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| And given all of the cross currents and forecasting and assumption making and the execution that goes with that, I think that’s pretty remarkable |
| And we did make good progress in the first two quarters |
| We just finished Tempe and it was a really solid return that we’re making on those |
| Our business is strong |
| We are seeing some encouraging news regarding the future as the level of new starts has begun to fall, which bodes well for the supply environment in 2025 and 2026 |
| And you look at consumer spending, it was very robust in the last number that came out and I think the PCE today came out pretty strong, where people are actually spending more than wages that are rising |
| Fundamentals for our business are good overall, taking the challenges and the opportunities together |
| On the demand side, job growth remains robust, U.S |
| consumer demographics continue to be supportive for apartment demand, the share of 25 to 34-year-olds is stable, the share of 34 to 48 year olds is growing and they have a high propensity to rent, given the record high cost of buying a home |
| I think we feel very confident about these rates for the quarter |
| Year-over-year same property revenue growth was positive for the quarter in 14 of our 15 markets and positive on both a sequential and year-to-date basis in all of our markets |
| The lease ups that we’re doing are doing really well |
| I think one of the things that Rick said in his, that I personally think is quite remarkable is that when we started the year, based on our ops team’s original guidance that we shared with the Street, we said that we thought total revenues would be up 5.1% for the entire year |
| Our balance sheet remains strong with net-debt-to-EBITDA at 4.1 times and at quarter end we had $181 million left to spend over the next two years under our existing development pipeline |
| We should be able to get a whole lot better pricing on properties in the future than we can today that has to play out during 2024 |
| households that are living alone continues to grow to nearly 30% over the next few years |
| I imagine you guys are managing the skip and evic [ph] process a lot better than your neighboring peers and you’re managing supply better |
| So yes, it’s complex calculus, but our folks are really good at doing forecasting |
| Seasonality is back, but it started earlier this year and was stronger than pre-COVID levels |
| So we’re doing well on the existing portfolio |
| So that’s a pretty good indication of a market where we’ve got an ability, once we get that fraud sorted out, to get that back to a far more normal run rate |
| This should increase apartment’s – the apartment business share of the housing market at least through 2026 |
| This cycle has been different in that we’re coming off the best year we ever had driven by the COVID reopening consumer high |
| And if the capital markets are forcing merchant builders not to build, which is exactly what it’s doing, and we have the capital to build then maybe we – well if we get the right returns and balance our returns from a cost of capital and a spread perspective in the right zone, then perhaps we would start developing to be able to deliver into a really good market in 2026 and 2027 |
| Then we increased the guidance in the first quarter because it looked like things were getting a little better and then again in the second quarter |
| There is a backlog, but that backlog is starting to improve |
| Right now, we’re offering, I think, four to six weeks free and on those properties, and we’re getting traction on them and leasing them up |
| And so when that happens, then the question is, if you actually believe those start numbers, then in 2025 and 2026, it’s going to be a very constructive environment to deliver new properties |
| I want to give a big thanks and shout-out to team Camden for improving the lives of our teammates, our customers, and our stakeholders one experience at a time |
| Effective blended lease rates for October remain positive at 1.4% |
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| As a result, we have revised our fourth quarter full year guidance to reflect weaker new lease growth, lower occupancy and higher bad debts than we expected even in the summer |
| Last night, we also lowered the midpoint of our full year 2023 core FFO guidance by $0.07 per share to a new midpoint of $6.81 per share |
| So on the challenge – where do you have the most challenge on maintaining occupancy? It’s in the markets where we knew that we were going to have a challenge in the fourth quarter with our supply impacted markets |
| The lower revenue resulted primarily from an unexpected rise in bad debt |
| You guys referenced a couple of times that only 16% of the communities are being impacted by new supply, but clearly new lease rate growth has dropped dramatically, occupancy has fallen as well |
| And I think there’s probably just a view that supply is a bigger part of the challenge in our progression of results from the second and third quarter |
| We are now anticipating fourth quarter new leases of negative 4.5% and a 4% average increase in renewals for a blend of approximately negative 0.7%, resulting in a decline of approximately $0.015 per share for the fourth quarter |
| On the supply side, starts have peaked and the capital markets hurricane has begun to reduce new starts |
| We certainly faced that this year as well |
| And again, we’re probably going to have some bad behavior |
| You have countervailing factors like homeownership rate going down or in terms of people moving out to buy homes at down at 10%, and the prospect for people buying homes next year looks pretty dismal relative to the current environment |
| As a result, we have decreased the midpoint of our full year same-store revenue guidance from 5.65% to 5%, effectively in line with our original revenue guidance midpoint at the beginning of this year |
| Effective net – new lease growth for October is currently negative 2.5% and is expected to trend a bit further down a bit further between now and the end of the year |
| The thing that surprised us and maybe we just – maybe we were just too optimistic on this |
| On the other hand, the hurricane in the capital markets is blowing hard |
| We’ve talked some renters, some really bad habits over the last two and a half years |
| In addition to this net $0.06 per share decline in same-store NOI, we are also anticipating an additional $0.01 in lower non-same-store NOI for similar reasons |
| As a result of the decline in occupancy, we lowered asking rents more than anticipated in September |
| Annualized August starts fell 42% |
| And it’s also – it just makes it – it puts a little bit more pressure on managing the bad actor move in, pay your rent, the expectation that we’ve had forever in this business |
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