Camden Property Trust

05/01/2026 | Press release | Distributed by Public on 05/01/2026 10:06

Quarterly Report for Quarter Ending 3/31/26 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the condensed consolidated financial statements and notes appearing elsewhere in this report, as well as Part I, Item 1A, "Risk Factors" within our Annual Report on Form 10-K for the year ended December 31, 2025. Historical results and trends which might appear in the condensed consolidated financial statements should not be interpreted as being indicative of future operations.
We consider portions of this report to be "forward-looking" within the meaning of Section 27A of the Securities Act of 1933 (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), both as amended, with respect to our expectations for future periods. Forward-looking statements do not discuss historical facts, but instead include statements related to expectations, projections, intentions, or other items relating to the future; forward-looking statements are not guarantees of future performance, results, or events. Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, we can give no assurance our expectations will be achieved. Any statements contained herein which are not statements of historical fact should be deemed forward-looking statements. Reliance should not be placed on these forward-looking statements as these statements are subject to known and unknown risks, uncertainties, and other factors beyond our control and could differ materially from our actual results and performance.
Factors which may cause our actual results or performance to differ materially from those contemplated by forward-looking statements include, but are not limited to, the following:
•Volatility in capital and credit markets, cost increases, or other unfavorable changes in economic conditions, either nationally or regionally in one or more of the markets in which we operate, could adversely impact us;
•Short-term leases could expose us to the effects of declining market rents;
•We could be negatively impacted by the risks associated with land holdings and related activities;
•Development, repositions, redevelopment and construction risks could impact our profitability;
•Our acquisition strategy may not produce the cash flows expected;
•Changes in rent control or rent stabilization laws and regulations could adversely affect our operations and property values;
•Failure to qualify as a REIT could have adverse consequences;
•Tax laws could continue to change at any time and any such legislative or other actions could have a negative effect on us;
•A cybersecurity incident and other technology disruptions could negatively impact our business;
•We have significant debt, which could have adverse consequences;
•Insufficient cash flows could limit our ability to make required payments for debt obligations or pay distributions to shareholders;
•Issuances of additional debt may adversely impact our financial condition;
•We may be unable to renew, repay, or refinance our outstanding debt;
•Failure to maintain our current credit ratings could adversely affect our cost of funds, related margins, liquidity, and access to capital markets;
•Share ownership limits and our ability to issue additional equity securities may prevent takeovers beneficial to shareholders;
•The form, timing, and amount of dividend distributions in future periods may vary and be impacted by economic and other considerations;
•Litigation risks could affect our business;
•Damage from catastrophic weather and other natural events could result in losses;
•Competition could adversely affect our ability to acquire properties;
•We could be adversely impacted due to our share price fluctuations; and
•Rising interest rates could increase our borrowing costs, lower the value of our real estate, and decrease our share price, leading investors to seek higher yields through other investments.
These forward-looking statements represent our estimates and assumptions as of the date of this report, and we assume no obligation to update or supplement forward-looking statements because of subsequent events.
Executive Summary
Camden Property Trust and all consolidated subsidiaries are primarily engaged in the ownership, management, development, reposition, redevelopment, acquisition, and construction of multifamily apartment communities. We focus on investing in markets characterized by high-growth economic conditions, strong employment, and attractive quality of life which we believe leads to higher demand for our apartments and retention of our residents. As of March 31, 2026, we owned interests
in, operated, or were developing 174 multifamily properties comprised of 59,416 apartment homes across the United States. In addition, we own other land holdings which we may develop into multifamily apartment communities in the future.
Business Environment and Current Outlook
Our results for the three months ended March 31, 2026 reflect an increase in same store revenues of approximately 0.2% compared to the same period in 2025, driven primarily by higher other income. We believe resident retention remains strong, supported by favorable demographics trends and continued demand for multifamily housing in our markets.
We believe the levels of new multifamily supply in the submarkets and asset classes in which we operate are manageable and moderating levels of supply should be met with continued demand to absorb these new deliveries. However, if this were to change or other economic conditions were to worsen, our operating results could be adversely affected.
Consolidated Results
Net income attributable to common shareholders was $42.4 million and $38.8 million for the three months ended March 31, 2026 and 2025, respectively. The $3.6 million increase during the three months ended March 31, 2026 as compared to the same period in 2025 was primarily due to a gain on sale of an operating property, including land, of $68.1 million, partially offset by higher other non-operating expenses of approximately $59.1 million primarily due to the settlement of a class action matter and an impairment charge related to certain technology investments. See further discussion of our 2026 operations as compared to 2025 in "Results of Operations," below.
Construction and Development Activity
At March 31, 2026, we had a total of three properties under construction comprising 1,162 apartment homes. As of March 31, 2026, we estimated the total additional cost to complete the construction of these three properties was approximately $176.6 million.
Litigation Update
On April 7, 2026, we entered into a binding term sheet to settle the RealPage class action litigation matter related to the use of a revenue management software. We and the plaintiffs agreed to negotiate and execute a long-form settlement agreement on or before May 7, 2026, which will be subject to preliminary and final approval by the court. Under the term sheet, we agreed to pay an aggregate of $53.0 million to settle all claims which have been asserted, or could have been asserted, against us in the litigation, inclusive of class member recoveries, plaintiffs' attorneys' fees, and the costs of administering the settlement.
Dispositions
During the three months ended March 31, 2026 we sold one operating property in Irving, Texas for approximately $77.0 million and recognized a gain of approximately $67.9 million.
Debt
In February 2026, we issued $600.0 million of 4.90% senior unsecured notes due February 28, 2036.
In March 2026 we amended and restated our existing credit facility to (i) remove a $300 million unsecured term loan facility with a delayed draw feature and (ii) extend the maturity date of the unsecured revolving credit facility from August 2026 to March 2030, which may be extended at the Company's option for two additional consecutive six-month periods.
In March 2026, we also repaid the principal amount of one of our conventional mortgage secured notes payable, which matured on April 1, 2026, for a total of $12.0 million, plus accrued interest.
Share Repurchases
In January 2026, we repurchased 1,096,807 common shares at an average price of $110.03 per share for approximately $120.7 million under our then-existing share repurchase plan, which authorized up to $500.0 million of our common equity securities through open-market purchases, block purchases, and privately negotiated transactions.
In February 2026, our Board of Trust Managers authorized a new share repurchase plan of up to $600.0 million. During February and March 2026, we repurchased an additional 1,536,223 common shares at an average price of $102.91 per share, and a total cost of approximately $158.1 million under the share repurchase plan authorized in February 2026. In April 2026, we repurchased 1,429,136 common shares at an average price of $100.78 per share for approximately $144.1 million. As of the date of this filing, $297.8 million remained available for repurchases under our share repurchase plan.
Leadership Changes
On March 27, 2026, the Company announced leadership changes effective March 24, 2026. Richard J. Campo, our former Chief Executive Officer and Chairman of the Board of Trust Managers, became the Executive Chairman of the Board of Trust Managers. Additionally, Alexander J. Jessett became the Chief Executive Officer of the Company, Laurie A. Baker became the President and Chief Operating Officer of the Company, and Benjamin D. Fraker became the Executive Vice President-Chief Financial Officer and Treasurer of the Company.
Subsequent Events
In April 2026, we acquired two operating properties, consisting of a 269-apartment home community in the Atlanta, Georgia metropolitan area and a 288-apartment home community in Orlando, Florida for approximately $171.3 million.
In April 2026, we created an at-the market ("ATM") share offering program through which we can, but have no obligation to, sell common shares and we may also enter into separate forward sale agreements with forward purchasers for an aggregate offering price of up to $500.0 million (the "2026 ATM program"). As of the date of this filing, we have $500.0 million available for sale under this program.
Future Outlook
Subject to market conditions, we intend to continue to seek opportunities to acquire operating communities, develop new communities, and to redevelop and reposition existing communities. We also intend to evaluate our portfolio and plan to continue our practice of selective dispositions and redeploying capital as market conditions warrant and opportunities arise. We expect to maintain a strong balance sheet and preserve our financial flexibility by continuing to focus on our core fundamentals which we believe are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs. We intend to meet our near-term liquidity requirements through a combination of one or more of the following: cash flows generated from operations, draws on our unsecured revolving credit facility and commercial paper program, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from our ATM program, and other unsecured borrowings or secured mortgages.
As of March 31, 2026, we had approximately $1.2 billion available under our unsecured revolving credit facility and currently plan to use our unsecured revolving credit facility as a liquidity backstop for borrowings under the commercial paper program; at March 31, 2026, we had $358.8 million outstanding under our commercial paper program. Over the next 12 months, contractual debt maturities include these commercial paper borrowings as well as other debt obligations of $663.8 million. Additionally, as of the filing date we had common shares with an aggregate offering amount of up to $500.0 million remaining available for sale under our 2026 ATM program. We believe we are well-positioned with a strong balance sheet and sufficient liquidity to fund future acquisitions, new development, redevelopment, and other capital requirements including scheduled debt maturities. We will, however, continue to assess and take further actions we believe are prudent to meet our objectives and capital requirements.
Property Portfolio
Our multifamily property portfolio is summarized as follows:
March 31, 2026 December 31, 2025
Number of
Homes 		Properties Number of
Homes 		Properties
Operating Properties
Houston, Texas 8,207 23 8,207 23
Washington, D.C. Metro 6,194 17 6,194 17
Dallas/Fort Worth, Texas 5,424 13 5,940 14
Orlando, Florida 4,276 12 4,276 12
Atlanta, Georgia 4,270 14 4,270 14
Phoenix, Arizona 4,094 13 4,094 13
Raleigh, North Carolina 4,041 11 4,041 11
Austin, Texas 4,038 12 4,038 12
Charlotte, North Carolina 3,510 15 3,510 15
Tampa/St. Petersburg, Florida 3,464 9 3,464 9
Southeast Florida 3,050 9 3,050 9
Denver, Colorado 2,873 9 2,873 9
Los Angeles/Orange County, California 1,823 5 1,812 5
March 31, 2026 December 31, 2025
Number of
Homes 		Properties Number of
Homes 		Properties
San Diego/Inland Empire, California 1,797 6 1,797 6
Nashville, Tennessee 1,193 3 1,193 3
Total Operating Properties 58,254 171 58,759 172
Properties Under Construction
Charlotte, North Carolina 769 2 769 2
Nashville, Tennessee 393 1 393 1
Total Properties Under Construction 1,162 3 1,162 3
Total Properties 59,416 174 59,921 175
Completed Construction in Lease- Up
At March 31, 2026, there was one completed operating property in lease up as follows:
($ in millions)
Properties and Locations
Number of
Homes
Cost
Incurred (1)
% Leased at 4/29/2026 Date of
Construction
Completion 		Estimated
Date of
Stabilization
Camden Village District
Raleigh, NC 369 $139.4 72% 3Q25 1Q27
(1) Excludes leasing costs, which are expensed as incurred.
Properties Under Development and Land
Our condensed consolidated balance sheet at March 31, 2026 includes approximately $458.0 million related to properties under development and land. Of this amount, approximately $315.4 million related to our projects currently under construction. In addition, we had approximately $142.6 million primarily invested in land held for future development and land holdings, which included approximately $97.7 million related to land held for future development and $44.9 million invested in land which we may develop in the future.
Properties Under Construction. At March 31, 2026, we had three properties in various stages of construction as follows:
($ in millions)
Properties and Locations
Number of
Homes 		Estimated
Cost 		Cost
Incurred 		Estimated
Date of
Construction
Completion 		Estimated
Date of
Stabilization
Camden South Charlotte
Charlotte, NC 420 $ 157.0 $ 128.0 2Q27 4Q28
Camden Blakeney
Charlotte, NC 349 151.0 103.0 3Q27 3Q28
Camden Nations
Nashville, TN 393 184.0 84.4 3Q28 2Q30
Total 1,162 $ 492.0 $ 315.4
Development Pipeline Communities. At March 31, 2026, we had the following multifamily communities undergoing development activities:
($ in millions)
Properties and Locations
Projected Homes
Total Estimated Cost (1)
Cost to Date
Camden Baker
Denver, CO 434 $ 191.0 $ 40.9
Camden Gulch
Nashville, TN 498 300.0 56.8
Total 932 $ 491.0 $ 97.7
(1)Represents our estimate of total costs we expect to incur on these projects. However, forward-looking estimates are not guarantees of future performance, results, or events. Although we believe these expectations are based upon reasonable assumptions, future events rarely develop exactly as forecast, and estimates routinely require adjustment.
Land Holdings. At March 31, 2026, we also had four undeveloped land tracts with a valuation of approximately $44.9 million.
Results of Operations
Changes in revenues and expenses related to our operating properties from period-to-period are due primarily to the performance of stabilized properties in the portfolio, the lease-up of newly-constructed properties, and the impact of acquisitions and dispositions.
Management considers property net operating income ("NOI") to be an appropriate supplemental measure of operating performance to net income because it reflects the operating performance of our communities without an allocation of corporate level property management overhead or general and administrative costs. We define NOI as total property revenue less total property operating expenses. NOI is further detailed in the Property-Level NOI table as seen below, and is not defined by accounting principles generally accepted in the United States of America ("GAAP") and should not be considered an alternative to net income as an indication of our operating performance. Additionally, NOI as disclosed by other REITs may not be comparable to our calculation.
Reconciliations of net income to NOI for the three months ended March 31, 2026 and 2025 are as follows:
Three Months Ended
March 31,
(in thousands) 2026 2025
Net income $ 44,374 $ 40,767
Less: Fee and asset management income (2,143) (2,487)
Less: Interest and other income (253) (10)
Less: Loss/(income) on deferred compensation plans 1,159 (1,198)
Plus: Property management expense 10,258 9,895
Plus: Fee and asset management expense 661 671
Plus: General and administrative expense 14,705 16,948
Plus: Interest expense 37,359 33,790
Plus: Depreciation and amortization expense 150,000 149,252
Plus: (Benefit)/expense on deferred compensation plans (1,159) 1,198
Plus: Other non-operating expenses 60,905 1,760
Less: Gain on sale of operating property, including land (68,100) -
Plus: Income tax expense 938 559
Net operating income $ 248,704 $ 251,145
Property-Level NOI (1)
Property NOI, as reconciled above, is detailed further into the following categories for the three months ended March 31, 2026 as compared to the same period in 2025:
($ in thousands) Homes at Three Months Ended
March 31, 		Change
3/31/2026 2026 2025 $ %
Property revenues:
Same store communities 54,105 $ 360,009 $ 359,261 $ 748 0.2 %
Non-same store communities
3,780 23,304 15,775 7,529 47.7
Development and lease-up communities
1,531 1,281 35 1,246 *
Dispositions/Other - 4,179 15,494 (11,315) (73.0)
Total property revenues
59,416 $ 388,773 $ 390,565 $ (1,792) (0.5) %
Property expenses:
Same store communities 54,105 $ 127,591 $ 125,188 $ 2,403 1.9 %
Non-same store communities
3,780 9,692 6,780 2,912 42.9
Development and lease-up communities
1,531 575 31 544 *
Dispositions/Other - 2,211 7,421 (5,210) (70.2)
Total property expenses
59,416 $ 140,069 $ 139,420 $ 649 0.5 %
Property NOI:
Same store communities 54,105 $ 232,418 $ 234,073 $ (1,655) (0.7) %
Non-same store communities
3,780 13,612 8,995 4,617 51.3
Development and lease-up communities
1,531 706 4 702 *
Dispositions/Other - 1,968 8,073 (6,105) (75.6)
Total property NOI
59,416 $ 248,704 $ 251,145 $ (2,441) (1.0) %
* Not a meaningful percentage.
(1) For 2026, same store communities are communities we wholly-owned and were stabilized since January 1, 2025, excluding communities under redevelopment and properties held for sale. Non-same store communities are stabilized communities not owned or stabilized since January 1, 2025, including communities under redevelopment and excluding properties held for sale. We define communities under redevelopment as communities with capital expenditures which improve a community's cash flow and competitive position through extensive unit, exterior building, common area, and amenity upgrades. Management believes same store information is beneficial as it allows both management and investors the ability to determine financial results over a particular period for the same set of communities. Development and lease-up communities are non-stabilized communities we have developed since January 1, 2025, excluding properties held for sale. Dispositions/Other includes those communities disposed of or held for sale which are not classified as discontinued operations, non-multifamily rental properties, expenses related to land holdings not under active development, and other miscellaneous revenues and expenses, including net above or below-market leases, casualty-related expenses net of recoveries, and severance related costs.
Same Store Analysis
Same store property NOI decreased approximately $1.7 million for the three months ended March 31, 2026 as compared to the same period in 2025.
The $1.7 million decrease in same store property NOI for the three months ended March 31, 2026 was primarily due to an increase in same store property expenses of approximately $2.4 million, which exceeded the approximately $0.7 million increase in same store property revenues as compared to the same period in 2025.
The $0.7 million increase in same store property revenues during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to an increase of approximately $1.2 million from our utility and ancillary income programs, partially offset by changes to occupancy of approximately $0.5 million.
The $2.4 million increase in same store property expenses during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to higher real estate taxes of approximately $0.9 million and increased salaries and benefits of approximately $0.8 million. The increase was also due to higher utilities of approximately $0.3 million, increased general and administrative expense of approximately $0.3 million, and higher repair and maintenance expense of approximately $0.1 million.
Non-same Store and Development and Lease-up Analysis
Property NOI from non-same store and development and lease-up communities increased approximately $5.3 million for the three months ended March 31, 2026 as compared to the same period in 2025.
The increase was related to higher NOI from our non-same store communities of approximately $4.6 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was primarily due to the acquisition of four operating properties and the stabilization of three operating properties during 2025.
The increase was also related to higher NOI from our development and lease-up communities of $0.7 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was due to the timing of lease-up for one operating property which completed construction during the third quarter of 2025.
The following table details the changes, described above, relating to non-same store and development and lease up NOI:
(in millions) For the three months ended March 31, 2026 as compared to 2025
Property Revenues:
Revenues from acquisitions $ 6.6
Revenues from non-same store stabilized properties 0.9
Revenues from development and lease-up properties 1.2
$ 8.7
Property Expenses:
Expenses from acquisitions $ 2.8
Expenses from non-same store stabilized properties 0.1
Expenses from development and lease-up properties 0.5
$ 3.4
Property NOI:
NOI from acquisitions $ 3.8
NOI from non-same store stabilized properties 0.8
NOI from development and lease-up properties 0.7
$ 5.3
Dispositions/Other Property Analysis
Dispositions/other property NOI decreased approximately $6.1 million for the three months ended March 31, 2026, as compared to the same period in 2025 primarily due to higher NOI related to seven dispositions completed in 2025, as compared to one disposition completed during the three months ended March 31, 2026.
Non-Property Income
($ in thousands) Three Months Ended
March 31, 		Change
2026 2025 $ %
Fee and asset management $ 2,143 $ 2,487 $ (344) (13.8)%
Interest and other income 253 10 243 *
(Loss)/income on deferred compensation plans (1,159) 1,198 (2,357) *
Total non-property income $ 1,237 $ 3,695 $ (2,458) (66.5) %
* Not a meaningful percentage.
Fee and asset management income from construction and development activities at our third-party construction projects decreased approximately $0.3 million for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease in fees was primarily due to lower third-party construction activity as compared to the same period in 2025.
Our deferred compensation plans incurred a loss of approximately $1.2 million during the three months ended March 31, 2026, compared to income of approximately $1.2 million for the same period in 2025. The change was related to the performance of the investments held in deferred compensation plans for participants and was directly offset by the (benefit)/expense related to these plans, as discussed below.
Other Expenses
($ in thousands) Three Months Ended
March 31, 		Change
2026 2025 $ %
Property management $ 10,258 $ 9,895 $ 363 3.7 %
Fee and asset management 661 671 (10) (1.5)
General and administrative 14,705 16,948 (2,243) (13.2)
Interest 37,359 33,790 3,569 10.6
Depreciation and amortization 150,000 149,252 748 0.5
(Benefit)/expense on deferred compensation plans (1,159) 1,198 (2,357) *
Other non-operating expenses 60,905 1,760 59,145 *
Total other expenses $ 272,729 $ 213,514 $ 59,215 27.7 %
* Not a meaningful percentage.
Property management expense, which represents regional supervision and accounting costs related to property operations, increased approximately $0.4 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was primarily related to higher salaries, benefits, and incentive compensation costs. Property management expense was approximately 2.6% and 2.5% of total property revenues for the three months ended March 31, 2026 and 2025, respectively.
General and administrative expense decreased approximately $2.2 million during the three months ended March 31, 2026 as compared to the same period in 2025. The decrease was driven primarily by lower legal expenses, due to legal recoveries of approximately $5.0 million received during the three months ended March 31, 2026 related to a construction litigation matter. This decrease was partially offset by increases in salaries, benefits, and incentive compensation costs, as well as higher acquisition pursuit costs. General and administrative expenses were approximately 3.8% and 4.3% of total revenues for the three months ended March 31, 2026 and 2025, respectively.
Interest expense increased approximately $3.6 million for the three months ended March 31, 2026, as compared to the same period in 2025. The increase was primarily due to increases in interest expense relating to the issuance of $600 million of 4.90% senior unsecured notes in February 2026 and having higher average balances on our commercial paper program during the three months ended March 31, 2026. These increases were partially offset by a decrease in interest expense on our unsecured revolving credit facility due to lower average balances outstanding and lower interest rates, as well as lower variable rate interest expense on the $500 million senior unsecured notes, and slightly higher capitalized interest expense compared to the same period in 2025.
Depreciation and amortization expense increased approximately $0.7 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was primarily due to higher depreciation expense related to the acquisition of operating properties in January, February, May, and December 2025. The increase was partially offset by lower depreciation expense related to the disposition of seven operating properties completed in 2025 and one operating property disposed of in February 2026.
Our deferred compensation plans recognized a benefit of approximately $1.2 million for the three months ended March 31, 2026, as compared to an expense of approximately $1.2 million during the same period in 2025. The change was related to the performance of the investments held in deferred compensation plans for participants and was directly offset by the (loss)/income related to these plans, as discussed in the non-property income section above.
Other non-operating expenses increased by $59.1 million for the three months ended March 31, 2026, as compared to the same period in 2025. The increase was primarily attributable to higher legal expenses related to a $53.0 million pending legal settlement, as well as increased costs associated with other litigation matters. The Company entered into a binding term sheet for settlement of a class action litigation matter on April 7, 2026, as disclosed in Note 9. "Commitments and Contingencies" to the condensed consolidated financial statements. The increase during the three months ended March 31, 2026 also reflects a $4.9 million impairment charge related to technology investments resulting from the permanent decline in estimated market conditions.
Other
Three Months Ended
March 31, 		Change
($ in thousands) 2026 2025 $
Gain on sale of operating property, including land $ 68,100 $ - $ 68,100
Income tax expense (938) (559) (379)
The gain on sale of operating property, including land recognized during the three months ended March 31, 2026, primarily related to a $67.9 million gain from the disposition of one operating property located in Irving, Texas.
Income tax expense increased approximately $0.4 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was driven by higher state and franchise income tax expenses during the three months ended March 31, 2026 primarily due to tax refunds recognized in the same period in 2025 related to tax legislation changes enacted in certain state jurisdictions in 2024.
Funds from Operations ("FFO"), Core FFO, and Core Adjusted FFO ("Core AFFO")
Management considers FFO, Core FFO, and Core AFFO to be appropriate supplementary measures of the financial performance of an equity REIT. The National Association of Real Estate Investment Trusts ("NAREIT") currently defines FFO as net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, and adjustments for unconsolidated joint ventures to reflect FFO on the same basis. Our calculation of diluted FFO also assumes conversion of all potentially dilutive securities, including certain non-controlling interests, which are convertible into common shares. We consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains and losses on dispositions of real estate, impairment write-downs of certain real estate assets, and depreciation, FFO can assist in the comparison of the operating performance of a company's real estate investments between periods or to different companies.
Core FFO represents FFO as further adjusted for items not considered part of our core business operations. We consider Core FFO to be a helpful supplemental measure of operating performance as it also excludes certain items which, by nature, are not comparable period over period and therefore tends to obscure actual operating performance. Our definition of Core FFO may differ from other REITs, and there can be no assurance our basis for computing this measure is comparable to other REITs.
Core AFFO is calculated utilizing Core FFO less recurring capitalized expenditures which are necessary to help preserve the value of and maintain the functionality at our communities. We also consider Core AFFO to be a useful supplemental measure because it is frequently used by analysts and investors to evaluate a REIT's operating performance between periods or to different companies. Our definition of recurring capital expenditures may differ from other REITs, and there can be no assurance our basis for computing this measure is comparable to other REITs.
To facilitate a clear understanding of our consolidated historical operating results, we believe FFO, Core FFO, and Core AFFO should be examined in conjunction with net income attributable to common shareholders as presented in the condensed consolidated statements of income and comprehensive income and data included elsewhere in this report. FFO, Core FFO, and Core AFFO are not defined by GAAP and should not be considered alternatives to net income attributable to common shareholders as an indication of our operating performance. Additionally, FFO, Core FFO, and Core AFFO as disclosed by other REITs may not be comparable to our calculation.
Reconciliations of net income attributable to common shareholders to FFO, Core FFO, and Core AFFO for the three months ended March 31, 2026 and 2025 are as follows:
Three Months Ended
March 31,
($ in thousands) 2026 2025
Funds from operations
Net income attributable to common shareholders $ 42,449 $ 38,822
Real estate depreciation and amortization 146,390 146,168
Gain on sale of operating property (67,878) -
Income allocated to non-controlling interests 1,925 1,945
Funds from operations $ 122,886 $ 186,935
Casualty-related expenses 250 130
Legal costs and settlements 51,192 1,872
Expensed transaction, development, and other pursuit costs 1,842 881
Investment losses 4,855 -
Other miscellaneous items 61 -
Core funds from operations $ 181,086 $ 189,818
Less: recurring capitalized expenditures (16,150) (16,098)
Core adjusted funds from operations $ 164,936 $ 173,720
Weighted average shares - basic 104,826 108,530
Incremental shares issuable from assumed conversion of:
Share awards granted 73 67
Common units 1,594 1,594
Weighted average shares - diluted 106,493 110,191
Liquidity and Capital Resources
Financial Condition and Sources of Liquidity
We intend to maintain a strong balance sheet and preserve our financial flexibility, which we believe should enhance our ability to identify and capitalize on investment opportunities as they become available. We intend to maintain what management believes is a conservative capital structure by:
•extending and sequencing the maturity dates of our debt where practicable;
•managing interest rate exposure using what management believes to be prudent levels of fixed and floating rate debt;
•maintaining what management believes to be conservative coverage ratios; and
•using what management believes to be a prudent combination of debt and equity.
Our interest expense coverage ratio, net of capitalized interest, was approximately 6.0 and 6.7 for the three months ended March 31, 2026 and 2025, respectively. This ratio is a method for calculating the amount of operating cash flows available to cover interest expense and is calculated by dividing interest expense for the period into the sum of property revenues and expenses, non-property income, and other expenses, after adding back depreciation, amortization, and interest expense. Approximately 90.6% and 90.1% of our properties were unencumbered at March 31, 2026 and 2025, respectively. Our weighted average maturity of debt was approximately 5.4 years at March 31, 2026.
We also intend to maintain or strengthen our capital and liquidity positions by continuing to focus on our core fundamentals, which currently are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs.
Our primary source of liquidity is cash flows generated from operations. Other sources may include one or more of the following: availability under our unsecured revolving credit facility and commercial paper program, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from our ATM program, and other unsecured borrowings or secured mortgages. We believe our liquidity and financial condition are sufficient to meet all of our reasonably anticipated cash needs during the next twelve months from our filing date including:
•normal recurring operating expenses;
•current debt service requirements including scheduled debt maturities;
•recurring and non-recurring capital expenditures;
•funding of property developments, repositions, redevelopments, and acquisitions;
•the minimum dividend payments required to maintain our REIT qualification under the Internal Revenue Code; and
•funding share repurchases.
Factors which could increase or decrease our future liquidity include but are not limited to volatility in capital and credit markets, changes in costs, changes in governmental regulations, including tariffs and rent control or rent stabilization laws, sources of financing, the minimum REIT dividend requirements, our ability to complete asset purchases, sales, or developments, the effect our debt level and changes in credit ratings could have on our cost of funds, and our ability to access capital markets.
Cash Flows
The following is a discussion of our cash flows for the three months ended March 31, 2026 as compared to the same period in 2025.
Net cash from operating activities was approximately $148.1 million during the three months ended March 31, 2026 as compared to approximately $148.2 million for the same period in 2025. The slight decrease was primarily due to the timing of real estate tax payments in 2026 as compared to 2025, partially offset by a higher prepayment of rental income received from our residents, the growth attributable to our non-same store communities, including the acquisition of four operating properties during 2025, and the timing of one operating property which completed construction in 2025. See further discussion of our 2026 operations as compared to 2025 in "Results of Operations."
Net cash used in investing activities during the three months ended March 31, 2026 totaled approximately $20.0 million as compared to $275.9 million during the same period in 2025. Cash outflows during the three months ended March 31, 2026 primarily related to amounts paid for property development and capital improvements of approximately $94.0 million, partially offset by net proceeds primarily from the sale of one operating property of approximately $76.7 million. Cash outflows during the three months ended March 31, 2025 primarily related to the acquisition of two operating properties for approximately $196.4 million, and amounts paid for property development and capital improvements of approximately $78.4 million. The property development and capital improvements during the three months ended March 31, 2026 and 2025, included the following:
Three Months Ended
March 31,
(in millions) 2026 2025
Expenditures for new development $ 47.4 $ 34.5
Capital expenditures 17.9 17.2
Reposition expenditures 21.7 20.0
Direct real estate taxes and capitalized interest and other indirect costs 7.0 6.7
Total $ 94.0 $ 78.4
Net cash used in financing activities totaled approximately $35.0 million for the three months ended March 31, 2026 as compared to cash provided by financing activities of $133.3 million during the same period in 2025. Cash outflows during the three months ended March 31, 2026 primarily related to $262.8 million used for common share repurchases, $231.8 million of net payments on our commercial paper program, $114.9 million used for distributions to common shareholders and non-controlling interest holders, and $12.0 million for the repayment of one of our conventional mortgage secured notes payable. These outflows were partially offset by net proceeds of approximately $595.7 million from the issuance of $600.0 million senior unsecured notes in February 2026. Cash outflows during the three months ended March 31, 2025 primarily related to net proceeds of approximately $425.8 million of borrowings from our commercial paper program. These inflows were partially offset by net payments of $178.0 million of borrowings from our unsecured revolving credit facility, and $113.5 million used for distributions to common shareholders and non-controlling interest holders.
Financial Flexibility
In March 2026 we amended and restated our existing credit facility (the "Credit Agreement"), to among other things, remove a $300 million unsecured term loan facility with a delayed draw feature and extend the maturity date of our $1.2 billion unsecured revolving credit facility from August 2026 to March 2030, which may be extended at our option for two consecutive six-month periods. The Credit Agreement also continues to provide that, upon satisfaction of certain conditions, we may expand the facility up to three times by up to an additional $500.0 million in the aggregate. The interest rate on our unsecured revolving credit facility is based upon, at our option, (a) the daily or the one-, three-, or six-month Secured Overnight Financing Rate ("SOFR") plus, in each case, a spread based on our credit rating, or (b) a base rate equal to the higher of: (i) the Federal Funds Rate plus 0.50%, (ii) Bank of America, N.A.'s prime rate, (iii) Term SOFR plus 1.0%, and (iv) 1.0%. Advances under our unsecured revolving credit facility may be priced at the scheduled rates, or we may enter into bid rate loans with participating banks at rates below the scheduled rates. These bid rate loans have terms of 180 days or less and may not exceed the lesser of $600 million or the remaining amount available under our unsecured revolving credit facility. Our unsecured revolving credit facility is subject to customary financial covenants and limitations. We believe we are in compliance with all such financial covenants and limitations as of March 31, 2026 and through the date of this filing.
Our unsecured revolving credit facility provides us with the ability to issue up to $50 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding under our unsecured revolving credit facility, it does reduce the amount available. At March 31, 2026, we had no outstanding letters of credit issued under our unsecured revolving credit facility and had approximately $1.2 billion available under our unsecured revolving credit facility.
In February 2025, we established a commercial paper program under which we may issue short-term, unsecured Notes under the exemption from registration contained in Section (4)(a) of the Securities Act. Amounts available under the commercial paper program may be borrowed, repaid, and reborrowed from time to time, with the aggregate face or principal amount of the Notes outstanding under the commercial paper program at any time not to exceed $600 million. The Notes will have maturities of up to 397 days from the date of issue. The Notes will rank at least equal in priority to all of the Company's other unsecured and unsubordinated indebtedness. The net proceeds of the issuances of the Notes are expected to be used for general corporate purposes, which may include property acquisitions and development in the ordinary course of business, capital expenditures, and working capital. We currently plan to use our unsecured revolving credit facility as a liquidity backstop for borrowings under the commercial paper program. At March 31, 2026, we had $358.8 million outstanding under our commercial paper program.
In May 2023, we created the 2023 ATM share offering program through which we could, but had no obligation to, sell common shares and we may also enter into separate forward sale agreements with forward purchasers for an aggregate offering amount of up to $500.0 million, in amounts and at times as we determine, into the existing trading market at current market prices as well as through negotiated transactions. In April 2026, we terminated the 2023 ATM program and did not sell any shares under this program, and created the 2026 ATM program through which we can, but have no obligation to, sell common shares and we may also enter into separate forward sale agreements with forward purchasers for an aggregate offering price of up to $500.0 million. Actual sales from time to time may depend on a variety of factors including, among others, market conditions, the trading price of our common shares, and determinations by management of the appropriate sources of funding for us. We intend to use proceeds from the sale of our common shares under the 2026 ATM program for general corporate purposes, which may include reducing future borrowings under our unsecured revolving credit facility, the repayment of other indebtedness, the redemption or other repurchase of outstanding debt or equity securities, funding for development activities, and financing for acquisitions. As of the date of this filing, we have not sold any shares or entered into any forward sales agreement and have common shares having an aggregate offering amount of up to $500.0 million remaining available for sale under the 2026 ATM program.
We believe our ability to access capital markets is enhanced by our senior unsecured debt ratings by Moody's, Fitch, and Standard and Poor's, which are currently A3 with stable outlook, A- with stable outlook, and A- with stable outlook, respectively. We believe our ability to access capital markets is also enhanced by our ability to borrow on a secured basis from various institutions including banks, Fannie Mae, Freddie Mac, or life insurance companies. However, we may not be able to maintain our current credit ratings or borrow on an unsecured or secured basis in the future.
Future Cash Requirements and Contractual Obligations
One of our principal long-term liquidity requirements includes the repayment of maturing debt, including any future borrowings under our unsecured revolving credit facility. At March 31, 2026, we had $358.8 million outstanding under our commercial paper program. Over the next 12 months, contractual debt maturities include these commercial paper borrowings as well as other debt obligations of $663.8 million. See Note 6. "Notes Payable," in the notes to Condensed Consolidated Financial Statements for a further discussion of our scheduled maturities.
As of March 31, 2026, we estimated the additional cost to complete the construction of three properties to be approximately $176.6 million. Of this amount, we expect to incur costs between approximately $93 million and $113 million during the remainder of 2026 and to incur the remaining costs during 2027 and 2028. Additionally, for the remainder of 2026, we expect to incur costs between approximately $68 million and $88 million related to the start of new development activities, approximately $58 million and $62 million of reposition, redevelopment, repurpose, and revenue enhancing expenditures, and between approximately $94 million and $98 million of additional recurring capital expenditures.
We anticipate meeting our near-term liquidity requirements through a combination of one or more of the following: cash flows generated from operations, draws on our unsecured revolving credit facility and through our commercial paper program, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from our ATM program, and other unsecured borrowings or secured mortgages. We continue to evaluate our portfolio and plan to continue our practice of selective dispositions and redeploying capital as market conditions warrant and opportunities arise.
As a REIT, we are subject to a number of organizational and operational requirements, including a requirement to distribute current dividends to our shareholders equal to a minimum of 90% of our annual taxable income. In order to minimize paying income taxes, our general policy is to distribute at least 100% of our taxable income. In February 2026, our Board of Trust Managers declared a quarterly dividend of $1.06 per common share to our common shareholders of record as of March 31, 2026. The quarterly dividend was subsequently paid on April 17, 2026, and we paid equivalent amounts per unit to holders of the common operating partnership units. Assuming similar quarterly dividend distributions for the remainder of 2026, our annualized dividend rate would be $4.24 per share or unit.
Critical Accounting Policies
Our critical accounting policies have not changed from the information reported in our Annual Report on Form 10-K for the year ended December 31, 2025.
Camden Property Trust published this content on May 01, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 01, 2026 at 16:06 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]