Camden Property Trust (CPT) 30 Apr 212021 Q1 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
Alua Askarbek	Bank of America
Neil Malkin	Capital One Securities
Alexander Goldfarb	Piper Sandler
Nick Joseph	Citi
John Kim	BMO Capital Markets
Amanda Sweitzer	Baird
Brad Heffern	RBC Capital Markets
Austin Wurschmidt	KeyBanc
John Pawlowski	Green Street
Alex Kalmus	Zelman & Associates

Call transcript

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Kim Callahan

Good morning and thank you for joining Camden's First Quarter 2021 Earnings Conference Call. We hope you will enjoy our new, more interactive call format today, which includes a brief video presentation as well as slides detailing some of the remarks from our executive team. Today's webcast will be available for replay this afternoon, and we are happy to share copies of our slides upon request.

If you haven't logged in yet, you can do so now through the Investors section of our website at camdenliving.com.

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

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

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

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

Ric Campo

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on Just recently, to list. we're focus, pleased Creating a to announce have eight that especially consistent, during folks that culture fun, requires intentional placed this year's number pandemic. the Camden encourages

to we Over skits created ways to fun to pandemic new support deliver allowed the lip-sync that videos our from having and come messages contests, up fun important teams. years, the that have The traditions us maintain with strategy Peter allows is as our new us culture the environment. consistently at culture our culture said, perform in the for superpower famously Camden’s that to highest eats level. breakfast. work And Drucker

to messaging. videos Our our platform share earnings and us enhance allows call

the the economy and which the led the quarter been have and first vaccinations the our inside an operating all distributed that rest of COVID-XX and operating guidance. opening teammates FFO driven income our speed one many the the our has for our year. now year by improved quarter, strength most first of the Camden our in you. building we markets. messages saw of the Clearly, of Here's of Presentation] view cultural This net to increase we of us [Video for with with has During at results outlook this share our

all while experiences apartment will investments other communities, virtual the accelerate driving in areas. customer better revenues, drive in As we lower increasing self-guided performance expenses. time year, expenses initiatives improve pandemic tough and as to opportunities AI that and list funnel advance strange keyless used made key many package deliveries and and will lowering have revenues and a our and the few, tours, last To Chirp leasing

more fall. the analysis the a It the publishing for we'll on reductions Internet a of ERP that discussion year, creates report the mining, footprint more in publish have we be in closer in on would call and a our video and a began culture. ESG robust carbon investments our Our I expanded it with later ultimate cloud-based made ESG remote moving us working data systems seamless, streamlines Things. to reporting

things on family of focus true distancing, of they We more when control, continue get was masks, advise right to moving equitable, with to best partners do could workplace. their the embrace the a and friends vaccinations, diverse, journey in thing we summer, there course. Last inclusive great and uncertainty, the at our forward Camden, on teams lives, their social and health as proper to

other the each listen We told our the to our great also teams, noise their helping be We Camden, for to take Thank us here. around and families, to not I'll that to asked call turn there get the I Keith. our the thank residents care And want team years them the train. We of members business. and would to after a you. and would team to it's families for pass over from your see and them. not our light pandemic and ahead our

Keith Oden

that XXX For, each Fortune have to to of included to hard, work. make incredible we list continues So an great on reflects Companies that that XX the It's fact we’re Camden, that you the work in takes to pride and Best of been workplace magazine's years. proud accomplishment Camden very of Work a place for fact the

that the brand. for is we far are as and track of that the expenses the a a Camden's we great a we And So they Camden also it's we the is the a to think lot creates impact things lot is a against great ways say, in our maintaining than around great creating matter. important being list is, investing culture of great actually see XX-year Camden's of and XXX. one workplace the we're think things that We're shareholders. our expense that in results at at have all look return And people positive proof to our of culture. that in look investment see our people, investment. your about that and And S&P do And the workplace those cost. small what that more We're amount And support we people workplace. investing ultimately, Fortune investing and they what

shareholders Over X.X%. the produced S&P last over XX for And Trust return about of our XX%. annual Property was the years, Camden has XXX an

almost X% than And great a in investment per XXX think directly culture make to incredible. work. our we to people place period, for that So it's we and S&P better making the a our the pretty that's attributable year Camden and XX-year

So thank this you thank And for a you all company you for of this for of all great time. do. part period being

and top our Phoenix in operating first a our Now, X.X%, Sunbelt for up who are revenue was details property quarter, our X.X%, on down Tampa the XXXX results, same expected growth quarter and performers located as leases With at markets. five X.X% top for X.X% few a of at for Rental X.X%, X.X% up Raleigh X.X% Denver routing of were with X.X%, sign the up. quarter the out blended ahead rate renewals plan down Atlanta first slightly list trends rate X.X%.

the which signed blended points early quarter fourth quarter, X.X%. in first were generally was For the rate XXX basis or in leases, effective the lower at

Our the across at new blended X.X% preliminary and X%. X.X% April for renewals improvements growth, average offers sent and over X.X%, board results indicated out respectively. averaging leases, are renewal on sign being Future

April the that revenues first the the expect full showed Houston reason in we in budget point down was up Camden's reforecast best our last the So averaged rates of among month was revenue primary the matched of our XX% XXX only moved the guidance. improvement about all improvement and X.X% for level fifth budget to basis and began. pandemic of in rental and be of from performance now revenue XX.X% markets since this in expectation for first was X.X% last for XX.X%, raising outs our to generally early purchase to first highest worth Net quarter in quarter and XXXX, is usually quarter each versus setting noting quarter, year retention our has with our and of move. Houston XXXX, leasing the year. year. first April, exceeded exceeding blended from which X.X% first Occupancy to during quarter dropped up the achieved through quarterly our than see the high It's accelerated of quarter XX% fourth XX% quarter choosing XXXX another of peak residents patterns which resident line XXX well we versus seasonal points the us year, quarter has yet last to which for from quarter and fewer Move XXXX our September. to runs homes the turnover marking begun original occupancy basis lower to season, XXXX XX% at and up

up Next Alex Financial Officer. is Jessett, Camden's Chief

Alex Jessett

Keith. Thanks,

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

San a at of a a began $XX million the In development million we our X.X% our we to of development of new we collected Camden XXX During X.X% Durham, rents Camden XXX a began XXX in a scheduled unit in favorably XXXX, North million and we development new Lake at of commenced leasing $XXX Atlanta. we $XXX both XXX development end, to higher Durham, Camden XX.X% million Orlando and compares in quarter Buckhead, delinquent, quarter Diego. Camden the Hillcrest, unit, the on only $XXX Carolina rents construction unit, with this quarter first XXXX, new in when collected quarter, XX.X% Eola, new unit leasing delinquency. scheduled first Subsequent with

to have serves to collectability. revenue accordance the we as period. amounts, as reserved reserves a corresponding a In GAAP, reserve. monthly future property and to We then money, When revenue current debt. the in due previously be This will certain We recognized is same bad statement. income month. all typically inappropriate no offset moves resident to be what with us reserve revenues uncollectable there the in for income reevaluate this us past believe we by Turning owing our and uncollected evaluate impact establish

the multifamily as revenue million. residents, reserved $X.X $XX.X receivable uncollectible have of million currently against we For

home. of For water of against repaired led Texas in damage among winter which resident vast other fully mid-February, with outages, our their of from type have damage, to than million our the to less X% a normal. experienced In retail, X.XX% temporarily receivable. experienced has reserved water damage widespread vacate majority $X.X any the pipes, we returned fully operations storm issues, only been units significant the and Texas to broken corresponding Today, power are requiring resulting

half offset and Angeles, both first and property were our full this quarter XXXX which of rates in rates new of lease than insurance the FFO we and first of level quarterly remainder D.C. Contained Washington, from upon year partially insurance property results entirely proceeds. second primarily with midpoint we amounts occupancy of The the guidance rental higher share, growth prior are the to event. same-store for year. our portfolio, until first the and of and refunds will timing per our based reported by expenses approximately quarter funds anticipated expectations amount the to Texas performance, the is winter not receive tax repair increased midpoint X.XX% Los now variance The meals in midpoint $X.XX level extremely We from property we Two-thirds our corporate or of unprecedented from of Last $X.XX greater our to year-to-date prior $X.XX $X.XX. and night, the X.X%. have proud renewal our unrelated over our $XXX.X within in above provided of of offset efforts for time to to is of April the team including level night, guidance Last the million per $XXX,XXX and operating the the XXXX $X.XX by this responding revenue Camden quarter of operations remainder associated of directly our expenses share range year, efforts, resulted subrogation maintenance same-store non to higher the is and certain tied relief our expected of at expense. likely The additional and residents. of storm.

entirely the additional X.X% for we growth full to revenue to result now from property level same-store is This outperformance. anticipated to Additionally, salary increase have of year reforecasted expenses increased expense our our midpoint X.X%. account from

As a from increased we X.XX%. XXXX X.XX% result, have negative guidance to our positive same-store NOI the of midpoint

Property continued the expense approximately midpoint the assumes operating growth insurance by revised market. expense X.X% our insurance expenses. XX% of increase total due comprises Our insurance X% approximately unfavorable to at will

of also this we of the Additionally, full $X.XX by from $X.XX our the our aggregate. that categories guidance as X.X% anticipated night, portfolio. to our with increase a $X.XX per to our outperformance. by non year XXXX the per guidance FFO assumes results remaining Last the share expense NOI reforecasted in revised directly grow approximately property will to expense at salaries same-store be share. and revenue increased result are The generated growth midpoint our X% of same-store increase by remainder benefits expected revised level additional increase tied now compensation of

$X.XX $X.XX midpoint $X.XX with share. new a is of to Our per guidance XXXX FFO

guidance second We of quarter the for also provided XXXX. earnings

second an of represents share the per share midpoint FFO from related same-store and The higher of approximately result of of expect quarter repair We in in and This compensation of increase NOI, to for our $X.XX $X.XX $X.XX range primarily within the the seasonality by $X.XX. per resulting from increases to share leasing certain during $X.XX is maintenance the our XXXX. expected first our expected insurance renewal. sequential per quarter revenues offset be increase period, the $X.XX expenses partially peak expenses, May increase from

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

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

Operator

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

Alua Askarbek

quarter. Hi on Congratulations everyone. a great

picture, the $XXX million about transaction wanted were So to know more I big bit market. a just to million. the about I you $XXX start in asking off guiding little guys to

in months thinking the market? guys we and you now year about into opportunities seeing there four the are are five are how you that what So that about or out

Ric Campo

have the opportunities, Well, the definitely is sell. news for prices pricing we The are we balanced to and properties going expected. way, disposition we a what to higher good is seeing beyond way challenge our program, expect since however, are we acquisition get is,

to that trade. going And to make so we're try

business disposition cap and week you, last that tell over portfolio If career, to this give of a you go last e-mail properties, will week acquisition in programs to of – never back that rates Tampa, of of we’re in the quality an I'll we able in example upgrade this – my I've the time our the you seen bought and low last lot I a lot just big real quality the property sold got in But cycle, on we’re the properties Tampa yesterday. time. working

in at the price which X the kind low of for So at development, this of it a reasonable property been right beginning was Tampa, $XX new $XX growth over what – X.X%. a a is have rate. in revenue X.XX a way get the the year period over X% exit And which a of The to seven is little cap cap property million we'll process was property, decent rate have road talk or the in of A a middle call in going an minus price minus, IRR it's only rate would X-ish. – X plus you at original million the a talk cap awarded to a you price with

major what market in Now for America are that's in properties trading every today.

the it why of are capture CapEx do us to a to So newer tight. between I would that. first to able that pretty we'll continue in trade properties and sell try older the And buy tough be it doing be think have really a it's lower that's pure I properties, good and the newer you equation, to going we'll is for don't disposition think and part definitely capture and to but the property But behind if acquisitions be place. spread, we

Alua Askarbek

on guys a enter how Got commented think it. you I then you. lot wanted to you Thank And Nashville.

you market? the terms in of are there cap seeing what rates So on transaction guys

Ric Campo

look cap supply into interesting its it the rates is when supply an Nashville, second at most you has the market The side, too. pretty because market. in Same. are coming tight Nashville probably

And we're so I we're be that really our teams looking week to in have again, we're any up properties high – properties are into other really Nashville. next so hard to – as today, prices going we'll be in you selling as long there buying I'm execute few properties able at actually – move high city can we're still of in you with we we'll just it's can next And as to think a you and year. acquire Nashville okay pay we're and We in and to And able the properties, this – be think Nashville acquire think country, are actually properties to that. I out it's prices, going out really again, and live well. week

Alua Askarbek

Thank great. luck that. you. Okay, with Good

Ric Campo

Thanks.

Operator

Our with comes Securities. Malkin One Capital Neil question from next

Neil Malkin

everybody. Hello

about coming continue what if COVID of some First of if Sunbelt you're are that. to it's you commentary steady? kind for great earnest, on And question, on are that in larger Any the it's just biggest accelerator your the can accelerating, of kind ground terms markets, just kind in talk see that your has from, you people telling beneficiaries? if seeing what like in they migration you in where markets of that's markets, been obviously, wondering kind of of the

Ric Campo

Yes.

that to Florida. Northeastern anecdotal for but again, I California Texas, plates license being in accelerated, and visible in exiting family mean, kind of characteristics most Northern prices migration and some to that's right in that’s say and been levels asking is it's the parts highest particular, Northeast on the are as currently Austin, had see most – a exhibit think our price. I mainly and In I of and up, I people Atlanta, elevated would across the has willing So pretty everywhere pay price spread of that phenomenon. the of between place California, mostly a going California it we the has where Austin, are home it's markets home of out-of-state we continue clearly platform, markets But we've Neil, in not The around And and in have that for single trends coming in in decade. last the example, impact our say that's Texas selling evidence would an new. incredible.

So price the sales was. price a in the X% is last above months, – XX for family average single Austin, in Texas asking what the home price

that of So historically seen incredible these people markets I the value indicative it's are exiting. kind markets housing relative our crazy indicative but to before, to it continues is in numbers be we've just, that of never – think they're finding

it's So a of I'm sure been don't continuation lot and I accelerated, – related COVID it's think this strictly think that's that people I I'm that of clearly increase. going I not a a just or people think true. on, see, what's so is not some

continuation, use in with will But long sure. And one, Phoenix you up think that's the open once markets question we've was Texas will a growth is one, the that laptop low mean about in and good have a open, I do I when lost are be their be totally, because go lost accelerator. continue the what the people in if think years the actually open, from the work So I just trend the to So talks be how great lot we California congressional their and think the agree and into always the a pro I think of rear not elevated you really and New weather seen the time numbers in be then York right, a being pandemic those but and have that seats, in we prices wanted is an right, belt and been States office, next view gained. lost Florida that there uptick out, California fully, couple census position rust yet. I right? it's what pandemic really when came just – you get I of And markets ability Neil, great as two interesting place probably level. I to housing are to so these and at in And happens because drives Florida look we're real over at for think mirror, came a States and this home migration. will

Keith Oden

I to Camden provider if new you that, you markets, markets, think look would but our residents. of Sunbelt of if come non-Sunbelt from number So York most about residents New non-Sunbelt new at our one is add

Neil Malkin

be is Is all when over there, coastal come a leverage think Okay. portfolio, rerating, not they're justified talked there should rates pretty to Sunbelt private, ridiculously the Thanks a spread coming of to and for compressed of that. there. is sub-X else, Other do be lot about brokers cap need nothing and public it mean, markets game. that picture, between diversified one you fair me that for the you of low maybe like and we've is talking much your And compared the years rates say about name least or And the it's at to anything side aggregated, bigger if being the to the on next growth should or down, lower? down cap avenues think cycle. and I several great portfolio, a in your

Ric Campo

and don't and at you that mean, if rates the a to cap have have cap like rates on we we on mean, shows Well, spreadsheet our NAV And you if the think cap our calculate I spreadsheet, okay. we go environment, that NAV Tampa number, stop. of what I sort based number rate Camden's the X.X use we current is. we various

that and act as and are markets private right. right. sometimes as we've real the this estate is right, act is it question be, forever market public sometimes who will ultimately the that's stocks debate the right And And public so, had the clearly markets right, or

thinking their an just And for that because other it's stock the is. is because not trade reason some have up going to they're the get private buy the stocks so to when to go faster relationship whatever somebody that's NAV selling ability market, hammered, stock about they or the have

going estate. say and current X.X trading like you and I plus leases trillion a a capital, for more somebody's you roll inflation And points wise, on and have the be the for is why of and or night Number and leverage it's or XXX rate is looking low at think our long-term and a month, think I they're where stocks year, our leases change right? and When good property still hear of real word, a X there. about what a paying sure, – yield, dollar like oh, our compared X.X the about you're let’s when roller you roller at the basic. about much today when multifamily, cap government we're out people our a a multi-families fed very some positive X% a in to that X.XX less about you and a worried XX supply a private XX inflation, in, XXX XX hedge every inflation other demand it's balanced. leverage low doing side sort of single over, with XX leases maybe very, very here, well, of you plus one, type of pretty dollar fastest everything the you happens, that great trajectory place hotels on and year think So worry the mortgage pretty and rate, to Tampa, stimulus that. cap trillion think think have trade, lease of years equation the else if you have finance rate, then using pretty positive than word to you price we And the basis, hear basis

think better have up, markets will markets to on the does, it'll than these for opened are fine, have I them great more job once You markets. most the just growth opened it markets that in up. the take And coastal like going time get do of

I in ever is low. I that crazy real this seen at is career probably side So are and the public in cap between my the rates a is – now gap really rates think say right wouldn't business bigger sector private clearly And spread the there that's point. sector the versus cap why I've private

right? So who's

Neil Malkin

Yes. Well, – what X.X just cap and and is obviously could you translate the due?

Ric Campo

mean, you can look now, like NAV it's or I a just that. share. Well, like you the cap three something quarter can – at – consensus four it's rate do right NAV And the $XXX from like

I'll For every $X math. XX but but points. the out rate it's I'm XX do number share, that – basis to basis a points a in you a so every there, cap is going about like not put $X share for

Operator

from Our with Piper Goldfarb next Alexander question Sandler. comes

Alexander Goldfarb

down morning there, deejaying nice tunes. morning Good good this on Keith, job and Hey the morning.

guys how of obviously paid getting business and property an in X.X% April expire, guys' of not impact your that won't unemployment, is that two ability or know sit across unemployment is seeing should the really level benefits does of feedback impact your you on asking a guy there that to more I to lot your the don't perform, portfolio, of different held that lot being are So the In extended impact across job was would increases of a if they're sort to home. jobs was got need as is an much payroll, into driver are a of benefits taking has portfolio are these what the the the no two related? because basically And at the your that or of unemployment acceleration extended take we is to increase real back, but groups your read articles it the because benefits people we markets indication talking I'm aren't different states. rent two there a people that you the about economy first, questions, of a and see

Ric Campo

not benefits, are restaurant a but areas make right. staying position, And work. more had think are related, about And unemployed making, going in the government I directly, benefits are they vast the are you home yesterday if $XX,XXX hospitality two saw I that. than for working like because think making afternoon, example, folks out in, XX% in that today bonus Restaurants, they're every under help those and receiving people if year. – that people that things to I are needed majority come of those a was back are signing you $XXX think driving I a by are that

And back but issue is economy that certain they're growth The biggest income doing so holding in higher $XXX,XXX, continuing D.C. well. a restrictions to markets our working, like rent, our holding the Washington and and back that increasing from are on folks us in from so of is some over are revenue average most of California work perspective,

so points top have number in in basis if be And opinion. those we line my our XX by higher place at least would didn't restrictions

months, rid good on get business in these markets and the of economy that think the piece. things this and we opens should be that – like in then CDC restriction get really the I past and once get renewals past six, cap other eight, multi-family XX So once more we the next the that,

in driven accruals for their our budgets, increase increase much our employees, we can't salaries it's but people, so – so have are of terms find original them. for by bonus today outperforming In costs to we not by

Alexander Goldfarb

a going thing. We so bonus like that's accruals good definitely about hearing up,

seeing and then opportunity Nashville, your proposition? other program side, tremendously to Does the to is years. it broaden you your work are that as obviously to is on construction try deal that have mitigate you capital of takeout? at view, to from rising a allow developer’s risk it's or pared The want do do markets you or the guys costs, your finish, you thing But to development a own, new guys funding risk over feel as look start you holistically put second more Camden really or you third-party sort to because your on like with that net better development like just back

Ric Campo

needle partners, ventures, buy $X wanted partners we our owned least move can't Camden billion the cheaper. And Camden what we on debt more that with us needle where the doing really deals can't venture the move whatever sting control want – needle to on that JVs doing we so equity joint you was risk $X XXXX process. did them. or And or anything new is that’s didn't And move and we – but less the debt and opinion the really really default Camden, think when XXX% XXXX, I – for those the could not back revenue to all pocket. it though isn't out our call when have did my it driving it, of risk is still a bring had created by that development at they you even from our you with billion on their to dealing more market they and to during want we were down any joint the cash programs the with driving risks challenges turned doing didn't deep-pocketed, program

that, we're balance pristine, companies to that. it, not our of Other get not sheet but So going do to I going we're different that's views have Camden. like deals keep

Keith Oden

plus And Alex, about the close just of you in size currently, billion lease to we're construction, under development. your up if in on new point $X.X take what's pipeline, development what's the

delivering been going rate a about So value. declining into these these create yields to we cap taking of think of we've ton environment – opportunistic a very that's advantage

equivalent I So pipeline. of $X.X in all terms think high about to billion time development our a is

based we're that now to everything play going opportunities working rates accretive. assets right like on they're on look really see acquisition in that’s cap be definitely we of for So kind

Alexander Goldfarb

you. Thank Okay.

Operator

question Our with from Joseph comes Nick Citi. next

Nick Joseph

starts? Maybe side, development in for the just you place as the pipeline What on cost out price with are both seeing also you sticking Thanks. feature construction.

Ric Campo

So prices are big up time.

are And months multifamily If you flat. of costs by, XXXX X% two well, look up is actually Even is soft up take at OSB is of it's prices, last maybe – look since XX%. X% April XXXX, XX% Labor markets about are are all plywood get. you difficult year XX.X%. this when in of so XX%, costs – time, let's lumber were in one up delays board XX%, take products XX at gasoline is about soft fuel, think chain In backups primarily more April issues of drivers, April just – and there, to lumber driven months, last up XX%. fuel, commodity is making up gas periods big – some you there if up is the or versus diesel, XX prices supply versus three April XXXX supply total our XXXX

you develop is which so the slower. at And can speed

it packages that in for a had. comes tough we is out walk several there So cost. good it's did environment to a on news we when us And lumber a jobs

exposure in the consultants to have of navigate water tough XX% our at don't we this and us lock did So this – helping on We commodity folks lot that construction package, give point. I lumber kudos our for really sort a of here. about of

the to more – big as way one obviously, doesn't for are we a pretty So even wide. big exposure much difficult. increase, hand can affect new for on and still what is but asset But you spread it more the compressing can with with as you they underwrite it have don't this increase what cap the on transactions an does Camden a buy cost a guess versus have becomes build it we price day, I rates and

for to still can so, to see are be even continue, the buy is And though to down what you're going robust. in that's spread and you sell between developments the why yields continue going pretty new going

Nick Joseph

impacts assistance and Thanks. that plans. helpful. rental Angeles Los Orange on you? just That's County And do specific How you then very think to the

Keith Oden

not couple people event of who $XXX,XXX get the of a Overall, in to where resident have bit rental little rental or effect assistance. their market that's for But amount the normally some does we us do qualified have million way you in Difficulty] qualify – affected receivables various it's then I about gotten negative of been million to meaningful Well, in carry doesn't is And base us mean, the that's – go the market, not $X And markets what our has [Technical overall, it any we whole part around that, moved but a this far qualifying all. are entire – and positive receivable. paying particular significant for all in if at a at not a so to different and rent. not And our would pretty by has through. you hasn't now about take California, out margins. elements of it that delinquency, in we've we're the the in that being it able of effect net – $X assistance of

income of getting income to at estate. in real that of been if a position XX, kind of couple guess things happen. over then billion control which is to is time, not – mandate resident June that or different overall we helpful So the away if as will the we not extended, because as not, will a of whittling going should out particularly average portfolio, our it back our – is that's in but I of and extended, of guess anybody's the that not ERAP that base. to hope to whether hope And we We But start be CDC currently $X helpful be very think and receivables. be it's our that in it's

gets this that fewer see next about how if we'll optimistic I'm terribly So that. tranche used, there on but is restrictions not in

Ric Campo

heard for here's the there think in looking there in last is people And at right, the meeting and folks, of to it our the a allocated And start paragraph this fraction challenges just California it's government our to rent I stimulus, check the is right XX,XXX box, one of of last And been minute one pages you those you so right, apartments about number doing California. two it to-date the send this massive do like government is all you to was, are you residents requirements government we got in a do. which say, One all can out. having February federal were that assistance, And documents, that is that in those part obviously. number, up, we've in talking documents this picking to money thrown this this had huge XX,XXX it's that requirements going December when puts with was the a just and that I garbage. think in happened you – right, Keith that to and and of the what this out have what, the are $XX it first is document and money out, billion what that in this the

designing rent you spend government we’re $XX apartment million set in relief challenge the the gave we Houston, tough. And for Houston, that streamlined for requirements of money have the is we in here. so involved Texas and fast. And it are really out And first In it, example, at did we of programs up regulations, otherwise, have ended by you back give couldn't it on we end it. with you'd end, bank, to give food federal out, government million more the the to if so we government $XX didn't based give of million and the $XX it to the to year the had

work and through the you. and losing information, – not you're them. ones get money are these are the the out this it's are the check are to don't that so people and they have get get are players to $XX,XXX the So all that, the once those with And C&D $XX,XXX, hurting in once are really website hardest not that stimulus $XXX,XXX that the hard getting households, and the on, stimulus to are hurting a they what money box leave don't people. have go people and back properties, all to that things is $XX,XXX, you just challenge they are the you And aren't they have that tight, their

at I companies but they apartments. the they space, live public has So it's camp the vulnerable great then a and challenge, of live people help in a think our job multi-family those industry most trying don't and of items done the most don't just to at

Nick Joseph

Thank you.

Operator

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

John Kim

Thank you.

look guys great on You video.

Ric Campo

Thanks.

John Kim

Were operated particular the for up of this do on trend year? at you to figure I you it it the I question had occupancy in back occupancy do had – that April to you And the XX%, is level a where to the in any up had remainder pick pick there which down Or XXXX? markets question drove expect back remain you expect that on to a you had XX.X%. higher?

Keith Oden

Yes.

that complete in was across of we'll at obviously, above if go are that best a to just board, markets, the our up projections you so pretty pre-lease our revenue months, stay portfolio, the part of XX% The of to our we're numbers days, re-forecast think increase good leasing our the it, of XX up and strength put obviously revenues if – next look went we XX, XX. the our in did I couple some indications season. into XX for support coming So bottom you XX went the And perspective did and reforecast across look the – guidance. we around out change

strength really So of the San the and revenue to are do do increase reason County, where the has Diego the only both debt. bad now, was LA. right markets market, nothing And did was not has for Orange two underlying – to it with that with good which

because to the our to and eviction debt, continue have bad strikers in that we portfolio in CDC, mandate elevated rent the levels can't California in of we Southern have all of California. because regard we – with a So challenge

bad debt. seen in So I reforecast. markets. XX slightly a absent in Without impact a had by on revenue debt think ever my don't I've we’d have two, been negative California, up those the very because all where of way done markets career the And a which we're – reforecast in only bad XX on reforecast positive all

are negative are – positive the a has in only have is, year. we one if the for is XX I our top reforecast, think well revenue negative The tell off in have leasing XX the the year. peak markets Houston I you have because their revenues and of for XX that revenue we to to if list, all total across board. X.X% comments that to to reforecast, down folks they're strength out the markets, that it's of Houston number revenues opening for exception the of level call I the that can now is off go kind you So really the get season. And working other you that And for growth Houston tails new out should the positioned

Alex Jessett

So occupancy third in quarter that year. to XX Obviously, to fourth that there, it's improvement. the XX% to the our back for and quarter got our assumes seasonality quarter, point full but John, we're second down in compare but a have going basis occupancy higher we've budget coming the reforecast in original that's

Unidentified Analyst

cap at not cap times, is three rate the rental discussion, Thank bit helpful. But case. rate quarters, three cap we And that that That's on the you. conservative? some that quoted like quoted you it the income, rates at on remain a rising because Tampa the that but or the rate view example on a X% offsetting if and assumption that's then potential exit growth construction compression costs, saw are that of was is cap to going low was you that of in

Ric Campo

price I going at Well, up the I a cap costs. not by above million rates that stayed of function, it's because costs way, think XX that replacement project, construction XX% the are price, the at

cap investors are today. that the of today cash-on-cash bogey looking am what a what real at, estate? from this a looking at two kind get not three, rate is is market cost they're replacement is return So gonna And I competitive

what what unlevered IRR flow three at an do at, IRR, when grows your you what buy how and components, has so exit And you whether you think at. about right, cash in you an

has so about your CapEx, the what's exit the been cap argument question like out, real rate what years for right. seven And – that's years, of is

you in New not but XXX it's development, that's that long-term, put what use. know you and people

how And is the the know that will what belief time. And in market. rate price so is the much drive massive be at will today exit asset there's the of the cap liquidity beyond market environment what liquidity, And drives in any liquidity. we ultimately, know we first liquidity

operating in prices thing Is important like? income in demand supply pretty or today, is and demand. most imbalanced. market the rates to What's and the order about is net feel flow cap growth is supply? and the you business able that are and drive dynamics supply The relative these to look second being – Long-term supply and how drives it demand cash much excess

imbalance look You most just from markets. in at that from perspective, –

the then think then at inflation. rates. you is so have people and interest the that inflation, view liquidity, next And but you actually demand Lot inflation. look inflation when and it's driver demand, And then interest and it's this is the worry of is rates people supply one driver, then last interest rates. number or have supply good, could And

that cap little first backdrop, the rates then issues, are with and issue. they think, an two a are maybe where So that bit really I because of inflation

that's whether knows the and three but three the the years, only unlevered IRR, years, that's who IRR right seven works. a is number want X% way, cap only if I So rate you, you in way the quarter guarantee seven a in math

Unidentified Analyst

rational concerned people between you think underwriting are sounds this Ric, point? So, three that are at quarters, you or it like it's

Ric Campo

lots No, today and in if want class capital people talked you before. I you have been multi-family place, have for of we to – to about reasons market is think coveted asset compete the a

only of XX bucks and now with – is money? points anybody the everything million go You're everything I we're you about, going put basis has and – like don't you capital we go, have go then if are you And with to penalizing your on, us going in can't $XXX penalize that the the The and talked that where profile because out in if so Fed alternative and two right to where's cash. I three, to else cash. Tampa growth government investment, on a going if

inflation stream live. that – cash you a And think about everyone because place be people when so to flow grow, can a a cash where it's to right, hard that needs flow it's disrupt, can stream protected,

you whatever. can't mediated technology on can't or You internet, by discern live the or

improve You sleep everybody not down But and definitely to at place. can may bathroom. their night has a They some it, to they technology. production but with go kitchen, head put need improve its need in a

go – why alternative looks said, from are what's whether an And they prices, are and good where it's asset pay to multi-family three, your willing two so cap. And about long – And your you're as then is investment our long-term, and right – weighted the with And on people a spread that's just it. perspective. are of doing whole positive cost all now, making it's that argument weighted of average your people why average long-term as cap cost capital good. capital

I So I is. think wrong. just don't it's think it

Unidentified Analyst

Interesting stuff. Thank you.

Operator

comes question Sweitzer Our with from next Baird. Amanda

Amanda Sweitzer

Thanks. Good morning.

rates Following debt blended can up an lease assumptions that guidance, on update your bad the increased you on and provide underlie ranges?

Alex Jessett

Yes, absolutely.

thought compare best think So we we I did probably that blended if are the we think when to increasing our budget, XX for by it basis what points. way original it originally about is to rates you

sort like basis is this, occupancy So points. XX works the math our up of

our we we that to rental XXX original rates AB-XXXX are And we blended That's the up was that to to points expire assuming going points. you entirely have did about slightly budget, by California. in gets The Our is fact bad March. when beginning that we're debt. going are XX thought of offset basis that higher driven to basis

July it looks earliest got the of the that. like sort and beginning offset Now from you've that's at an so of

number way had which about think our we would XXXX, is to by year been XXX debt have in points. which was XXXX. But the points XXXX, what basis for compare if about it line to XX going you that so is that basis be And we bad with a normal in

Amanda Sweitzer

assumed on That's of cap some basis rate DC about between your all? really at in guidance you given were you you helpful. dispositions, spread. changed fuming are today spread previously think and dispositions comments, then in points negative And targeting cap Houston, and your rate XXX have sales I the still acquisitions

Ric Campo

likely do did. Alex, I'm on that today spread, pretty will based targeting in in same in negative that guidance, XXX to we're kept our and points markets, better still I And We dispositions. And terms are think do those that what hearing spread. we'll we'll we use but seeing two we sure the probably of spread you than continuing we're that better basis – yes, where model. hopefully, than

Alex Jessett

correct. correct. That's Absolutely

Ric Campo

in between sell now, timing – where will given we And I used be the than variation negative model will, there buyer spread. and the looks like and model. in that be Right do be things will timing, but that's so but better think the that'll real the differences may some we an hopefully it interesting we are, the right. what

Amanda Sweitzer

time. Thanks. Appreciate the

Ric Campo

Sure.

Operator

question comes RBC Brad Heffern from Markets. next Capital Our with

Brad Heffern

wondering leaving keep almost of just one. I see X%. was I it the isn't fix a gives through everyone. is at so whether rent Houston, I hour, to going know little COVID didn't Thanks. know, that could as I'll Hey, it's market else? top or forward, we we're go the you the just seeing it necessarily that COVID growth it, anything but if energy to that supplier, there down obviously break anything to sequential you there surprised and you're was talk optimism recovery,

Ric Campo

Yes.

The a that geographically to year lag in pretty we've jobs prospects while, the – in we not another last energy are business big people talked a we about well. the But right of year, that between So they're takes delivered. It thought. than back price crude And This versus XX,XXX the in going employment not Houston get about very related there's just have improvement big a lot those not of is getting new with dealt Houston come Houston. better. apartments we're Houston is quicker is XX,XXX apartments that challenge supply. issue in in, improvement in business. distributed unfortunately, most And energy now in got in employment but it's definitely delivered

lease of So a And we the fair end in catching of the definitely same amount the they up. builders merchant are all from built places. – everybody, up sort shrapnel

I've supply. And mean, would in people midtown, downtown more restaurants year, you that in them. uptown ever We Houston is, are overall, busier builders relief get tell area I merchant the as new recovery do it's out, so seen general the terms Houston's in as thankfully for of supply a of well of open, Houston. I are vibe the So next issue that some than and

is pretty in pretty So the feeling right now it's – robust robust. Houston

we'll think year I as we'll So do well the do the better ensues. – as

putting is to that our me, me reforecast together we to last that if I But made for percent only I and portfolio encouraging months down have And certainly from wouldn't original revenue Houston half year. you, the a you'd I told think we when were shared growth our with expectations. then six sounds guidance. relative extremely ago have bet Houston didn't for in

Keith Oden

a did on petrochemicals in that from than I plants the still the around state because the that are storm are are are it Houston and geared story, bigger and offline the think on primarily that to effect the Houston just storm. rest to I there of onto did of plants the primary winter the and chemical – what plants just also ship channel. up add getting had mean, winter still it

Houston, that definitely Houston storm winter get been have I think without the – just It storm. And said, could in back. a back. the I helped So starting lot whole we're winter like better to we're just

with is how going energy transition the happen discussion major what's we've of and from acceleration make interesting that is about the driven activism. companies. going large of that's Houston energy and seen school part discussions to transition And by big is the energy think a renewables. energy I big thing the of more to And other by really energy old to investor

If an you mean, look ExxonMobil I as example, stock. at own I Exxon’s

all their are that government I in $XXX making their lead the the it's to part going these huge for announced these have that you. billion their capture of solar ship putting transition be votes it. addition channel. or could move example, U.S. finally, needs Houston that. Exxon, to in infrastructure proposals continued around to build carbon in it's go $XXX activists see on Exxon I this is there's into major But that So government and – what the And energy majors It billion put carbon and and and And to had or the maybe alternatives think whatever, investments capture a their part in. capital – just and and program be of going to stimulus wind in

massive in old school transition not drives energy, power the market. the amounts Texas in So of already wind energy we're this any solar. position, we're be electricity investing country. where And of a to source that It's than it's going has largest state of

they're has saw You a Tesla big doing Houston. just battery south plant a that battery that program of

to really a thing. going interesting it's So be

held XXXX through us the me, growth in of and but to – top winter into middle the the So should our be we storm view. back, XXXX to XXXX quartile once my end of Houston get supply, move revenue in the to up and XXXX

Alex Jessett

increased basis it sequential I'll at occupancy point Houston if look occupancy quarter quarter, fourth the first XXX And increase was to also you points. sequential largest we out from had increase,

Brad Heffern

Yes, fair enough.

you. Thank Okay.

Operator

Wurschmidt next Our Austin comes with from question KeyBanc.

Austin Wurschmidt

Great. Thank you.

diluted bit uptick Just on the well? more maybe, it of just as Houston, we've supply? you by if sticking an mid-XXXX there better, was some you peak positive better traction also this rates that to then your to little the Ric, guidance is there And absorbed time are revision lease I seeing Houston probably to you starts comment the or around a sequential just that get occupancy was think when theme on curious with on

Ric Campo

was Houston because that's had think peak plus normalized a normal start normal what COVID it job the is I in you COVID, unfortunately, in call environment, getting you'll happened better more the right. side, supply growth think weeks few what's pounding, you right. at right. negative, and losses, this oil Last the also year when have time, But I oil happened, job of gas within and gas a

environment and tourism and issue And traveling environment like business huge for a I And actually business of things When are visitors a here. was than improve. once obviously. a normal look a Houston people destination. more that think is it so that's where more Houston get business more normal Houston that over a you in at that, to in conventions that destination And it's will and we

with citywide the so had are of And I in that business head group week. there events. June, markets said starting XX said that they And a last lunch the convention he Houston's convention –

be which have but is coming petroleum that You world December, to in the it's of supposed be in December, going conference last December international a to was XXXX. event

we momentum but and Houston from think side, quicker – event to we end supply. I because XXXX the the don't business think a the recovery, travel that's I – mid once more move side so the – will of get business And of that will that's

Keith Oden

from If the you to look of of signed leases by basis at for XXX improved Houston XXXX, first points. XXXX April blended rates quarter

but number, not So strong incredibly an strong incredibly an improvement. still

Austin Wurschmidt

lease really that helpful. to reflect the revenue lease year? leases it That's the at higher kind points assumption, just XX in of signed guidance, rates on the And basis Yes. rate or point, balance of increase then does is clarify, Alex, also through same-store simply this assume

Alex Jessett

it Yes, does.

first at what's is you through a quarter today year. the third take signed effective then So the rest expectations of component obviously looks second the going today signed for the and the it for quarter our of quarter, and and to

Austin Wurschmidt

rates lease and the in That both renewables new leases year are also back half on the the higher original your of than expectation?

Alex Jessett

Correct.

Austin Wurschmidt

Okay. Thank you.

Operator

Our comes Green John next with from Pawlowski Street. question

John Pawlowski

going. Thanks lot call the a for keeping

market second enter this internal price private around the is it the downturn and a that really Call well-positioned sheet. only share balance with has better growing your year, real solid. it's share even you of how comes all to helping Just rock remained the And dislocation half understand repurchases early and dialogue evolved. XXXX the suddenly

believe substantial at since better fundamentals. you're really summer the and NAV you've a still a trading clarity discount on bit operating You got

haven't balance curious the just sheet of on taken downturn the you repurchases why So share into the heading well-positioned advantage side?

Ric Campo

And challenge right. share bought shares. narrow of I lot edges million, million hand, want is that the all like then the repurchases – around that of about truck, million, want have started buy like, something to up go what that you okay, XX let's and a back a X share about, like other back or able I it's with about like that. we XX – think shares don't the think the when on when we you okay, when that of share moving to or buybacks, windows about oftentimes, just happens that. tickle start or be Well, talking course, But the And can I sudden, to do is and that a the shares like we $XX – the something they're think we fairly buy buy up.

sheet, our in acquire it to – you manage flow and because And have of reap the a so we persistent all or how to not sense it that be balance the to right, but to difference, to of ability we're dividends. from have all we cash to down fundamentally, it, be when make and me, most about a enough out of leaky has our paid balance think has sheets bucket,

a in, and so of back get when think you of a I kind time. chunk difference, buying you're And it's a waste big make enough stock just unless make a to can

gotten windows if a every said, at like looks and dramatically a gone that price. back and the to this that stock. where the point the in you the numbers so we've And acquire good look looked – time away in we really at we up us It's can from

back oftentimes think on lot. that's to where doing buy it's capital you think sell a are stock we So buy it's it's people allocation not real the your own but cheaper, on not hand, it, it constraints do. If you that or cheap, make can if issue. other just the my it's view. We not don't thing, decision and the one it. just a there's we it's in go, in me, the think And then worth they But effort investors, about

did you don't one windows we and just And and even when long-term back think you stock at the If the point months it – I was and not when it's was years low when open think buy was big, we opportunity. XX% about that that stock bought have for of stock periods had back today the and we big peak.

John Pawlowski

from the mean I just more right. decision, relative

dollar in the believe be side. assets there a and months put market you into or stock. your bath of about you a if seven and a your more private decision. It's just mean, kitchen into or could visibility you XXXX. six, a that where repurchasing and the shares. And NAV, relative had above, XXX I was a you mean, whatever talk second So dollar I half good selling

it's cost the dollar final and to opportunity the just I guess more is an non-acting, So that fungible the question. is it

Ric Campo

Yes.

of – properties. at I long-term think that, but the You do the day just of owners end multi-family can always multi-family long-term, we're

sell when a risk lot the stock the about and risk then that spread, talk – sell immediately friction a And to if execution current lot or of balance I about go goes there's way. assets magic in sheet And after then borrow a so we And involved something work when of execution the assets I started then and have that selling stock don't strength a could then it. assets. we in and of But – between use of the world talking doing There's wave no make money it's and it. and to that then buy and doesn't yes. want and buy wand it,

in I issue. pretty hear you though, attractive. asset investing doing. think are think allocation that our existing we've I been we So it's what an And creating we assets, That's returns

John Pawlowski

you the for Thank time. Okay.

Ric Campo

Sure.

Operator

with from comes Zelman Alex Kalmus next & question Associates. Our

Alex Kalmus

the question. thank you Hi, taking for

wide called They reach about and April you spreads occupancy seen and a new the talk the some we've Obviously, seem signings. on the it's So approaching the how decision. there. Over to and you're pandemic, Can is pretty through? your dynamics renewal been good the parody leasing side lease that?

Alex Jessett

system. Yes, so we use our revenue management

renewals. and both price start new You'll to leases

voluntarily portfolio got increases a kept in timing I of to bit on early our similar actually them we So And frozen both model a would the actually because are in mid-summer. the inputs sides. pandemic. on issue we the little renewal through froze

we way some the bit think maybe would as robust little of going happen just our through more work So are but I natural it have that renewal a happened in way to mid-summer that of the lot throughout of model and it on both both reforecast period. our and lease renewal the foreshadowing. tells sides, side new on A the foreseeing increases strength side is you the balance

Alex Kalmus

markets you. other of how front? do side thank activity on your the that's the and it, – of has how some you sec. has touching certain that the And thinking changed pretty progressing Houston, some on start you're for updates been So We've supply talked on Got the about a strong markets? have just year about

Alex Jessett

in Witten's is numbers deliveries total were for forecast – for if platform, across delivered we No, XXX,XXX. Camden's his year XXX about XXXX, XXX,XXX you take were about we apartments about this and

much up for another of was last markets, movement but some different if year year which And of there's year, go this again, the he's employment So to apartments brunt markets growth at Witten's job than a of got the of be not this deliberative Houston, And year, most in really to pretty this kind fundamentally. shifting with the is and numbers, supply is XXX,XXX in of that's exception at picture among long-term five he's apartments. last good supply times shape going deliver then the some XX,XXX with you our million, new again, took the XX,XXX new And year. equilibrium. supply, backed it eight are growth just around to, times $X.X feet, XX,XXX our got kind back XX,XXX being feet, about at obviously

and aggregate, to look the really ought going be rents for throughout year. they raising in renewals are and supportive to those the – for So be supportive like

Alex Kalmus

Thank you much. Great. very

Operator

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

Ric Campo

fun choppy replay. a with understand was group today. that us the the thanks for video the for in being little Well, I have

without how new you You'll be this us it being let able choppy to see like know and format.

sort it that. of go through helps, more a going of I it you're sort like we of kind makes kind follow little and and you are and through interactive helps think a it's numbers, of interesting slug when

and to forward And NAREIT, virtual to you look hearing from most months, we on in then next I thank care So up in take and so format. of think couple of so the form see, you. talk in coming you this we'll

Keith Oden

care. Take Yes.

Operator

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

now disconnect. may You

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