CAMDEN PROPERTY TRUST Q1 FY2025 earnings call

• Ric Campo noted Camden was named FORTUNE's 100 Best Companies to Work For for the 18th consecutive year. Q1 operating exceeded expectations, beating guidance by $0.04 per share. New supply has peaked, absorption is strong, new starts are at a 13-year low, and rent affordability is a tailwind with Sunbelt markets driving growth.
• Keith Oden discussed market outlook: top five markets for revenue growth, rental rate trends, occupancy improvement, low turnover rates, and high customer sentiment.
• Alex Jessett provided updates on real estate and capital markets: completed $199M acquisitions, started $184M in development, lease-up of some communities, a $600M commercial paper program, and financial results showing core FFO of $189.8M ($1.72/share), $0.04 ahead of guidance.

In the first quarter, Camden's top five markets for revenue growth were Tampa, L.A./Orange County, San Diego Inland Empire, Washington, D.C. Metro, and Houston, with same-property revenue growth ranging from 1.3% to 4.5% compared to the overall portfolio's 0.8%. Rental rates for the quarter had effective new leases down 3.1% and renewals up 3.3% for a blended rate of negative 0.1%, an improvement from the negative 1.1% blended rate in Q4 2024. Occupancy averaged 95.4% in Q1 versus 95.3% in Q4 2024, and is expected to remain stable. Renewal offers from May-July had an average increase of 4.2%. The annualized net turnover rate was 31%, one of the lowest in the company's history. Camden's customer sentiment score was 91.1 for Q1 2025, the highest since 2014.

Core FFO per share for Q2 2025 is expected to be within the range of $1.67 to $1.71. The full-year core FFO midpoint was increased by $0.03 to $6.78 due to lower interest expense from the commercial paper program. The company anticipates $750M in both acquisitions and dispositions, with no Q1 dispositions. Development starts are at $184M, within the guidance range of $175M to $675M.

Economic uncertainty and market volatility, potential supply chain issues in development, impact of government job losses on certain markets (though Camden hasn't seen major impact yet), and insurance losses potentially offsetting insurance premium savings.

Q: How is the macro uncertainty impacting guidance?

A: Ric Campo said uncertainty makes it a wait-and-see mode, but the business is doing well overall but caution is needed due to market gyrations.

Q: Which Sunbelt markets are seeing quicker stabilization?

A: Ric Campo and Alex Jessett mentioned D.C. Metro, Houston, San Diego Inland Empire, L.A./Orange County, Tampa, with Nashville and Austin expected to improve later but have strong future prospects.

Q: Perspective on DOGE and D.C. market?

A: Ric Campo stated no major negative impact on D.C. market seen on the ground, with strong employment and high occupancy.

Q: Underwriting construction costs and tariffs?

A: Ric Campo said 2%-3% in costs for tariffs, with margin compression in construction, but potential supply chain risks.

Q: FFO guide and second half outlook?

A: Alex Jessett explained impact of acquisitions and dispositions on FFO, with newer assets expected to grow faster to offset dilution in latter part of 2025.

Q: April new lease momentum?

A: Alex Jessett said no softness seen, with uptick expected from Q1.