Earnings call transcript Q2 2023

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Kim Callahan

Good morning, and welcome to Camden Property Trust Second Quarter 2023 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 slide presentations in conjunction with our prepared remarks and those slides will also be available on our website later today or by e-mail upon request. will opportunity listen-only to participants presentation during All an with ask Instructions] be mode in the [Operator questions afterward. this note, please event recorded. being And is

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

quarter the it our release Camden’s discussed As earnings everyone’s hour. is We XXXX on reminder, to this reconciliations our includes at on available which website to complete within financial call. call non-GAAP complete will a time respect like measures, one be of section camdenliving.com, second would Investors and and

after your queue items respond unable to limit to please we’d rejoin call to happy everyone questions today, have the be If to concludes. to in we additional question phone with the So then speak if one, discuss. initial e-mail or additional you are the by queue

Campo. this time, the At to turn over I’ll call Ric

Ric Campo

Good morning.

want the Stock to to day. Camden’s by to to birthday public the share members memorable this Last with team the and few company. we remarkable management you. XXth music theme rang York as rest It’s special week, We commemorate team happy moments for journey, coast Exchange X,XXX of and Camden’s a bell were a joined of on-hold today from been coast Board Camden’s a birthday. Our was celebrate closing Executive New

and in XX seconds. go two XX we minutes with here So years

Presentation] [Video

value million. Our business geographically in XXXX, billion. value we $XXX of have Texas In with was apartments product and an XX,XXX a built markets with X,XXX we built started Today, to last. $XX.X of apartments enterprise diverse three with some

team Over a on one improve the our our stakeholders, Camden team focuses and time. improvement. constant the investment years, have customers to that and exists lives best-in-class a platform operating experience created of we members, at our

would to strong. moderate be continues quiet is from boom conditions housing still market year. transaction decline business to last with unprecedented and Our knew the from continue happen. Market that we post-COVID The all XX%

the to next to their big continue increased excellence to residents. devising as starting permits out absorbed past months. This difficult given Oden. trend than Keith give I and is really our up over fall for lower capital. And quarters. financing hard XX cost is and well New years a their environment are want our homes and family to And Camden Move-outs commitment markets to of bode shout the teams should work supply for to our finally, to providing living next

Keith Oden

Ric. Thanks,

July XXXX with Florida high demand XXXX our about and apartments Same-property our the Camden Charlotte concerns with revenue some line was the understandable in for well. Despite and saw with Sunbelt quarters, Tampa, both in second trends. quarter have as a strong Florida strong. levels rates of Nashville results three X.X%, Southeast growth our we highest the at in markets remain quality markets: in markets, results supply quarter result. midpoint guidance details past expectations very XXXX Orlando elevated and in growth our Now revenue as for of and operating we several Consistent maintained on for our the the

quarter new X.X% leases renewals X.X%. X.X% up with up of blended rate and signed grew leases Second by a

mid-X% range. range. for XXXX Occupancy the the rates moderating rates quarter trended sent August in show high September and results were and July during preliminary Renewal higher second XX.X%. growth XX.X% out slightly X% at Our offers averaged in July blended of of the with in

for second year us turnover currently for the purchase move-outs the seasonal normal versus fourth homes XX.X% the is occupied the full in for XXXX quarter. well quarter and Net XX% see of XXXX and of slowing portfolio in Our typically were and to XX.X% XX.X% the we of XX% XX.X% positioning second year-to-date quarter XXXX. was for the quarter

Camden’s Jessett, now I’ll the to call over turn Chief Officer. Alex Financial

Alex Jessett

Thanks, Keith.

II, community lease-ups and a to million north than stronger usual our well with completed schedule, yield we quarter-end, remained subsequent of a Tempe as quarter, the in construction $XXX Phoenix During XXX-unit, of Camden stabilized ahead X%.

ahead In are pro Camden II’s forma. addition XX% schedule, of of Tempe approximately rents stabilizing to ahead

XX-year-old leasing Camden disposed at community the in XX% X.XX% during per for a an million continued and we a which Mesa, over is a over over rate FFO We X.X% million. XX-year in Palms, quarter, Camden $XX.X XXX-unit XX unleveraged we tax-adjusted period. averaging Charlotte community of a XXX-unit, community leases this At hold leased, end California Costa generating June, approximate $XXX NoDa, Also the of sold XX% Sea yield month. now IRR for cap our

approximately average XX, unsecured secured We recognize line million. of in million charges interest conjunction rate early retirement utilized credit $XXX.X of our is this our we to of of approximately debt variable XX% rate May now with $X.X a debt the of of debt On retire with weighted X.X%. unsecured.

accelerated we and ahead prior $X.XX previously quarter, in the midpoint income. core primarily activity of timing quarterly of development $X.XX $X.XX outperformance corporate per second non-same-store at driven by expenses of higher and associated was fee communities reported of with by net income, certain share the For the our overhead the mentioned FFO leasing our This operating guidance. driven $X.XX

same-store revenue, and X%, expense and we at midpoints reaffirmed night, our X.XX% Last X.XX%, NOI respectively.

X.XX% increase the and growth average X.X% the renewables average blend midpoint Our X% a in of new X.XX%. approximately increase year revenue for leases based remainder anticipated of an a upon in is of for

the our the XX.X%. for that occupancy anticipating average remainder will year We of are

move-outs typical We continue higher level of residents. nonpaying to experience a by than

of as now we operate reminder, restrictions of in last compared rental have our which year-to-date amount we twice half lifted the the the all on move-outs result, As contracts. the of ability year. a non-payers now municipalities of as to enforce early to have a first And

We net effectively having when and bad abides estate real is the who new to negative revenue who of therefore, delinquent rental lease opportunity from a Rather, having debt reserve their a for resident our of balances residents no contract, receive lower impact and benefit there a leave. nonpaying with by XXX% resident we the back, commence pays.

these will costs, we However, repair I which discuss the delinquent associated partially noticed payers. have maintenance with and shortly, move-outs higher-than-normal of

of expense growth X.XX%, assumptions. underlying we midpoint the maintained some of have at updated have our we Although, the

State Texas rates of excluding tax X.X% rate assess other an is markets approval independent increases, Recently, the will bill legislature the Senate this anticipated approval, tax of Texas tax Upon taxes. or to value. rate. we school reform of believe XX% Texas subject approximately equates passed increases in independent reduce assessed to district reduction Therefore, November. X are our value $XXX rates Average Bill which district likely, valuation tax by school and the X% per voter tax $X.XXX total reduction in in Texas approximate

dollar prior some We dollar line. in guidance, is to have Texas the reduction our assumed for so in bottom rate rollbacks not this

settlements. also prior with both had greater-than-anticipated success have our valuations, Houston current We year year and

total taxes property of result of to tax all X.X%. expect we adjustments, now a by these increase As

generally expenses prior our and favorability XX% anticipated a property primarily repair now up the The which million is point X.X%, our miscellaneous expenses remaining $XX,XXX exposure. unit increase make towards under insurance aggregate maintenance do of increase levels of tax XXX count smaller offset claims costs to from and not items. our are continued occurrence resulting from increased by per from Repair $X total resulting other higher and basis to from expectations, turnover

debt. Last per communities quarter with of our of FFO night, year midpoint per guidance secure share results midpoint by This primarily share. and second lower the share prepayment of per increase we associated a outperformance also $X.XX per development in our XXXX interest $X.XX increased full from $X.XX share second the expense core $X.XX for new quarter of $X.XX the

the quarter provided XXXX. guidance also for earnings We third

to second We in development increases prepayment. increase expected a portfolio, net from second decline the the periods, certain incentives, $X.XX partially with offset quarter additional and associated half in and by from resulting the $X.XX the the FFO an a recorded and from $X.XX seasonality primarily to of $X.XXX quarter per within three represents of NOI quarters per decline leasing utility of primarily increase peak of to with in company non-same-store timing $X.XX range higher third expect expense our The public costs cent related associated debt revenues interest This expenses of overhead a sequential result be $X.XX the increase expenses leasing same-store sequential our the share approximate $X.XX. core share NOI quarter. $X.XX during for the mid-point in of

cumulative This offset $X.XX Camden CPAM $X.XXXX of and second increase disposition. $X.XXXX FFO by partially core is in lost from FFO quarter our

balance quarter with debt had remains $XXX million our left end, under development the and EBITDA years X.X to next pipeline. two for spend sheet second we to the at Our net strong at existing quarter times over

At questions. this to time, we’ll open up the call

Operator

Eric Our We will the come session. Citi. first [Operator will question Wolfe Instructions] question-and-answer from now begin with

may You now ahead. go

Nick Kerr

kind which pipeline? insulated, on then good seeing Kerr Eric of and markets process and or expect more that what recent all I in when It’s this the you’re ask wanted just terms to abate of less to all current specifically, Hi, Nick starts, for actually given you morning. morning. competitive supply are

Ric Campo

seeing news we’ve all Well, the the started that starts definitely markets. is in good decline

at year, started recently, – XX%. over May decline came May over last finally look the – starts XX.X%. they’re June, were In down you to headline from were RealPage June just or out June down that – was down May If starts headline the in

Fed’s which So financing financing, clearly, and it’s having its of result, getting equity of bank with financial and capital markets down. – cost everything tight desire increased the the along the slowing is is difficulty

markets, you how absorbing look in In of been we’ve terms our absorption, at it’s of when good. been most

have we of better anticipated from a As Alex pointed our actually absorption – than our all out his in done developments opening perspective. net remarks, in

time it’s market the XXXX what into like of months, new toward it’s sort So equation. XX kind to going all And constructive supply. of end XX months of supply when pretty and think – we absorb of the XXXX, think the then about in to this for be look frame side you XX might

our which a portion of seen lot the – that supply haven’t high we that, out, are of of pointed are is not just this in they not Alex market. points lower competitive one by our as of they’re portfolio. the reasons but and It’s negatively everybody impacted and just is of sort not wall worried really – about. affected end for So substantial properties because A price it

diversity question from about helping product is our really us no So There’s perspective. that. supply a

Nick Kerr

a of do XXXX, for sort I And the guess the balance Thanks. XXXX, on Camden’s you with what’s appreciate color. that deliveries deliveries in and so. is your to less up sheet guess, follow-up I I then presumably have appetite ramping

Ric Campo

we shown if that will things financed. be for that opportunity shovel-ready clearly, they to work aggressive out history And the – we has way think plenty sure? deals have might, of Well, that get in area can’t acquire we be there’ll

Nick Kerr

Thank you. color. the Appreciate

Operator

Our Capital next Markets. with question KeyBanc Wurschmidt will from come Austin

go may You now ahead.

Austin Wurschmidt

assumption Great. occupancy the the impact How versus average just backfilling non-paying Thank you. year economic with the half turnover? do course from XX.X% normal back of the residents we reconcile for

Ric Campo

notices course. what as course And not six our of difference big the on moratoriums the operate estate months are our getting Yes. over rent. in a have those protected vacate. we – the have our who call in would moratoriums last we primarily that the back has by statutory those in happening real of been markets is expected been their been in The of we short-term normal portfolio all turnover sort paying run They’ve to incidents normally people

most our end gets reckoning in in portfolio end have to of resolve which and close, we moving out sort up they So is typically removed property for our them they as what as though proceed skip. can them normal resolve now non-payment or from rent. reach people the of of the that just we – of day refer When being order game, and that by

people who disappear. they’re just So

apartment. that’s said, thing bad the Alex in necessarily not as but who been haven’t been And paying because these are a rent, people they’ve living

if our backfill XX to notice XX would out move tougher they So opportunity as have an or creates we teams. have opposed people ordinary it just the a apartment, where because skipped, you for course days dynamic much that get who and to onsite

we I we think had mentioned is category, pre-COVID. roughly as have or Alex short-term to as we would many twice move as And in the which have notice folks out number, normally that

of of impact and move factors projecting normal the of for of our balance rate of the it the takes who And have that, shows sort the it’s middle cohort of out in – night through on that that year. turnover we’re to up the in you people the that cycle, – double So a onsite the to of have the different you top you set but react XX.X% or teams. in the this occupancy

Austin Wurschmidt

of share if number skips were a what represents that? you delinquent much or today? you long-term that how the units And vacant But is those to and/or bad debt could then of put just related numbers units put some just you also around occupancy tenants, can to

Alex Jessett

Yes.

a there’s couple So things.

it’s our we is actually our have total The first because out is purchase total moving houses. at you one turnover, is folks look down. if less turnover And actually to

that. of offset the that’s So

see we from we’re at prepared going XX% to next to that, so XX.X%, actually week. about that’s be said occupancy to we’re level. And that upon this continue in Keith going actually his think up we’re pick remarks based by why

to that’s turnover the low. strong And so occupancy maintaining we continue is is have because pretty

about in If basis you historical our probably thinking at – it points. normal the in to is bad And fourth XX debt, to is around be and average bad that’s XXX about times. basis quarter that debt the think XX full we’re points for should of our we year compared going that look

Austin Wurschmidt

helpful. Very you. Thank

Ric Campo

as the July, Alex’s about Austin, roll forward dropped homes, put into actually quarter, X.X%. to just And purchase it at number number Yes. outs point to that for that, were on to digits the a last the but about XX% we single move we

where homes haven’t purchase July. We great you’d were a single the have hit there since outs in we had back to crisis. We on move seen to couple a to single-digit quarters that metric. again go digits And financial of that we in

So for sure. that trend continues

Operator

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

now go ahead. You may

Steve Sakwa

May, new little wondering kind you provide for and the on was signings, Thanks. monthly on of give could just Yes. Good lease more of morning. you us next go to April, just leases four negative trends and if all over quarters? sense on the And kind set I next wondering, ramp color a June with to bit quarters, expect the July. to just trend, the rates in the a new I’m delivery into at I four guess the do say,

Alex Jessett

Yes.

in At the to new our back trend, it’s up obviously time, look we’re the periods, fourth heading be for half next over a leasing seasonalities year, you X.XX%. obviously up the then peak down we And would for into the this you of if told so the second and renewals going of X%, follow point some coming So at into months. leases X.X%, normal quarter. blended couple

November you’re negative, that’s you going negative sequential month-over-month, do rents of terms if In see in and are typically looking what just some typically December, anticipating. we and at

I said, going from November that And as typical seasonal patterns. So decline being a December. that’s October to to just

Steve Sakwa

Thanks.

Operator

St. will Haendel next question come Our from

with Juste Mizuho.

ahead. You go may now

Haendel St. Juste

A here. question. taking for couple thanks the there, Hey

overall what’s core lease and markets? highest lowest where your it amongst is First, the to portfolio and loss

Ric Campo

Yes.

loss followed right sort X% is range. Phoenix, to The to our X% the of the lease Diego highest Inland loss actually Nashville. edge overall which is San to on and of slight is Empire gain be lease. lease a by lease in loss to to would Denver to our in lowest And teetering flat So

Haendel St. Juste

D.C., Atlanta, your where larger does And markets, Houston, most lie? of that

Ric Campo

Yes.

around Houston D.C. call pretty is around it Atlanta it’s X.X%. right around is right mid-Xs. a of high, is actually then So X%. sort right And

Haendel St. Juste

Thanks. Okay.

the expectations ballpark, And a year, imply then does think the lease, half back X.XX% I earning? for you so and plan that what to blended XXXX about mentioned when loss a

Ric Campo

Yes, right X.X%. around

getting of be the year our So XXXX should of RNN. December to X.X% that hit numbers if the for rest we

Haendel St. Juste

you. Thank

Operator

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

ahead. go now may You

John Kim

you’ve isolated Thanks, thought? you guidance year like like you when steeper and expected happy is But from XX in come on the had on wondering birthday, coming it decelerated – and revenue prior. debt everyone. it your A than signed than same-store for better X.X%, June, that if question same-store had in I made your in with your about in guidance the X.X% that lower guidance sounds revenue points deceleration bad basis it leases maintained, looks was than

Alex Jessett

had what I the progressing increase also compared we thought guidance we exactly everything No. we when as quarter. we as that mean, are first anticipated. we did increased as guidance But so right in now progressing we Remember to expected. last is

John Kim

year. Texas taxes, Florida, Okay. anticipated Florida And reduction at Texas that your then, in discussed you of nearly just I the was guidance an you update mentioned Alex, on already already the of that potential you as states, if factored and some into and think

Alex Jessett

Yes.

just So X%. by up is up I’ll market. Florida XX%, us, for is XX%, is it Tampa Florida Orlando we do up South anticipating of are sort and

So to obviously number compares higher Texas, to some of tax our markets be total of in X.X%. which taxes, that we think but terms going our growth is up

John Kim

millage reduction in anticipated in the So are rates Florida? not

Alex Jessett

have do This reductions We rates. some in the total. is millage No.

down if anticipating So down tax about in X% X.X% Tampa, Florida at in X.X% and South rates, we’re millage. in down on Orlando, look I

Ric Campo

by It’s most assessed be to The higher all value. markets. in values continuing are driven

John Kim

Right.

Okay. you. Great. Thank

Ric Campo

Thanks.

Operator

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

You ahead. now may go

Alexander Goldfarb

yes, you. birthday. don’t over happy day guys a although, happy XXth, XX, so And you look Thank

Ric Campo

Very good.

Alexander Goldfarb

questions two here. So

the driving The were focusing Atlanta, like markets portfolio, occupancies almost get maybe that or the that evictions, which first for but this quarter. and on says LA more were question you skips I rate your down is on across guys

up revenues if for hear LA X%. maybe talk on X% or the in beyond bit more you guys Sunbelt, we or a two, broadly, the and and skips rents evictions, good you that color are if up and supply it’s at little all about So just Atlanta can put driving so, pretty then

understand the much evictions seeing portfolio more versus skips pricing a peak the by operationally so color just on the elevated difference we is between season. versus leasing supply just that bit what of the you use impacted how can guys policy in normal you’re maybe So and

Ric Campo

Yes.

a and question skips and then evictions. first, come Let’s with supply we’ll start to the back

and one year, bottom we to it’s operating in a the is big So when the of our – have our be into you going by one submarket? is about done are think to always so impacted we thinking that, game process, that that about take they because do consideration we going in very by impacted supply, to competitors we they’re typically And your need communities – the things to we’ve variable to up that be and markets when lease the their plan for extent a is it have ups are new plan. that much

that. So we sub with of do and just submarket, want but you bottom a if use do RealPage, a level, kind and submarket when you our – of that, start pretty to proxy analysis, own assets for at up you you if good a to it’s define the and we use gathering

So the is got have to lease we a that if be communities in, that in that ups you’ve community first impacted. going going to will submarket that going level that clearly existing be are on that’s

second and age define the filter XX-year And what’s as of the brand old to older, to of different Camden’s new going that’s or new them our is relative not asset we then probably with competing thing and – the be a we a at development. look point you they’re price and use assets development

– if – more asset through it that about, is two a is – understandably or is that you a than sub-market Camden in it that’s Camden is a it focused old. is So but concerned is built on than years supply you asset and affects being and that, less asset a it those take the run everybody in when XX filters,

of of market markets When community. what in is by all Camden’s out all you total is impact the of those about filters, that – XX% through is a the market comes impacting run supply supply two Camden of

markets it’s period. the six in of XX quarter numbers So headline XXX,XXX being apartments scary over delivered Camden’s a

through at about XX% that Camden the from to up it’s supply is is really this When out likely you that category. impact in analysis of look go bottom community, and turns it the the that,

XXXX, numbers reason in market where timeframe, why a XXXX big a sometimes being that of even see, over part got the delivered. the you XX,XXX crazy look you that’s in of see apartments and though kind XXXX – roughly Austin, like XXXX, these So you’ve

for bottom That’s scary any supply, sure. community. really of you when it’s discover But about the up that I Camden’s a analysis, hell that – impacting do that’s XX% even number only you of

think and I handle some able XXXX. we’ve version in expect is likely our to growth with Camden throughout – been And strong So is impacting so and of whatever continue job and these that we that XXXX to markets. communities I migration far – supply end that the

Alexander Goldfarb

skips And it are Atlanta and is Okay. just it’s and is just really well evictions to then right? Or it are markets say that fair as LA, being the other impacted?

Alex Jessett

Yes.

the but are by outliers, will good markets. California a we and thing. our that the other upticks Atlanta clearly seeing some are way I tell So That of in you is

the have of courts All courts opened all up, are the but delayed.

are rental numbers so the And on I as is starting the should better. some contracts abiding thing, side, the court good expect tailing out time, again, not good is which once to acceleration to now, move these flow quite because open obviously, are and folks see through the starting to systems is that get you’re year, and start we by have starting for really as see which things to them quicker much lot said pretty a and you’re off you getting a been some

Alexander Goldfarb

Okay.

know litigation? may Second add question what be released don’t this guys standpoint, that you the also you is Avalon, but RealPage, see class as action from released saw I your you do guys was from guys from can you

Ric Campo

class not comment to call. on going litigation action on Thanks. We’re this

Alexander Goldfarb

Okay. Thank you.

Operator

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

You may now go ahead.

Josh Dennerlein

time. the for thanks guys, Hey Yes.

comment think second growth year. new in lease of question I on clarify, half the to a after wanted Austin’s Just

on but a in things XQ? negative, you think seasonality year-over-year what new month-over-month said lease for basis I might growth turn about

Ric Campo

No.

Josh Dennerlein

You Okay. positive? still assuming

Ric Campo

yes. That is correct,

Josh Dennerlein

Thanks, Perfect. guys. Okay. All right.

Ric Campo

Thanks.

Operator

Our next question will RBC. from come with Brad Heffern

go now may ahead. You

Brad Heffern

occupancy had of driving Have to to a and a pricing uptick little recent strategy that’s wanted into everybody. occupancy morning, Good more. commentary the else there focus you driving shift an it? XX%? the just is more Hey, bit I something Or that’s dig what’s thanks. in to

Ric Campo

we our yes, we earlier, it’s – the saw So I than that should that more to what described be we notice numbers occupancy to period short of absolutely move adjusted markets – level of our maintained of And we several also had pricing June we when is in this through it have we we double beginning spend you occupancy And the sort outs, which impact the in situation elevated. May, sure this of then that when elevated historically. make our and we marketing timeframe. adjusted time where it’s

good we’re that in exception bit the pretty a with maybe California think probably I along is said, news as possibly little Atlanta. maybe in Alex far of the

We’re probably who’ve people with us, of facing an eviction, the of that, in leaving volition. that rid been of paying getting not and living of pretty then process just far along own cohort rent, their

the couple not prior many There’s move them out the for The – years. they’ll been a clock there will in, running just or eventually paying moved is mean, – and up, a finite they either they evicted be that. rent I they’ve number of to of time of gig them. is

et So normal of – another of cetera. kind end grinding quarter notices there’s that now. or backfill things concern the of pre-lease, a It’s able got return terms probably in process group. elevated so of proper to It’s of note right should getting the cadence through at which finite being to an

getting end the to of I we’re think that. So closer

not there just We’re yet.

Brad Heffern

where costs on then a side, has have trended pinpoint about talk and math past than And on couple the it. if construction start can development you new over quarters? the it Got today is better the out Okay.

Ric Campo

gone has has not definitely So but flattened, construction cost down.

are is is in pencil. you really motivated still of stayed XX% costs there’s costs lot probably But at construction and probably. in land land flat look not XX% not a down motivated so decline has land – of sellers that and you’re are very, XX%, very cost And costs, when but – to gone if that with landholders hard terms land a a up

and are sort rental as about rates they system-wide rates of up much think going were. you When occupancy as not

of yields difficult – year So starts time today. last you relative a number very in that number the almost that because just it have And cash lack to new and would is – if in this probably significant fund dynamic, still we on they third. availability the a drop cash development not June – lenders very, that funds of plus seven development show the fundamentally return if you’re penciling can June I on if of make developers the we because think think you it. could Hence a

is as going up But with have, cost. current a especially that It costs environment, as rate dealing just with you’re pencil. the the problem interest it’s construction project big they much the if that’s overall of doesn’t pretty part

construction And seen in the any so relief kind we have not of costs.

see multi-family space, still XXXX. into out lot What even really going should when is really down see – the this the I what’s mean, you continue months. And you XX think And will looking though are don’t now. have a that numbers pretty XX under construction. busy cost to months folks and building they I And may will. you about don’t those you you just interesting the in see to are in start of takes Because have out XXXX, continues way a the is when contractors you interesting be construction that it that a think if think, some future contractors pipeline. really

XXXX, the and get They’re to in they next have be to how competitive compete start job thinking going XXXX. to more tightening about their to and margins have

end reductions some But printing right year next see the the still could are the towards now, pipeline’s year. we So cost of contractors money. full and

Brad Heffern

you. Thank

Operator

from with Jamie Feldman will question Fargo. next Our Wells Instructions] [Operator come

You now may go ahead.

Jamie Feldman

done bit guidance? And to shifting just put you. in Can price? into then talk you know variability impact – potential you you the refinancings – you’re XXXX gears had that your that look what little a do about – or you assume a some the how reasonable thinking during numbers Great. that Can reasonable you expirations, how Maybe what needs? to your right. about to you think I at unsecured get point, do then as a out time All as at line Thank ahead your if balance And quarter. I the it factor credit some the unsecured into just on the on could some can’t talk sheet. you turning about,

Alex Jessett

Absolutely. Yes.

if the that of points XXX that rate debt of we basis So the debt about look north you line rates. prepaid, was at credit our on

guidance it than actually with is to debt, from for So coming and prepayment. we of that associated interest had prepay our expense full numbers anticipated entirely $X.XX lower $X.XX. that $X.XX accretive is the in that increase early was that the our year

I our numbers, of are will XX bond points inside XX tell what we line be basis our of probably that full that any year least credit. borrowing transactions. year we’re would underneath a you we assuming Today do could not at in

we And transaction be to to so this our numbers. year, rates accretive bond hold that do if going improve, assuming sometime a or it’s

Ric Campo

what long-term debt Yes. run be The that short-term to rate numbers that numbers. debt. have interesting would rate transaction variable rate is next you is they’re rate today debt floating actually about and our bond accretive The think any year historically of and than won’t than embedded thing the when our and more this cheaper debt markets capital has our long-term in with we expensive the kind Obviously, change year. In is Fed now debt. doing floating been today doing market

the and [indiscernible] the to strongest all long-term a and EBITDA, ultimately, always optionality you the long-term X.Xx that with expect sheets of been the in to over because future we balance have one fixed have change the sector. having that. But rates, without to debt cheaper in And we people

right to put of our when We market for will an that. some is opportunity the that into earnings accretion take

Jamie Feldman

very That’s on about how great. opportunities make on helpful. the what leverage. I side? just or thinking some capital were acquisition if are then, thoughts? Would find leverage Okay, JVs great mean, point a or increase are you And you really you latest your just to the you interesting

Ric Campo

Well, Xx is have we talked leverage going in to that leverage. our room definitely We’ve and Xx. between our remain always

given year costs XXXX it us the construction given the great acquisitions. something bid a a be of we’d in choose And – so with into that we down XXXX spread if horizon be XXXX, coming and to to really just to the and lean buyers it being we might lot might leverage right have And dry sellers. perhaps on increase ask the opportunities. that there between able the to development, seems before isn’t Today powder for opportunities lean

The joint not comment ventures, will no, ventures. we on do joint

do most way. management’s focus ventures into invest have and of are rather stewards sheet joint to we than zero the dollars think rather And We it to pristine our whose we’re keep land investment our zero simple balance complicates on in complicated our balance fewer sheet. XXX% the with we aren’t REIT and on going balance And our We world. dilute that. it we just that things and shareholders’ of it our transactions going would just complicates sheet and

Jamie Feldman

Okay. That’s very helpful.

Austin? If in you investors this you just don’t me about stabilization squeezing Can more, and potential me in emailed one just Atlanta one mind because question. your of talk occupancy

Ric Campo

to? referring you are What

Jamie Feldman

markets think those seems occupancy you at are versus point portfolio average. what the like can of do stabilize there? Just the two outliers It

Keith Oden

Yes.

So both they from the year. markets which those were where is in are down last mid-XXs, of

portfolio period reasons, ability and time, for real gotten operate and turn number in long considered quickly up where over be around release. units come some efficiencies getting whole we time of our we to a sort – to to that’s For that’s the prepared XX% to of more a primarily of just wanted lot terms estate of the the

issues. got two you So separate

that of You you have have market. coming ton to are units do Austin, in a

my kind wide, see XX,XXX close they broadly apartments delivered. market way guess is our So Austin through going and pressure being of XXXX in you’re to XXXX, as they’re to still in work that

is make XX% world. about the Camden’s earlier to we supply point made relevant I somebody that think is world, would I XX% only I the to of is and relevant else’s obviously mean, but other

to handle my supply under entire guess so The the able I going we’re pressure. – And Camden’s market is pressure. to terms that’s stay But coming. in don’t be think okay of stay under I going being will to

about have case. to Atlanta’s fraud So actually nothing XXXX, supply fewer are widespread. but have They a post-COVID, a was is with came acts bit Atlanta this microcosm do of that COVID, much little XXXX have coming. and But in a and that’s units most obviously. there’s do just bad coming different little been bit They of that of – it pretty

can the go technically though hard gets of those competitors still which the of door until most we into network – it’s our it they countermeasures, fraudsters, evict in non-payment in done it’s in takes once the put through of six for process, react Atlanta. even things it and that to get the it’s to you the And you in environment of months and kind once one done, in, have have we’re seven to in

The reality that so a trying it’s is on of to it’s is, a are There slow. the the crowded. get It’s process, process. through lot people ground

and is was in So of that issues. just Atlanta got we’ve issue apart – a people guess fine. Atlanta we’re any It’s get – its in But our next our from I that separate run competitors the there folks working are supply through got most the over that’s to six there’s well. think be as an apartments months. do will we’ve out. again, My of And to course that’ll four

Ric Campo

give this of a issue. example personal I’ll you

– bank So apartment a the Bank America thousands had through and last in I opened then flowing America Chicago. of it, by of at a or never we’re they they’re competitor Ric apartment tried known. Vice is that to I And My be – the my regional by pretty the information recently And apartment card to just and And way, name to Charlotte? to an in on. in the a And to an a competitor of the card, trying credit bank or because opened account rented I’ve said, I Bank of an at account a up ran immediately I never Charlotte. has credit way, I went on. released sent limit I know lease President apartment rent America a well which lived dollars defaulted happened an Chicago. Campo year I credit defaulted happened in to XXX. really Bank score to that opened

was, isn’t. he And no, the answer

an real And the in and where really six to for Six to my nine should do three in rent go for free personal months cipher stolen credit do that cottage so internet sort or to on live of And it’s report. something months is or of And our has it. interesting, and the for been be identity apartments with how then where apartment credit say, they back and trying competitors fraud months been this my months? a system out it on off people internet industry. for where fraud it’s figure get the you through having how and score the and to unfortunately happening personally was our But my eye-opener. a get all is industry

Jamie Feldman

Well, the it’s that appreciate thank for All me right. you I and letting squeeze last Yes, much color crazy. in question. you very

Ric Campo

Sure.

Operator

next with Our question UBS. come will from Goldsmith Michael

now may go ahead. You

Ami Probandt

supply acquire is develop Probandt. think outlook the it. in the a this thinking in? that avoid selective just by not Or Sunbelt? Ami about Do or the you you chunk sub-markets is supply Hi, future long-term for impacts can in being avoidable I’m and how of portfolio that supply you the large really potential

Ric Campo

it product. we and price we in Keith pointed diversify geographically the through way different product-wise buy Well, portfolio, that our have we out earlier our sub-markets, is do maybe I properties think And buy as points. portfolio

it so in is market. because generally of new the be of you at And have the has top cost development the new structure building be to properties, oftentimes to

just America a big When apartments in and for shortage. have you sale, shortage a think single-family including we in of America, about housing, housing affordable rental not

– And to middle the the market end the don’t top you that that or of to the end development, and it market. work shortage so numbers middle that to with The new bring has the have build be to the numbers market. when be – is to of challenge top at and so

new a And where a to they portfolio to, when costs you their a including going do lower have think People anywhere, middle you they any it to, that properties today major are have like that less where market to has oversupply the unless rents XX%, Sunbelt. development. Camden’s rents of XX% are which the don’t you have that lot what so have don’t not than

market middle in going in properties A not the of are move that You’re properties afford situation or those folks market those are into can’t them. top a properties they just up where to because the the

And long so is – for haul. our so that’s built the portfolio

a have be going not properties of affected. our development, lot from Keith market competition some We our they’re pointed we’re is properties, negatively the end But to our as new to out, top going which are of of that and – have have do middle properties.

XX problem, And markets operated down and and the supply years oversupply in to for a undersupply. so well, that the up continued – is Sunbelt in always we’ve Sunbelt and we’ve well and idea do and

to XXXX And people really And all rent what? XXXX. good today The good we’ve really supply’s start months. building. the going in supply, are going the situation And And and of significant you’re stop a once that news in going we next the to be market towards is we’re over efficient. in a end seeing do think you the going when guess and overshoots markets. have starts seen is say, People to declines in be of then market where growth XX again in our Sunbelt it to after

that’s to Sunbelt in but build, they on of making you people rate builds reasonable your that’s when not and because a is the just it’s they can’t, That’s stop. you supply, because growth Sunbelt return the is. end investment. make where the migration build to need So a on we moving the in is, a job the return And where done folks that build the great reason where their are job have the investment,

back then very go didn’t to we’ve And And overshoot so we’re that where soon. building the see coming the on we’ll going happen. cycle stop to

is that the in we business. bottom last this just happened long-term – good news has over that’s multiple XXXX they’ll really some XXXX, is, will a times cycle then to rise will And is cycle. probably will rents is, normal the than down in normal line XX the cycle. will in over years. rise the So And with continue do well a and catch faster rents little, And result of and as that the in occupancies – go supply and XXXX XXXX last up but occupancies

Ami Probandt

Okay. And then one. just a quick

the yields you start what a development project that If today, you be would were target? to would

Ric Campo

flows pipeline to have we’re like development roughly with have an we X% starting X.XX% something IRR of the X%, and a that’s sort today all So cash projects X.X% that.

Ami Probandt

you. Thank Okay.

Operator

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

Ric Campo

on call conference fall years. appreciate and over the soon. supporting being forward start to season now the you We we’ll for look Thank see the XX you. you We’ll Camden of today and

Operator

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

You may not disconnect.

Camden Property Trust (CPT) 4 Aug 232023 Q2 Earnings call transcript