Camden Raises FFO Outlook as Leasing Pressure Eases
The apartment landlord sold its California portfolio for approximately $1.625 billion after the quarter.
Camden Property Trust (CPT), the apartment real-estate investment trust, reported lower second-quarter earnings as property revenue contracted and operating expenses climbed. Earnings fell to $0.18 a share from $0.74 a year earlier and $0.40 in the first quarter.
The quarter showed firmer occupancy and easing pressure on new-lease pricing, though higher costs continued to weigh on property income. Same-property occupancy rose to 95.7% from 95.1% sequentially, while new leases were signed 3.3% below expiring rents, an improvement from a 5.2% decline in the prior quarter.
Property revenue declined 0.9% to $392.9 million from $396.5 million a year earlier, driven by lower rental revenue. Core funds from operations fell to $1.68 a share from $1.70, while Core adjusted funds from operations declined to $1.39 from $1.43. FFO rose one cent to $1.68 a share and rebounded from $1.15 in the first quarter, when litigation-related charges reduced the measure by about $0.48 a share.
Same-property revenue excluding California slipped 0.1% from a year earlier after rising 0.2% in the first quarter. Expense growth accelerated to 2.4% from 1.9%, deepening the decline in net operating income to 1.4% from 0.7%. Blended lease rates declined 0.2%, compared with a 1.4% drop sequentially and 0.7% growth a year earlier.
Camden expanded its acquisition program, buying five communities and two land parcels during the quarter and two additional communities afterward. The transactions totaled 2,061 apartment homes and $645.4 million, compared with 557 homes and $171.3 million of purchases following the first quarter. Leasing at Camden Village District reached 88%, up from 72% during the quarter, while Camden South Charlotte advanced to 13% from 2%.
The company raised the midpoint of its 2026 FFO guidance by $0.02 to $6.12 a share and maintained its Core FFO midpoint at $6.75. Its EPS-guidance midpoint is now $9.93, up from $0.66, reflecting the expected gain on the California portfolio sale. Camden also improved its same-property NOI-growth midpoint excluding California to negative 0.6% from negative 0.9% after lowering its expense-growth assumption.
The California transaction covered 11 communities with 3,620 homes. Camden earmarked about $900 million of the proceeds to repay revolving-credit and commercial-paper balances after liquidity fell to $287.4 million at June 30 from $881.9 million at the end of March.
That repayment would address leverage that increased during the quarter. Net debt rose to $4.65 billion, lifting net debt to annualized Adjusted EBITDAre to 5.3 times from 4.2 times a year earlier. Camden also slowed share repurchases to $144.1 million from $278.8 million in the first quarter as it shifted capital toward acquisitions.