CPT - Earnings call transcript Q4 2020

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Operator

Good day and welcome to the Camden Property Trust Fourth Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity for questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Kim Callahan, Senior Vice President, Investor Relations. ahead. go Please

Kim Callahan

thank earnings and joining Fourth Camden's Good call. you XXXX conference quarter morning for

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

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

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

We will hour one call attempt our complete within seriously. to

We in this by to is with your queue queue we'd to time, know multi-family another we today, If everyone over the are after speak the e-mail call turn call or Ric phone you discuss. have we questions additional unable their after concludes. to I'll you questions to additional be happy Campo. the respond if At that company As right call us. to that two rejoin ask limit holding then items to

Ric Campo

for Welch, of have before With I what adapt culture I work, And scope they and where years The about Jack year. successfully thinking it by before Jack maintained was work, Throughout this COVID that we companies' changed morning has perfectly changed. that systems to these hold our heard have and the in change every changes and fall. which When work. last to office for has to. joining that can apartments rolled package our This resident on home. a with mobile our delivered Camden they from and will many flexibility unassisted we home communities convenience fully separated hours. through product each grocery to. implementing XX Thanks, Kim. home while page will speed and tours, internet is migrating to a even whether ago, of most ago, experience leasing recall and and Good package over abilities music based And has able directly quote that that navigate requires for enjoyed grown our creating developing only also enhance this our they're packages five sold most how captured robust words, Residents Camden from morning. employees, the including tours schedule encourages to access our to same on changes virtual work a from to front in months making which Chirp to Team rewards unprecedented of to residents to history, Every business brought provides call out a financial the discounted we self-guided real directly normal residents, be single creating of away technology have efforts and program pandemic lives be The today. leasing for homeowners sweeping more they outside you enabling theme had Examples solution American, include, package XXXX. cloud pandemic. past delivery change when and you family work door, their from high seamless a to demand by thank deliveries for creating

We in will everything to do. we change we to find continue ways before have to

like Camden Teams calls to meeting our past quarter virtual have Beginning Zoom, and on utilized we conferences, interactive Microsoft and platform internal meetings. For earnings for offer we meetings, next a quarterly investor year hope virtual as the platforms more in and industry well. analyst

stay tuned. So

As our is optimistic. outlook we start XXXX

half to ongoing year the assumptions rates businesses and reopen virus. work. show battle many of and Our country's improvement will vaccination the until back the as get are during people on against based businesses accelerate. the hope first year that COVID workers and half a the continued of for second the more more ultimately With We difficulties

which jobs that in XXXX setting Sunbelt businesses Team to of in many in markets lost the early reopened and already of recovery the added and many for back stakeholders Fortunately, well half stage for time want while a were thank I made teammates, environment had we thank operate, beyond. want you. lives at experience the ever, have the Camden you we our we second Keith, for sure of the faced the great toughest one and change. done XXXX your of our the a operating to was of improve chance and customers pandemic, that

Keith Oden

they you horses. Rick. Henry have asked was think said customers thanks, I something the Ford to, would on idea Yes, onto And my when if he had have of change faster before what they said I wanted,

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

overview, for Empire the anticipate Phoenix, our Tampa, and majority I'll and basis guidance. operations overall for that in - this same on remain would likely up produce X% property and Diego/Inland provide property details on X% the revenue in range our Houston should side X% low the portfolio, the falling to year down end same will fourth quarter of XXXX range. that San within outliers market to At of looked revenue range. one- property the which positive range. with Expected would markets three-quarter be growth additional of is range an percent is XXXX and guidance the which The points the a growth for We of higher be received with B range the rating grade midpoint average at all XX markets our down points Following basis revenue same of the XX of or growth in C portfolio. our overall

outlook and provided roughly million by steady for supply. economists in amount Our they We in our new new on typically XX anticipate growth new up recovery along with based this Witten with projected in and have Advisors to markets on is forecasts, completions. most Other in projected markets, along estimates million completions. third-party XXXX, of XXX,XXX mentioned a firms call X.X jobs job economic over XXXX a supply XXX,XXX multiple general major X and and in demand for Camden's jobs

be So the outlook seems to prove be manageable correct. regardless estimates of to which

Phoenix, in Phoenix, metrics For We A calling outlooks. XXXX earning and ranking produced an Up in San budgeted and with year, top providing XXXX online a for and stable nearly are apartments. with XXXX both X% with demand past new both estimates new being again budgeted of over supply Empire revenue accelerate to XXX,XXX should new a goes year. A growth roughly new also those Diego/Inland outlook. growth to good XX,XXX the X% and market X% X% of of demand for around to an Tampa Raleigh with around XXXX of our growth out and XXXX balance jobs markets. X,XXX San in and roughly X% both this growth created to revenue XXXX, five top new average jobs Diego/Inland improving of revenue a ratings to this and new in with our with to is DC given and projected X,XXX revenue around of over range expected deliver Denver, projected XX,XXX give and next markets minus Atlanta Metro years but all but XXX,XXX to expected market looks round new to in once supply Tampa, the a units strong received rebound rating rating, the declining And plus Atlanta X% only for B Phoenix, range. XXXX XX,XXX jobs year. with minus With our ratings completions X% units revenue stable. jobs, In and Supply to apartment with A for XXXX call projections trends. Empire Austin job Similar this of coming with and in over outlooks. only growth Raleigh last unit recent additional growth X,XXX completions. three X,XXX X%

improvement for has and for years two nearly past do B minus conditions new XX,XXX conditions the starting and new coming demand X% Supply roughly years, been steadily levels delivery outlook. Denver past new XX,XXX strong XXXX year supply at of an In see by renters. performers ratios during B have But a steady us expected with units several XX,XXX for over and for coming new XXXX. markets some southeast we're year. the Florida, XX,XXX years, online last respectively last positive jobs. this years, over XXXX, over remained for in moderate the year. on at prospects three growth Austin these revenue of new jobs course with and In and expect this horizon with several improving steady, of given property anticipated X,XXX supply growth new new units market to in XX,XXX averaging rated offset annual been supply new over ranking plus After respectively All X% market DC increasing and roughly C to competition the in we the for scheduled

Orlando from at improvement industries. over Job still roughly year. an exposure B same XX,XXX call last market Orlando market, the a and issue few new their supplies the is with better in moderated that condominiums slightly property in and but new to but and a past outlook. we a New rental estimates Competition jobs four steady achieved growth operating percent that for stable in from XXXX continue tenths earns that for years XXXX. hospitality rating expect in given is sale conditions this trend And units, travel year. XXXX down revenue should in growth remained an XX,XXX of

roughly with to steady year level XX,XXX stable Charlotte grades New of a development to new versus activity the remains be with received completions so XX,XXX B XX,XXX both and X,XXX Dallas should outlook. supply minus this jobs. strong

in it's for in high sub was XXXX average and our X,XXX should add city each new absorb Dallas that should X,XXX new stronger year year, of over are are job plus anticipated Approximately but units Conditions than with C portfolio. XXX,XXX XXXX. expected. A be this rating Charlotte estimates slightly year years. ongoing deliveries the in Our an once help supply came the past competition the this downtown LA/Orange over new new gave and versus particularly few be But will in the power pricing expected markets a town and pricing strong performance XX,XXX of healthy Dallas limited. in better units power outlook. last the roughly in growth XX,XXX our challenge We in XX,XXX will are delivered jobs similar likely County much to with with improving again online XXXX jobs. economy over But levels

should C with jobs operating see XX,XXX again rent be Estimates growth outlook supply as around conditions of of expected XX,XXX improve, higher faces should begin County delinquencies hopeful southern and markets year. LA/Orange again over XXX,XXX roughly as coming still year. healthy rating balanced better, the our expect in Job half this but XXXX with apartments this completions Empire. as in new not to a other and to supply County XXXX. year. we're slightly received we a bad than this San Diego well Our markets, saw apartments including particularly for Inland year new back will growth demand perform with but California most in online County once conditions portfolio Orange debt that Houston of LA are stable and negative metrics. our this

continue getting to new struggle of levels high So expect Houston we with do and lease ups will many concessions.

some growth of moderate However, slightly is nearly expected, growth B, for compared portfolio with to job Houston's revenue our to year post inventory expected which rating most our decent with XXX,XXX of new help in absorb a market. XXXX recovery in markets would Overall, might this year the this jobs certainly XXXX. our

midpoint quarters of all at between property plus growth total of minus earlier, our a three I and of we percent our As a expect should growth year, achieve a this revenue mentioned revenue X% our be markets and portfolio the X% to range. XXXX same guidance

year a X.X% one percent operating was the for few XXXX a fourth details and our for XXXX. tenth property the of full Now quarter same growth of results, revenue of

performers Rental X.X% X.X%, down mid fourth blended top at roughly leases for at down were at for Atlanta Phoenix rate for X%, X% effective Raleigh of were Our and around the both trends the with at as the expected Tampa rate quarter X.X%, high quarter range signed to X.X% growth. a renewals in and X%.

preliminary to levels. basis XXXX Annual XX%. rose XX.X% to quarter, quarter and for compared And XXXX. XXXX last the to expected to Alex fourth board outs XX% at the blended the XX.X% of Occupancy from homes during was four last seasonally and improvement Our fourth slight of at years. full turnover XXXX, quarter up an At still and full XXXX Camden's are March growth. move of has XXX XX.X we're the versus for Chief sent XX.X% but last the across an out the over January leases, slightly year than purchase about quarter January a results rate which for about on net I'll February average to XX.X of point the being Jessett, XX%, compared indicate points XX% move turn offerings January Financial year about and increase. average call out 'XX compares over this new XX% as renewal roughly for to lower Officer. X% in average renewals occupancy XQ averaged

Alex Jessett

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

XXXX XX.X% Durham, downtown the compares of future in X.X% X.X% In fourth this Once the homes. North our rents a rents higher delinquency. again, development scheduled and Cypress fourth our of the see seasonal the development $XX XXX quarter new RiNo, North II, new XXX began the quarter, a venture in Camden of completed Creek on unit acquired End XXXX, Camden Phase both new During we leasing to with quarter uptick do Carolina of collected an Camden a of $XX in joint million million unit Denver we XXX we for XX.X% land XXX construction development Phoenix, when apartment scheduled four million slight II, favorably development $XX Houston. only approximately of We acres we at a Also we and delinquency. with actually collected unit delinquent. during typically in quarter in

of from be statement. reported debt, reserved reserves certain Turning out fourth impact have previously line the debt, money, not this $XXX.X now appropriate $X.XX. revenues with midpoint the the us previously amount rent offset entirely uncollected will share, collectability. non-cash the to owing is debt received, $X.XXX this revenue, When bad owed period. month. moves XX% an under rent during prior straight we $X.XX been of the we whose Over as $X.X a $X.XX Last uncollected share and represents the corresponding yet there a XXX% ultimate and in operations collectability per retail or line tenant is us recognized recognized, have retail negotiations from which in typically the to summer. per million we believe This or monthly serves approximate fourth reevaluate bad from straight receivables the of night, same adjustment of our $X.XX XXXX accounting, reserve, we resident for rent quarter. have in as bad is of since we income funds one no adjustment for $X.XX amounts to income but range by midpoint future to an to establish We million guidance as This variance GAAP, with bad be accordance quarter current in to evaluate to We debt which what the property our resulted retail then of below and uncertain.

rates appropriate we accounting fourth was quarter as refunds property a in became Houston timing timing net fourth offset repair property the for DC. and made line was As quarter store lease of certain that maintenance income with and the expectations significant necessary, in higher it tax outperformance slight and occupancy Washington and of be might progressed, in restructuring adjustments. expenses, tax the operating the Same by the apparent

same operating point mid-XXXX. X.X%, delivered environment X.X% growth XXXX, revenue year of store growth guidance For NOI X%. FFO more The and full of return store of of we same upon a normal decline XXXX our predicated is expense an midpoint to by our and

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

from Chirp decrease to income And X.XX% same FFO asset from and/or and either end gain in per FFO the share in investment. six the $X.XX the $X.XX decrease by XXXX. by of in to share operating FFO. fee per primarily decrease and increase from per of change lower and combined and net cumulative and our the and in share in during from contribution to of decrease properties FFO management of performance balances from we per combination in and cash related interest portfolio communities primarily decrease FFO general expenses the $X.XX non-recurrence $XXX XXXX share growth approximate full be per quarter lower and decrease results FFO from store net with activity of net off FFO a year interest X.XX% XXXX our our operating write approximate bonuses sale to portfolio. XXXX per income share approximate NOI finally, to in an of and from XXXX XXXX the April technology to an net $X.XX $X, lease dispositions revenue At receivables $X.XX The $X.XXX $X.XX in other assumed same in $X.XXX results per decrease share approximate up $X.XX is projected retail core of results. $X.XX expecting primarily the approximate per Each FFO and representing an included our and approximate approximately from million acquisition guidance for bond our COVID-XX of rent of expense, related actual the approximate And And offering. increase from share represents $X.XX of in diluted of towards of expense anticipated midyear. which FFO increase year-over-year approximate income. year FFO share which funds, which XXXX X.X%. full impact $X.XX and incremental share approximately our to to FFO, FFO per $X.XXX income expect and of midpoint decrease We administrative, property $X.XX an XXXX. our due $X.XX partially expenses. development assumed in store fourth straight And acquisitions in $X.XX from and adjusting line an range share decline growth FFO with After $X.XX resulting $X.XX development per the due the XXXX due of per store offset forma of resulting X% $XXX in midpoint, share approximate related pro the non-same lower retail XXXX is XXXX quarter fee share third of impact, directly And are frontline our on And our This management relief management XXXX resident higher midpoint per same resulting driven COVID primarily share per our store an $X.XX of pro forma million decrease, $X.XX related of of asset higher a rates.

due $XXX balance details year. development of $XXX X.X% are of assumed remainder insurance starts Our aggregate. Property by expense The categories increase also unfavorable sheet midpoint the Page the insurance on throughout total million X.X% including the our approximately comprises insurance the spread approximately anticipated XX% budgeted property other for continued at in of X% XX expense to to grow of our the million supplemental our plan assumptions, to package expenses. will approximately expense level operating market. growth at

income, on including first within overhead per sequential the management midpoint and We attributable decrease tax and the be the the share of $X.XXX our of the the $X.XX. the for annual expect each represents seasonal off and and of as quarterly of line per of will $X.XXX property timing offset primarily to increases XXXX, combination anticipate per is higher quarter quarter FFO share quarter the expenses result the NOI Washington by of excluding of be X a of of store typical After same of $X.XX the trends January receivable, right straight quarter first fourth be XXXX range to property a $X.XX salary flat which reset timing share lower in tax asset for from DC fourth fee XXXX, to annual of part the accrual our We of growth in anticipated other onsite year refunds salary expenses, will Atlanta. increases. retail

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

based meet From that recovery. virtual cloud well mobile various banks allow beyond. we for residents points. time, prior be lead At AI the finally, systems, and and to schedule, technologies transition financial on call play with we'll XXXX And their poised as XXXX, access calls, this open invested to very to basis the up to leasing, is to we to realize are the cash in set questions. us XXXX, excess in efficiencies will in on XXXX technological that earning advancements. XX approximately have current will important Our XXXX discussed I year

Operator

today question-and-answer Askarbek come first our go of ahead. We with begin And America. the will Please Instructions] will Bank Alua now question session. from [Operator

Alua Askarbek

you for Thank everyone. Hi, my questions taking today.

about your dispositions So I finance just talking for quickly year. want and off for start this to acquisitions

you're actually that a what to able little just a There's of looking chances you are at amount that about in. was and in I guess acquisition to lot are the pricing? activity wondering and markets more guys XQ of So kind I get what bit

Ric Campo

Sure.

disposition balanced, acquisition right. So program the is

So a spite dispositions. we'll those confident in able execute of very buoyant, to XXX a XXX be feel million midpoint of we The We private how protocol going given today, year underwrite the environment. strategy the did similar properties what - this we very you where have the is of COVID for and acquisitions million new we're But transactions. last to on be is of cycle. pretty market - to the in

If - of the thing we old. properties we that that years last you billion properties of six those or for versus age AFFO. that about basis years. think XX cycle, average at time, disposed were is the that roughly about average properties acquired on $X over points really the And terms five like the in was of negative on XX was old that properties transactions spread new And interesting were

newer be properties able we lower non-core CapEx with higher where CapEx we'll same better scenarios. now on then older is so growth buy sell the to going think right with thing properties and And and

We buying underweighting. markets in will be where

from in markets we an more dispositions DC be So and Houston. if some Dallas at would be Denver. potentially of The our would those will have markets you as Raleigh, the look underweight concentrated well that Tampa, it and Washington, come

Alua Askarbek

then any for just were quick a like the in markets you. and that what other were range quarter And Got and question collections. Orange collections XQ, for LA collections just it. top County this on then Thank at past Great.

Alex Jessett

Sure.

in had for and was higher was amounts LA/Orange X.X% a of general delinquency delinquency. LA That California San so got delinquent. you County County fourth in to quarter, X.X% X.X% us delinquent. Diego California. But the obviously So look if

Orlando was X.X. Tampa that side X.X% X.X delinquent, the and Phoenix delinquent, equation, Houston of On X.X%, other Denver X.X,

Ric Campo

will would don't the just markets the example of to won't. function they government. put a classic I more not and that that And the negatively a all to and group they impacted. local what add credit just have you to pay a various to getting can't out function interesting put from to And are see that free plays pay. how California folks that destroyed. this it's loan of a be that just and like at pay you, California how have look And brains in they that just government responds that'll their of is moratoriums of all Yeah, a kind and just the It's ultimately, of in forward. people will legislation state Both just be that of governments or and have have just going the the it have - Camden, people

Alua Askarbek

Thank it. you. Got

Operator

will And your Capital next question ahead. Please Neil Malkin go One. from with come

Neil Malkin

everyone, good morning. Hi,

of about the First you've markets. in progression in sort change to what seen, talked question, of out state. regard is music the talk just y, you of about your migration sort coastal can or with highest, I or of MAA kind new people after from think, history, leases from

great. action Thanks. kind Just of seeing you're be That'd there? curious, what

Alex Jessett

Yeah, at. favored There that we're certainly Sunbelt. an of have long acceleration since in look trend a this seeing we the migratory that are couple things environment. patterns absolutely, as so And current

are we of U-Haul attracting look our an and data, instance, for at market when So score markets very which residents. which indicator is retaining certainly one well, way

the out way six fact, states top traffic one U-Haul we operate. for In XX of where are

call we them out flow bottom. like Jersey ranking and While New should states Massachusetts traditional New maybe towards York, are the

York clear New there lines, do York patterns, move residents Camden markets, certain a actually in finally, uptick those is our one number along we residents. new Google looking then of residents, in look Search move Sunbelt provider into although at markets. our of when And is south So new to New the most within fact, non-Sunbelt of our

volume apartments. of an approximate Atlanta XX% of uptick searching for for there over For doubled And same XXXX, instance, residents was XXXX looking almost York December in residents York apartments New February of period. Miami from that through the New search

certainly mind, I direct some America are been this does beginning, Coast, in certainly favorable for seeing has into Sunbelt look West are it the as said we accelerating. time. the going very keep which So of and it is in migratory patterns very on East Middle the But these now like quite Coast some out trends, funnel the

Ric Campo

if you when recently. at Samsung as just moves pretty of a only fangs which being got by XX% more is amazing example a that. not is But of office ton, plant Even companies, leased you think about that picking major chip announced in announcements, Austin Austin for currently, $XX the billion up of look all the space including

moved when migration as enterprise moved and - a well. thinking start to software big and Hewlett Houston in there's Coast just Packard So Austin Houston enterprises number got you West especially even some as a group well, about and to their out

says Alex been on it's time, it's like a going definitely it's long for now. So been accelerating but

Neil Malkin

Guess weird. tech it's only anymore? live in the California. thought not I guys Yeah,

Alex Jessett

No, more. not any

Neil Malkin

do right. back acquisitions It's are to position sub of your Yeah, is sheet questioning. you forecast FFO and the at? of be about kind I cycle you that here? given first kind to selling guess of but going an EBITDA line talk one, think a your just calculus of And what versus into yields, not I could being, then you're of just you as that environment. sort from - know the wanted you Last why EBITDA of what can that kind AFFO, standpoint, guidance, buy last you in wasn't guess, think I aggressive. guess be yields I the you're to going aggressive you good balance going surprising in

Ric Campo

we look and property was end last AFFO challenge one of recently better a the is development add, we the was we cash in trading what showing as in last probably Well, had XX start properties and think is that so at that, just is budgets points. XX points, higher there they're ultimately, older negative cycle at The that look, XX today market cycle up. out negative newer properties, even for And bid our But probably the I are widest when even to said, is though to on leased basis we it. we and opposed the FFO the the look with older as the I'm before, the selling to another. speaking, flows, for biggest conservative spread what basis think - that spread. But happening I and generally way just to in spread on real from value

similar you of acquisitions that and if spread. so and look and billion spread what of contribution, when X end bring spread. billion we development be AFFO of alongside the positive last the X disposition going negative bottom we dispositions, the the development, then did time, of when sort contribution negative the had of at think spite you met is, FFO you is billion line terms a - But of to program, with a over And in we in up acquisition you

we're I kind way at acquisition properties, then So very advantage of sort definitely capital the older on well. at look - taking And huge is of we're the market today of bid. as bid the very, our it's newer there's them that as top a is fine long disposition pricing being private the a on robust, huge properties bidder as

we that do like narrow that's And the did to we're our the versus And that properties between to spread, buying, can low properties we long-term. much So rate low on exactly rate keep extent we're to the we're you're as cash in can higher going what and negative properties. cycle. cap portfolio flow selling improve of of or it's as newer pretty the older the quality sort selling last buying spread we cap

Alex Jessett

mind, timing in keep a in And our differential there's model.

will the latter the towards we're the be acquisitions year. of dispositions So with assuming midyear part the once again,

Neil Malkin

you, Thank guys.

Operator

go your Johnson Derek And ahead. come Bank. question next will with from Deutsche Please

Derek Johnston

for granular Hi, morning. markets. We're more everyone. private little Good on a looking update

We levels elevated the of asset seen of acquisitions land to surprised opportunistic team distressed see deals? any were your outside XQ parcels. has Now, in not

is these potential the you the So lower? believe markets Or to private market waiver stabilizes? are guess until too risky adjust deals environment still still this need where do opportunistic one I question,

Keith Oden

asset right. spread, to you're even the But public when in guess adjustment interest then in if you and there's at fundamentally think to ability finance at market, the class is and Well, cap rates, what about you great growing about a markets private when X%, people I with to to inflation with And on if wrong, private a an going markets look flow the a disconnect. the there'll look markets, reasonable public massive be are forward. cash markets negative right, believe rates relative that going this year going when you worried a cap the a private XX And at rates is for market private are you the what's be own.

and could multifamily do. purchases we been that The distressed are of end development, able we've to But we And did in as day, as a we pick one going project at up was did example, decent there developments to that. shovel good of be we And when is the example you exist. And they far ready some of don't the so I have out America, there. think up that those. no there a Durham distressed assets pick for about talk we assets knew distress, land

you not have get in most in last high their anybody out the a you ton there's of maybe about there significance. stacks, private the - their of buying then, most deals of nothing properties and of in leverage of If capital who's think of builders, now cycle, that a of equity and the lot can the side, the so any but complicated structural merchant

Derek Johnston

Okay, that your energy well That's Huston, now. surprising, current given on market, and given more migration in historically Houston new high in especially the XXs is portfolio which the especially in market supply. in in And has creating excess so has use administration's highlighted. thank right helpful. you. how that's trends a fundamentals been you best headwind impactful Thanks. is class for gears, which absorbed the possibly Are energy longer-term policy policies the Switching crude

Ric Campo

than debating and rather land. federal of we for example, community going and the And issue. spend prices with businesses orders executive up improve time I of fair is down energy most short-term drive friends my to view so, them amount this Biden their believe not energy that a administration's Yeah, In of on entire think new like the is sooner I on later. for drilling. less is the And the ban think it about XX% part when of drilling Texas, than leases have you -

Mexico, different a You it's go to animal. New

So what to higher Mexico, nearly even maybe are going that. is, I XX%, New is it's happen going or believe, than think - people to in

Mexico, into Permian Basin. And so the the New from shale in goes

to are are land in people to in Texas going over people abandon federal move what thinking Mexico New that that So and is Texas.

think so positive it's Biden about definitely And and have effect on his which the change - you administration have on issues, climate going positive Biden the effect to recovery. a a when price Houston of oil, will

to can and way at fuels that The and to I have of energy rid decades And going switch all That's maybe a know going point. fossil they that to get idea know energy we you're the some electrification all that other happening next flip XX the get the clean not just is - they you for companies think of thing transition, the is highway energy system a are take there's these transition years, also to decade to done or entire because no that. or get two. that

Houston administration And headwind so is a in the actually a not positive and view. Biden recovery, for a my energy

Derek Johnston

Thank you.

Operator

our will ahead. Nick Yulico from Please go question next come And with Scotiabank.

Sumit Sharma

before. to questions here up I'll to Sumit Nick. And against is keep I the question This just And want in iron ask because we're for everyone running morning. have good hour. Hi, the one,

the doesn't what in declining DC? the is seasonal really, I drove you and the could decline? mean, occupancy mean, offering trying rents particularly something through whether us walk the more Or about sequential you seem if than Q-over-Q, consistent competition there more do? So Houston to in be It to understand I is compared year? about inquisitive at the think that. mentioned, couple that improvement growth that year, in is least SS earlier about you your are the of when when the for to questions And contemplated DC, focused Houston or a of then range on at last start dispositions call, so rent we reflected

Keith Oden

questions. two that's technically, So

decline years the XXX going year. the apartments delivering this in The had already given and of working environment, an rig Ric Houston. I process the another now to in on. be think that's We're is I about with done that apartments the positive a There two In we in though going for the already weak delivered damage pretty on incrementally to XX,XXX And the agree XX,XXX rigs in sequentially going right the what's So year. was from last into what's working. Houston. right with decline last on in XXX count fact almost probably even it's

happened. absorption to So take up delivered obviously were would jobs have that require of able Houston their line rate of job the losses at the that And off kind just XXX,XXX XX,XXX fall normal in that being any that system, but already worked is bottom to with slack. a way through it's associated the hasn't normal, kind apartments be a

being And result take they're much this work that it as would as apartments better way we data up Now year, expecting that providers, the XX,XXX system year. our But great. from which through. the that's maybe looks working still its are that have much a jobs, XXXX be of to delivered like this to completions stuff through we've kind got would XXX,XXX in

that's portfolios, just up makes just which as got Camden's on have - we decent a competition close work there's combat hand-to-hand the that assets, lot a way It's as stuff too supply. of to part either simple think much in I you of we got downtown that So it's or inside through.

Ric Campo

see other of a thing sequential And do because to higher from your I'd we we to had What unusual this the was the the third a typically, add lot seasonality. second is although occupancy question? only quarter, that actually fourth of XXXX but the is, than also decrease part was typical,

Sumit Sharma

dispositions would no? that perhaps just towards statistics range improvement Is mentioned and you more be in DCC, the not or optimistic guess I your so related, from any second SS focused your there Houston question. saying. it's your contemplated it's side on a dispositions the in I'm

Ric Campo

our in in half. on DC And first both Houston and that's strategy we're based believe to second is - and so the selling the Yes, the half that the going year, we not be thought. clearly second of that half we'd better and it's in why

Keith Oden

able And in XXX basis we're assuming better going model, if our and point negative you anticipate actually that to spread, do to that. than look we what's we're be absolutely at

Sumit Sharma

Thank great. Okay, you.

Operator

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

Alexander Goldfarb

there. down morning Good

Keith Oden

Alex. Hi,

Alexander Goldfarb

capital as unfortunately, every industrial construction the word apartments use underwrite is and the next on hottest I'm just allocations it just Sunbelt not out to seem but developments, like speaking costs to guy capital, deals private going be you as to to gets so question the class. the overused, guys on Hey, new are And filling asset unabated. the those first

So up. go stuff continued all materials, labor, just to that fun

like to think where you lumbers are as inability to guys a find prior three trying about have taps deals people or constant that just pencil. of investment develop invest the been roof paying your in part attempts So where through

Or is where Cal? do anticipate this there maybe discount to commented hence Is a think the changing there one definitely a Southern of sell Cal and boosts where how changing you investment you positive previously that to the you just why hesitant get So is Southern world, anything were because to the just make help that's and trying time? maybe of ARB it viewing Southern to sell now that you Sunbelt, Cal like that about seems will you're harder harder. numbers some was to work, the

Ric Campo

California gets robust terms pricing. there's very I in it ARB think think right, still Southern think I other Well, harder, exactly there's bid for any you're of an but a I don't and harder market, California and between Southern

I $XXX really in buy somewhere for done and It's a can't our out job, a cap $XXX been more we all figure in team our rate perspective, able sell - But not point. and that's have of it's there's transactions then that higher our at million much - Southern have from to work. it again, else. is So great And California pretty development million manufacturing to starts hard. people this

that's have at selling just can a rates as when right. really highest bidder, buy and always cap buy you to think In start talking easier, we of good we about sell, we're the because as long is lot the we terms whole be what the

Alexander Goldfarb

of prune drudgery Okay, of and Cal there so is Southern if out you're dealing that Cal? you'd the the to mean recycle a finally does Southern Ric, bid, with that start saying good

Keith Oden

pretty we're going California, to those So markets parts but the look are I ex darn maybe okay, LA, well. best recovery in do think at a of when scenario, you

longer Ric don't I'm good the So - future when to have position term when we diversification, how two about to next geographic want ourselves issues, thinking looking the you or of who of longer I'm term at longer debate. a But when with question sort pay years. in from government want the still up three start we the recovering The that's a we time I'm with think do and put people to going rent cash to every to California to they The where do are flow going growth, - mean is - I well. think especially - for both dear the in every that's Houston. mentioned is overweight dispositions to and in assets of we Washington Houston are going a one we're Southern be California, on and based come the are dispositions we're and from including recover But I looking those really earlier, of DC, markets. our markets,

dispositions margins, come that's to are going at where So the from. the

Alexander Goldfarb

fine. that's Okay,

normalcy mentioned guidance the to predicated in and you by return is, a and question on much to comments, sort the you is Alex, of economic guys have Sunbelt start midyear better the from situation of Coast. at sort the second data the in looking your US The that

where expecting? York, are it's everyone's I I So or are Atlanta not how San Francisco at New home. mean, much change like - still assume and really you Houston that

of just sense a can So of relativeness you give mean normal on we're Coast? you us to the what versus what experiencing return here by

Alex Jessett

it debt. of lot around circles a and absolutely Yeah, bad

of more second XXXX line using part XXXX sort is really ability typical that's and And to to start our in of leases. so of then our latter what with in item a push as guide, belief And our in curtail sort the new is so that bad see be we one year, item. debt will the to

it, think to that's to our not again, part in book. but numbers, started pushing obviously, those is pushing of our - we sort you the we've new If start leases latter able our going the of have But perspective. that and year, to huge what's hope but in in renewals, been there about pushing we're models, not really the is be

Alexander Goldfarb

you. thank Okay,

Operator

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

Austin Wurschmidt

guys. thanks Yeah,

that Or in is and dispose assets What's are supply? that any in the you investment little targeting focused? to exposed types if sort of looking more overweight? to Houston of the selling age a thinking infill product you be I'm side, an you're assets the sell, the considering already your that more mentioned around Just curious you're more to new markets, may it you're of of on DC that those

Keith Oden

more at rate on quarter, do we cap every And age and what it portfolio capital, growth look what return return and invested it's properties obviously, CapEx, look invested with - force that you on are that in for we on future. three year is at and of two we that and to doesn't we a high invested lowers it be if the next years, profiles. that it's try CapEx pick all put - will total have every invest rank or the Definitely, capital driven. our that we what slower in the return to on than return capital growth you give And

higher are generally at in And so as, to into Houston, fall you you speaking, bottom you have when much lot perspective, on when CapEx a category. the at recover and a urban don't it in line is have it be - higher speaking, generally end, what assets look And core. lease there's from properties we about faster even so that ups going that that of urban a the older think with recovery, pressure recovery, rate

assets. CapEx assets higher and sell older, those of let's sort our So keep

CapEx. years about the invested and it's we So what return more of of next three sort capital on is the believe after drudgery

Austin Wurschmidt

where mean demand good all? smaller even trends sense, into not to tuck overhead? in more premium that there and Sunbelt, at standpoint, pricing it a you migration flip side, earn and these the today the a then from considered on of yield trends have be Have markets, guess, that I from competitive in without any you're secondary I portfolio maybe are Makes you much added some could the or

Keith Oden

that need that lot to to about has really lay its relationships spent the in it's - that other that I the all have cities that one in know fairway Nashville. ton due there's Camden's growth, we there's markets. mean a It past, a understand as the been Its as do the of our of Yeah, just expensive land. It's things in in so pricing. and time done Sunbelt diligence of far most new the sure Nashville, market right right so the of we've trade make up we've to where the of in, shown then hasn't we down construction population, talked market educated that the high We've but highly trying are.

there - an Nashville look one as opportunity to the than really of from - that happy footprint So next do it's and would expand attention, that get we in to you lot market is we a But too part in the and for be make how pandemic. geography this part kind want one going as to know this a with what through might of performed we're of as the the of our bet other rollout. is well

core that of one Camden's make time got love it's characteristics because the we'd markets and assets So add to Nashville some that over we all for. other look in

Austin Wurschmidt

over portfolio or is something little a just quick time, well you building sort on the thinking then as a scaling or mean and as table I of follow on more are up, up And development offs acquisitions a one more quicker? maybe or

Keith Oden

the Yeah. ideal days would acquisitions multiple chasing we - those then in but like Nashville. situation, unicorn could find small the if It'd be are be markets obviously, first, portfolio asset that like a and these and

Austin Wurschmidt

Understood. Thank you.

Operator

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

Nick Joseph

migration or new there's of there's if any or any New Thanks. or And the job? York higher are I I differences get then be comments the levels? of difference on income that number one, they two, for income you've the tax in able And you from kind appreciate a residents trends. an ultimately kind may on relocating a side? other Number And ask are wondering working you remotely typically if California for Thanks. of I'm higher just seeing that rents opportunity states. they are the seen move to

Ric Campo

us income. not do come and where we so New what know of rental markets and of them all used and rent pull our that that gives data gut to probably pay the rent my to they're more friends specific time time. them with from whole City the a and every absolutely, I from in over lease can they is gives to single lot What they realize price it, capacity rate absorb also and they their York do that to are the Yeah, that to my increases capacity

Keith Oden

are Yeah, coming renting those anecdotal apartments but there evidence and some from have people and jobs, are - for continuing and not is more at already mobile per here jobs in to markets they're that I working working think se, jobs. home other and just having and

Ric Campo

I'll he in permanently have And of New went New of ours expenses have as a relocated compared the York what It Houston add why he him quality out his a who as people when him in that's in send put that markets expenses, from York for a through no with to to uptick life. what attracted City. it, we been spoke daily - costing is reason I he so to was dramatic long. was banker And and to has Houston and has

Keith Oden

Yeah, matter right. whether I more making you can think rent? But people answer is that is enough soft the people market the the what yes. where are money, rents think of push idea issue now, more make, no the today, can't I right they pay

And to power resident up, increases pandemic and so just ultimately, pricing stuff. supply that. able we markets that do higher and given can take be firm have the don't, then once the and all we Right bases now, of then the are as rental to kind income

Alex Jessett

three a City us doesn't York here the love lot trend for buddy, New banker of things there's that a make of that provides. all still One

Keith Oden

long-term, they of City off give never LA, people what San think you fascinating I And get want I leased compared in downtown things for Francisco, markets was really only really markets property to to to even the people And same in with I look, example. that in downtown working urban is are Yeah, are that in XX and long in of those a downtown - New urban XX% highest Francisco. the just the We is project we've urban apartments to fine month. last our think Houston. in York going write units longer can want urban Sunbelt New leasing to back there's time. leased Houston, think though York workers is one San going and the I markets - be it's But the think the urban and because take

or I New So wouldn't sure. York San write for Francisco

Nick Joseph

Thank you.

Operator

from And come our with Please go next Hightower question Evercore. will Rich ahead.

Rich Hightower

'XX it lease Hey, guys. doing to Hope try well. fourth that quarter there precisely? keep everybody a was back us as to here. the half rents as Can is can in roll up pressure is sort sense half those new weighted first you on I weighted you far forward as the quick. supply of know give I'll of pressure whether some we peg

Keith Oden

been that continue. a It that whatever the that takes go for pressure as everything it going the that's inspections the schedule lot or far wrong Yeah, last officials month is is years, delivery, models, has because say put longer. to getting against I the right don't off of skilled forecast as going labor. so people's on think sign city of in will against they've of now. There's have and distinction. any through and been a The still can actual process slower, going meaningful I schedule to And three

to moved you if it's - Houston, that like wouldn't even a accuracy XX,XXX them matter stock if is And a it where far as you're it my - put much doesn't month-by-month So when the to concerned. get as apartments guess from February I is of in XXXX role, no. in answer is market get going had November, you

Rich Hightower

Right.

you. Thank Okay.

Keith Oden

You bet.

Operator

Haendel will St. next question come And our from

Juste with Mizuho. go ahead. Please

Haendel St. Juste

for the thinking there continue four exposure? happy pair one that market, you What's just Sounds can to Dallas markets on with you're your of are going more fairly add number have with Houston here some to quick guys, two or Atlanta year. you leapfrog to same here. comments pretty the your with soft on this years? maybe Hey, number been more like of And last me couple as

Keith Oden

we Well, definitely our and we up long-term can move there. of Dallas like some exposure

like or profile years. over look - their also the to We when next good growth three you at two looks really

going top is Dallas that be revenue think a quartile few next years. we to so And growth in here the market

Raleigh, We've way X% as far probably market Austin, a our properties in yeah, As for been have us is acquired been we've large - And our Atlanta like right X%. X% portfolio stay if developer Atlanta have Atlanta goes, And of but now. we our you and it's here, and there. it's markets a more at we'll of we Tampa, that bit. like look for in a acquisitions, or X.X%

start markets, try so term. we to that the Raleigh a are an in profiles Austin get at perspective, little And growth to strong So more. good of acquisition balance time can those markets even growth and really Tampa and and use the Tampa we going we're those more from looking long Orlando, bit or spend all are

Haendel St. Juste

And development but the of got forgive line year XXX type what Got missed and yields you I starts this me you underwriting? through million this, are where it. Thanks. if

Keith Oden

the - are year are those are those this - starts new So

Alex Jessett

them in So if we you actually package, order. the in we're supplemental under look always development pipeline, put our

then - that, which District of pretty which we so shovel some Village, fourth or the have following that Durham $XXX one Durham, purchased So in And site as and Arts quarter just it or the Cameron that one million. the first ready. is started to is but that we was proceeding that is the soon. is Camden we get That's subset expect

Keith Oden

sort we're And of more Durham going of in not countries middle California urban in push the and urban the and it's those to is LA and five is are it's an on we're going to the to be project, Durham going - - urban six. but be low yields classic and

Haendel St. Juste

Got it. Thank you.

Operator

come Please And from Markets. Kim our John Capital next with will question BMO go ahead.

John Kim

Thank you.

more in impacted why costs and if increase that's can any any XX% expect, big and the increase market On particular provide there's insurance you you too more? color it's

Ric Campo

a insurance property be XX%. a that So This That natural give XXXX, plus we couple our is tell GL facts there issue. in insurance are but what us I renewals our up global disasters. XXXX. causing May May, challenge XX Globally, just so the were XXX% an set up not an disasters being record for is now insurance will about the in XX side idea, on we is almost natural that to that Camden will - XXX%. market. insurance In US will you on discussion. be global for is billion of a This a property premium the - sort of we do issue start before and told specific billion X, And of you

because same lies the peers, to of problems. therein we challenge. all my talked interesting, the all So It's I have

As what one, our Camden number real in of will I a said, Camden we the majority not And than develop most, tell you estate. do going is vast better it's actually I that because fact, is issue. to

then loss to the very fantastic So on the know exactly the trying claims. property on walls. insure. And if side have side, that's GL we what's And helpful behind you're we

real So that's going what But facing. And issue. be all very helpful for us that's the that's we're too.

John Kim

fair it others? Miami, say, are than the more Houston, is California, are those to of But impacted the markets some that

Ric Campo

remember the very underwrite again, real disasters because entire we insurance. this is the we when global get issue. least go that the us, book is for specific and our out at well. exceptionally And and way we No, insurance they property quality business. estate, of said one by well, habitational, had favorite And which I very, have the do looking limited for of They're so of our not a score to providers, and you we've of losses natural survived very fact once

issues. This board not score is specific So habitational. market we across is well. the This very

In people are liability who general seeking either property all or insurance. addition to

John Kim

rates. ability on renewal push to your second question my is Okay,

You But mentioned concessions? what's pushing new normalize. typically ability rates or your rates in things to renewal of provide you don't given increase this the second push when half year

Keith Oden

for renewals. got for rates since have going renewals we've about on we renewals. through the Yeah, in that to on been that out now now think in so been February - and We've realize true. from X% renewals. somewhere reinstated And that's And we're on and raising we to range February March. we're And right running up X% X% gone range

allow we've - giving renewal terms in ability that that what And the that's think - at I of I of we highs residence. are now market of a still to So will our think the rates historic without rates maintain in retention have kind occupancy. terms right proven up still

clear it's range. we're that rates not X% now, right where vacancy on going any renewal are the by X% be is to So in which forcing we to

Ric Campo

so this our year, about increase is that at of predicated budget our a renewals look part upon to the the in be the to in X%, all you second comes to back full original If the guidance for we question what's year. down leases are by and X% anticipating new recovery

we're then we if those push obviously strong So renewals currently further, But push doing what is I get we point, a recovery, Keith's mean rents further. can those X%. to

John Kim

you. Thank

Operator

And will come ahead. next question John Please Green from go our with Pawlowski Street.

John Pawlowski

Thanks.

parking, fee what's fees, revenue of revenue, final late same drag of XXXX? question revenue, in the Alex, common terms hitting when like one lift Just year-over-year or store areas other versus store same together, it all you put revenue, me, for kind on

Alex Jessett

comes the No, break out of and absolutely, between sort would here's when revenue. difference it I to how XXXX so XXXX Yeah.

that The of other bad a XXXX. guidance that in And that is anticipating our debt lower first upon is was thing component are we the recovery. predicated

million for what million lower we've debt. So pick our up between budgeted pick lower higher half we're We about the got for makes another out $X bucks. fee income program a renter's plus. we And and is us. insurance revenue. think we our much that side about a should revenue the should that think And and utility be be XXXX about rolling renter's half delta should our actual we'll be up for revenue million insurance million a And then Sharp pretty think and $X up concessions. we'll about then a bad on new about X.X million XXXX

John Pawlowski

great. right, much. All Thanks so

Operator

with our Associates. go Pardon Zelman next from And Janney. go Stevenson be Please our ahead. & muted. line with next Kalmus come your Please Rob And may question question will be will ahead. Alex me,

Alex Kalmus

Hi, thank taking the you for question.

about those these expand we're that late of market this given balance have to the in So of markets, given especially wall quality loss of and sheet stage potentially the the recovery, thought transaction the in shifting supporting days? you multifamily given expanding into cycle profile from capital in sort leverage the

Ric Campo

no. is answer The

a was going answer beyond people came the sheet talking we yes. and about markets time, keeping all the kept about four our that a dramatically, financial then I to for We which we times? and at bucks in think have to between including a debt metrics that our remember then XX do long market. we us sheet? and the debt unsecured debt well, is $XXX. the of of But of That's have much problem? of what's defensive, is been or happen? of balance you of think debt. the me, down amazing I be sort have strong going - And that sector time, five people for low balance strong the to from The - the to is the the shut they're X% best too and got balance think. but goes later in who's XXXX. we're all conference weeks have then Camden's to to in first leverage profile need stay are cycle, X% pandemic, at Well, And asking hand maybe you other they price to be last my And What week what March, all started answer sudden two where going We the our the stock profile. multiple given sudden we think the on and criticizing a we the going sort Why start our capital, EBITDA to times, are And increase do about to question - I new sheet March the going a and and up talking

keep I happen, but to to That's of with strongest think. the sheet sector, a time. just to think are strong one you a continue we thing for in bank, to to our potential us going I the we're recovery, so sheets which of it Camden keep balance going there's a the a balance going long fundamental And is can because take

Alex Kalmus

be understood we're last guess room, I and question very a this this how looking are, but more For limited no on purchases then and could year was yeah, just prudent. done, that ground or more from throughout land is the because more but tag the sort - some the distrust at yes seeing November. predicated And maybe sure, there's was or the we land beginning that the same Or market and ready but this already something the year, the is higher as earlier? of in happening a Is at deal of was price you little you've market? urban given mentioned

Alex Jessett

Yeah.

the So quarter, acquisition a land if in this you was fourth look at shovel ready our site.

bought getting plans, things So we deal bought permits, ready effectively go. we a go that ready along we other all bought of to with these -

apple orange. really it's So and an is

Alex Kalmus

much. it. Got Thank very you

Ric Campo

we have questions. we any don't Okay, I think other - have

you your appreciate on we today we virtual and Thank you. new interactive quarter. platform time visit with So next will our

Operator

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

disconnect You may your time. now this at lines

Camden Property Trust (CPT) 5 Feb 212020 Q4 Earnings call transcript