Camden Property Trust (CPT) 30 Oct 202020 Q3 Earnings call transcript

Company Profile

Participants

Kim Callahan	Senior Vice President-Investor Relations
Ric Campo	Chairman and Chief Executive Officer
Keith Oden	Executive Vice Chairman
Alex Jessett	Chief Financial Officer
Sumit Sharma	Scotiabank
Alua Askarbek	Bank of America
Nick Joseph	Citi
Alexander Goldfarb	Piper Sandler
Austin Wurschmidt	KeyBanc
Rich Hightower	Evercore
Neil Malkin	Capital One Securities
Rob Stevenson	Janney
Amanda Sweitzer	Baird
John Kim	BMO Capital
Zach Silverberg	Mizuho
Alexander Kalmus	Zelman & Associates

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and thank you, and welcome to the Camden Property Trust Third Quarter 2020 Earnings 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. Please go ahead.

Kim Callahan

you Camden’s thank earnings quarter and call. conference morning for third 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 third non-GAAP section it earnings call. reminder, the on to the measures, our release and complete available discussed reconciliations will

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

We will hour. one call attempt our complete within to

have their queue As multi-family another company We is in right analysts right we after us. holding already now. know, XX the call

the So speak to respond additional we If with concludes. your today, Ric call Campo. please to this be limit or over At turn happy to the questions after questions are everyone e-mail queue unable call to time, two. to phone we’d in I’ll the by

Ric Campo

Kim. Thanks,

corporate the stopped team results of Despite by team Camden. the have to was team the We our staffs incredible eye turmoil, you're the music all-stars. all care achieved of they supported the stare, business. today storm. throughout best. is on-hold every Our never onsite true, that us we X,XXX-yard COVID wanted Camden attributed regional and to Camden our Instead of from you team simply day what showed with the of expect what of tiger, know up taking team can a reminding of celebrate That's

as glass remarkable you join So this your spirit, we celebrate will your in all you raise evening performance. Cheers. to

by our We've Our third aided and product and performance for team, market capital equity by was the but believed also allocation Camden diversification our our that geographic brand volatility selection. quarter our was lower always would of and earnings. the driven

generalization in low cost housing and We’re demand. most however, this to an and California. scores. our workforce, California, exception quality market growth, other attributes housing only the business most drives to for the properties pro-business, high is employment of are us are markets that population drive areas parts The of in educated have cities Compared These Southern and state. life which in of friendly

fewer have U.S. paying high in lost Our jobs other markets markets the than

County Camden versus Overall, losses Phoenix, markets. losses with Houston. in fact, As X% to a markets year-over-year best for been matter have been Orange in U.S. between Toughest losses of X.X%. Angeles Los our the Atlanta of and the down for Orlando, the through markets Tampa, job have employment of been in X.X% X%, being Dallas, Austin, and September and Job markets most our have down it's losses X.X% range XX% less

that job million been X.X that been folks ability the a our million And $XX,XXX our added back – jobs have the that added pandemic, were lost, in that had back, when another have make been than not workers year. Of supporting at other is lost group XX beginning that pay employment and million jobs back. to trends not and making less low-income year. are added $XX,XXX million between the $XX,XXX are XX a key rent X.X think losses trend apartments of you employment key are residents' their the we Another stay there about

need Executive those resident possible, income higher share So income our back have residents. that the soon Again, all And do turn obviously are team of our the unfortunate than haven't are that. we XX of Camden to not jobs to Camden. Oden, for many and really to delivering excellence want over living I been of residents losses, as negatively aren't it's have that call lower I'll Most live and not that add residents, that our jobs Vice we impacting they Chairman. back There our Keith added but million the our – Camden's lion's to workers been as have not base. that thank at job

Keith Oden

quarter purchase take full Ric. year continues this the quarter. quarter. brief homes, questions closer to XX.X% your to the that of it for that third first a that's we're get third to versus for our with second continues team seem to it the There more results where normal, XX.X%. for and tailwind the was of XXXX a quarter. to moved our our of a like to contrast This today keep something only up the to the as XX% budget home and stabilizing third Overall, second are we Thanks, this was move-outs the exceeding year-to-date from spiking. Several things year. so conditions lot our had quarter sales of year-to-date. of occupancy. homes in certainly actually moved average, purchase if that their be communities signs for evidence is original up average they're to few my of again and XX.X% in pleased portfolio, as possible. of XX.X%. markets, Obviously, in we XX% are XX.X% of can kind is XX.X%, that be In of we April at quarter, anecdotal And worthy A XX.X% to the move-outs in year But you performance by Turnover Camden. getting celebration I'll back that May remarks many quite quarter were in occupancy the the a to than up

to We is bears anecdotal that October little uptick a in some see elevated. did evidence always watching and year little of a showing starts to year-over-year. so remarkable XX%, in your caps the stat the rest I'll keep year, So really change if rally QX the a stats. Thanks the turn the far. see but Everybody Camden Alex all at for to over Clearly, is for little up bit very on Jessett. this a call to

Alex Jessett

Keith. Thanks

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

of both generating Downtown, $XXX a X% million yield. new over Phoenix, unit Camden on stabilized XXX a End unit During new completed we in construction XXX million We development Camden recommenced the unit third Camden quarter million in on million unit in construction II, Camden in And Arizona, construction a North development unit XXXX, Plantation, new development stabilized a Atlantic, development Houston. I, Charlotte. $XXX million $XX We a XXX $XXX development began XXX NoDa, Tempe, $XXX a we Tempe new Arizona, new in Camden XXX Florida. and on

XXXX For were the were decline third renewals a effective of effective X.X% up blended for new and leases of X.X% down quarter X.X%.

our Occupancy decrease growth was new third that anticipated indicate and of renewals from of discuss XXXX Our I blended the October the third the XXXX operating later. results for XX.X% second effective a and X.X% third both will for this for X.X% leases which the quarter for X%. XXXX quarter XX.X% experienced quarter during averaged and a up we where part lease of a decline of leading quarter in outperformance, to in

leasing in tours is We same October, leasing our a the residents, quarter, in activity actually property October, alternative of X,XXX signed to XXXX. pace residents many property third with with where conducting of monthly total success continue X,XXX existing we portfolio, and acceleration total slight great have method averaged leases. leases In for retaining To-date, third averaged slightly year-over-year. of the prospective in our on XXXX quarter signed ahead signed XXXX activity we

far Our our third collections quarter expectations. exceeded

compares arrangement in scheduled a XX.X% scheduled X.X% our the rents quarter to delinquency deferred the scheduled higher in rent rents to collected of collected The when delinquent. XX.X% both XXXX XXXX, we with XXXX, our X.X% As rents is rents of our second favorably scheduled with we This quarter start good our XX.X% of October, X.X% collected and our a of only residents collected. and a off delinquent. fourth XX.X% we X.X% quarter when of of third with with of

Turning with to future out statement. period. bad amount same resident as the we be typically uncollected evaluate rent We in monthly current We month. When be bad uncollected debt, collectability. recognized there'll for inappropriate which the corresponding the in debt moves of GAAP, our to previously income impacts debt accordance certain property the reserves reserved us owing and in offset then as to XXX% bad have a and revenues owed income establish reevaluate bad no reserve, is serves rent believe by a this to us as debt we what money,

better and levels primarily higher quarter Turning of occupancy of from income XXXX we than activity. higher or prior midpoint higher results. than from $X.XXX from and reported of $XXX.X $X.XXX from results $X.XX in anticipated night, of the our $X.XX third non-same from our than levels per recorded funds outperformance by anticipated per measures mentioned cost share, than than same store a from our of store revenue driven an million resulted comprised $X.XX development anticipated guidance and approximately anticipated levels other overhead anticipated net to income, share. previously approximately of is other Approximately $X.XX exceeding leasing communities. financial $X.XXX Last and range than primarily investment sale in $X.XX for the higher re-letting lower our Chirp This share due to per incomes. for control of to debt operations gain technology higher Approximately from this to bad gain in higher quarter the to collection $X.XXX net in general third-party, the third $X.XXX revenue anticipated lower due the related the

increase the year expense We by an primarily and than higher The guidance prior anticipated our anticipate revenue, is of property our and current XXXX tax full year-to-date increase the will growth fourth between same-store tax guidance valuations to total expense year growth and anticipated X% our full entirely for At taxes our expectations assumption original X.X% is fourth of full to year same and performance X% also anticipate X%. now resulting as operating expense, net compared in year-to-date net The anticipated same driven full our earnings X.X% and by the by Last quarter in timing Houston. X.X% now driven refunds We provided of accruals. property of almost increase same-store and original decline we year budget of XXXX upon total operating in X.X% year XXXX. night, for the quarter. total our store store increase to income growth X.X%. midpoint, to operating based we of XXXX expense have difference updated our XXXX income revenue expenses

FFO expect third third after be fourth $X.XX excluding for to We with the previously results the mentioned midpoint technology. $X.XX. per range quarter $X.XX is within a in of of to quarter our share the of sale The on gain line quarter

turnover quarter corresponding other be to Our anticipated are our fourth income. lower normal seasonal in third refunds, entirely offset property market timing and seasonal normal utility, reduction and of to in rents tax personnel expenses repair net the and and maintenance, declines unit by occupancy

we under million end, spend today, development of our left the At million XXXX. under maturities unsecured just outstanding have approximately quarter no equivalents. $XXX until And And $XXX comprised and $X.X existing next billion over of three As our cash in debt had facility. pipeline. of years to no scheduled $XXX liquidity amounts cash million credit have we we underneath

Our various banks time, call with earning cash approximately the XX is this to up points. basis invested open At questions. excess current we’ll

Operator

Nick the Yulico Instructions] session. Please begin [Operator now comes go with question-and-answer from Our first will ahead. We Scotiabank. question

Sumit Sharma

Hi, Nick. good Sumit here This question. morning, guys. in my Sharma for for you taking is Thank

So cover. played you it and Zeppelin was the ago, two a Doors, The last quarters Led quarter guys

match, So music, right. And mentioned them the whole very strong as you was picks, earlier, today’s both the it Tiger. Eye of of

better. you I’m guys So feeling thinking are

So it’s ahead and could of obligation in of dynamics? looking what change collections kind my actually risks terms your but optimism factors market or to you, ask

Ric Campo

obviously, and where – is what we on anything you employment don’t think spiking it’s and think certain worry the that XX going have news or heard Paso forward. economy, was whether this us morning it’s all don’t and working today – if with other business, coronavirus apartments in about thinking I I would you reopening the economy I about heard El a the shutdown. states the don’t have Ultimately, economy any works

And I if on clearly all go so March me everything, to in March, middle of would again off back would concern think. a that shutdown. bets what are a be America, happens And then

Keith Oden

driven to policy ability national we regarding destiny of mandates CDC Yes. of mandate. processes, that, to continue types to estate. their similar real control ending a of start level the seeing to at control to the to mandates would the just out that in ability destiny get through add of positive landlords that I those their If real allowing to push of real needs landlords get the terms their estate control for of that come landlords estate the the eviction and their to

would again. about the add Ric’s point open that to I So getting economy

two those at So of probably list. things the my would be top

Sumit Sharma

know And of it’s sequential market you the XX% largest year-over-year if sort leased, comment Downtown Houston. drops. Great. I but saw and it’s in guys I could Camden that on occupancy a in you

drive is could there the apartments optimism easier the newer of to So we’ve have understand downtown project? from factors or think other I heard for the as lease I’m trying that markets, you some doing pipeline. just are to whether

So probably could equation what start, but change I for asset? sort that prospective particular the it’s wondering just of know on

Ric Campo

think the were I way Houston, about they America, demand are supply markets going our Houston, maybe pre-pandemic. of fundamentals I’m and experiencing to I general, Sure. think markets in most but in talk ex-California, most

overlay, a going market was there’s soft but a kind into the definitely pandemic Now pandemic. of Houston

the If sort beginning third the the of I barrel not great. in XXXX a think barrel $XX at of of the about oil – to a XXXX, you energy at business beginning of business went energy was mean, $XX from XXXX. under XXXX, that quarter

was is kind only the And in XXXX energy decline so that had in was Houston of you on then And had supply. recovering. in really market actually a America what going wasn’t

development So of has do is coming now productive build that’s they course, builders what pipelines new online. and lot up merchant Houston their of a

the is actually today driving Houston’s definitely fared because Houston well. what’s So pretty generally of some weakness speaking, but market coronavirus,

of the of terms XXX,XXX of jobs of year-over-year We’re We’ve is in are lost amazing, sort back, about of X% growth. those jobs and pretty lost. XXX,XXX half down job out which it’s

very San downtown Francisco, units because or – XX a cities New pieces there. Downtown And in are it’s Houston office of that I properties not XX or are actually XX% and cities lease-up that occupancy is that downtown people well. are same Francisco, But about forget leasing I’m urban York, happening that think X Atlanta there than right or downtown to just actually Normally they’re lot mostly Southern less or that are So Dallas I the properties not encouraged of we’re now, lease or to doing month like by as the Charlotte really in some the York units New challenges equation. a San about And a or think dense month. a the you of given the same. couple

than other our people of urban the so think different is And urban in about. very markets some that

start up. at phase is demand but so going to and given the supply And pick second ultimately our not anytime definitely we’re there, soon

over a really to be I long think good period will continue downtown of time.

is challenged during terms we With pandemic original be project with today of the fact of achieving make a today. that it’s side Y there a XX% with. of good. course, sense Hotel really did given start Y We leased the doesn’t hospitality be think I in to that’s – going said, any the as perform lease-up. in on definitely the And our this that property to We’re Hotel pandemic, would it’s equation in in have

Sumit Sharma

so Thank you much.

Operator

with of next Our will come Askarbek go from ahead. Bank question Alua Please America.

Alua Askarbek

congrats Hi, a the today for great questions quarter. everyone. you Thank taking and on

Ric Campo

Thank you.

Alua Askarbek

picture, to any as to board a out still and demand you in across as markets movement just demand more leasing we lot a a more see see do are head of off, your the well. of start lot activity starting state or Coast? Or Sunbelt particular months? the from you and and quieter markets in thinking Big out So Northeast West about of the especially the the of like into slowdown area

Keith Oden

place markets decade but some ramped and Yes. the – pandemic, time. but Clearly, during from We trend gotten for last it’s that’s to a the of that’s a Northern it’s been our up that’s in-migration, definitely are been long for going in on markets. from California seeing

traffic, traffic in interesting like much overall of But terms traffic In traffic. thing more total is digits, double that that motivated. do we the numbers down low down the is get XX% are year-over-year is, our

dialed on are Our – don’t higher. of fin and just the at closing internet’s motivated. now, we rates almost get because We’ve XX%, back we very some intentionally our that traffic we’re XX% is do occupied

off. our quarter. fourth enough to And overall, as it into, right particularly get down down than come lack way don’t So more falls is our into – is still of with But the seeing maintain leases in while where traffic we portfolio now. that. to the the structured need traffic. our holiday over we period We’ll always traffic traffic roll is time, that of much during with that It’s going start we occupancy that’s slow okay season, that see that

So challenges traffic that’s portfolio. I of got would mentioned, that got across as are where entire The overall, we’ve we feels our new on. have where, you coming ton chat pretty do normal say a the just supply Ric –

where And I we are the so supply cycle, related outside urban last of challenge where our of in that’s of and of in lease-ups, infill, markets to merchant some most say Houston are all communities dose South – builder by the other the is. of we maybe that was and supply directly where so the Florida, heaviest weakness on have urban affected places coming that’s and experience would outside

Alua Askarbek

And then rates. the it. Got renewal just thinking about

in out November for that you up renewals? kind October. to guys are Do and up going in going So and like, rates of are expect keeping the keep I them you see what December

Keith Oden

Yes.

about we And back headed point the But to we we like to conditions, to that being when more of normal terms where So normal our levels, X.X% on X.X% able pre-COVID looking We months, were three new customers operating care and pre-COVID. we’re year. increases take more back the renewals. it’s think range we’re headed quarter at of put think normal when we we we renewals. that – will we next the and that we renewal of think got back take care voluntarily residents in traffic portfolio, felt we and to hold were first to of for said maybe in our of were in some across level on there trend back

than see that September. would just a We’re of continue I up. sending I expect better tick and normal in had out order renewals to back markets. now. we of to X% to And think We kind everyone back started little our all

think tick we roughly should we I continue pre-COVID. and that’ll So up back to were to get where

Alua Askarbek

Got you. it. Thank

Keith Oden

You bet.

Operator

come from with ahead. Citi. will question next Our go Nick Please Joseph

Nick Joseph

What and on all are or portfolio your to but you do in of stabilized little a on close development, I being markets Thanks. operating appreciate the normal, just the comments in seeing at on properties. stabilized not of either So concessions weak. properties? terms but it that four those remain market

Ric Campo

other historical just a concession, that’s Nick, our we don’t norm for more which concessions month of a a free our we do of – you communities, in is round don’t portfolio. really really than development in that, offer where

management driven YieldStar system. completely We’re net by and pricing, revenue on we’re our

the the YieldStar We recommendations overrides have very system. few within to

are the see So more concessions. we primary I to using the as our back pricing their I mechanism. prevalent going become that even term has the it’s use know competitors of do YieldStar rent because suspect become effective – competitors much

that recommendation there’s people that, something we end If up tolerance that rent. if of of who take don’t make management at you’re system YieldStar occupancy; and do, in we you’ve we let then the the toggle no back lot it, – but panic you’re a definitely And YieldStar question intend rents, to so people do other XX% decisions, about and patience free a we those you and are not the it’s but and or a month just gradually any revenue telling to to – you is YieldStar mode, do. have not got just sort with it’s something that a see

Nick Joseph

Thanks – go ahead. sorry,

Ric Campo

about talking being our not going as You’re is What see we pricing signed what – show we see effective to rents. us start are at. you leases what

Nick Joseph

And door, difference perspective, if marketing there’s a free sees of kind don’t on property next see perspective? point. effective the if you net two someone free no rent, even a disadvantage a a same month basis, months any rent at the If from you’re marketing or from

Ric Campo

end customers right? huge we We is, a don’t. discount net features the teams our resident, if know just the in right, effective to months lease at – and day, creating mechanism just what their right? of a trained are term. for is the financing rent. reason don’t is them the And up And that so market free, the And sell the the during to know for marketing rent. free two mechanism doing and you’re creating that’s down is get So rent, They you’re a what benefits, rent you’re rent their

So free, if are effective then our they’re is come two the down, but months going rents market to not. overall

it’s kind one-off. so of And

it of for to it. know don’t And as people think situation our a us at all. negative through we how competitive sell So

Keith Oden

business get And of sort a sort fundamentally a people can then deferred. file just move practice rent declaration and their in in and then CDC of where world a it’s bad

free a offering up they it’s occupied trying community with what business they move opened and to they’re beyond and trying finish and mostly do your into to two are community, start practice. they’re to two a to CDC get, then months you the do. declaration bad months a honestly, And to merchant with It’s that they just incentive they’re builders get them may If and that. who and end free – off have XX% line, you

Nick Joseph

you. Thank

Keith Oden

bet. You

Operator

Piper Goldfarb Alexander from ahead. Sandler. go Our with next question Please will come

Alexander Goldfarb

morning there. Hey. Good down

Ric Campo

morning. Good

Alexander Goldfarb

Hey.

so and question, extreme from at about a two talked then up of clear because of your following Nick’s lot sort free, on months the I’m there. Just peers just going

really markets, impactful is really material aren’t just to competition free you your the including you. either or in takeaway? across all much the or free Cal rent market rent like Is you’re isn’t seeing So and that guys whatever sounds Southern D.C., not it

Keith Oden

impactful. into got net said, obviously they’re rent, going not Ric would down, reflected. it’s price say wouldn’t they’re to two go and months with lease-up, that’s YieldStar I I community, free and rent Like market the just say our you, that clearing it’s all and communities for competitive our pricing. six Yes. is factored directly our if given you’ve

You some markets the see reduce California – a we’ve experience in of has it’s these board, not recommended rental across market, Southern to I portfolio. rental our the had reducing or but – in overall we’ve in rates our not meaningful rates YieldStar in our of had would say it’s terms

you – and third revenues the flat higher If – actually think we of had XX quarter last markets about we markets of quarter, you our Alex, basically about that if down. third had Orlando than that those think year. two we of had were was the had XX

but our – our you of, XX it’s had picture overall we got COVID, yes, been So back of not have is the one it would had portfolio markets. in to it’s not where

year-over-year XX of So revenue and pretty have that’s good. our markets, actually positive they’re

Alexander Goldfarb

trends and And the Sunbelt, ask of of you we’ll already are and place I then the given morning leaders’ about hearing move from make that were a to with Or Port chairmanship. think the move employment of the and economies But to Dallas, CBRE the – chatter COVID just business discrepancy coastal for the if the on accelerated we’ll the where driving lockdowns of continued they’re Ric, you’re Sunbelt? the what’s happened fallout? CEO in Chairman the Texas, that Okay. guess restrictions talk, increased are haven’t markets their I the Chairman there announced that same; more you you down to from or the were certainly in states, second they because is businesses relocating between companies But your does, versus going guys to anyway. rebound question Houston blue LA is this the

Ric Campo

energy, definitely we’ve you in The back, there’s Houston. them like place in is long year-over-year employment about September at with lost added all for and And look you’ve pro-business been chatter you and think when a LA added X.X% is Even but time, I big, zero X% in I these at look markets. right? which of has these and sort more back. it’s jobs back half But down mean, it and a Houston, and they’ve more of accelerated. down market LA then we’re definitely zero discussion Houston, in have jobs. added trends

that great And accelerate. the notion of going and The probably I And commutes, week. so long-term think it sudden COVID then in a and place COVID are of all going right? the home, think I continue. that in put about the some it’s to these is to accelerated virtual leasing. is migration notion less had place, people think the we talking that of will great were notion from the migration we acceleration what the all of And a done of accelerator, markets in from work that, trends like it’s I trends call are but Because to continue,

Alexander Goldfarb

Thank you.

Operator

ahead. question Our Please come Austin next with KeyBanc. go will Wurschmidt from

Austin Wurschmidt

everybody. Good morning, Hi.

on actually some need versus new of and it the remain remain to competitive though see to pressure to occupancies renewals. rates? lease-ups to I sounds order comfortable Over lease you we at fair new it renewal think even stimulate kind So the roll to well pricing could these in on as under expect say could higher trend Or that XX%, continuing negative improve you you feel leases. down time, you that with Is traffic, because continue fair? mentioned of offer that

Ric Campo

new the year have in being we that’s this delivered XXXX. to most into that’s fair where and the Austin, Yes. markets over construction then believing

– a of for plenty traffic. the good. operate. fundamentals coming we are got that we’ve locations are type There’s communities There’s that the challenges the The our of of in entirely So operate almost back. we demand employment’s lot

Charlotte Houston an example. in markets, an However, is example. the be an Dallas of is some would example.

are Our desirable most located places new communities places the for to builders that build in merchant are products.

apartments So in the that were directly mentioned, just going construction those XXXX same I impacted three And they year. as roughly are that’s new get construction the that unfortunately by this they are multi-family deliveries the markets all levels on. of in the

another going Houston. get in XX,XXX We’re to apartments

apartments to in get XX,XXX We’re Dallas. going another

in We’re get apartments XX,XXX going to another Charlotte.

So be under going by are the places new that are pressure. to impacted continue supplies to

to the when world, that job the have going continue lot subject to supply, they growth, Phoenix’s They of they’re Raleigh, to the They’re that and supply. been new these places They’ve for lot fundamentals. have good good in-migration they have go just business. good outperform don’t to reason. However, a you and of are of new Denver, got patterns not a of Tampa, got great markets do

going the that’s to going into to probably bifurcation portfolio the to XXXX. and continue supply continue think our I that’s So be markets is

likely that there we’ve from first. XXXX, to we’ll in get decent a but it’s think amount got to get of I relief here

Austin Wurschmidt

That’s on detail. assuming you. Can starts. terms in the wanted hit just you’re some the trended to on then of underlying a economics rents you the of cetera? I et the starts? development deals provide And Thank helpful What new

Ric Campo

Sure.

we rent. the hurdle We Our X% do yields, rents suburbans and stabilized time. to interesting new we they’re to think X% and And as do urban, pay start And put a to the are the starts, is might And of over in do our it’s market. rents we period years stabilize yields projected a do X.X%. our what then untreaded if use are on generally, with. trended between to what X.X%; we today,

going first markets, be to think going other by longer. where depending the Keith’s We levels going to to up. back the if this have or look side on and are market, markets you the to gets rent point then back down supply on second XXXX we some rents the, equation And XXXX markets, at XXXX, quarter and of second quarter, and is take to are the going of

our so trending way But future. how the model of sort grow more to over are those we in And we the going been these think definitely the rents developments. are and yields conservative have we

Austin Wurschmidt

it. Got very Thank much. you

Operator

Our Hightower with Rich next go Evercore. question ahead. comes from Please

Rich Hightower

guys. morning, good Hey,

Ric Campo

Good morning.

Rich Hightower

recently, an this seeing home the into I year-to-date pretty that trends in you’re average already, guess to to the for is maybe is know there. more COVID dig just you underway accelerating that uptick were said statistic. purchase that follow-up on year-over-year, stable idea uptick but move-outs I

tell, in that? template Or to? the go what a I accelerating over se home it XX home this is tailwind can to X, to of sales those operating have just is it strong back attribute should demographic the help would much. from that doesn’t this you long years, we’d COVID next best to been early as – the, since what seen probably mid-XXXX. think, ownership we’re Is you The COVID So time per help It’s sort moves? and causing country, it we’ve that

do expect? what think guys and we what that So should you about

Ric Campo

think do accelerating, I COVID it’s absolutely.

and right, about starting the think third point. their you XX, economy. for daughters lots there’s the and if doing People they’re oldest is economy millennials are – children millennials, houses the and it’s are older ultimately of form they’re houses, those XX some living oldest and in overall. live now mid-XXs, for two build because happens my the doesn’t good workers I were so would in building so to better is apartments at that in lot actually And hurt to a what you what house of they right So America have actually that the are good the have a houses buy houses they’re good houses, moving of households. the they now, demand, think oldest thing And put products I apartments, you okay? And to in expected being when having that’s a classic be the buying millennials if their buy and housing they’re of – we out because And apartments. have really a millennials. And always right?

so think COVID. by that said, it’s definitely And with accelerated I

rates the the is really on if at rate their I as things the fascinating of money you it too, look historically they’re the people think interest savings one are and equation is actually think low saving of spending between money. today, start the stuff and well. part aren’t COVID I And of where

like saved have for a because go at a XX% actually people what not because a thing going out during they’ve is games money mirror, a things fog alone I rational that of didn’t restaurants we you’re And do that. so but to this like think who you days, you enough by have have payments. money the going And lot to and you football and move-out to of to and it get now vacations down don’t COVID, point. could happen that had to rate

look move-outs then housing that lots we to going the and for have, And the urbans markets, no discussion And our and had housing you of in no, calls are there’s Labor lots you the the from interesting because of is potential the thing after answer and our have to Day, some massive me suburbans we of that to the a when gives of challenges Texas, there one shareholders. the had of Houston, go. I’ve them you had questions, some if have two-month in supply – from at of and to we’ve is, houses? Houston. energy millennials inventory One place building, is we shareholders get with a right, have buying And lot softest

move for you And rate had no so them out the no can't urban go a awful the an there's too. even because for inventory. go, if dweller to we place And because suburbs to there's are XX% if you place suburbs, – to there's no apartments, for

a maybe it is think trend, I don't the But so. happen. could over this years long-term XX next So

will over, – people once they're putting we that that's in COVID have just – doing of COVID go right think have And things and COVID think the socially. that in bars, going of are I one People continue want I and challenges still getting is to out now to future. right. the you'll they're the tired spikes,

a actually So, homeownership I good think ticking overall. is it am up. too not I thing rate worried about

Rich Hightower

comments. for Thanks the Okay.

Operator

Malkin from with Our go next One ahead. Neil come Capital Securities. will question Please

Neil Malkin

morning. Good everyone. Hey

Ric Campo

Good morning.

Neil Malkin

of are your sure, they don't I open some X. know November Angeles, all tougher worry. markets, will Los I'm up but County miraculously Orange

that you increased think that be to viewing maybe that you? guys margin, because heavily apartment may that COVID bring homes. you one with leaned sort time today you are can you our First terms of about that people things technology forward talk maybe with gain mobile more can long-term question, When there apps like how of in and your have us, with leasing just in more employed, COVID on isn't efficiency, Are nature. of behind and is the

Ric Campo

absolutely. Yes,

to about type all to ultimately at open we has going look really has end remote the et than us a about To we locks when think mobile basis, ability looking been ultimately a we if a sudden horizon. horizon COVID. on leases, on talked it up the when for these the making COVID efficient all it been great more virtual probably are of look three had would I much a was for or that we're And and things we these at ever became have so As wasn't year using at was on we work, and thought of it our up maintenance now the two, lot we're accelerator. earlier, when of point for made things cetera, talked one years our month we miraculously applications that

for locks open but the So had in for going application Camden, to to industry. I some mobile tell game great the And an common just that is I changer door not think you really think be up absolute space will efficiencies. area we've do I really,

Neil Malkin

to that look interest given – to in deliveries? development very pipeline, guess And recall like I low And appreciate maybe that accelerating comfort the what's a and pricing then transaction XXXX is favorable market disposition context, you – looks question schedule for I just what like obviously standpoint, or just maybe your marketing the the projects. that, on from guess, favorable be does Austin's in whole, that. a development for looks demand I but the back what completion what how your like don't transaction high started rates? with going three given Yes, current your

Ric Campo

development, of in we as numbers XXXX. rate And have good very it's the be try you to in easy can we a have, markets you and development not still continue not come have when we – right costs much the still get to construction to like at the XXXX, because as to So would think rise, do construction – maybe down. It's but lower can. going we're right costs COVID, for

definitely we development to point. to – And that still the pipeline to numbers and difficult but I it's one to work you're is if the capital, place of one that's well, for so get a pipeline us going will deploy at continue the have to number think definitely to try add we right because this

and acquisition market. of terms the In disposition

the So, end transactions were they about at one-third of year are of October. what last through – this

at transaction trading and high cap But trading time big rates. is low clearly so down And volumes all is time. what prices

know, not rate, COVID and And So will since seen change. in that three’s come Orlando cap that you rates some they're Austin, you Dallas, opportunity talking have we Houston, cap and all in four tell have acquisition dramatically Denver, everywhere. a we're an the I Tampa, has

not with so And said, when that we're acquisitions you tough start we – really have are – three. with

they're alternatives obviously cash nice very there. low a, leveraged to still or three quarters cash leverage are out rates cap And have get most on and say interest so IRR lowered even returns as three people as rate, buyers, to with they relative with and then their hurdles able a with positive

going an what's and sort we now more a clearing, from of interesting need disposition between still think environment. more I that So sort perspective, quarter. to little market first it's happen a clearly of little a

definitely the as But we some do disposition where rates market, to continues, future that what the close years if of a that tough years look last we're cycle, then And and now. may bought opportunity Camden If big was, four right $X sold more. did XX – were continues well. in developments who – bought cap you market at. assets probably if acquisition focused in assets we're or positive billion of very the were it's unique sold at old that there we that to that situation the cap old we that very we on rates we worth for And the

Neil Malkin

Appreciate the color. Thank you.

Operator

Our ahead. Rob go Janney. Please with Stevenson next will come question from

Rob Stevenson

in the been and started on costs Good Ric, the a construction to on other there you was pre-pandemic, morning can relative much quarter construction and it expand I costs? if just your higher how your mean in costs, are you seeing What you'd guys. about them all. started comments projects in if you spike there's labor materials lumber cost

Ric Campo

costs because So general COVID conditions. clearly the of I think time increased that has and

with property do have building PPE the we And distancing. COVID Orlando. is a the in to proper you you that proper all – example, have challenge in Downtown, For have we're the and

And to we delays is, manufacturing it's as all go increases conditions it down, one we big in We a project about things. sort and Right. keep had safe, general haven't employees conditions just kinds your we're you challenge our those have been our and stairwells and and up. go it's of process general mostly slower. makes of slow workers And spikes, and just it cost the But way, the and construction have that.

little people I challenges difficult – and an because think is of a are the projects I not a issue. of an to challenge. more having has real that supplies costs inventories inventory is is, because properties the the today. today, restock has that they're way labor definitely today and And is equipment having And right the getting one – of getting a interesting example, everyone's that restock timing think of primarily – the and going for in their completed been to this supplies, most inventories terms starting of to think down. be situation, I been down sort And are

higher be, X% I – to than our saw it starts, And X% X% good X% would say because to to so last maybe that's X% but higher. used that, actually today are prices on we to

is of come down to down, news to but your the you, are why the come good what hard improve numbers So and rate growth still enough make. has it yields that's hasn't have

Keith Oden

pressure and indicates doing lumber. spike and up, And lumber as it's up response And construction that that at in in the there's be on be a we've to that. demand there just lot your and question the guess definitely everything, new we the housing, go add it's to look a ramps that mentioned product, as is a definite have just is area that forward. home is one continue my problem lumber would I which time, is single had going market it costs the Rob, more wood big for had ramps now in what process family And in out to in challenges you to in of going right definitely a demand, we we

hard So really area figure at out costs. to Ric's trying package ways are commentary overall our looking that, we to on probably for manage opposed to one as lumber that's the costs

Rob Stevenson

given Okay. October, markets that just your any is you more also, today September, how incremental do many you And than would Keith the see that's then list that And on restrictions? showing seasonally. then weakness evict in residents can't be pandemic

Keith Oden

Well, we number. have it's not a big

apartments those throughout mandate, CDC less go the XXX prior have and For XX,XXX actually evictions some mandate default the a COVID entire about we're in through work who pending. back have pre-dated that are people CDC residents to already we COVID had that – in to and the have XXX us It's and, not the allowed jurisdictions of process. were and system-wide status our to we to think those, have, working XXX us through than because most given

to they're all small challenges. overall non those XX – XX for processing of different world in It's other that of markets the of factors in to evictions. not frustrate of our picture, we're a been when small, probably has most of order rolling there restrictions, you've our own huge when having it's of regular to of of going in its work California, residents and who going the a COVID most exception protections in a set that, to process. of which the our It's obviously ability So set a environment, rules We see through end California, back our evictions very the of markets our monthly. component just extension to deal knows terms are but got and a outside system-wide with California, a kind big of

out if you year, it's XX,XXX average maybe So people just evicted XXX, for XXX being the apartments. do of an

can't pay. It's X.X% And are fascinating delinquency there. number. us, an moral they two X.X% the LA, pay Houston. we it's delinquency And to California, they delinquencies difference and me really is a the have a so is between the The and have issue to see that we in have these That's biggest hazard. in that have hazard minuscule you moral balance not high in it's rate an we – today rate won't

Rob Stevenson

Okay. seasonal? just then And October, markets than more September, incremental weakness any in showing

Keith Oden

No, no.

Rob Stevenson

Okay thanks guys.

Keith Oden

bet. You

Operator

Amanda Please Our question with will ahead. Sweitzer go from next come Baird.

Amanda Sweitzer

of you fill any from back, seeing from Great, pre-COVID, kind you lenders guys spreads loan national the have funds about then what rates both development how and good Have and just in of morning. LTVs? and come changed or then terms you're in terms of interest in other pulling today gap Can terms talk lenders debt construction financing? seen

Keith Oden

Yes. Sure.

into that from what's are falling gap. by into by And money by definitely think I and biggest market the that of because that driven the being instead to the XX% some is, banks gap, I of Ron that challenge the debt banks biggest is want it's to was there having have syndicate. happened going And are by not to Witten of fill regional And definitely he's market. development saying, banks that The it do debt. So pullbacks debt the under in issues believes driven debt on think And but is now pressure down COVID. center builders capital XX%. be merchant are maybe XX%, is coming starts then been fill to not early coming his The funds had on, definitely projections. smaller construction original

and So difficult. over loan loans troublesome getting million is a getting is over million $XX very $XXX

developments California a real hard are definitely properties having and other So in urban getting financing. time big

that way spreads have. rates the have they reasonably falling with interest tight and stayed think I

in I've rates because or been, because just lenders seen reasonable minimum folks talk there's need some construction minimum spread, interest lows. time loans The think their rate guess. I floors a all I about are

there where place, there is, some And more bridging And is challenge are that's coming biggest the but but lot the actually I So that it's generally requiring getting debt is in. issue that's with loan the the in equity. amount. are mezz equity whole construction because funds those are and put think financing, a in market

Amanda Sweitzer

Well, thanks.

Operator

ahead. Kim Please John Our next with from BMO go Capital. question will come

John Kim

you if seeing wondering stabilize Thanks. threes. Are two of more provide and stabilized potential was or higher? in have cap deal rates to the assets and more you're on are these color some cap these could assets rates be they I potentially Good the with to morning. some

Ric Campo

start when leasing that they are new is challenge XX% we tremendous They're the developments but, stabilized up. they're occupied, cap rates XX%, have of oftentimes around stabilized underwriting those and but there's a number full, and we them –

the so XX% be, three cap and to project we rate. likely with goes the when It's down I up that And given is go you to questions how up quarter, beforeit competition. at occupied have a X,XXX three look leasing hold it, actually units can that around

cap very because wall of today And very financing. are just very, rates sticky the capital these of and the cheap very, the so

if under some decent Right. seven a You And very can XX two a can get leverage years. a Freddie-Fannie for floating it, you and get loan, change debt to you're two. floater, rate for

about think multi-family, when post-COVID, fundamentals, come believe keep And rents you to XXXX. to XXXX back so be to going the that very or XXXX very, going And people the most private will that's back – early by market's it's market buoyant. and

John Kim

then wondering rollout Alex, that then why And wanting sell I'm to just Chirp to make but this Technology Okay. assuming just and you impact was you the platform, it party. you chose third to that I'm the sold your mentioned across doesn't case. the sure portfolio,

Alex Jessett

rollout by the to else there across not was Chirp the fully all. And with up in end we the that because XXXX. we at does we solve, there anticipate it a was that Ultimately and came being impact a portfolio that. yes, industry needed rolled need No, out of solving was nobody

cetera. spun always somebody and that belong third-parties, could market it we it ultimately up, so could that it to run And it to to we else but needed with knew et

very great found natural we with a that And a we so think buyer fit is us.

exterior now, as right the what X,XXX signed And got up a aspect but rolled we've about the so And little have we that's up transaction, doors. the of bit sort and very XX% got much are out very, And locks. our we said, opens over the consummated we've units with of still gateway the communities involved. probably I

John Kim

May who I buyer ask was. the

Alex Jessett

RealPage. was Yes, it

John Kim

Great. Thank you.

Operator

Our Silverberg Please next with question go Zach from come will Mizuho. ahead.

Zach Silverberg

guys. morning good Hi,

in trends certainly your for As easier comp and the you cities the market, supply all been altogether year occupancy in couple most XXXX, near here time retention it putting XXXX? will with provide which certainly feel markets some years have sales of about you up and do corners your or COVID but migration best and in in picking of highs, discussed or over home all worried favor past

Ric Campo

Yes.

We're top continue process the that under have now of XXXX. XXXX. think And most earlier, Phoenix, starting Charlotte in just Denver, putting renewal guess supply on that, challenges of for we our the is Houston, where probably probably at to in and we're right to are that those success be having some pressure. deck Dallas, XXXX guess momentum great have I think I have is mentioned continued new and continue. of I’ve And lease rates pressure. that will to my going the level property my And markets Raleigh, going out that the Tampa those that start rates the markets in will together have budgets to supply

Keith Oden

my some prior post-COVID. you because with this really I XX hurts head and kids interesting think home. is always to COVID of tailwind olds is year the think be the home One at number, of the look a big to parents. see to unwinding have know going moved should is their be and have that to a this, it that about moving And things I XX to When

about So end lived to of It's XX% XX% XX olds spiked it’s by year pre-COVID, home. middle the to at third now XX% COVID, the had of to XX% have down quarter. we in the to of XX

sort of market. breaks renters missing into So COVID at is demand There's or are million, will millennials had come the high once still of job a some back, And back come and of we've gains one that doubled home. positives over that the us propensity released. those up for

more moving think to offset buy out than people I houses.

Zach Silverberg

question. debt profile Kind comment has bit guess a higher wondering the the of sort provide run just average I color pandemic. geography the earlier more And or the was could and has color. or in tenants little bad type where of any follow-up changed I credit you appreciate throughout your if product

Ric Campo

call to that's So Keith policy them debts you, and AB-XXXX if have want bad by highest a for it's California, in you are what primarily, or policy mentioned sure. there. driven delinquencies And as that there, just

maybe driven. XXX most but the X% The America given we've for higher markets, a other and where Orlando very of markets situation tourist seen you kind basis points to much basis XXX there is Orlando And of including South South pretty market Florida there. the than driven, travel the are a job would matter the a – obviously state kind Florida, have of in South of be same normal losses points in rest

there's would things but up end credit we absolutely of quality, quality that keep would with high, is we'd because your one of Class occupancy just by no basis the points. credit same our happen what credit terms seeing urban delinquency board. just quality evictions difference to ever B you more we most not, or more are delinquency in could our from easily and XXX And is across the in – lowering A, In Class the suburban. is more and no important skips, you Yes, debts be and bad quality. increase upside credit the We dropped we

Zach Silverberg

you Thank Awesome. guys.

Operator

Our next with Zelman go come ahead. Associates. will question Please from & Kalmus Alexander

Alexander Kalmus

back three you growing properly to bedrooms you Are grown do accounting was When cohort? that you or for you like more have, bedrooms think in three future? I demographics. in you're one, your Hi, the see my today mix for families those the would on circling you two, positioned just for think you regarding the portfolio question. of about thank point taking the

Ric Campo

our three is components bedrooms. one our of would to And we at bedrooms move bedrooms. X% buy be look substantially out higher bet three our took if three If I rate one have our than our Yes. bedroom you three about portfolio compared our bedrooms our in to bedrooms houses

to have to houses a catered because move families and people out rent in higher with always single or propensity a or people buy we to So or they to apartment generally, two have one not people the houses. to

In more and addition that. like more just stuff, require families amenities things

and rate not rent bedrooms, it move rate and very twos, out have Denver has many, properties that in in it's We property, Denver. and buy a and than any property, bedrooms turnover other a but that one family has higher for all, three example, higher to a house great a of our

we So catering future. will it's not to the a are to in cater market that or

Alexander Kalmus

expenses, just you. at that Got And they utilities looking it. inflationary last from Makes year. Thank sense. weren't

of peers some How do the utility back work you working have going usage many increases? the versus at home your back your So of are going sense on apartments? on had much to markets? your a from higher tenants in Given

Ric Campo

will I What tell Yes. you.

you at look thinking not which a of a there better large increase. significant of it, look a If if rebilling, was way expense, is increase, probably at utility there utility you was but

than we a that would. more believe and at they trash we've do home, water lot So are lot typically a utilizing got they of our residents

we from of are fact home. deal working great a our got residents in we've So think

Alexander Kalmus

Got it. color. the for Thank you

Operator

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

Ric Campo

Thank thanks for you. And call on today. the being

talk up coming NAREIT sure to am We you at – will soon. here of lot I

thank and we and later. safe. will see great stay a weekend you Have So, you

Operator

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

disconnect. You may now

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.