Camden Property Trust outlines 2025 FFO guidance increase and signals $400M buyback potential amid supply moderation

Earnings Call Insights: Camden Property Trust (CPT) Q3 2025

MANAGEMENT VIEW

* CEO Richard Campo emphasized the completion of Camden’s headquarters relocation in Houston, highlighting, “We are excited about moving on and the new beginnings that it will bring for 2026 and beyond.” Campo noted robust apartment demand through the third quarter, making 2025 one of the best years for apartment absorption in the last 25 years. He stated, "The case for investing in apartments is compelling. Demand is high, supply is falling to below 10-year pre-COVID averages, bringing balance back to the market."
* Campo referenced private market sales with cap rates for high-quality properties in the 4.75% to 5% range and drew attention to a “clear disconnect between private and public market values for apartments.” The company repurchased $50 million of shares at a significant discount and retains $400 million in buyback authorization, potentially funded through dispositions.
* D Keith Oden reported same-store revenue growth of 0.8% for the quarter, up 0.9% year-to-date, and occupancy averaging 95.5%. Oden said, “Renewal offers for December and January were sent out with an average increase of 3.3%.”
* President, CFO & Assistant Secretary Alexander Jessett detailed the sale of three older communities for $114 million and use of proceeds for share repurchases. Jessett explained, “At the midpoint of our guidance range, we are now anticipating $425 million of acquisitions and $450 million of dispositions for the full year, reduced from our prior guidance of $750 million in both acquisitions and dispositions.” Jessett highlighted a core funds from operations (FFO) of $186.8 million or $1.70 per share for the quarter, exceeding the guidance midpoint by $0.01.
* Jessett added, “We are decreasing our full year same-store expense midpoint from 2.5% to 1.75%. And maintaining the midpoint of our full year same-store net operating income growth at 25 basis points.”

OUTLOOK

* Jessett stated, “At the midpoint of our guidance range, we are now anticipating $425 million of acquisitions and $450 million of dispositions for the full year, reduced from our prior guidance of $750 million in both acquisitions and dispositions.”
* For the fourth quarter, Camden expects core FFO per share within the range of $1.71 to $1.75, representing a $0.03 per share sequential increase at the midpoint. Full year 2025 core FFO guidance midpoint was raised by $0.04 per share to $6.85.
* Jessett: “This is our third consecutive increase to our 2025 core FFO guidance and represents an aggregate $0.10 per share increase from our original 2025 guidance.”
* Fourth quarter occupancy is projected between 95.2% and 95.4%.

FINANCIAL RESULTS

* Jessett reported core FFO of $186.8 million or $1.70 per share for the quarter. Property revenues were described as “in line with expectations,” and property expenses continued to outperform, particularly due to property taxes coming in below forecast.
* Camden’s net debt-to-EBITDA stands at 4.2x with no significant debt maturities until Q4 2026 and no dilutive maturities until 2027.
* Noncore FFO adjustments for 2025 are anticipated to be approximately $0.11 per share, primarily related to legal and transaction costs.

Q&A

* Eric Wolfe, Citigroup: Asked for early thoughts on 2026. Jessett replied, “What I will tell you is the earn-in for us is probably going to be pretty much flat, which is going to be consistent with the earn-in that we had for 2025.” He added, “it certainly does shape up much better than we saw in '25 in terms of uncertainty... most of that should be worked out as we go through 2026.”
* James Feldman, Wells Fargo: Inquired about private investment appetite and market disconnect. Campo said, “There remains robust demand for multifamily... The challenge is, there's just not a lot out there.” Stanley Jones added, “2025 is trending about the same as 2024, so still well below pre-COVID levels.”
* Adam Kramer, Morgan Stanley: Asked about fourth quarter lease spreads. Campo responded, “We think our blend will be down about 1%. If you sort of think about that on a typical seasonality basis, this sort of is what you see in the fourth quarter.”
* Austin Wurschmidt, KeyBanc: Queried about revenue guidance and occupancy. Jones confirmed, “The main driver that we saw in the reduction... was rate driven, and that is because we were making sure that we could get the occupancy to the level that we felt comfortable for going into the fourth quarter.”
* Steve Sakwa, Evercore ISI: Asked about the scale of buybacks. Campo replied, “We could sell properties on Main Street for $0.75 or for $1, and we could buy our stock back for $0.75 on the dollar... we will not increase leverage to do that.”

SENTIMENT ANALYSIS

* Analysts voiced concerns on occupancy, supply absorption, buyback scale, and demand outlook, with a generally cautious-to-neutral tone. Questions pressed for clarity on forward guidance, supply impact, and capital allocation.
* Management’s tone was confident during prepared remarks—"We look forward to moving to a stronger growth profile after the excesses of post-COVID supply environments end"—but slightly more measured during Q&A, especially on 2026 projections, where Jessett said, “We’re not going to give any guidance, but if you're an optimistic person, there's certainly things to be optimistic about.”
* Compared to Q2, management’s sentiment remained constructive but acknowledged more uncertainty about the macro environment and supply transitions.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for acquisitions and dispositions was reduced from $750 million each in Q2 to $425 million of acquisitions and $450 million of dispositions for the full year in Q3.
* The core FFO per share guidance midpoint increased from $6.81 in Q2 to $6.85 in Q3.
* Q3 reported core FFO of $1.70 per share, in line with Q2, but the outlook for Q4 is higher at the midpoint.
* Q3 occupancy averaged 95.5%, down slightly from 95.6% in Q2.
* Management’s tone in Q3 was more focused on near-term stabilization and capital allocation (buybacks) compared to strategic development and acquisition growth emphasized in Q2.
* Analysts’ questions in Q3 shifted more toward capital allocation (buybacks/dispositions), supply absorption, and occupancy strategy compared to Q2’s focus on rent growth recovery and demand drivers.

RISKS AND CONCERNS

* Management cited continued new supply, slower job growth, and economic uncertainties as ongoing challenges, leading to a focus on occupancy over rental increases.
* Direct competition from new supply remains pervasive, with Austin and Nashville highlighted as the most impacted markets. Campo noted, “every part of our portfolio is directly competing with delivered supply.”
* Elevated concessions in high-supply markets such as Austin, Nashville, Denver, and Phoenix were reported at about 10%, with efforts to prioritize occupancy.
* Analysts questioned the sustainability of property tax refunds and potential headwinds for 2026, but Jessett said, “We have no reason to anticipate that in '26 and '27 and '28 and going on forward that we won't continue to have the same level of success.”

FINAL TAKEAWAY

Camden Property Trust delivered third quarter results in line with expectations, highlighted by resilient demand, strong resident retention, and a continued focus on capital recycling and share repurchases. While management reduced full-year acquisition and disposition targets, they raised core FFO guidance for a third consecutive quarter and signaled further buybacks if market conditions persist. The company is navigating supply headwinds by prioritizing occupancy, managing expenses, and leveraging a strong balance sheet, positioning itself for improved growth prospects as supply pressure moderates into 2026 and beyond.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/cpt/earnings/transcripts]

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