Camden Property Trust Q4 2021 Earnings Call Transcript

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

Question: Bradley Barrett Heffern - RBC Capital Markets, Research Division - Analyst : Alex, just as a follow-on to that last question about new lease growth. You have the 15% plus number in January, and it seems like you can probably sustain double digits through the second quarter before the comps get really tough. But just to hit the averages that you talk about, it seems like it will be some sort of low mid-single-digit number in the second half of the year to hit the averages. So is that the right way to think about it? And is that kind of what we should think about as your expectation for market rent growth from where we are right now?

Question: Bradley Barrett Heffern - RBC Capital Markets, Research Division - Analyst : Okay. Got it. And then on the balance sheet, obviously, this quarter, you ticked below the bottom end of your typical 4 to 5x range. I'm curious for funding needs beyond the dispositions in '22, should we expect that those will come from debt? Or do you have a desire to keep the balance sheet maybe cleaner than it would normally be just given the place in the cycle?

Question: Neil Lawrence Malkin - Capital One Securities, Inc., Research Division - Analyst : First question, a little bit bigger picture. So you guys have a unique insight into sort of the divergence between Sunbelt and coastal. To some extent, you have the D.C. and then obviously Southern California. And I'm wondering, I've heard kind of mixed things between people have elevated coastal exposure kind of being incrementally positive and seeing people return to the office or whenever that happens, maybe in 2025 expecting solid growth and sort of almost like a return to normal in a California market kind of like a pre-COVID type of thing. But at the same time, you're seeing amazing historic levels of in-migration to your Sunbelt markets and just very strong growth as evidenced by where you are relative to pre-COVID rent levels. So I'm just wondering if you can kind of give your view on over the next, call it, 3 years, what you see in terms of job growth, population growth, migration in the Sunbelt versus kind of what you're seeing in California. And if you just think California may be a little bit impaired just given the significant outflow of businesses and people.

Question: Neil Lawrence Malkin - Capital One Securities, Inc., Research Division - Analyst : Maybe just again on just thinking about the acquisition side. I mean, obviously, putting a lot of capital to work. And that's great. I'm just curious to see if your underwriting standards have changed, your unlevered IRR targets have changed. I understand that your cost of capital is at historic levels. But it's just buying at a 3 cap, and you're kind of uncertain about what the terminal or exit cap rate would be. And -- so just when you're having those internal discussions, I mean, has anything changed? Or have you gotten more bullish on your like sort of year 1 through 3 rent growth assumptions that make you comfortable going in at a low to mid-3 cap? And, yes, so if you could just maybe expand upon that and if you'd use debt more so to get an even higher positive leverage this year.