Camden Property Trust (CPT) Q2 FY26 earnings call: guidance and Q&A

How will the 0.5% same-store revenue growth be achieved, considering occupancy, bad debt, other income, and current leasing trends?

Alex Jessett highlighted strong visibility into Q3 due to signed new leases (25 days out) and renewals (60 days out), noting a sharp acceleration compared to last year. He expects a slight uptick in Q3 occupancy and a less significant downtick in Q4 compared to last year.

“we've got pretty good visibility right now to the way the rest of the third quarter is going to look. And it is really a sharp acceleration versus what we saw this time last year.”

asked by Eric Wolfe · answered by Alexander Jessett

Are stock buybacks off the table given current acquisitions, and would they require further dispositions? What is the broader capital deployment strategy?

Ben Fraker stated that buying stock is currently the best investment, given the stock trades at $111 versus a consensus NAV of $130. While the company is focused on tax-efficient 1031 exchanges, they are not done with buybacks and would consider selling additional assets to fund them if the discount persists.

“I would say that just generally, if you look at the best investment we can make today, it's buying our stock even at this level today... That's a gap, a big gap.”

asked by Haendel St. Juste · answered by Benjamin Fraker

Does the statement about system-wide positive signed new leases mean new leases will be close to flat in July/August, or does it fluctuate?

Alex Jessett clarified that it bounces around but they are getting close to flat. He expects Q3 to be an outlier compared to last year and Q2 this year, providing pricing power for Q4. He emphasized the "green shoot" nature of positive new leases after several years.

“it absolutely does bounce around quite a bit. but we are getting pretty close to the point where it's going to be flat... this is the first time in several years that we can sit here and tell you, we've seen system-wide some positive new leases.”

asked by Brad Heffern · answered by Alexander Jessett

Is the expectation for further improvement in new lease pricing into Q4 still valid, and what is the expected blended rent growth for the back half of the year?

Alex Jessett expects new lease pricing in Q3 and Q4 to be fairly similar. He anticipates blended rent growth for both Q3 and Q4 to be positive, in the 1% and just over 1% range, benefiting from easier comps in Q4.

“what we're anticipating is both the third quarter and the fourth quarter to be positive on the blend sort of in the 1% and just over 1% type range.”

asked by Steve Sakwa · answered by Alexander Jessett

Is the "hockey stick" growth thesis for Q3 still intact, or is management pulling back on it?

Alex Jessett affirmed the "hockey stick" thesis, stating Q3 looks strong with "tons of green shoots" and will be an outlier. Ric Campo added that the market has a "recency effect" but historical trends post-financial crisis show strong growth after supply/demand rebalances, which is expected next year.

“Absolutely. Not pulling back whatsoever... the third quarter is looking really strong. We have tons of green shoots. And because of that, we feel really good that the third quarter in terms of new leases, renewals, blends, is going to be an outlier.”

asked by Rich Anderson · answered by Alexander Jessett

Has Camden pulled back on using concessions, especially compared to last year?

Laurie Baker stated that concessions are leveling off and are primarily used in high-supply development areas or for new acquisitions. She gave Austin as an example, where occupancy has firmed up, leading to concessions burning off and improved pricing power.

“As a practice, we do not use concessions, but we have on a handful of our communities where we've had acquisitions or new developments that we are also leasing up... we are seeing that moderate throughout all of our markets.”

asked by Wes Golladay · answered by Laurie Baker

What is Camden doing with AI or technology to drive same-store revenue, or has most of this already been accomplished?

Alex Jessett expressed bullishness on AI for every income statement line. He described Camden's "leadership, crowd, and lab" approach to encourage AI adoption, empower team members to find solutions, and test them. He expects real benefits to the bottom line within the next year, particularly in increasing renewal percentages and minimizing expenses like insurance and utilities.

“We are incredibly bullish about what AI can do really for every single line item on an income statement... I firmly believe that at this point in time next year, we will be talking about real life, real benefits to the bottom line for Camden.”

asked by John Kim · answered by Alexander Jessett

What percentage of leases are currently at a gain to lease, and what is the magnitude?

Alex Jessett stated that in July, the company rolled into a loss to lease situation, which is a positive change from earlier in the year. He noted that gain to lease situations are primarily in Austin and Nashville, while other markets are operating at a loss to lease. He also mentioned that 50% of communities had positive signed new leases in July.

“in July, we actually rolled into a loss to lease situation. And we haven't been in a loss to lease situation this year. So feel really good. That's the direction in which we're going.”

asked by Austin Wurschmidt · answered by Alexander Jessett

Why is there hesitancy to provide specific monthly new lease numbers for July, given other data points were shared?

Alex Jessett explained that providing monthly numbers puts the company on a "treadmill" where people focus too much on small data pieces rather than the overall picture. Ric Campo added that the market overreacts to short-term data, and longer-term trends are more important.

“it puts you on a treadmill where I think people focus far too much on little pieces of data rather than looking at the whole picture.”

asked by Eric Wolfe · answered by Alexander Jessett