Camden Property Trust Q1 Earnings Call Highlights

Key Points

• Camden reported Q1 Core FFO of $1.70 (beating the midpoint by $0.04) driven largely by timing items, lower bad debt (under 40 bps), strong occupancy (April ~95.4%) and blended rents up ~100 bps, though it recorded $58.2 million of non‑core FFO charges—mostly a $53M class‑action settlement.
• Management is proceeding with a planned sale of the California portfolio (buyer in diligence, expected close end‑June/early‑July) and intends to reinvest about 60% of proceeds via 1031 exchanges while using the remainder for buybacks; Camden repurchased $423M of shares (avg $104.08), closed post‑quarter acquisitions for ~$170M, and issued $600M of 10‑year bonds to extend maturities.
• The company reaffirmed full‑year 2026 guidance (same‑store revenue midpoint 0.75%, same‑store NOI midpoint -0.5% and Core FFO midpoint $6.75), but guided Q2 Core FFO to $1.65–$1.69 (a slight sequential decline) and characterized the recovery as primarily supply‑driven with improving supply trends in Sun Belt markets.

Camden Property Trust NYSE: CPT reported first-quarter 2026 results that came in ahead of the midpoint of management’s guidance, while executives emphasized that much of the outperformance was timing-related and that the company is watching peak leasing season closely.

Leadership changes and market backdrop

Kimberly Callahan, vice president of investor relations, opened the call by noting recent changes to Camden’s executive team. Executive Chairman Ric Campo said the promotions of Alex Jessett to chief executive officer, Laurie Baker to president and chief operating officer, and Ben Fraker to chief financial officer reflect the company’s succession planning and “homegrown talent,” with each executive having more than 25 years at Camden.

Campo also pointed to Camden’s workplace recognition, saying the company was named to the Fortune Best Place to Work list for the 19th consecutive year and ranked No. 13 this year.

On apartment fundamentals, Campo said new supply “has peaked and has been cut in half in most of our markets,” while first-quarter apartment net absorption was “one of the best since 2016,” despite slow job growth and weak consumer sentiment.

Operations: lower bad debt, low turnover, modest April improvement

Jessett said the company posted its lowest bad debt level since the onset of COVID-19 at “less than 40 basis points,” attributing the improvement partly to larger income tax refunds received by many residents, continued resident financial strength, and enhanced credit screening. Jessett said refunds for middle- and higher-income earners are up about 10% versus last year, and he noted Camden’s renters “pay a low 19% of their income toward rent.”

Baker said operating performance was “generally in line with our expectations.” She added that first-quarter results were “slightly ahead of budget,” but the outperformance was “mainly driven by timing-related items.” Baker said preliminary April results were on track and showed “modest improvements” in occupancy and blended lease rate growth versus the first quarter.

Turnover remained “exceptionally low,” Baker said, with first-quarter 2026 annualized net turnover of 30%, “one of the lowest in our company’s history.” She said only 9.2% of move-outs were related to home purchases, and she pointed to “record levels of resident retention.” Renewal offers for May through July were sent out with average increases in the mid-3% range.

In the Q&A, management provided additional color on early second-quarter trends. The company said April occupancy was about 95.4%, compared to 95.1% in the first quarter, and that blended rates in April were up about 100 basis points compared to the first quarter. Management said it is anticipating a “pretty strong third quarter,” with a potentially better-than-typical fourth quarter if supply continues to fall as expected. Jessett highlighted “green shoots” in Atlanta, Dallas, Orlando, Nashville, Raleigh, and Southeast Florida.

On concessions, management said Camden does not offer concessions, but it is seeing market concessions “come down fairly meaningful in most of our markets,” which it tied to lower supply. The company cited its Village District development in Raleigh, noting it is offering a concession there but “not much over” one month free, which management said indicates concessions are “starting to get into check.”

Capital allocation: buybacks, acquisitions, and California sale progress

Jessett said the company’s process to sell its California portfolio was progressing on schedule, with “over 230 companies signing confidentiality agreements.” Camden is in diligence with one buyer for the entire portfolio and expects a closing “at the end of June or early July.” If that does not work out, Jessett said there are other potential buyers that could step in, “although with a later closing date.” Management said the sales price is “in line with expectations,” but did not provide details.

Jessett said Camden continues to assume about 60% of the proceeds will be reinvested via 1031 exchanges into its Sun Belt markets. The remainder of the proceeds—modeled at $650 million—has been used for share repurchases in late 2025 and year-to-date 2026.

Camden also provided updates on transactions:

• Disposition: A four-year-old Dallas community was sold for $77 million, generating an approximate 12% unlevered IRR over an almost 30-year hold period, according to Jessett.
• Acquisitions: After quarter end, Camden acquired Camden Alpharetta (269 homes) in Atlanta and Camden at Lake Nona (288 homes) in Orlando for a combined $170 million.

Jessett said the company is underwriting additional acquisition opportunities and expects it can deploy 1031 proceeds, while cautioning that exchange timing can add variability to 2026 earnings since proceeds are not received until exchanges are completed.

During Q&A, management said transaction volumes remain below pre-COVID levels and in line with 2025. It also said it is “not seeing a lot” of lease-up acquisition opportunities, as sellers are generally trying to stabilize properties before marketing them. On pricing, management said Sun Belt cap rates for newer, well-located properties have been stable for about 18 months and are generally in the 4.5% to 5% range.

Asked why Camden opted for a single buyer for the California portfolio instead of splitting it into smaller packages, management said the approach “limited our execution risk while maximizing proceeds,” adding that the company selected a buyer due to its strength even if splitting the portfolio might have brought “a little bit more” in proceeds with added risk.

Management also said it has been active on acquisitions, stating it had recently been “awarded another $250 million worth of acquisitions,” bringing the company to “pretty close to halfway” toward its $1 billion goal.

Balance sheet actions and first-quarter financial results

Fraker said Camden recast its $1.2 billion unsecured revolving credit facility, extending maturity by four years while lowering all-in pricing by 15 basis points. The company also issued $600 million of 10-year unsecured bonds at an all-in effective rate of 5%, which Fraker said extended the weighted average debt maturity and reduced near-term refinancing risk.

Fraker said Camden repurchased $423 million of shares during and after the quarter at an average price of $104.08 per share. Including $271 million of repurchases in 2025, he said the buybacks reflect “disciplined and opportunistic” capital allocation as shares trade at a “significant discount to NAV.” Camden’s updated 2026 guidance assumes no additional repurchases, though management later said additional repurchases remain possible depending on conditions and balance sheet capacity.

For the first quarter, Fraker reported Core FFO of $1.70 per share, which exceeded the midpoint of guidance by $0.04. He attributed the beat to:

• $0.01 from higher revenue, primarily from lower bad debt and higher collections on delinquent rent
• $0.02 from property expense savings that were “largely timing related”
• $0.01 from timing of third-party construction fee income

Outside core results, Fraker said Camden recorded $58.2 million of non-core FFO charges, “most of which” related to the previously disclosed $53 million class action lawsuit settlement detailed in an April 9 8-K. The remaining charges included $4.9 million of anticipated investment losses from two climate technology funds.

Guidance and outlook: reaffirmed full-year expectations

Fraker said management is reaffirming the midpoint of its full-year 2026 same-store guidance, despite improved bad debt results in the first quarter, calling it “premature” to extrapolate one quarter across the full year. The company reaffirmed:

• Same-store revenue guidance midpoint: 0.75%
• Same-store expense guidance midpoint: 3%
• Same-store NOI guidance midpoint: -0.5%
• Full-year Core FFO guidance midpoint: $6.75 per share

For the second quarter, Camden guided to Core FFO per share of $1.65 to $1.69, reflecting a sequential decline at the midpoint. Fraker said the expected change is driven by a $0.04 sequential decrease in same-store NOI, as higher expected revenue is offset by seasonal and timing-related repair and maintenance expenses and annual merit increases, partially offset by $0.01 of additional non-same-store NOI from acquisitions.

In discussion of the broader recovery, management characterized the near-term environment as supply-driven rather than demand-driven. In response to a question about whether job growth or supply is the key constraint, management said it is “entirely a supply story,” pointing to domestic in-migration, job creation, and corporate headquarters relocations as supportive of Camden’s markets. Campo also offered a completions cadence across Camden’s markets, saying completions were about 200,000 in 2025, falling to about 140,000 to 150,000 in 2026, about 135,000 in 2027, and about 120,000 in 2028.

On market performance, management said class A versus class B performance in Camden’s portfolio is “pretty flat,” while it has seen a bigger difference between urban and suburban assets. Management said urban assets were about 70 basis points better on revenue in the prior quarter, attributing that to supply falling fastest in urban areas.

Management also highlighted Houston as a market where underlying fundamentals appear strong but results have lagged, attributing some of the softness to lower consumer sentiment in 2026 compared to 2025. Jessett said Camden’s rent-to-income in Houston is 16%, among the lowest in its portfolio, and said the market should improve as sentiment normalizes.

About Camden Property Trust NYSE: CPT

Camden Property Trust is a publicly traded real estate investment trust (REIT) specializing in the ownership, development and management of multifamily residential communities across the United States. The company's core business activities include acquiring land for new construction, overseeing the design and development of garden-style and mid-rise apartment communities, and providing ongoing property management services. Camden's asset management team focuses on maintaining high occupancy levels, resident satisfaction and operational efficiency through consistent leasing, maintenance and community engagement programs.

Camden's portfolio encompasses a geographically diversified mix of properties located primarily in high-growth Sun Belt and major metropolitan markets.

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