Camden Property Trust (NYSE: CPT) Q1 2020 Earnings Call Transcript

Camden Property Trust (CPT) Q1 2020 earnings call dated May 08, 2020

Corporate Participants:

Kim Callahan — Senior Vice President of Investor Relations

Ric Campo — Chairman of the Board and Chief Executive Officer

D. Keith Oden — Executive Vice Chairman of the Board

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

Analysts:

Derek Johnston — Deutsche Bank — Analyst

Michael Bilerman — Citi — Analyst

Jeff Spector — Bank of America — Analyst

Austin Wurschmidt — KeyBanc — Analyst

Nick Yulico — Scotiabank — Analyst

Neil Malkin — Capital One — Analyst

Alexander Goldfarb — Piper Sandler — Analyst

Rob Stevenson — Janney — Analyst

Rich Anderson — SMPC — Analyst

Zach Silverberg — Mizuho — Analyst

Alex Kalmus — Zelman & Associates — Analyst

Presentation:

Operator

Good day, and welcome to the Camden Property’s First Quarter 2020 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Kim Callahan, Senior Vice President of Investor Relations. Please go ahead.

Kim Callahan — Senior Vice President of Investor Relations

Good morning, and thank you for joining Camden’s First Quarter 2020 Earnings Conference Call. Before we begin our prepared remarks, I would like to advise everyone that we will be making forward-looking statements based on our current expectations and beliefs. These statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from expectations. Further information about these risks can be found in our filings with the SEC, and we encourage you to review them.

Any forward-looking statements made on today’s call represent management’s current opinions, and the company assumes no obligation to update or supplement these statements because of subsequent events. As a reminder, Camden’s complete first quarter 2020 earnings release is available in the Investors section of our website at camdenliving.com, and it includes reconciliations to non-GAAP financial measures, which will be discussed on this call.

Joining me today are Ric Campo, Camden’s Chairman and Chief Executive Officer; Keith Oden, Exit Vice Chairman; and Alex Jessett, Chief Financial Officer. We will attempt to complete our call within one hour, so we ask that you limit your questions to two, then rejoin the queue if you have additional items to discuss. If we are unable to speak with everyone in the queue today, we’d be happy to respond to additional questions by phone or e-mail after the call concludes.

At this time, I’ll turn the call over to Ric Campo.

Ric Campo — Chairman of the Board and Chief Executive Officer

Thanks, Kim, and good morning. Our on-hold music today was unsurprisingly pandemic themed, and included a couple of selections for Michael Bilerman’s personal COVID-19 playlist. four of the five songs were probably familiar to many of you, and the fifth song was a unique cover of a Led Zeppelin classic. Even that song has a COVID-19 connection. A resident at Camden’s high-rise community in St. Petersburg, Florida wanted to do something for special for his wife’s birthday and despite the at-home stay order.

He asked if he could use the roof of the community’s parking garage to sage a concert for his wife. Of course, we agreed. Not only did he surprise and delight her, but all of the other residents whose homes overlooked the garage rooftops. They got to enjoy an incredible performance by Sean Hopper and Chris Barbosa from their perfectly socially distant balconies. This is just one example of the many ways that we and our residents are working together to help ensure we make the best of this complicated journey we’re on.

I want to give a big shout out to team Camden for their resilient, their commitment to improving the lives of teammates, customers and shareholders one experience at a time. Our on-site property teams have really stepped up to help our residents during this unprecedented time to make their homes a true place of refuge. Our corporate and regional support teams have continued to be highly productive, adapting to telecommunity without missing a beat. During times like this, it brings the importance of our homes to the forefront. I’m proud of Team Camden. Thank you.

We’ll use most of the call today answering questions about what we’re seeing in our business in real time. We won’t spend much time talking about the distant first quarter and will not provide guidance for the rest of 2020 in this uncertain environment. We are more prepared for this recession than any other, thanks to the lessons learned in the financial crisis. We know that we will come out of this recession in a great position with financial strength and a focused, motivated team. Keith?

D. Keith Oden — Executive Vice Chairman of the Board

Thanks, Ric. Someday, someone will write a novel titled, “A Tale of two Quarters”, and it will begin like this. It was the best of quarters, it was the worst of quarters. Camden just arguably had the best quarter in our 28-year history. We had the highest FFO per share of $1.35. We had the biggest quarterly outperformance relative to our established guidance. We had a sector-leading same-store NOI growth rate of 5.7%. And yet in the last two weeks of the quarter, everything changed. Fortunately, our leadership team has been together for decades, and we’ve dealt with our share of disasters and disruptions. Our experience with previous dislocations provided us with a road map for navigating this pandemic.

First, take care of the Camden team. Make sure that they were operating in the safest possible environment. Also make sure that we address their financial well-being. Employees that are under personal financial distress will never be able to do their best work. To accomplish this, we did two things. First, we added $1 million to our long-standing employee emergency relief fund. $750,000 of that came from Camden and $250,000 came from Camden’s executives. We provided grants of up to $3,000 to were made available to our employees whose family’s income had been impaired or his living expenses had increased due to the COVID-19 impact. To date, we have provided 350 employees with total grants exceeding $1 million.

Second, last week, we announced a bonus exclusively for our frontline employees, both on-site operations and on-site construction teams of $2,000 for each full-time employee, totaling approximately $3 million. The best way for us to ensure that our residents are afforded living excellence is to ensure that our Camden team remains physically, mentally and financially healthy. Our next priority was to assist our residents who had lost jobs or substantial income from the COVID-19 impact.

In April, we announced a $5 million resident relief fund for Camden’s residents who were experiencing financial losses caused by the COVID pandemic. The resident relief fund was intended to help impacted residents by providing financial assistance for living expenses, such as food, utilities, medical expenses, insurance, child care or transportation. The objective was to provide residents with a bridge to get to other forms of assistance, such as unemployment insurance, stimulus checks or PPP loans, many of which had been delayed beyond their expectations.

We subsequently approved and delivered relief funding to nearly 2,400 Camden residents totaling over $4.5 million. We didn’t we were didn’t give out the entire $5 million. Some people ask for less than the maximum amount of the grant and some of the applications in the initial group were not qualified. So in order to fulfill our commitment to distribute the entire $5 million of funding, we allowed additional residents to submit applications on April 20. All residents who submitted a qualified application, demonstrating loss of income due to COVID-19, were eligible to split the remaining $460,000.

Between the date we announced the resident relief fund and the date we reopened the fund, which was only nine days, an additional 12 million Americans filed unemployment claims. We knew the need for relief had increased, but we really had no idea how much. In the second round of resident relief, we reviewed and approved over 5,800 additional applications, which would have amounted to $79 per person if we had stuck to the original plan to split it among of the remaining $460,000.

As a result, we decided to increase our initial commitment of $5 million to $10.4 million, allowing all the approved applicants to receive grants for $1,000 each. This brought the total number of Camden residents receiving resident relief fund assistance to approximately 8,200. We’re very proud of the way that we have been able to support our residents as well as our Camden team members during these complicated times.

At this point, I’ll turn the call over to Alex Jessett, Camden’s CFO.

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

Thanks, Keith. eight weeks ago, our corporate and regional teams began to work remotely. In two months, so much has changed, but our teams continue to adapt and respond to each new situation. The technology investments we have made in the recent past are paying dividends. We just completed our first ever virtual quarterly close, a task that would have been so much harder without our investment in a cloud-based financial system.

Our on-site teams are having great success with virtual leasing, and we are preparing for our first ever virtual annual meeting of shareholders. Understandably taking a backseat to the discussion of current operational trends, Camden had a great first quarter, helping to position us well for the COVID-19-related environment we now face. Details about our first quarter performance are included in the earnings release and supplement published last night and available on our website. So right now, I will focus primarily on operating trends we’ve seen in the second quarter.

But first, rental rate trends for the first quarter were as expected until mid-March, when our leasing offices were closed to the public and we began offering existing residents 0% increases on renewals. For the first quarter of 2020, new leases were up 0.5% and renewals were up 4.2% for a blended growth rate of 2.5%. Our April results indicate a 2.5% decline for new leases and a 0.1% growth for renewals for a blended decrease of 0.8%, which is approximately 500 basis points below the blended growth of 4.1% achieved in April 2019 when we were clearly operating under more normal circumstances in a pre-COVID environment.

As a reminder, our new lease and renewal growth data is based on when leases are signed versus many of our peers that report based upon when a lease becomes effective. We believe our methodology represents a more real-time view of what is happening on the ground. However, if we use the same methodology as our peers and look at leases that became effective in April, our new leases would have declined 1.2%, and our renewals would have increased 4.5% for a blended increase of 2%. Occupancy averaged 96.1% during the first quarter and 95.6% in April compared to 96% in April 2019. Our current occupancy rate is 95%.

Although current situations are certainly affecting people’s living decisions, we continue to have great success in conducting alternative method property tours for prospective residents and retaining many of our existing residents. In April 2020, we signed 3,807 leases in our same property portfolio, comprised of 1,322 new leases and 2,485 renewals as compared to 2019 when we signed 3,756 leases comprised of 2,025 new leases and 1,731 renewals.

For April 2020, we collected 94.3% of our scheduled rents, with 2.5% of our residents entering into a deferred rent arrangement and 3.2% becoming delinquent. In a typical month, delinquency would be approximately 2%. So our April collections were 96% of typical. Markets experiencing higher than normal delinquency rate includes Southern California at 9% and Southeast Florida at 4%. Markets with delinquencies at or below 2% include each of our Texas markets, Austin, Dallas and yes, Houston, along with Phoenix, Tampa and Orlando. So far, rent collections in May are trending slightly ahead of April. Regardless of our current collections, rent is still contractually due to Camden from each of our residents.

According to GAAP, certain uncollected rent is recognized by us as income in the current month. Any rent recognized as income in the current month without corresponding cash receipt will be reevaluated in subsequent months depending upon future payment history. The resident relief funds that Keith mentioned, also as according to GAAP, will be recognized as a separate offset to property revenues in the quarter. The $750,000 contribution to the employee relief fund will be expensed to Camden’s corporate level G&A and the approximate $3 million bonus to our frontline employees will be predominantly booked to property level expenses.

In addition, Ric Campo and Keith Oden have each agreed to voluntarily reduce the amount of his annual bonuses, which may be awarded in the future by $500,000. The aggregate $1 million reduction in compensation will serve as a contribution to the just mentioned payments. And now a brief update on our real estate activities. During the first quarter of 2020, we we stabilized Camden Grandview Phase 2, a $22.5 million, 28 Hometown home development in Charlotte, and we began leasing at Camden Downtown, a 271 home new development in Houston.

Also during the quarter, we acquired five acres of land in Raleigh for the future development of approximately 355 apartment homes, and we sold approximately five acres of land adjacent to one of our operating properties, also in Raleigh, to facilitate a public right of way. This disposition created an unbudgeted gain on sale of land of approximately $400,000 recognized as FFO in the first quarter. We decided to temporarily suspend construction activity on our recently announced Camden Atlantic development in Plantation, Florida, as only very minor site work had been completed to date.

And due to the impacts of various local ordinances, combined with current market conditions, we have delayed the expected dates for initial occupancy, construction completion and project stabilization by one to two quarters at almost all of our new developments. We will continue to update these dates as we gain more clarity. Turning to liquidity. Subsequent to quarter end, we issued $750 million of senior unsecured notes with a coupon of 2.8% and an all-in yield of 2.9%. We received net proceeds of approximately $743 million, net of underwriting discounts and other estimated offering expenses.

As of today, we have approximately $1.5 billion of liquidity comprised of almost $600 million in cash and cash equivalents and no amounts outstanding under our $900 million unsecured credit facility, and we have no scheduled debt maturities until 2022. At quarter end, we had $235 million left to spend over the next 2.5 years under our existing development pipeline. Our balance sheet is strong with net debt-to-EBITDA at 4.2 times, a total fixed charge coverage ratio at 6.4 times and 100% of our assets unencumbered. Our 2022 debt maturities include $100 million in January and $350 million in December. And we have not yet made any decisions about prepaying those or any other future debt maturities. Our current excess cash is invested with various banks, earning approximately 30 basis points.

Turning to financial results. Last night, we reported funds from operations for the first quarter of 2020 of $136.3 million or $1.35 per share, exceeding the midpoint of our guidance range by $0.04. This $0.04 per share outperformance for the first quarter primarily resulted from approximately $0.005 in higher same-store net operating income resulting from higher rental income and general expense control measures, approximately $0.0075 in better-than-anticipated results from our non-same-store and development communities, including our recent acquisitions approximately $0.01 in lower interest expense as our original guidance anticipated a $300 million 30-year issuance mid-February at 3.4%, approximately $0.005 from the previously discussed gain on sale of land in Raleigh and approximately $0.0075 in a combination of lower overhead costs and higher fee income. Given the uncertainty surrounding the social and economic impact from COVID-19, we withdrew our previous 2020 earnings guidance, and we will not provide an update to our financial outlook this quarter.

At this time, we will open the call up to questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question today is from Derek Johnston of Deutsche Bank. Please go ahead.

Derek Johnston — Deutsche Bank — Analyst

Hi everybody and thank you. Some of your peers have focused on maintaining occupancy over price, some have paused pricing and lost occupancy, while others have temporarily put in place concessions to kind of bridge the gap. So I guess the question is how are you balancing these scenarios at this point? And to what level could occupant decline to where you’re still comfortable if you want to maintain price?

Ric Campo — Chairman of the Board and Chief Executive Officer

Yes. So our long-term average occupancy is in the 95%, 95.5% range. We’ve been running above that for about the last 1.5 years. And at the same time, part of what was driving that was we had really great traffic, and we had the ability to push rents without having any impact on occupancy. So if you think about where we came from at the end of the first quarter, we were at 96%. That was about in line with our plan for the quarter. We dropped to 95.6% by the end of April. And as we sit here today, we’re about 95%. So yes, we have seen a decline in our occupancy. It’s not anything that we’re overly concerned about at this point.

We would like to maintain our occupancy somewhere around the 95% range, and we’ll adjust our metrics to make sure that, that happens. With regard to your question about concessions, we don’t we use net effective pricing. We have not offered concessions. So it’s all based on our revenue management model. And we think our customers are smart enough to make that determination on their own about upfront concessions versus net effective rents.

The other thing is that in this environment, we just think it’s you’re unnecessarily taking unnecessary risk and complication when you start concession in an environment where you’ve got tenants there are residents that are under potential financial distress going forward. So that’s something that is not something that we have done and not likely to do. So yes, I think we’ll make sure that we based on the traffic that we’re seeing and the pricing trends that we’re seeing, we’ll do we need to do to try to maintain our occupancy somewhere around the 95% level.

Derek Johnston — Deutsche Bank — Analyst

Okay. And just a quick follow-up is, how has leasing demand evolved from, let’s say, April into May? And how do you see it unfolding through the important spring and summer season?

Ric Campo — Chairman of the Board and Chief Executive Officer

Yes. So if you think about it in three time frames, the first would be something that’s relatively normal in our world, and that would be from the beginning of January through March 15 when kind of the world changed. And that in that time frame, over the prior year, our traffic, our guest cards, visits, new leases, we’re all almost exactly in line with where we would have been in 2019. So it was clearly, business as usual, good, steady, heavy traffic and converting roughly 8% or 9% of all of the guest cards and about 20% of all the traffic.

So the next period of time is kind of the March 16 through April 12, that 4-week period where it was the maximum kind of the shock effect of people being told to stay at home. Obviously, we had a huge impact on our guest cards in that time frame, dropped about 45% of normal. Our visits our physical visits dropped about 84% of normal. So huge change in consumer behavior. And our new leases during that time frame were roughly 50% of what they would have normally been. The next time frame that I think is relevant for you to think about would be sort of from the April 13 timeframe through this week.

And we’re getting closer back to something that looks and feels a little bit more normal on guest cards. We’re down about a 13% over where we were this time last year for that time for that 3-week timeframe. Well, we’re still way down on visits, and that’s not necessarily concerning to us. We’re still 62% on physical visits from where we have been, but that’s because we’ve completely changed our business practice to virtual leasing. And that’s there’s some actual some interesting benefits to the that our residents have pointed out about being able to lease an apartment that way. So that one is not particularly concerning.

New leases are definitely down over the prior period. We’re down about 21% on new leases from where we were for that 3-week period in 2019. The offset to that has been our renewal rate, has increased pretty substantially. We had the lowest turnover rate that we’ve ever had in our company’s history at about 37%. I didn’t think I would ever live long enough to see an apartment portfolio with a 37% turnover rate, but that’s kind of where we are. So I hope that gives I mean, so big shock for the first four weeks, and then a recovery through this week that’s getting within hailing distance of looking like normal.

Derek Johnston — Deutsche Bank — Analyst

Thank you.

Operator

Our next question today will come from Michael Bilerman of Citi. Please go ahead.

Michael Bilerman — Citi — Analyst

Hey. I wanted to sort of get your perspective on how you think about the $10 million of relief that you provided to your residents. It’s 1.5% of annual NOI, 6% on a quarterly basis and 18% of sort of monthly, I guess, is this going to be a recurring? Should tenants not be able or need more assistance in the future? Do you sort of view this as a concessionary tactic of being able to provide additional funds for them to be able to ultimately I mean, cash is fungible, right? They can pay the rent or they can pay their normal expenses. So how should investors be thinking about future programs like that?

Ric Campo — Chairman of the Board and Chief Executive Officer

Yes. So the way I think the easiest way to think of it is in a couple of different pieces. One piece was the immediate financial impact to 8,000 of our residents. And while there was a lot of talk about stimulus checks and there’s a lot of talk about PPP money and then possibly even stimulus checks that were going to be sent out. The reality is that in state unemployment that people were trying to get through the queue and the reality is that the impact of this was so sudden and so many of our residents were caught off guard and didn’t have the financial resources.

It wasn’t really about paying rent. It was about paying groceries and medical bills and transportation expenses, child care and those kinds of things that were completely unexpected to a lot of people. So we just felt like that because we were getting anecdotal evidence and feedback from our frontline teams about the financial difficulty and the urgency of the situation that we felt like we could do something quicker for most people that, honestly, was intended to be a bridge to get to something that’s more durable, whether it’s state unemployment, whether it’s the stimulus check or ultimately one of the PPP grants.

So part of it was an immediacy, part of it for financial need, part of it was the ability to assist our residents at a time of their maximum financial stress. Now we so if you think about our resident base, we have roughly 80,000 adult lease folks, their signatories on a lease. And about one in 10 ended up getting the resident relief funding from us. And so it was to address an immediate need to get people to a bridge to a more permanent and durable situation. And then the issue of what they do with their money, it is cash is fungible, and we made no requirement whatsoever that you apply it to rent. Some people may, but that’s the choice that they’re going to make. But it’s really more about the long-term brand issue for what Camden stands for.

And I think as this unfolds, we’re going to get we’ll see a positive effect of the actions that we took on behalf of our residents and our employees, and we’re willing to play the long game. The all of the financial impact, as you walk through, those numbers are correct. It will all be it will happen in the second quarter. And then we’ll be back to a more normal run rate. And to the third question, which is, do you anticipate doing this in the future?

We have no current plans to do any other resident relief plans. It’s possible that if our employees continue to have financial needs, and we at some point, we may want to look at replacing our emergency relief fund. But that’s a program that’s been in place for over a decade. So immediacy assistance, brand long-term about how we conducted ourselves at a time of maximum financial stress for our residents were all the things that we had in our mind.

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

Yes. Let me just add to that a little color because to me, there’s been a lot of discussion these days about how companies ought to be more socially responsible, how they it’s not about the bottom line only. It’s about taking care of customers, it’s about taking care of communities, taking care of employees. And so we just thought that the benefit of immediacy, very quickly getting the folks the money when it was hard to get money from the government, it created a put a zip in the step of our employees and even residents that didn’t apply for the grant actually communicated with us and sent us just thousands of congratulatory e-mails saying, no, I don’t need the money, but I understand now why I really live at Camden.

And as long as I’m a renter, I’ll be with you. So to me, this is our way to sort of say to the industry and the corporate world in general, these are the right things you should do. I will tell you that multiple companies followed our lead. And I spoke with probably 10 different companies on how we did it and why we did it around the country, and that was a good thing. So to me, it really is about the long game, and it’s about being a good corporate citizen to your community and your customer.

Michael Bilerman — Citi — Analyst

How did you weigh providing capital and checks to people versus simply entering into deferral agreements for a period of time for their rent until the government assistance comes into play?

Ric Campo — Chairman of the Board and Chief Executive Officer

Well, we did that as well. Over 2% of our people have payment plans now or 2.5%, something like that. And so so we did both. But ultimately, when you think about when we started thinking about what could we do that was a major statement that was going big, if you want to call it that, that would be an amazing thing for not only our employees, but residents and residents that didn’t need the money, right? And so that’s why we sort of did what we did as opposed to saying, “Hey, we’ll defer your rent.

And the idea was, look, bridge people from point A to point B because one of the things I think is really fascinating is when the government obviously stepped up in a major way with increasing unemployment insurance benefits by $600, extending them beyond what the states had as well. So a person if we had a two income household and each person made $40,000 each, our average household is about $105,000 or $110,000, something like that. But the math that I’ve seen are based on a $40,000 person.

Their take-home pay was roughly $6,500 a month, and the rent says $1,500. And once they apply for unemployment insurance, if they both lost their jobs, then you have a situation where they actually get an increase in their income of roughly $1,500. And so the amazing so from our perspective, we thought it’s going to be hard for people because there are so many people applying all at the same time, people to get this money. But ultimately, when you bridge that gap, they will have funds available that if they lost their jobs.

And then the other part on your question is the whole gig economy. We have tons of gig economy people that work for us or that not work for us, but our residents. And they’re having just a tough time navigating legacy systems that states have with respect to unemployment. And it’s really hard for those guys to get lined up. So that’s kind of that was the longer thought process behind it rather than just saying, okay, we’ll defer your rent.

Michael Bilerman — Citi — Analyst

That’s really helpful. And just last question. So out of that 8,000 residents who took the money, what percentage of those paid their full rent? What percentage of those paid no rent? And what percentage are on deferrals?

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

Yes. The exact numbers, I don’t have right here, but the vast majority of the folks that receive money from us paid their full rent.

Ric Campo — Chairman of the Board and Chief Executive Officer

And I think in Alex’s opening comments, he gave indications that our May collections are actually running slightly ahead of April collections. And that’s, certainly to me, a little bit unexpected, given what’s happened in the world in the last 30 days.

Michael Bilerman — Citi — Analyst

Right, yeah. Thanks very much.

Operator

Our next question today will come from Jeff Spector of Bank of America. Please go ahead.

Jeff Spector — Bank of America — Analyst

Good morning. Thank you. And thanks for all you’re doing. For what it’s worth, BofA’s ESG strategists continues to point to the growing importance of ESG. So thanks again for your efforts. My question today is on Houston. If you could just talk about the Houston market, it seems to be more resilient than we were expecting, possibly even you and your team, in terms of collections, occupancy. It looks like it was up year-over-year 40 bps. And then if you could also discuss your downtown project that you’re leasing up, please?

Ric Campo — Chairman of the Board and Chief Executive Officer

Sure. So Houston is definitely a very interesting market. The when you look at what’s happened in Houston, there were 342,000 people filed for unemployment through this current period. By the end of the month, it will probably be more like 400,000. And I know people sort of connect Houston with Energy, and they should because Energy is a big part of the economy here. But it’s also a broad economy, 7.2 million people, fourth largest city in America, and there’s a lot of other things that go on besides Energy. And so Energy is definitely top of mind.

Energy, obviously, has had a real rough road that they’ve been on and probably will be a rough road going forward. The to give you a sense of the last cycle in Energy here in 2014 to 2016, Houston lost a net 5,000 jobs. And what Energy did is they lost 95,000 jobs. And then other the economy was doing well in the other parts of the Houston economy that are more related to the U.S. economy were doing well. Petrochemical businesses were doing well because of low oil prices or their feedstock, and that tends to give them higher margins.

As long as the overall economy is doing well, then the sort of downstream part of Energy does well. In this situation, we have the U.S. economy going down, and at the same time, that Energy is going down. The 95,000 jobs that were lost in Energy, they’ve added back about 30,000 of those jobs. So what was going on with Energy prior to the pandemic was that Energy was actually starved for capital during the 18 months prior to the pandemic. And they really didn’t add all the 95,000 jobs they lost. And the interesting thing is they almost doubled their production in the Permian between 2014 or 2016 and 2019 as a result of just more efficiency and better technology and things like that.

So the good news is Energy doesn’t have 95,000 jobs to lose because they only brought back 30,000 of those 95,000. So while energy will places like Midland and the Permian are definitely getting hammered for blue-collar workers that are working on rigs and what have you. And they are starting some of the service providers are starting to lay people off. The Energy hit is probably going to be a lot less than it was in the 2015 to 2016 cycle because they just don’t have its many people left to take out, if you will. So that’s the one hand. If you look at generally the we listened to two big players here, Patrick Jankowski, Bill Gilmer from U of H.

Patrick’s with the greater use of partnership, and they’ve been economists that have been following Houston forever. And so both of them think that Houston will have net job losses in 2020 between 75,000 and 100,000 jobs. And so even though you had 400 you have roughly 400,000 people on file, the question ultimately is, how fast do those do the consumers get out of their bunkers and do they start getting back to sort of normal. Texas is phasing in and opening program with retailers open now with 25% sort of occupancy levels. By the middle of by the 18th, they’re talking about going to 50%. So there is an opening phase by the end of the month. They are, in theory, going to be open.

We’ll see how whether consumers actually come out of their bunkers or not. And that’s the big question, I think, we have nationally. The other thing I think is really interesting, and this could be a real benefit for Houston longer-term is that even before the pandemic, Houston Energy executives were calling for energy transition plans, meaning that if you look out in the future, oil demand was supposed to peak in 2030 or something like that. And so all the major oil companies are focusing on how do they transition. I think this pandemic and the Saudi-Russia issue, when oil went negative, has created a massive wake-up call for these energy folks. And so people don’t realize that Texas is #1 in wind generation. And in the next two years, it will probably become #1 in solar.

And so I think we have a real opportunity in Houston to actually lead the Energy transition with all the brain power and engineering power that we have with Energy. I think the Energy companies think of themselves as maybe the Kodak in the film business, and they don’t want to be go the same way that Kodak or Polaroid went. And I talked to a lot of senior Energy executives, and I think that’s kind of happening. And I think it’s a major happening right now. So that could be a positive for Houston over the long term. The Downtown project, we are in the early stages of lease up. It’s definitely tough sledding right now. We’ve been absorbing about 10 units a month, which is pretty slow. The but we are making leases.

We made leases in the last couple of weeks. We’re, I think, 16% leased at this point. We did have part of the building was structured as a Y hotel. And prior to the pandemic, they have the highest number of pre bookings of any Y hotel that they’ve ever done. And of course, we know what happened to that now in the pandemic. So we’re not sure exactly how that’s going to play out over time. But it’s a great piece of real estate. It will be great long term, but in the near-term, it’s going to be definitely leasing that project up.

Jeff Spector — Bank of America — Analyst

Comments were very helpful. One follow-up on a previous question. To confirm, are you saying that your applications are back to normal, your recent applications, let’s say, as of this past week or 2?

Ric Campo — Chairman of the Board and Chief Executive Officer

No. They’re not back to normal. In terms of guest cards, which would be kind of the what you think of as the starting process for leading to a lease, we’re about 13% below where we were this time last year. And that’s for the period between April 13 and May six. We’re about 13% below what we would normally see or what we saw last year in terms of guest cards.

Jeff Spector — Bank of America — Analyst

Okay. Thanks for clarifying. Thank you.

Operator

Our next question today will come from Austin Wurschmidt of KeyBanc. Please go ahead.

Austin Wurschmidt — KeyBanc — Analyst

Hi, good morning everybody. You guys have indicated that you’re offering flat renewals, but I don’t believe you’ve specified a time horizon, where some of your peers had said 90 days or maybe through June 30. So curious how you’re thinking about when you might start to take more of a market-based approach or let the revenue management system take over as it relates to renewals. What are your thoughts on kind of changing your stance there at this point?

Ric Campo — Chairman of the Board and Chief Executive Officer

Well, I think what we all have to do in this environment is sort of play it by ear and see how the market is responding. So we have put out guidance that we are going to hold things flat for 60 days. And the 60 days would have been sort of, I guess, expiring in mid-June, perhaps, but maybe to the end of June. But I think what we really have to do is kind of feel out the market, try to understand how our customers are feeling and our employees are feeling. Because if you think about a renewal, let’s say, if you’re getting a 4% increase in a renewal, we’re talking about $45 or $50 a month to a resident.

And when we’re in a the reason we froze them and the reason we did all of the other things we already talked about doing is we wanted our employees focused on one thing and one thing only. And that was taking care of those people in real-time right now with their issues. I don’t want to have those employees having to knock on the door and say, “Hey, by the way, I know this is really a tough time, but can you give me $45 more because we need it.” And so for our view, our view is that we stated the 60 day, but we will plan it we will make changes as the market dictates.

Once we get back to a more normal situation, our customers know that we’re like any other business, and a, they need to pay their rent; and b, ultimately, they we provide value to them through all of the packages that we have. And part of the issue you have today is they can’t even use the pool or the barbecue grills or the gyms or things like that. And so I hate to ask somebody to pay higher rent when they’re not even getting the full complement of amenities and packages like that. So we will 60 days from now, and then we will evaluate as we go forward. And ultimately, I think it will be better for our customers, better for our employees to evaluate it in that way.

Austin Wurschmidt — KeyBanc — Analyst

Got it. No, that’s helpful. But just to understand it then. Is that renewal the flat renewal offer then, end of June, is that for renewals then into kind of July, August that those are getting offered?

Ric Campo — Chairman of the Board and Chief Executive Officer

Yes. Our renewals, we generally go 60 days out, but right now, we’re going 90 days out.

Austin Wurschmidt — KeyBanc — Analyst

Got it. And then just last one, kind of following up on the Houston commentary. Helpful comparison from kind of 2016, 2017 when things turn negative, certainly a delay from when oil rolled over from late 2014. But curious how the supply setup looks differently than last time. I think I recall supply ramping pretty significantly into 2016 and 2017. And today, things are fairly shut down. So how would you compare and contrast that side of the equation?

Ric Campo — Chairman of the Board and Chief Executive Officer

I would say the supply well, the Houston supply is actually peaking right now. We had when you think through the supply, it actually fell off in 2015, 2016, 2017. And then when Hurricane Harvey hit in 2017, we ended up with very high occupancy. And so Houston was the only market in America that where you could tell a story that had a recovering economy and a declining supply picture. So what productive developers did was they ramped up development in Houston.

And so today, we have 21,000 units that were permitted in 2019. And the projections for 2020 were 14,000, 15,000. That will probably fall off some. But Houston will have more supply to deal with than it did during the 2017, 2018, 2019 kind of time frame. And so ultimately, though, however, when you look at some of the projections on supply everywhere, the peak supply was somewhere around 400,000 units. And most of the analysis that we see around the country are supply dropping to barely over 100,000 units net.

And that generally is what you see in a economic situation like this, is equity for new development and construction loans from new development are very, very, very difficult to get today. And if you didn’t have it already lined up, you’re probably not getting that done. And it’ll be interesting to see how that all plays out. But Houston does have a supply issue it has to work through in this environment. That’s why I said our Downtown project is going to be tough sledding for the next 1.5 years.

Austin Wurschmidt — KeyBanc — Analyst

No, I appreciate the thoughts. It’s helpful. Be well. Thank you.

Operator

Our next question is from Nick Yulico of Scotiabank. Please go ahead.

Nick Yulico — Scotiabank — Analyst

Hi, everyone. Ric, I just wanted to ask you about the balance sheet. I mean, clearly, you’re in a very good position, low leverage, a lot of cash. How should we think about your deployment of the balance sheet over the next year? And are you seeing any interesting acquisition opportunities opening up yet, realizing it maybe early, also thinking along the lines of maybe partnering with private developers who need capital. I mean, how are you kind of envisioning the opportunity set here?

Ric Campo — Chairman of the Board and Chief Executive Officer

Well, clearly, the our balance sheet is the strongest in the sector. We’re sitting on over $0.5 billion of cash with an unfunded $900 million line of credit. And this is exactly where we want to be. Over the last two years, in every single conference that Keith and I and Kim and Alex attend people pound the table going, why are you going under leveraged? Why are you sell under leveraged? Why are you issuing equity? Those kinds of issues. And what our answer was, was that we’re in the longest economic recovery in American history.

And something is going to come along that’s going to change that. I don’t know what it is, but when that happens, I want to be positioned to have the best balance sheet in the sector because there should be opportunities that come up over that. Now all of a sudden, now we know what happened. And now could we have all predicted this? We didn’t predict the why it happened, but we did predict that it could happen and would happen and it did. So that’s the positioning we’re in. Now about opportunity, opportunity will happen. There’s no question because if you look at the merchant builder model, they have high prefs or prefs that eat at their profits and their capital every single month.

And as you have when you have an environment like this where the future is uncertain, and you have capital issues that are much more leveraged than we are. So are there going to be amazing opportunities like during that presented themselves and in 2009 and ’10? Unfortunately, we weren’t positioned to be able to deal with the amazing opportunities we saw then. I think there will be some, but it’s very early to tell what they are going to look like. I think that most people are hunkered down. And if you didn’t have a transaction that wasn’t completed, wasn’t hard earnest money or financed and ready to go, you’re probably not getting that deal done. So it will take a few months for the market to kind of settle. There’s really not a lot of transactions going on.

To the private developer question, we have been fielding lots of calls from private developers who want who thought they had their equity in their debt and now they don’t. And they’re either trying to sell us their plans and get out of the trap whole, with their chase money. We fundamentally will not partner with private developers or do mezzanine financing or anything like that. One of the other big things we wanted to do during the after the financial crisis, we wanted to have a very simple structure. Our cash is our cash, and we’re going to be 100% and when we invest, we’ll invest 100% of our assets in that. We do have a joint venture relationship with Texas teachers, which is very good. But fundamentally, we won’t be doing private developer equity transactions.

Nick Yulico — Scotiabank — Analyst

And in your experience, how long is it going to take before you can become more comfortable with underwriting rents for the future development pipeline?

Ric Campo — Chairman of the Board and Chief Executive Officer

Well, I think the I don’t know how long it is yet because we’ve only been in it for 1.5 months, right? But I think that there are some fundamental things that you can count on. You can count on people needing a place to live. You know what the forward supply picture looks like. And you can also sort of plan for some scenarios on how the market will open over time. And so I think that gives you, once we get a little closer to how does it how do places open and how do industries adapt, industries like leisure industries, or the oil and gas business in Houston and those kinds of issues, that will give you more clarity.

And with capital structure we have now, we’ll be able to make earlier decisions and make more aggressive bets than others, I think. So I think that it will become more clear probably in the next three to six months. And then you’ll start seeing activity and people making decisions on what they’re going to do going forward. And so I don’t think it’s going to be years, but it’s definitely going to be a few months.

Nick Yulico — Scotiabank — Analyst

Okay. Thanks. Appreciate it.

Operator

The next question will come from Neil Malkin of Capital One. Please go ahaed.

Neil Malkin — Capital One — Analyst

Hey, thanks, guys. I guess just kind of maybe digging into the previous question. What is your view on development within your portfolio and your markets over the next 12 months? I mean like you said, starts are expected to be close to nothing, but you’re in a position, balance sheet-wise, where it would behoove you to start now and really reap the benefits in 2022. Any thoughts there?

D. Keith Oden — Executive Vice Chairman of the Board

Yes. We have we’ve got a decent development pipeline. We think it’s appropriately sized, given kind of the opportunity set out there right now. As far as additional starts, we had original guidance. We had a couple of starts for 2020. We’ll wait and see on those. The one in Florida, Atlantic, we had literally just were in the process of finalizing our pulling permits for construction. We really hadn’t doing some site work,etc. So we just put that on hold out of an abundance of caution.

But at some point, my guess is, is that when we see a little bit more clarity on what the job and the reemployment situation is going to look like in some of these markets, then yes, we’ll probably forge ahead with our planned developments, whether it gets done this year or whether it leads over into the first quarter of next year. We still think, fundamentally, there’s a lot of value to be derived. And from doing what we do with our construction and development team. So a little as Ric said, it’s too early to kind of even start speculating on that because we need to see a few more cards.

It’s still really early, but we’re clearly going to use our balance sheet strength to do two things. We have $235 million left to fund on our existing pipeline, and it’s a great development pipeline that’s being delivered in a very geographically diverse way. So that’s one thing that’s a priority for us, is to complete that and not have to have any stress at all about funding $235 million to complete that pipeline. And then secondly, we’ll turn to opportunities for capital allocation, whether we’ll look at what does new development look like in the new arena and then compare and contrast that to potential acquisition opportunities that inevitably are going to come our way.

Neil Malkin — Capital One — Analyst

Makes sense. Other one for me is, can you just juxtapose or compare and contrast your kind of core Sunbelt markets with your Southern California markets just in terms of delinquencies, people who contacted you about payment plans. And then how things are performing on a submarket and price point spectrum?

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

Yes, absolutely. And as I said in the prepared remarks, if you look at California for us, for the month of April, California was 9% delinquent. If you sort of break that into two categories, LA Orange County being one that was around 11% and then San Diego, Inland Empire was around 6%. If you compare that to, obviously, to our Sunbelt markets, our Sunbelt markets are considerably lower and in fact, if you look at our total delinquency, which we reported at 3.2%, if you were just to back out California alone, that number would drop to 2.4%. So California is definitely putting a is putting a drag on our numbers.

D. Keith Oden — Executive Vice Chairman of the Board

So just one of the things that’s interesting that we data that we got from the resident relief fund is we really didn’t see a disproportionate number of residents applying for the resident relief fund from California, which is kind of interesting if you think about it. It was it’s about what you would expected it to be. And about it was pretty equivalent across our entire footprint of our portfolio. So plus or minus, we have 80,000 adult lease signatories with over 8,000 people who applied and verified that they either lost their job or lost significant income. And we didn’t really see a big there wasn’t a disproportionate amount in California, and yet we’re 10% delinquent.

So what so one conclusion from that is that while our California portfolio is not under any disproportionate financial stress, it’s under disproportionate behavior stress. And those are very different things. And as long as policymakers continue to kind of accommodate that behavior it’s going to remain under stress. I just don’t I don’t see any way around it, but that’s very different than saying, can they pay do they have the ability to pay? If they were financially impaired, they would have applied for the resident relief fund. And so we know that there’s a chunk of residents in California who are behaviorally acting not appropriately.

Neil Malkin — Capital One — Analyst

Huge amount of hazard out there. Thanks guys with the question.

Operator

Our next question today is from Alexander Goldfarb of Piper Sandler. Please go ahead.

Alexander Goldfarb — Piper Sandler — Analyst

Hey, good morning, everyone. And I would echo, I mean, I think you guys have been great for your residents, employees. I mean, remember back with Harvey, you guys helped your employees rebuild. So I think it’s good that you guys help out. And interesting the moral hazard comment, Keith, on the on Southern Cal. Not to leave Jessett, Alex Jessett out of the conversation, but a double question for him. One, it just in full disclosure of the accounting treatment for the $10 million or, I guess, $11 million, but $10 million when you net out the senior comp, how that will hit the P&L.

And then a separate, but included in the question for you, have you seen the rating agencies change their tune this time? It seems like we’ve seen very few REIT downgrades. Clearly, apartments are better than retail, but still, everyone’s been affected. Are you is your sense from the rating agencies, like you guys just did your issuance last week, that the agencies are giving the companies more time to settle out what the run rate NOI impact will be before taking action? Or what’s your sense?

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

Yes, absolutely. So the first question, when you look at the resident relief funds, the way we will account for it is as an offset to revenue. Now we’re not going to run it through same-store, but it will be in revenue. And if you think about our Components of NOI page in our supplement, it will be its own separate category. So we’ll take the entire amount in the second quarter as an offset to revenue. When you think about the rating agencies, yes, obviously, I’ve spoken to all the rating agencies over the past couple of weeks as we got ready for a bond issuance and as we completed a bond issuance.

The first thing I would tell you is that REITs, by and large, are so much stronger today than they were leading up to the last downturn. And I think that is giving the rating agencies some comfort. I think the other thing that you have to look at is one of the big issues that rating agencies look at is access to capital. And when Camden is able to go out and start with what was originally issued or originally sort of whispered as a $300 million bond transaction. And really quickly grew to over $8 billion of demand, which led us to upsize it to $750 million, I think events like that give the rating agencies a great deal of comfort about the access to capital that most of us have.

And I think that’s why you’re going to see them obviously be much slower in making rating decisions than they were in the past. And then I’ll add to that, that if you think about what did happen during the last downturn, there were a couple of rating agencies, in particular, that were very reactionary and sort of moving people down two steps in one action. And I think they really quickly realized that, that was an overreaction. And I think they’ve sort of learned on that side as well.

Alexander Goldfarb — Piper Sandler — Analyst

Okay. And then the second is, I don’t think you addressed the hospitality market in a question, but you did say that Orlando, Tampa, and I think Phoenix were all some of your best rent collection markets. So can you just comment on what’s going on there? Maybe your residents aren’t as into hospitality as other people in those markets, but what the impact is?

D. Keith Oden — Executive Vice Chairman of the Board

Yes. I wouldn’t have included Orlando in the less than impacted. We are seeing outsized impact in Orlando. Tampa, not at all, is performing better than most and so is Phoenix. So of those three markets that you mentioned, I think that the weakest of those three would be Orlando, and it would probably be in our bottom three or 4.

Alexander Goldfarb — Piper Sandler — Analyst

What is that, Keith? Orlando 10% collection, 8%?

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

No. So Orlando, so what Keith was talking to is pricing power in Orlando. If you actually look at delinquent in Orlando, Orlando is only 2% delinquent. Maybe it’s a matter of time, and we’ll see how May results end up, but it is holding on remarkably well in April.

Alexander Goldfarb — Piper Sandler — Analyst

Thank you.

Operator

Our next question today is from Rob Stevenson with Janney. Please go ahead.

Rob Stevenson — Janney — Analyst

Thank you. Good morning. You guys have given April occupancy rent numbers, but how should we be thinking about operating expenses? I mean, you’re saving on turnover cost. There’s probably some other expense lines that you’re also saving on. But then you probably have higher insurance and maybe utility costs with everyone staying at home. And then there’s some extra COVID expenses. How does this all offset? Are operating expenses higher or lower today? How should we be thinking about that?

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

Yes. Ultimately, you’ve got a couple of things that are going on there. So first of all, the $3 million bonus that we discussed, that is going to be booked to operating expenses.

Rob Stevenson — Janney — Analyst

I mean, I’m just talking about the normalized, excluding the stuff that’s not recurring?

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

So once you pull out the $3 million and you look at the salary side, we should expect to have some general salary savings associated with open positions that are going to stay open a little bit longer. The other thing that everybody is seeing really sort of across the board is that benefit costs are coming down. Ultimately, in this sort of COVID-19 environment, people are just not going to the doctor unless they absolutely have to.

And in fact, I will tell you that most of the hospitals and doctors that we know personally are really seeing a downturn in the amount of sort of cases they’re seeing today. So I think you’re going to see savings on the salary side, ex the bonus. When you come to utilities, obviously, the trash is going to be a little bit higher, but keep in mind that we rebill almost all the utilities back to our residents. And then where you really are going to have savings is on R&M.

So as we retain more of our residents, obviously, our turn costs go down, and that’s a reasonable number for us. Property taxes for us right now, we started the year thinking we’re going to be at 3%. We don’t have any reason to believe that’s any different. We just went through our insurance renewal. We thought our insurance for the full year was going to be up somewhere around 20%. That’s exactly where we ended up. So I think by and large, once you sort of strip out the nonrecurring events, you should have some minor savings on expenses.

Rob Stevenson — Janney — Analyst

Okay. And COVID doesn’t overwhelm that?

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

Yes. And then the last thing to add, and I know you wanted to sort of strip out expenses that were sort of nonrecurring. But we do have property level COVID-19 expenses. When we look at our number for April, that’s right around $300,000. And that’s associated with additional cleaning, masks, the fact that we’re having special services come out to enter into units to do the repair work. So you absolutely are going to have some COVID-19 related costs.

Rob Stevenson — Janney — Analyst

Okay. And the second one for me is when you look back at the global financial crisis, which I guess is probably the best example that we have at this point. What was the final collectability rate at the end on those tenants that deferred rent, got put on payment plans, made promises to pay, the sort of the noncash payers at that point in time? What did you wind up collecting at the end?

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

Yes. So if you go back to that point in time, we really didn’t have deferred programs. I think probably the better way to look at it is to look at what did bad debt do. And so bad debt started off right around 50 basis points. And it actually increased to about 100 basis points during the crisis.

Rob Stevenson — Janney — Analyst

Okay. Thanks guys. Appreciate it.

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

Absolutely.

Operator

Our next question today will come from Rich Anderson of SMPC. Please go ahead.

Rich Anderson — SMPC — Analyst

Thanks. Good morning, everyone.

Ric Campo — Chairman of the Board and Chief Executive Officer

Morning.

Rich Anderson — SMPC — Analyst

Appreciate as always on-hold music, WCPT. So question first question is, you get good results relative to perhaps some expectations in terms of rent collection in April. Looking even a little bit better in May. At what point do you say, “Boy, this is pretty resilient, we might actually be able to provide some guidance in the second quarter.” How many successive of months of proof that you’ve got a good flow of rent coverage by your residents that will get you to a comfort, even if we’re not past this, and we’re still sort of in quasi lock down around the country?

D. Keith Oden — Executive Vice Chairman of the Board

I need to see a couple of weeks where we don’t have another $3 million three million unemployment claims filed. I mean, it’s I think it’s better that it’s not six million, but three million is just a staggering number. So until we kind of get to maybe an inflection point or somewhere where you kind of say, everybody that’s going to be unemployed by this, by and large, already is. Then I think you can start making some more rational estimates of what does the next 60 or 90 days look like. But to me, it feels like there’s still it’s kind of still moving away.

I guess there are some of the good I guess, there’s good news in the sense that as it turns out, all these, the state unemployment claims turn out to be lagging numbers because people have been in the queue for they’ve been unemployed for longer than they’ve been able to get their claim filed. So it’s entirely possible that what we’re seeing now is kind of in the rearview mirror, but I don’t think we’ll know the answer to that for another month or two. But I can I think I can speak for everybody here by saying, Rich, as soon as we get to a point where we think we can give you some meaningful guidance, we’ll do it.

Rich Anderson — SMPC — Analyst

And then the other thing is all of you, you and your peers, were ahead of a curve in terms of tech investments, and that’s obviously helping you now through the leasing process. Curious though, if you were somewhat concerned going into it, maybe not ready for prime time yet, as they were not fully rolled out. If that was something that has proven itself out so far, there have been any hiccups in the process.

And a corollary to that question is, do you see any scenario where you can have more robust leasing activity in this environment when you consider elevated close rates and sort of people just sort of processing and coming to grips with this new normal in terms of the leasing process in today’s environment. Could we actually get to a point where it’s almost just like it, but for different reasons?

D. Keith Oden — Executive Vice Chairman of the Board

Yes. Rich, we had several different pilots underway for doing some version of virtual leasing and self-guided tours. So we were we had put in a lot of time and effort on it. But we had not yet convinced ourselves that our customers would accept in large numbers that not having the one-on-one interaction, personal touch, Camden cares approach to the leasing experience. I think we’ve put that one to rest in the sense that the feedback from our customers regarding the virtual leasing experience.

So number one, we ramped up we went from our toes are in the water and maybe up to our ankles, to we just dove off. And I mean, we’re just in it head deep. And so we were able to quickly do that because of our our history of rolling things out and technology initiatives and getting buy-in very quickly. So that all getting that process in place and just taking the plunge and saying, you don’t have an option now, and we’re not going to talk about it anymore. We’re going to do it. So that was good in the sense that our folks quickly adapted. The flip side of it is, is that the feedback from the residents has been incredibly positive.

I mean to the point where there are a lot of people who’ve indicated, I like this better than whatever process we had in place previously that involved a personal visit and a tour and the rest. So I think that there are permanent changes that are coming out of this. That’s just one of them. There’s going to be a bunch of others, but that’s probably the most immediate in terms of business practices that when we come out of this, even if somebody waived a wand and we were back to January type conditions, we’re not going back to that from the standpoint of how we operate on-site. There’s too many too many clear advantages and also consumer behavior is probably ahead of where we were.

Ric Campo — Chairman of the Board and Chief Executive Officer

Yes. Let me add too on just on the work side of the equation. Our corporate office and our regional offices, we have been out of the office for a long time now. And I think Alex had his fastest close in terms of closing our quarter, all done virtually, all done in the cloud, and we took we spent a fair amount of money, and it took us two years to implement a cloud-based technology. And we complained about it forever until we had to actually use it.

And now people are going, wow, that’s amazing. So I think there’s going to be dramatic changes in how people think about the workplace, how they think about how do you start your workplace back? Do you start at 25% people, 50% people? And I think we have a fair number of people that really like Zoom and like telecommuting the way they did. I drove in and it usually takes me from I’m sheltering, I’m in between houses here in Houston. So I have a place out in Columbus, Texas, which is about an hour in a normal commute day, it’s an hour and a half-ish or an hour and 45 minutes. And it took me less, almost about an hour to get in today.

So a lot of I think there are going to be a lot of fundamental changes in how we all do business, not just on-site, but in our corporate offices as well. And companies that haven’t invested in the technology and don’t have that ability to immediately plug-and-play at their homes are going to be really disadvantaged. And I think it’s going to make us think more about the homes and what our people need to have high speed Internet. They need to have it needs to be secure and all those things. And I’m sort of excited about that a bit because it could deal with a lot of really you could end up with a lot of really cool and more flexible workplaces than we’ve had in the past.

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

I’m enjoying a four second commute myself, so. Yes. Yes. All right. Thanks guys and gal.

Rich Anderson — SMPC — Analyst

Thank you, Ric.

Ric Campo — Chairman of the Board and Chief Executive Officer

Yeah.

Operator

And our next question today will come from Zach Silverberg of Mizuho. Please go ahead.

Zach Silverberg — Mizuho — Analyst

Hi. Thanks for taking my questions. Just curious on some comments you made about turnover. How low do you think they can actually end up? And are you seeing any extra benefits on the revenues and expenses side?

D. Keith Oden — Executive Vice Chairman of the Board

Well, I never thought we would get to 37%. So I’m probably not a good one to ask, but can it go lower? Yes, I think so, because the for a couple of reasons, that people who are enjoying the living experience that they and it’s not, everybody understands it’s not optimal to be sheltering in place. But the companies who have taken extraordinary care, not just turning keeping the place open, keeping the lights on. The companies who have taken extraordinary care, which are, by and large, our public competitors and probably a dozen or so really, really well-run private companies are going to differentiate themselves as a place to live for the next five years out of this kind of mess that we’re in.

And so I think it’s actually been a time where if you love the place that you live in and you’re being cared for and you’re being, in extraordinary ways, being taken care of. You got to question, why would you leave that? Because the pain associated with not being cared for correctly and properly in this kind of environment is probably not a risk that a lot of people are going to want to take. So that’s not going away anytime soon. So could the 37% become 33%? I suppose it could, but we’ll see.

Ric Campo — Chairman of the Board and Chief Executive Officer

On revenue expenses, generally, lower turnover lowers expenses. You don’t have to relet. You don’t have to have commissions on it. You don’t have to redo carpet, stuff like that. And on revenue, I’d always rather have a renewal at a maybe a lower rate than a new lease because you’re you’re saving all the other costs. So low turnover is a real good thing long-term for this business and for Camden.

Zach Silverberg — Mizuho — Analyst

Great. Appreciate the color. And just on your press release, you outlined last April, or a more typical month, about 1.5% delinquency. What percentage of this 1.5% do you end up ultimately collecting? And what is sort of the time frame behind that?

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

Yes, absolutely. So it usually takes us sort of a month or so, and we’ll work that 1.5% down to what is typical, which is about 50 basis points.

Zach Silverberg — Mizuho — Analyst

Great. Thank you.

Operator

Our next question is from Hardik Goel of Zelman & Associates. Please go ahead.

Alex Kalmus — Zelman & Associates — Analyst

Hi. This is Alex Kalmus on for Hardik. On the expense front, property taxes were obviously a tailwind this quarter. Can you walk us through the market level buildup for this decline and what you expect on going ahead? Is this all from Texas?

Alex Jessett — Executive Vice President Finance, Chief Financial Officer and Treasurer

Yes. So if you think about what we had for property taxes, it was predominantly driven by some select refunds that came that we got in. And those were all refunds that we knew were going to come our way. You’ve got you had, Dallas was represented as was Atlanta. And so that was all very typical. If you think about property taxes in general, I started the year believing that property taxes were going to be up right around 3%. And I still think that is going to be the case. If you think about the markets for us that are sort of a little bit of an outlier on the property tax side. You’ve got Houston currently, which is sort of up 7%. And you’ve got Orlando, which is up about 9%. But you’ve got that offset by some of our markets that are actually having negative growth when you think about refunds.

So where we are today, we think 3% is probably a pretty good number. What I will tell you is what typically happens. When you go through cycles like this, the great thing about property taxes is it’s the one large expense item that actually can turn negative. And in fact, it did turn negative during the last downturn. And I assure you that all of us that have very good tax consultants, and I know that Camden has some of the best tax consultants out there. And I know that because our peers often call us and ask us who we use. Our tax consultants are out there and they’re ready to fight. And so maybe we don’t get the benefit in 2020, but I’d expect to see benefits in 2021.

Alex Kalmus — Zelman & Associates — Analyst

And just a quick follow-up. With regards to the renewals that you’re offering, are a lot of these are some of these under 12 months? Or are we thinking mostly 12-month lease renewals?

D. Keith Oden — Executive Vice Chairman of the Board

The vast majority of them are taking 12-month renewals. We offer the terms depending on anywhere from nine months to 15 months, but it’s predominantly 12 months. If your question is short-term renewals, no, we’re not seeing that. People are I think people are wanting certainty of their living conditions for the next year.

Alex Kalmus — Zelman & Associates — Analyst

Got it. Thank you.

Operator

Ladies and gentlemen, this will conclude the question-and-answer session. And at this time, I’d like to turn the conference back over to Ric Campo for closing remarks.

Ric Campo — Chairman of the Board and Chief Executive Officer

Great. Well, thanks. We appreciate taking the time to visit with us today, and we will talk to you soon. Take care.

Operator

[Operator Closing Remarks]