CPT Q3 2026 earnings call transcript, November 6, 2026

Well, I was raised up beneath the shade of a Georgia pine. And that's home, you know, sweet tea, pecan pie, homemade wine, where the peaches grow. In my house, it's not much to talk about. But it's fair when love has grown in southern ground. And a little bit of chicken pie. No beer on a Friday night. It fit just right. And the radio. The touch of a precious child. And no.

It's the little things in life. That mean the most. Not where you live. What you drive. Or the price tag on your clothes. There's no dollar sign on a piece of mind. Just I've come to know. So if you agree, have a drink with me.

In a traffic jam.

It helps people.

Ideas I think are right, and I can stand beside the idea to stand and fight. I do believe there's a dream for everyone. This is our cause. Yeah.

I'm your Dixie.

I picked you people in tune. There wasn't much to do.

The German car says so. Yeah, she's gone around.

She's just gonna meet her boyfriend down at the street fair.

They got Canadian begging on their pizza pie. They got a cooler full of cold Coronas and am still alive. It's like we're all living in a big old world. Cup, just fire up the blender. Mix it all up.

Where I come from, here. Here's what I tell everyone. I was born by God's dear grace in an extraordinary place. Where the stars and stripes and the eagles fly.

Countless dreams, the way it should.

To know that we've got it good, where the stars and stripes, and the eagle flies.

That stands in a harbor for what we believe. And there's a bell that still echoes the price that it costs to be breached.

To display.

Good morning and welcome to Camden Property Trust's third quarter 2026 earnings. I'm Kim Callahan, Senior Vice President of Investor Relations. Joining me today for our prepared remarks are Rick Campo, Camden's Executive Chairman, Alex Jennings. Chief Executive Officer, Lori Baker, President and Chief Operating Officer, and Ben Fraker, Chief Financial Officer. Stanley Jones, Senior Vice President of a Real Estate. Investments will also be available for the Q&A portion of our call. Today's event is being webcast through the Investors section of our website at camdenliving.com, and a replay will be available shortly. After the call ends, and please note this event is being recorded. Before we begin our prepared remarks, I would like to advise everyone that we will be making forward-looking statements based on our current expectations and beliefs. These statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from expectations. Further information about these risks can be found in our filings with the SEC and we encourage you to review them. Any forward-looking statements made on today's call represent management's current opinions. And the company assumes no obligation to update or supplement these statements because of subsequent events. As a reminder, Camden's complete third quarter 2026 earnings release

This quarter's music choice followed a decidedly patriotic theme. Tuesday was election day, and as often is the case, about half the voters are happy with the outcome and half are disappointed. But it's important to remember that we live in the greatest country in the world and that we have more in common than what divides us. To quote country musician Aaron Tippin. It's a big old land with countless dreams. Happiness ain't out of reach. Hard work pays off the way it should. Yeah, I've seen enough to know. That we got it good. Camden operates in great markets in our amazing and resilient country. And it's becoming clearer that happiness or recovery is becoming closer. And in our high demand, high growth markets. I want to take this opportunity to congratulate Team Camden for their commitment to improving the lives of our teammates, our customers, and our stakeholders. One experience at a time. Alex is up next.

Thanks, Rick.

And good morning, everyone. First and most importantly, thank you to our Camden team members for delivering yet another. Strong Quarter. And in particular, thank you to our Camden Builders team who continue to deliver outsized fee income leading to our third quarter core FFO outperformance. Overall, 2026 is playing out much as we expected, showing definite improvements over 2025, but not quite a full recovery. On the operations front, Camden was the only the S&P 500 Multifamily REIT to experience sequential improvement for both new lease rates and blended lease rates each quarter this year, and we were the only one with second to third quarter acceleration. Sequentially, blended effective lease rates improved 120 basis points in the third quarter as compared to a 10 basis point sequential decrease this time last year, and on a quarter-over-quarter basis, blended effective lease rates increased 40 basis points as compared to a 40 basis point decrease for the third quarter of last year. Clearly, things are improving. Last night, we made slight reductions to the midpoint of our anticipated full-year same-store revenue and NOI growth as seasonality kicked in a bit more than anticipated in September. Concessions have remained remarkably sticky, seemingly led by many merchant builders now turned reluctant operators. That said, our current expectations for same-store growth still fall squarely.

Within the original guidance we provided earlier this year, and the midpoint of our guidance for core FFO remains unchanged at $6.75 per share. At the macro level, things are also improving, as apartment completions in the Sunbelt markets have fallen to a 7-year low, with peak supply firmly in the rearview mirror. Rates, commodity prices, and labor shortages are further hampering new construction starts to mid-2010s levels or below, meaning we should have a long runway with continued low levels. of future supply. Apartment absorption remains robust, with year-to-date figures exceeding expectations across many markets. Market rental prices and vacancy trends are also improving. Effective rents for new units have recovered from their lows, though they remain below peak levels in most markets, and rent growth momentum is increasing. After more than four years of rising market-level vacancy, occupancy rates are gradually improving and reaching more normalized levels. Affordability and household income dynamics are working in our favor as well. Wage growth has outpaced rent increases for nearly four years, improving affordability overall, and the median rent-to-income ratio is declining, which means renters are less burdened than in previous years. Our resident is financially strong, and the U.S. economy remains healthy. At the same time, the timeline for 30-year-olds to reach household milestones has lengthened.

With more living with parents or delaying home ownership, nearly 20% of adults aged 25-34 live with their parents, indicating delayed independence but potential future rental demand. Turning to real estate investments and the market outlook, apartment transaction volumes increased over the summer, but the market has recently become muted due to rising interest rates. This led us to make the decision to maximize liquidity for future opportunities by canceling the acquisition of two operating communities and one land parcel, and we do not anticipate any further acquisition. Despite our lower than anticipated acquisition volume, based upon our most recent tax analysis, we do not believe we will need to pay much, if any, of a special dividend. from our California dispositions. This has been a transformative year for Camden. Some may say, in light of the recent interest rate volatility, that we were lucky with our timing of the California sale. But luck favors the prepared and I echo Rick's shout out and thanks to our fantastic team members who are always prepared. I continue to be very proud of and impressed by team Camden. I will now turn the call over to Lori Baker our president and chief operating officer.

Thank you Alex and good morning everyone. Camden's third quarter net operating income results were in line with forecasted levels with lower operating expenses partially offset by a slightly greater than anticipated seasonal slowdown during September. Rental rates for the third quarter had affected new leases down 2% and renewals up 3.6% for a blended rate growth of positive 1% while renewal growth was in line with our expectations. new lease and blended lease growth were at the low end of our anticipated ranges, likely driven by the persistent concessions that remain in many of our core markets and sub-markets. However, as Alex mentioned, our third quarter rental rate growth showed significant improvement over both the first and second quarters of this year and over the third quarter of 2025. New lease growth showed 130 basis point improvement from negative 3.3% in the second quarter of 2026 to negative 2% this quarter. Renewal rates improved 80 basis points to 3.6% from 2.8% in the second quarter. And we saw a 120 basis point sequential improvement in blended rate growth from negative 0.2%. 2% last quarter to positive 1% this quarter. Our preliminary October results reflect occupancy in line with last year at 95.2%. With new lease, renewal, and blended rates trending better year-over-year, and signed leases improving from September to October. Resident retention remains strong with...

Thank you, Lori, and good morning. I will cover our third quarter results, capital allocation, our balance sheet and liquidity, and our fourth quarter and full year outlook. We reported third quarter quarter. FFO of $1.71 per share, two cents above the $1.69 midpoint of our guidance, driven primarily by higher third-party construction fees and higher interest. and other income. Our same-store portfolio performed in line with expectations through the first two months of the quarter with greater than expected seasonality in September reflected in our revised fourth quarter and full year outlooks. We closed the 1.625 billion dollar sale of our California portfolio on July 29th completing a large component of our 2026 capital recycling plan. Here is how we have used those proceeds. 900 million dollars to repay the debt that funded our earlier share repurchases and acquisitions. 125 million dollars to fund our August operating acquisition and land purchase. 50 million dollars to repurchase shares in August and early September. 55 million dollars after quarter end toward the redemption of our 500 million dollars of senior notes due in November and to pay down borrowings under our commercial paper program. And 55 million dollars. Remaining in cash investment accounts for general corporate purposes. On the investment side, we acquired three communities during the quarter for approximately 305 million dollars.

Thank you, and we will now open the call to questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch button. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. We ask that you please limit yourself to one question, and if you have additional questions, you may re-enter the question queue. And our first question for today will come from Nick Joseph with Citi. Please go ahead.

The next question will come from Jamie Feldman with Wells Fargo. Please go ahead.

The next question will come from Jemma Galane with Bank of America. Please go ahead.

The next question will come.

Yeah.

Hey, everybody. Thanks. As a fellow Texan, I wanted to get your thoughts specifically on the election, just given you have roughly a quarter of your NOI here. Do you think anything has changed substantively? I think on one hand, you know, you have protections in the state constitution. The cities were all kind of blue-leaning anyway, but then at the same time, it is an unprecedented swing compared to the city. Texas has been run historically. So, appreciate any comments. Sure. Clearly, there was a big change in Texas with every statewide election. Going to a Democrat that hadn't happened in 30 or 40 years. So, there are going to be changes, but the good news is that, generally speaking, Texas Democrats tend to be more... More middle-of-the-road Democrats than on the coasts. And the other thing that I think is important, even though people talk about how Texas has turned blue, it's actually purple because you still have a divide. The divided government. In the Texas Senate, Republicans still have a 19 to 12 margin in the Senate. And without government, without... The, you know, any bipartisan...without bipartisan support, nothing will get done in the legislative session this year. So, and I think a real positive thing, and I think this is actually... I've been hearing this nationally and also big time in Texas, and that is that the governor, for example, and the senator-elect have both come out.

Real fast after the election has said that they are both focusing on bipartisan support, that they want to do better for workers in America, including in Texas. And so I think that. That is a real positive that's come out of this this kind of shocker for Republicans, is that that is that that, you know, the Democrats are a not hardcore progressives and. And B, they are they they know they have to work across the aisle to get anything done. So I don't think that you're going to see any dramatic, you know, changes in in how. How, you know, Texas is operated. And I think that they understand that that that that that they will be held accountable for, you know, killing the golden goose if if that. Happens. And and so I'm pretty optimistic about about how the how how this massive shift to the left is actually what I think. It's going to be a massive shift to the center rather than a hard right versus hard left shift, because in order for them to govern properly, they do have to have bipartisan support. And I think the other thing I would add to that. If you look at the actual results, the young folks swung really hard to the left. The young folks are typically our renters. And so it will be interesting to see if some of the more unpopular positions that we have in Texas, unpopular for young people, if those getting dialed back may actually make Texas even more appealing for young folks to move here.

The next question will come from Amy Progrant with UBS. Please go ahead.

The next question will come from Wes Galladay with Beard. Please go ahead.

The next question will come from Steve Sackwa with Evercore.

The next question will come from Rich Hightower with Barclays. Please go ahead.

The next question will come from Adam Kramer with Morgan Stanley. Please go ahead.

The next question will come from Austin Werschmidt with Key Capital Markets. Please go ahead.

The next question will come from Julian Bluen with Goldman Sachs. Please go ahead.

The next question will come from Alex Kin.

The next question is a follow-up from Amy Probant with UBS. Please go ahead.

Thanks for the follow-up.

This might be a question related to the previous question on the Texas election outcome. Do you expect any changes in Florida property taxes following the Amendment 3 passing? Do you think that this is a 2027 impact or is it likely more intermediate or longer term? So as you're referring to Amendment 3 that required 60% of the vote to pass. I believe it got 62%. You know, we've been keeping an eye on that because what that's going to do is lower the homestead exemption from a staggered perspective and put a significant hole in the property. Tax revenues from single-family homeowners. So the question becomes, where is that going to come from? We are working closely with the Florida Apartment Association, who has a relationship with the governor-elect, Brandon Donalds. And we'll be having those discussions to educate them on what impact that could possibly have to rent affordability in the state. But nothing has been determined on what taxes are going to happen on the commercial. Real estate side.

This concludes our question and answer session. I would like to turn the conference back over to Alex Jessed for any closing remarks. Please go ahead.

Thank you, everybody, for joining us this morning, and we will see you guys in Atlanta. Take care. The conference is now concluded.