Camden Property Trust Reit Q4 2025 Earnings Call Transcript

Camden Property Trust Reit (NYSE: CPT) Q4 2025 Earnings Call dated Feb. 06, 2026

Presentation

Kim Callahan — Senior Vice President of Investor Relations

Good morning and welcome to Camden Property Trust’s fourth quarter 2025 earnings conference call. I’m Kim Callahan, Senior Vice President of Investor Relations. Joining me today for our prepared remarks are Rick Campo, Camden’s Chairman and Chief Executive Officer Keith Oden, Executive Vice Chairman and Alex Jesset, President and Chief Financial Officer. We also have Lori Baker, Chief Operating Officer and Stanley Jones, Senior Vice President of Real Estate Investments, available for the Q and A portion of our call. Today’s event is being webcast through the Investors section of our website@camdenliving.com and a replay will be available shortly after the call ends.

And please note, this event is being recorded. 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 fourth quarter 2025 earnings release is available in the Investors section of our website CamdenLiving.com and it includes reconciliations to non GAAP financial measures which will be discussed on this call. We would like to respect everyone’s time and complete our call within one hour, so please limit your initial question to one, then rejoin the queue if you have a follow up question or 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 email after the call concludes.

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

Ric Campo — Chairman of the Board and Chief Executive Officer

Good morning. The theme for today’s On Hold Music uncertainty could not be more fitting for the state of the multifamily REIT sector. It’s no exaggeration to say that the words uncertain or uncertainty have echoed through the conference call transcripts during 2025. And why wouldn’t they? The operating environment last year was uncertain, and every sign suggests that the first half of 2026 will be marked by the same cautious tone as last year. The songs that you’ve heard this morning reference uncertain times. However, the song verse that best captures the current uncertain vibe for us is from the Dora’s classic Roadhouse Blues.

Well, I woke up this morning and I got myself a beer. The future’s uncertain and the end is always near. The end of uncertainty, that is. Here’s what we are certain about. We are certain that we finished 2025 strong, exceeding our original guidance for core FFO by 13 cents a share. We’re certain that people need a great place to live and we provide that. We are certain that new supply has peaked and is falling like a knife in our markets. We are certain that 2025 had one of the highest levels of apartment absorption in the last 20 years.

We are certain that our Sun Belt markets will continue to grow faster than the rest of the country, prompting us to market our California properties for sale. The sale allows us to expand our Sunbelt footprint, simplify our operating platform, and buy our shares at a significant discount to net asset value. We are certain that our residents are resilient and the financial prospects are strong with rent payments at only 19% of their income. We are certain that apartments are significantly more affordable than owning a home and will be for the foreseeable future. We are certain that new lease rates, net operating income will grow in the future.

We are certain that Camden has one of the strongest balance sheets in Reitland. We are certain that we have one of the best teams in the business providing living excellence to our residents. And finally, I’m certain that Keith Oden is up next.

Keith Oden — Executive Vice Chairman of the Board

Thanks, Rick. As we reported last night, Camden’s same property revenue growth for 2025 came in at 76 basis points, which represents a 1 basis point beat to the midpoint of our most recent guidance. And our operations teams are celebrating like they just won the Super Bowl. In putting together our projections for 2026, we reviewed supply forecasts and job growth estimates from several third party data providers and we budgeted from the individual property level up, taking into account each community’s historical performance, current sub market dynamics and other relevant factors. On the supply front, it is clear that deliveries in almost all of our markets peaked during 2024 and continued to decline in 2025, setting up 2026 and 2027 to be below average years for new supply completions as a percentage of inventory peaked at nearly 4% for our portfolio in 2024 and are expected to be less than 2% this year and closer to 1.5% in 2027.

Regarding 2026 job growth, I’ll echo Rick’s comments that uncertainty is still a key theme in the markets this year, but we are certain also that whatever jobs are created this year will predominantly be in Camden Sunbelt market markets which continue to attract corporate relocations and growth as a result of their affordable business friendly environments in 2026. We expect operating conditions will improve over the course of the year with modest acceleration in the second half of 2026. The midpoint of our 2026 same property revenue guidance range is 75 basis points, basically the same that we achieved last year with half of our markets falling between 1 and 2% revenue growth and most others flat to up 1%.

The two outliers with slight revenue declines will likely be Austin due to continued supply pressure and Denver due to recent regulatory changes affecting income from utility rebilling. As many of you know, we have a tradition of assigning letter grades to forecast conditions in our markets at the beginning of each year and providing outlooks of improving, stable or moderating for their expected performance during 2026. We currently grade our overall portfolio as a B with a stable but improving outlook. Our first three markets are rated either A or B and should achieve revenue growth in the 1 to 2% range this year.

Washington D.C. metro ranks as an A with a moderating outlook. Despite all of the conversations around D.C. doge and politics last year, D.C. metro clearly outperformed our expectations with 3.5% revenue growth in 2025 and heads into 2026 well positioned with 96% occupancy. Houston is next with a B rating and a stable outlook, the same grade as last year. Supply has been quite limited in Houston for the past couple of years, allowing it to place number four for revenue growth in 2025 and we expect Houston to exceed our average portfolio growth again in 2026. Our Southern California markets earn a B grade with a moderating outlook for 2026.

Like DC Metro, Southern California outperformed our original expectations, posting mid 3% revenue growth in 2025 in large part due to declining levels of bad debt supply has not really been an issue in most of our California markets, but we do expect less of a tailwind from reducing bad debt as we move through 2026. Denver was our number three revenue growth market in 2025 and receives a grade of B with a moderating outlook. Market conditions in Denver are fairly stable, though slightly more challenging in a few of its urban submarkets. But as I mentioned earlier, revenue growth is expected to decline year over year due to lower levels of utility rebilling and other income anticipated in 2026.

Our next four markets earned a B letter grade with improving outlooks. Nashville, Atlanta, Dallas and Southeast Florida are all expected to improve over the course of 2026 as existing supply is absorbed. We have begun to see the proverbial green shoots in some of these markets and have budgeted between 1 and 2% revenue growth for each market this year. Orlando, Raleigh and Charlotte received B ratings this year with stable outlooks and budgeted revenue growth of 0 to 1% compared to relatively flat growth last year. Demand has been solid in all of these markets, but it will take a few more quarters to see any meaningful improvements.

Given the higher than average supply delivered, particularly in the two North Carolina markets, we’d grade Tampa a B with a moderating outlook and Phoenix a B with a stable outlook and expect relatively flat revenue growth in both markets this year. Tampa benefited from above average occupancy in 2024 and much of 2025, but has since returned to more normalized levels around 95%, tending to slow the revenue growth there. Phoenix still faces elevated levels of supply mainly on the western side, so we expect pricing power to be limited for most of 2026. And finally, Austin earns a C this year with an improving outlook after being stuck for a C minus for the past two years.

New supply is finally slowing and there is light on the horizon. But given the overwhelming amount of new apartment homes delivered in 2024 and 2025, it will take a little while longer for market wide occupancy to improve and concessions to burn off. Stay tuned as we’re fully expecting Austin to receive a B or better in 2027. And now a few details on our 2020 fourth quarter 25 operating results. Rental rates for the fourth quarter had new leases down 5.3% and renewals up 2.8% for a blended rate of negative 1.6%, which is fairly in line with what we saw in 4Q24 and what we expect for the fourth quarter expected for 4Q25.

Renewal offers for first quarter expirations were sent out with an average increase in of 3 to 3.5% and as expected, move outs to purchase homes remain extremely low at 9.6% for the fourth quarter and 9.8% for the full year of 2025. I’ll now turn the call over to Alex Jesset, Camden’s President and Chief Financial Officer.

Alex Jessett — President and Chief Financial Officer

Thanks Keith and good morning. I’ll begin today with an update on our recent real estate and financial activities, then move on to our fourth quarter results and our guidance for 2026. During the fourth quarter we disposed of three communities located in Houston and Phoenix for a total of $201 million, acquired one community in Orlando for $85 million and stabilized Camden Longmeadow Farms, one of our two build to rent communities located in suburban Houston. Our transaction activity for full year 2025 included the sale of seven older higher CapEx communities with an average age of 22 years for $375 million and the acquisition of four newer assets with an average age of 5 years for $423 million.

We recently began marketing for sale our 11 California operating communities. Obviously the market will dictate final pricing, but preliminary indications of value and market chatter range from $1.5 to $2 billion. We are assuming this transaction closes mid year. Additionally, we are assuming that approximately 60% of the sales proceeds will be reinvested through 1031 exchanges into our existing high demand, high growth Sunbelt markets and the remainder of the proceeds, modeled at $650 million will be used for share repurchases. We have already completed nearly $400 million of the $650 million of share repurchases associated with the planned asset sales, and we expect to complete the remaining buybacks in early 2026.

In anticipation of this additional buyback activity, our board recently approved a new $600 million share repurchase authorization. The just over $1 billion of 2026 acquisitions from the California sales proceeds are projected to occur during the summer months. Based upon this timing of asset sales, asset purchases and share repurchases, we are assuming no accretion or dilution in 2026 from this strategic transaction. Variability in transaction timing is considered in our core FFO guidance range. Turning to financial results, last night we reported core funds from operations for the fourth quarter of $193.1 million, or $1.73 per share, $0.03 ahead of the midpoint of our prior quarterly guidance, driven entirely by higher fee and asset management income from our third party construction business as we favorably closed out several jobs which came in well under budget.

Property revenues, expenses and NOI were exactly in line with expectations. Turning to guidance, you can Refer to page 24 of our fourth quarter supplemental package for details on the key assumptions driving our 2026 financial outlook. We expect our 2026 core FFO per share to be in the range of $6.60 to $6.90 with a midpoint of $6.75 representing a $0.13 per share decrease from our 2025 results. This decrease is anticipated to result primarily from an approximate $0.04 per share decrease in fee and asset management income as the outperformance we experienced in this category, particularly in the fourth quarter of 2025, is not anticipated.

In 2026, an approximate 4.5 cent per share or 3% increase in general overhead and other corporate expenses and an approximate 4.5 cent per share decrease in same store net operating income. The growth in operating income from our development, non same store and retail communities is entirely offset by the impact of our disposition of older higher FFO yielding communities in 2025. At the midpoint, we are expecting same store net operating income of negative 50 basis points with revenue growth of 75 basis points in line with 2025 and expense growth of 3% versus 1.7% in 2025. Each 1% increase in same store NOI is approximately $0.09 per share in core FFO.

Our same store guidance includes California for the full year and California is accretive to our numbers by approximately 25 basis points on revenue and 40 basis points on NOI. The midpoint of our 2026 same store revenue growth of 75 basis points assumes 55 basis points of growth attributed to rental income and 20 basis points of growth from other income. We expect market rent growth of approximately 2% for our portfolio over the the course of the year, with most of that growth occurring in the second half of the year. Recognizing a portion of this rental rate growth with our slightly negative earn in flat occupancy and a slight improvement in bad debt results in expected growth of approximately 55 basis points for rental income.

Other income, which is primarily comprised of utility rebilling and fee income, represents 10% of our total property revenues and is expected to grow around 2% in 2026, adding approximately 20 basis points to same store revenue growth. Page 24 of our supplemental package also details other guidance assumptions including the plan for up to $335 million of development starts at the end of the year and approximately $200 million of total 2026 development spend. Non core FFO adjustments for the year are anticipated to to be approximately $0.14 per share and are primarily legal expenses and expense transaction pursuit costs.

We expect core FFO per share for the first quarter of 2026 to be within the range of $1.64 to $1.68. The midpoint of $1.66 represents a $0.10 per share decrease from the fourth quarter of 2025 which is primarily the result of an approximate $0.05 per share sequential decline in same store NOI driven by an increase in sequential same store expenses resulting from the timing of quarterly tax refunds, the reset of our annual property tax accrual on January 1st of each year and other expense increases primarily attributable to typical seasonal trends, including the timing of on site salary increases, an approximate $0.04 per share decrease in fee and asset management income from the large outperformance we recorded in the fourth quarter, an approximate $0.04 per share increase in interest expense from higher debt balances resulting in part from our actual and anticipated share repurchases and an approximate 2 cent per share decrease in non same store NOI due to our late 2025 and anticipated first quarter 2026 disposition activity.

This $0.15 per share cumulative decrease in quarterly sequential core FFO is partially offset by an approximate $0.05 per share increase in core FFO related to our share repurchase activity. And finally, we plan on launching a new 400 to $500 million bond transaction later this quarter. At this time we will open the call up to questions.

Question & Answers

Operator

We will now begin the question and answer session. To ask a question, you may press Star then one on your touchtone phone. If you’re using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star. And then two Our first question comes from Eric Wolf with Citi. Please go ahead.

Nicholas Joseph

Thanks. It’s Nick Joseph here with Eric just on the Southern California Portfolio sale keeps talk about why now is the right time to do that. You know, just given obviously the considerations of California right now. Obviously I think over the past few years you’ve thought about kind of that portfolio exposure relative to the rest. And so essentially why now?

Ric Campo — Chairman of the Board and Chief Executive Officer

I would say why now is because we think there’s going to be a pivot point in the Sunbelt growth story and we want to be in front of that rather than behind that. That’s number one so we think Sunbelt is going to grow, and when it turns, it’s going to turn.

It’s going to turn pretty strong and pretty hard, I believe. So that’s number one. Number two is if you look at the transaction volume across America, the coast have been the most vibrant transaction environment. When you think about if you’re a developer and you want to, you need to sell your, you know, development deal you did, you’d rather not sell it in Austin today. But in fact, California has had really decent revenue growth. So you don’t have to, you know, buyers are not having to kind of pick the point when they think the market is going to turn and go up.

It continues to be a pretty vibrant market. So those are the two main reasons, and I guess the last would be when we think about the ability to execute the transaction in a very buoyant buyer market, we also look at the opportunity to redeploy the capital, not only in the Sunbelt, but also to buy the shares. And so when we can sell the California portfolio at a cap rate that’s substantially less than our implied cap rate that’s implied in our stock, that’s what kind of drove the decision, those three things.

Nicholas Joseph

Thanks. And then, you know, you’re marketing that as a portfolio.

But how are you thinking about either splitting up into smaller portfolios or individual assets, or is the goal really to sell it all at once?

Ric Campo — Chairman of the Board and Chief Executive Officer

Well, the good news is that there’s lots of buyers and there are lots of different permutations of the portfolio and how it can be either done in a portfolio deal or individually. And what we’re going to do is maximize the purchase price, whether it’s individually or separate or combinations of thereof.

Nicholas Joseph

Thank you.

Operator

And the next question comes from Jamie Feldman with Wells Fargo. Please go ahead.

James Feldman — Analyst, Wells Fargo

Great. Thank you. I guess just going back to some of your guidance and, you know, the thoughts on a pickup in the second half. Can you just walk us through your thoughts, your thoughts on new and renewal rents and blends as you go throughout the year? And are there any markets that are more or less concerning as you think about hitting your numbers? Thank you.

Ric Campo — Chairman of the Board and Chief Executive Officer

Yeah, absolutely. So what we’re Expecting in the first quarter is slight improvements versus 4Q25 in both in terms of new leases and renewals, which obviously will translate to slight improvement on a blended rate for 1Q26. As we go through the second quarter and beyond, we’re going to have a lot more visibility because we’ll start to get into our peak leasing seasons and at that point in time, we’ll give you some more color on exactly what we assume for new lease renewals and blends for the rest of the year. But I will tell you, obviously included in our numbers is an improvement and is an improvement at the back half of the year, which is what I said in the prepared remarks.

When I look at individual markets, you know, as Keith walked through when he gave his letter grades, certainly we’ve got quite a few markets that are improving and really we don’t have any markets that are declining. So based upon that, there’s nothing that really sort of jumps out to us as a big concern. We’re absolutely seeing green shoots in some of our markets that have been a little more challenged throughout last year and the year prior. So we feel like we’re in good shape. But obviously we need to get into the peak leasing seasons and see how the rest of this year unfolds.

Operator

And the next question comes from Yawn Gallen with Bank of America. Please go ahead.

Jana Galan

Thank you. Good morning. Question on the guidance, and thank you for covering some of this in your prepared remarks. But can you clarify how to think about the timing of the 1031 exchange acquisitions? And, you know, I think some of the myths relative to the street may be that you’re a net seller this year, but it does also sound like some of the share buyback activity is front end loaded. So if you could kind of help me kind of walk through that.

Ric Campo — Chairman of the Board and Chief Executive Officer

Yeah, absolutely. So for the full year, when we look at California, and when I say California, I’m picking up the California sale, the redeployment of about $1.1 billion of capital into the Sun Belt, the redeployment of about $650 million of capital into share repurchases. When we look at all of that combined, effectively, we’re saying it has no net impact whatsoever to 2026 guidance. When you think about timing, the anticipation is that California closes mid year. The anticipation also is that the $1.1 billion of redeployment happens in the summer months. So call that mid year as well.

So there may be some slight, slight little delays where we may sell before we buy, but we’re trying to get as efficient as we possibly can on that entire process. And then when you look at share repurchases at our stock price today, we think we’re a screaming buy. And so we’re certainly going to be doing the share prices earlier as soon as we can get them done. So that’s how it lays out for the full year. As it comes to differential between our numbers in the street, I really don’t think a part of it is California because as I said, it’s just a net neutral.

Operator

The next question comes from Steve Sacwa with Evercore isi. Please go ahead.

Steve Sakwa — Analyst, Evercore Isi

Yeah, thanks. You guys are obviously penciling in some development starts this year. Could you maybe just talk about your expectations for stabilized returns? What are you seeing on costs and you know, how are you underwriting rents today in those development projects? Thanks.

Ric Campo — Chairman of the Board and Chief Executive Officer

Yeah, start with the cost. Go ahead, Alex.

Alex Jessett — President and Chief Financial Officer

Yes, so on a cost basis, here’s the good news is costs are coming down. We’re seeing anywhere between 5 to 8% reduction in costs. But clearly developments are still hard to pencil. And if you can you look at our activity in 25 and it was more muted and you look at the guidance that we have for 26 and we’re saying that any starts are going to be in the latter half of the year. We do have a couple land sites that we own and we have a couple of other land sites that we control that we clearly could close on and could start this year.

But developments continue to be a challenge. When we look at rental rates, obviously the way we sort of think about things is we try not to look at trended too much. We try to look at what everything looks like on an untrended basis. And we’re seeing really sort of in line with, call it five, five and a half on an untrended basis, which can get you up to sort of a six on a trended basis.

Operator

And the next question comes from Alexander Goldfarb with Piper Sandler. Please go ahead.

Alexander Goldfarb — Analyst, Piper Sandler

Hey, good morning down there. Can we just get a bit more color on the 14 million of legal expenses? And I know that you guys switched to core from a nareit, but still across the industry, these legal expenses, settlement, political advocacy, whatever in aggregate is all becoming more regular part of the business. So if you just talk one, on the 14 million and two, how you guys are thinking about legal political advocacy and stuff on a go forward basis.

Alex Jessett — President and Chief Financial Officer

Yes, I’ll hit the first part. And so the first part is that 14 million is the combined number of non core adjustments which includes legal and costs associated with development, acquisition activity, et cetera. But legal costs, it’s well known that the legal battles that we’re in the middle of and legal cost is becoming a significant number. And the good news is that it will go away at some point. Right. This is some very specific actions that you guys know about those things will resolve itself and will return to a more, a more normal cadence when it comes to that category in terms of how we’re thinking about activation. Rick.

Ric Campo — Chairman of the Board and Chief Executive Officer

Sure. So when you think about the. Let me just talk about political action issues. And this is a pretty simple, simple math. So in the last five years, our political action activity was primarily dominated in California. 92% of our spend on political advocacy was in California. And so once we close that portfolio, the political advocacy in the Sunbelt is pretty much zero.

Operator

And the next question comes from Michael Goldsmith with ubs. Please go ahead.

Ami Probandt

Hi, thanks. This is Amy. I’m with Michael. What gives you confidence that you can redeploy the capital received from the asset sales within the 1031 window, given some of the increased competition that we’ve been seeing and pretty low cap rates across the Sunbelt? And then if you can’t redeploy it, what’s the potential impact to earnings? Is there a tax implication here that you would have to, that you would have to pay? Thanks.

Alex Jessett — President and Chief Financial Officer

Yeah. So we just came back from NMHC and I will tell you we talked to quite a few sellers that absolutely have portfolios, have individual assets, etc. That they would love for us to buy. Camden is a fantastic buyer and sellers recognize that because we don’t have financing contingencies, because they know we’re real, because we have been doing this for 30 years, three years. So we are the type of buyer that sellers want. So I don’t think we’re going to have an issue redeploying this capital. And not to mention that we’ve got one of the best acquisition teams in the business spread across the country tasked with doing this on a full time basis.

So I’m not very concerned about that. But I will tell you that if you look at the way we’re doing, our math is that there are tax consequences and if we cannot redeploy this capital, then we would likely have to do some type of a special dividend.

Operator

And the next question comes from Austin Warschmidt with Keybanc Capital Markets. Please go ahead.

Austin Wurschmidt — Analyst, Keybanc Capital Markets

Great, thank you. Just going back to the acquisition opportunities. Just wondering, you know, the types of deals that you’re looking at. Are these, you know, development deals that are in lease up, are they mostly stabilized transactions? And then could you just also talk about some of the specific markets you’re evaluating and whether there’s any new markets included in that.

Stanley Jones — Senior Vice President – Real Estate Investments

This is Stanley. So on the acquisition front, we are evaluating, we’re already evaluating a number of opportunities across all of our markets and those are stabilized opportunities both on and off market. So, you know, look, we’re going to continue to leverage all of our relationships to find opportunities to redeploy the proceeds from the California sale. So. And like Alex said, our investment team is up to the task. We did 423 million in acquisitions in 2025 and we certainly could have upsized that if we had wanted to.

So we’re very sanguine about the opportunity in front of us and are already making some headway with that.

Alex Jessett — President and Chief Financial Officer

And at this point we’re not anticipating any new markets.

Operator

And the next question comes from Hendell Saint, just with Mizuho. Please go ahead.

Haendel St. Juste

Hey there guys. Good morning. Another one on the SoCal portfolio trade. I guess a bit of a two parter. First, it looks like those assets are still in the same store pool and that taking them out would be about a 15 basis point drag to your annualized same store revenue forecast. So first of all, is that fair? And then secondly, if you’re able to actually achieve closer to the upper end of the range that you outlined, close to the 2 billion, I’m curious how you think about the incremental capital deployment of that if they would also be earmarked for acquisitions or any tax limitations there. Thanks.

Alex Jessett — President and Chief Financial Officer

Yeah. So as I mentioned in the prepared remarks, the impact of California coming out of same store will be about 25 basis points on revenue. So that’s how you need to think about it.

Ric Campo — Chairman of the Board and Chief Executive Officer

And I think on the issue of if portfolio sells for $2 billion, which we would really enjoy, we would increase the 1031 exchange pie and then probably increase the buyback.

Operator

And the next question comes from Brad Heforn with rbc. Please go ahead.

Brad Heffern — Analyst, Rbc

Yeah. Hey everybody, demand question. There obviously been a lot of issues with the job market for college graduates. I’m wondering if you’ve seen a noticeable impact on your business from that. And is that something that’s a potential. Upside lever if that, you know, proves to be just a 2025 phenomen?

Ric Campo — Chairman of the Board and Chief Executive Officer

You know, the job prospects for college graduates has been in 2025 was kind of the worst in a decade. And if you look at the unemployment rate for, you know, people in their 18 to 24, it’s at 10% right now. The other equate part of the equation too is if you look at those same, that same cohort living at home, it’s back to pre Covid levels. Meaning like in 2019 we’re back to 2019 levels and it was down big time over the last couple of years.

So on the one hand, it is definitely a tough market for those folks coming out of school, which could be a tailwind if in fact you have some sort of reasonable job growth in the second half of the year. There’s a fair number of folks that are pretty constructive about better job growth in 26 versus 25. When you think about the tailwinds of the big beautiful bill, the tax refunds people are going to get as a result of that and kind of the wind down of tariffs and some of those other things that have been a drag on the uncertainty aspect of the economy in 2025.

Because I think what happened then is right after Liberation Day, companies like us and many, many others just didn’t know how to react right. What’s going to happen and how’s it going to be. And so you had this sort of hiring freeze that happened. And the question will be whether that freeze unthaws in 2026 when you have a pretty stimulative construct with the economy. So I think it remains to be seen. I look at it as a potential tailwind when that demand is released because most of those people want to be on their own and rent an apartment from Camden.

Brad Heffern — Analyst, Rbc

Thanks.

Operator

And the next question comes from John Kim with DMO Capital Markets. Please go ahead.

John P. Kim — Analyst, DMO Capital Markets

Thank you. Alex, you gave the impact on same store revenue from California in 26. I’m wondering if you could provide that same figure for 25 just to get an Apples to Apples where same store revenue is going for your remaining portfolio. And then going forward, how do you think that impacts same store expenses? Just get it in California. Really help mitigate property taxes. What’s the going forward impact on same store expense growth?

Alex Jessett — President and Chief Financial Officer

Yeah. So if you look at 2025, the impact on revenue would have been the same 25 basis. Points. Point. So it’s consistent, it’s consistent in 25 as it is in 26. If you look at expenses for 2026, it doesn’t really have any impact whatsoever to our expense numbers on a go forward basis. You are right that Prop 13 does limit taxes, which is helpful to the growth rate in California. That being said, one of the things that we’ve absolutely experienced in our other markets when it comes to property taxes is they go up, but they also come. I mean, if you look at, if you look at our 2025 results, our property tax total growth was zero.

And so California was up, but most of our other markets were in fact down. So I don’t really think it’s going to have that much of an impact on expenses on a go forward basis.

Ric Campo — Chairman of the Board and Chief Executive Officer

Let me add to that that if you take the sort of portfolio cost, and I mentioned our political advocacy group expenses in California, if you take the last five or six years, say, and these costs by the way, are not in same store numbers, so they wouldn’t be in your same store occupancy numbers. But if you average the cost over that period of time, it’s 80 basis points off of your net operating income. So said another way, you know, if California is growing at a 4% NOI and the rest of our portfolio is growing at a 4% NOI, and we have to subtract that 80 basis points off of California because that’s included in our corporate GNA, CA really delivered a 3.2 NOI opposed to our compared to our rest of our country that didn’t have the same kind of operating costs embedded in our G and A.

So we were, we actually, when you look at the overall Sunbelt portfolio, outperformed California by 80 basis points because of that excess cost. But it’s not embedded in the NOI growth.

Operator

And the next question comes from Rich Hightower with Barclays. Please go ahead.

Richard Hightower — Analyst, Barclays

Good morning, guys. I think since Keith brought up 2027 as it relates to Austin specifically in the prepared comments, I’m going to assume 27 is in play for this call. So maybe as we think about a lot of your core markets going forward, just give us a sense of what that steepness of the recovery curve, that exit velocity, whichever metaphor you want to use, where do the markets stack up in your current forecasting as we think about the end of 26 and then into 27. Thank you.

Keith Oden — Executive Vice Chairman of the Board

Now we have to say we’re not going to give the guidance for 2027. But we will talk about it. Rich,

Richard Hightower — Analyst, Barclays

it’s a rank order, right?

Keith Oden — Executive Vice Chairman of the Board

Yeah, exactly. Exactly. So one of the things that’s kind of interesting about where we are and it gives us some additional degree of optimism about what the Sun Belt markets may look like not only in 20 at the end of 26, but in the 27th and beyond, is the fact that if you, if you look at Camden’s rents for properties in our portfolio that have been built in the last five years, we are, as we sit here today, we are back to the rent levels that we were achieving at the end of 2021. So we are about to start year five of basically no rental growth.

And this is unprecedented. I mean, in our 35 years of doing this, almost 40 years of doing this, we have never had a three year period where rents were flat to down and not even in the GFC, not even in Covid. So we are already four years in, we’re beginning 2026. And you see our guidance for 2026. If all this works out the way we expect it to, we will be four and a half years downwind of basically zero rental growth. And that, you know, that’s just not sustainable long term. And we’ve seen it coming out of the gfc, coming out of COVID when you get a turn and a pivot that Rick was talking about, it’s not, it doesn’t go from 1% to 2 and a half because it’s, you know, if you look, think about our average renter over that same period of time, our average renter’s wages, their actual household income has gone up an average of 4% a year over that five year period.

So their income’s up 20%, their rent’s basically flat. We’ve got. So our residents are incredibly financially healthy. And when it turns, it usually turns pretty hard. So hard. It’s always hard to pick that point. But it just feels like we are way, way down the trail of flat rent growth and due for something different.

Ric Campo — Chairman of the Board and Chief Executive Officer

The only thing I would add to that is that when you think about markets, we talked, Keith gave Austin a C, right. And the issue there is you’ve got really good drop growth, but you just had a whole lot of supply. You know, they added more than 15% of the supply in three years. And so Austin, Austin, Nashville are probably the ones that are a little slower to come out of the system. But all the rest of the markets are pretty much positioned for when that supply gets taken up over the next 12 months that they’re going to be, you’re going to have a, a situation where simple supply and demand economics work, which means that we’ll have more demand than supply and rents will go up.

The other thing to think about is when you, is that if you think about the way, the way concessions work, right? So when people are leasing up, they give a month free, they give two months free. If it’s really tough, maximum is three months free. But I don’t think there’s not very many places where it’s three months free. And so what developers do then, or operators is once they get to the point where they don’t need to give that month, they stop giving the month or the two, right? And so what happens then? And that’s if you stop giving a month, that’s an 8.3% increase immediately in the rent roll by eliminating one month.

So that’s where that’s the Keith’s point, that it doesn’t just all of a sudden you go from flat to 1%, 2% growth when you stop the concessions, it’s immediately, if it’s a one month free, it’s immediately an 8.3% increase in the rent roll on the next lease. So and then it just takes time to, you know, roll the leases over and get that revenue growth. So and that’s going to happen. It’s because of simple supply and demand. And if you think about when rents went up big time in 20, 21 and 22, it was a function of not enough supply and huge demand.

And you had increases that were unprecedented. If you go to St. Pete, for example, we had a 50% increase in rents in a three month period there. And the reason was we were at 98% occupied. We had a tiny number of units were available and the market price just skyrocketed as a result of that. And that’s simple supply and demand economics. And I think we have the recency effect that’s going on in the market today, meaning that, oh, three years of flat rent growth, it’s probably going to be another five years or six years of flat rent growth.

That just doesn’t happen long term. The market will work and supply and demand economics will move in our favor over the next few years.

Operator

And the next question comes from Rich Anderson with Cancer Fitzgerald, Please go ahead.

Richard Anderson

Hey, thanks. Good morning. And just file this one away for 2027 on hold music Austin POWERS theme song Just throwing that out there. So. My question is on new lease rate growth. Alex, you mentioned, you know, you’ll give an update as you get closer to the spring leasing season. But what I see, you know, from fourth quarter 24 it was negative 4.7, fourth quarter 25 is negative 5.3. I get it. You know, it takes some time for these things to happen. Even though that was post peak deliveries as you described it, Keith. So I’m wondering if you were to, you know, I think it’s an important metric to get that above the, you know, kind of the zero percent threshold eventually for multifamily to work again, particularly in the Sunbelt.

Do you think, you know, how probable possible or maybe even unlikely is it to see new lease rate growth this year, you know, somehow get above that 0% threshold? I know, you know, I know you perhaps want to be careful about, you know, setting expectations at this point but probable, possible, unlikely. What do you think?

Alex Jessett — President and Chief Financial Officer

Yes. So clearly that inflection point is very important. You’re exactly right. And my belief is that as soon as we all hit that inflection point, I think a whole lot of generalists that have been out of our stocks are going to come flooding to our stocks and we’re all going to see massive pops. So it’s just a matter of when. Definitely not if because it will occur. I think it’s probable. I think it’s probable that it could happen this year. Now obviously we’re going to continue to update you guys as we get each quarter’s worth of activities as we see what’s happening on site.

But I certainly think it’s probable.

Operator

And the next question comes from John Paloski with Green Street. Please go ahead. Please go ahead.

John Pawlowski — Analyst, Green Street

Thanks for the time. Forgive me if I missed this during the call late, but I wanted to talk a little bit about the change in the Denver regulation around utility rebilling or reimbursements and then any other income. So maybe if you could talk about for a minute the specific legislation and is there any other concerning draft legislation in other states or markets you’re in that might drive downward pressure on your ancillary income just given how proactive you’ve been over the years and with bundling services? And there’s a lot of, there’s a lot of non rental income for each unit.

So I’m concerned about longer term risk to your other income streams.

Alex Jessett — President and Chief Financial Officer

Yeah. So we didn’t talk about it in the prepared remarks. But what you’re referring to is House Bill 2510 90. And yes, this is new legislation that was put in place in Colorado effective January 1st of this year which no longer enables us to bill for common area utilities. It is a significant item for us. The total value of this is about $1.8 million. If you extrapolate that out, that’s close to 19 basis points of same store noi. So certainly is an issue. It’s something that we’re having to account for. And obviously we certainly do make sure that we monitor regulations that are out there.

The good news is that most of our markets, the reason why they grow so fast is because they’re pro business, pro growth. And obviously putting legislation like that in place is not pro business or pro growth. So not really worried about it in other places, but we’re certainly paying attention to Denver. I don’t know. Laura, do you have anything to add?

Laurie Baker — Executive Vice President – Chief Operating Officer

I mean, I would just add you asked about some of the specifics of Colorado. And the key impacts are no hidden rental fees. So it’s full transparency. We’re seeing this across the country. We’re all kind of mobilizing as an industry to ensure that there is transparency and that our residents know exactly what they’re paying for. But in this particular bill, the landlords have to show the tenants the full cost of renting before they sign anything. And that includes this common area maintenance and giving some estimates of what their utilities would be. And so that’s some of the impact here, trying to average out what you assume each renter’s utilities bills will be.

So that’s the impact we’re seeing. There’s certain things you are not allowed to charge back to our residents. So sub metering is important. Because of this restriction, we have submetered all of our properties and we did it fast and furious at the end of the year to make sure that we were able to capture as much of the information we needed. But it did eliminate any unclear utility pass through charges and just really requires more disclosures. And so that’s the impact overall. And as Alex said, I don’t think we’re expecting in any of our other markets something similar to this, but we are closely monitoring that within Camden as well as at the industry level.

And I play a big role with the National Multi Housing Council and this is something we’re paying attention to across the country.

Operator

And the next question comes from Alex Kim with Zelman and Associates. Please go ahead. Hey guys, thanks for taking my question.

Alex Kim — Analyst, Zelman And Associates

Do you talk about if you’re seeing any difference in performance or rent growth between your urban and suburban assets and your expectations through the balance of the year as well? Thanks.

Alex Jessett — President and Chief Financial Officer

Yeah, absolutely. So it’s interesting, our urban assets are absolutely doing better and really starting to gap out just a little bit in terms of what we saw in the fourth quarter. 25 revenue. And my gut is, and the way we’ve modeled it is that that’s probably going to continue as we go throughout 2026. This is a sort of a turnaround from what we saw obviously for about three or four years. So today what we’re seeing is Class A urban is doing a lot better. But of course they got impacted worse at points in time. So they had a little bit of gas in the tank to get back to where they were and go from there.

Operator

The next question comes from Julian Von with Goldman Sachs. Please go ahead.

Julien Blouin — Analyst, Goldman Sachs

Yeah, thank you for taking my question. I think you mentioned you’re expecting market rent growth of around 2% in your markets this year, I think on the third quarter call that was in the sort of 3 to 3.5 range. Maybe two quarters ago. I think third parties were maybe talking more over 4%. I guess what has changed the most in that outlook to sort of drive that revision downwards. And then as we think about that 2% expectation for this year, what does that assume in terms of job growth and sort of how do you think of maybe sort of the down case scenarios to that?

Alex Jessett — President and Chief Financial Officer

Yeah. So if you think about the way Rick started this call is he talked about uncertainty and this is clearly a time of uncertainty. And what all the economists and obviously what we’re doing is we’re talking about what economists are telling us. What the economists were looking at in mid-2025 is they were looking at the simple math that supply is falling off the cliff. And everybody recognizes that. The last time you got to the level of the supply that we’re expecting, everybody had some really, really large outsized growth. It’s just a matter of when does that actually happen and how quickly is all of the excess supply being absorbed.

And so obviously it’s taken a little bit longer to absorb some of that excess supply. I think we’ve hit on some of the reasons earlier in the call. If you looked at the hiring of May grads, that was obviously very weak. There’s obviously the job growth hasn’t been as great as everybody had expected and I think that’s been putting some pressure on it. But back to one of my earlier comments. It’s not a matter of if, it’s a matter of when. It’s absolutely going to occur that we’re going to see this momentum come back to us, but it’s just pushed back a little bit.

Ric Campo — Chairman of the Board and Chief Executive Officer

Yeah. Just specifically on the employment growth outlook 2025, Whitten had originally had job growth across Camden’s markets closer to 350,000. That is, everybody knows that got revised dramatically down. I think he ended up the year at 170. His forecast for 2026 is 257,000 jobs across Camden’s market. So, you know, part of the head fake for forecasters and everybody that looks at this data was that, you know, a million jobs sort of evaporated that were reported as created in 2025. That as it turns out, after all the revisions, it was not anything close to that. So some of it was probably just in the data set.

People like that look at this and use the BLS statistics or we’re using numbers that got revised away. So hopefully we’re we’re on track with better data for, for 20, 26 and 257,000 jobs across Camden’s platform would be a really good year for us, particularly in light of what Alex described as, you know, we got, we’re about to get, getting close to the end of this outsized development pipeline that we’ve had. To work our way through for the last three years.

Operator

The next question comes from Alexander Goldfarb with Piper Sandler. Please go ahead.

Alexander Goldfarb — Analyst, Piper Sandler

Hey, thank you for taking the follow up. Just want to go back to the comments on lack of rent growth. Certainly in the past number of years everything else has gone up. Uber rides, groceries, everyone has streaming services, et cetera. So Rick, do you think the traditional sort of 20% rent to income still holds or do you think because of inflationary pressure on people’s lives plus all their other activities and subscriptions that maybe that number is no longer 20%? Maybe it’s something lower than that.

Ric Campo — Chairman of the Board and Chief Executive Officer

No, I don’t think so. I think that, I think that that number is still a really good number.

At 20 people are very, it’s a very affordable thing. If you look at the, at the, at the real job growth or real wage growth over the last three and a half years, four years, it’s, it’s 4 to 5%. And that’s real, that’s after inflation. Right. So the thing that’s interesting when you think about, when I think think about our customers, we spend a lot of time, you know, getting, trying to get inside their financial, you know, ads and also in what their preferences are for apartments and things like that, you know, and you look at the, like the, you know, the forward consumer, you know, confidence numbers and stuff like that and affordability is like the big question today.

But when you look at our demographic average income of $121,000 for our resident base, their earnings are going up 4 to 5% on a real basis for the last three to five years. Then you go, well what’s really happening to them? Why are they unhappy? Why is the consumer confidence, you know, at low levels? Part of it is just the psychology that you had high inflation and price, everything kind of went up. And then I think the bigger psychological issue and this gets to the overall housing market, which includes single family market, the single family for sale market and the inflation numbers really haven’t caught the, haven’t done this kind of concept on housing.

So Covid with low interest rates and increased demand drove housing prices up dramatically. Interest rates doubled on the 30 year mortgage. So the attainability of A single family home today is so expensive relative to what it was pre Covid that that’s hanging on the, I think on the consumer’s mind a lot. And so even though their financial picture is pretty good, they still feel really bad about the economy and about because of this single family house price issue and just the narrative that’s going on because if you think about other big ticket items like, like the price of gasoline and I filled up my Suburban the other day and it was $2.17 a gallon.

So even though you have food prices that are continuing to be elevated and some other costs that went up because of inflation, gas prices are down, rents are flat. So I think it’s a psychological issue that we have with American consumers today that that isn’t as real from a pure dollars and cents perspective. From an apartment perspective, it’s more of an overarching issue. And unfortunately that overarching issue makes people think everything’s more expensive even though their finances are pretty good.

Mason P. Guell

And the next question comes from Mason. Gel with Baird, please go ahead.

Mason P. Guell

Hey, good morning everyone. Looks like your revenue enhancing and repositioning capex guide is down from last year. Can you talk about why this has guided lower and what initiatives you are working on within this category?

Alex Jessett — President and Chief Financial Officer

Yeah, so on the, on the reposition side it is down slightly. But you have to keep in mind we’re now this is something that we do every year and we are reaching the point in time where we’ve done probably 70 to 80% of our portfolio and there’s a little less opportunities to be there this year. But I will tell you I still believe this is one of our absolute best uses of capital. Absolutely plan to continue to do it. And I will tell you that I have no doubt that our repositioning team is listening to this call and they’re probably very excited that somebody else is noticing all their good work that they’re doing.

So yes, we will continue to do this. It’s a good use of capital for us.

Operator

And the final question comes from John Pawlowski with Green Street. Please go ahead.

John Pawlowski — Analyst, Green Street

Thanks for taking the follow up. I want to go back to the development economics question. So the four properties that you have in the pipeline today on current market rents, can you give me an estimate on like where these would be yielding today? Or is it in that low, that 5 to 5.5% range? Alex, you quoted on the shadow development pipeline? I’m just wondering how these four assets are kind of trending given the malaise in market rent growth the last Few years.

Alex Jessett — President and Chief Financial Officer

Yeah. If you look at our development pipeline that we’ve actually put out there, it’s two deals, which is Baker in Denver and Gulch in Nashville. And then what I told you is that we’ve got a couple other sites that we control and those sites that we control and we could close on this year and in fact start this year. When I look at those sites, those returns are a little bit better. Those returns are penciling on those couple of sites to sort of call it the. The mid five on an untrended basis. Baker and Gulch are more challenging.

This is why, if you look in our math, originally we had them as 20, 25 starts, and now I’ve got them as potentially late 20, 26 starts. So the math is. I think everybody’s pretty well aware of what’s going on in Denver, at least downtown Denver. It’s a tough place, tough place to develop today. I do think the economics are going to get better, but we’re certainly waiting to see if those economics get better. Before we get started, we talked about buyouts. Buyouts are absolutely coming down 5 to 8%, but maybe they’ll come down a little bit more, which makes that economics better.

Then I would say the same thing about our deal in downtown Nashville. Nashville is a fantastic market, but everybody knows that downtown Nashville is very oversupplied. And so we’re waiting to see a little bit more clarity. And when we see some more clarity in that market and we can take a look at the economics and make sure it makes sense to start. But if we can’t do it on a way that’s accretive to our shareholders, we’re not going to. But right now we’re patient and we’re going to find the right time to start, which is penciled to be towards.

The end of this year.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Rick Campo for any closing remarks.

Ric Campo — Chairman of the Board and Chief Executive Officer

Thank you. We appreciate you being on the call today. And we’ll see you soon or talk to you soon, I’m sure. Thanks.

Operator

Conference has now concluded. Thank you for attending today’s presentation. You may now disconnect. .