

taxes, Excluding $XXX anticipated plan night, $XXX less year. salaries expenses spread XX to first X% provided the balance in increase not starts including our the of details guidance of sheet mentioned, Last assumptions million supplemental previously and of XXXX. other our the benefits on million package I've Page are remainder for to of than aggregate. earnings we development property-level quarter also for throughout also and at the the

increase We $X.XX expect $X.XX fourth of the be reset sequential to range $X.XXX $X.XXX remaining year. property January which amount, slight in share revenues; primarily in FFO due accrual NOI an timing in The expense of offset other per increases, on-site $X.XX is attributable to decrease X midpoint of primarily the first result including share Of a property to decrease income. same-store per to trends, seasonal the approximately higher due of sequential tax from this from to increases same-store of share typical The $X.XX. operating by is each due of to a approximate within certain XXXX, and increases, the time, salary quarter decrease of increases overhead for sequential the our taxes and questions. partially in call of same-store and other in expenses salary up of income, from corporate on the $X.XX timing quarter combination this $X.XX an cash per open lower lower to interest FFO expenditures. At of to balances net decrease we'll the annual resulting is operating resulting represents the due

Operator

[Operator Instructions].

comes first Scotiabank. Trent from Trujillo Our of question

Trent Trujillo

So that assets with about for makes you net pool leverage. the be can your talk buyer find how maybe deals? deal for which to you low and a the to and attractive sense flow pricing guidance you talk acquirer, you've the and seen about But competition calls expect

Richard Campo

Sure.

just Housing of, in National over record Diego. San believe, a sort we Multi Council and They of got people from indicates So sort popularity had X,XXX meeting investors the of back today. multifamily with attendance I of which

normal remains of a very And between environment, a a -- right growth. it's and sort it is have that. buyers buyers understand growth And question happening I that about that competitive of as what's there's sellers. a so there's sort revenue to white-hot think that revenue sort of no So opposed now kind of you standoff

this this you and kind spread bid of between So have ask point. at

sort today there of is What because to need happen, the center need now. so and between clearly, to there sell gap be then a -- of movement is two out that And what's hasn't in going sort or transactions really of last on though, will hasn't And spread part last of half enough will the buy. going there been 'XX. last buyers month bid-ask understand that or to sellers we towards data points lot think -- there really a been

be to competitive. I going to think it's continue

through X cost the of rate cap the below at looking to we can and quickly believe we X plus properties X -- couple property, rate replacement X, improved in low that cap sort of look minus. -- of Xs to pretty operations we move bought, can that we're mid-Xs years over that that -- are last X or a or you we the sort where transactions up Camden-izing If for

is will think So million $XXX there everything. much $XXX obviously today more. million of The be guidance we opportunities. to million pretty or It's $XXX

by key X for so backdrop given transactions is perhaps. X to the the up the haystack not and in with The we operate up, by that talking though, the it's goes coming going -- think end buyers, we're undermanaged we are knowing properties And where very and needle happen. us, can in of think towards market can or for you we sellers about where come that but kind NOI actually up, finding move better. So hoping that, we the the

Trent Trujillo

on concessionary that helpful. of in the some just follow-up, supply? are markets very Atlanta touched mean, And a about the you your Great, there you talk you back what's But coming can perhaps concessionary looked we've prepared your supply those that's power and But Dallas, in environment in seeing I basically, markets facing largest high at environment? XXXX? and easing pressures are pricing and remarks.

Richard Campo

concessionary environment in development submarket and market. depending varies the So on the business,

free. okay, free say, just can't or free you months three month So it's X X or months

doesn't definitely submarkets varies you and to a stabilized get When it building occupancy. vacant just projects sort just free they're them leasing really matter are trying have opens, that of to developers a really So to by up. rent who because

that. the you to more free, the go And X don't moderate the And and have months so over X. are aggressive you markets three market, more generally

an starting example, free for market in sort downtown. sort the is yet years event Today, and X Houston, sense. like in turnover it's months to of to the prior Harvey ago-ish, X.X, in X more Just a X.X of was there to

XX%, property it's is capture think occupied small and you to there, the markets of like or to it's you now the need be you a that months you that question the that are some are stabilized But leasing taking a to stabilized moderate sort for very, uptown properties area. to we've of those I was the number concessionary. concessions have renewals. start of is up. concessions renewals sort at in X have so whether leases actually. competitive good free, But you should that are you're news pretty about apartment pretty the as you But to think occupied and is, the XXX-unit in are If a XX%, speaking, and and generally when be Charlotte in will having very having keep of XX% seen the order get Dallas, given XX% us, be X which year to

property the mean So fact that giving doesn't is a concessions existing to. have properties that significant new

And give the so just have and in of those market share properties. you portfolio have our revenue kinds of very stabilized because that a concessions don't capture same-store growth sort supports we stabilized to to

have the to have revenues one equation; hand, X% on you of you operating concessions What the on you increase moderate is the and side in the other just So have X% development ability your the depending the concessions in don't the hand, portfolio. on to X% or market.

Operator

from Our Joseph next of question comes Citi. Nick

Nicholas Joseph

the you demand? their prices Houston, enough level? does On enough see get job Or in contemplate that growth think you do energy Do job growth drive you sector? sectors the medical petrochemical can and XX,XXX oil assumption will at to growth current in job need

Keith Oden

Yes.

from kind off. XX,XXX when were is years from in large does among ago not the X -- downsizing companies contemplate the job oil There growth the people oil Houston they still, the contribution laying pretty still So of Houston companies. any recency effect and strong

come as of are increasing, your So they from add even an reluctance staff clearly volumes great where deal environment when backdrop, are. which in you that to there's a

come event. the start primarily but continue they there'll jobs, Harris in jobs are -- -- $XX they've here limit But support stretched what most to total steady-state probably medical activity. and from field County. areas pretty was are in a the point XX,XXX barrel The staff. add to back of of X has on center in where to increased goes adding will that's be terms just significantly $XX to not Activity operations, But So ago. and a the across it years still is and office where the distributed -- is in reluctant oil a and XXXX a companies the $XX pretty to

So going The get I part and that's we very that very a of think picture XXXX. X,XXX That's are probably completions the doable is almost in for to the XXXX. XX:X ratio, for the XX,XXX we're now. Houston where Houston in right is healthy most important

Nicholas Joseph

projects, the Is change Diego what's cost San driving a on and market scope development estimated or And the increases? pressures? Phoenix cost then future in construction it

Richard Campo

San we have and reconfigured made the that that have But the from efficient maximize it site. -- of and views both. it's we No, project, to Diego trying more the it elevated

generally, those an cost so changes had to in also continues issue market. of but to we be projects, scope And in both have every

Operator

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

John Kim

But it any year, Keith, on the at your based you on were revenue. market primarily would I if markets think same-store be look outlook? in NOI, differ that's outlook that to same-store there for on your

Keith Oden

Well, NOI the described swings to based going you property you of X-year one-offs things Alex get year Charlotte like have this primarily in event on. on that have the where that in tax, we're situation like kind an revaluation going

a Camden's look you -- we're estimates, when jobs, look Atlanta me, over looking being critical on X. on at Denver focus the going get X.X total you at I ratio. you and you that Houston jobs. tend for And if if back but is we got really equilibrium. that apartments. that's get a at the to data at XX that's about XXX,XXX over to and And at then low dig look X.X because you X ratio, that's always We've -- to though year-over-year to -- at even going it revenue about trend. same-store XXX,XXX -- at look we're a across -- and results, X.Xx -- interesting. I it's into new But you've We're So should got have of platform, a growth range, you've in going jobs-to-completions of XXXX, because X.X. market-by-market get excuse about XXX,XXX And ratio range, ratio to or have a these that's second X-year also on at that high that, primarily end then the piece is of And D.C. the end that have talked

overall XX -- So the our of as again, me XX got you markets market. the our rankings, back biggest the directionality those to But about rated the get portfolio -- of XX are to indicators we've stable.

a So the anticipating not in there's lot of that swings portfolio. we're

John Kim

stock hit also, little then that guidance unique a component your in sector. your X-year of bit might be external growth a high. the And today, is a FFO Earlier

what hit your common target utilizing you or your ATM to equity your for maybe appetite year, acquisition raise perhaps the again or versus leverage level? dispositions If your is raising

Richard Campo

have the sector. sheet best the luxury balance we clearly, Well, in of the having

So between, growing at or is a will, the or you about we via stock debt sort capital you're it's each debt if when capital time. what if either of look have on that have or of other the capacity keeping and kind efficient the at in strong sheet, of site. just balance always understanding but a we you look And to balance capital. most dispositions common mechanisms decide those And have externally, at and we appropriate levers, raising

all-time about an excited are are stock the well. and other as on we're debt levels interest low rates So high. hand, But our hitting low

And balance so for is best figure what capital. out the trying just the to fit between it's a

John Kim

But last around? anticipated the as anything of you raise as would far deploying as that that you not with you was it time think the as differently did there capital this quickly

Richard Campo

development. the 'XX I more have wasn't. that us, you only I XXXX, what just take and going buyers though, did mean, we be capital balance we 'XX's year, where did all good last XXXX increase facts we our the over though them that and whenever opportunity, acquisition in hit leverage had would We for sellers try -- and for we you're did The increased didn't sales multifamily when the we -- more was guidance even we there think there did was. equity news into be than to to are going together. think transactions consideration thinking about to

deploy months So that capital start all on capital get it a the one to to because can't takes XX your XX development when actually out. hand, you you

development. do we could but you development, development acquisitions acquisitions and and/or looked exceeded equity we underachieved when our actually raise the our And add projections we the So was that way at acquisitions.

think didn't people development. though to even did. So takes the we deploy, that It just actually deploy we time

Operator

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

Austin Wurschmidt

supply for been your at the curious for then And could Houston from is XXXX if what point. Just deliveries provide peak outlook just XXXX? this you in have absorbed Houston

Keith Oden

of -- still project end in -- the process, year the probably been would substantially, absorbed. Yes. the XXXX of -- depends huge of in has 'XX that at the delivered so probably absorbed. are The are deliveries ones area size And in started combat. deliveries of -- the an on And that the that concession that Ric on we the how most the what plugging still activity, was. those mentioned at had they started were was locations submarkets overhang earlier, still most at and 'XX the been say, -- capital to in But the in range the beginning uptown X.X the The think stuff I deliveries the out, in the the that the the -- have -- 'XX, that still deals, Those submarkets. all I many markets market. -- in the attracted the which as were got hand-to-hand and have, new midtown since X-month in we're fighting downtown, still -- most it they're those Galleria,

And a a some -- our move areas markets, when impacted results those XXXX. most that not XXXX, we've able for beyond if those we of new that's And exposure in footprint optimism forms year for supply have our totally picture. we you been the the to has X different new it the that So and that's it's basis but by in you in in produce impacted Houston lot got of did why supply. Houston exposure last why

for think earlier, we've and up got so In terms apartments -- I we deliveries XX,XXX. in has -- about of in mentioned X,XXX with XXXX to year deliveries Houston this for --

troubling not -- a a on what standpoint, as not terribly get job for terms of a still in -- growth. normally Houston we supply long number get from we So that's as

would and, call 'XX X,XXX in XX,XXX be XXXX. in progression it, the So

Austin Wurschmidt

levels? the guys what's in I having the increase sector. to then your balance few sheet from leverage times guess, a And appetite best you referenced current have

Richard Campo

We have end of talked keeping about to And the our that right debt-to-EBITDA range. range. Xx now low the we're at in Xx

Austin Wurschmidt

you Where year to end in do 'XX? expect the

Alexander Jessett

around X.Xx. year-end, we'll At be somewhere

Operator

Our comes Bank Lynch. from Wu of next Shirley America Merrill question of

Shirley Wu

it in guiding or will So get to take terms order to you What think of currently, low X.X% range? that revenue you're to X.X% of in end the high to do growth.

Keith Oden

XXXX growth in job to performance, think easy than that's we and coming when it's worse at -- better because A jobs. a variable -- that's expected knowable. is we growth, the pretty look lot biggest or supply whatever look out for out predict is is expected job the wildcard lot than on when I The known single

at jobs. trend the to over new XXX,XXX got this morning You've like

for in right I doesn't X.X is of obviously, you're it XXXX but And think -- XXX,XXX projected national take million got estimates. going job so our million. we've of the not Wheaton's numbers bunch a for our of X.X growth a bunch at to XXXs, not get you -- get may

of our like the using total we're So that our I X.X over forecast. odds in million getting

Shirley Wu

have there actually I Got that that on doing you do to delays forward, your to think development, But deliveries? is you're future early. Camden even labor And North markets. noted competitors a do quarter it. your a delivering labor due you And going been of differently? tight have What I your anticipate End lot noticed affect

Richard Campo

End, And in that's think construction. Camden be team efficient. they because in Labor of applaud definitely and caused and to beat to I to what amazingly. And market executed a great is can definitely most out of that I -- Camden we very issue, they're an teams, competitors all in the North what's delays their doing there our case development just have

talking for -- about think think delays, if the last we've about I been years. the X you delays

I the is team And we of did a budgets. so anticipate one that things our really to in construction the try think as delays

let's on your okay, kind the have And out. schedule, think to you kind so stretch going little of when a have of side, know it erring issues, you we we're of

team you're a you if associated Because you're lower with you other are the thought. you and costs bringing well, go down. end your it thought faster it than conditions that bringing and cost amazingly general executes faster, at when time up So in than

too. in were to that we in projects, other and we're very so And trying achieve fortunate Arizona,

Operator

Your question of next comes from Drew Babin Baird.

Andrew Babin

where supply pricing, shutdown? you that government also, I new waived about guess, anything anything about from positioned is is the you regard kind And late wanted relative of you there. D.C. more value-oriented where Obviously, hearing spectrum And feel a price properties to about kind there your like are you're are geographically to the on -- to about side do how with around point talk I fees of of where Metro? the bit. your or little D.C.

Keith Oden

Yes.

supply had So for it completions, which new rated still for stable, That have think roughly depends last your is a XX,XXX feels right. so markets XXXX, area, proper exactly XXXX. we XX,XXX I then D.C. of that's jobs footprint. The we've difference Crystal geography and of been as you at impacted about Metro The that year to pressure, right. got B just on -- think in -- D.C. adding is it would that's the most the area. what the City and D.C.

very a footprint of different competitors lot have a do. our We than

Maryland put And assets really Northern so Virginia, results. have good Southern to really our continued

it think depends. I really just

we -- X%, X.X% D.C. revenue me. seems has our that's up last And year. to about revenue at for from -- think total forecast that I about growing right

them impacted In terms the relief. of from our that they like. literally would the of on fees to work indicated that a all have And we with the had that folks of that we shutdown, impact are indicated handful we and have needed folks late

backpay. under -- the until And they're I their shutdown. people long made most so they've And financial without guess, being would -- this news gotten okay duress, next probably have if by today, that it good the is

Richard Campo

Yes.

of government from not snowstorms in I of over it the the hurricanes given be laid as the what shutdown companies that different to how government a residents able related. a pay, shutdown happened we off put started, not this so contractors about projects. was think when of because working think people our when and had off situation, things it's caused that to it's -- things or to be because private dislocated government on are teams well, interesting is have that program and anyone together affected furloughed laid years And lot to not just that different you employees kinds all for all kinds get but

government, It's I D.C., right? happy in So with issues. and that hadn't having it's excited missed by And way good prepared their and corporate citizens, were were the way to understanding was deal really out as our on of our that advance customers. so step information. our we we front trouble of get teams are paid the and rent the And just teams customers all don't they over country, sent helping were a not our when in making that,

Andrew Babin

transitioning to Southern helpful. California. And then that's Great, quickly

D.C., of Inland there but and you're of either your County, broad your supply by to, your in your there? I jobs is also guess, where some kind supply Southern think price it's point may affected can the you're Empire, where about exposure then of of sort a the pockets I similar differ adding dynamic or be kind from positioning, exposed you Diego California it main like where focused of San and who's your of pockets peers; not. Orange talk in kind markets might just coming

Keith Oden

Sure.

not a difficult Our I all apartments long for up portfolio so I the process any There's San would don't. where giving concern. or say we that I just results footprint. you to the to adjacent would all way mean, directly difficult, near these go from I we're is is we're there say is mean, really there's a --'s and numbers, aggregating -- and have where different just -- when Irvine Diego place planning very supply that so Hollywood. than delivery just California. it's Southern there We over takes other

So a you're footprint. XX,XXX over at entire new deliveries for that projected looking California footprint, XXX,XXX that Southern jobs X. X, That's

operators. long immediately get just the as that's long time, same very at X don't leased in healthy So up you have as for area, to your deals or as impact a don't X market situation as you our have trying

an some sure We've an Last be got strong. couple as little footprint's so A- and going -- improving. to And set it but as that's folks, years different to the California but feels really A that's than a of bit we rated up next stable. year, like place a Southern again, it have had have

well assets I think exposure in have about single one I relates positioned as of it that not our really California. to we're to a There's any new Southern supply. particular concern So

Operator

of comes Sandler Goldfarb question from next Our O'Neill. Alexander

Alexander Goldfarb

question first on is Just Houston.

in late in Houston. suggested the speaking anything that it recent going comments, the there But down market just had that folks to in your was jobs year, like some revised there that the unusual were down. commentary on expectations sound there been doesn't softness from Just

tough bit it concern there just was market was a comps? that was for of in Or some in year-over-year just folks? little fact, caused there, So -- some momentary some pause maybe the

Keith Oden

I can hypothesis. you give my

first. aside, answer Houston didn't in there ability We get let's that renewals. is was the always that other or didn't raise the put the you quarter for anything of to that just bit numbers if X than we fourth rents quarters. any than the concern That's weaker or numbers way cause the see But is. normal indicate -- it resetting question So in little that seasonal a see our other would

experience So some hypothesis My that's heard too, phone just calls you get we what our because noise, the get. the that, of is. on obviously, and we same

Houston. of builder, that's in with built described to to come being and in would a by go Houston only the and you someone all because being merchant go product to having of that Houston builders to non company that conversation sort which, the you're new way, and on be downtown, already is you most the now as exposure happens supply, the you midtown merchant If -- -- the if Camden's right if who impacted only and the has have guided construction I've you a that public XX.X% areas be area, a with new Galleria tour any

are preponderance being So of all of the that's that leased now. assets the up right

talk months-plus a I their because fee the you, or a to second is you who they're Galleria currently are area, X If getting in promise midtown in beat they downtown, year they third of feel merchant like in brains lease-up in rent. builder either or the

rent under currently have. exit that's They're off what their they And have stress anticipated. they on probably ideally better -- roll way would had forma numbers. they not They're certainly because already than wanted at pro a so an

-- you that you of through a -- guys. yes, just which area, We us, communities you'll areas We'll X of Houston that hear more impacted anywhere like tone are from a by portfolio those lot by for there's think projects, in and dealing of have our that and sort have it. back, just more gloom a described, lot you the And of But if So hear you -- but visited, of to outperforming the would our people there's doom talking than a just was always if the We've bias that's that and some But you're is, areas Metropolitan about while. the go X our we don't those see the -- then like another report, report unanticipated sounds is and sounds performing of really large, it's slip something becomes I But do. if selection and on to a like to. been supply. weakness most maybe that competitors. you're so what that right? I with get that. of our talk other who

Alexander Goldfarb

Okay.

just So oversupply, localized anything not market-wide? really it's

Keith Oden

Absolutely.

Alexander Goldfarb

seem in the is talk on don't expense self-insurance, Alex especially Okay. on But that question second a the been this how then expect unemployment the that you're been, can point. how bit a does seeing And labor control, and to you the has like given payroll? repeat. on really came rising low mentioned about year last for it And wages. minimum wage, what pressure market has is low strong just

to if, this residents just getting So income. is in whether are of blessing it a sort fact, thoughts curious your or that your higher means

increase more, are your and folks rent leasing offsets your more so pay having residents to have you if So maintenance that. the income, people

provide can you some color. If

Richard Campo

Sure.

it to and their of a and to is do about are the pressure, interesting right? it's think they at company. they do important than feel of job. culture why a work #X and wages people the belonging not for, job a has company stay trust wage it's a when consider and you with when It with has reason feel that Because more think I

because have the and were But under-market one we wage did pressure as don't on make leaving low for that. all So that we wages. some because hand, Alex just of unemployment of and adjustments folks clearly mentioned, people we --

that. a we sure our I they're the the market. minimum groundskeepers of would think give pay higher paying equation I and example their example, that, part know sort and employees an maybe lot minimum wages of competitors, lowest making in I'll is for our slightly wage, what and like fair that you maybe our than be and of paid wage. of employees folks are

would base the Our lowest $XX.XX an for common hour. denominator pay person be

we always not sort wage bare up, of so of of so And that or pushed cost kind minimum that sort were folks at have thing. -- they wage the up, the that minimum,

employees sure that wage take in create in trying would I than that marketplace the haven't salary make competitive so have their and And companies levels great been their pressure to are culture of and we proactive care more probably do. think

uptick customers. into our agree it higher the over the from income and already. We -- at I you have years. XX,XXX. have pretty of look we're are like of And run XX,XXX changed last that wages, market, do we So built now change of And at, or rate dramatically generally the X our went we in X beginning if speaking, better household the sort sort went from and for customers our median

used wages and So make have lot they make higher moved to of a of people -- incomes. as a we them lot into these people higher not that But have -- have XX,XXX, XX,XXX. properties many now

Alexander Goldfarb

us foreseeable Okay. the at like does But future. it that's consistent for wages be are sound something with to higher least going

Richard Campo

question it. no about Absolutely,

Operator

Stevenson of next from Rob Our question comes Janney.

Robert Stevenson

compare expect currently this developments for construction? And the to year? expectations does $XXX X stabilized million under million the $XXX that that yield What's you to start of expected with how the

Richard Campo

probably So developments in have because they The of our -- that portfolio of the Costs the up the to future is gone X% have probably cost now. pressure. in come rents. range yields of right than just X.X% comes lower we challenge end faster range are the for it on

today but think minus X.XX or current about -- kind you so the for plus an when of across it's acquisition, market And America.

So -- positive X%, now or built spread our we're we're pipeline, properties XXX we X.X%. basis even nice X%, that the to ago, development XXX a years to XXX X point we're getting still getting X though X.X%. And or

Robert Stevenson

CapEx revenue-enhancing roughly as And for you these detailed as buckets? wholesale guidance, each in provided the Okay. And are then and redevelopments. well guidance the many expected what some of How the returns are stabilized repositions each? both units in of guys

Alexander Jessett

Yes.

you've three sort talking to to So in X,XXX right for redevelopments, yields at closer units, those a repositions, there, And that When are about we're to you X,XXX looking of still around you've got projects are return. got so development-type approximately you're XX% go XXX and yields. approximately units.

Robert Stevenson

in years? Camden external then that, of capacity, the mean, next able over be availability the couple opportunity Camden the are you And of for of internal of mean, more be I portfolio on you to in annual terms capacity? what sort additional this basically I people And if and to lot guys of to there you Okay. you do even of what's Or set units a really would terms amount of you people is had be the limited an this to year if do extra this? and basis? done needs had wouldn't in do

Keith Oden

Yes.

substantially more, right capacity more doing do to we're than have We now.

at when our serve doing to on governor increase them XX% are think in I the were we limitation that and we X,XXX, standpoint both can range. is, a submarket such units that an age that an somewhere X% underwrite close to the the started of the from we get annually they on peak, condition, incremental the in dollars first to The assets process. X,XXX and it

new uninitiated that's are Externally, like, for apartments' reposition to that's you kind great you've that competitors' today's submarkets, But tell deals still our looking of be submarkets asset completely redone best-case -- new the interiors where scenario a a construction new. asset years can't are architecturally between XX that that the in delivered and to once way market kind up occurring. old. the that bucket our cared maybe difference to -- we're themselves to The development of brand So XX average that's what present the the even happens the look do done consumer, and our they in -- there's for. they're they're consumer

new you're XXX% something the get maybe but to close pretty you'll construction, on going full rental get not rate to it. the So

underwrite So that's those if incremental can to range, set. investments, and in XX% X% somewhere of you the assets, on the types opportunity

if still we numbers. bet we pretty And around so district here, we X,XXX on Camden's don't it's the table their and perspective. and go process teams starts and because then muster it we -- through the look I reposition organically make at best recommendations, And another go now we then wish But we had level the in case with that yes, passes at from a everybody forward. the the vet right

Operator

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

Wesley Golladay

wage at become equation bigger I'm when just this we part rent slow? growth supply Looking for to wait wage of a growth? something does for have wondering growth, the Is to

Richard Campo

portfolios. Yes, absorb enough every on rents I in existing that in supply to able absorbing But an online. supply being think the so. to We're raise that's impact existing have does market coming

pretty the been right more you still and supply you has last growth or that of lot your the didn't but could off been and to up of at years If revenue to the and the for raise And a raise X% obviously, from, look X% a when beyond or has because you progression of you supply, it stable was takes sort the you'd lot didn't have ability couple have have same XXXX, demand you now rents supply. X% supply of whole just XXXX -- say, table. there, primarily rents your the the kind the more. have into straight of And demand,

Wesley Golladay

'XX income year-end 'XX? is it And improved? to maybe how versus materially rent at year-end Is trending

Keith Oden

that's -- average, X have -- increases have group been income, We're years. X last what still been rental residents our about a now pretty been. as almost which we've we've running much in for are XXx the our years, X%, that that getting increases on or tells which X% for that range X rent been to wage And our me mirrored

until an is disposable So we increases number to our think up of is the even don't managing that are. impact XX%. rental keep any income income, would the standpoint with population resident good what from XX% to see closer news that underlying I got

Operator

Instructions]. [Operator

question next from Hardik Our Zelman of Goel comes Associates. &

Hardik Goel

clarifying Just questions. a of couple

the it that number What flow, for X.X%. On unlevered property allocation if expense cash some be X% was CapEx? and yields, including to development maintenance would ongoing management you so mentioned

Richard Campo

minus or those terms included you if in points Generally, costs those are numbers. XX basis plus of

Hardik Goel

it. Got it, got

one Just more.

those starts which delays you and you markets the mentioned, are to seeing at choose On if split XXX about your and had of more start? think, you in I Because $XXX up market, developments others? labor you which you'd look delays predevelopment labor by that to are think pipeline, to you And roughly versus starts factoring have, on your predevelopment $XXX in to you guidance? million million as

Richard Campo

when we definitely do pro We the think we time are frame in factoring development is what real and a forma.

if some much kind Charlotte market. extended it's developments our maybe of maybe think point. there pretty of issue, most construction on was those period this tough times would -- -- say, where markets it tough, to And have anything then I compare period rise, probably we months. when really We have our pretty Labor, are X There's that extended So on don't XX-month under stick-built that sustained. sort you didn't -- years labor. a by we to, of ago -- high anywhere have X at we maybe X from because a this construction -- probably

periods Just their But labor depending peak shortage. difficult. think when have they at generally because They they sort time, I not that are so a doesn't where pool was so it's one do. periods acute of caused had And like But much market the same the labor are there's the of the cycle all achievable in are -- upon yields. including developments. more at what's all lease-up decline speaking, there we And that is we real, a in it -- what situation. and sort of has the our construction size market. you And sort on new of of of have the depends the part been in definitely most think also projected

Operator

Our next St. question comes from Haendel

Juste of Mizuho.

Haendel St. Juste

homebuilders We've fairly amongst seem I price in guess, South markets you So those the regions, homebuying? much to homebuying entry-level your Florida from the especially from Texas I'm specifically curious, and that pressure Ric, points. seeing heard how strong trends be are in

Richard Campo

or afford about location having want those ownership out Diego, optionality. overall, getting than hours the price I you able is can our millennials is you other that price idea And not them Houston of married and in moving same XX% situation. the buying demographic be markets in the They a a into is has you need a think the are of lot lower that core other that a it's And understand making to a a San city. that that and to demographic to It's the mortgage. been. Houston yes, any Houston, where when right? kids is, to of -- A then buy you people our don't life, later think -- drive the that higher want buy homes with decision. I whole the want by than portfolio. things the not home been because we it an -- as right? XX -- or home lower people Well, go has like challenge in the of home Florida, specific median is home -- affordable South be urban so a specific is to that And minutes in think challenge move much And when places, home need out average but to burdened if X.X know thing millennials is kind to decision, home the financial central around So and life later in

of And that's have rates that low of kind you. that's homeownership I up fact of think hasn't the interest and what things spiked so one spite rate in driving the

Keith Oden

That's our higher in had 'XX, Just to was X years fourth last XX% the a quarter that, X indicated a percentage note or on about we it probably the of in been Houston, purchase average. move-outs than of in home. a it's X on points

record year great a total had in It So sales. Houston set units. new terms home a of for

XX%. market multifamily So we and XX% in in drop below relevance XX%, occupied, despite the and that, Houston our stayed the never

pretty it's robust. So

Houston. You're homes the selling They're homes of a right, hearing from is starter in Houston, correct. lot particularly what in builders you're

were that Southeast homes the points out story. There probably of is or moved percentage purchase long-term residents different again, trend. Florida in only that, And the 'XX. a quarter to X our is of X.X% X fourth below

jobs probably So probably Florida. got we XXX,XXX months of big trailing a not South Houston in XX,XXX, either in of part and it XX,XXX and XX market, in the story part is

Haendel St. Juste

you rent quantify That's rents helpful. the those from come between other markets are heavier the percentage submarkets? supply could with areas what say your you actually, versus Houston Would what Houston growth and -- of your maybe three differential

Richard Campo

have the at markets. to submarkets, urban and give between broadly don't you we suburban our all of I in because but can those three exact it of I So look it

three So year would differential clearly for submarkets in differential was those the products, of And all suburban category was urban about last for our and bucket the in favor X.X% identify Houston. revenue of on the growth.

are the in in So that three It's of you're impacted be it's versus number area, would a not nothing. meaningful urban terms that those submarkets if -- suburban.

Haendel St. Juste

if blended Great. rent I what compare not. missed January how last January? the lastly, of I'm And sure in And was to it or year? not then But does that

Richard Campo

can this get the don't gave later. blended and you that call me I to last X.X% year. about think from you if I But we It's year,

up X.X%. leases And So roughly you math, about if renewals. flat the -- on on that's about it's new and do X%

Operator

Our next Capital One. question Bernstein of Daniel comes from

Daniel Bernstein

comments I was to are B, thoughts NMHC bid-ask the the maybe heard just also widening you bid-ask there. your spread And assets; where wanted suburban, urban. A, ask at out, and on those spreads

understand are to on the think opportunities side acquisition for going you to be the Just where better. you trying

Richard Campo

Sure.

So valued-add. overbid the are properties most

that's space. really a crowded Now

what above trying original to involved not And merchant returns, builders we have property are who get but stabilized. They're interested sweet year definitely they're we for spread the to space so X, their what -- a is because able definitely now spot the their making what in space it's -- not we the that a or between value-add sell much owned we're as we're is the bid-ask was. not want differential cost -- I original think think

their profit they And every for wait, promote, from their so they make get promote. that to given IRR have eroded day hurdles the they them generally on

like buying going in you -- this it's convince utility own But property to a properties. have spread middle traveled, looking to and and it, properties, managers, a because of properties product to it managed put to add, really low many. as perhaps I for of that a buy sort to they're said, -- we're of and the want So cost rate. And I'm below But XX,XXX because the because all myself their there's what them can replacement the you on that what in don't the sort their builders will, I that's buy think going is merchant cap type for on that managing of sudden, and get I a and less there. third-party they're manage -- not maximize value tend if have by you're really take that they story we're to yield newer property, being so to then new we space. to XX,XXX from better which bid-ask a opposed specific don't I great be in Gee, story of just property able trying older to I'm

buyers have are to a have that sellers many compress that buyers I will. bit if come because sellers you as the sort little think it. just think closer I that meeting the going to to So towards the But will the middle, opposed the to there's will come in properties of so and of trade spread to

Operator

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

Richard Campo

lot over next conferences. sure for a in see of on everybody, going you we're the or to two the thanks, various being month call. Well, the And I'm

take we you you. So Thank to talk when we'll you. care, and see

Operator

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

disconnect. You now may

Camden Property Trust (CPT) 1 Feb 192018 Q4 Earnings call transcript