Camden Property Trust at Citi Global Property CEO Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Eric Wolfe - Citi - Analyst : Well, we'll get to the rapid fire at the very end. I guess, my first question would really be, as you think about investor attitudes toward the Sunbelt markets, I think they've certainly changed over the last couple of years, and that's partly because the coastal peers that have been down talking them for so many years are now rotating into your market. But the view was usually that any period of excess rent growth would usually be followed by supply, such that it would just come down. I guess why is that not the case going forward? Do you think your markets can generate above inflationary-type growth? What do you expect that growth to look like for the next few years? And why won't supply ruin the party this time?

Question: Eric Wolfe - Citi - Analyst : And you mentioned in your opening remarks that you're marketing, I think, you said an asset in Houston. You've announced this plan to sell down DC and Houston over the next couple of years. I guess my question is why do this now? Why wasn't this done, say, two years ago? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2025 / 7:10PM, CPT.N - Camden Property Trust at Citi Global Property CEO Conference What's different today than two years ago that changed your opinion, basically the impetus for doing this now?

Question: Eric Wolfe - Citi - Analyst : And I think you said that you're going to front-load the acquisitions. And I was just curious, is the reason for that mainly because you think it's just going to be more difficult to find acquisitions in this environment that is going to be to sell those properties, I guess, why front-load the acquisitions? What's the reasoning behind that strategy?

Question: Eric Wolfe - Citi - Analyst : Can you just sell assets and do a normal 1031? I mean, I guess --

Question: Eric Wolfe - Citi - Analyst : Got it. And then last year, you bought back some stock. There has been some --

Question: Eric Wolfe - Citi - Analyst : Right. Exactly. I mean, your leverage is only at 3.9 times. So I guess the question is like at different moments this year, the stock certainly isn't as cheap as it was last year, but there have been periods of time where traded around a 6% implied cap rate. I know you can't trade it. There's blackout periods and things like that. But maybe you could talk about the cap rate that you're expecting on acquisitions for this year. And to the extent that that's much lower than your stock, why wouldn't you just buy your stock?

Question: Eric Wolfe - Citi - Analyst : And then I think in terms of long-term investments, your development pipeline has been a bit lower as a percentage of the overall company for a little while now. You did talk about doing $675 million to starts this year. I guess what do you need to see for development to kind of come fully back? And are the projects that you're starting in Nashville and Denver? Are they the ones that are actually in your supp? Or are there other projects that you've lined up?

Question: Eric Wolfe - Citi - Analyst : When you say that starts are 60% down, I guess, are you talking about versus like some peak period during COVID? Are you talking about versus a normal run rate? Maybe just help people understand when you talk to your friends in the merchant development business, like what percentage of sort of competitive starts are you seeing today? I mean, your market --

Question: Eric Wolfe - Citi - Analyst : So if construction costs, interest rates, financing costs stay around the current level, how much do you think rents need to go up before you start seeing more active construction pipeline?

Question: Eric Wolfe - Citi - Analyst : Got it. So that would imply like sometime in 2028 to 2029, you see things get back to a more normal average.

Question: Eric Wolfe - Citi - Analyst : Great. Any questions on capital allocation and markets before you kind of switched the operating update, just jump in if you have them. And I get that you don't probably want to talk about specifics on each month of blended spreads, and it was probably pretty annoying for us to keep asking for weekly, daily spread.

Question: Eric Wolfe - Citi - Analyst : To the extent you feel comfortable, I may just update us on sort of what's happened so far this year. I think you said that you're expecting around flat blends in the first quarter. So presumably, you're heading towards that. Is that right? So maybe we'll just start there. Any update you can give us.

Question: Eric Wolfe - Citi - Analyst : I think last year at this time, you mentioned that you were seeing a little bit of occupancy weakness. I think you pivoted a little bit of a different strategy, and that was part of your presentation. It sounds like this year, you're not seeing that, right? This year, it's a little bit more normal pattern than what you saw last year, at least?

Question: Eric Wolfe - Citi - Analyst : Okay. And I guess, what -- are there any sort of lead indicators, I guess, that you can talk about for the peak leasing season? I don't know how much -- presumably you have decent visibility into the next, call it, 30, 45 days because you can kind of see where you're sending out renewals, their acceptance. I think as part of your revenue management, you probably have a projected occupancy over some period of time. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2025 / 7:10PM, CPT.N - Camden Property Trust at Citi Global Property CEO Conference So maybe just talk about those leading indicators what the sort of projected occupancy is, if you can give that or other things that you're looking at that tell you about how the next one to two months will shape up?

Question: Eric Wolfe - Citi - Analyst : Is there any sort of notable markets thus far? And as you think about markets that you're sort of intently watching to try to understand how the peak leasing season is going to shape up, maybe one that subject to a little bit more supply, but seems to kind of be exiting that, I don't know, like in Atlanta, maybe like a Dallas, like are there any markets that you're specifically watching to try to see how this year could end up shaping up?

Question: Eric Wolfe - Citi - Analyst : And then in terms of DC, I've gotten a lot of questions recently just about thoughts pretty obvious, given all the headlines, better on the layoffs. Maybe it's a little too early for you to see something changing there. But if you were to see something like what were to be, would it be in changing traffic patterns, nonrenewals would be tenants coming to you asking for a break. And are you seeing any of that yet in the DC area?

Question: Eric Wolfe - Citi - Analyst : So what would be the first sign that would make you worried?

Question: Eric Wolfe - Citi - Analyst : Yeah. First sign.

Question: Eric Wolfe - Citi - Analyst : Maybe a question on sort of housing affordability and turnover. I mean, turnover has been sort of reaching new lows. I guess, what have you seen so far in terms of renewal acceptance retention so far this year? And is there anything that you can see sort of change that other than, say, just interest rates going down a lot and housing affordability thus getting better in terms of turnover just staying at these low levels?

Question: Eric Wolfe - Citi - Analyst : Last week at EQR's Investor Day, they had a slide up there that surprised me a little bit. It said that 40% is actually, I think, 42% of their tenants were actually sort of middle age to seniors. I was just curious, what is that for you? And I guess when everybody thinks about people a ton of millennials trying to move out to buy homes or Gen Z or whoever eventually doing that maybe that doesn't come to fruition because there's a certain percentage there that are just choosing to be renters. They could probably buy if they wanted to and their middle age seniors, they're just not doing that.

Question: Eric Wolfe - Citi - Analyst : I mean, if you look at sort of, say, 35 to 45 year old, it is growing a little bit faster, right, than the sort of 25 to 35, just as sort of millennials get a bit older. You did make that entrance into the SFR product, I think what was 1.5 years ago, a year, like a year ago? So I'm just curious, like as you think about maybe your core demographic getting a little bit older, is there anything that you're doing differently from an investment perspective or development perspective to sort of meet that trend? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2025 / 7:10PM, CPT.N - Camden Property Trust at Citi Global Property CEO Conference

Question: Eric Wolfe - Citi - Analyst : And then in terms of other income, I think some of your peers are announcing some pretty big numbers, 60, 70 bps contribution to same-store revenue from other income, and much of it is really just coming from these WiFi bulk programs. Remind me, I guess, where you are with that? Did you already do that multiple years ago, and you're just sort of --

Question: Eric Wolfe - Citi - Analyst : So you did that a couple of years ago. So that impact is already in there. Because I think MAA did the same, right? And now they're recycling into a new type of program. I don't know if the same upside was there for you if you were to sort of change around that program nor not.

Question: Eric Wolfe - Citi - Analyst : Got it. I guess last question, your balance sheet is 3.8 times levered. You mentioned that you would need to see sort of better opportunities to lean into your balance sheet and lever up. Can you just define what those opportunities would look like? It's just hard for me to imagine them in a world where all we hear about is sort of 5 cap type stuff trading under your cost of leverage. Just trying to understand what it would take for us to be sitting here in a year or two, and your leverage would be at 5.5 times.

Question: Eric Wolfe - Citi - Analyst : Well, 5, whatever -- you're at such a low level today. I mean, it doesn't have to be 5.5, what it would take to really materially increase your leverage because you do all have all this embedded capacity. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2025 / 7:10PM, CPT.N - Camden Property Trust at Citi Global Property CEO Conference

Question: Eric Wolfe - Citi - Analyst : All right. So the eagerly anticipated rapid fire questions. What will same-store NOI growth be for the apartment sector in 2026?

Question: Eric Wolfe - Citi - Analyst : 4%. Sunbelt be better than coastal?

Question: Eric Wolfe - Citi - Analyst : Okay. Will there be the same more or less apartment REITs at this time next year?

Question: Eric Wolfe - Citi - Analyst : Got it. Okay. Great. Thank you for your time.