Steady as she goes is the watchword for Camden Property Trust's Atlanta apartment portfolio this year. That is the message company execs gave stock analysts during a conference call this week about the Houston apartment operator's 13-property portfolio in Metro Atlanta. Atlanta — along with Southern California, Raleigh and Orlando — was expected to have a stable 2017 for Camden.
“All of these markets faced healthy operating conditions, with a reasonable balance of supply and demand metrics,” Camden president Keith Oden said. “Overall, new deliveries in these markets should increase slightly during 2017 while job growth moderates a bit, providing growth rates more in line with long-term historical levels.”
Eleven of Camden's 13 markets are expected to grow rents by 3% to 5% this year, Oden said, led by what he expects to be the hottest Camden market: Denver. But that could be offset by what Camden officials said could be the firm's weakest market – its home turf of Houston.
The Houston market — where Camden owns and operates about 25 properties — is expected to see historic property rent declines of up to 4% this year, Oden said.
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Camden also unloaded $1.2B of its portfolio last year, reaping strong demand for multifamily properties, officials said. And this year, the REIT expects to develop between $100M and $300M in new projects.
“Our offensive game plan stayed conservative, with no acquisitions and a slowing development pipeline," CEO Ric Campo said. "We ran the score up by improving the quality and the geographic makeup of our property portfolio by selling nearly 13% of our properties into a very receptive market that would be difficult to replicate today."
Those sales last year have been a double-edged sword, since sellers are still expecting premium value for their properties. Campo said after last year's sales, Camden "had more cash than I've ever had on my balance sheet and the lowest debt position ever." But that does not mean he can spend it.
“I think you have a standoff between buyers and sellers today," Campo said. "Buyers think that with Treasurys rising the way they did, that they ought to get a bigger discount. And the sellers are not willing to give that discount, so there's a standoff and it will be interesting to see who wins in that area ... There's just not a lot of sellers that are willing to adjust their psychology on where the pricing of their assets will be.”
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