Camden trims revenue outlook after third-quarter FFO beat

$1.71 per share in core funds from operations put Camden Property Trust 2 cents above its $1.69 third-quarter guidance midpoint, even as it cut full-year same-store revenue and net operating income forecasts after a sharper-than-expected September slowdown.

Camden kept its full-year core FFO midpoint at $6.75 per share as lower operating expenses and higher third-party construction fees offset weaker revenue.

CEO Alex Jessett said: "2026 was showing improvement over 2025, though not a full recovery." He pointed to fewer apartment completions in Sun Belt markets and robust absorption, while rental concessions remained persistent across many markets.

What changed in Camden’s outlook?

The revisions were:

• Full-year same-store revenue growth fell to 0.0%, down from a 0.5% midpoint.
• Same-store NOI growth moved to a 1.0% decline, compared with a previously expected 0.6% decline.
• Expense growth eased to 1.75% from 2.5%, reflecting lower repairs and maintenance costs and property tax savings.
• The full-year core FFO midpoint stayed at $6.75 per share.

Fourth-quarter core FFO guidance was $1.63 to $1.67 per share. CFO Ben Fraker said the $1.65 midpoint reflected a full quarter without NOI from the California dispositions, lower construction fees and lower interest income, partly offset by lower interest expense.

Jessett expected fourth-quarter blended lease growth to remain slightly positive but below the third quarter’s 1%. He also expected occupancy in the low-95% range, compared with the mid-95% range in the third quarter.

The unchanged per-share target rests on cost control and construction-fee income, not stronger property revenue.

How did leasing and occupancy perform?

Camden’s third-quarter lease measures improved from the second quarter:

• Effective rates on new leases fell 2%, compared with a 3.3% decline in the second quarter.
• Renewal rates rose 3.6%, up from 2.8% growth.
• Blended growth reached 1%, versus a 0.2% decline.

New lease and blended growth still landed at the low end of Camden’s anticipated ranges. Prospective-renter traffic fell more than expected in September, prompting the company to reduce prices. Concessions at competing properties ranged from roughly three weeks in West Palm Beach to two months in Austin, Jessett said.

Preliminary October occupancy was 95.2%, unchanged from the prior year. Signed leases improved from September to October, and Camden sent renewal offers for December and January expirations with an average increase of 4.5%.

Better traffic and renewal pricing after September softened the immediate leasing picture, but they did not erase the pressure from concessions.

What did the California exit change?

Camden closed the $1.625 billion sale of its California portfolio on July 29. Fraker said the proceeds went primarily to debt repayment, acquisitions and share repurchases. The company also sold its remaining Los Angeles land parcel after quarter-end for $10.7 million, leaving it with no California assets.

During the third quarter, Camden acquired three communities for approximately $305 million, bringing year-to-date community acquisitions to $755 million. It also began construction on Camden RTP, a 398-unit development costing $130 million in the Raleigh area.

Camden canceled plans to acquire two operating communities and a land parcel after interest rates rose. Jessett said the company sought price adjustments, but sellers would not meet its terms.

The company does not expect further acquisitions in 2026. Its latest tax analysis also led it to conclude that it does not expect to pay much, if any, special dividend related to the California sales.

Jessett said Camden currently prefers buying shares at a discount to acquisitions, although it could find opportunities at better prices next year. Fraker said the company repurchased $50 million of shares during the quarter and had $248 million left under its authorization.

The sale removed California assets, and Camden is now prioritizing debt repayment and discounted share repurchases.

Why did Camden pause Nashville and Denver development?

Camden decided not to proceed for now with development projects in Nashville and Denver and recorded non-cash impairments on both sites. Jessett said the company recently bought an existing Nashville property across from its land for about $370,000 per unit, compared with an estimated construction cost above $600,000 per unit.

Camden does not plan to sell the Nashville land now and may revisit development later. The projects remain paused, and the land remains available for a later review.

Where are market conditions improving?

Concessions had improved in Atlanta, Southeast Florida, Dallas and Houston, while Denver and Nashville continued to face persistent concessions. Austin recorded Camden’s strongest third-quarter occupancy despite substantial concessions in that market.

Jessett expects the revenue-performance gap among Camden’s markets to narrow next year as peak supply recedes. Camden did not provide 2027 guidance. Fraker said the company remained in its budget process and would provide an outlook on the fourth-quarter earnings call.

The outlook points to gradual improvement, not a full recovery, with no 2027 numbers yet.

Where does Camden operate?

Camden Property Trust, founded in 1993 and headquartered in Houston, is a real estate investment trust that owns, develops, acquires and manages multifamily apartment communities. It provides rental housing to individuals and families through apartments with varied layouts, amenities and resident services.

Camden focuses on high-growth Sun Belt metropolitan areas in Texas, Arizona, Colorado, Florida, Georgia, North Carolina and Tennessee, generally within major urban and suburban markets. It manages communities through an in-house property management platform and has expanded through development, acquisitions and ongoing renovations.

The portfolio remains concentrated in Sun Belt growth markets, with local concessions shaping revenue performance.