Camden lowers NOI outlook after same-property income declines 0.2%

Camden Property Trust (NYSE:CPT) kept its recurring earnings target intact but trimmed its full-year outlook after same-property net operating income slipped 0.2% in the third quarter. The Houston-based apartment owner reported diluted Core Funds from Operations of US$1.71 per share for the three months ended September 30, US$0.02 above its guidance midpoint, while reducing its 2026 diluted EPS midpoint by US$0.49 to US$9.44.

Same-property income remains under pressure

The underlying operating picture was considerably less dramatic than the headline EPS result. Same-property revenue was down 0.1% year on year and same-property NOI declined 0.2%, despite occupancy edging up to 95.6% from 95.5%. Effective new lease rates fell 2.0%, although renewal rates rose 3.6%, producing a 1.0% increase in blended lease rates.

Camden now expects 2026 same-property NOI to decline 1.00% at the midpoint, compared with its previous forecast for a 0.60% decline. The revised range is negative 1.50% to negative 0.50%. Revenue growth guidance was also reduced to a midpoint of zero, while expense growth is expected to reach 1.75%.

California sale reshapes the reported numbers

GAAP earnings were lifted by the July sale of 11 California communities containing 3,620 apartments for approximately US$1.6 billion. Camden recognised a gain of roughly US$1.0 billion, contributing to diluted EPS of US$8.71 for the quarter, compared with US$1.00 a year earlier. That gain is excluded from FFO, making the US$1.70 of diluted FFO and US$1.71 of Core FFO more useful measures of recurring performance.

About US$0.9 billion of the sale proceeds was used to retire borrowings under Camden’s revolving credit facility and commercial paper programme. The company also repurchased US$50.0 million of shares during the quarter, taking year-to-date repurchases to US$472.8 million, with US$247.9 million remaining under the buyback authorisation.

Capital remains available for acquisitions and development

Camden ended September with approximately US$1.8 billion of liquidity and US$209.3 million left to fund its existing wholly owned development pipeline. It acquired three communities in Tampa, Charlotte and Nashville for a combined US$305.2 million, while construction began at Camden RTP in Morrisville, North Carolina. Four communities under construction represent 1,560 homes and an estimated total cost of US$618.0 million, but only 17% of the pipeline was leased as of October 31.

Core FFO guidance for 2026 remains at US$6.73 to US$6.77 per diluted share, with a midpoint of US$6.75. Fourth-quarter Core FFO is forecast at US$1.63 to US$1.67 per share. The next test is whether occupancy and renewal gains can offset weaker new-lease pricing and rising costs once the one-off benefit of the California disposal falls further into the background.