CPT - Earnings call transcript Q1 2022

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Kim Callahan

Good morning and welcome to Camden Property Trust First Quarter 2022 Earnings Conference Call. I'm Kim Callahan, Senior Vice President of Investor Relations.

Joining me today are Ric Campo, Camden's Chairman and Chief Executive Officer; Keith Oden, Executive Vice Chairman and President; and Alex Jessett, Chief Financial Officer. Today's event is being webcast through the Investors section of our website at camdenliving.com and a replay will be available this afternoon.

We will have a slide presentation in conjunction with our prepared remarks and those slides will also be available on our website later today or by e-mail upon request. note is please recorded. And Instructions] this being event [Operator

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

Camden's available is complete on at to within reminder, time hour. be which earnings a our in to one our and will the complete I'll non-GAAP it this first Instructions] XXXX website hope Ric section [Operator call to includes call. reconciliations over We the of measures, Campo. camdenliving.com quarter release turn At call As financial this Investors discussed

Ric Campo

initiative our one provide Any on happen have support is out April April us telling XX Fools also The deal three these customers for was just at communities comments. on of manage, one included but how a today for Work Since theme gross been billion. comprehensive groups being like April closed real of implementation this completed will asset big Kim. Camden was management Kim Alex fact with would his that with history, in I'd events finance, a more estate legal, XXX. history. jokester. the of Camden most in details in group initiative, acquisition the financing Camden the in big accounting Camden's amazing with was with communities. permanent Camden. next. of finally, give Kim Keith April big Teachers our Reimagined as the and all Summit Camden The of the Thanks was to big the assumed years partnership want we that attempting truly been of we continuing of to of And our the staff, IPO and a our consequential At shout we members a I in up in our transaction time. no S&P valuation to began merger team and the teams day Fool's never for first, Callahan day has one team Later effort. while competitors, largest day jokes The Teachers' was our that along XXXX was to the fools experience shout acquisition for and a since extraordinary lamest our to lives our give the ago, our of investments, joke. in one same April XX Xst our the Texas XXXX interest purchase a in our a Thanks. Texas out the that $X.X completion music improving Fools. Xst, field. Kim their that's We're days on a day, work in and outperform restructuring

Keith Oden

Ric. Thanks

Southeast XX XX Florida results. of strongest posted few and April exceeded a our our the growth Same-property Phoenix operating company's best revenue with growth history. in showing quarterly XXXX revenue XX.X%, expectations at first results in quarter markets growth our on trends. Now, Tampa, double-digit details the our the quarter and

guidance rate XX.XX% an XX.X% a XX.X% XX.X%. remainder our growth XXXX range. of blended from increased full for year X.XX% Rental up the improved and to our rates for first up of for projection leases quarter Given had new of revenue signed the we've the this renewals outperformance outlook year, the midpoint at

XX% Our XX.X% May also increase XXXX June at quarter preliminary for renewals April results Renewal XX.X%. year of XX.X% dropped to quarter first Net April are move-outs normal at XXXX performance and below during our quarter homes of new to trending remain at we XX.X% seasonal each turnover typically out for to normal from Move-outs and averaged offers to-date. year. and XX.X%. purchase last were of for versus trending quarter at sent the was with in XX.X% compared at XXXX. the XQ is last first portfolio. matched an quarter for first the with versus the line XX.X% blended occupancy and patterns XX.X% see to for well of our XX.X% growth average XXXX homes which XQ Occupancy of XX% quarter to leases last in purchase

list Finally included XXX year This For. list only the prestigious XXth of of Fortune's marks I the air last S&P year to of Companies to Camden in want acknowledge for Camden named consecutive and for on team this Best to companies indeed. Fortune's years five named being list. recently XXX rarified XX to one Work our is all also

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

Alex Jessett

Thanks, Keith rarefied and certainly air.

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

two portfolio. Camden's and with transaction XX of a venture this land $X.X inclusive of acres our land in development remaining in XX.X% We XXX-unit average first Texas billion markets Subsequent Orlando. in in the we undeveloped a development of for XX-acre in X,XXX debt. we parcel XXXX, the communities Charlotte the quarter purposes. Richmond age funds purchased with joint apartment years new of involved end for interest primarily assets a multifamily Sunbelt assumption future approximately include homes in we for an ownership acquired XX of Maryland of $XXX two and The located stabilized parcels fund Largo for across million Lake disposed quarter of $XX comprised development XXX-unit million the to XX Eola in future During Camden we community acquired

this expect of approximately will initial an FFO We X.X%. provide acquisition yield

fully which unsecured a initially package, As Houston, allowed will This a portfolio assets or of on transaction remainder contribution the very us attractive slightly result line expected million transaction Austin, markets with We $XXX the operating concentrations. increase with $XXX of while Tampa including this acquire the of to risks. supplemental hand funded net of as will XX and income transaction Dallas Camden's reflect on lower markets no of this drawn detailed from cash flat-to-slightly execution on integration million credit. our included page

we to approximately used million existing and of of consolidating X.X million down now mortgage the quarter debt common shares $XXX.X issued net million proceeds, pay to also end, are which credit. secured of of received $XXX line funds. We Subsequent our we

$XX pipeline, no approximately our we $XXX maturities under September and quarter As million million have of under outstanding until had line. our left to we of spend existing today, years end, three we At scheduled next development over have XX the year. debt this

based prior per debt balance and prior by of guidance debt lower we net quarter partially for million the XXXX range times. sheet portfolio, midpoint from primarily $X.XX. rates $X.XXX offset approximately of XXXX XXXX. our at in revenue resulted our our from share rental our losses. non-same-store Our cumulative EBITDA unbudgeted and our quarterly to have property night, our $X.XXX from quarter of increased of expense share, with of the of April received our midpoint was higher of $XXX.X or $X.XX Last This anticipated rates of FFO full $X.XX sale self-insured $X.XX earn-out first midpoint and bad reported operations same-store the X.X Chirp of be to of and the expectations variance strong lease year year, The remains outperformance the per levels year-to-date and guidance for higher to Last the resulting higher from new insurance to our to $X.XXX higher-than-expected for second funds operating $X.XX the the remainder above we an upon the growth from for performance investment from from X.XX% $X.XX occupancy, completed XXXX night, XX.XX%. renewal in

is of average in in an midpoint increase growth anticipated upon revenue revised leases new based X% Our average renewals. XX.XX% and an increase XX%

XX.X%, remainder same average points We budget the period. for year original the are basis for also from the our anticipating that will our of XX up occupancy

expense higher-than-anticipated to and insurance of increased have of X% from from midpoint expenses in costs, results full expectations revenue Austin, we Additionally, related guidance. same-store to year Dallas higher our growth property resulting bonus valuations X.X%. the accruals increased our the tax This from increase initial and

create initiative this initiative, NOI we midpoint to expand our of the from of XXXX first customer or and result, apartments, do adjusted work from support conduct a community The to efficiencies. our operational leverage more two of To shifted joined nested quarter, objective our primary communities service, the property we same-store the in our the customers. focus leadership this, to which leasing we end or operations. exceptional XX.XX%. model with deliver has guidance redesigned At and on together our prospects XX% our being implemented to As strengths operations teams, shared residents of the way our business re-imagine to been serving one is

the the in lease us If equity term, time and over decrease remaining the an income per lease term. the NOI share a to full differential We experience. as of were by above per name would a plus of million due below-market accounting to of in that, the decrease also process, $X.XX resulted $X.XX related A primarily tasks, at net A the million well debt, better the program were XXXX secured approximately in year allows could Purchase at delinquency a assumed $X.XX $X market, team anticipate that in existing an A this management, the of points fees. of fund management assets community net of severance which budgeted members two place as $XXX previously and interest be remaining assumption as increase identify a new million current has from and acquisition. resulted centralized FFO for first and such a on for our XX% to amortization our guidance. Last renewal leases basis which approximately price $X.XX full XX% acquisition the from additional a the have to share our to transaction, after average focus asset rate remaining the in fund and decrease the This fund our seven approximate months. non-cash property $X.XX approximate $X.XX of in midpoint reduction initiation or average joint identified debt is and and above or budgeted fixed of this per the we us leasing accounting future FFO increase for LIBOR from amortize requires the market we This the over of will from ventures which payments increase to either million. the $X.XX basis, at in for at night, few. the shared On following any a customer X.X%. the division components: removal acquisitions of from X.X%. $X.XX Additionally, to XXX savings stabilized is to floats created $X a support shares and was automated on of which acquisition leases XXXX related issued below portfolios, approximately consolidating comprised $X and leases share. the processes from execution of streamline increased a midpoint amortization guidance the invoicing, should increase decrease $X.XX $X.XX quarter. the save the the Camden service made each basis, XXXX year to

does revised make not for to guidance year, will to accretive include investments. acquisitions we our Although, opportunities continue additional this look

Our dispositions million by another still revised includes $XXX guidance year-end. of

rate fund unbudgeted of in $X.XX sale budget cumulative and the $X.XX a the the share our additional per to FFO $X.XX we an earnout anticipating our to also by $X.XX approximate are acquisitions, original Chirp projected interest partially from increase addition same-store This guidance $X.XX increase on the increase rates in from related investment. variable In NOI overhead interest first received higher versus is our to anticipated $X.XX expenses higher of revised anticipated to expense quarter outperformance and due of our FFO our from debt. related increase offset

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

increase a leases a $X.XX. of the of decrease portfolios, fund We and net related The the quarter. second the within range acquisition joint of two equity from amortization $X.XX assumed fees, secured assets in fund approximate $X.XX transaction. of $X.XX the to expect represents million shares from share to a increase ventures non-cash to consolidating in This additional of be the to debt, quarter the management for the recorded the $X.XX increase from first comprised acquisition, of to of income FFO of primarily is a the below-market share result asset $X.XX $X.XX the $X.XX approximately $X.XX and an due per to our increase $X.XX in per NOI increase assumption the midpoint issued a $XXX $X.XX and in and related the from fund decrease decrease property existing a

sequential the NOI communities and G&A in certain refunds a at and approximate and related quarter timing sequential also investment by $X.XX seasonality the second as up the open from first insurance May leasing $X.XXX quarter quarter, earnout during are resulting an lease-up, end of increases and property expected time, $X.XX of same-store this unbudgeted additional decrease We development A the to company of from our we from higher our from $X.XX revenues NOI of sale received a call now higher expense offset fees. At a will the in our increase increase sale expected in $X.XXX a decrease first the increase expenses, quarter. renewal from public anticipating Camden tax to from of peak various due the questions. Largo received the of higher the from Chirp to periods, first sequential decrease in a result maintenance partially repair

Operator

come Joseph with Nick will question from Citi. first Our Instructions] [Operator

may now ahead. You go

Nick Joseph

Thank also you. conversations And how partner the then the deal walk calculated? JV came was of you through your Can valuation about? with how

Ric Campo

Sure.

ultimate in by was valuations our assets of sell conversations and the about assets. We pool have pool ongoing date of the with finalized And JV talking partner. actual sort disposition The we're XXXX. to of

of thought kind December. sense together We we pretty that wanted to us They just over value parties. had in of long-term of pretty we that we of metric we We the to were the that made average to exit evident The years. window. an X-year and portfolio way we a it'd had the be we kind by And valuation -- a a fair appraisal price ahead So, And think go it meeting portfolio. create that buy four next for minds. figured interesting took what the completed of then is we values doing negotiated was had did sort then them and immediately. both -- market in a for

acquiring $XXX positive very put had for in capital of that holding perspective, above by the way them. and period a was it it our transaction IRR took the So pretty The us fact positive XX% out in allows our portfolio on for be their and worth through an million Teachers billion from And a transaction $X.X more efficient cash was those to assets. they of Texas.

primarily helps urban us suburban And The outperform our that they're generally. other great suburban the seeing both portfolio. to those for about really just transaction so parties. is and with I is of assets continues think Suburban part we're interesting this equation, it

Nick Joseph

markets seeing the That's just then Thanks. given rates? And rise just helpful. what very you today, maybe in in are interest the transaction

Ric Campo

cash. to for Transaction be. market in or buoyant. say the what I part head there's leveraged got bids thinking acquisition you of at plus changed of has long-term weeks really that core multifamily about pause. very pause. going in value-add in, That scratch basis that pricing assets market that holders is the taken core for which aggressive think very, definitely space tenure space being taken But but a up very we sort the hasn't of kind still has the people Clearly acquired ought assets four all definitely definitely about by that. are and points and don't definitely when XXX-plus play The a continuing would has or market for three buyers

in multifamily by asset demand can't in massive rates. it's order. then interest liquidity; four supply marketplace fundamentals So could value there's we'll and of are which any sort and think about know ultimately which going we up; space see all you when driven inflation in that this you which the things about expectations argue the today; -- you and then Liquidity

at looking I like their underwriting. to But rethink having of buyers changed most the So -- just a at margin leverage it it definitely think the institutional really that us are kind some from pricing buyers are as perspective. hasn't

Nick Joseph

Thank you.

Operator

will question next Our Deutsche Bank. Johnston from Derek with come

ahead. go now may You

Derek Johnston

in the versus to just on rate morning mentioned rigid the on levels treasury. Good let's Yes XX-year the and that cap everybody. environment. Hi, rate stick spread tight cap thank And you. think historical I this you

accelerating from some you or D.C. markets? and keeping what's dispose So perhaps other

Ric Campo

to really. a primarily couple this budget year. as methodical We hundred a program disposition long we because sales. the million we're like year But to have can the flow of we year those I keep usually have current do at continue and execute we of nothing cash mean and as end that. to of in of Well, a going the acquisition dollars the we

of last about with of $X.X an four billion think average and XX years the age of maybe have actually was years we of with you an $X.X years. with average assets fund, billion exception If XX sold the we which the age have XX years, acquired

going makes be and continue in sense. involved market the to So to we're it

like pruning some of of done past in be the Houston to disposition will markets also been in perspective I we growth, through and If D.C. some you portfolio from mean margins, where and talked continuing lower our from those those as the in exposure primarily operating. sell they're well. our we'll through the as we at reallocate capital think but about love about organic -- fruit all and we our We low has all Camden hanging done And dispositions we've the a markets. assets

Derek Johnston

comes sheets then REITs. think all that. in debt have unsecured you I And environment rates? refinancing, you the this you talk appreciate year. kind to one might maturities Thank guys and can Okay. your how bankers versus speak look have you what balance that But it to $XXX previous you. of looks rate when the -- of when Clearly, to I best million amidst like

Alex Jessett

Yes, absolutely.

of we dispositions XX is dollars about debt our hundred the due of of that at that the and an it of the for rates that The are in year six right end around you that seven comes couple And that way got model Ric for paying that we've about us a X.XX%. to overall December have $XXX it now So plan the at on give we million is right million ago mentioned. you indicatives about if think But call idea, X.X%. weeks number sub-X%. was probably debt

aggressive pretty So acceleration rates. on

Derek Johnston

very That’s That’s helpful. from it me. Thanks.

Operator

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

You may ahead. go now

Neil Malkin

Thanks, guys.

Another quarter. great

you some just First, you're I communities. to think one of Alex seems clusters of of it on potting It like are color your some about give you're could and examples operations. give the like everyone or to of more on the next sort you you the your touched or way Can that assets if sort sounds just like your just kind Again, it OpEx of that. load. sort serving staffing shifting generation of reduce peers

going over of give the how that some next can elaborate you be If kind Thanks. that great. just would forward see XX months you on that

Keith Oden

our of But bit the geography to right? is And we unique birds, some because our call very it detail geography. it's pretty portfolio unique nesting it you call of our that Camden coding. – probably little I Sure. just humming So Yes. the about of in give a approach respect. people

in communities communities, and we reformation that So Nest, and then up reporting XX And in standalone about payer that staff. about within this are single with communities or manager two minus our end of responsibilities community up three. have are we XX a still into after of are duties end plus that XX nested with we XXX of groups

personnel. a to to where maintenance on staff or So that just regard is geography leasing for being those and interchangeable the and with personnel communities whether way the in that's able on-site really becomes step need based it's

out the opportunities kind two the of staff growth way ability of be of and is One have things biggest community in we that's of to going portfolio When having and close lot again, then a geography single We're enough to manager, regarding ability there folks driven they're the the community is additional be sort their of work. it by manager, sister opportunity were people analyst all and started our line out because and lays operations leader So and to that a on-site their Everybody to that an have What really the position have that this. challenges make for to experience you over their leasing we assets positions, we teams. of geography. permutations the mind. to those a the end as stacking don't accomplish out, in our assistant challenge. is promotion didn't when of That's the with But can approach grouping outside by to the for the stack started sales is up just kind we position that were time going different works single one historically trying of migrate in new asset the ability one growth to providing increases. that

aligned provide the is a second have a this assistant driving manager, thing many better for was mousetrap linear you us properly a single end skill community But with that just a sets – come up up you cases. to your was outside opportunities. So – in manager, inside with you are influence always not growth staff, you to in staff, for where community situation have that

an some not become up manager. people leasing as logical salespeople manager in And support naturally with administrative lot to people. assistant and sales an assistant tasking honestly, administrative generally for inclined move in cases them are cases it's a next The advances end consultant. who most they You a very really only And some duties to best are cases of sales best our to have role. in our and much has

not structure being approach. able of inherent people's linear were the to by to single shortcoming because community of we strengths bound And so that just the having that was an leverage

So up that to their growth and us really then more influence the people was provide get opportunities where second to matched are strengths for within is driving that hierarchy. natural for

I that about our philosophy. a little explains hope So bit

Neil Malkin

guess, Other me related to, Yes. No, you. for renewals. one that's is Thank great. I

stronger I to what teams low. I Obviously, because thought think across look management push hard think quite I you a what renewals and we kind leases the compared are of new think those built don't you historically would the bit up. And is board of as have like. on versus turnover loss to lease

wondering think so even prices. given think I'm XXXX Thanks. you quarters? do And you low take for to the people you and just these about I how through several to would renewals over the discuss power up pricing willing XXXX turnover next just of How that into like stacks sort environment

Keith Oden

Yes.

leases that -- and you think our about roll. think manage the I mean rent I new So when we renewals

place Our amount trying if revenue occupancy might caps we're it a management cases. in team be is to an that manage doing to turnover this looking you're done appropriate some and daily to situations and put we've or in where at

I think And up reality on significant we're portfolio started time we obviously frame and that both in the renewal really lease of seeing last for that. year. new is our the lapping sort May-June increases

public rest were they had company peers to both power. pricing had of coming not a of have that most do of so kind we're where our renewals to aggressively the started gotten new the not the that we and and where and leases point market certainly a already And into period lot of pushing

So we're into going first. to run that

trail just a price the of going to the renewals and first XX%, move You of price in And got rental complete these increases. clearing to that XX% a XX%, because -p reset headline we assets. started is of reach market that's both think lot for multifamily. are terms new of rates there's down lot first the a It's markets in around questions these And about true. market clearing for a the we in conversation leases

since three-year over residents think yet these But to of And you have are for actually two But some a pandemic. second then rents you think the you ago decreasing very context go almost eye-popping We for the it two were kind have our we modest had back period the big seen because that. increases. years they're we now. years I right of who of previous getting increases beginning year

period per the years. for rents since the it's three-year X% over it's it it's we headline. one would our year the the first But be in residents that most part more kind our So all definitely for like three it's But are in of of portfolio. reach reset if XX% a reset year will

anymore. those end picked three we don't significantly. reset Loudoun I the growth to And have going D.C. we probably Houston even have more up proper completely three And maybe are any the two in But reach Houston That's not are reset markets our we think of D.C. not markets proper year. not where the and of probably our and in will then the by County. end of by in D.C. constraints rates year County think regulatory this County. have area the that's L.A. the that And constraint. regulatory Metro that a the be in pretty LA

Ric Campo

add that. just I'll to

and XX% leases If Houston it's two markets the and our you renewal biggest and and blended you we out Houston D.C. signed all take had XX.X%. D.C., included. take the increase Take markets a out, with

reset the is ability over couple years. So the next issue jobs the back they Houston's jobs lost all has the all an the not during that added been back Houston added we lost during with the of to country do that that markets the to And overall -- has the the not rest pandemic. as that have economy to level have Keith's pandemic. point And energy has the not of still

gas and if tank the in on going renewals forward for new And so will leases. Camden you there's

really We're to I some new two like them. white on X% years. One over Phoenix largest nothing leases it's hot to us other wrong. able do our of but Tampa start of next of least increases that don't get reset or getting in big these And couple markets. or X% markets at the mean, we're

Neil Malkin

Thank you.

Operator

Janney. question from next Rob with come Stevenson Our will

You may now ahead. go

Rob Stevenson

Good five and the what that the the expected for morning projects on what pricing remainder And you what's is materials Keith the on availability year? I other or start current yield are labor new for over on expecting of starts? question you'll And here under stabilized guys. projects seeing development? you Alex guess the related are

Alex Jessett

Yeah, absolutely.

our a look you we're pipeline, yield. if around So stabilized current right at anticipating X%

If the yet started you haven't around assets to is look right we that X.XX% X.X%. at that number

think high high costs, and about for probably month. If escalation rises construction you a to rises X.X% the about it easiest is around we're between right bifurcate way think seeing it to

For construction around a number down some ago of tell we're think news. wood seeing we $XXX the is I that we will normal which saw but time. were right you in it's months that $XXXX Lumber that good the board get three off is about foot, certainly X% $X,XXX I though per about to it's starting month. is well-above frame to

escalation. little some still that might seeing significant, still slowing It's fairly are down be we're there a it So but bit. some signs

Ric Campo

are is of longer taking The to equation general condition that up it's because other costs part build.

growth starting originally years one anticipated and out at we a rent higher yields start flat-line every low our next definitely has we fairly right over better pretty pipeline and So development than that of rental X%. the the of then growth that of expectation we're much with by been and now couple enhanced

days the three on to that And our projects XXX this of days that how ago. you into XX get XX adding And the in we ones that's So we're But anything time construction can into this we XX get start of of frame terms thing starting our fast this addition there's that added yields. upside definitely the marketplace. supply year. we're in in years to issue additional year the to

is really, the a through issue chain XXXX, it's problem supply to going be XXXX. So

this of to is and takes supply market. longer sort is, new that's the so than in So news people on news. a that to bad take good most happened push the the news good starting to all longer It that you is to come lot that's to demand But is -- think response bad in news. industry The going this that's build.

the on through XXXX supply feel pretty us make the through end about pressure not major year having of should side. demand that and XXXX the So good and

Rob Stevenson

terms thinking you're to guys XX% taking spending in trade-off versus rental just last and you a period portfolio increases are years? days, these bunch rate going acquired money? you of how few been get of the JV some redevelop, about the out has And how given that units already time the expect the unit redevelopment JV And over you or there to Okay. in for of inside the is on that able

Keith Oden

-- redevelopment program total We grouping just million. about our of $XXX Yeah. another for approved of in

it's the yield attractive. but more regard for over either still down acquisitions vintage best development new pricing look the to years the assets XX that continue are as the with and new escalate, Camden positions rental existing So play REIT we anywhere to the our XX construction time, book or as Obviously, it on still allocation between makes much around works on come that rates business from board those has of to the capital old, reposition.

had a assets There So we'll next of are are that pool invested we on joint the that continue for sense. Board under best more be they we venture. the JV But There we will to made as some and play can. the They was already extremely our partner do couple that the a fund the already supportive. in repositions They likely play the understood acquired return honestly, couple with capital always added were are repositioned. to that done the on as year.

on consent to will be with assets, didn't obviously that some the Camden assets do happening like didn't -- partner. as will on operated have But -- added waiting were ground capital rental approval interrupt But the didn't have we our or fund. there on based what's or fund as or appropriate were be not the the have just it's So not within repositions submarket. buy-in they of were we there's conditions if the in to rates they and the

Rob Stevenson

Have Okay. weekend. a Thanks guys. good

Keith Oden

bet. You

- Ric Campo

You too.

Alex Jessett

You too.

Operator

Anderson Our SMBC. next question will come with from Rich

go now may You ahead.

Rich Anderson

team. Thanks, Hey. morning. Good

equity own of the to you done Any the all? about net get was it needing your degree if inclusion larger made have So that? sure from Was you'll count your to it what perhaps influenced the bankers stock. indexers because But influence offering new new inclusion. wondering I'm for at the by post I'm demand

- Ric Campo

joint acquisition. was It for the we strictly No. equity $X.X billion. venture bought I the offering to pay -- was mean for it

billion we side cash million in and $XXX debt needed sheet. our the $X.X we had off on take balance You

$XXX So reload line a down our of sheet us made has balance the of that what given the debt-to-EBITDA -- that that the rates to get interest sense to million area. down equity X.X lot the on sort and looked with we it bond drew and back happened to in offering the market

acquisition. all no driven was it the So by

Rich Anderson

Okay. Fair enough.

say question in least would role the like time heavy Second what And your a major XXX a a seasonality degree lot M&A what it's hear better plays like think even at even season that the really degrees said Sunbelt. degree into heading markets you July in that. Phoenix, maybe to market we're I'm leasing in curious of there's I like guys teams for you to you in to well peers November. management

about third a So and you just up do you it's it be as that somebody have seasonality when guys might kind you talk north? the as for muted quarter, for EQR like or factor second prevalent like of feel you or an do

Keith Oden

You're of seasonality degree always going have Rich. to some

a have going the we're a the they occupancy. you high starting just see, reverse -- to from the continue are the of been mentioned. volumes -- As -- seasonality turnover the the entire mentioned, there reason you low to these and the and seen leasing for to occupancy we've level very portfolio the is in of not the just We Phoenix that past. got turnover and be -- that But season, reverse from incredibly of has low as level levels you our -- rest our

our it's just for always fact. around more so. conducive mean before -- move has to -- reason tend And done to doing back just but It go in -- impetus whatever So to people or something an the kids they people relocating. school, but markets I it's get -- to they're There's a more summer. in been.

next So don't going think we -- you're to the I don't numbers how start many think seasonality year-over-year will be in the six going see leasing back it's think anything months, now between seasonality like you're pre-pandemic. because just a go not to of there. there, and in you're set leases not see just facts. it comparing comparing if to that, executed but don't call that just I I out different it's it, is

Rich Anderson

got. Yes. That’s Fair enough. I Thanks. all

Keith Oden

Okay.

Operator

America. will question Dennerlein from with of next Our come Bank Joshua

You go may ahead. now

Joshua Dennerlein

Yes. Hi, everybody’s everyone. well. Hope doing

your if place? for given missed everything XXXX, but guys already discuss Sorry in did you that's I it, earn-in

Ric Campo

we second time it's And to a about, not. going that. not predict it. that such it's quarter to third It's it's ultimately. is Maybe about or did a probably that a -- talk better talk it's just number number but We a we're really speculative ask to hard --

Joshua Dennerlein

bank I'll my Okay. in question it keep XQ. for

Ric Campo

Very good.

Joshua Dennerlein

your then, one I REITs provide announced new looked to whether, Is a like of know similar preferred some or have as markets? in you it you've third-party program, that program quarter peers other structured set And a investment your would well. Yes. and this equity where developers you up something mezz at, could

Ric Campo

margin And at focus it our on point, attention ventures was of before. sheet that on -- clean keep joint decent competitors this those But types usually our our transactions rather the it. And no make balance and XXX% portfolio. our on done our actually of do I would We've we portfolio. know existing have we and money

have the most it keep we're to and that in way. going balance simple and We sheet cleanest the sector

Joshua Dennerlein

it. Got

Sounds Thank good. you.

Operator

come will Haendel St. from Our next question

Juste with Mizuho.

ahead. may You now go

Haendel St. Juste

you're partnering operator. Maybe curious, SFR pronunciation. in I the about appetite guys. guess, the curious, It why very for returns at about Houston. to Hey, I looks targeting development like approach your you've more. you, Thanks. you're to maybe That’s the alluded I now here projects like looked doing started two I'm of But perhaps want you're you in builder. actually past here. looking with good type I'm talk talk taking this. product, you're guess, and the a local Thank

Ric Campo

Sure.

look the we way apartments, is, Houston purpose-built And acquired So market have both right? And that decent to the are and dip single-family rental in they're talking horizontal and about We just they're fact you're those in properties. two sort it's we single-family toe XXX-plus just scale properties for-rent the them an the that are one both projects of to a they're interesting thing subdivision, all and into. -- our think units. at

you you. interesting we it subdivision taste. look it's and have our we're a animal. single-family run already and you too can and an with we If housing involved scale us rental of like ability and less in history, expansion of senior far-flung But if got The in for a our areas two for those maybe housing subdivision some kind were and market the have an have in I student involved got at within potentially is think different sort what for that markets just just you then us apartment in. staff And

of are million multifamily are with and So single-family properties much the the not size The the I purpose-built And like rentals Most the those that in of challenge we're ideal. million. as $XXX the our $XXX -- over is is yields most in they space. put said, pretty the project new toe our are today on are water. like same developments

inefficient an rental. don't senior for oftentimes work But also the deals for that. smaller municipalities on like to So, development single-family area think little it's it's our us a and people understand I

entitle benefits it's efficient to our get sometimes and that some into but area us in interesting longer from they're look and projects. operations think an ultimately, to how more takes and maybe to at operated it So translate I final for -- ultimately have

Haendel St. Juste

sounds it. case two mindset interesting. but study? perhaps do there Got Certainly That's a now may a is these to you're that projects like more, using be

Ric Campo

Yes.

Haendel St. Juste

some gave the small a color you the XXX last course talk you maybe think days the expense and of XX guide days? into pressures get in question maybe of further Thanks. the Maybe year? a the amount detail maybe on happened more in more not bit And curious of the you over out given XX guess the seeing on what's on risk the Alex. captures for kind I'm a what there new guide ago. property same-store that the increase guidance, insurance the of in touched basis taxes. guess increase, can point could of those out curious about bit do or I guidance Second You you're the some about that I'm of pieces? But you I each

Alex Jessett

absolutely. Yes,

thing So, the first about is I'll talk taxes.

in some as initial rollback in typically valuations that obviously there's be do. valuations initially expenses. component we think taxes The they're our up total in XX% but and going were it. remember were to to we is to those have contest thought up to X.X%. that's And taxes, will that the be Austin range. you be one the is there We our we rates to XX% got for driver And They going X.X%. So we up increase now in. Obviously, about of account big of We Dallas. going anticipate

insurance to up Originally, The with around we thought of right are insurance XX%. market. XX%, be insurance that now our cost is continues second around think up, up to insurance. it have be component a it, associated of it is was around rates. is going XX% rates going which XX%. call We We to really tough our be

And or trying feel accruals. three pretty right that do little as we probably is our We have side the here weeks, bonus what the it are done market we to is outperformance in the but we good renewal. we a salaries. our other And of have whenever in number. increase we actually on a typically know obviously, next to four the have side, then now revenue bit do more going We're

As our on-site teams efforts. reward do their you for know we

directly so for tied got outperformance that's what rest component side you've for revenue year. And the to a the the anticipating we're of on

Haendel St. Juste

That’s great color. Thank you.

Operator

will Heffern RBC with next Capital Our Brad Markets. from question come

You ahead. may now go

Brad Heffern

move-ins on move-outs to Sunbelt outside? areas give stats from you any Can the outside updated or

Alex Jessett

Yes absolutely.

our the came about think non-Sunbelt year, first in you if XX.X% move-ins markets. of of this from quarter about So,

quarter that's year-over-year actually first started, up look got that on compare number is right the at of from before a points basis, basis quarter COVID of XXX And it that up to XXX you you first XXXX. If if the about points. basis XXXX,

So, robust folks and outside continue Sunbelt that on see acceleration really, into continuing our demand from see to from to Sunbelt moving really the front. markets

Brad Heffern

any And stands rent currently? it. Okay, income update then where got on

Ric Campo

Sure. XX%. now income rent around to is Right

a And number. -- about challenge slightly income at residents the rent-to-income household If new our is to to leases XX%, you number the look average at is ask that our don't their income but is less than with lease it's $XXX,XXX right little we our overall ratio XX%. and update our

goes is when rent somebody we don't happening but stays to So, their what's because we the same income we update renew is, ask them income. the up, been their

XX% and everybody's I probably numbers a you XX% teens are little probably income. less And at upgraded those so It's than think if in the overstated.

Brad Heffern

Thank Okay. you.

Operator

Steve from Sakwa with Our will next come question Evercore ISI.

may You now go ahead.

Steve Sakwa

it. Good of, the maybe question talk about Maybe you XQ, Thanks. first just the revenue kind you full what within morning. I the missed I guess Could just in debt. bad that saw you're for bad growth on budgeting debt trends year?

Alex Jessett

Yes absolutely.

for collections So, first us XX.X%. in the were around right quarter

back trend. bad sort of the and you you think about go If debt to

basis right in points. a ahead. maybe XXX points. XXXX, as that that points pre-COVID basis that around stayed well. to was In was slight that number that thinking and around in we're of right number around go through improvement Yes all What us XXXX XXX So, bad XXXX call anticipating debt for it down way XX will is basis and get about we're

Steve Sakwa

Sorry.

do think the reverts basis that just XX next about points think down you you year? If XXXX, towards

Alex Jessett

right is basis I portfolio, We in which certainly more anticipate our that through delinquency normal historical mean going in right points, XXXX, with to California get trend. as averages. really line a to if move XX we we're back is you ignore our around

the we to in can to XX% basis So, XXXX that what is then we get to in scenario hope more And we went a should you by in typical year. assume since points I the public. told the be experienced that that's we XX we going way as going that time XXXX, by to the get we which be California contracts, point where we're enforce certainly as we long

So, that's year. very much a normal

Steve Sakwa

Keith. Got question, or it. second guess for maybe just And then I Thanks. Ric

in much markets states discussions curious discussion have Washington I'm gone rents the of that? we're thoughts the maybe more how of control and just in markets, picture, York are New of some about of what California rent big kind folks Florida having outside of your what given some the you're kind with Just and about just up. seeing – and

Ric Campo

it think municipalities Florida on are on the the with state you at anywhere about very and but Texas, level states when that repealing governors in states may of seems control. counterintuitive near level, deep go good cities like at definitely red doing to bands to rent a sort going no it Republican statewide local We're talk – question. the think they There's game the local

state-by-state really not generally coming in scenarios. concerned National for California industries talking an a shape exception We repealing, Housing most had the thing. on think, week Nationally, control. think speaking, about national of I California the control. expects of their leadership example rent so call to rent really and have just lawmakers on involved It's serves this with thing. too conference it to that and we're up and won't with very pretty we're Laurie in Association, really another week Council, Multi I in markets, in ongoing our the – on rent Baker last California a we're And our good a rent in basis about we're be we're control Apartment fight group, markets, the good statewide control But issues.

Steve Sakwa

me. for Thanks. it That's Great.

Ric Campo

Okay.

Operator

come Mitchell Connor will Sandler. question from next with Our Piper

may You ahead. go now

Connor Mitchell

Hi. Thank the you for taking question.

more it stand-alone Can regarding single-family us, attached if first circle just are or just would remind be to I to you back So have couple of townhomes? items the these rentals. products,

Ric Campo

with at garages developed places our make townhouses in our or with whether Atlanta probably, think Camden the I front they're at two you example certain yard townhouses program detached. think about These property. are sense part starting in as ultimately of not, products, that, standalone And too. we're car think when out townhouses We and I for Buckhead We backyard. development

We the get they're highest all have time. townhouses and absolutely townhouses, and the rent, average they're and they bedroom three full

think that detached. just having two right negative. be don't that I building I negative it's – think, The to we're So townhouses now are

Connor Mitchell

mortgage remind you purchases Great. was, given And there's Thank – of just or if can rates us to you. a decline? question any then the the home again second of rising the acceleration been move-outs

Keith Oden

Yeah.

were the We in XXs. declined year. actually last we high from So

is we're our over XX-plus to Long-term down the this average year XX% to far about portfolio XX%. years back So XX%. for

people. So much we're traction number with what to see anytime buy now have buy the still could X% this were months that mortgage tenure average like quarter, -- above in mortgage below for I even rates I requirements a borrower spike the them. in probably I getting in effect sort move long-term to are is a is. or but suppose, around And of gets putting because in before underwrite it's more hard corresponding it versus worse where rates, I the it's and the just you that -- the recent -- ago better upside scrutiny well game changer it's the just think have I And lenders the lot place they most panic, in on soon. that the seven Xs six can't to possible

long-term our to points on average just that And below It likely so pretty move-outs or XXX homes. basis we'll stay it's gets think, buy I much XXX tougher-and-tougher.

So affordability for two do the you have killer not of markets rate. mortgage years have things in those now have for first-time in just home you single-family And X% five prices doubled is only last homebuyers. combination of many a our a most the and

Ric Campo

around our the XX% numbers XXXX to watch move-out was When April, March the in through or you look houses at XXXX, see of to in month. from it end -- was to buy of interesting

the back it go this March, XX% was out, were but And March. -- XX%, then March as in to was at you pointed And to So fell Keith it we prior if which is far same April the of as XX%. much XXXX. April and pretty in

XXX spring sort to from and April rush point decline basis thought So March XXXX as the People market XXX of summer. basis decline is to from we the a April. buying And had home into the April a point XXXX before season.

year-over-year people high numbers for us. month-over-month that home And the be those is to this afford at And me rate going a some the decline so high where and or buy market price can't point. single-family in tension not the move-out interest there is stress and tells problem to homes having

Connor Mitchell

that. me. Thank Thanks. you color it on Great. for the for That's

Ric Campo

Okay.

Operator

Sachs. Our Chandni will come with Luthra question Goldman next from

ahead. You may go now

Chandni Luthra

you it question. it where for Thank in if taking now? capture you last come Could XXXX? remind do year, lease you Hi. your it believe of us hasn't apologize. has, in portfolio And how my to up I and right expect stands much

Alex Jessett

Sure.

as work right we we So loss for to large is us a around capture of obviously, XX%. as lease -- percentage And should we XXXX, through that.

all the Now to for generally to that way for all up a not of way bringing have obviously, you renewals, market we're -- renewals remember the reasons. variety up

really that quite rest of but we capture get it amount, year. never So you'll for a of full bit should the the

Chandni Luthra

Great. issues And supply well, up construction activity, you same supply has permitting give surprise kind kind of there. costs mean, and hour, chain XXXX, see us before so continue the anybody could as activity that at then, time, you're thinking end it's news the we and update how to been costs. the But of higher compounding interest really construction it's to of thoughts I in in about your an on obviously, markets? around, your if not no

So how year? are you backyard thinking your about in supply next

Ric Campo

Go ahead.

Keith Oden

then apartments our goes And on based estimates in XXXX completions got that this has Witten year. portfolio at Ron about his Camden's – XXXXXX. across in Yes, XXXXXX to

entire talked longer just about markets. which across XXXXX numbers XX the built. Ric increase it And that jobs get to about capture believe our – So Ron his earlier updated completions that this try to is to do of I takes has is all impact these our

with. completions years last using what made on how some first just long start everybody everyone long wrong date of and that been in years unit same been turned progress of the the estimates deliver and understanding completed the two been So this years and and for construction they're work badly think metrics and I they've is product. effects that's how elongated They've finally dealing to doing all period to around kind

market as historical believes across So we them if to be market decent point none numbers which happening continue completions the we're year next slippage his up it of to is at rates Camden's you I troubling and he this captured, look terribly job get have think thinks above XX,XXX that look not long as he by growth. at going markets there's

Ric Campo

revenue shows also of supply above or the trend in average new It above in growth in. XXXX spite coming long-term

Operator

from come will Our John next BMO Markets. Capital with question Kim

now You ahead. may go

John Kim

full Alex the first in remarks Thank that of is year, assumption the you. including you includes or revenue the X% the for on your XX% renewals. is remainder wanted mentioned of same-store Good morning. your that that to year quarter? X% in I prepared guidance the And just clarify

Alex Jessett

Yes.

best full a getting I we're way think the XX% at blended includes XX% to the look probably is year. blended that so towards and the

John Kim

Okay.

rate. the much So new renewals to focus your lower just lease lease on why The growth it's mention but I'm not case. at did new too XX%. you wondering that's rate growth than

Alex Jessett

renewals. the we've where Yes. years had it X.X call have past situation new over leases Obviously, we've than a been had higher

leases if about point why think you are assumptions they yet. Now will at that typically in right? renewals time some it's new not less for converging earlier, that see. than are And And at converge are assuming had that's with place But our just And what rates in there we lower you right now that associated mentioned sort renewals. when past costs a – of years certain typically least we've obviously I resident in X.X resident the there that's got on are what frictional why are leaving. you've

John Kim

XX% lease signed third your older leases quarter I'm Okay. in a that higher to loss would loss to the your were you leases? what way had than on Is to My year? on last that second minimal of ventured the in first just quarter assuming loss be that XX% and second is break lease. question down leases what your on is any there that to

Alex Jessett

in occurred lease looking in-place to about what that as compared leases. an occurred Yes. we when loss doing signed XX% leases mean the to at so the I we're -- is talk March that we're

why You depending -- you are if to that an lease of right minimize lower either numbers mean move you I trajectory start as the rate to loss then build throughout off flow that's theoretically, upward upon starts And XXXX, starts year. forward. have you of to higher in how to you increases the or

John Kim

you. Great. Thank

Operator

will Our with Wurschmidt question come KeyBanc. Austin next from

now may go ahead. You

Austin Wurschmidt

related said much wanted just a really I seasonality how everybody. the you back the trends peak. from new bit, rate go recognize a just moderated think remain to this Thanks XQ. versus wondering, is to to low lease they've very And which turnovers here the quite tougher until comps and occupancy and what just normalizing steadily really really just normalizing operating because conditions you up in point held up well bit

back still elevated and So trying the new levels. I of guess that fairly traffic even occupancy keeping to what's from getting to to historic you're higher leases extent holding relative you drive sort

Keith Oden

proper, places still have certain you parts think Loudoun proper includes to those not D.C. would market getting which Washington are. rate increases through are where able push County what D.C. market are -- still of we we California. I assets the and that And increases D.C. start are numbers. are constrained to we And with the be from where meaningful the rate

Our XX%. in total for rents of portfolio-wide against a average D.C. north Washington the something of were X.X% quarter

plus it's or XX% minus -- of NOI. our So

that's is still parts of from other places Washington where of moderate rental story increases the part increases. that, in -- as California you XX%, of getting to we're a or CPI-type no it's kind have and rental big XX% So

I of mean think I biggest So story. part it's the the that's --

of In to haven't able rental of and we close haven't we County believe we we if because raise in a Loudoun were to mathematically rates Washington in know D.C. had and rent. that just anything terms unconstrained reset certainly if we D.C. you -- proper -- been

we choose of real pay. be of to the control constraints come process we now, not getting I So the period of I trending that sort believe you increases the I rental do the are or or even end through have where still it's on of we year that to it out regimes way will this likely just not a the are happen by and of I going of of when our right constraints allow that And just certainly the to regulatory we actually think be to. coming things constraints, don't folks to will and hope fiat that though out still work mean out order think there's expect that get a of by happen. time of local paying the I estate

point. So to the I rental it's think get hope uncapped at really -- that we it's certainly but I I And end I feel of the good a year. given think -- position, just by going we're the increases -- we're some like in to

Austin Wurschmidt

I No appreciate it. perspective. that Got

And where portfolio constrained? so market then how to have year-to-date? also loss is the the increased I'm from of much curious markets lease across bucket you're And much how rents

Alex Jessett

Yes.

on So X%. it's right up year if year-to-date on be you for XXXX, think to increasing about around market think a and going full we sort of rents a basis,

hard larger exactly to our calculation. much to because Because we're On sort sort about loss amount California, that of you that think what I to market the back Keith understand portfolio. probably you loss sort and don't lease. And it seeing a is it got total so can in the D.C. is right? that way XX% which is much to lease so of going quarter. to you probably discover. And have of lease, understand loss And is best minus extrapolate to way true it, you've probably can or which out to take the It's that, think of the there's make laid is rate first what almost up plus what

we think then able I we're idea as challenges the sort to better legislative what move what that the real we establish is So true have to a is. of going much we're market and through have to loss lease of

Austin Wurschmidt

Right. Right.

So period much over the three-year rents presumably were more moved that wages that about market you have in than market call. earlier talking probably

Alex Jessett

Absolutely.

Austin Wurschmidt

implying full assuming think, you're of the rates lease for targeting the So, guidance you XX.X%, and revenue lower half systems that to the you to the Are back with at/or then underlying occupancy year? growth. Alex, specifically get below the in for I'm revenue to back back also more guys what in respect I the year? management same-store yes, assumptions you're And curious

Alex Jessett

Yes.

where it's high set because your mean, you're the the setting I that settings. rental And occupancy you're So rates, to we've you're that we enough point we your renewal that sweet max trying occupancy really we to the is type really that ultimately is And get rental settings, of rate and our lease higher set, higher continue of interesting, that's you matter demand. have set drives And new on sort right? high that you no how what to just tremendous seen why seeing out rates. increases having. the

a at experienced numbers into our really it's we've XX.X%. and past that sitting to perhaps We the have the that do believe levels conservatism built and we're over five quarters saying, we here that that some So want occupancy not matter continue. be four we do can't or

go-forward think what so are rental you we're assuming as about a And that sort terms at baked blended averaging you, got I if assuming of rates XX% of we full we're in that's the what basis, then on And in. for year. you've told

the you XX%. that's if So right look at quarter first around

for look so imply to you maybe that third second quarter call that assuming a the the XX.X% get at already If it number a X% for we're of we X% fourth sort quarter quarter. and the we're number at that down would

Austin Wurschmidt

missed I the or current versus for XX% look then tracking so prior is of it. is thank you known Got that. the to move-outs periods XX- that plus similarly? elevated what that out vacancy. XX-day And number you Kind when availability -- is

Alex Jessett

Yes.

very We continue have to turnover. low

Austin Wurschmidt

Thanks the time. Great. for Okay.

Operator

will come John next Green Pawlowski question from with Street. Our

ahead. now may You go

John Pawlowski

Texas Ric keeping one the for just going. call the Teachers Thanks question trade. on

end of rates? the in You any done was portfolio December. any repricing due mentioned higher the Was or there impact the of the to valuation at interest year

Ric Campo

adjusted have at current the thought But for the what was. came mark-to-market sort -- at -- the appraisal we we price. Well of that did then we struck we quarter, is -- the end -- year. did where that appraisal of to formal we at we that's market also we point And first the the then where

was there at in two from adjustment an March. we kind were and that number with what those December basis X in probably not the up prices appraised about of early then having had big December having the since metric of February and used of sort in another So of sort -- end we we a discussion ended valuation

Keith Oden

to adjustment for... There price was purchase no

Ric Campo

adjustments on there's interest No rates now.

Keith Oden

was it rates. before meaningful interest the stuck in No move

John Pawlowski

rate... Okay. cap guess the I

Ric Campo

I -- go ahead. don't think

Sorry.

John Pawlowski

high Okay. marketed? you above the guess is side. cut Could rate in kind cap Yeah. bidders I you I surprised of No, off sorry just talk about other this how there. tent how and X% the were I'm many the on us broadly

Ric Campo

Texas talking about You're transaction? the Teachers

John Pawlowski

Yes.

Ric Campo

and direct the It in are partners There bidders other Camden JV the was tent. negotiation was a no between which Teachers. the of Texas

in in value based -- so end at on price than cap values you original the we the the did December. I to became at wanted when evident from it, appraisal day trade values value to the Teachers just that valuations their on And they were that perspective and at of least substantially Texas the the it we look after calculation rates higher the think December that

really and was So a I looked when because XX week overall start was bid clearly of at wouldn't the thought their we a try into portfolio in to you multiple think efficiency they transaction out From transaction. market, gig. good a it everything it they markets and just have gone properties really, if was And that's perspective X,XXX do XXX-day finish able been from to it the the our perspective to had unit transaction. bid the we four

value were. we both sort getting in a interested it Teachers so even of was the what to And think was about as be not at what got as to it possible clearly I you done having as though know in very fair -- we and And was we will time deal soon thought never as we we looked and when it. bid you happy values bid moment were

John Pawlowski

for Thank the color. Okay. you

Ric Campo

Sure.

Operator

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

Ric Campo

in in in-person today. first with thanks of see Well, in And June. weeks, in That's for Great. NAREIT the you we'll couple a -- being few guys us right? NAREIT

thanks take a lot So and care. Bye.

Operator

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

You may disconnect. now

Camden Property Trust (CPT) 29 Apr 222022 Q1 Earnings call transcript