Once again, the executives at Camden Property Trust began their quarterly earnings call with a song. In their meeting with analysts earlier this month to discuss fourth-quarter 2024 results, the Houston-based REIT’s leaders went with “Time to Move On” by Tom Petty.

As always, there was a message behind the song choice. “After a few years of waiting, somewhat impatiently, for better investment opportunities in our markets, we believe 2025 is the year for Camden to move on,” CEO Ric Campo said. 

With new supply pressure subsiding, it should set the stage for a return to improved revenue and net operating income growth, according to Campo. “As the headwinds in recent years turn into tailwinds in 2025 and beyond, there are attractive opportunities for us to continue development starts and to pursue acquisitions,” he said.

Campo compared this period to the time following the global financial crisis of 2007-2009 when the REIT acquired $2.7 billion in apartments with an average age of four years,  sold $3.8 billion of properties with an average age of 24 years and developed $4.2 billion of new projects. “Recycling capital in this way keeps our portfolio competitive, lowers capital expenses and accelerates our return on invested capital, driving long-term core FFO growth,” Campo said.

However, as the Camden leadership team looks to become aggressive, it must work through a transitional year as supply still weighs on operations.

Positive signs

Camden executives said they began to see signs of improvement in their portfolio in Q4 when new lease rates improved compared to Q3. That is expected to continue in 2025.

“Although we are not going to give monthly new lease and renewal data, I will tell you that we're very encouraged by what we're seeing so far in January in terms of signed new lease agreements,” Camden CFO Alex Jessett said on the earnings call. 

While January 2024’s performance provided false hope for a strong year, Camden Executive Vice Chairman of the Board Keith Oden hopes Camden is better positioned for rent growth this year. The firm expects new leases to be slightly negative for the full year and renewals to be in the high 3% range.

It was a “good month in January for sure, and we expect that it's going to continue to improve throughout the year because every month that goes by, we're taking another big chunk out of the supply bubble that we've been fighting and continue to have in front of us,” Oden said.

Camden projects same-store net operating income to be flat this year, as expenses rise 3% and revenues increase 1% at the midpoint of estimates in 2025. Strong demand in Camden’s markets, which are home to 58.3% of total U. S. population growth, should help it deal with the supply that is still arriving. While 2025 should be a transition year, the firm expects strong growth in the second half of the decade.

“When you look out to 2026 and what's been happening on starts and what's likely to happen on completions in '26 and '27, I think we're set up for one of those two- or three-year runs that are going to be pretty impressive for the entire multifamily sector,” Campo said. “I think where Camden is located in our markets, we're going to benefit more than most from that.”

Market performance

Musical introductions aren’t the only tradition on Camden’s earnings calls. The REIT also provides grades for each of its markets at the beginning of the year.

For 2025, Tampa, Florida, earned an A-minus with manageable supply and a Q4 boost in demand. The Southern California markets of Los Angeles, Orange County, San Diego and the Inland Empire also look strong, though they may weaken slightly.

“Their growth rates are expected to slow a bit during 2025, given slightly higher levels of supply and less of a tailwind from bad debt declining, thus they received stable to moderating outlooks,” Oden said.

Even with uncertainty around federal government job cuts, the Washington, D.C., metro also earned an A-minus, with supply that was “in check,” according to Oden. Camden’s home base of Houston rounded out the top five with a B-plus rating, limited supply and healthy demand, followed by Denver. 

Oden gave B grades to Atlanta due to improving bad debt, along with Orlando, Florida, and Southeast Florida. “Phoenix, Raleigh and Orlando should all see slight declines in supply over the course of 2025, but pricing power in those markets will likely be limited for most of this year,” Oden said.

Dallas and Charlotte, North Carolina, two markets facing supply pressures, earned a B-minus, while Nashville, Tennessee, and Austin, Texas, got a C and C-minus, respectively. “Both markets posted negative revenue growth in 2024 and will likely repeat that in 2025 as new supply continues to pose a challenge,” Oden said. 

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