Camden(US:CPT)2026-02-06 17:02Financial Data and Key Metrics Changes - Camden Property Trust exceeded its original guidance for Core FFO by $0.13 per share, reporting Core FFO for Q4 2025 at $193.1 million or $1.73 per share, which was $0.03 ahead of the midpoint of prior guidance [9][34] - Same-property revenue growth for 2025 was reported at 76 basis points, slightly beating the midpoint of guidance [13] - The company expects Core FFO per share for 2026 to be in the range of $6.60-$6.90, with a midpoint of $6.75, representing a $0.13 decrease from 2025 results [35] 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% [27] - The company disposed of three communities for $201 million and acquired one community for $85 million during Q4 2025 [29] - For 2025, Camden sold seven older communities for $375 million and acquired four newer assets for $423 million [30] Market Data and Key Metrics Changes - The company anticipates that new supply in its markets peaked in 2024 and will continue to decline, setting up for below-average years for new supply in 2026 and 2027 [14] - The Washington, D.C. Metro area achieved 3.5% revenue growth in 2025 and is rated A- with a moderating outlook for 2026 [19][20] - Austin is rated C+ with an improving outlook, as new supply is slowing, but it will take time for market-wide occupancy to improve [26] Company Strategy and Development Direction - Camden plans to expand its Sun Belt footprint by selling its California properties, with preliminary indications of value ranging from $1.5 billion to $2 billion [31] - The company intends to reinvest approximately 60% of the sales proceeds into high-demand Sun Belt markets and use the remainder for share repurchases [31] - The overall portfolio is graded as a B with a stable but improving outlook, with expectations for modest revenue growth in 2026 [18] Management's Comments on Operating Environment and Future Outlook - Management highlighted the uncertainty in the multifamily REIT sector but expressed confidence in the resilience of residents and the affordability of apartments compared to homeownership [8][11] - The company expects operating conditions to improve in the second half of 2026, with a slight acceleration in job growth primarily in Sun Belt markets [16] - Management noted that the current economic environment has led to a hiring freeze, but there is optimism for better job growth in 2026 [88] Other Important Information - The company is facing a new Colorado legislation that affects utility rebilling, which is expected to impact same-store NOI by approximately 19 basis points [120] - Legal expenses are becoming a significant part of the business, with $14 million in non-core adjustments anticipated for the year [70] 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 they want to be ahead of that trend [46] Question: Can you discuss the guidance for new and renewal rents? - Slight improvements are expected in the first quarter of 2026, with more visibility during peak leasing seasons [55] Question: How will the timing of 1031 exchange acquisitions work? - The California sale is anticipated to close mid-year, with redeployment of capital happening in the summer [60] Question: What are the expectations for stabilized returns on new developments? - Costs are coming down by 5%-8%, but developments remain challenging [66] Question: How will the new legislation in Denver affect ancillary income? - The new legislation will impact utility rebilling, resulting in a loss of approximately $1.8 million in revenue [120]