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CP

CAMDEN PROPERTY TRUST (CPT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered stable operational performance: Core FFO per share was $1.70, a slight beat versus the 2Q guidance midpoint ($1.69), while FFO was $1.67, in line with guidance; GAAP EPS was $0.74, aided by a ~$0.43 per-share gain on a property sale .
  • Same-property results were steady: revenues +1.0% YoY, expenses +2.4% YoY, NOI +0.2% YoY; occupancy ticked up to 95.6% from 95.4% in Q1 2025 .
  • Management raised FY 2025 Core FFO midpoint by $0.03 to $6.81 and lowered same-property expense growth midpoint to 2.5% (from 3.0%), lifting NOI growth midpoint to +0.25% (from flat), reflecting property tax refunds and favorable insurance trends .
  • Strategic recycling continues: $138.7M Tampa acquisition (Camden Clearwater) and $60.0M Houston sale in-quarter (with ~$47.3M gain); subsequent post-quarter sales of Houston and Dallas communities ($113.5M total) support portfolio quality upgrades and near-term dilution that is expected to reverse as newer assets grow faster .
  • Balance sheet remains strong (Net Debt/Annualized Adjusted EBITDAre 4.2x) with no significant maturities until 4Q26; management sees supply peaking and expects pricing power to improve into 2026 as deliveries normalize, positioning the stock for a potential narrative inflection on growth visibility .

What Went Well and What Went Wrong

What Went Well

  • Core FFO beat by $0.01 versus guidance; FFO met guidance; GAAP EPS materially above guidance due to sale gain: “EPS $0.74 vs $0.29 guidance midpoint variance $0.45; Core FFO $1.70 vs $1.69 variance $0.01, FFO $1.67 in line.” .
  • Operating stability: occupancy 95.6% (up vs Q1 and YoY), blended effective lease rate positive at +0.7%, renewals +3.7%, with bad debt at 0.6% (back to pre-COVID levels); management credits VERO screening and strong retention culture (customer sentiment score 91.6%) .
  • Expense tailwinds and guidance raise: lower property taxes and insurance trending favorably led to lowering same-property expense growth midpoint to 2.5% and raising Core FFO midpoint to $6.81 (second consecutive +$0.03 raise) .

Management quotes:

  • “Apartment demand was one of the best in 25 years… New additions to supply have peaked… rental rates should firm by the beginning of 2026” (Ric Campo) .
  • “Our blend actually increased monthly April through July… we are now anticipating that our second half blended rates will be just under 1%” (Alex Jessett) .

What Went Wrong

  • Same-property NOI growth subdued (+0.2% YoY) as expense growth outpaced revenue; sequential NOI was modestly down (-0.6%) .
  • New leases remained negative (-2.1% effective) given competitive concessions/supply, with Austin a soft spot; management expects improvement as supply moderates in 2H25–2026 .
  • Near-term dilution from asset recycling: CFO flagged 2H 2025 FFO drag as dispositions (older, higher CapEx assets) exceed acquisitions short term; growth of newer assets should offset in 2026–2027 .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Property Revenues ($USD Millions)$386.319 $390.565 $396.509
EPS (Diluted, $)$0.37 $0.36 $0.74 (includes ~$0.43 sale gain)
FFO per Share (Diluted, $)$1.68 $1.70 $1.67
Core FFO per Share (Diluted, $)$1.73 $1.72 $1.70
Same-Property NOI Growth YoY (%)1.2% 0.9% 0.2%

Versus company guidance (2Q):

Metric vs 2Q25 Guidance Midpoint2Q25 ActualGuidance MidpointVariance
EPS (Diluted, $)$0.74 $0.29 +$0.45
FFO per Share (Diluted, $)$1.67 $1.67 $0.00
Core FFO per Share (Diluted, $)$1.70 $1.69 +$0.01

Consensus vs Actual (S&P Global):

Metric (S&P)Q4 2024Q1 2025Q2 2025
Primary EPS Consensus Mean ($)0.3608*0.3775*0.3008*
Primary EPS Actual ($)0.37*0.36*0.3051*
Revenue Consensus Mean ($USD Millions)386.197*388.858*393.745*
Revenue Actual ($USD Millions)387.837*393.062*399.210*

Values retrieved from S&P Global.*

Segment breakdown (Same-Property NOI contribution and occupancy Q2 2025):

RegionNOI Contribution (%)Occupancy (%)
D.C. Metro14.0% 97.3%
Houston, TX11.7% 95.1%
Phoenix, AZ8.6% 94.4%
Dallas, TX8.2% 95.3%
Tampa, FL6.4% 95.4%
SE Florida7.0% 95.5%
San Diego/Inland Empire, CA4.6% 96.1%
Los Angeles/Orange County, CA4.5% 95.6%
Total Portfolio100.0% 95.6%

KPIs

KPI (Same-Property)Q2 2024Q1 2025Q2 2025
Effective New Lease Rates (%)-2.5% -3.1% -2.1%
Effective Renewal Rates (%)+3.4% +3.3% +3.7%
Effective Blended Lease Rates (%)+0.1% -0.1% +0.7%
Occupancy (%)95.3% 95.4% 95.6%
Bad Debt (%)0.8% 0.6% 0.6%
Annualized Net Turnover (%)42% 31% 39%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
EPS (Diluted, $)FY 2025 Midpoint$1.16 $2.38 Raised (+$1.22)
FFO per Share (Diluted, $)FY 2025 Midpoint$6.68 $6.70 Raised (+$0.02)
Core FFO per Share (Diluted, $)FY 2025 Midpoint$6.78 $6.81 Raised (+$0.03)
Same-Property Revenues Growth (%)FY 2025 Midpoint1.00% 1.00% Maintained
Same-Property Expense Growth (%)FY 2025 Midpoint3.00% 2.50% Lowered (-50 bps)
Same-Property NOI Growth (%)FY 2025 Midpoint0.00% 0.25% Raised (+25 bps)
EPS (Diluted, $)3Q25 Range—$1.01–$1.05 New Quarterly Guidance
FFO per Share (Diluted, $)3Q25 Range—$1.64–$1.68 New Quarterly Guidance
Core FFO per Share (Diluted, $)3Q25 Range—$1.67–$1.71 New Quarterly Guidance
Dividend per Share ($)Q2 2025$1.03 (Q4’24) $1.05 Raised QoQ earlier; maintained at $1.05 in Q2

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 & Q1 2025)Current Period (Q2 2025)Trend
Supply/demand & rent outlookStarts down sharply across Sunbelt; flat-to-modest growth expected; supply peak noted Witten Advisors: ~4% rent growth in 2026, ~5%+ in 2027; demand strong despite supply; pricing power should improve Improving setup as new deliveries decline (positive)
Blended lease rates & occupancyQ1 blended ~flat to +1%; occupancy ~95.4% Q2 blended +0.7%; July improvement; 2H blends just under 1%; occupancy mid-95% expected Gradual firming in 2H25 (positive)
Bad debt & screening techNormalizing towards ~50 bps; tech initiatives reducing fraud Bad debt ~55 bps expected; VERO screening credited; strong retention (customer sentiment 91.6%) Improving collections quality (positive)
Taxes & insuranceInsurance renewal expected; FY assumption ~flat given loss trends Lower property tax growth (<2%) via settlements; insurance premiums down ~10%; FY expense midpoint cut to 2.5% Expense tailwind vs plan (positive)
DC strengthHighest blended rates; top occupancy 97% DC had highest rent growth and occupancy; “I’d take every market behaving like DC” Continues to outperform (positive)
Austin softnessChallenged by heavy supply; expected improvement as supply trails off Still softer than anticipated near term; long-term outlook strong; acquisitions reflect conviction Near-term headwind; medium-term opportunity
Development cadenceNations (Nashville) start; cautious on starts given uncertainty Cautious; targeting 5.75–6% yields; costs flattening/down; suburban focus (Nations) Selective starts; disciplined returns
Portfolio recyclingPlan $750M acquisitions and $750M dispositions in 2025 Back-end loaded dispositions; near-term FFO dilution offset by faster growth from newer assets Execution underway; short-term drag, long-term upgrade

Management Commentary

  • Strategic positioning: “Camden is positioned well with one of the strongest balance sheets in the industry… no major dilutive refinancings over the next couple of years” (Ric Campo) .
  • Operating discipline: “Renewal offers for August and September were sent out with an average increase of 3.6%… net turnover of only 39%” (Keith Oden) .
  • Guidance drivers: “Lower property taxes and insurance… decreasing full-year same-store expense midpoint from 3% to 2.5% and correspondingly increasing the midpoint of full-year same-store NOI from flat to positive 25 bps” (Alex Jessett) .
  • Near-term cadence: “We expect core FFO per share for the third quarter to be within $1.67–$1.71… typical seasonal increases in utilities and R&M” (Alex Jessett) .

Q&A Highlights

  • Blended rates trajectory: Management sees monthly blend improvement April–July and expects 3Q blended “just under 1%,” with 4Q similar to 2Q, supported by occupancy and lower bad debt; teams use VERO screening (reducing delinquency) .
  • Market dispersion: DC and LA showed strong quarter-over-quarter revenue growth; Austin remains soft due to supply but is expected to snap back with demand and reduced starts; absorption at record pace across Camden markets .
  • Expense Opex clarity: Property tax settlements and insurance premium reductions drive lower expense growth; insurance premiums renewed ~10% lower, with overall insurance cost assumed flat due to expected losses .
  • Recycling & dilution: 2H 2025 FFO dilution expected from dispositions of older assets; newer acquisitions should grow faster and offset into 2026–2027 .
  • Development/credit environment: Cautious on starts, targeting low-5s to 6% yields; private credit mezz costs (10–13%) seen as deterrent to oversupply; cost buyouts showing 2–4% savings .

Estimates Context

  • Q2 2025 EPS: Primary EPS actual $0.305 vs consensus $0.301 (minor beat), while GAAP EPS reported $0.74 benefited from ~$0.43 per-share gain on sale; revenue actual $399.21M vs consensus $393.75M (beat) . Values retrieved from S&P Global.*
  • Trajectory: EPS and revenue beats/matches across Q4 2024 and Q1 2025 were modest; Q2 showed more meaningful revenue outperformance versus consensus. Values retrieved from S&P Global.*

Where estimates may adjust:

  • Expense run-rate revisions: Lower taxes/insurance may prompt upward revisions to NOI and Core FFO for FY 2025; management already raised Core FFO midpoint to $6.81 .
  • Leasing trajectory: Blended rates improving and occupancy stable could support modest upward revenue revisions for 2H 2025, especially in stronger markets (DC, LA) .

Key Takeaways for Investors

  • Core FFO execution is consistent; 2Q beat versus guidance and FY Core FFO raised again—expense tailwinds (tax and insurance) are the catalyst .
  • GAAP EPS strength was non-recurring (sale gain); focus remains on Core FFO and same-property NOI stability as supply peaks .
  • Asset recycling is accelerating; expect near-term FFO dilution but improved portfolio quality and faster growth from newer assets (Tampa/Nashville/Austin) into 2026–2027 .
  • Markets: DC and LA are outperforming; Austin is still soft near term, offering medium-term upside with declining starts and strong job growth .
  • Balance sheet and refinancing risk are low (Net Debt/Adj. EBITDAre 4.2x; no major maturities until late 2026), enabling disciplined capital allocation and selective development .
  • Trading lens (near term): Seasonal 3Q utility/R&M headwinds offset by occupancy and bad debt improvements; watch 3Q Core FFO $1.67–$1.71 range and any incremental tax/insurance updates .
  • Medium-term thesis: As supply normalizes, blended rate/pricing power should strengthen across Camden’s Sunbelt footprint; Witten’s 2026–2027 rent growth forecasts suggest a narrative shift toward re-acceleration .

Citations

  • Q2 2025 8-K press release and supplement:
  • Q2 2025 earnings call transcript:
  • Q1 2025 press release and call:
  • Q4 2024 8-K:
  • S&P Global estimates: See “Consensus vs Actual (S&P Global)” table. Values retrieved from S&P Global.*