Camden Property Trust Q4 2024: Diverging Views on Transactions, Market Demand, and Lease Growth

These are the key contradictions discussed in Camden Property Trust's latest 2024Q4 earnings call, specifically including: Transaction Market Dynamics, Market Demand and Economic Conditions, Lease Growth Expectations, and Development Strategy:



Market and Revenue Performance:
- Camden Property Trust reported same-property revenue growth of 1.3% for 2024, with most markets achieving results within 100 basis points of their original budgets.
- For 2025, they anticipate same property revenue growth of 1% within the majority of their markets falling between 0 and 2%.
- The performance was driven by improved operating budgets and reduced supply pressure, with expectations of improved revenue and net operating income growth as new supply declines.

Geographic and Market Strategy:
- The company's top 5 markets are projected to see revenue growth in the range of 2% to 2.5%, accounting for over 40% of their budgeted revenue for 2025.
- By end of 2027, Camden aims to reduce exposure in D.C. Metro and Houston to prevent any single market from representing more than 10% of NOI and no market representing less than 4%.
- This strategy is to ensure geographic diversification and better balance, utilizing more aggressive development starts and acquisitions in other existing markets.

Transaction and Capital Activity:
- Camden anticipates $750 million in acquisitions and dispositions, driven by the expectation of a more active transaction market due to favorable capital deployment opportunities.
- They plan to execute a similar strategy as post-GFC, recycling capital through acquisitions and dispositions to improve portfolio balance and maintain competitive positioning.
- The strategy involves buying properties below replacement cost and focusing on markets with significant supply constraints, such as Austin, to capitalize on future growth opportunities.

Supply and Demand Dynamics:
- The company expects 2025 to witness a decline in new supply across their 15 markets, with estimates ranging from 160,000 to 230,000``` completions, setting the stage for improved performance in 2026.
- The supply estimates are total for each MSA, not all competitive with their existing portfolio, indicating a positive outlook for future demand and revenue growth.
- This expectation is based on third-party data projections and Camden's market positioning, which aligns with long-term megatrends of population growth in Sunbelt markets.