Camden Property Trust Q3 FY2025 earnings call

• Completed the move of Camden's Houston corporate headquarters from Greenway Plaza to the Williams Tower in the Galleria. - Strong apartment demand continued through the third quarter, making 2025 one of the best in 25 years for apartment absorption. - Apartment affordability improved with 33 months of wage growth exceeding rent growth. - Camden is positioned well with a strong balance sheet and no major dilutive refinances in the next couple of years. - Bought back $50 million of shares at a discount to consensus net asset value. - Disposed of 3 older communities for $114 million, used proceeds to repurchase shares. - Stabilized Camden Durham and completed construction on Camden Village District in North Carolina. - Making leasing progress on Camden Long Meadow Farms.

Same-store revenue growth for the third quarter was 0.8%, with year-to-date growth at 0.9% and sequential growth at 0.1%. Occupancy for the third quarter averaged 95.5%, consistent with the third quarter of 2024 and slightly down from the previous quarter. Year-to-date through September, occupancy averaged 95.5% compared to 95.3% last year. Rental rates in the third quarter saw effective new leases down 2.5% and renewals up 3.5%, resulting in a blended rate growth of 0.6%, a decline of 10 basis points from the previous quarter and 40 basis points from the third quarter of 2024.

• Full year 2025 guidance adjusted: $425 million in acquisitions and $450 million in dispositions, reduced from prior guidance of $750 million in both. - Core funds from operations for the third quarter were $186.8 million or $1.70 per share, $0.01 ahead of the midpoint of prior quarterly guidance. - Increased full year core FFO guidance to $6.85 per share, a $0.04 per share increase from prior guidance. - Fourth quarter core FFO per share expected to be in the range of $1.71 to $1.75.

• Uncertainties in the economy, including slower job growth and economic uncertainties. - Supply dynamics and consumer sentiment in certain markets, such as Austin and Nashville where consumer expectations of rent discounts exist. - Potential impact of broader economic factors on apartment demand and market conditions.

Q: Provide early thoughts on 2026 in terms of building blocks earning.

A: Not giving guidance for 2026 yet, but the earn-in is likely flat, and the environment in 2026 should be better than 2025 with less uncertainty.

Q: Thoughts on current broader appetite for investment in apartments from private investors and specific markets.

A: Robust demand for multifamily, dry powder in multifamily is high. Less transaction volume in Sunbelt now but will pivot in mid-2026. Cap rates for Class A assets in markets at 4.5%-5%, Class B at 5%-5.5%.

Q: How fourth quarter shapes up relative to normal seasonality.

A: Anticipated blended rate down about 1%, typical fourth quarter, with slower leasing period starting 1 month earlier than usual.

Q: Impact of direct supply on portfolio.

A: Every part of portfolio competes with supply. Directly competing supply in portfolio was 20% last year, down to 9% now, expected to improve in 2026 and 2027.

Q: Lean into share buyback and dispositions.

A: Current stock price is a 30% discount to consensus NAV, with a mid-6% cap rate, making it a good capital allocation to sell assets and buy stock.

Q: Impact of supply on 2026 and beyond.

A: Supply deliveries coming down, demand driven by migration, demographics, and retention. Home purchase not likely to increase soon due to home price, interest, tax, and insurance factors.

Q: REITs vs private world and Camden's position.

A: Public market has dislocations but smart investors buy stock to drive prices closer to NAV. Camden buys and holds, creating long-term cash flow.

Q: Selling assets and tax questions.

A: Using 1031 exchanges on sales, can absorb gains for share repurchases. Property tax refunds expected to continue with successful contesting of valuations.

Q: Impact of concessions on market rents.

A: Elevated concessions in highest supply markets like Austin, Nashville, Denver, Phoenix (around 5 weeks, 10% on average), but Camden is outperforming.

Q: Development projects and capital allocation.

A: Currently better to use capital for share buybacks due to discount to replacement cost, but expect to be more active on development side as construction costs come down.

Q: 4Q blends and market softness.

A: 4Q blends expected down 1% due to focus on occupancy in 3Q, some markets showing improvement in Dallas, Charlotte, Nashville, Atlanta.

Q: Concerns about demand moving forward.

A: There are concerns, but Camden doesn't need as much demand due to less supply and high retention rates.

Q: Class A vs Class B performance.

A: Class A assets doing better than Class B, with Class B assets in suburban markets facing supply pressure.

Q: Market rent growth in 2026.

A: Witten Advisors' numbers have moderated slightly but still expect 3%-3.5% in 2026 and over 4% in 2027.