Investor Presentation September 2014

Transcription

1 Investor Presentation September

2 Forward-Looking Statements In addition to historical information, this presentation contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates and projections about the industry and markets in which Camden operates, management's beliefs, and assumptions made by management. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties which are difficult to predict. Factors which may cause the Company s actual results or performance to differ materially from those contemplated by forward-looking statements are described under the heading Risk Factors in Camden s Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission (SEC). Forward-looking statements made in this presentation represent management s opinions as of the date of this presentation, and the Company assumes no obligation to update or supplement these statements because of subsequent events. 2

3 Outlook for Multifamily Industry Same property net operating income ( NOI ) projected above long-term trend for next several years Strong demand from: Growing Echo Boom population with high propensity to rent Large share of jobs going to the age cohort Pent-up demand from young adults living at home or with roommates Homeownership rate declining steadily and negative sentiment toward home ownership New supply being met by strong demand 3

4 Favorable Demographics Trends Over 60% of this age group choose to rent Source: Witten Advisors Echo Boom Population Aged (millions)

5 Young adults steadily finding employment YTD Year-Year Change in Employment (000) Source: Witten Advisors data through June 2014

6 Pent-up demand from young adults living at home Annual Change in U.S. Population Aged (millions) Estimated Home Move-Backs Potential Pent-up Move-outs from Home M more young adults than usual living with parents Source: Witten Advisors 6

7 Homeownership Rate Returning to Lower Level 70% 69% 68% 67% 66% 65% 64% 63% 62% 2Q % 7 1Q90 1Q91 1Q92 1Q93 1Q94 1Q95 1Q96 1Q97 1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 Share of U.S. Households Who Own Home Source: Witten Advisors seasonally adjusted homeownership rate

8 Negative Sentiment Toward Home Ownership Many people choosing to rent rather than buy Moveout rates from apartment residents purchasing homes have declined dramatically (23% at peak vs. 15% in 2Q14 for Camden s portfolio) Strong credit scores and significant down payments now required by mortgage lenders 8

9 Manageable Levels of New Supply Multifamily starts expected to peak in late 2014 or early 2015 then decline Rising construction costs and interest rates make future development starts more challenging Single family rentals don t compete with well-located, amenity-rich apartment homes 9

10 Multifamily Starts 300, , , , ,000 50,000 Actual Starts Projected Deficit of 450,000 starts from Q92 1Q93 1Q94 1Q95 1Q96 1Q97 1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16 1Q17 5+ Rental Starts, trailing 12 months Source: Witten Advisors 10

11 Demand projected to exceed supply in most markets 2-year average ratio of estimated job growth to multifamily completions ( ) Long-term Equilibrium Ratio of 5:1 Las Vegas Phoenix San Diego Orange County Los Angeles Tampa Atlanta Orlando CPT Average Dallas SE Florida Denver Houston Charlotte Raleigh Austin Washington, DC Ratio of Jobs to Completions Source: Witten Advisors and Axiometrics 11

12 Strategy & Portfolio 12

13 Camden s Strategy Maximize portfolio cash flow growth through excellent customer service Create value through development and redevelopment Recycle capital through acquisitions and dispositions Maintain strong balance sheet with low leverage 13

14 Camden s Portfolio 183 communities containing 64,152 apartment homes including development properties High-quality properties with average age of 12 years one of the youngest in sector Same property occupancy 96.3% (as of 9/7/14) 14

15 Geographic Diversity & Market Balance Las Vegas 6.3% Denver 4.1% Washington, DC 16.0% LA/Orange County 7.0% San Diego/Inland Empire 3.8% Phoenix 3.4% Dallas 7.0% Austin 2.7% Houston 12.8% Corpus Christi 1.9% Atlanta 6.0% Tampa 6.8% Raleigh 4.2% Charlotte 5.5% Orlando 5.8% Southeast Florida 6.7% Percentage of NOI by Market 2Q14 Actual (Including pro-rata share of NOI from JV communities) 15

16 Growth Drives Results Top 25 Metro Areas For Estimated Gains: Employment Growth (in thousands) Population Growth (in thousands) Rank Metro area Gain 1 Houston-Baytown TX New York-Wayne NY-NJ Dallas-Plano TX Los Angeles-Long Beach CA Atlanta-Sandy Springs GA Chicago-Naperville IL Phoenix-Mesa-Scottsdale AZ Orlando FL Denver-Aurora CO Austin-Round Rock TX Philadelphia PA Seattle-Bellevue WA Washington-Arlington DC-VA-MD-WV San Antonio TX Fort Worth-Arlington TX Minneapolis-St. Paul MN-WI Santa Ana-Anaheim CA Riverside-San Bernardino CA San Diego-Carlsbad CA Charlotte-Gastonia NC-SC Las Vegas-Paradise NV Portland-Vancouver OR-WA Baltimore-Towson MD Tampa-St. Petersburg FL San Francisco-San Mateo CA Rank Metro area Gain 1 Houston-Baytown TX Phoenix-Mesa-Scottsdale AZ Dallas-Plano TX Atlanta-Sandy Springs GA Los Angeles-Long Beach CA New York-Wayne NY-NJ Orlando FL Washington-Arlington DC-VA-MD-WV Riverside-San Bernardino CA Austin-Round Rock TX Denver-Aurora CO Fort Worth-Arlington TX Las Vegas-Paradise NV San Antonio TX Charlotte-Gastonia NC-SC San Diego-Carlsbad CA Seattle-Bellevue WA West Palm Beach-Boynton Beach FL Tampa-St. Petersburg FL Minneapolis-St. Paul MN-WI Fort Lauderdale-Pompano Beach FL Miami-Miami Beach FL Santa Ana-Anaheim CA Raleigh-Cary NC Chicago-Naperville IL Over 98% of Camden s NOI is derived from these markets Source: Moody s Analytics July Highlighted represent Camden markets. 16

17 New Leases / Renewals Average change in same property new lease and renewal rates vs. expiring lease rates when signed 8% 6% 4% 2% 0% -2% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14* * July 1 August 31 results New Leases Renewals 17

18 Rents Continue to Rise Average Monthly In-Place Rents (Camden s Same Property Portfolio) $1,200 $1,186 $1,180 $1,167 $1,173 $1,160 $1,160 $1,140 $1,141 $1,128 $1,120 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 18

19 Household Income Growing Average Household Income for Camden s Residents $85,000 $82,000 $83,000 $80,000 $79,700 $79,700 $77,900 $75,800 $75,000 $70,000 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 19

20 Rent-to-Income Ratios Favorable Average Rent-to-Income Ratio for Camden s Residents 18% 17.7% 17.7% 17.4% 17.3% 17.2% 17.2% 17% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 20

21 Occupancy by Market Current Same Property Occupancy (as of 9/7/14) 99% 98% 97% 96% 95% 94% 93% 21 Charlotte Austin Washington, DC Southeast Florida Atlanta CPT Average Denver Houston Phoenix Orlando Las Vegas Tampa Southern California Raleigh Dallas

22 3-Year Average Same Property Growth vs. Peers Revenue Growth ( Average) 6% 4% 2% 0% CPT ESS PPS AVB EQR UDR BRE AEC MAA HME AIV NOI Growth ( Average) 8% 6% 4% 2% 0% CPT ESS PPS AVB EQR HME UDR AEC AIV BRE MAA Source: Company Financial Reports 22

23 2014 Reported Same Property Growth vs. Peers Quarterly (2Q14 vs. 2Q13) Revenue Growth Quarterly (2Q14 vs. 2Q13) NOI Growth 8% 7% 6% 5% 4% 3% 2% 1% 0% ESS CPT UDR AIV EQR AVB PPS AEC MAA HME 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% ESS AIV UDR EQR CPT AEC AVB HME MAA PPS Year-to-Date (2014 vs. 2013) Revenue Growth Year-to-Date (2014 vs. 2013) NOI Growth 8% 7% 6% 5% 4% 3% 2% 1% 0% ESS CPT UDR AIV EQR AVB AEC MAA PPS HME 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% ESS AIV CPT UDR EQR AEC AVB MAA PPS HME Source: Company Financial Reports 23

24 2014 Expected Same Property Growth vs. Peers Revenue Guidance Midpoint of Range 10% 8% 6% 4% 2% 0% ESS CPT AIV EQR UDR AVB MAA HME PPS AEC NOI Guidance Midpoint of Range 10% 8% 6% 4% 2% 0% ESS UDR AIV CPT EQR MAA AVB AEC HME PPS Source: Company Financial Reports 24

25 2014 Guidance Original Guidance Earnings Guidance Earnings as of 1/30/14 as of 7/31/14 FFO per share $ $4.30 $ $4.30 EPS per share $ $1.64 $ $1.67 Same Property Performance Revenue Growth 3.50% % 4.00% % Expense Growth 3.25% % 3.40% % NOI Growth 3.25% % 4.25% % Average Occupancy 95% unchanged Transactions Acquisitions $50 - $150 million unchanged Dispositions $250 - $350 million unchanged Dispositions (Joint Ventures) $100 - $450 million $66 million Development Starts $150 - $300 million unchanged 25

26 Acquisitions, Dispositions & Development 26

27 2013 Acquisitions Acquired 3 communities for $225M Camden Vantage Atlanta, GA Year Built 2010 Camden Post Oak Houston, TX Year Built 2003 Camden Sotelo Tempe, AZ Year Built 2008/

28 2013/2014 Disposition Activity Disposed of 12 wholly-owned communities in 2013 with an average age of 25 years for $329M Disposed of 16 joint venture communities in 2013 with an average age of 19 years for $269M Disposed of 2 joint venture communities in February 2014 for $66M 2014 guidance includes dispositions of $250M-$350M for wholly-owned communities which are currently being marketed for sale 28

29 Development Activity Completed 65 communities with over 23,650 apartment homes for total cost of $2.9B since IPO Development projects $100M recently stabilized at projected 2014 yield of 8.6% value creation of nearly $60M $1.1B currently under construction or in lease-up estimated value creation of $250M $700M additional projects in future development pipeline 29

30 Current Development Pipeline ($ in millions) Estimated Total Total Initial Construction Stabilized % Wholly-Owned Projects Location Homes Cost Occupancy Completion Operations Leased (1) Camden NoMa Washington, DC 321 $110 4Q13 2Q14 2Q15 82% Camden Lamar Heights Austin, TX Q14 4Q14 4Q15 17% Camden Flatirons Denver, CO Q14 4Q14 4Q16 17% Camden La Frontera Round Rock, TX Q14 1Q15 4Q15 16% Camden Foothills Scottsdale, AZ Q14 1Q15 3Q15 13% Camden Boca Raton Boca Raton, FL Q14 4Q14 4Q15 13% Camden Paces Atlanta, GA Q14 2Q15 4Q16 5% Camden Hayden Tempe, AZ Q14 2Q15 3Q15 - Camden Glendale Glendale, CA Q15 3Q15 1Q16 - Camden Gallery Charlotte, NC Q15 4Q15 2Q16 - Camden Victory Park Dallas, TX Q15 1Q16 1Q18 - Camden Chandler Chandler, AZ Q15 2Q16 2Q17 - The Camden Los Angeles, CA Q16 4Q16 2Q17 - Subtotal 4,169 $1,008 Joint Venture Project Camden Southline Charlotte, NC 266 $48 1Q15 3Q15 4Q15 - Grand Total 4,435 $1,056 (1) As of 9/7/14 30

31 Development Camden Flatirons Denver, CO Camden La Frontera Round Rock, TX Camden NoMa Washington, DC Camden Lamar Heights Austin, TX Camden Paces Atlanta, GA 31

32 Development Camden Foothills Scottsdale, AZ Camden Hayden Tempe, AZ Camden Gallery Charlotte, NC Camden Boca Raton Boca Raton, FL Camden Glendale Glendale, CA Camden Victory Park Dallas, TX 32

33 Development Camden Chandler Chandler, AZ The Camden Los Angeles, CA Camden Southline (JV) Charlotte, NC 33

34 Future Development Projects ($ in millions) Total Projected Estimated Project Location Homes Cost Camden McGowen Station Houston, TX 320 $82 Camden Lincoln Station Denver, CO Camden Conte I/II Houston, TX Camden Shady Grove Montgomery County, MD Camden Buckhead Atlanta, GA Camden NoMa II Washington, DC Camden Atlantic Plantation, FL Total 2,590 $684 34

35 Capital Structure & Liquidity 35

36 Strong Capital Structure ($ in millions as of 7/31/14) Unsecured Lines of Credit $237 Mortgages $931 Senior Unsecured Notes $1,589 Equity * $6,806 Total Market Capitalization = $9.6 Billion 5.7x debt-to-ebitda 4.1% weighted average interest rate on all debt 83.8% fixed-rate debt 66.2% unsecured debt Manageable debt maturities over next several years 6.0 years weighted average maturity of debt * Based on closing share price of $75.49 on 9/8/14 36

37 Manageable Debt Maturities Future scheduled maturities excluding Line of Credit (as of 7/31/14) ($ in millions) $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 $1,814.4 $252.0 $249.2 $177.6 $24.5 $ Thereafter 37

38 Liquidity (as of 7/31/14) $272M availability under unsecured credit facilities $83M equity issuance available under ATM program Sufficient liquidity to meet near-term capital needs Unencumbered asset pool of approximately $5.8 billion 38

39 Summary 39

40 Why Camden? Experienced management team with proven history of performance and sound business plan Consistent long-term focus and commitment to highgrowth markets Strong balance sheet with ample liquidity Well-positioned to capitalize on future opportunities Ranked #11 by FORTUNE Magazine on list of 100 Best Companies to Work For in America 40

41 Definitions & Disclosure FFO The National Association of Real Estate Investment Trusts ( NAREIT ) currently defines FFO as net income attributable to common shareholders computed in accordance with generally accepted accounting principles ( GAAP ), excluding gains or losses from depreciable operating property sales, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Camden s definition of diluted FFO also assumes conversion of all dilutive convertible securities, including noncontrolling interests, which are convertible into common shares. The Company considers FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions of operating properties and excluding depreciation, FFO can help one compare the operating performance of a company's real estate investments between periods or as compared to different companies. Net Operating Income (NOI) NOI is defined by the Company as total property income less property operating and maintenance expenses less real estate taxes. The Company considers NOI to be an appropriate supplemental measure of operating performance to net income attributable to common shareholders because it reflects the operating performance of our communities without allocation of corporate level property management overhead or general and administrative costs. EBITDA EBITDA is defined by the Company as earnings before interest, taxes, depreciation and amortization, including net operating income from discontinued operations, excluding equity in (income) loss of joint ventures, (gain) loss on sale of unconsolidated joint venture interests, gain on acquisition of controlling interest in joint ventures, gain on sale of discontinued operations, net of tax, and income (loss) allocated to non-controlling interests. The Company considers EBITDA to be an appropriate supplemental measure of operating performance to net income attributable to common shareholders because it represents income before non-cash depreciation and the cost of debt, and excludes gains or losses from property dispositions. 41

42 Non-GAAP Reconciliations Expected FFO Expected FFO is calculated in a method consistent with historical FFO, and is considered an appropriate supplemental measure of expected operating performance when compared to expected earnings per common share (EPS). A reconciliation of the ranges provided for diluted EPS to expected FFO per diluted share is provided below: 2014 Range Low High Expected earnings per common share - diluted $1.57 $1.67 Expected real estate depreciation Expected adjustments for unconsolidated joint ventures Expected income allocated to non-controlling interests (Gain) on sale of unconsolidated joint venture property (0.04) (0.04) Expected FFO per share - diluted $4.20 $

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