Camden Property Trust (CPT) 28 Oct 222022 Q3 Earnings call transcript

Company Profile

Participants

Kimberly Callahan	executive
Richard Campo	executive
D. Keith Oden	executive
Alexander Jessett	executive
Jeffrey Spector	analyst
Nicholas Joseph	analyst
Austin Wurschmidt	analyst
Neil Malkin	analyst
Richard Anderson	analyst
Alexander Goldfarb	analyst
Chandni Luthra	analyst
Robert Stevenson	analyst
Wesley Golladay	analyst
John Pawlowski	analyst
Beier Luo	analyst
Dennis McGill	analyst

Call transcript

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Kimberly Callahan

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

Joining me today are Ric Campo, Camden's Chairman and Chief Executive Officer; Keith Oden, Executive Vice Chairman and President; and Alex Jessett, Chief Financial Officer.

Today's event is being webcast through the Investors section of our website at camdenliving.com, and a replay will be available this afternoon.

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

them. our would prepared advise making Before performance beliefs. and on of our not I statements forward-looking expectations like differ the you are risks involve These based be found can uncertainties we to begin future in cause SEC, Further encourage expectations. our actual will could and remarks, from to guarantees review information and with we and be everyone to we risks results statements current that filings that materially about these

represent Any no current forward-looking statements supplement subsequent made on update to and today's these assumes call company because of management's events. the or statements opinions, obligation

section Camden's As camdenliving.com, complete reconciliations non-GAAP it call. at third to a includes the and is this measures, discussed reminder, on Investors be our which of will financial earnings website XXXX release quarter available in

then that in you respond e-mail we call your we questions We today, questions concludes. X additional hour, discuss. everyone to to hope and are be happy X, we'd or the queue to our by within If unable to after speak you limit call phone additional items rejoin with ask the the queue complete to to have if

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

Richard Campo

unwavering city each tour. [Presentation] resulted teammates shared Good customers, Earlier message Camden a of morning. award today this music other Trust shareholders with the idea was XX The You. in wanted theme our Camden to send our to that The our ceremony thanks their annual of during and video throughout was pandemic year, and this beyond. all for of Thank commitment our on-hold Team managers our Board to

Richard Campo

Rents their be as above long-term seasonal are the for Operating fundamentals slowdown strong holidays. and continue following to customers prepare normal trends.

and rise interest relative supply. for all continues home are this to home rates markets. given new the our price appreciation, in in rents Even higher strong pre-pandemic is historical setting in at a And play, Demand ownership to high renewal much outstrip all-time up levels, apartment affordability than comes start into as seasonality XXXX. of and an

a Our development to external pipeline growth. continues source of be

discussed the the transactions we as capital on Apartment or last remain call, of participants for and balance buying selling continues we will properties year. cost price As quiet not rise our to discovery continues. earnings of be

of positions balance Our customers take to and advantage of and for experience do one unfold. in our opportunities, our of teammates Camden time. lives they would land us all as of sheet teammates, strongest a like to REIT all is our the shareholders I thank one they our the improve to at

Keith Next up on the call is Oden.

D. Keith Oden

Thanks, Ric.

a and quarter October on Same-property for our the revenue quarter third year-to-date. was results operating details XXXX growth XX.X% few XX.X% trends. XXXX and Now

outlook of was we've rates the full growth for revenue at our performance with our year third so the expectations, had maintained X.X% XX.X% and has signed signed at X.X%. in our range. up midpoint new XX.X%. at growth for Rental renewals for quarter of Our line XXXX blended XX.X% leases of and at are To date, X.X% a with new blended trending up XX.X% during renewals rate October leases guidance leases

became that was leases For in blended approximately October, the XX%. effective rate

XX.X%. quarter from the is XX.X% of quarter slightly XX.X% during averaged down the in October XX.X% at trending last quarter, currently and Occupancy third occupancy third XXXX 'XX.

dropped the last homes of XX% a for move-outs continued through versus was to rates. purchase Net move-outs XX.X% would expect the XX.X% purchase last turnover year, in quarter decline to to year given mortgage remainder quarter. recent homes the and third to the see in We increase XX% versus

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

Alexander Jessett

Keith. Thanks,

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

Florida. a Hillcrest, million new million XXXX, third in Atlantic of San Buckhead, and Camden quarter XXX-unit, development we began in a $XXX Camden million. the new and both Camden Camden $XXX cost with rental a combined leasing And Creek XXX-unit, new Houston began Woodmill a we Diego. We single-family Plantation, both $XX construction metro at development the XXX-unit, combined Meadow and on in development area stabilized communities, XXX-units in million Farms of During Atlanta the Camden to $XXX Long

the further During $X.X extended with from credit existing X-month our we million quarter, extension XXXX, of maturity increased unsecured options. to August X $XXX the and capacity to line billion

loan term with We also further added a maturity extension delayed $XXX XXXX million option. a X-year with August draw an

have under million under line drawn we our amount no $XX outstanding term approximately Currently, and loan. is our of credit

our use to term credit bond, unsecured December year. likely on matures our will $XXX line and this off XX pay of loan We which million, X.X% of

authorization Board recently did or increased million. million repurchase during any $XXX end. share from quarter not repurchase We after $XXX our to Our shares

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

$X.XX funds $XXX.X for from are third reported million same-store quarter which property we approximately or results night, or in of of share $X excluded from our associated operations expenses Included Ian, share. per Hurricane per million $X.XX Last are the results. our with

Excluding combination income the prior been property third primarily corporate higher overhead This resulted per lower of slightly expenses. variance range. quarter the and share slightly impact from other would from $X.XX our the results guidance above midpoint positive our Ian, have $X.XX of

the and During higher-than-anticipated we quarter, from utility repair expenses inflationary experienced pressures. maintenance resulted and

offset claims health were lower of insurance amounts due However, expense these lower increased to levels employee amounts. by entirely

for XX.XX% reconfirmed our previous midpoint operating revenue, net and Last of night, income. we same-store at guidance year full for growth X% for the XX.XX% expenses

of based increases X.X%. XX.XX% achieve new the renewals and quarter XXXX. growth for year lease averaging XX.X% occupancy the These with averaging in the is the of revenue remainder compared increases XX.X% approximately assumption of of to blend upon fourth approximately Our expected same-store blended

$X.XX night, per $X.XX anticipated lower This full overhead $X.XX. share XXXX year per midpoint from our share previously guidance corporate midpoint results increased also the new a primarily increase we costs. Last of FFO for of than by

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

with per in a the increase represents is recorded third midpoint tax $X.XX communities decrease We lease-up our the expect from to fourth partially refunds property the the nonsame-store in within and same-store share in $X.XX turnover quarter expenses in higher FFO maintenance sequential to $X.XX in $X.XX $X.XX. for quarter. our repair other of the per result impact Hurricane of $X.XX timing communities. typical unit resulting increase $X.XX be property the share increased range in from NOI share utility, development The from combined $X.XX of occupancy quarter an mentioned approximate of an and sequential third and revenue in from increase our the increase approximate NOI, primarily per and expenses driven net rents, market $X.XX by $X.XX by Ian, This offset from seasonal and lower previously lower resulting

quarter net $X.XX amortization related second This increase aggregate partially fund market to of in decrease assets. is our of low by the leases the offset a acquisition $X.XX

us As market amortize either in we or our first the leases place discussed of the above FFO accounting quarter time the recognize XXXX, lease at of on months. below-market to will amortization over Therefore, the in earnings we differential identify remaining term, is assumed price and approximately the net acquisition. from purchase below noncash in required of call, leases which $X.XX X average acquisition

to we of quarter. amortization above in the If in the FFO third recognized reduction will FFO the year-end final over costs recognize the A in the would market, in related and rates term. fourth higher related XXXX lease amortization, resulted insurance attributable and higher quarter corporate We $X.XXX $X.XXX were leases primarily to $X.XXX remaining and accruals. higher in other expense, $X.XXX certain health this an the of have from expenses to anticipated of decrease FFO interest variable timing interest higher

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

Operator

Spector Bank will of America. the come from [Operator first with Instructions] Jeff And question

Jeffrey Spector

should year Ric's How supply -- My markets? I -- Ric, in guess, that, there's demand is to is thinking continues I supply common are supply. to first you you comment for outstrip feel for I your that guys that question continue. in a about now? 'XX different forecast Or XXXX do How will forecast, various follow-up in know a on say. And next that

Richard Campo

in 'XX is definitely supply be going out there. Sure, to

we and decent coming And new that's supply think markets, think we projected XXX,XXX number, markets. units about growth our our continue. with Witten's a to I to from have migration going job Ron into

able issue, units pretty supply think in. obviously, economic new so we to continue even on should should out we that period, XXXX decent that year observed big XXXX good supply coming -- of the and be raise in feel the should to could there be the But rents And number we that some with be during barring a that horizon. about

Jeffrey Spector

the consumer we there you And thinking signposts into about back, is on to How 'XX? head weakening? be you of into clear that pipeline. development How then 'XX? as my as thinking head we that some about mean the does seem second I are pulling are

Richard Campo

decisions and good is start looking Clearly, of development, are I year, them at making we in start the we year. on developments think of we're of that when the end middle each we there's or the And -- one towards these fair news number XXXX. deals in a if our of

so that And perspective. have from we'll just market the to how works see out

of feel is which the things one construction good. is pricing we are to starting that out, is I flattening think that

economy wait maybe to how so does also few and the the to more market how sense cost year. And on it see cards makes -- next

Operator

Joseph Nicholas will with Citi. question next The from come

Nicholas Joseph

hoping but rates can not been would market Recognize some recognize you but cap be where probably trended that color out lot points data transaction around recent also provide recently market, kind is traded, have any the appreciated. that mostly of on thoughts or more across your you've of a

Richard Campo

Sure.

right a I exactly And is deal think problem have quiet little we going market that's here. a technical perspective. from that very the

here. this So my -- me on join going to side Keith's on

yes, you to think a going don't price it not -- have people But you're in if to this the you discovery, about into get market. so market's reason do then if probably today,

everyone. I version point get up especially I transact as of rate the to -- just gone of to that's debt, think capital the having that that so the computer a in just when you there's key uncertain The fix their And has -- are is floating buyers reason were Cost keys. think, rethink ultimately, high-tech environment. using for is this no this debt, models. we And

Yes. So

have The -- value. substantially quarter the is think cap rates the of sort to So and people definitely property are I for waiting happens. risen news it's see what good first

it down is good in on what get. way, So our all you numbers talk way, And XX%. who still We're our we numbers. anywhere and depends above competitors' saw normally you're to from NOI to, XX% driving way the news you a

some so that's And of of kind rise. rate helping the cap offset

There's be And wall to still that And there be there think a really is wants to invest so out in will I going capital transactions good ultimately, multifamily. done. of a year. XXXX

market, slowing a about still going is going start to they growth I should think we average, XXXX, start keeping in decent already. so better than falling -- even in think but on have a we're great embedded values that to flow for have have I And terms it's when than thinking growth. dramatically probably more rent than year that a in the cash some from benefit but be lot XXXX, of it slower have you

Nicholas Joseph

uses very of capital, bit. kind was then And development That a on we've helpful. obviously, as touched think about you of

there point mentioned You the of more a At you think executing capital? implied what How today? become mid- repurchase cap your use X% rate that to share high do stocks the attractive in program. does about

Richard Campo

$XXX it's FFO authorized saw big the when recently, of but one hand stock, on you in today, -- of been stock as are cap -- interesting values our -- because by not about increased rate, Well, buyback tell yield program but that to the a Historically, hard it's clearly pretty the and a Board are buybacks buyer you price. attractive our we implied its stock think is our what the it's the million. release we've

want The have a to sheet land it's that REIT issue keep strong. is back. in lot And you we of stock buy to hard definitely balance our

the in XXX stock. stock and we've But to buy that's XX and you your done market sell cents cents in a when So out as the go we're money dollar, buy borrow to private going can dollar past, on on pretty good the the at at assets not investment.

moderate not to -- XX%-ish to basis, through to a take persistent and be it And can time. do a of get our so has has always sales through we the continues said market the price in -- we'll our we've And at we'll discount be stock be philosophy. debt. and We'll and on that

Operator

The question with from next Sakwa come Evercore. will Steve

Unknown Analyst

[indiscernible] from development have a question Evercore. I follow-up about front. just

hurdles on how capital? And conservative you changed your on in underwriting? deals given So how of much change your more you cost much being are development have the

Richard Campo

money changed we didn't have on. our earnest Well, We the have development deals we hurdles. that hard definitely contract that under had

has Our do least XXX wide you to get And average gone points at some cost that like obviously, gone a our cost it, not capital. when of and of X we're weighted from some And weighted going to our of X spread XXX average capital down change basis to of everyone substantially, up cost capital else's. positive development to of isn't change. a has and

we And today, have hurdle development then developments we're new it. definitely hurdle each And started so that of that that our into putting pipelines. implemented one on new future we existing haven't

you've our up The good gone news seen have rental substantially, as rates is that in numbers.

we anticipated than in we've of able in rents. terms -- lot a do So of to had been better

XX% starts cost their builders per merchant year. are X% is to XXXX XXXX, going a telling putting it were to that month, going when financing. we number And down of bank cost the we starts today substantially go given and capital that fall we seeing and lack in think because usually, negative call that are think be slow me most a start also construction so We increased or of

we are we our rate. yes, the all of reviewing and So into hurdles, fact, fit our projects have in increased new that hurdle

Unknown Analyst

Okay. contraction guidance. end top $X.XX second helpful. from previous That's there My the of with really question

of kind so operating you more could some So far? trends you've a upside? conservative be And may the outlook, color what provide the limiting on indicating seen

D. Keith Oden

looking top days a end full $X.XX really rise our when in a And we're than quarter there there's last you're just a the year. are month end, a and you was $X.XX bottom reflects the better Yes, of or the that there's in into the at lot fact the decline in XXX year. but a XX world days visibility when

because likely So narrowing guidance be we the less is to it's really there just think variability. more

the I just the uncertainty the guidance ERAP width of into collections. quarter third that took of amount The on the we and payments. primarily around was mean

And it's particularly environment, so just over. because they're things this X hard in and that they're California direct have very it's we items control in -- model to D.C., -- Washington, not those

that bit midpoint full got the better at and Actually So give the little little and think third We guidance our reflected guidance was trying less just for same. quarter, clarity investors over year. the a visibility. raised we've the yes, $X.XX in the kept But to the -- up around just more likely the it's time forecast really it's we period we're midpoint. a to bit where end

Operator

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

Austin Wurschmidt

X% for helped, Ric, just much Xs. new go up you And that which expect secondly, from how still think deal development. Last guys I quarter, you need First, yields had hurdle year? then low on the starts rate? commence costs Camden the but mentioned the discussed And Xs low this to have has you from ranging future rents back to Nations down here to to gone to some, going achieve you

Richard Campo

not go To start upon in first quarter. Nations the don't terms to year. going construction the very cards depending this be they're going next big second economic -- down. answer Usually, to fall takes cost in the start in year's costs first to It part, substantially think of will a But how and we're going a down bad we it drive down, situation situation soon. to really

a at really we're in style crisis assume this in financial not that big crises have you that problem. anticipating financial next We year the way, unless but point,

at prices happen already at the done during down costs pre-pandemic maybe lumber. commodity seen developments the like do there and a lumber stay some being least little. as But be and then moderate, tripled But though for prices We're pandemic. we've will what will pipelines just will is fewer flat,

development scheduling will add to less So time to of be fewer I pressure and is schedule that developments out having out will the be our might to with to well. compress the able which as of time able money done rather take to think save be and some the there on it that than system time frame, out cost we'll getting some take also think of which cost, -- -- I shorten

ultimately, will is, where given good rental should yields So help be about likely rents and And to today levels well. are that are. it is that news strong in as be those where are the XXXX, we

Austin Wurschmidt

So based would meet that starts that the you looking hurdle? today, at on have how future that volume maybe And backlog X% of the sort of of of projects? those what assumptions, some sort current rents and cost, represent today's many

Richard Campo

we point now, this it's a be at what pipeline yet. right haven't we're development X,XXX we we're one units or really it. an going Well, to not going bunch each looking on the to wondering at that pipeline. units lens put rate to that with because in time going point spent independent of basis the our And X,XXX have hurdle and in But is at evaluated around on each new be

is when to really the today, the you good the that if want Now into prices, about you have to equity into obviously. too, you debt go capital don't to, want markets have go we news, don't the you really don't net market think market, that

profile. you a And -- is that certain development use will then that we You're certain fund trading, with future. -- existing -- at dispositions right? And in for a growth rate asset you likely about start so -- has to looking development with a what a thinking different new trading the start price at in that when do

sell funding can we'll okay, development accretion have is that. if think than hurdle limited So saying, by dilution and what do certain rate look that and a dilution rather development, and on from and scenario model create the selling will just to the and other assets buying sort we a I at incremental that properties, of have we I -- then

a for bit the will dynamic little for year. next change so the hurdle on new And that developments rate

show And fund whether just to all we'll ability buybacks we'll have and the out bottom plays to next market -- will you and the there's or that line through is with And to development how activities dispositions. figure have an stock year. to see have what us have other out

Operator

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

Neil Malkin

issue, great. to or First question, ] either the strong. [ very debt October like move-outs mentioned noticed Obviously, running basis maintaining, L.A., D.C., assumed dipped sort long-term to you've in Alex to this previously, in it every reimbursement Sunbelt year. out of from were occupancy I [indiscernible] California been like XX.X%. it XX potentially guidance think as then had points XX.X% the vacancies That's of I that with quarter. funds. are raising it elevated some like do looked seems you delinquent And average But the half back of bad guys

you took by XX like seems it So points. that basis down

can what's what leading talk maybe and I seeing mentioned. the you to you're So that, things the and just drop all just about

Richard Campo

that? take Alex, do you want to

Alexander Jessett

absolutely. Yes,

thing on the So touch occupancy. I first would is

So had asking thought. occupancy is are than we higher than by market expected, our lower a we the certainly rents rents same but little bit our or token, net

a between rates. it was occupancy of So sort rental and really trade

the are will sequential primarily you thing to especially third out, less in I the driver you and second point for in was correct, the The ERAP did proceeds that and Diego second and what a California, of on quarter San differential we the basis saw L.A. quarter growth have from

$XXX,XXX the to ERAP quarter. you third less So as about to idea, quarter the had Diego in second an received compared San give

would in If you have been X.X%. Diego up San that those sequential revenue normalize our both of

the had third you Hollywood, in look compared and at $XXX,XXX to less the we particular, the If as in ERAP second Camden L.A. quarter quarter. in in about

the So we in a and income compared debt less quarter. third And significant to had would second higher bad reletting the impact. quarter that as have then Phoenix, in obviously, also

would up have that, you If would that X.X%. been normalize

the of So what that saw. sort of really is drivers you

Neil Malkin

Okay.

just And long-term out all more -- of potentially there. nothing to be move-outs particularly so potentially California it's It's of be really elevated contributing clear, portfolio laid will nothing that? delinquents, in to about the for -- your any

Richard Campo

third second evictions if third Well, normal the -- than more quarter. quarter skips quarter had quarter. -- in the We and in did -- than have the and or than we you we more second have second --

of out. are by is some that And who people clearly driven moving

second interesting higher One of numbers we is the when had collection things really that in that's look you at rate. a quarter, the the

by third moratorium like And I residents was primarily had pay quarter California a think And to January and you eviction the And where their XX% change. and change. the is have XXXX. answer rent. then XX% situation extended thought that some they and then California was most would driven until the

you do and you not -- take you And evicted to about give don't and be opportunity able that. you're to they pay Gee, so people be have your -- going to say, don't runway people -- when to rent, an

no And hopefully consumer XXXX. so behavior, improve we starting in driving in that or January, have hopefully, eviction will things moratoriums and bad

Neil Malkin

commentary Okay. maybe potential to some a Other from to brokers there's that, that companies that ramp. bit. some one implement attraction from very employers seems talk is, continues been growth in-migration seems conversation heard Sunbelt and of But It about be reversal return for like continues we've of Certainly, office. job as little the me like strong. across to

So may thoughts us hoping to one reversion signs in-migration some that strong in-migration in confidence maybe or data be in anecdotal bigger the there And of your be or some sort on way? picture could was that? then you or any of I points give early very

D. Keith Oden

Yes.

has Camden's numbers migration of migration net Camden. So He's Ron net got the at Witten's based net are markets in-migration for -- for numbers XXXX, $XXX,XXX XXXX $XXX,XXX. -- he for same to into on

positive lot So that reversing, in going his significant not geography. it to will -- to be increase stays XXXX. to overall obviously, I that variability. in-migration elevated numbers subject work actually a net pretty think directionally, is in-migration But to continue but it the indicates XXXX. Camden's only And not forecast of and the And a they're done is in in he's

Alexander Jessett

you it's basis of non-Sunbelt of actually that, And up points our came the then that XXX basis compare quarter if from so particular market, quarter in And points. and to XX.X% add markets XXXX, our XXX in move-ins third up to third sequentially. I'd that's the

in to increases continue to sequential we see So our markets. migration

Operator

The next come Anderson SMBC. question Rich with will from

Richard Anderson

of add question. you picture described, changes the back patterns, as to at we're Ric, then to want from that but about have sort if all of have it could might a history of seasonal because some we a see I we what are big seeing, looking some happen potentially So clues recession, this a normal And kind coming.

And a Chapter that multifamily protects if or you against your called that curious fundamental confidence could X firm just like deceleration -- industry What think open outcome what an happening. to happen And is that a and seasonal leave have, Is this it, be what the the there last now? will potentially scenario from I'm the back in -- mind draconian, it into a avoid current of wondering pretty is and would something look at today scenario. really you time But that that? year maybe option if multifamily normal I'm call you beyond meaningful patterns. setup growth times same-store fell last negative about you several

Richard Campo

Yes.

think, to sort call of if right, different you whatever normal all, had we the or hard XXXX do 'XX is landing I want a like So first recession going crisis, world... A soft landing, it, a financial is multifamily of or a well. in business recession and to you have

from one, is across starting level That's high reason the is, you're out numbers, high at number and Occupancy a number -- the one. right? So country.

really are consumers doing our the two, consumer well. Number --

their our of in of still. of income a XX% for in rent. income than is They're bank the percentage $XXX,XXX paying the average rent less new employed. lot They're $XXX,XXX, in They people. cash well Our have

for in, had as supply coming we've public the the to consumers So portfolio And But killed bit, are that been business we've last much. you have great. we company doesn't never doing years, goose. XX some cases. it's have -- have, golden it in-migration our in has slow supply yes, growth we really when of markets diversified But and coming. impact the a because supply but these coming this It a little the might

to the single-family to through XX% that home think buy down start we relative pricing and single I multifamily go houses. you folks single-family to when the XX% you at ever we were think it's move-outs, The October model summer, were digits to in our about and to as pricing. today are rates for the tripled going been now. are people the numbers being is think So when about home we -- moving XX%, history And is good at in thinking as number for out trending interest

I serve think with those on the held be I -- our be any it's slowdown. a And largest down up. in so economic -- Board in that, forward, of are to America. really this going sales June privately multifamily not from good should homebuilder they're XX% and And the all backdrops, all should be place a

D. Keith Oden

on land rental -- on of the a if this growth, take and X% start it sort as at I as to year, just up of if rent to guidance we Rich, revenue, we've given a XXXX So even the would is year with sort would normal long add -- type recession that that, embedded X.X% the rents you start bit -- the to side. hard and I is think little

multifamily a be really it really As a XXXX, place. far persist protected going to is think into long is into doesn't I as --

as As in Ric their mentioned financial different don't great earlier, now really long scenario job, it's residents a different obviously, lose prices. are our shape. -- residents as good as our And

up it live on job, as As rental be and term their we'll growth. they that long live X% to where to continue still going they're going They're lease live. have to out implies they their

just but a or X the in call direct it million near course, impact things we mitigating million to there's end margins, XXXX. think lot I the not factors of just jobs affects if of it's where portfolio over sit we So to mean lose that of a today. doesn't our term, It the it, X economy,

Richard Anderson

to -- history was its mentioned guys? XX% how bad What compare At at worst? income that, it has its highest? for does side rent when quick gotten XX%. in of it you a Just to to you And how

Richard Campo

think I in zone. just stayed -- As do markets, it -- low-cost So noticeably high-growth, to rents that in aren't We're have rents right? with anywhere we markets. markets. We've the our actually and never had in has our

we've Coast I East So by XX% Coast. West been and driven maybe years at and think over probably the

If you look at XX%, California, it's that. probably higher the It's than XX%. in

is affordable. City But the move stay. back. one why and of to see because cool has you a done for And Sunbelt well reasons line New a price that the is really the have Once and York that's move that they it's can think you bottom people apartment, I lot in -- apartment half and of the don't you Charlotte it people get like so

our so -- I never last the income that really. -- pressure had years, the on to really for last in the think rent ratios residents' market we've And [indiscernible]

Operator

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

Alexander Goldfarb

X questions. So

it weighting. not portfolio D.C. comparing to your having to going Cal Just not obviously, just about back is and now, markets. especially the mix. in and But And mean overall especially who Southern look analysts time the given to D.C. peer I transactions right capital would it's any be and Southern Cal having portfolio it an are D.C. the asked your the at outsized if America, you helping doing seem large like

to seem when these fund down markets it severely elsewhere. like markets and and or exit So the sell return, are down would weight

definitely the cost has better than be Cal, a Southern still now, diversification taxes, cetera. et Just economic supply, Sunbelt supply right push sort D.C. of Cal whereas decade-plus its ability and more resilient has issue the California because other through of on the of lot seems while parts to curious a living proven in Northern to in and

to curious, just portfolio at X as your you look over the X your So thoughts years? next

D. Keith Oden

Yes.

portfolio D.C. just look and our rate big not our have. California have of other Alex, the I that at still of the So And seek the pervasive. markets the economics the chunks experienced it, is all that that are our will level. rental water reset proper Metro way portfolio think I Ultimately,

think are Metro. average Probably D.C. California. in same rents up point, we'll the portfolio some ultimately, of in our I the going in exceed at

disconnect what until at. just markets, more Maybe. which importantly, like you opportunity D.C. markets trade But this -- have XX%, shrink those really we'd reset the going So over asset is we've question long valuations X I a got your underlying of the California between to XX% is of you've and things reality the to time. underlying term to X the all mean, consistently those term, by said that our number? there's that the long in then kind Metro get that you California ought on way, at a at huge of portfolio. think to in right X And of now, rental that D.C. right is almost XX%?

and turmoil X still I it this the interested as we'll that and a at markets, possibly in look support buyback we pricing. or to point. those to Ric the around program development then doesn't mean about edges, even if share math more in uncertainty And won't what I'm at kind of happen know, do works. then that get opportunistically program to something, It reap talked the So what our -- underperformance setting we of in needs let's let's believe level through that the period and be

Richard Campo

bought If in the you around XX in assets like and concentration we've $X and/or we billion, have the market pretty last ultimately, think done last billion years, $X what years. XX substantially and we developed sold moved trading the about in

of a of you'll over And period long so do some that. see us time,

Alexander Goldfarb

Sunbelt pretty XX next from But question where markets well supply. saying, risk? supply apart like year, any going has you are And managing area supply or over months, you're where of Okay. -- Houston. at submarkets there second outside with is any a back look submarket just your as there's actually any your view guys markets not you then you that hey, to Again, at the as or traditionally next maybe could look or this is all that your issue? across an supply properties is be all concentration the have portfolio, submarket citing that Or could done

D. Keith Oden

tells and in puzzle real to migration. it but So continued Alex, Same also continues the that our and XXXX in in Austin me tell apartments that Charlotte. in a the has XX,XXX thing like Austin, to and be there employment in the to where almost portfolio, overall rests is what just tell would strength market completions X I me answer if yet cities. outperform growth growth, Because look places you job I that at had we these

XXXX, in forward supply of increases Camden's that Well, the you to actually roll if markets. market almost all

this completions to got across about moving Witten's completions XXX,XXX year, about Camden's XXX,XXX think year at next I portfolio.

necessarily meaningful, not of job on what's happened light in-migration. concerning it's but that's in us So to growth and

I markets fall then that the that Camden XXX,XXX indicate XXXX. from you across than starts in to in into forward in down data news to is good So if his less about think look roll and we go further all XXX,XXX the XXX,XXX data of Witten's XXXX, -- they for at

of and by we're completions norms. But -- down, have the or for and the to for that's a the be going starts to 'XX they're in Now year-and-a-half historical through slug going good continue world coming is, that because to reality way the multifamily to out news horizon. are are on way probably lot next 'XX elevated now so

that able But it's our view in we'll to between continue that our growth new have our geography in-migration. and be to backfill with job -- --

Operator

come will Chandni Next Goldman with question from Sachs. Luthra

Chandni Luthra

I So guys any Hurricane increase talk on hurricane? the short-term the any in seeing Ian. or rates leases Are of aftermath wanted about to you impact in

Alexander Jessett

not. we're No,

D. Keith Oden

seriously very we we quite no have impact. Fortunately us, for had nor did had residents We damage. any little

got $X So very -- top -- been was of path The little would damage. that of right given it's amount top had forecast the less We maybe Category that with we estimate over very gave with which of Orlando fact of the it how we as storm of disruption. pleased having Bay, it no, originally million, we the different the than storm minimal is But was you. that we Tampa be storm, conversation X were it different a out. where and a size had over went a and a -- lucky turned little that magnitude

either -- be try kind would We where benefit from badly homes coast see -- the on the normal people Florida. areas the of are have moving place at that -- into Those from really of to their those our people that rebuild they wouldn't a seen affected not not gulf market. we've short-term shelter while

or issue assets [indiscernible]. So not been either a our us, overall, it's on big physically for

Chandni Luthra

it. that thoughts about items real bucket? think should estate How follow-up, other taxes, on And preliminary line a any the we year? next as into Got that insurance expenses go all

Alexander Jessett

Yes, absolutely.

first. real And obviously, because if taxes, you Obviously, So about expense XXXX item. look X they line at they're think address look down. is then has a to preceding values and fantastic that's been going our sort growth interesting supposed real year. that estate at and assessors real I'll largest to come at, look also values But of clearly, NOI an typically growth the what year be years XXXX have

if I But to protests have think of going a working XXXX. and lot And this lot to typical at still end budgets. our our through working But property going believe point that would probably we're through think was process we're obviously, -- of lawsuits a this in the tax range. our towards so probably expenses I high I of in I time, be are

driven the think about pressure. of R&M inflationary expense be you utilities to If categories, and the going Clearly, by rest the are

is inflation upon So point in at it doing what time. depends that

as which in on call, talked in a our by a on year million. benefit this program, to side, be I we million, our million to us it in $X should reimagine rolled work $X about is out about salary the $X On us site to but site XXXX earnings XXXX, last benefit about

are these offset So of obviously, that's lot expense pressures there. potentially a that a positive that out should

did pretty -- on insurance this global Florida, a has of storm global of light the sort large events. in have then a in And year although terms side, been we

So my is insurance normalize. starts is, that hope to

Operator

The from Janney. Rob next come with question Stevenson will

Robert Stevenson

the transactions? the pricing land? that pipeline? on is current actual $XXX just off And hold market And you're What's seeing the there? seeing development come transactions? current Or expected what's that yield like property stabilized million for on Is are you

Richard Campo

is have that properties X.X%. in the we -- yield X.X% to The are Yes.

right So landowners X-ish. kind terms The to have what is challenge lower it's in ought negotiating be. but the seen to some of we really it of -- with have price were at their land, it's we the you today hard we -- call that peg price,

land terms price what be there in So the some of definitely sellers of the movement is in on sort future. should

prices land even we I some, And executed. today. think, again, to underwrite with down it's going hard haven't

What have we already are are having doing have hard in contract we that land been we though those positions out. our that pushing earnest money, under

today for understanding haircut are a them so had to or push we decision would people a And ask that if that likely agreeing to not make we out, either clothes.

early during because drop dropped and it if merchant know But the getting stickier across seeing contract happens friends, the their contracts investments, a they've a not start I they quarter. of builder think my land the will repricing on are in country. land interesting so And part that's know all -- to tends they be they're those of scenario. most hard and significant to once dropped And be have what contracts, the see sellers first I

Robert Stevenson

XXXX? the question, And earn-in growth, what's into second Okay. then given today heading rent strong the the

Alexander Jessett

Yes, absolutely.

for about us X%. So right is the earn-in now

Operator

question Golladay with Wes will next come The Baird. from

Wesley Golladay

were think same about a tracking next year, XXX,XXX it's looking XXX,XXX. now for you the out I to on year we forecast we will and out the question Do play last thing for supply at midyear have with If about supply. look now? XXX,XXX XXXX forecast

D. Keith Oden

Yes.

on is difference completions. the deliveries I on else we've just the there's assume slippage everyone And projects. that to that all seen and it the get near things for the frames a do is think our that the battle. in lots don't And that of construction I time brought experiencing And the the have or and of reach finish still relationships to line. because folks these it's either worse experience we

think Witten x that issue saying, capture years, the it's -- will completions and know persistent be and both straight So to some turned of have of the for they that of were delay X RealPage had we because we tried out I x. this XX%

XXXX is forecasting. still It a right don't complete. X- haven't they've numbers. started, I way XXX,XXX to all to guess of So the completions really if adjust the period, up. Because is see at over number X-year me it the into it's just think My XXXX. look add shift going surprise them to -- to maybe they I wouldn't tried to their I that it in captured know some

in it not first -- a quarter of rounding sort it's there is question the or XXXX And if XXXX. of completes

is of and folks give my employment So see look versus and give say, haven't we'll worth I numbers time, any it be it's I'll me forecast, you more individual and most year. all less likely my matches But period to to guess handicap probably captured how still to and X it useful think the would I than -- up XXX,XXX. that they would for of at over that trying be years'

Wesley Golladay

and starts the JV was believe have have exposure -- then then like you I'd And use reduce you I about to with JV your a X to Houston. that But plan talk Houston. then bought Okay. exposure. high

that indicated wondering, now, this plans the energy your have big world right U.S. persist? everyone have else a then So energy more just would had maybe years, in side I'm around zooming for out bigger few to you in in some differential But and medical. of was a -- and seen. may we expansions industry chemical between bullish bit the and differential the city And I'm little than more an industry the at you that past, context, and maybe has a detecting mentioned have point if the Houston area they

Richard Campo

Sure.

with unique So because finite to a do acquisition it. fund acquire Texas something that Teachers of next risk, of the had zero life X we properties of right? And the years the execution fund or we with to knew so with X have the over opportunity we the had

just us to made that. sense for do it So

rental against went over time. -- Yes, of were exposure the we is rent development started it kind properties. for our of which and X [indiscernible], part reduce want deals, The single-family to in other we Houston it

regular really because very it's compatible with business. that I to on multifamily and an us side, think the opportunity for the the business so market that's And learn market understand

making doing drill has What major the pay is And shed companies got energy dividends or being being times Wall sure the markets. has oil where taken they're was reason right drill, methodical prices not Dallas, Houston Long term, they're so of not more multiple rather you that is, and because they're stock and they to other would same required the -- think buybacks and Houston allocation right, very in reset and their has negative had than energy now, and about when -- if have hammered, to that. Florida Austin Street it or in XXXX their the dividends rents shareholders. baby were capital doing

is new So the markets. in job that Houston compared other growth these to

example, and months their or did. pre-pandemic For substantially recruit before employment Dallas, about higher employment went and X Austin X than Houston pre-pandemic

we our pre-pandemic this employment hit Now summer.

markets. Now well we're a not it's still relative other as robust doing basis, but in as on the Houston,

think I anywhere because tend so Houston they that you when really to and cycles. Houston And does the from it tank, couple think X- -- said be to I've in calls, in about a gas of energy cycles, XX-year

And of because now of from lot of we're in want a pushback gas government doesn't right think drilling. -- domestically, folks oil super of the lot There's most the domestic really of a because the because administration. a cycle Biden the lack drilling and of

You have X barrels. million [indiscernible] cutting production

Ukraine You situation. Russia the and got

to has And world the to fast to energy, have so people know energy, and renewables not we it's and have going as as have we think.

there's capital look primarily gone carbon billion and know the Inflation Gulf we a positioned you carbon Houston the that we in I transition likely spent that well come out we the what albeit and that next as to is is in when those -- fields if in these are of shallow wells is at done, big Exxon all so started capture and we companies the the going water other they leasing they've that have some that depleted. to can store Houston, think are but to the years. transition, when which you about world Act, to ultimately, and transition, going few over is energy well So because have of And about you think really energy capital add $XXX of Houston Reduction then be think the

all the that capture, happening start ammonia into hydrogen country And #X chemicals [indiscernible] forward so lot about decarbonizing when is propel to the here. world, headquarter companies the we us here there's you transition carbon in and things the are complex, the with Houston are green going of industrial is those and and think and and an about energy and the that production a energy exporter the of thinking in fact

I going long tank to of and -- more be gas market that. great be the term, the is think have to markets its in to So the over it's a Houston recession of rest it'll than in going going a because -- it's

D.C., we years, our been way in Now that constructed fundamentally largest geographically. may our California diversified want the to -- to really X ultimately, and you or over ultimately. X is being it we but diversify And X lower when portfolio our exposure great we're has markets Houston because in next want be has have really been the concentrated to markets, be

we'll do in So hopefully, I we've moving been do we that. can it last billion continue year will continue. do before, X, a do in $X of Like that to some in environment. it And the or trading over -- said And And to will assets on around the able markets. hopefully, we we've this been basis. nondilutive

markets Whatever and of are in I rest there's And the the or where going buy reset, in we we other or a the prices differential into Sunbelt. sell cap the between newer development rates we're fund assets if think can Houston underweighted, to they be will D.C. assets massive lean versus California in higher-growth don't when or that.

Operator

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

John Pawlowski

impacts market? markets a and markets? upward are is that And is revenues in What mentioned just of ticking of now bad outside you Alex, Phoenix in other any as pressure up. right regulated seeing debt debt bad percent timing there

Alexander Jessett

absolutely. Yes,

So to compares you right the quarter was our around right and it collections were at around when the XX.X%. that if now last collections, right XX.X% look so for quarter

look dropped you California, look quarter you made there, 'XX. the That's that a if third real at that California Ric off if to collections we're So collection were earlier, at in in XX.X%, but quarter story. in second XX.X% collections Phoenix, XX.X%, the to our our the point

John Pawlowski

Keith, seasonality your the slowdown a traffic seeing in normal in right then, local now? any markets team And of are Okay. outside

D. Keith Oden

is No. by we're can entire traffic we the have that -- that commonly can we we that in more place I of or to mean, effectively of I we traffic, put handle technology hear the than handle the funnel, given because continue -- low complaint reasonably the have lot we most across still the all these traffic. apartments in numbers that are those north our particular vacancies very the generating quarter, There's a from historical of in cities. XX% quarter, portfolio. But -- rate tons from and Camden for though did that fall still across still want live good fourth XX people of perspective of And the second you're to a crazy in -- are occupancy Camden. even plenty

John Pawlowski

Okay.

it Just would assume year, balance one seeing slip over to XX% into of high the this I follow-up Again, would want occupancy be the you're but above I that there. XX% thought today? occupancy but still pedantic, don't

D. Keith Oden

So ahead Alex. -- to we're going Go

Alexander Jessett

Yes.

will the average So we a obviously, is occupancy will year, assumes where get as that that average full And towards our the pattern we XX.X% for end is. that follow year. seasonal the of

Operator

will Barry Mizuho. Luo with question next The from come

Beier Luo

lease? loss to wanted you to just if I quickly disclosed ask the guys

Alexander Jessett

Yes.

about X.X%. is us to lease to loss So

Beier Luo

any chance that negative loss there see is lease And this Okay. year? you go during

Richard Campo

No.

Beier Luo

Okay. you think terms -- tax secondly, And pressures? any about can of any talk -- like labor you for just expenses, on in efficiencies mitigating do

Alexander Jessett

what's the question? sorry, I'm

Beier Luo

next tax year any like and on Just pressures efficiencies labor for tech mitigating initiatives?

Alexander Jessett

Yes.

absolutely. So

program, funnel. our we recall, is place, that happen mainly [indiscernible] which you if could in initiatives our about have work talked reimagine without -- not So we tech and

up able about to salary benefit of so pick be those And because in $X net million million a side we $X factors, on XXXX. the to should

absolutely. So

Operator

& from Zelman Associates. The Dennis with will McGill next question come

Dennis McGill

clarify XX.X% to year, I way. a the you thought the comment. minute the for remarks, Just just the to in meaning said for I ago, different a And fourth quarter occupancy XX.X% wanted think I start, the said in prepared rest you of guidance?

So just can first? that you clarify

Alexander Jessett

fourth the in quarter. XX.X%

Dennis McGill

metrics. deceleration to traffic, relative think thought. income That's stark XX generally, pretty about and levels. talking in same I the seasonally. good still just that past number That's And Okay. as what then the healthy recognizing And seen that basis growth income time, strong their points what at and you're to you've from the we quarter, change third a

in-migration about favorable. talked being You

the affordability You've going got against is consumer. for-sale

longer. that right the collectively you the have they're apartments of guess of all staying would and suggest trade-off So is wouldn't narrative I now. occupancy rate to make in that

of are some sequential you filtering what that's are offsets So think, that that causing the deceleration? through

Alexander Jessett

a should down. enforce And we a the talked we will rent, Well, have see Number contracts, come and good our on out, up net to seasonal think as folks as pushing by see by Number is number of one, finally to not thing have has come normal to little we got That, picked driven way, couple financial non-payers, is if move up we starting expect factors. turnover patterns, you've have our are physical And paying because actually are who we should move that the any and rents. long-term been a bit. them occupancy we've down, about, two, those occupancy that doesn't out. you bit, as if push are occupancy. I a follow impacts our can that it you tick although little ability people

factors that. couple are of those a So are driving that

Dennis McGill

the occupancy you that's getting a but fourth that's bit, you you quarter pre-pandemic since to I about to power about in guess, 'XX. then And a the below here valid were where between economic, then that, think and now back think down point levels is that start pricing when physical bit XX.X% do Okay. soon come a pretty

of year? that into part So transition the move you we're is the seeing, next that as first

Alexander Jessett

in talked a our very creation have going to lot and our in migratory in of job markets. continue favor we've strong about terms of We patterns things

terms it And depends be we rents, some bit upon But occupancy think strong keep job to in 'XX. I position creation good we what push pushing able should have going see once is we to I to economy in then remain But in -- what XXXX. what push the we are a ability little think think is I I as do said, in see the further. the our pretty we rents. in of long-term a to

Richard Campo

leases choice Alex And wanted a We time a on you is have based dynamic through our and some the going average our system all the number. our be ] going [ was of [ and rental revenue ] change good is that's the revenue that made year. X growth that we to. change rate up. end XX% if -- some we've a could have keeping And Remember, rates choice. occupancy to about really and the rental average think in pricing we And if -- X keeping mentioned

X zero go of revenue on in mean, If negative and the to to new months back leases. -- at we're usually pre-pandemic of last you levels, in terms look I year renewals new the leases historically

And it's so ] going above And XXX levels into XXX we're pre-pandemic fit. to be we points the [ think XXXX. basis going or right just

people point to are move out Alex's we to earlier, us. And want that paying

and move in mean, I just earn-in it keeping -- out, right? because a California. to at as pretty a But and that. rent so XXXX to and -- the to don't it's good that with look you're pressure understand D.C. about as I discussions help them we're at at and XX -- loss basis it's trying place the starting paying substantial. sure We've points if And making had primarily a an flaw system. people we in is a on really the look I lease so

Operator

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

Richard Campo

see today Francisco. will appreciate Well, you we Great. on in time of call, some Nareit we your the and at San

about since we'll about new to stuff then probably it a a lot have will be talk So of week-and-a-half.

have Take great care. weekend, Bye. and go care, and take So Astros. a

Operator

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

disconnect. now may You

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