Q&A With Camden Property Trust CEO Ric Campo
With $1.1B of projects in the pipeline, Camden Property Trust is one of multifamily's biggest developers. We talked with CEO Ric Campo about radical changes facing the industry, which markets are hot and which are out in 2016, and how his firm is handling the sliding economy in its HQ of Houston.
Bisnow: What are your plans for the year?
Ric: To continue to provide Living Excellence to our customers, execute the $1.1B of projects in our project pipeline, and keep a strong balance sheet.
Bisnow: What markets are really hot this year?
Ric: Atlanta, Denver, Southern California, and possibly Las Vegas and parts of Florida. They’re all good places to live, have good job growth, and vigorous housing demand by Millennials. They also have good weather.
Bisnow: What markets are off your list?
Ric: All markets go through their cycle and Houston is definitely slow right now. Houston and Washington, DC, are lagging three to four years behind job growth.
Bisnow: What trends are you seeing in real estate in general?
Ric: It’s been a very slow recovery after the downturn in 2008. We are six years into the recovery cycle and there’s still nervousness. We are very much watching and waiting. On the other hand, we are seeing slow growth. This means there are rising construction costs and more competition. Camden has a strong balance sheet, low debt, so we’re ready for whatever the market throws at us. The economy is recovering, just not as fast or as hard as it could.
Bisnow: What’s new for multifamily this year? Is Camden experimenting with micro-units, for example?
Ric: We are not doing micro-units. There is no real need for micro-units in most markets. You might need them in markets like San Francisco or New York, where rent is exorbitant and there is little space, but in Houston, we’re content with doing one-bedroom units. Millennials require less space. They don’t cook. They do want social space.
Empty nesters are also creating demand for bigger, more luxurious apartments in the urban core. Some of this might be new in the sense that we’re building lots of amenities and projects near transit. It’s setting up an interesting contrast between Millennials and empty nesters.
Bisnow: You are headquartered in Houston, which is suffering from low oil prices. In fact, you’ve halted some projects because of that situation. What’s your outlook on Houston overall?
Ric: Houston is the energy capital of the world, and that will continue. Our technology prowess has doubled domestic oil production over the last several years. Once that balances, Houston is still where you want to be. It is a great place to live, work and play.
12% of our portfolio is in Houston. We have 8,000 units in Houston spread over 24 properties and we have 95% occupancy. Houston is catching up with a growth spurt. 1.3 million people moved to Houston last year.
Bisnow: You were instrumental in bringing the Super Bowl to Houston. What does it mean for the city?
Ric: It’s great for the city. It’s the biggest sporting event in the USA and possibly the world. Of the top 10 all-time top rated TV programs, nine of them have been Super Bowl games. Something like 120 million people watch the game. The Super Bowl shines a bright light on the city to the entire world. It’s an enormous marketing opportunity, not just for out-of-towners, but for the people who live here. It gives a sense of civic pride.
We are all competing for capital, not just financial capital but intellectual capital. It’s a great way to market the city as a place for diversity, technology and fun.
Bisnow: What made them pick Houston?
Ric: Houston is the most diverse city in the USA. It is the city of the future. Our strength is in our diversity. It shows we know how to all get along together, that we respect each other’s lives.
The 50th Super Bowl was in San Francisco and it was kind of a look back. Now, the 51st will be in Houston, and it will be a look forward.
Bisnow: Who do you want to see in the Super Bowl?
Ric: Houston Texans vs Dallas Cowboys. Just kidding. I’d love to see the Houston Texans and the New York Giants—you know, someone from outside Houston so that more tourists will come to the city for the game.
Bisnow: Camden Property Trust was ranked as one of the most diverse companies in the USA. What does that mean for the company?
Ric: Diversity is a huge advantage because you’re serving a diverse customer base, and you must reflect your base. It’s important to use diversity to your advantage. Embrace it.
Diversity is basically treating people fairly. Our world has all kinds of different people, and we need to recognize that and cater to that. If you can’t empathize with someone, you can’t really serve them. We respect our customer’s needs and lives. We really believe that we change people’s lives. We give them a home to create memories. That’s our brand promise.