Market Insights | Camden Property Trust (CPT) 4Q 2020 Earnings SoundbitesFred Krom, 03/08/2021
What's Happening Next in Multifamily? Explore 4Q 2020 earnings sound bites from Camden Property Trust (CPT).
“In 2021, we rate our overall portfolio a B, with CPT’s same property revenue expected to be -0.25% to +1.75%. Outliers include Phoenix, San Diego, Inland Empire and Tampa, which should grow 3% to 4%, while Houston is likely to remain -2%.”
“Phoenix (#1 market): 5% revenue growth the past 3 years. Expected revenue growth of 3% to 4% this year. We give this market an A rating with a stable outlook. Supply and demand metrics look strong with estimates calling for 19k+ new jobs and 9k new units.”
“San Diego (#2) and Tampa (#3): A-minus ratings and improving outlooks. 2021 revenue growth projected at 3% to 4%, with both markets seeing acceleration recently. San Diego projected to create 100k new jobs in 2021, with new supply of only 7k units. Tampa should deliver 7k new units, with roughly 50k new jobs.”
“Atlanta (#4) and Raleigh (#5): Budgeted revenue growth of 2% for 2021 and ratings of A- and stable outlook. In Atlanta, job growth is expected to rebound to 100k+, with only 7k new units. In Raleigh, projections call for 40k new jobs with 4-5k completions.”
“Denver, DC Metro, and Austin receive a B+ rating with declining outlooks. We expect conditions to moderate given new supply and increasing competition for new renters. Supply-demand ratios in Denver and DC remain steady with 65k and 90k new jobs anticipated vs. new supply at 8k and 12k new units, respectively. In Austin, 15k units expected in 2021 vs. 60k new jobs.”
“Southeast FL: B rating with improving outlook (after ranking C+/B- the past two years ) as we're seeing prospects for positive growth in 2021. Supply expected at 20k units vs. 70k new jobs. Competition from for sale and condos is still an issue.”
“Orlando: B rating with stable outlook. Job growth is moderate given travel and hospitality exposure, which should continue in 2021. New development strong at 8-10k completions vs. 35-30k new jobs.”
“Charlotte and Dallas: B- with stable outlook. Charlotte outperformed in 2020 but ongoing levels of supply particularly in downtown will challenge pricing power. Approx. 7.5k new units anticipated in 2021 (vs. 8k last year) against 50k new jobs. In Dallas, 17k new deliveries expected vs. 110k new jobs (20k units delivered in each of the past few years will limit pricing power).”
“LA/Orange County: C+ with improving outlook. Delinquency and bad debt should improve but performance will lag SoCal (San Diego). Job growth should be 13k vs. 18k units completions.”
“Houston: C with a stable outlook as we expect negative rent growth against this year. New supply estimated at 20k+ units vs. 100k new jobs, which may help elevated concessions.”
“Top 4Q performers by rental growth were Phoenix (5.7%) followed by Tampa (2.9%), Raleigh (1.5%), and Atlanta (1.3%).”
“Preliminary January results indicate a slight improvement across the board for new leases renewals and growth. February and March renewal offerings are being sent out on an average increase of roughly 3%.”
“In 4Q, occupancy averaged 95.5% vs. 95.6% in 3Q20 and 96.2% in 4Q19. January 2021 occupancy has averaged 95.7% vs. 96.2% last January”.
“During 4Q, we completed construction on both Camden RiNo, a 233 unit, $79M new development in Denver and Camden Cypress Creek II, a 234 unit $32M JV development in Houston.”
"West Coast migration to Texas is accelerating, with 85% of all the office space in Austin now being leased by FANGs."
“The Biden administration and climate change is going to have a positive effect on the price of oil and Houston’s recovery and that’s why we’re going to sell assets in 2H21.”
“We’d love to add some assets in Nashville over time and make that one of CPT’s core markets.”
“In May, our property insurance premium is expected to increase 40% due to the record level of natural disasters in 2020.”