Camden(CPT)2023-10-27 18:34Financial Data and Key Metrics Changes - The company expects core FFO per share for Q4 2023 to be in the range of 1.74, representing a 1.73 in Q3 2023 [8] - Same-store bad debt was 140 basis points in Q3, higher than the expected 100 basis points, and is anticipated to be 150 basis points for both Q4 and the full year 2023 [34][34] Business Line Data and Key Metrics Changes - Effective growth rates for new leases were 0.8% in Q3, 5.9% for renewals, and 3.4% for blended rate growth, with new lease growth for October currently at negative 2.5% [4] - The company anticipates occupancy to average 94.8% in Q4, down from previous estimates due to higher skips and evictions [6] Market Data and Key Metrics Changes - The share of U.S. households living alone is projected to grow to nearly 30% over the next few years, which may stabilize demand for rentals [3] - New supply in markets like Nashville and Austin is at 6%, leading to increased competition and concessions [38] Company Strategy and Development Direction - The company is focusing on maintaining higher rents rather than increasing occupancy through lower rents, indicating a strategic choice to prioritize revenue over occupancy rates [47] - Development starts have been pushed back due to increased cost of capital, with a focus on long-term stability and potential future opportunities in 2025 and 2026 [119] Management's Comments on Operating Environment and Future Outlook - Management expressed that consumer behavior has not returned to pre-COVID norms as quickly as anticipated, impacting occupancy and lease rates [11] - The company expects a gradual improvement in leasing and occupancy levels in 2024, assuming a stable economic environment [52] Other Important Information - The Texas State legislature passed a tax reform bill that could reduce independent school district tax rates by approximately 4.8% if approved [5] - The company has implemented income verification processes to mitigate issues with bad actors in the leasing market [57] Q&A Session Summary Question: What is the impact of high supply on Camden's performance? - Management acknowledged that 16% of their communities are directly impacted by supply, leading to lower new lease rates compared to non-impacted communities [40][41] Question: How does the company plan to address occupancy challenges? - Management stated that they are not willing to lower rents dramatically to boost occupancy, preferring to maintain revenue levels [47][102] Question: What are the expectations for bad debt moving forward? - Management expects bad debt to decrease as regulatory backlogs improve and they implement stricter tenant screening processes [82][88] Question: How does the company view its capital deployment strategy? - Management indicated that they are cautious about new acquisitions and developments due to the current cost of capital but are open to share repurchases if opportunities arise [66][93]