Camden Property Trust

Camden reported second-quarter core FFO of $1.68 per share, $0.01 above the midpoint of guidance. The California portfolio sale closed for $1.625 billion on July 29, and management said transaction costs are about $15 million. For the full year, Camden reaffirmed core FFO guidance at a midpoint of $6.75 per share. For third quarter, core FFO guidance was set at $1.69 per share at the midpoint. On same-store guidance excluding California, management kept revenue growth at 0.5%, lowered expense growth to 2.5%, and improved NOI guidance to a 0.6% decline from a prior 0.9% decline. Management also said second-quarter same-store rental rates excluding California were down 3.3% on effective new leases, up 2.8% on renewals, and blended rate growth was negative 0.2%. Second-quarter occupancy averaged 95.7%, versus 95.1% in the first quarter, and July occupancy was 95.8%.

Alex Jessett emphasized that Camden’s California exit and reinvestment strategy is designed to improve the portfolio by shifting capital into faster-growing Sunbelt markets and Camden stock. He described leasing trends as a clear improvement, saying the company is seeing “green shoots” across new leases, renewals, blends, and occupancy, with some communities and even system-wide new leases turning positive on certain days in July. His tone was confident and upbeat, but he kept stressing that the company is still early in the recovery and is not declaring victory yet.

Ben Fraker said second-quarter core FFO of $1.68 per share beat guidance because occupancy was stronger than expected across stabilized communities. He detailed the capital moves tied to the California sale: $694 million of share repurchases at an average price of $105.17 per share, about $900 million used to repay line-of-credit and commercial paper balances, $195 million earmarked for awarded real estate, about $200 million expected for future 1031 acquisitions, and $330 million for general corporate purposes. He said pro forma net debt to EBITDA was 4.5x at the end of July, and Camden also closed a new 1-year $350 million unsecured term loan to enhance liquidity. On guidance, he highlighted the $1.69 third-quarter FFO midpoint, the reaffirmed $6.75 full-year midpoint, and the improvement in same-store expense outlook.

Analysts focused on the pace of leasing improvement, whether new lease pricing could get close to flat in July and August, and how that would flow into blended rent growth. Management said signed leases are giving them confidence in the rest of the quarter, but they declined to give monthly new-lease figures, saying day-to-day data can be noisy and misleading. Questions also centered on capital allocation, with management saying buybacks are not off the table if the stock trades at a persistent discount to NAV, but future repurchases would likely require more asset sales. Other questions covered concessions, debt maturities, and market-level performance; management said concessions are moderating in high-supply markets, the term loan provides flexibility before a possible refinancing in November, and challenged markets like Austin, Denver and Phoenix are showing improvement.