Camden(US:CPT)2026-02-06 17:00Financial Data and Key Metrics Changes - Camden Property Trust reported Core Funds From Operations (FFO) for Q4 2025 at $193.1 million, or $1.73 per share, exceeding prior guidance by $0.03 per share [18] - Same-property revenue growth for 2025 was 76 basis points, slightly beating the midpoint of guidance [7] - The company expects Core FFO per share for 2026 to be in the range of $6.60-$6.90, representing a decrease of $0.13 from 2025 results [19] Business Line Data and Key Metrics Changes - Rental rates for Q4 2025 showed new leases down 5.3% and renewals up 2.8%, resulting in a blended rate of -1.6% [15] - The company disposed of 3 communities for $201 million and acquired 1 community for $85 million during Q4 2025 [16] - The overall portfolio is expected to see same-store net operating income (NOI) decline by 50 basis points in 2026, with revenue growth projected at 75 basis points [20] Market Data and Key Metrics Changes - The Sun Belt markets are expected to continue growing faster than the rest of the country, prompting the company to market its California properties for sale [5] - The Washington, D.C. Metro area achieved 3.5% revenue growth in 2025 and is rated A-minus with a moderating outlook for 2026 [11] - Austin is rated C-plus with an improving outlook, but faces challenges due to high levels of new supply [14] Company Strategy and Development Direction - The company plans to reinvest approximately 60% of the proceeds from the California sales into high-demand Sun Belt markets and use the remainder for share repurchases [17] - Camden aims to simplify its operating platform and expand its footprint in the Sun Belt by selling its California assets [5] - The company is optimistic about future lease rates and NOI growth, citing a strong balance sheet and resilient residents [6] Management's Comments on Operating Environment and Future Outlook - Management highlighted the uncertain operating environment in 2025 but expressed confidence in the company's ability to navigate challenges [4] - The company anticipates modest acceleration in operating conditions in the second half of 2026, with expectations for job growth primarily in Sun Belt markets [9] - Management noted that the current rental market is experiencing flat growth, which is not sustainable long-term, indicating potential for future increases [75] Other Important Information - The company has begun to see improvements in some markets, with expectations for revenue growth in the range of 1%-2% for several regions [13] - Legal expenses are anticipated to be approximately $14 million, primarily related to ongoing legal battles [46] - The company plans to launch a new bond transaction worth $400 million-$500 million later this quarter [24] Q&A Session Summary Question: Why is now the right time to sell the Southern California portfolio? - Management believes there will be a pivot point in Sun Belt growth, and selling now allows them to capitalize on a vibrant transaction environment [26][27] Question: How are you thinking about splitting the California portfolio for sale? - There are many buyers interested, and the company will maximize the purchase price whether sold as a portfolio or individually [29] Question: What are your expectations for new and renewal rents throughout the year? - Slight improvements are expected in the first quarter, with more visibility during peak leasing seasons [32] Question: How will the timing of 1031 exchange acquisitions impact guidance? - The company anticipates that the California sale will close mid-year, with redeployment of capital occurring in the summer [36] Question: What are the expectations for stabilized returns on new developments? - Costs are decreasing by 5%-8%, but developments remain challenging, with rental rates expected to stabilize [40][43] Question: What impact will the new legislation in Denver have on utility rebilling? - The new legislation will significantly affect income from utility rebilling, amounting to about $1.8 million in lost revenue [89]