CAMDEN PROPERTY TRUST (CPT)·Q3 2025 Earnings Summary

Executive Summary

• Q3 results were mixed: Core FFO/share was $1.70, a $0.01 beat vs guidance midpoint, while GAAP EPS of $1.00 trailed guidance midpoint by $0.03; same-property NOI was flat YoY and down 0.6% sequentially as operators prioritized occupancy into the slower season .
• Management raised full-year 2025 Core FFO midpoint to $6.85 (+$0.04) on lower interest expense and reduced transactional activity, cut same-property revenue midpoint to 0.75% (-25 bps), and lowered same-property expense midpoint to 1.75% (-75 bps), netting NOI midpoint unchanged at 0.25% .
• Sunbelt supply remains the key headwind (notably Austin and Nashville), but demand stayed solid (95.5% occupancy; bad debt ~0.6%), with DC Metro the top-performing market; concessions remain elevated in high-supply submarkets .
• Capital allocation tilted to buybacks and recycling: $50M repurchased at $107.33 (authorization remaining ~$400M); dispositions of older, higher CapEx assets at ~5% AFFO yields fund share repurchases and portfolio upgrading .
• 4Q setup: Core FFO $1.71–$1.75 guided (midpoint +$0.03 q/q) helped by seasonally lower OpEx, favorable tax outcomes, and lower floating rates, partially offset by net dispositions; leverage at 4.2x Net Debt/Annualized Adj. EBITDAre with no significant maturities until late 2026 .

What Went Well and What Went Wrong

• What Went Well

  • Raised full-year Core FFO midpoint by $0.04 to $6.85 on lower interest costs and reduced 4Q transaction activity; same-property expense outlook cut materially (driven by favorable property tax settlements, especially TX/FL) .
  • DC Metro led performance (top sequential and YoY revenue growth in 3Q), supported by return-to-office dynamics; management not seeing direct consumer impact from the DOJ-related headlines referenced on the call .
  • Disciplined capital allocation: $50M buyback at a “significant discount to consensus NAV,” with management signaling willingness to keep buying funded by dispositions of slower-growth, higher CapEx assets .

• What Went Wrong

  • Top-line softness: same-property revenue +0.8% YoY and +0.1% seq.; NOI 0.0% YoY and -0.6% seq. as operators (industry-wide) prioritized occupancy in face of abundant supply and seasonal slowdown .
  • Sunbelt supply pressure persists (Austin, Nashville among most impacted), requiring price reductions and accepting elevated market concessions (≈10% or ~five to six weeks free) to protect occupancy .
  • Marketing costs (notably SEO) elevated amid competitive leasing; management reduced 2025 same-property revenue midpoint by 25 bps to 0.75% to reflect rate pressure while holding NOI with lower expenses .

Financial Results

Headline Financials and Margins (oldest → newest)

Same-Property Performance (YoY and Sequential)

KPIs (oldest → newest)

Estimates vs Actuals (S&P Global; Q3 2025)

Values retrieved from S&P Global. Note: S&P’s “Primary EPS” excludes certain gains; Camden’s GAAP diluted EPS was $1.00, boosted by a gain on sale (~$0.78 per share), consistent with the company’s reconciliation to FFO .

Guidance Changes

Additional context: Non-core FFO adjustments for 2025 expected at ~$0.11 per share (legal and transaction pursuit costs) .

Earnings Call Themes & Trends

Management Commentary

• “We are pleased to report that our third quarter 2025 Core FFO was approximately $0.01 per share better than anticipated… we are raising the midpoint of our 2025 Core FFO guidance from $6.81 to $6.85 per share.” — Richard J. Campo, Chairman & CEO .
• “Private market sales…cap rates for high-quality properties landing in the 4.75%-5% range… we bought back $50 million of our shares at a significant discount to consensus NAV… If market conditions remain at current levels, we will continue to buy the stock.” — Rick Campo .
• “Almost entirely as a result of the decreased transactional activity anticipated in the fourth quarter, combined with lower floating-rate interest expenses, we are increasing the midpoint of our full-year core FFO guidance by $0.04 per share… This is our third consecutive increase to our 2025 core FFO guidance.” — Alex Jessett, President & CFO .

Q&A Highlights

• 2026 outlook: Management refrained from formal guidance but cited a better setup with materially lower deliveries and resilient demand; cautioned about macro risks but highlighted strong retention and low move-outs to home purchase (9.1%) supporting demand even with slower job growth .
• Capital allocation: Will “lean in” to buybacks while avoiding leverage increases; dispositions of older, higher CapEx assets at ~5% AFFO yields support buybacks given mid-6% FFO yield on shares and 30% discount to consensus NAV .
• Concessions/competitive posture: High-supply markets offering ~five weeks free; Camden prioritized occupancy in late 3Q, pressuring new lease rates flowing into 4Q .
• Regional color: DC Metro remains best; Dallas/Charlotte/Nashville saw sequential gains; Austin remains the poster child for supply pressure but shows signs of quick turnarounds at assets as absorption occurs .
• Operating costs: Property taxes tracking better than expected; marketing (SEO) costs higher due to competitive traffic acquisition .

Estimates Context

• Versus S&P Global consensus for Q3 2025, Camden posted slight revenue and EBITDA misses and a larger EPS miss on the “Primary EPS” measure (likely excludes gains), while company GAAP EPS was $1.00 benefiting from an $85.6M gain on sale (~$0.78/share), consistent with the reconciliation to FFO .
• With lower interest costs and reduced 4Q transaction activity, management raised full-year Core FFO midpoint by $0.04, offsetting the trimmed same-store revenue midpoint; Street models may need to reflect lower OpEx/taxes and fewer 4Q transactions, but still conservative on Sunbelt pricing power into 4Q .
  Values retrieved from S&P Global.*

Additional Press Releases and Liquidity

• Dividend: Board declared Q3 2025 dividend of $1.05 per share (record 9/30/25; paid 10/17/25) .
• Liquidity/Leverage: ~$796.3M liquidity at 9/30/25; Net Debt/Annualized Adjusted EBITDAre 4.2x; no significant maturities until 4Q26 .

Key Takeaways for Investors

• Near-term: Expect a seasonal 4Q with modest rate pressure but benefit from lower OpEx/taxes and interest expense; watch Sunbelt concessions and occupancy vs rate trade-offs. Core FFO guide implies modest sequential improvement in 4Q .
• Estimate implications: Incorporate lower same-property expenses (taxes) and lower 4Q transaction volumes; S&P “Primary EPS” miss reflects exclusion of gains, while FFO/Core FFO tracked in line with guidance .
• Capital allocation tailwind: Management is actively arbitraging public-private disconnect via buybacks funded by dispositions; this should be NAV-accretive while upgrading portfolio age/CapEx profile .
• 2026 setup: Supply decline (from ~190k to ~150k completions in CPT markets) and strong retention improve pricing power prospects; DC strength and improving Sunbelt pockets (Dallas, Charlotte, Nashville) support reacceleration potential .
• Risk monitor: Prolonged Sunbelt concessions, macro slowdown impacting job formation, and elevated marketing costs could delay rent reacceleration; however, low move-outs to purchase and affordability gap to homeownership provide a cushion .
• Balance sheet: 4.2x leverage and staggered maturities provide flexibility to pursue opportunistic buybacks and targeted development/acquisitions as conditions normalize .

Notes:
- All company figures from Camden’s Q3 2025 8-K/press release and supplemental unless otherwise noted.
- *Estimates and “Primary EPS/Revenue/EBITDA” consensus vs actuals are values retrieved from S&P Global.