Camden Property Trust

Good morning and welcome to Camden Property Trust's third quarter 2024 earnings conference call. I'm Kim Callahan, Senior Vice President of Investor Relations. Joining me today are Rick Campo, Camden's Chairman and Chief Executive Officer, Keith Oden, Executive Vice Chairman, and Alex Jessett, President and Chief Financial Officer. 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 2024 earnings release is available in the investor section of our website at camdenliving.com, and it includes reconciliations to non-GAAP financial measures, which will be discussed on this call. We would like to respect everyone's time and complete our call within one hour, so please limit your initial question to one, then rejoin the queue if you have a follow-up question or additional items to discuss. If we are unable to speak with everyone in the queue today, we'd be happy to respond to additional questions by phone or email after the call concludes. At this time, I'll turn the call over to Rick Campo.

Thanks, Kim. The theme for On Hold Music today is coming together and getting along. With our national elections just four days away, and what looks like an even split among voters, a message of unity seems appropriate. To all of our Camden associates, if you haven't already done so, please use the time off Camden allows for you to get out and vote. And whether your preferred candidate wins or loses on Tuesday, please remember Tim McGraw's advice. When the dreams you've been dreaming come to you, when the work you put in is realized, let yourself feel the pride, but always stay humble and kind. We had a good third quarter with earnings ahead of expectations, and the rest of the year is playing out as we anticipated. Apartment absorption in our markets has been the best in 20 years, excluding 2021. Strong multifamily demand continues to be driven by strong job growth. Camden markets are growing faster than the U.S., in migration to Camden markets, and fewer consumers choosing home ownership and are renting well-managed apartments from Camden. Apartment rents continue to be more affordable than buying a home. High prices for homes, mortgage rates, property taxes, and insurance continue to support rental demand, and this is not changing anytime soon. A recent Wall Street Journal article on October 27th titled, This Year's Housing Turnaround Ended Before It Started, reports that 2024 sales of existing homes is on track to be the worst year for housing since 1995. New apartment supply is at an all-time high, 50-year peak, as we all know. And while absorption has been great, filling these apartments has limited meaningful rent growth in most of our markets. Trailing 12-month starts are off 35%, with monthly starts off 49% from the highs. This backdrop should put new multifamily starts in the mid-$200,000 range next year. Witten Advisors projects... rents bottoming out in 2024 and through the first half of 2025, and then starting to accelerate through 2026 and 2027. We look forward to sharing additional details on our strategic plan and future market concentration goals along with our 2025 guidance when we report fourth quarter and full results next year. I want to give a big shout out to our Camden teams. Thank you for a great quarter and knowing that they are ready for a strong finish to the year. And thank you for improving the lives of our teammates, our residents, and our shareholders one experience at a time. Keith Oden is up next.

Thanks, Rick. Our third quarter same property results had revenues in line with expectations with slightly lower than anticipated operating expenses. Our top markets for same property revenue growth this quarter were the same as last quarter and included Southern California, Washington, D.C. Metro, Southeast Florida, Denver, and Houston, all with revenue growth above the portfolio average of six-tenths of a percent and ranging from up one to up five percent for the quarter. Rental rates for the third quarter showed signed new leases down 2.8% and renewals up 3.6% for a blended rate up one-tenth of a percent, with an average occupancy of 95.5%. Preliminary results for October reflect moderation in both new lease and renewal pricing and in overall occupancy levels. Renewal offers for November and December were sent out with an average increase of 3.5%. Resident retention remains high and turnover remains low, with less than 10% of our third quarter move-outs attributed to home purchases. Net turnover for the third quarter of 2024 was 46% compared to 51% in the third quarter of 2023. Year-to-date net turnover was 41% compared to 44% in 2023. I would also like to encourage all of Team Camden to do three things. Number one, Get out there and vote. Number two, finish the year strong. And number three, always stay humble and kind. I'll now turn the call over to Alex Jesset, Camden's President and Chief Financial Officer.