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Camden Property Trust Adds to Development Pipeline

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During the first half of 2019, Camden Property Trust completed more than $1 billion of debt and equity transactions designed to strengthen its balance sheet and give the company maximum financial flexibility in this part of the real estate cycle. According to firm CEO, Ric Campo, the company accomplished these fundings and have been able to increase FFO guidance, in spite of having more cash earning lower rates than originally anticipated.

FFO growth per share for the quarter and the year increased 7.6% and 6.8%, respectively, he said on the firm’s Q2 earnings call. “We added to our development pipeline and completed the acquisition of Camden Rainey Street in Austin in the quarter. We are on track to meet or exceed our original acquisition targets of $300 million for 2019, in spite of a very difficult acquisition environment.”

According to Keith Oden, EVP, second quarter revenue results were in line with the company’s increased guidance, which sets the REIT up for continued strong results for the balance of the year. “Overall, same-store revenues were up 3.4% for the quarter and up 1.5% sequentially. Second quarter growth in our top four markets were Phoenix at 5.7%, Denver 5.1%, LA-Orange County 4.8% up, and Atlanta at 4.6%, up. As expected, our weakest markets for the quarter were South Florida, Charlotte, and Houston with revenue growth in the 1% to 2% range.”

Regarding rents on new leases and renewals, second quarter new leases were up 4.1% and renewals were up 5.6%, for a blended increase of 4.9%, he explained. “The second quarter 2019 blended rate of 4.9% was a 30-basis point improvement from the second quarter last year of 4.6%. July preliminaries are at 4.1% increase on new leases, 5.3% on renewals, for a blended growth rate of 4.7%. As expected, we’ve seen steady improvement in our new lease rates from January through June, and as is normal, the new lease pricing will begin to taper off as we approach the end of our spring-summer peak leasing season. Our August and September renewal offers continue to reflect a healthy rental environment and are being sent out at an average increase of 5.7%.”

The company’s qualified traffic remained strong and supportive of the REIT’s above trend occupancy levels across all of our markets. “We averaged a strong 96.1% occupancy in the second quarter versus 95.8% occupancy in the first quarter of 2019, and 95.7% in the second quarter of last year. July occupancy is trending to 96.3% versus 96% last year. Our turnover rates continue to run at historically low rates with the net turnover in the second quarter at 46% versus 49% last year. During the quarter, our move-outs to home purchase remain low at 14.3% versus 14% in the first quarter, with both quarters well below the 14.8% for the full year of 2018. It appears that the rising price of starter homes will continue to put a damper on home ownership.”