CPT - Earnings call transcript Q4 2024

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Kimberly Callahan

Good morning, and welcome to Camden Property Trust Fourth Quarter 2024 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 Alex Jessett, President and 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 shortly after the call ends. And please note, this event is being recorded.

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

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

please initial So respond queue additional are questions queue call phone in with then Ric if question rejoin the by to to everyone have to X concludes. At unable discuss. the the e-mail to Campo. or happy call a or I'll to If we'd we turn be time, follow-up speak over items your you this after additional question to today, limit the

Richard Campo

in get our Thanks, move saw not It's time In captured a few seen Camden level to It's for XX somewhat move the late believe Kim. great What time Camden growing. to this get under of my first. morning. the peak reach on. ahead? better our multifamily Team going. After going. on. grass in to knowing. XXXX to we on-hold impatiently is a for lies no is baby, feet over we waiting The markets, way in year Tom current Move It's XXXX, years. deliveries It's move On. investment opportunities time years to music of It's Good this is Petty to I quarter theme But Time The center have time of on.

pressure growth. to to supply the new income for expect a XXXX, revenue setting stage lessen We operating throughout improved net return and

keeps recent there $X.X our lower average XX are age attractive of years, $X.X into billion average our financial As an with executing its to billion apartments in core an playbook in that great capital apartments acquisitions. The to Camden plan It's starts time age invested follows apartments time be strategic of years. expenses of of acquired headwinds to The turn billion on. we positions and XXXX plan. X and in pursue tailwinds executed and backdrop to on the XXXX years growth. capital positive competitive, FFO opportunities sold us we It's development our with portfolio after driving market crisis, this way accelerates a Recycling move [indiscernible]. developed continue in long-term for $X.X similar capital, where and beyond, the return

are nation. of affordable This growth rent-to-income captured reduce to have our is million in for Camden Camden's costs. I years. it's margin know to remains next. long-term of resident's out ratios. Keith their but that Camden XXXX, growth to prospects the new a at nation's move Camden projected customer why, and rent operating be operates supply. experiences past Sunbelt want produce financial wins needed to of outpace going population and not Occupancy lead new Texas growth. to give a technologies wide again lives state was improve our record on budgets get the outpaced Resident X likely customers option many years, over to place smart Florida to to residents Sunbelt implementing at nation's and and despite homes X historic which our from teammates, housing you which a our works customer family a X next continue for megatrend our population of premium markets. We is has our to and added versus growth growth will making sentiment the outsized Team time demand continues which XX.X% rent improving team XXXX, retention in to the outstanding strengthening consumers. Wage apartment Each over of markets own home. up The X/X high. by U.S. continues bottomed. for more to in a the Florida in levels, The and most growth. continues exceeding the couple and as new nearly to the our Population experience attractive Texas time. call population big improve shout know, markets stakeholders, in and Oden performance

D. Keith Oden

Ric. Nashville both and growth in while outperformed their points slightly expectations, basis below of same-property results our Metro, Washington, was budget. Thanks, Camden's San with markets Austin XXXX of Inland came Diego, our X.X% and Empire revenue XXX within D.C. most achieving in budgets. original

For X% and XXXX, between anticipate property we revenue of X%. the markets of majority growth falling X our same within

year, one should D.C. in revenue this Houston, to top Southern to Tampa and these for markets were California, these Several year. the XX% X revenue. account of we including Metro markets in and markets top as over markets them growth see our our of of expect X.X%, Our X% Washington, top performers join range budgeted of last

growth markets and half Our Orlando, Phoenix, Southeast of expected markets year Atlanta, given X X challenged Camden's this remain last next supply budgeted budgeted and These Denver, Dallas and XXXX markets coming X% these online. markets, to are X Florida, revenue. are down of of the they revenues new our continued levels on were and roughly year our last Nashville which and Raleigh, include over Austin, X%, X% comprise for Charlotte. In between revenue represent revenues,

optimistic to We will they they another end cautiously them X% in position we're year, this X% better but where expect a decline than XXXX to that started.

a beginning of tradition than last in have portfolio year. of in order a year with B a markets grade during we as to their of rating each currently XXXX. We stable signing our with know, and ranking the you letter a slightly a markets our better outlook, of forecast expected outlook our performance B moderating conditions at grades many As overall our

Our deck, is card as the we and of our outperform focused included report on slide incorporated this will Sunbelt The outlook. footprint is call which us remains and webcast available allow into economy healthy, full earnings part our U.S. website. to overall our expect market

range into given across several of for buying third-party XX in-migration completions forecasts XXX,XXX our XXX,XXX to expect supply from markets to and home. We XXXX relative conclusion XXX from over setting firm projections providers XXX and course Despite XXXX our single-family markets of XXXX. continued to to We apartment delivered unaffordability the was the through peaked reviewed average data estimates, see we new strong up our be demand homes with the a slide. apartments compared markets from of year move supply during range in as and a for their XXXX, wide each below in XXXX will declining the that be unanimous

various price these a with will points. estimates the As be totals of locations MSAs and new portfolio supply existing all reminder, are competitive and given submarket this for our of not product each

the range improving, stable of outlooks markets. mentioned I growth A- X of markets moderating. X% Four for with a Camden's or Tampa revenue our expect of received of As top earlier, in to X.X% grade performers we year and and outlook, strong manageable levels, boost during should with it one this be the our A- that an of an given earns in 'XX. occupancy we a fourth quarter improving demand of saw best supply varying

Supply Denver bit Orlando outlooks. expect did fraudulent Diego XXXX. Inland in stable ratings, and check, a XXXX, outlook, as in bad performer declining, Southeast to the progress reducing a growth Phoenix Raleigh to last for A- would rounds revenue of versus be San and by a to this to are revenue received year integrated likely particularly activity. and more growth markets of in slow B- to next with most in this supply growth. Atlanta with rates Houston both L.A., with over in limited supply this with should due California Empire of also ranks for moderating moderating moderating declines given during they X achieved but would growth slightly be top to job received but as year. Virginia finish rate with markets year a B should improving the slightly will and in be stable and the X% all Raleigh County made power X all stable outlook. a last grade X.X% Bs, below with X the remains supply, with Orlando next and of and XXXX, markets rating the our course Most in and supply B+ in to year, Orange X X Southern demand. are healthy higher less Northern ranked revenue mainly Our slight those levels growth B+ outlooks. Washington, see we're revenue as we Florida a B+ D.C. coupled and Followed with and as top and and expect in our #X a they XXXX Phoenix, B with tailwind Maryland, expected a limited We rank closer X. moderating X% an outlook of thus submarkets the again see expected an moderating given outlooks. out moderating to from Their in we've with budgeting X% pricing be outlook and X.X% debt year. in Houston growth debt of Metro bad B a

again a our and with B- levels one there in occupancy from see XXXX growth above-average of performers was outlook with expect year. Dallas Florida expected moderation revenue year, a XXXX. achieved stable last earns Southeast the to top minimal in we this we

and one the is past this supply is quality XXXX repeat competition C elevated continues Both job much of uptown Dallas rated year supply and migration to and as through expect submarket. And Nashville ranks the challenge. our supply While new of new the of with grades top growth likely to the as pose same level was last a outlook. Charlotte a continue nation's delivered markets aggregate in and respectively. year. C, life, the negative working growth And year, over with The metros B- the that finally, main XXXX in coming still of and in new Austin that as the revenue still will and is fall for posted in moderating still South Charlotte online in will market MSA we received

Our outside while CBD Nashville Austin's is outlook area, outlook of downtown is the stable. improving, for particularly

were increase April fourth up renewals X.X%. X.X% of Jessett, XXXX. I'll rates and out down the average move-outs X.X% few call for fourth operating as quarter offers a X.X% an blended for February expected, had Renewal year over on to turn remained signed Alex through fourth of Officer. for the Rental XXXX both purchase very Camden's quarter 'XX and a Now sent homes negative at the quarter our low for to results. of X%. And Financial new Chief leases rate at details the and President full now

Alexander Jessett

Thanks, Keith.

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

$XXX unit, we the of suburban in almost XXXX, $XX construction Camden is Farms, community XXX-unit Houston, which rental which market single-family Meadow located million in community Raleigh-Durham leased. located fourth Long In XX% the a quarter on Camden almost XXX XX% completed now North Carolina, is now leased. During million Durham, of a

community a Subsequent which unit, was purchased rental newly community X%. Additionally, end, Camden XX% a suburban is Woodmill XXX continued $XX we unit Austin a at we for million $XX approximately at million quarter located acquired Houston. suburban of currently constructed This occupied. single-family leasing stabilized yield a Leander, Camden XXX to also community, Creek, in

Last midpoint fourth the property Turning ahead guidance. core to final claims million or and core lower-than-anticipated of prior resulted $X.XX valuations. financial $X.XX for XXXX by $X.XXX results. operations night, lower per in driven tax other funds of quarterly our from entirely higher operating quarter of expenses, This reported outperformance share, lower and we $XXX.X income insurance the $X.XXX from of in

of growth and revenue of expense For NOI of XXXX, X.X% X.X%. we same-store growth X.X%, delivered growth

expense by primarily X.X% driven taxes Our was on XX.X% respectively. growth of year and property and full insurance, X.X% declines

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

flow for One dispositions, for anticipated a acquisition of helps ensure guidance this midpoint cash uptick $XXX of portfolio a year's in million an geographically the key is of Operating diversified investors. and each. drivers our consistent

of market than X operating we the next select years, no income of to XXXX. of and our of in dispositions few messaging, and past combination our Over our target a largest end less income Metro and Houston by growth our market seek markets, greater net will by more consistent with representing X% markets, than exposure a existing X other our balance D.C. the net with market of operating through no XX% representing reducing

Additionally, assets we faster-growing proceeds will and dispose of communities. older, newer, into the more redeploy capital-intensive

As execute the to X will be this negative we may geographically there matching The flat. age yields end faster-growing portfolio. for basis upon we be and and of location more points communities, result while FFO yield newer plan, depending diverse, relatively differential be AFFO to disposed the these expect a XXX transactions,

incremental $X.XX core non-same-store and expect share during primarily $X.XX, XXXX This communities, $X.XX per from timing from XXXX acquisitions from the our share share XXXX dispositions. an our per X midpoint to the our $X.XX is We range of $X.XX of increase in and/or from net decrease results. resulting the development with XXXX. A to representing anticipated our in communities core of $X.XX development approximate increase million to from FFO operating retail FFO result related in to per growth primarily per in our be from decrease $XXX lease-up assumed a contribution offsetting of income the share the and

efficiency development levels share position debt increase attributable months we of communities. The anticipated we $X.XX FFO exchanges facilitate is interest compared activity. are increase and outstanding a debt This anticipating acquisitions per core balances certain part the by higher interest to on they're expense anticipated disposition. completing of offset in purposes XXXX matching higher reverse disposition as share XXXX, the our capitalized resulted as and average in and to of $X.XX X cumulative $XXX For average complete from in per million lower balances tax to timing XXXX before

A expecting are For due cash rate line $X.XX in income an average FFO, we from core expenses. At approximate X.X%. resulting on FFO. share decrease with per interest $X.XX decrease general NOI Each and XXXX share other revenue of are of and management same-store same-store operating X% of the anticipating the growth of to approximately credit $X.XX per net XXXX, flat X% of $XXX average per is expense an core combination outstanding X%. balances million property increase in higher primarily in we and under share with approximately administrative in and income minimal our growth midpoint, in

and midpoint growth end the is based XXXX loss upon flat an to a at flat effectively of Our lease. same-store X% revenue earning of XXXX

annual a X.X% in December rental a results from rental to market XXXX. increase XX increase rate Recognizing XX, in XXXX XXXX, market expect XX, We rates basis December half market budgeted rents. in point of increase this net

We Rental that in improvement assuming basis and basis points combining basis XX basis XX occupancy basis in income of XX revenues increase debt XXXX, growth a level our budgeting rental The remaining point bad similar point point primarily basis our XX of XX% XX to in XX.X% and property and utility rents, X%. our occupancy revenues. a anticipated are fees encompasses and of other income annual point is is of our XXXX, XXXX average total averages at bad our in as net our with grow increase XX comprised annual a rental approximately debt, market rental point income. are decline rebilling improvement. When in we XX%

our of the and transaction anticipated adjustments throughout $XXX share approximately for of legal other $X.XX for contain outliers. Page per pursuit development XXXX plan growth the primarily of midpoint year are $XXX Noncore are Our expense same-store to X% approximately not including year XX the supplemental starts significant category any assumptions to development spend. guidance costs. expense spread total details also and million of does expenses XXXX package million up and be FFO

in each driven an our primarily our an anticipated including expense on-site in by trends, our result part of quarter the resulting $X.XX balances interest to of to related the The salary reforms, core per per of from same-store expense per an share tax debt increase from activity. sequential X of NOI, attributable be January actual typical approximate quarter to resulting and share accrual acquisition other the approximate increases. And $X.XX per in reset increases, ] of from tax first quarterly $X.XX. [ is core We on partially increase expenses and property $X.XX core first acquisitions. within per sequential year which of midpoint decline from range $X.XX the quarter our per $X.XXX expect sequential seasonal annual higher in share FFO for quarterly This FFO same-store the timing share in first $X.XXX of share XXXX fourth $X.XXX is quarter, the increase of cumulative to in by an a decrease primarily decrease the FFO approximate timing represents share offset

for debt We At We quarter are facility, months our $XXX had trade-outs be relatively the development existing million $X.X was over first and $XXX million left our XX% blended rate. maturities no approximately the year-end, under less XX anticipating flat. to billion credit on to our fund outstanding lease of next pipeline. less than than fixed

sheet remains with up questions. strong net debt-to-EBITDA the call balance this we'll to at Our X.Xx. At open time,

Operator

your And Instructions] will question Wells Feldman come Jamie today with [Operator Fargo. from first

James Feldman

Great.

growth hoping quarter just think thinking assumption. throughout it provide more Can about on And new what was trends the year? color you talk quarter? fourth in you do you're your and I So blend a through first how could renewal some you lease

Alexander Jessett

Absolutely. Sure,

X% look look will blend. So leases, we're for negative X% full year year, the now. year supply the absorption with leases for you look way throughout XXXX new a of And to between at anticipating I high very optimistic how full new be going is the will in and the new I somewhere probably is slightly to we are the at the the the be would If unfold, particular, way on at obviously, that range. about it in X% renewals if progresses

time to where quarter, And new continue leases this point we'll is we so we're third start the on. the and anticipating that by see from then it positive that get to will

Operator

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

Brad Heffern

signs right so, now those of if of Are seeing trading ground? lines? impact you And supply what are the the on

Alexander Jessett

data, is to and in And far new so tell largest new we're improvements. we're you going not that looking We the quarter. And the absolutely what signed are. signed lease fourth at lease seeing new January terms renewal monthly by in new throughout will -- encouraged although are we quarterly indicator very we're that improvement give I of the lease

Operator

today question ISI. will next Your Steve come with Evercore from Sakwa

Unknown Analyst

This on had for question [indiscernible] is a transaction I Steve. around guidance.

and after So exposures. muted on are opening [ rate, seller and today? a $XXX things us guiding help like provide standpoint, timing, market are Can seems up from more the terms of color you're in years ] transaction and pool you're in market the of you of couple of acquisitions buyers it seeing to what type million cap

Richard Campo

Sure.

a what's high that right? buyers at think when primarily sales years, and prices about is last pay of happened to of have odds, transaction muted the couple Sellers markets. So and sort want been don't you it's And sellers prices. very want been high buyers

sure a to is XXXX you're constructive than happened with the pretty years. But on Supply of the increases. [indiscernible]. buyer be created continuing that's volume. from so then rental seller perspective. going then side, sort going a that the also so in standoff be rates pretty couple an in and outsized last what's have It is for to now of growth put of And And on has better It's lower [indiscernible] been longer. some between I significantly view pressure peaked year the that have 'XX, XXXX for to a 'XX, higher accelerating you future. think And transaction

rental and buyers pretty pro of increase happen growth so to point that's confident can allowed price what than feel going do they've maybe the because XXXX. So positive is sometime forma to their rates, about a it's that in during pay second higher before inflection they thought derivatives that to on rent actually

going in buying. perspective, to of years is be to you pretty think going last buyers then that lot of side we out it to And that, recycling we're led of to it recycle gap, capital, of that's And between Alex acquisitions. next big have we're financial more it crisis did we're we for the capital going I sort we have be us sellers. lot want -- the and going be much where then as call since sort to and is well what the that you to activity. fund going up those And our closing And thought development to really and move after was, a -- couple that as cycle, going on and to that, this pointed if into transactions So selling our be acquisition/development from disposition earlier, to sets of aggressive the get like forward. think acquisition you're the the to a great have a of

Operator

And of will your America. today Jeff with come Spector Bank next question from

Jeffrey Spector

distress. can be Ric, that there take are follow-up lot gives today, to and say mixed will really I'd confidence not that And hearing guess, you things distress are we're a you are to post similar of stress. seeing what of? I'll of hearing point. was hearing I that What ask crisis, world as advantage you a financial that mean -- I there

Richard Campo

go X moderate when to Well, happened, the you Fed was if and distress, that, to propped banks took you but up 'XX. FDIC in they Sure. the loans. 'XX and have think what mark-to-market construction primarily really about -- saying distress. maybe it to was no 'XX Reserve After interest there's crisis, a by rate mean back the there the Federal didn't the financial and I

in was going which a result their leveraging, real equation not real decreased difference that happen and today, commercial of was the their exposure. the is also GSE diversified part the have banks over significantly estate is leverage thought commercial today, financial of a GSE, estate during the that they've And exposure, the so and to today that the eliminated great distress of crisis. And lot after people as

the of is stronger, situation there's or to you're where creates on what are a that, people stronger. And are banks pressure no real force borrowers borrowers in to And course, sell. banks So distress.

part there's distress sort institutional in been pretty buying Now of space. properties distress, up. not there's market, leveraging low-quality fund investor online today I and money me -- the but through C&D of raising we're the the in had kind And stressed. quality of mean, them and some you where investors go clearly pages, that about sellers syndicators stories are today, not -- the are financially significant the borrower

So get What rates think don't during I we're in we're had pricing we peak, going when to the going get there. that the "distress" out right, better were just to is cap Xs.

prospect cap are leverage X. rates Xs a forward the better going to can your on formas IRRs get And pro to Now basis. a going your you in so with up be X.X that growth into

little So today. it's different a

to So all I have and in distress we're don't think deals. the going that buy market these great

in Austin Austin. It's growth, gets next population -- outsized #X America like or growth. you has in a on so, supply project population Camden On rents a transaction, are see than in for growth market, supply complicated the cost, terms it's percentage the its most. a property look -- depressed. replacement buying in you us good, our we're and Austin, other the at when below XX% going the lease-up basis deals at of hand, once when look And out worked Leander more in it's at very obviously Austin to you're when year, are in over The

and Austin is be XXXX XXXX, Austin's not XXXX. great to in going So --

then but drive below it number. to able can growth into size costs. can to build buy a cap the positioned I we're marketplace rate and buy build replacement when good have I cost to up be really why there, that below replacement go So in

Operator

from will St. And Haendel today your next question come

Mizuho. with Juste

Haendel St. Juste

XX%, So us if expectations. to can terms I your bit They like seem of with bit year in you in you expected. new versus fourth walk of us on push stability the more about performed sooner in rate and resilient give portfolio this January have rate think and bit the new be noted quarter we quarter how seems occupancy, And lease than can a peers? lease you a a through in color the might improvement rates some the previously

on -- sense some how are guidance improvement perhaps aggressive the more rates you you're quarter lease us or being color a how that first can the provided, of in here think on give maybe embedded but bit result you stability broadly, front? So in what the you -- seeing much perhaps perhaps new

D. Keith Oden

Yes.

So fourth think year Haendel, quarter was was pretty what we the would our expectations little -- walked across better -- commentary it of have a next I the we it's for in be, those and -- his actually markets. is. thought not bit regarding year, did all of terms than And it guidance our broad full Alex through in

do what to is does that occupancy so our model we're do the pricing it improvement is stickiness us And think our and price which best, just to I seeing that allows then around find rates accordingly. across entire strength and which portfolio,

January. think it's good had over. it's fundamentals, And quarter. like I into It carried as looks operating really So carried fourth Alex mentioned, good it's a over

goes transition January of places continue February it's year had we supply/demand in an have sure, front that of is maybe going think the -- get so things big that year dynamics. But think we by, multifamily making that set constructive we led you to chunk we in we've -- wasn't supply around happening this I and case. the So you more the XXXX, maybe into anticipate year. what's to good. been when between don't pretty for good for back that. But year. a impressive half out optimism they're taking in month last think to year, had for of that of quarter more that normal kind of because entire really to importantly, every happen what's past for we're up for that Good one January. month expect continue fighting the X- in likely we're And pocket and -- -- out to move But back out to what us. for month kind and going sector. we last in full the that the far 'XX, starts so happening to other going total throughout 'XX and horizon we're strong And of I X-year look the the runs pretty on I But of had out normal on and on to getting some really a see air I -- 'XX turned be us. here bubble completions don't and looks think what's for We started we're when another year. a a of been first -- XXXX those or to be It that

in benefit think I than we're where to our is most from Camden's located that. more going markets,

Operator

And will Citi. your Eric Wolfe with next come from question today

Eric Wolfe

seems XXXX. to acquisitions, last around rationale that on the could you activity you're GAAP your based bps And you guidance, this It expense and from transaction the front XXX the through strategy? interest mentioned, also, X can just I potential activity this about like loading think, talk dilution of

Or you sort of the transit of the of should models, $XXX couple be So continuing on dilution XXXX? is GAAP next say, bps actions our not through of what for in meant like, sort by this years? building we that XX million of

Alexander Jessett

Yes.

Absolutely. So we'll both of it. parts hit

buy thing we're doing first We'll these to reverse do we that that in And going XXXX efficiency purposes. that The anticipate for is, tax sell. is we're exchanges. we before

assets. at older look what first at will our be that or XXXX we're disposition capital-intensive is looking that is have we part to complete will second for you the The more

FFO assets so probably spread the selling. that, of a we're we're and on see to And because larger on assets between going the FFO you're buying

will a basis, be call wider, important that be very I basis, AFFO on basis for look that it, the note for to think spread on FFO XXX tight. little it's to around going bit to we're an point an at But range going it's XXXX. what

trading think you we're going geography 'XX just where about a in happens what completing the comparable we but our assets where point to 'XX, not throughout want to get If be in go going them. we're plan, time we very as and to

be I our lower we'll it in we've we're in sell So bit exposure likely in in in for lower a that 'XX be going it Austin, cap exposure community D.C. rate, community Houston. If a or will and our cap it, in and a good trading at trade 'XX, how probably will a to that instance, quite comparable at be they trading Nashville we'll pretty we'll a think talked rate. will that also for community particular D.C., call a about call

think take and extract to 'XX. fair 'XX the you're into it's So seeing in like and don't dilution that that 'XX I

Unknown Executive

Yes.

we did time, billion would we I of you out flat. acquisitions $X.X be that The At negative look we dispositions. this, point this at time other over the were thing to of $X.X where turned is if that XXX to million and spread last did add budgeting basis

the once issue It's dilution property cap tuned is growth, right? going cap going It's because are or of those not market and the then part occupied. part that higher spread. dilution starts not -- not are the rates. And revenue it is, XX% the leasing Leander But the it's rates is transaction, look at permanent rates and a stabilize. or to so NOI finished, to newer the challenge finished compress getting you And if that higher of cap Camden to to at growth property of was when you converge older look

properties yet. you're we're going are leased more to have fully dilution So up not when buying that necessarily

billion so still that which $XXX of year, expect we'll equation. through I transaction waiting market the the that's $XXX But of you'll that middle entering start have the wings billion, gaining capital of that market. that's the the steam, means in part the And

are I be the budgeted to -- going sure this basis tighter we XXX to cap we'll going do we're the better. spreads of towards will the year. So I'm points, back but and tighter have think, But half rates, be

Operator

And your next today question with Markets. Austin will come Capital Wurschmidt from KeyBanc

Austin Wurschmidt

could So those talked you constructive markets? take the you hit Are Alex, capacity the next D.C. fundamentals top I exposure going what the the your you given lean of there about your plan? balance and selling outlook Houston, into markets few in strategic with have trade years, I which down keeping for portfolio pair of any management conversation kind objectives. this enter the your some that what's instead And about. just the you on of tax-efficient strategy. kind new would guess guess to with comments for for then And right on sheet guys it

Alexander Jessett

Yes.

by 'XX, not X call market of NOI. the said So any over do end of the is have XX% what that want I on we to that's

think And D.C. is about you so have we which if it, X and Houston. there's markets that that, only are today that Metro over

where be we'll bringing that's So down. that

that ton falls of than has today The that sense to a Nashville. have NOI. a market Additionally, it only us category into make X% less market that just to is of doesn't

our be that which be debt have think still will us take gives the increase X.Xx it of target #X some a opportunities, bit up create we'll we're in there of to to take our value shareholders, is the and that. where a of sector, into stay balance the Xx and leaning leverage, sheet, below advantage there ability main advantage obviously markets. When absolutely absolutely. why opportunities. EBITDA, we you we is little are because opportunities real And The to So If multifamily but we can reason do and about can our capacity for level. going that bringing of one

something at. So absolutely looking that's that we're

now looking what not you're transaction now now, opportunity. because to And stability we're more not right is tremendous there's think a market. see I some that of the for going just in right right amount

us we forward in are that should But the as will you we near selling. buying match building there, than more fund opportunities go are term. the and dispositions execute So see we plan, the and with

Operator

And question your Capital today BMO John with next Markets. from will Kim come

John Kim

CapEx, return versus or uplift to to revenue and which what rents last the typical or was either this about year. ask rental $XX contribution of And looking last has? on get? increase year you or to Can repositioning want update blended million year you the you're remind I us revenue enhancing same-store

Alexander Jessett

Well, years. all, the question reposition is for first on of we've this X about had first absolutely. Yes,

bringing thank So back those for in. John, you,

an program tremendous absolute Our has reposition been success.

it, basis, reposition makes really mean I NOI XX% XXX generally at X% XX XXXX to call which in around that us. look points, it for on about have is you capital a think getting But generally additional or repositions, that minus are ton was, not equates to from that sense return the somewhere door basis to about our dollars impact XX is nothing. way invested plus the to portfolio. rent. When I we to it an something should per an why We is certainly remember what do it's in that And reason of you refreshes we're on doing. certainly the real

of you and of absolutely real on development. is the a If type build the your the that about everything shows like what estate we think exterior, It of age house. timeless. the bathrooms kitchens are But it else, really age shows

bathroom really a And natural it in a we and supply the a so brand-new we does and kitchen against go and on and in can the look exterior brand-new, defense that market. if refresh make create can the new we looks see it

us return. of about branded rental have have lower basis, think higher and or kitchens it door lower just brand a next looks a well. higher And that you When asset we the has we much If a course, adjacent adequate a because can directly and directly charge rents much to rate can new brand-new, asset owns charge positions basis incredibly and an must whoever we that has get bathrooms.

program something us. reposition something us bit. is ton you're do makes going quite a a sense that of to the see It's that So to

repurposing space is that that real we are point some thing we I'd looking of estate. other at a a it, and And cetera, means of indoor that have call makes turning us an at to court is that what looking The out our also that at court that basketball well. et basketball a and lot -- nobody units, that sense into additional community, uses, as

Operator

with Rich from come will today question next Barclays. Hightower your And

Richard Hightower

to -- in progressive this is earnings us pretty a mean been the course is over into consistent rent it's about dropping blended the all of get think the to off the guidance? over pace much a risk I sense of current And trying year. of how ultimately about same-store get step-up But markets want a growth that cushion of wrong a baked theme in there just the sense time? I pretty and I'm rents that that season I of are supply Sunbelt

Unknown Executive

anyone's Well, whether or is RealPage X right I be numbers, years next it mean, now. supply look think baked. I for when the at or you the Witten the

like of You're a we supply but all difference. XX%. to down which in are Phoenix, not Phoenix, of mean markets units. is a couple markets, little happen west up in I XX%, it's side down or side a of on In starting and be it's most down of big East the bunch the Phoenix, starts or a

construction think development haven't a -- a I or rates as There's and We've year, thought ratcheted last from also lot done We an -- much to people up tariffs. On dramatically. of did lot that Most boxes you supply short to the I issues. another costs, as tariffs, so in and up being X.X while think are doesn't today, when electrical pushing tenure comes is construction products the lot not the dramatically, Lumber X% they the just think a look but things drop they're And developers X% when pressure don't lot of analysis bought. down dropped at still there's out cost. of them. pressure on would the of a I tariff not of maybe that. Canada, keep risk mean on costs, X% of will we or they're are add include Mexico, X% products like up on on

there's in would that increases you current with have say really order work. make in So forma forma the structure, 'XX to -- I significant a pro 'XX, pro cost 'XX, rent to

in there's rates a just unless costs happening. that starts, think fall upturn development don't have construction that's I big a risk dramatically, and you fall not So dramatically, in big

there's low risk So pretty I from a think supply perspective.

supply screen, mean I think people's play XXXX, could the progress. well bets how the until I coming deliver. it XXXX do think I stops. economy. if going I increase when probably mean, even how the but you to long the starts -- wouldn't in -- is we the even that's be we then on going side. risk XXXX, it's to year, it or because bigger And know radar happens I 'XX And overall coming, risk had is it versus recession a take think supply it I and in things out -- into that's then but that's think this takes it's you don't -- to on play if what in bigger on have come it's about if off to think all just not probably are that

on at least sailing into end I and 'XX. supply, we've So got through of think clear 'XX the

Operator

from Ami with And question will Probandt UBS. today come your next

Ami Probandt

in leading in is could Diego, So performance you San Arkansas representative think to Do demand a the you specific quarter. markets. the mentioned of in on top discuss Or you are And Washington, the Houston overall then some market? that markets stronger in Canada's boost Tampa there attributes are and these L.A. that fourth D.C. performance? specifically Tampa,

and sustainable? So I'm hurricane-related that's if wondering

D. Keith Oden

et Tampa, yes, we've cetera. seen that happen hurricane-related And So on Harvey, it sure. with mean will for that eventually, Houston moderate time. is over in I

definitely So was a that hurricane-related thing.

D.C. It's I around Washington, us commentary it's everybody Metro. is because group differentiator And XX%. think group peer had at the for market that Metro. D.C. markets, happened in have peer public have. constructive other we're pretty public has any other concentration On our company performance largest overlap we the you Alex the out, as those meaningful with Houston is that in only biggest in I what's and NOI look in presence. And pointed market we the if think that markets, the those Washington,

and of to that in time. of relatively XXXX it the committed combination X.X been Houston performer over And looks well. is, we're Now bringing the as like supply. again, for digits last a reality be great single that down just years, But will that's low to some is period has

put of didn't sector being issues. is just other But have ago, the energy a was that in pipeline lot all current waves well. missed of because -- couple Houston when the sort incredibly of years got play You of of performing the of

to last I X been that's in and continue think supported the it supportive more much all to indications that years. has even going are be than maybe

story I sure, has in and debts, working markets et has that bad been of the And down think all cetera. for COVID-related Southern California pretty well. anybody well. coming through assets a cessation pretty markets, those include of California, on by X has driven initiatives the those done to lot that So On is good as

I assets think story Southern a in anybody So that owns for pretty California. that's also good

to NOI operate So in the across on and metrics, occupancy markets tend growth better our we board. on

you've forward our So of our understanding now helps. with to we there's probably X way you're happy efficiency and and if [indiscernible], those just that some time got in which all right probably portfolio XXXX. these the in operate and the markets But and looking markets, those -- how let's really assets on markets, bring

Richard Campo

execution on I would more a little ability. bit Camden's break

It's it's on all that great You're not out is a believing it. XXX know on care players. best that And value player. it's want to we team. every coming a brings just of players that take our the adds energy, that have they don't and feel of it's synergy best work not -- Fortune in X know day you don't customers of And you philosophy, just companies really and and case, Sunday, up the are become one that the [indiscernible] working and XXX, list if their for to XX team, customers, our straight, it's Fortune's we for years

that's And turnover. fun somebody It's a great benefit question. There's " like going Camden. But big are people, when team. I a And going have part raise say, you to that's -- so think I'll customers ask "yes, to great and to and of you guys really a lower the going so this okay, incrementally very have it's they're and place, rent, pay -- sure, to I and you more

Operator

question And with from come will next today Rob Janney. Stevens your

Robert Stevenson

new the any you Regarding the start expected there on to is and on expected $XXX under X for starts today also, to about wait $XXX you Carolina the And the construction? guidance, versus projects? to need where costs million if yields can talk construction given development these million where penciling expected rents North assets currently start yield of have expected yield you those are anything

Richard Campo

growth and around to where lot easy kind been, have starts, what a that's numbers yields development ones it's and find currently of X%, tell backdrop our rate a projected will to you, I developments is our of under you, given were including not those cost pencil rental But the -- numbers. the current and of that The Sure. have our construction.

so And numbers we're haven't -- we developments but have we us been our can those I why rent get that to much able growth as or should located, outsized as where that better. markets to in that's excess given think to, and lean the in are

Operator

from Adam And Stanley. your Kramer today come Morgan next with question will

Adam Kramer

ask in few D.C. bit I here. a and about a wanted little Washington, to questions maybe

government. a with first, of I demand maybe just the lot around kind Obviously, just on federal what's headlines of and workers a happening think maybe smaller latest there. federal

So just there, last then maybe transaction the what's from maybe there maybe the part couple side composition cap of the market happening weeks and in in demand again, in second still in a as are of is outlook the foot the changes? And as of basis rates a in of what or D.C.? just your you per square D.C., on seeing what guys even terms terms government

Richard Campo

mid-Xs great D.C. rates high to the minus. property depending Cap in the me Let the in -- transaction is first. the on market or transaction a plus are hit Xs market.

of fact -- years couple that category transaction and be think in an D.C. range, not good. When think, we changes, So revenue kind really A government look the think continue, there's I interesting. been has about a outperformer you the demand from that last you still be the it's decent at volume there. growth when of has will And that will

I some prices a administration. ahead, spike more talk in the of I'll win, at incumbent look There's because single-family the if demand. of demand had the you of always an there the Go transitions let been than during property there's you because mean, be Keith. just more current new to If Keith there, transition sale tends markets for about

D. Keith Oden

I is it's for Yes. actually ], it's crapshoot, government of thinking between going every time of out what downsizing the figure to mean is a what's now of -- being hear. think. potential cross do you of people. I kind kind trying versus There think talked And currents happen menace to right [ about about you

have I they're number latest government error offered of was the think in everybody the think federal I I last total of, which heard count workforce. to rounding a that, for sign entire up it is people XX,XXX was at XX,XXX they to buyout going And said the up a federal or package. the

is -- So the time, that the at I on. going think conversation same

you're You're come have to to another the broader conversation you're having if to about back going federal office. a employee,

to Metro And portfolio which weak for D.C. our so I think effect that been it knock-on well the very that there's probably a be link could for as years. last there of frankly X And back us, in proper, the has big have to move in D.C. the D.C. it's more and and D.C. Proper. them of people sense make actual work going to for a preponderance an to or potentially office portion to Witten closer return into -- that proper,

broke never probably going to asked go going a on you're regardless So I so. a who many there's go think talk. lot I on lot the think And [indiscernible], there's think else do federal I do of employees betting to actually to of of are something how them under

Alexander Jessett

rates. increase in tell I'll And signed our highest has year-to-date, you, Metro new D.C. lease

Operator

with next from today Julien Sachs. come Goldman Blouin Your will question

Julien Blouin

trend the sort this the of closer end Yes. development end I the wanted to just XXXX. what in high drives between to ask of end versus the on year? starts and you spread to low high of low sort end the

Richard Campo

would costs and just -- seen, one we example, hit an low believe Nashville we've that Nashville if we what It's mean, so be a from I I development that return. spreads if take just sure of matter we things reads perspective, dramatically. reasonable making mean is of necessary were a busy the as

You your jobs. bid get anybody to couldn't

nations bidding Nashville Now our on X we deep property. have of subcontractors

contracts them So execute broader construction a what that, or rather that to then, we b, is for. then -- asking than a on maybe we just And hand, contracts, when go had would sub probably a, other less us little. which means the have what X% tell me X% can to get tells flatten, you've costs base, we from that buy happened go buyout they X% when down we once actually the anywhere you buyout

will going -- have more markets So it's be positive just rental and on of confidence us the year, that lean derivative give in. second a towards to of that better view middle when these we lot will so in of turns a rates, to the

risk. need to So it's get paid decision for really a we about development

So we have and that spread for and we can we positive 'XX is and then there to we get need midyear. going 'XX. revenue be the XXX to for and to what more between build can XXX confidence to basis growth points We'll have the buy of that what 'XX in confidence

So that will determine that range. sort high of of get end to the we whether

One can of we deals basically into can't I get could get who deals those their step then that and the merchant other, as think, opportunities done and we see builders done. those

during that done now. lot historically over transition a have we like We years, have times especially the

can't And we get able those either. up that done pick to of might so be some

well. So high as that that push could us towards range of end the

Operator

next from Piper Connor with And your Sandler. Mitchell question come will today

Connor Mitchell

still and so ton half inside markets. costs seems growth back talked color going there's obstacle. the that I all far. the financing back the the, the you pickup to eventually money broader But year. expectations the for just had Maybe on guys it increased the transaction to in just apartments a of rent of bidding about appreciate maybe And overcome like

growth is think much thinking is you transactions leverage just I question especially last, there negative will I do back half? And in more guess in quick longer how about a how that think come the on So the is follow-up just an that. guess to the my the Or the much might justifies that really aggressive on you expectation it leverage? being that of 'XX? for of underwritten too rate negative be market high to Do 'XX

Richard Campo

'XX 'XX that Well, the And betting of over exactly indication to happened years. history might that's growth be the any are what's that's what people sure for and is be future, are is going years. on what if outsized

And going X% can't make to in or economy be are [ GDP look you holds, going a Otherwise, of -- are numbers, excess 'XX -- a we And and what And we robust, recession they their significant wouldn't job usually, have happens rent you the supply, that growth you the supply then growth prices to X.X% not where get at to have never but market snapback. ] today. You or just have holds continues up the supply can robust. what And 'XX, know you a underwriting especially downturn have if you. be is have right? and 'XX. they to be is when developers you X%,

So and drive go I up you some in are will think markets our NOIs when closer to in together what's going to XXXX. about happen think that our markets, going top are NOIs sellers is buyers the And growing.

down if a betting believe that can you And same, they trajectory that count on have even hopefully, even the rate are be I higher going cap Over are growing to are so to the come And for then on. the and cash though stays flows think longer. longer you some. rates people going they're period, a

going able your NOI supply, combination with leverage revenue to -- of in to will the continue is the growth and -- think negative your they'll the drive I today. growth ability to people So buy be they even to keep

term, long NOI and buyers the have think rates cap a and to growth to down you're have some, come there if isn't the sellers. up then stalemate if rates I between go or the going don't

the And so transaction, for there specific interesting, And we'll buy see a we And in is what are, rate we if growth at But be recently. future. really you're higher perhaps, that pretty a to get just higher. happens to is trying their was in basically bidding to and the [indiscernible]. but And the price be view a a were same, Nashville look, their that like cap number, they're flow going you robust. what hear seller on will will is happens. we're cap the rate market example, right going The now, said, cash we

for of think all on I get And XXXX. what a and it's end interesting there the -- be to think the year midyear between will to more now -- see it will there so I very interesting But be be in to I an going happens buyers positive second we'll come market to new market. to think going the signs derivative for and that lot rent into the opportunity to transaction are create buy. robust that and of growth, And that's sellers a

Operator

today question Securities. Michael will Lewis Truist next from Your come with

Michael Lewis

back than in have any come to of to to this no wanted more decision I your XX% portfolio market.

diversification trend So there's been this towards and apartment REITs lately.

it know, XX of think right? the a it just of you is investors any Aren't better, for more be? apartment that there our better next there? I'm [indiscernible] thinking markets are into it just structural secular or D.C.? little your does nothing difficult not about out really markets. a say about case? lot you does Houston markets that about markets wide flat to As There's that Or more whatever or is or opportunity years the say distinguish? bit XX a might across -- and it and They're just Or diversifying being set more

D. Keith Oden

more all our better. depends So land. say say opportunity are when And set markets. it Well, some I markets across it's about on you the would

about of underperforming years and because would had were what children and Washington, X those it's X about Houston example, they portfolio, talk at have years markets, all Camden's where lot problem Houston ago, anybody X D.C. and or it's been a straight. our about. talked wanted -- the we are in internally And to been largest X For for

and in and top X Metro our -- we performer to probably or here today, X as Washington, or slated year and forward, Houston are the the X fast year well. probably in So top D.C. for this are be X top next

markets exemplify an at -- we in is cash assets the the expense just some standpoint, balance an to has portfolio So better, that having today, D.C. consistently in a our migration, XX the yes. -- Houston level ago, from operate absolutely about than it's question on more to to all over asked have and years at if It's time I them that that love. ability markets among what that's grow flow. performing and we And Metro. characteristics see is would allows want growth, you rents job better that Every in of reversed. been mean, to us X move market a

a not markets, just we like Houston. markets opportunities. D.C. about It's a other great growth we're statement statement balancing opportunities and and Nashville, where underweight about anyway it's got in it's just those opportunities and Austin So in

Operator

today question And Nick your come next Scotiabank. will Yulico with from

Unknown Analyst

I clarify at to [indiscernible]. Jamie's the wanted your Alex, answer question to beginning.

in assuming QX QX into absorbed to an from rates seasonally? basis? with to a you is continue Does lease cause one that would pattern Or that it's going on and continuing improve look new comp like turning Like normal the said absolute being positive seasonal there. fourth benefit quarter? You there to mean a are

Alexander Jessett

Right.

budget. seasonality. we're our what's that's in And So least to turning at

the of so in move not in just new quarter. to that And see when the least around the that we a people power. want quarter, fourth And and is of what lease that's our the the always positive who just -- usually lot quarter. means there's pricing third amount that's holiday It's you et then rates have season, softest cetera,

point return you to to so more at a And it pattern should in time. see that start normal seasonal

Operator

with next come question And Street. your David Green today Segall from will

David Segall

Nashville wanted or you to and to a rents development need X% Denver would yield? in unit achieve ballpark Can just proposed the drill per to down I achieve bit more who the on you starts.

Alexander Jessett

to that. to get We'll with [indiscernible]. you have back

Operator

And come today with & your will Kim next Zelman from Alex question Associates.

Alex Kim

the well. trends your was appreciate up the to and revenue far choices flowed always for quarter lease-up communities then you XXXX lease-up for song year? and broadly the leasing I could how if X leading into about more wondering the I talk as call so your that for the line just in

Alexander Jessett

Yes, absolutely.

the communities. furniture can a just that et and of leasing the show up if and demographic they to have looks and they are X make and up that has fit, that they're are rental that type our we've single-family tendency you a look sure been rental again, they single-family very the bedroom communities their at show communities then show product It's they And particular slow in we lease-up, up for once -- them cetera. that upfront So measure are.

so a is And it slower leasing.

decision going a as as the what Camden But Durham, they're -- I move we to is, in, we've we we Now will in long them think make it that they're out. one to if takes seeing. When the our to that's decision is been to And think it make the move good lease-up. really that's third long think them last sticky. take at once be to a equally in news that turnover, look which is

fourth quarter, that we leasing slower. expect, would we the type During had is of which the

you is said where occupied. slowest so and look XX% [indiscernible] they Woodmill are, always the Durham being one if it's of said, is that's asset. That whether or new Creek XX% an not the I calls, a previous lease-up or is quarter fourth to the As quarter occupied, existing not

both So getting of those stabilization. are to close very

we And is those in some bit stabilize. get as And behind. Long so they a XXXX then should Meadow from little obviously, uptick X Farms

XX% other The X, leased. started after just them because at it

Operator

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

Richard Campo

multifamily. We earnings the season for cap to appreciate your close large and out we're today, the glad time

you So next we'll or in conference see the roadshow. next Thanks.

Operator

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

may You now disconnect.

Camden Property Trust (CPT) 7 Feb 252024 Q4 Earnings call transcript