Camden(US:CPT)2024-05-03 19:57Financial Data and Key Metrics Changes - The company reported core FFO of $1.70 per share, which was $0.03 ahead of the midpoint of prior quarterly guidance [121] - The first quarter same property performance was better-than-expected, primarily due to lower levels of bad debt and favorable trends for insurance and property taxes [116] - The company maintained the midpoint of its full year guidance at 1.5%, with revised assumptions reflecting a 50 basis point earning and flat loss to lease [102] Business Line Data and Key Metrics Changes - Rental rates for the first quarter showed signed new leases down 4.1% and renewals up 3.4%, resulting in a blended rate of negative 0.9% [95] - Preliminary April results indicated an improvement with new leases at negative 1.8% and renewal rates at 3.4%, leading to a positive blended rate [95] - The company experienced 80 basis points of bad debt in the quarter, compared to a budget of 120 basis points [99] Market Data and Key Metrics Changes - Employment growth has been robust in all markets except Los Angeles, which continues to struggle [92] - The company noted that 9.4% of move-outs in the first quarter were attributed to residents buying homes, the lowest in its history [115] - The top 10 cities increased their populations by 710,000, with 9 Camden markets in the top 10, while the bottom 10 cities reported a loss of 200,000 people [114] Company Strategy and Development Direction - The company plans to push rents in markets with less supply impact while maintaining occupancy levels [134] - The company is considering starting new developments in markets like Charlotte, which is absorbing supply well [31] - The company aims to maintain a pristine balance sheet with no partners, allowing for flexible capital allocation [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for apartments, citing strong absorption rates and demographic trends supporting rental demand [93] - The company anticipates accelerating rent growth in 2025 and 2026, assuming the economy continues on its current trajectory [93] - Management acknowledged the risk of a recession but noted that current job growth and economic conditions in the Sunbelt markets remain strong [36] Other Important Information - The company has $450 million remaining under its existing share repurchase authorization and repurchased approximately $50 million of common shares in the first quarter [98] - Property taxes, which represent approximately 36% of total operating expenses, are now expected to increase by only 1.5% year-over-year, down from an original projection of 3% [103] - The company has stabilized several new developments, including Camden NoDa, which is now 99% occupied [97] Q&A Session Summary Question: What explains the difference in rent growth perspectives between the company and competitors? - Management indicated that different perspectives arise from varying market operations and data interpretations, emphasizing their extensive market experience [7][8] Question: Which markets are prioritized for new development? - Management highlighted Nashville and Austin as markets with significant supply issues, while also considering Charlotte for new developments [16][31] Question: How does the company view the potential for bad debt reduction? - Management expressed optimism about sustaining the current pace of bad debt reduction, aided by improved screening processes [28][62] Question: What is the outlook for new lease rate growth? - Management expects new lease rates to improve in the second half of the year, driven by seasonal demand and easier comps [57][64] Question: How does the company plan to manage occupancy and pricing? - Management stated that they will continue to monitor occupancy levels and adjust pricing strategies based on market conditions [132][134]