Camden Property Trust (CPT) 27 Oct 232023 Q3 Earnings call transcript

Company Profile

Participants

Kimberly Callahan	executive
Richard Campo	executive
D. Keith Oden	executive
Alexander Jessett	executive
Michael Goldsmith	analyst
Brad Heffern	analyst
Haendel St. Juste	analyst
Austin Wurschmidt	analyst
Eric Wolfe	analyst
Joshua Dennerlein	analyst
Steve Sakwa	analyst
John Kim	analyst
Connor Mitchell	analyst
Wesley Golladay	analyst

Call transcript

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Operator

Good day, and welcome to the Camden Property Trust Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Kim Callahan, Senior Vice President of Investor Relations. Please go ahead.

Kimberly Callahan

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

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

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

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

call other will our calls our are as We which time, discuss. time and As you items this of today, questions we'd measures, call to unable or everyone's camdenliving.com, at your website X rejoin reconciliations call multifamily by additional X limit At with would third in after XXXX the later the quarter phone be companies non-GAAP everyone to like to queue within hour Camden's it initial queue financial the have Rick a and on complete respect reminder, Investors if discussed we over earnings then Campo. release to I'll concludes. happy to the turn section Complete hosting speak this to today. respond there e-mail to to are in question available includes be additional If is the call. Please

Richard Campo

good Kim, Thanks, and morning.

music and an Jimmy of honor was Our on-hold memory Buffett. of

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hand, hurricane is the other blowing the the markets On hard. capital in

advice of this As his a you Jimmy's breathe for turmoil, to we encouraging song. hurricane make is to breath And If what leave nod result songs we a doesn't you strong. he in, dead, your just it, do. are New of Hurricane the on, which from Katrina. head, our from of is devastation try exactly move it the the plan to out, will after teams explain that wrote Don't X heed Orleans

pay Our are they still and multifamily back back normal say don't, more where business the year year has that We've not more behavior to in through we're business. because cycles. by we out. coming of reopening XXXX strong. getting move their I driven best they has to normal many different they the been ever is actually had, been been high. a we a customer normal if This off consumer rent COVID cycle

was We levels. that it and year identity breaks. and lease stronger have skips pre-COVID than had started We planned a for happen. normal fourth and elevated this due is didn't high to earlier cancellations fraud, quarter, but Seasonality more theft but back,

overall, taking a we our year, revenue share the fourth X%. of have good opportunities for would revised together. we full normal weaker challenges summer. expected in bad however, quarter lease for growth reflect year result, the guidance and and In new Fundamentals our higher to a than growth, growth occupancy As lower debts even the business are we

the households The is ownership share of the the to at living market, to to demographics The today that apartment propensity of to for of share nearly The continues. continues -- continue to side, grow alone record rent, be reach to have they XX-year-olds buying markets U.S. high of XX- home at few This given our supportive to XX-year job -- growing demand. to buy-to-rent and or The XXXX. in-migration of XX% is business high the of for consumer long-term XX trend robust should share apartments a the premium out share through years. XX-year-old of On the a demand is with U.S. remains housing many increase people. least share apartment of growth home. stable. U.S. highs over next The cost are

up big XXXX, absorption drivers of at but to shout time. supply lives should teammates, begun customers Advisors will XXX,XXX project be starts Witten X the elevated our through units reduce our Completions I for peaked side, Team an our give hurricane demand of and want XXXX. improving On XXXX August to the capital and out starts a lease our above stakeholders, starts the in units and thanks the XXX,XXX and to markets a just have in end markets. Oden to Annualized next. starts. new fell XX%. experience has fall orderly allow Keith in Camden will is for

D. Keith Oden

averaged in more in a Rick. continue of fourth third were revenue XXXX our slower XX positive should Overall, XX.X% September maintaining the in given quarter line and positive for occupancy focus October raising is all the defensive on we first both slightly quarters. rental moderate rates. occupancy and are the on season versus quarter also our as XX.X% currently operating of a over trending Rents the Year-over-year, entering markets was strategy at year-to-date results re-leasing to and to moderating markets. growth ending in with expectations. year. our XX and our XX.X% remainder shifted basis our third of for at the sequential quarter same-property Thanks, Occupancy

in where move-outs X.X% rate supply, net for basis trend the effective and the high And levels X.X% renewals -- our expected the impacted were Move-outs the of in currently now October years. and is end our bit Effective the communities will long-term down new further communities Effective seeing for a the retention for renewal of but XXX for Supply should deliveries homes past move due rates on-site and a up new points for for level historical new several quarter. During many further average ] during are vast our our expected, for markets factor averages. year. accounted for October as around of and and to X.X% seen those just growth for quarter. by lease the Camden is leases, bit down XX are near we between to rates was breaks, to our quarter, X.X% negative compared of is being not. lease X.X% resident by a rate growth. basis blended were in next majority full we've is growth new last are third remain XX% due October growth Camden's located points year blended at the exceed levels but our positive submarkets X% date quarters. elevated to quarter for and competition of teams. remained which of XX% lowest fourth the Gross XXX skips for purchased rates turnover turnover higher over Effective over the [ to total to third lease X.X%.

now fall, level to new which bodes Chief Officer. We some the as starts it has turn for Alex are future Financial begun 'XX. in to the seeing I'll the Jessett, of encouraging supply over environment news and regarding well Camden's 'XX

Alexander Jessett

Thanks, Keith.

line of quarterly guidance. the our reported For third FFO of with midpoint the core prior we per share, quarter, $X.XX in

resulted net rise expectations, revenue lower-than-anticipated debt. bad primarily offset expenses. which we of The $X.XXX lower-than-anticipated our quarter, lower met Although results from by unexpected an the of for in was $X.XXX entirely experienced revenue

Our resulted property almost from lower lower-than-anticipated in operating taxes expenses Texas. entirely

previously XX% tax legislature would district are tax rate is by excluding an taxes. -- reduction had We increases we increases, this equates approximately assumed tax $XXX other Upon tax subject in X increases. state school offset anticipated be rates Texas November. value. Therefore, voter approval, assessed in value markets previously tax rate. per in and rates X% of to district by or Bill will independent valuation bill As in our reduce $X.XXX these Texas assessed total tax Texas district the independent Texas rollbacks approximate the discussed, reform approval other of rate passed school X.X% to school reduction which independent rate partially Average the Senate likely, believe Texas of Texas

per $X.XXX savings prior the total the from However, savings the as these property in occurred. X.X% compared third of for total of a this increases to will now We recognized $X.XXX have taxes prior quarter. X.X% our by increase and our fourth be expect other quarter, of expectations to not guidance. $X.XX occurred remaining in share

to are believe third bad quarter fees same-store quarter, another debt happening are points we in This behavior higher third September. in basis point fourth basis the bad for back on conjunction points basis in And to quarter basis fourth both bad primarily was had basis debt equates $X.XXX fourth the quarter, the revenue. XXXX. for year. quarter experienced and additional bad revenues, the would now with for residents. to third equates increase share. also the the increase total consumer with per in and in is points other quarter. points basis the XX driven point Turning $X.XXX XXX be primarily for higher share increase higher fees, we or full the In Instead, and to of the bad We third XXX and anticipating tied quarter, not approximately We XX the XXX debt the $X.XXX on year for XX bad anticipating financial of we fourth our for same and the basis rental bad debt in debt stress increase $X.XX per debt basis the and this for administrative of debt for points per share quarter expected points XXX full XX approximately

XX.X% Our average actually with We back of the the September. had called third lower of prior in and year. for higher-than-anticipated offset fourth occupancy in quarters, XX.X% guidance same-store July half by in both consistent entirely occupancy throughout occupancy August levels occupancy and the fairly

In and been will now we higher-than-anticipated approximately of occupancy fourth skips this quarter and has average $X.XX is has returned. adjustment evictions unpredictable believe that seasonality, basis prior the XX.X% historic point pandemic since impact estimates in share. combination from the per the with anticipate We which XX

in X.XX% in new in renewals leases more increase back X.X% result and of in lowered September. a a average X% blend of We for decline had approximately increase than anticipated rents we occupancy, a of the in As asking expected a average half year. the the

effective rates higher at blended for this were third the X.X% than Our quarter.

caused occupancy lower rates, quarter signed However, our is a which following reduction through in guidance. fourth

now greater-than-anticipated of debt in the resulting fourth anticipating in impact a approximately increase fourth of leases occupancy same-store fourth per a of which negative cumulative for and and a decline is $X.XXX We average the share, negative fourth X.X% per X% The lower blend quarter are quarter. new share $X.XXX quarter. X.X%, of renewals $X.XX fourth quarter and of the third approximately quarter approximately for shares bad and rents in per

As year same-store beginning to at original of our X.XX% of line the from full this year. effectively a X%, decreased midpoint result, guidance in the have our guidance we revenue with midpoint revenue

expenses. to Turning

taxes had in we $X.XXX third favorability of mentioned, in primarily previously the As quarter.

associated taxes also skips $X.XXX tax maintenance quarter occupancy. to and share and favorability per repair This are lower and fourth and is in evictions partially of $X.XX higher be quarter. with $X.XXX favorability anticipated by the of in expenses fourth offset We higher marketing anticipating of

have guidance a As a net of we $X.XX same-store to result, year adjusted per our X.X% full from X.XX% midpoint share. the or expense

reduced $X.XX property year new share. X.X%. and in share same-store per increase per full $X.XX lower X% share same-store occupancy we from been offset midpoint the the same-store per midpoint to XXXX primarily resulting debt, taxes. by $X.XX has $X.XXX per to the same-store rents, in partially $X.XXX $X.XX by guidance the core in decline previously FFO from night, the Last lower Our bad also from of in a mentioned full NOI share decline share resulting lowered expenses resulted share year per decrease per share of our This per midpoint $X.XX

$X.XX addition in share per decline also NOI we for in additional anticipating NOI, same-store In this to non-same-store $X.XX reasons. an net are lower similar

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

from $X.XX by We XX occupancy represents This XX $X.XX. result core the the $X.XXX in basis fourth points share in expect share typical same-store $X.XX NOI, the of third approximately within per of be quarter primarily declines. a FFO higher the seasonal in per lower for offset recorded points driven bad by to lower from resulting decline of quarter. midpoint basis $X.XX $X.XX The range is of the to decreased from revenue resulting expenses debt, $X.XXX lower of $X.XX and partially property in

with had spend call next Our And the to our $XXX strong balance quarter time, remains this At will we at for net pipeline. EBITDA under debt the open sheet X.Xx. development end, over existing at questions. X quarter left third years million the to up to we

Operator

Our Michael with Goldsmith UBS. Instructions] question from first comes [Operator

Michael Goldsmith

directly properties How side? compete And point? you notable submarket any or products are And new there months? about on you due supply either thought alongside last are impact merchantable previously X concessions trended then this, with would the to on the consumer the price supply over that other drivers seeing

Richard Campo

and Let part. do Keith first last the let me take part, I'll the

merchant that months from builder to one the don't an joke want a on free. get there's merchant old last to be So perspective, the builder in the the X you street world

the X a in the free example, builder no like you're market market so for the in, that. months There's there's -- merchant like in with depending the product. And about market question if on you're Nashville,

and have -- #X other supply maybe are Austin, now in. that -- America Nashville the Nashville markets don't the was supply In new coming right X% markets, though, and with in Texas

you like at come incent at in. And other definitely you going but builder to going if like seeing to for there. look so you kind that. are there's month, most merchant when And maybe something any in look Charlotte, have people discounts -- free of builders markets example, And or free are X-weeks peak concessions a merchant are market to rent to or then

the of I And happening part pretty think that is normally. so equation

more that the the concentration free a markets X-month that going have so to be And are higher are number. to to -- closer going have

-- the then -- this behavior sure. minute, consumer portfolio supply at quarter, our And about huge in But rather not post-COVID our consumer consumer the return isn't of because optimistic than looked maybe And like we will -- that. thing that, issue that normal were think of terms us behavior. just behavior, too and talk we changing more that when a describe we this fourth new by surprised The it's on let it we consumer would the supply to maybe way -- of a about sooner affected nature was has. what Keith the what for and just by behavior behavior me is I it's in mean

about they somebody talking rent. paying moves apartment and I'm an So the into aren't when

that that or example, Today, you if before X Atlanta, consumers in for apartment you know your to can actually for you're months X leave. have stay in

I and for long you what and and as can they know need an do. you as so go online in do give I live to And apartment you behavior, that consumer just say, that, free can and how they'll

if Atlanta, look example, points. for XX normally, they're And at -- basis debts like be our that Atlanta you bad X%. would so And

system, So understand that -- the have move. to part able they them we should they pay consumer definitely they of convince they they and pay, and haven't if has don't behavior been that -- to the ought

of terms people every tighter will change And think that because what's is the in is getting market out. move to so happening I ability

to over they're X the now are X months. Governments and or backlog next starting and get better

you'll portfolio address on don't a that normal you and... situation Keith, the issue to go I supplying think perspective. from our more back why

D. Keith Oden

Yes.

And want communities give how no, to to but we detail how how it then the is bit properly anticipate the of quantify we've little look around you the that. think that and that answer more color short and sure do we we I asked was, question I pool supply a make shifted. at is the impacted Michael and challenge

into of likely that those stratify in and we by not. elevated So lease-ups times those are to because supply new be are so to do it's really our portfolio impacted markets that important

age existing the we be so And second then new lease-ups. price if one. going our is the And point that's actually the proxy not a is affected years. where that. the useful to as for XX have a filter at in look at scientific, for And been that And It's by completely it assets, is submarket years to we that way. is but it's we proxy cut use make over filter the it

that XX% So are portfolio supply of units apartment when Camden's challenge. in stratify that a you way, markets about Canada's have total

impact have supply interesting the is, it's -- is beginning of year, things because new the is most the Now of under forecast the supply we or thing at of the either new reliable probably from that is one all construction not. community that the to

the be started, be the a You may to it's or there once supply it something But with. gets have X. going delivery miss it's time going and by to deal to quarter to going you're

about think supply, believe communities you that way, by it impacted this are quarter rate of of XX% lower second non-impacted the by XX% in if lease we XXX points. than a new basis the had for being So year, that our communities the that impacted communities directly

and But happening. it's of where meaningful, So supply and matters those it it's matters, important XX% directly it's more our it's but portfolio. to communities only yes,

elevated bigger you know third that the -- I be. third there's And forward the to still progression our supply going just a the in is lot there's impact part of what's supply roll that is what quarter, the if quarter. and from second think view anxiety and a to a of coming So I challenge results probably of about a and

impacted basis community, is that to of XX% If the you impacted so moved third XXX roll to points. basis number differential between the forward non-impacted XXX points -- those quarter, and same numbers instead

only communities its XX of XX% leases. it's new our basis on points in So

that about that So math to is the was attributable And the -- if gave you you kind the XX that on if directly think points the to stats challenge debts, impact number and XQ or alone of compare delinquency points. XQ XX of that to roll Alex you basis quarter. of line, was bottom that that in what we to bad that basis roll do supply the down the increased

dealing their it's lot that consideration yes, our run to it pricing supply It's team at almost and a in to for attention has for our now. the and rate. been the decisions. something X yes, deal something that matters, with. We've through in for But they're with because just operations portfolio, of months pay into least to sure, take to it's that's have mean, we we're going to making So it's going of -- I when continue XXXX end

Operator

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

Brad Heffern

Camden that Do this basis? near-term a you high And change supply have concessions? negatively you time offering impacted chance think you there being in on of policy policy least at that is of any might not because the

D. Keith Oden

Yes. -- our the do are to just way We're and lease-ups what the by much of YieldStar be expected consumers kind and works. we the on we is. it's because consumer. -- the rent not that's that's our that find new offer But traditional concessions And transparent, telling algorithm

month bad just makes in, bit we've it business. a puts of -- on pay have forever free can't your managing the going -- little see prorating -- actor in confusing I the to me, to that also And no pressure it lease it's So month rent, It's expectation it's and term. the that move us over the rent" then it this to we had of intention balance -- "a consumers. back more

our just lease-ups do any the we'll but communities. it's forma, we we -- pro it what on established think new into our that's part to about cake of not when continue development So on baked because

Brad Heffern

seen about curious that or evolved? we've then year a And it. not at there's we next Got won't have it thinking guys XXXX, how asking guidance what recently? growth I'm Do you point? like thoughts that, chance are market on based anything see you your Okay. Or rent for on thinking that think how this but about

Richard Campo

use And falls pretty development you -- off due at it's Witten when interesting we and continued absorbing in a starts lot. you estate. look real because Advisors Witten Ron and that release dramatically, Well, XXXX information start

looks homeownership environment. of dismal people like out -- XX%. homes buying And going have people -- countervailing to buy down at terms current the You pretty to at the for in next factors homes relative prospect down rate moving year

And of you a for you -- close -- where cross job because alone, don't apartments. percentage have for the as and so that buy of have number more -- of that go people have homes, in do live people living demand fewer to you when you people are houses. that don't They're out that people growth have much currents and to get I've in demand need are create moving of you to quoted the alone the X/X you out adults U.S. buy they apartments

a higher apartments, rent so And becomes propensity and that older as well. to demographic system the that stabilizes

some So occupancy Ron of have in modest going stay levels that markets. then going growth are to thinks now to and have rent where kind you're they you're that

And construct that there's so growth there growth going occupancy year? think had is X% sort XXXX. in 'XX? The and -- definitely the no. I the rent a a Yes. some But have XXXX slower would -- record is in argue probably we're a same you of is that think in -- is answer to it or we are a in have reasonable model But that rent should I

Operator

St. question comes Haendel Next from

with Juste Mizuho.

Haendel St. Juste

continue year-end, bit probably going down higher mid-next into the about seasonally more occupancy I here, decision slower supply. it even let expected demand, ] maybe ticked bit I'll October? up expect a sounds a heading have talk And back like to into would year. that now trend to certainly occupancy you to [ in

might back and hindsight is able the in tactical falling occupancy get when curious and been a might perhaps I'm in misstep we most if the portfolio have to So XX%? where to that be

Richard Campo

buy out we could lowering dramatically. by rents wanted Well, XX% remember, occupancy be mean at and go we I and occupancy, -- right? rent to occupancy correlated, if are by XX%

better just think fit. a so And it's we

in on where higher we revenue set would XXXX. this we But an and doing up a the I and to we reasonable where doing, feel have seasonality our for environment we think with occupancy. ongoing Our going settings we're with debate they're where we higher are. we comfortable feel to really are, and with team, with what And we rent basis. consumer comfortable start ought rather to have

D. Keith Oden

Haendel, we So the The on to kind XX.X% idea of going just go a conscious of that up our into half And that that, was follow let clearly, decision. at wasn't occupancy because that. implies a XX.X% that was for year back occupancy the October. guidance

the and I about and think delinquency beginning of level -- the lease XXXX. to elevated normal want way a our of So and of expectation it expectation in the did our -- and of by points basis ratably lease over course year, long on X skips kind would we of talked was of but talked little getting Alex happen connect you around bit, kind first but go end quarters. getting to that and to and would XX felt continued had the progress breaks we we delinquency also there of an And towards the the delinquency, if certainly at that We really year metrics the felt a like back of the break. dots planned good we make skips about what XXXX

of reversed. points at sudden, the again XX. glide there of get you're of a -- of all to a on instead to at basis get all And instead end the of path in Well, sudden, third and glide We quarter, what? dropping to a path XXX were that a metric guess

flows But that and they're completely our yes, a, they're skip means, facing have really judicial is by that idea people termination out. Obviously, category So then move the was these a, the in But of anticipate, lease And or to lease and moves -- you take when they lease real short-term which and anything in mean -- anticipate And of you same typically don't or way they're then skips if move they're that in is that I probably have going are and the asset. out portfolio unexpected. was pre-lease no who's in the the way terminations. breaks win who skips of night night, going before to to hard to their apartment; -- there's to to date. eventually out is, middle -- do, move good challenge of that care the the it. chance the of do a the the typically b, when out somebody breaks don't lease no middle through

unit got fewer short-term more. an is and didn't. category of it the turn we So been of the we lease apartment do only you shorter takes more get bit in just And noticed, you not that maybe used break We that turn to -- elongated. to not are longer harshly it's and in a because thought so we probably little getting a those, days -- would be

reason it those factors. the wasn't a of happens it it of just be the result but great -- And seasonality. Certainly on so into occupancy, that's it biggest anything as wouldn't we why our thought get challenge compounded to XXs

Haendel St. Juste

Got lease process earn-in the for mentioned highest you thinking give us last it. and involved appreciate full lowest? with I the an update Maybe on and year X.X%. was where here. Certainly is And the the is where the thought quarter, and think complexity you around understand overall portfolio can today loss 'XX

to bit. were seen the a in of haven't come you budget [indiscernible] hit for numbers If year, rest your

update you for that year earning can So on an where us perhaps is? next feel give you

Alexander Jessett

Yes, absolutely.

to lease just us X% and loss under for So our is we're growth. actually embedded showing

the XXXX. should embedded around growth quarter, fourth our for make our be we for Assuming re-forecast X.X% right

D. Keith Oden

Yes.

the have which quarter knew the in It's where we markets. you going have most to our do fourth supply-impacted a the challenge, occupancy. the on we markets on challenge in So challenge were that with maintaining

X it's continued Austin, we supply big anticipate be it's anticipate. and which elevated breaks, of a it's would lease did of did in compounding kind terms the of kind not So of Atlanta, those then Charlotte, both that we

Operator

from Our Austin Capital next question Wurschmidt comes KeyBanc Markets. with

Austin Wurschmidt

rate XX% occupancy fallen what impact the as cetera? get some evictions, could clearly, occupancy that guess, only that new as of given lease and from well. into actually dramatically, and change impacted reaccelerate I times has it both lease of couple is that growth being a and XXXX, around items occupancy that communities referenced et highlighted XQ view? rate growth the rate bad And But as dropped guess that I seasonality, guys by skips see we your belief and has You new of supply. just are you would growth is

Richard Campo

really right? than January has the we've in XXXX we came a are actually it on think spending, similar very pretty came seasonal think slowdown the I of think you in are the to this is fair number it so last of in and the that have quarter robust amount economy we've plausible the XXXX, strength people than at continue and strong happens out. them growth robust have bought out overall, depends very to the look PCE I and then consumer consumer I more the economy pandemic, is that -- I March, today up in issue savings since the have and seasonality had what we where a the a was you and start and just wages pattern start spending we rising. April, know very the then February, more with typical, you that like in of had which still year moving mean, will had And far, be job have first you would where October, pattern, similar expect in you September, if

levels and reasonable consumer a that pickup pandemic. before in the like construct year for continues pretty have we occupancy a resilient you leasing every should had to assuming so And and be you XXXX, have the have

D. Keith Oden

talked and But had that going say So be the debts we're evictions. in that perspective, the our would of market. XXX the XXXX. impacted we've and stratify X Camden's things XXXX assets -- similar quarter so, have X to run second third that if supply, in X and impacted I in and that's it's almost a supply, our not groupings around between to in between I or of mean challenge bad already of you impacted. differential have you -- are we've is number that just Austin, non-impacted, now in in deliveries we and from the to environment same The portfolio somewhere what the highlighted our and or was about skips points about there's basis year going is for On coming lived rate. those months if and

that are going in impacted ones be The to continue XXXX. are now to impacted probably

there the as through good in -- So operator, XXXX. of that's our to probably from stay least I run going news think the rate, is at an standpoint --

that reason there's a they -- bad elevated behavior during In the and as all construct as that be to debts be But COVID. are continue regulatory now we no or fourth bad and expectation I to of the very the terms debts expect quarter. that expected kind right me would in as the to to COVID result still of cleansing evictions. we clear bad this came of a mean have and skips of is process a that

in obviously that think debt continuing basis they And and to I that thought still that mean, process years. one and a stays same up probably that's if of peaks in being I -- Maybe progress. to wrapped bad prior we're XX and really again, probably behavior. of basis to it probably we by But then was it the but The a happen [indiscernible] expectation path little double do pre-COVID going all see bad the a prior is bad bit this portfolio XX glide a this year We unwinding a making was, some actors of in start XXXX. I COVID in have of I then not. from last -- we're what a in behavior to bad evictions talked process what habits of would or on XXX we we're points we throughout that to X.X are our We've go lot have it of year XX and lot it double to bad and a of averaged every over level on the it at gets XXXX. think I get can't XX evictions. that renters, were years XXXX, but points in some sudden some more the COVID a think elevated a the our portfolio forever. just And and lot COVID. you back end skips Skips

in we've X think [ that that to our will But those in But XXXX. captured that the in I So in ] of be XXXX. work way their rate. out already, run most challenge I going supply less think is

Operator

question Eric with comes Citi. next from Our Wolfe

Eric Wolfe

to up of changed last sort guess this like it's you embedded external look kind thing. sort up wanted ways I of to the that it perspective your pretty of follow to of just process understand I seems sort in of certainly or point, of sort we're get people's sort I'm and on to and it's out to just at bad now can a [indiscernible] What debt whether point trying mentality. internal, of down from leases one get answer.

an anything can on some basis maybe And evictions that bring basis points would or factor think that for noise find down come given mean, you're thinking and something, just what to year, common that is at? skips will or you warning now? estimate you're you're perspective, I seeing XXX debt next from the this -- as there's would like points for bad with how signs like Just that all guidance So you XXX recent internal you understand a the there an for trying what them? with guess about you up I do running

Richard Campo

ahead, Go Keith. Yes,

D. Keith Oden

Yes.

should things. do not getting what everything will apartments process are rent, we our accelerate forward who making move We in paying we debts. it One, is year we -- be will well, that of no So like and folks as it optimistic looks this that no, that face challenge. than were paying certainly But sure been a in solve X bad are of have possible terms there's that and out. and it to more question, to the

good able forward paying from the Those not Now our get being news your prohibition rent. lapsed. judicial is someone the to that regulatory all have of markets apartment in on move that's perspective, to a submarkets, out one virtually and of every

municipalities -- a there's just huge So is are with what they're backlog, who we're overwhelmed. left

example, kind of whole getting have players the through their of Some better County much the those in the the things even just the D.C. as done the they Atlanta But lot improved, haven't other moving cities have worst in most and cities. process. job act a as together in of others up for and worst than that even the -- have, area, of improved even Montgomery

happen. still just too So in the and on -- doing get actors places, you're part of it's we pathway And like historically. for it's it's to possible, bad long that. for it It's just is pushing out it to taking focus get municipalities some string got that taking longer than -- did to there's on way trying but like this. to everything still we're something when And a a

I We're -- who things itself think and and fraudsters the -- that some highest evictions, skips of out. done incidence have of the ultimately, think internally. are So that, yes, where people have we have we I will then old And kind it work and income verification, days the things every back making we system for dark And we on and frictionless we -- to the in interest purely customers. instituted in actors. went online like lease. did our ages, the of which bad We've a we

are these to good and of actors, introduce a in then and versus people, between verification in burden bunch catch to X your some them actors a We're more letting also these bad to but balancing that deter Atlanta. having to get to actors. get community friction done with to We've through of have impediments and there's going putting process -- go obviously, which the off into But probably back to submarkets some move income be get bad municipalities will act in the we're will and go and business X submarkets. do to good Well, a it other on. other more testing months things that

but good complex calculus, folks it's yes, doing are at So forecasting. our really

cross think X.X% ops that with original team's I things have remarkable which But when quite is ops I this, revenue Rick think expect will of the all we we the to guidance that our started if said that year, one we with second given is in a fully Street, that our shared in the of we on when based the personally off said delivered little NOI points that currents year. remarkable. we execution XX do, be better same-store quarter. numbers, it's first assumption because would for think getting $X.X things our original and again And make on number. pretty that, quarter the and thought a the the quarter it of was our Then the goes that's I were X% guidance increased the we said and guidance basis billion then done, looked entire in guidance. total we That's up growth. forecasting original and fourth and like that all making team That revenues our

Eric Wolfe

this Because at did are that -- sort it's August and what's driving whether good some to this understand or figure the and right? it makes what's there's or it out agree. of September, to things in guess sense. No, moment, shift people tone the trying it concerning Yes. then I shift And I maybe and maybe up happened shift like kind seem pretty people did trying until in of consumer. supply

to how got going But XX% impact your we those then trying to by properties are in then And guess that's XXXX. directly along that impacted so just of supply. understand I lines,

Just will number supply have next of a you view if sort year? throughout peak that year next that of then the when impact down? curious of how will look goes And as sort

D. Keith Oden

Yes.

little the tick tend under is some. -- went merchant XX% 'XX so a of places if the bit I my may would herd So honestly, is number but and that's [ in same It animals construction surprised next coming lot that -- now. as builders It's move stuff or just be matter so impacted a going very right be be and building XXXX. where up in the to to guess a of submarkets ] because, is the above same they product it year, will communities that, of

the bit. run our But most think analysis we're the XXXX level, property -- again, of little up year a for I year. rate this it's based a tick So that probably it pretty had that that detailed the -- we what internally probably on may in is and is done think I we in to we've it at think similar

Operator

from comes of Bank question next Joshua Dennerlein Our America. with

Joshua Dennerlein

the in I a Or with XXXX? deal seeing heard I like I the Just like end kind is XXXX? general to was lease just new the just earlier in softness it that have of through think explore XXXX. on the trying implying of to through we're think Was thought like that wanted rate I comment, through you'll about to supply, -- from what we of be could like supply? will it just a continue comment growth end you

Richard Campo

Keith's It's on But about and and the that supply our out the Yes. XX% portfolio. numbers of on balance point through to XX% by is comment of a between the supply. impacted there general those those the portfolio differential

portfolio. that to more supply the XXXX. it's through have But to going we're of so limited And again, piece

is and -- of thought on right? have them more combination circular are equation. you you didn't hand, have for one of the Is everything, the well, you a it you softness or portfolio. than all bad have backfill then equation, behavior because breaking a when that, And it happening debt earlier it's if the consumer have part skipping all is all side Is an you their sort if Now the leases, folks. it you a backfill of there's when it? Consumer part of what's And quarter? probably supply? have to biggest you issue is the Supply people the them. move-outs in Is the discussion it's didn't -- what it you'd is have about, sort and to equation because those then you backfill of fourth the is Is behavior? the of when

actors X XXXX. debts bad and be breaks will supply the are and that because better. that much all the things are bad and headwind hopefully, happening things implementing have a trying that really are So in from of portfolio we're headwind skips and for it's won't part out to as getting And keep of a municipalities different we the

are example, many a getting like, And to There there to markets are few market mentioned, look just as backlog backlog, barriers are but as the And in out. is -- there country, people every that in if for you is improve. a starting just are except X Keith are off, not backlogged. California, X.X%, and the are that are And the still In X X.X%. X.X% kind bad are taken been but bad [indiscernible] have debts now X%, the debts having trouble California of and or Atlanta. out moratoriums

that that then the close and And now so edge, of certain to when the with middle they longer they skip will there's of that them backlogs can way they you do. in, when know what's get night. will in the to stay those no they then sort other administrative for happen folks is -- what stay happening -- And understand is they fix. that And they

which, I skips good they breaks think who on the one them because haven't really our getting been people XX% thing is property and owe because paying. a of money hand, we're us out lease of are

creates creates and bad more other the vacancy it On debt. it hand, more

because seasonality, to things. needed slower right, apartments a of more to all you the So time, that at we that's equation fill of that part and at of -- effect have say, those of look and circular the

properties, debts our estate having be even year, in getting but So next down. a more supply, real of back I on headwind faster go should we'll with new and that think clarity still bad as our that have getting some we

Joshua Dennerlein

floating as Okay. are we guys to you with you I touched don't rate just guys just if any the going then for debt at this exposure point something there's or it it? keep is yet, want but plans on And think to do it

Richard Campo

situation been about cheaper over a you of rate we're time, a Today, yield and debt. period curve. when with if very debt debt So flat unusual think you floating rate think floating long always a has in long-term than

day, debt. low though the the even But very, we in because the going very it's so portfolio of a bottom at line bit is up. have long-term of our little rates end steepening And

manageable. So But looks high. have debt, when low you very it's look at it as a we it because percentage debt, of total

costs our term it's rate line at our already this so and run of credit with loan And point. in our

steepen just come doesn't either we to of years what ultimately, now, in yield short need the sense market. curve about the bond rates bonds right will to next And rate volatility worry too much will think don't I it so down. the on going long-term a betting of lot I the And make over and floating think be to given is couple because me be to debt

and look level we dropping, through the and run when FFO a because I will comfortable sort as interest lower the down thing we're at The rates extent today be in having then see today it that start rates start with So to because to at of move fix curve flow would the whole the worst over years. certain these couple world in gas rates yield of to next our we'll the current tank have cost. long-term

Operator

Our next question with comes ISI. from Steve Sakwa Evercore

Steve Sakwa

with capital probably deployment right the really one on is Just list question. now. high I know not

we've I north rate. implied a cap trading think of got X.X% probably stock the

a how institutional know that guess up there's a you I So looking market? I disposition are about marrying high-quality for apartments. repurchases if thinking there lot of capital and is share maybe

bit So the sort buying company on stock? and a thoughts shrinking of any back

Richard Campo

XX% And to maybe the times the at the was been had where we've We've has time have able and buy. and but in really opportunity, we needed where it been we to to didn't to a this the fund XX%, the -- needed we is be had to Well, discount stock sell appetite and be to assets timing what we past, NAV we've thought had of described consistent past our in And have sort in assets how persistency. that we it. have buyback to persistent. least sell

about, when companies long-term again. at returns one come supply today, an what through We rate asset this should of And multifamily think see year, for get of you that a -- this at a model cliff get X once back look look And of for pretty apartments when we you cap and everybody is you reasonable you -- a will capital worried uncertainty do the implied if $XX deployment have about to sold small million. hard X.X%.

But market think makes slow. the it do there acquisition that there's for or down flip XX% do a deals We Yes, about that. So XX% it side you think interesting sense us of to when year. that, have means from the dispositions which prior XX%, sounds It's really it's to done. getting I -- that is market. is the disposition XX%,

will. so And down for long the do was when we stock period us, if it, the probably the time. of we aggressive stock we opportunity buyers substantially were for And a to of have

Operator

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

John Kim

that for wanted my Alex, at lease clarify minus when two or that at X%. lost I'm just wanted operating one you're XX%? expecting question items sustainable positive below think Rick X.X%, have to mentioned And I at especially lease clarify how then that no for XX% still I on wondering time new rates response just being, to and at in occupancy, around you're growth I above X%. is, get you Haendel's Keith, renewals focus and immediate call this mentioned question. it on to just but the you your there's to

Alexander Jessett

ahead. on Yes, -- go So the

D. Keith Oden

had issued out October. XX.X%. of an Alex. at and closed occupancy quarter -- I'll just guidance, guidance it take occupancy for of the We're our That as was at -- do -- our prior The our the being expectation. occupancy I'll first flat yes, rate guidance about back then in to before get included XX.X% that XX.X%, we revised fact the so we light fourth we

we still not we're we're we're make to as decisions renewal pull so and It order get That -- target rates can was the that levers no, on to make would to in we'd new But back either back be possible. as The mid-XXs. So preference. the that good XX.X%, not to XX.X%. to not that with leases get of achieve our quickly our or silly operating limits going But that. at doesn't just like set sense. our yes, within and we

Alexander Jessett

leases not that or our sustainable. the to for November. in have quarter fourth think And sitting guidance we're Obviously, leases you're months here doing and today typically XX renewal X renewal, of ahead a on we the mind renewals new almost a ahead we typically, then that call in to your time that keep whether of question time. to that new are And you're XX if and month signing days to it, is

I rates think confident we these feel for the about very quarter.

John Kim

more and on the was the question XXX spread points. basis between renewal My new leases,

Alexander Jessett

points operated basis but where Yes. of completely of realm at wide, the a in little XXX historically is time. have not it's we out points

So that. think can maintain we we

Operator

question comes next with Anderson from Rich Wedbush. Our

Unknown Analyst

noise better than So for stresses the managing are imagine in I relative or wonder prepared an think managing bit supply you there a of you these less said down you're that where your this to Do could you the in and despite in markets, what an if aggressive little create Steve get a about ill-prepared be opportunity lot buy you're guys settles latter you. evict of behavior competition. process year? perhaps to neighboring a people could and I system the handle all said private start your that peers, months. buying to stuff about you're not distress, you step we opportunity better. within as to skip into bit in part something obviously there's little your consumer are next Not maybe probably premier going fashion more a that operator maybe anything, but particularly the next X Ric, and

Richard Campo

interesting is, is, there strategy today, are opportune with And Capital X.X% X.XX%. deals -- figure on Well, that trading really what going try at is by sure. opportune way. now, question, the to and at even the investment line interesting the the thing, it's Right is an out we Rich, and allocation to transactions an the are we'll bottom what we most try for that. or Welcome back, look execute most still

so in today. of there lot marketplace the And distress a isn't

gap I been think and ask, sort sellers of definitely a bid the primarily have of and the narrowing buyers. between coming not you the buy And a so -- the it's had the -- and from

that is wall like? wall big Fed continues and done? to is some that that market that Is going there waiting But a supply All look what capital there, is there How the clarity is capital out impacting? have in -- the we sitting waiting. these just the long-term for of today uncertainties more tenure to be of on

And I that are there say. properties ] question on want are seeing C-minus property a all to -- And were mean you were the be be so of distress? floating I there will deals deals [ it's that up debt you to that blowing transactions wouldn't to with will of up the plenty in overleveraged, be, to do would really that town. because hard are today those today, blowing that be never take rate want and tour part on I

And either. so I there -- want be wouldn't and to

And that and happens are now, the there are there's those opportunity blowing just deals no really if are so type up, right the investment-grade today, in there's if those not future. in there. the no our and But so okay? of stress market And -- in properties, the we'll see

Unknown Analyst

with How sort Or do evict and and there marry the that Or shared this then an markets? of is supply where meaningful Okay. portfolio in XX% impacted phenomenon? of issue it Is sort skip particular? portfolio. more overall of you seeing evict any And the is you're skip like anywhere situation?

D. Keith Oden

evict, you Yes, markets California a the basis the different infestation call, that of almost concentrated County, worst primarily about the points if we've -- California that's directly the skip probably -- last which proper, Atlanta Montgomery kind that to points, in and XX talked bad regulatory tied a California, yes, evict but basis took the D.C. on debts, our had alone, the XXX of a pursuing is think for fraudsters. highly question I skip Ric that's those against localized is the continue but reason, COVID have of number is gave that. But alone in and -- of fraud our to is it's almost X, restrictions

So generalized -- not that's a problem. it's not

move in supply, markets in The people to would others. and there the And But I we're do while build worse It's to in. is anything ages, mantra sharing -- to, merchant we're that is builder want want from success. merchant to is the doing say, of apartments worth want maxims than business -- places, generalized. people worth a in builder doing everybody better some people

And in supply a that's kind X every there's of so and that's where another. our we issue today. And find ourselves to of degree markets, -- one true or

Richard Campo

thing to properties The the properties. about tend they new to go interesting fraudsters is and they tend to to the highest end go

Houston. XX example, lease any were there, and most downtown, building, which the if breaks to in the go a of think rents Houston, also XX-story you And have in Buckhead, highest I building they people. has fraudulent in fraud we Atlanta any For Houston we building our of downtown is building have all

because sophisticated. And to the tend higher the higher-end more folks going interesting so end it's to fraud be the property

our less of Keith's X.X%. to that to L.A. say, in difference sort And Diego in those be, want San And they're more X.X%. And you bad and are then two L.A. the militant County. open between California, Diego, County than numbers debts just is San in point, is that

And again. pay driven because the your really people to of In trained And pay. your that regulatory the to did that you don't definitely so to getting past, to for it know the next should ready first, that it construct it to get we're be to than cell then government we're list doing phone rent. people you goes push down has apartment they more they apartment the -- going phones have so right be. now what bill COVID, pay rents by it's during But

Operator

[Operator with Instructions] next Piper Our Mitchell question from Sandler. Connor comes

Connor Mitchell

keep past So at the I'll to as just we're one it hour. the

you affects process updated just this the for that? investment deliveries and and assumptions With timing, how talk then the outlook environment, for and the that about the and into some can current appetite, underwriting you guys are impacts the guidance updated development going

Richard Campo

well. development lease-ups are current on Tempe is that pipeline our We So doing making we're finished it really returns those. solid really and The just doing doing that well. a really we're was

the in well existing portfolio. doing we're So

capital In deployment, acquisitions starts is terms of other new very time. or or mean, I unusual a this

that gone our to Our in environment on a of has current and of doesn't transactions cost lot cost we and capital. based it that today of sense underwrite make understand recognize up we capital dramatically the

we have and acquisition obviously. been pushed very have development back, so front, starts, we And on quiet the

hate are of what going causing in stability and think as get we we market. And view knowing and is sort be this consternation to because future, having -- all I most of so of sort not world that all stability and what's volatility think the what some I I that's things right? I more though the think mean, in the And a hates

has though, developments contractors start example, the in there'll XXX,XXX lots we units, that for to with XXX,XXX you squeeze to what's for go think to costs, work going will capital food. When development that future, will should, margins And units from as of when that happen thinking inflation be about construction not overall jobs today. coming a -- pricing future down, to having than being be XXXX. shut That the construction better costs during or down, get able in can with play should of a as properties whole out workers we to on result we lot over

you we the get are deliver then maybe environment in we And returns if -- a then right a if to so good markets of be build And not capital start really start forcing the and to very and is, able capital -- that market returns to And constructed question and happens, and capital perhaps 'XX it's the -- right balance the exactly have numbers, we spread cost perspective to well, and 'XX. new properties. in to XXXX, in is we it's XXXX and our from the build, a would a what when believe into constructive be if deliver developing actually zone, doing. builders which those merchant going to

goes relative competitors, We're move a that's to And here. And will acquisitions. game countercyclical our long with -- we playing a same do if thing that. we'll then

out growth very properties, of older growth reinvested bought CapEx We look really basis. since on bunch did sold we -- probably over at higher ago, in have newer, to billion properties, XX $X properties. XX accretive if that and very, higher we lower with -- -- history we lower been turned be properties years maybe and of sold -- our CapEx, in And and a a starting you

us with way the open to is as -- that this so opportunity could the the management portfolio next of do And opportunity capital it year a today, lot for well.

today, -- bottom think So sector would sheets yes, world, it make with strongest sense path sort the makes kind of the be in the could I on in deployed line one weird stand to and to it's be. balance is, and a is there's of that that capital and wait could where returns see that the future what and best the of see we really

Operator

Our with comes Baird. from Golladay next Wes question

Wesley Golladay

from new X than delta in your what tenants a but that pay won't can for I can worse markets. get and recovery there? leases be type pay, those markets on Would your question have you are of supply the that that

D. Keith Oden

on part But to I to recovery So guess would pay try about. can pay, pay They the but go is music. My -- they are won't won't those pay, of can't collection pursue. do will actually pay -- them. can't interesting eviction pay we I recovery a over -- go some conversation have all the people conversations we cases, an agencies. won't the me? turned -- We degrees success. question, If this, you that quite with turn the your the the is on so is Wes. In varying the Those but obviously, face actually low, of to subgroup. can't pay first -- pay, we catch pursue not sorry, -- time pursue didn't folks before I'm

Wesley Golladay

so lease can So the market? think have leases a guess -- lift cited? having yes, in to it the is low what X new right potential in Yes, year kind run delta next of leases I more the I'm those that market in artificially in normal just new markets in rate. now here on fraud you you supply trying from the will that's on market, the I see be the

Alexander Jessett

October to in mean, was you it I is. Absolutely lease think our if about give you trade out effective for X.X%. an Atlanta, idea down so new --

got market a to So a once we that's an ability get a where good get back normal far indication more that sorted fraud pretty rate. that we've to of run out

absolutely. So

Operator

with Fargo. James from comes question Wells next Feldman Our

Unknown Analyst

are. just in think rates your right about This this is [ think Jamie. to fund and How we for about trying you for environment? but revolver ] comments now to before, There John development was on interest need about do and growth this where

Richard Campo

sorry, broke up. I'm kind of you

part have was spend We have other your you that of $XXX on Because development million roughly left now. we And what to the place question? the in broke up.

Unknown Analyst

me -- now? understand you Sorry, can hear I

Richard Campo

Yes.

Unknown Analyst

Perfect.

Just in environment? to size grow 'XX, given you this right now? revolver understand, maturities how your do the trying afford Just to in of

Unknown Executive

Alex, do you want that? to take

Richard Campo

the thing access markets, capital Well, The -- bottom great out lots issue market the of to maturities that multifamily to capital we that -- so have market. open, have bonds the the is is we are take about markets could business And is and line we open. to if obviously right? bond access

We Freddie for lending have still and Fannie there environment -- also to access there's if bond a and out robust multifamily. have and the isn't market open

that X.X% built constraint. given a our capital debt we're don't when think, all manifest debt pretty for a you [ this sheet issues, -- capital concerned opportunities maturities sit like for estate about to not So times and fund at our this. to and debt-to-EBITDA low balance we've at and it. And I $XX of are with sitting ] position low be somewhere and real on around to in safe no and they themselves. very if billion having fund has that mortgage able a That's isn't

Alexander Jessett

still lot a that cheaper Yes. not is money. go to private revolver that, costing a all. constraint person I XX-year would the X%, is and at out would what not we're about just add us that but to thrilled the borrow a obviously, And cost than it

opportunities And do so are the and debt absolutely there we And what over advantage XXXX, that's cost do. do if for of accretively actually really have private to capital we guys. if we'll the in something can a the once,

Operator

with comes Our [indiscernible] from Green next question Robin Street.

Unknown Analyst

me. for one Just

to on development. touch want Just

without about to the a increase that lease-up entering competing now in occupancy to new are the much you concessions more at Houston provide properties with are outside concessions. Raleigh market expect properties you competition, Tempe in thinking well did those do or the You How strategy for incentives quicker? lease-up more time

Richard Campo

NoDa, think, on Well, as we're traction I -- for of doing and well Camden the -- concessions, kind now, Charlotte, before, lease just we getting offering, are the leasing I like on or example, I in properties of part them effectively out on up. And are and the free builder properties, all them of for weeks think at free, the market the and we're is world, up, X to and the in concessions said will Right with conditions. X are we equation the the have don't it the really depends really those rest day, months X people are merchant worried about compete end that. will something the and just of ultimately, that the they there. But

at Phoenix If very dramatically. I fast up a concessions, is the and mean, time, I that is give markets lot you a with we've of yet one but did not of supply, the -- had, same we of rates Tempe with very, a one we with II look Phoenix at -- the was great limited pace leased example. or absorption think the

Charlotte be we're in the forward. both properties fine going think and leasing going to I up Raleigh built So we've

Operator

our over closing remarks. to session. for turn Would concludes question-and-answer like conference to Campo This any the Richard

Richard Campo

at very on Great. you we Well, LA. Nareit and the appreciate everybody will in soon see today, I call

take and care, thank So you.

Operator

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

You disconnect. may now

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