• Core Funds from Operations (FFO): $190.4 million or $1.73 per share for Q4 2024, $0.03 ahead of prior guidance.
• Same-Store Revenue Growth: 1.3% for 2024.
• Same-Store Expense Growth: 1.8% for 2024.
• Same-Store NOI Growth: 1.1% for 2024.
• Core FFO Guidance for 2025: $6.60 to $6.90 per share, midpoint of $6.75.
• 2025 Revenue Growth Expectation: 1% for same-store properties.
• 2025 Expense Growth Expectation: 3% for same-store properties.
• Debt to EBITDA Ratio: 3.8 times.
• Development and Acquisitions: $750 million anticipated for both acquisitions and dispositions in 2025.
• Net Debt: Less than $200 million outstanding on a $1.2 billion credit facility.
• Occupancy Rate: Expected to average 95.4% in 2025.
• Rental Income Growth: Budgeted at 1% for 2025.
• Interest Expense Increase: $0.10 per share increase anticipated for 2025.

• Warning! GuruFocus has detected 11 Warning Signs with CPT.

Release Date: February 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Camden Property Trust (NYSE:CPT) anticipates a positive market backdrop in 2025, with new supply pressures expected to lessen, setting the stage for improved revenue and net operating income growth.
• The company exceeded its operating budgets in 2024 despite record supply, showcasing strong operational performance.
• Camden Property Trust (NYSE:CPT) plans to recycle capital by acquiring newer properties and disposing of older, more capital-intensive assets, aiming for long-term core FFO growth.
• The company reported core funds from operations for Q4 2024 of $1.73 per share, which was $0.03 ahead of the midpoint of prior guidance.
• Camden Property Trust (NYSE:CPT) maintains a strong balance sheet with net debt to EBITDA at 3.8 times, providing capacity for future opportunities.

Negative Points

• Camden Property Trust (NYSE:CPT) anticipates a decrease in core FFO per share for 2025, with a midpoint of $6.75, representing a $0.10 per share decrease from 2024.
• The company expects same-store revenue growth of only 1% for 2025, with some markets like Nashville and Austin facing continued challenges due to new supply.
• Camden Property Trust (NYSE:CPT) is experiencing slower leasing in its single-family rental communities, which could impact revenue growth.
• The company anticipates a 100 basis point negative FFO yield differential for matching acquisitions and dispositions in 2025.
• Camden Property Trust (NYSE:CPT) faces potential risks from economic downturns, which could impact overall performance despite a positive supply outlook.

Q & A Highlights

Q: Can you provide more color on your blend assumptions for new and renewal lease growth throughout the year? A: We anticipate a blend of 1% to 2% for the full year. New leases will be slightly negative, while renewals will likely be in the high 3% range. We expect positive new leases by the third quarter, continuing from that point on. (Alexander Jessett, CFO)

Q: Are you seeing signs of the impact of supply fading on the ground? A: Yes, the largest indicator is the improvement in signed new leases throughout the first quarter. We are encouraged by the improvements seen in January. (Alexander Jessett, CFO)

Q: Can you provide more color on your transaction guidance, particularly regarding timing, cap rate, and buyer/seller pools? A: The transaction market has been muted due to a standoff between buyers and sellers. However, with rates remaining higher for longer, sellers are under pressure, and buyers are optimistic about future growth. This is closing the gap between buyers and sellers, allowing us to recycle capital effectively. (Richard Campo, CEO)

Q: How do you view the potential for distress in the market similar to post-financial crisis opportunities? A: Unlike the financial crisis, there is no significant distress in the institutional investor quality space today. Banks and borrowers are stronger, and there is no pressure to force sales. We expect better pricing rather than distress-driven opportunities. (Richard Campo, CEO)

Q: Can you discuss your portfolio management objectives, particularly regarding market exposure and potential new markets? A: By the end of 2027, we aim for no market to represent more than 10% of our NOI and no market less than 4%. We will reduce exposure in D.C. and Houston while increasing it in underrepresented markets like Nashville. We are open to leveraging our balance sheet for opportunities. (Alexander Jessett, CFO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.