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| CPT > SEC Filings for CPT > Form 10-Q on 2-Nov-2012 | All Recent SEC Filings |
2-Nov-2012
Quarterly Report
We consider portions of this report to be "forward-looking" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to our expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions, or other items relating to the future; forward-looking statements are not guarantees of future performances, 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 they 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, or other unfavorable changes in economic conditions could adversely impact us;
• short-term leases expose us to the effects of declining market rents;
• we face risks associated with land holdings and related activities;
• difficulties of selling real estate could limit our flexibility;
• we could be negatively impacted by the condition of Fannie Mae or Freddie Mac;
• compliance or failure to comply with laws, including those requiring access to our properties by disabled persons, could result in substantial cost;
• competition could limit our ability to lease apartments or increase or maintain rental income;
• development and construction risks could impact our profitability;
• our acquisition strategy may not produce the cash flows expected;
• competition could adversely affect our ability to acquire properties;
• losses from catastrophes may exceed our insurance coverage;
• investments through joint ventures involve risks not present in investments in which we are the sole investor;
• we face risks associated with investments in and management of discretionary funds;
• tax matters, including failure to qualify as a REIT, could have adverse consequences;
• we depend on our key personnel;
• changes in litigation risks could affect our business;
• insufficient cash flows could limit our ability to make required payments for debt obligations or pay distributions to shareholders;
• we have significant debt, which could have important adverse consequences;
• we may be unable to renew, repay, or refinance our outstanding debt;
• variable rate debt is subject to interest rate risk;
• we may incur losses on interest rate hedging arrangements;
• issuances of additional debt may adversely impact our financial condition;
• 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;
• our share price will fluctuate; and
• the form, timing and/or amount of dividend distributions in future periods may vary and be impacted by economic or other considerations.
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
We are primarily engaged in the ownership, management, development, acquisition,
and construction of multifamily apartment communities. As of September 30, 2012,
we owned interests in, operated, or were developing 209 multifamily properties
comprising 70,871 apartment homes across the United States as detailed in the
following Property Portfolio table. In addition, we own other land parcels we
may develop into multifamily apartment communities.
Property Operations
Our results for the nine months ended September 30, 2012 reflect an increase in
rental revenue as compared to the same period in 2011, which we believe was
primarily due to a gradually improving economy, favorable demographics, a modest
supply of new multifamily housing, and a decrease in home ownership rates, which
have resulted in increases in realized rental rates and average occupancy
levels. Same store revenues increased 6.5% for the first nine months of 2012, as
compared to the same period in 2011. We believe U.S. economic and employment
growth will continue during 2012 and the supply of new multifamily homes will
continue to be below historical levels. However, we believe significant risks to
the economy remain prevalent, and while there have been increases in employment
levels in the majority of our markets, the unemployment rate remains at higher
than historical levels. If economic conditions in the United States were to
worsen, our operating results could be adversely affected.
Development Activity
During the nine months ended September 30, 2012, we completed construction of
six development projects containing 1,495 units, including one community
containing 244 units in one of our discretionary funds in which we have a 20%
ownership interest. As of September 30, 2012, three of these projects had
achieved stabilization. At September 30, 2012, we had a total of six development
projects under construction containing 2,040 units, including one development
project containing 276 units in one of our discretionary funds, with initial
occupancy occurring between 2012 and 2014. Excluding the development project in
one of our discretionary funds, we have remaining expected costs to complete of
approximately $178.0 million on the five consolidated projects as of
September 30, 2012.
Acquisitions
During the nine months ended September 30, 2012, we acquired sixteen operating
properties in five transactions totaling approximately $583.1 million, including
assumed debt of approximately $272.6 million. Twelve of these operating
properties were former unconsolidated joint ventures in which we acquired the
remaining 80% ownership interests. On September 30, 2012, we also acquired the
remaining 75% noncontrolling ownership interest in a fully-consolidated joint
venture for approximately $10.2 million. During the nine months ended September
30, 2012, we acquired approximately 16.7 acres of land in two transactions for
approximately $16.7 million. We intend to utilize these land holdings for
development of multifamily apartment communities. We funded these acquisitions
through cash generated from operations, proceeds from our at-the-market share
offering programs ("ATM programs"), proceeds from an equity offering completed
in January 2012, and proceeds from property dispositions.
During the nine months ended September 30, 2012, one of our funds acquired one
operating property and two land holdings totaling 18.7 acres which it intends to
utilize for development of multifamily apartment communities.
In November 2012, we acquired approximately 2.4 acres of land located in
Plantation, Florida for approximately $9.0 million.
Dispositions
During the first quarter of 2012, we sold three operating properties consisting
of 1,033 units for approximately $55.6 million and recognized a gain of
approximately $32.5 million on these sales. In August 2012, one of our funds
sold one operating property consisting of 253 units located in Austin, Texas for
approximately $54.4 million. Our proportionate share of the gain was
approximately $2.9 million.
During October 2012, we sold two operating properties consisting of 473 units
for approximately $26.6 million. In October 2012, one of our unconsolidated
joint ventures also sold an operating property consisting of 596 units located
in Kansas City, Missouri for approximately $40.7 million.
Future Outlook
Subject to market conditions, we intend to continue to look for opportunities to
expand our development pipeline, and acquire existing communities. We
continually evaluate our operating property and land development portfolio and
plan to continue our practice of selective dispositions as market conditions
warrant and opportunities develop. We also intend to continue to strengthen our
capital and liquidity positions 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 liquidity requirements
through cash flows generated from operations, draws on our unsecured credit
facility, proceeds from property dispositions and secured mortgages, equity
issued from our ATM programs, and the use of debt and equity offerings under our
automatic shelf registration statement.
As of September 30, 2012, we had approximately $5.6 million in cash and cash
equivalents and approximately $455.1 million available under our $500 million
unsecured line of credit. As of the date of this filing, we had common shares
having an aggregate offering price of up to $123.6 million remaining available
for sale under the 2012 ATM program. We believe our remaining payments on debt
maturing in 2012 are manageable at approximately $190.3 million, which
represents approximately 8% of our total outstanding debt and includes scheduled
principal amortizations of approximately $0.6 million. On October 1, 2012, we
repaid a $31.5 million secured third-party note payable which was scheduled to
mature in August 2013. This secured debt related to a fully-consolidated joint
venture in which we acquired the remaining noncontrolling ownership interest in
September 2012. We believe we are well-positioned with a strong balance sheet
and sufficient liquidity to cover near-term debt maturities and new development
funding requirements. 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:
September 30, 2012 December 31, 2011
Apartment Apartment
Homes Properties Homes Properties
Operating Properties
Houston, Texas (1) 9,002 26 9,354 26
Las Vegas, Nevada 8,016 29 8,016 29
Dallas, Texas 6,562 17 5,979 15
Tampa, Florida 6,493 15 5,953 13
Washington, D.C. Metro 5,791 17 5,604 16
Atlanta, Georgia 3,769 13 3,546 12
Orlando, Florida 3,764 9 3,564 9
Charlotte, North Carolina 3,574 15 3,574 15
Austin, Texas (2) 3,213 10 3,222 10
Raleigh, North Carolina 3,054 8 2,704 7
Southeast Florida 2,520 7 2,520 7
Los Angeles/Orange County, California 2,481 6 2,481 6
Denver, Colorado 2,171 7 2,171 7
Phoenix, Arizona 2,076 7 2,433 8
San Diego/Inland Empire, California 1,665 5 1,196 4
Other 4,680 12 4,680 12
Total Operating Properties 68,831 203 66,997 196
Properties Under Development
Washington, D.C. Metro 596 2 783 3
Orlando, Florida 438 1 858 2
Denver, Colorado 424 1 - -
Austin, Texas 314 1 244 1
Houston, Texas 268 1 372 2
Tampa, Florida - - 540 2
Total Properties Under Development 2,040 6 2,797 10
Total Properties 70,871 209 69,794 206
Less: Unconsolidated Joint Venture
Properties (3)
Houston, Texas 3,152 10 4,368 13
Las Vegas, Nevada 3,098 14 4,047 17
Austin, Texas 1,360 4 1,613 5
Dallas, Texas 1,250 3 1,706 4
Tampa, Florida 450 1 450 1
Raleigh, North Carolina 350 1 - -
Atlanta, Georgia 344 2 344 2
Denver, Colorado 320 1 320 1
Washington, D.C. Metro 276 1 276 1
Phoenix, Arizona - - 992 4
Los Angeles/Orange County, California - - 421 1
Other 2,841 8 2,841 8
Total Unconsolidated Joint Venture
Properties 13,441 45 17,378 57
Total Properties Fully Consolidated 57,430 164 52,416 149
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(1) Includes one property consisting of 290 apartment homes located in Houston which was included in properties held for sale at September 30, 2012. This property was sold in October 2012.
(2) Includes one property consisting of 183 apartment homes located in Austin which was included in properties held for sale at September 30, 2012. This property was sold in October 2012.
(3) Refer to Note 7, "Investments in Joint Ventures" in the notes to condensed consolidated financial statements for further discussion of our joint venture investments.
Acquisitions
During the nine months ended September 30, 2012, we completed acquisitions of
seventeen operating properties and one of our unconsolidated joint ventures
completed an acquisition of one operating property as follows:
Number of Date of
Apartment Acquisition
Acquisitions of Operating Properties Location Homes (1)
Consolidated acquisitions:
Camden Addison Dallas, TX 456 1/25/2012
Camden Holly Springs Houston, TX 548 1/25/2012
Camden Park Houston, TX 288 1/25/2012
Camden Sugar Grove Houston, TX 380 1/25/2012
Camden Parkside Fullerton, CA 421 1/25/2012
Camden Fountain Palms Phoenix, AZ 192 1/25/2012
Camden Pecos Ranch Phoenix, AZ 272 1/25/2012
Camden Sierra Phoenix, AZ 288 1/25/2012
Camden Towne Center Phoenix, AZ 240 1/25/2012
Camden Pines Las Vegas, NV 315 1/25/2012
Camden Summit Las Vegas, NV 234 1/25/2012
Camden Tiara Las Vegas, NV 400 1/25/2012
Camden Belmont Dallas, TX 477 6/28/2012
Camden Creekstone Atlanta, GA 223 7/12/2012
Camden Landmark Ontario, CA 469 9/27/2012
Camden Henderson Dallas, TX 106 9/28/2012
Camden Travis Street (2) Houston, TX 253 9/30/2012
Consolidated total 5,562
Camden Asbury Village (3) Raleigh, NC 350 1/27/2012
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(1) The properties acquired on January 25, 2012 were former unconsolidated joint
ventures in which we acquired the remaining 80% ownership interests. The 4,034
apartment homes were previously included in our unconsolidated joint venture
property count.
(2) Acquired the remaining 75% noncontrolling ownership interest in a fully
consolidated joint venture. The 253 apartment homes were previously included in
our consolidated property count.
(3) Property owned through an unconsolidated joint venture in which we own a 20%
interest.
During the nine months ended September 30, 2012, we acquired two land tracts and
one of our unconsolidated joint ventures also acquired two land tracts as
follows:
Location of Land Tract Acquisitions Acreage Date of Acquisition Dallas, TX 4.7 5/8/2012 Austin, TX 12.0 8/23/2012 Consolidated total 16.7 Orlando, FL (1) 15.0 3/22/2012 Charlotte, NC (1) 3.7 9/28/2012 Unconsolidated total 18.7 |
(1) Land tract owned through an unconsolidated joint venture in which we own a 20% interest. In November 2012, we acquired approximately 2.4 acres of land located in Plantation, Florida for approximately $9.0 million.
Dispositions
During the nine months ended September 30, 2012, we sold three operating
properties and one of our unconsolidated joint ventures sold one operating
property as follows:
Number of
Dispositions of Operating Properties Location Apartment Homes Date of Disposition
Camden Vista Valley Phoenix, AZ 357 1/12/2012
Camden Landings Orlando, FL 220 3/7/2012
Camden Creek Houston, TX 456 3/16/2012
Consolidated total 1,033
Camden South Congress (1) Austin, TX 253 8/30/2012
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(1) Property formerly owned through an unconsolidated joint venture in which we
own a 20% interest.
During October 2012, we sold Camden Laurel Ridge comprised of 183 apartment
homes located in Austin, Texas and Camden Steeplechase comprised of 290
apartment homes located in Houston, Texas. During October 2012, one of our
unconsolidated joint ventures also sold an operating property, Camden Passage,
comprised of 596 units located in Kansas City, Missouri.
Stabilized Communities
We generally consider a property stabilized once it reaches 90% occupancy at the
beginning of a period. During the three months ended September 30, 2012,
stabilization was achieved at three recently completed development properties as
follows:
Number of Date of
Apartment Total Cost % Occupied at Construction Date of
Stabilized Property and Location Homes Incurred 10/28/12 Completion Stabilization
Camden LaVina
Orlando, FL 420 $ 55.5 96 % 1Q12 3Q12
Camden Summerfield II
Landover, MD 187 25.0 95 % 1Q12 3Q12
Camden Montague
Tampa, FL 192 20.0 96 % 2Q12 3Q12
Total 799 $ 100.5
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Development and Lease-Up Properties
At September 30, 2012, we had two consolidated completed properties and one
completed property owned by one of our unconsolidated joint ventures in lease-up
as follows:
Number of Date of Estimated
($ in millions) Apartment Cost % Leased at Construction Date of
Property and Location Homes Incurred 10/28/12 Completion Stabilization
Camden Royal Oaks II
Houston, TX 104 $ 13.2 61 % 1Q12 3Q13
Camden Westchase Park (1)
Tampa, FL 348 48.0 95 % 3Q12 4Q12
Consolidated total 452 $ 61.2
Camden Amber Oaks II (2)
Austin, TX 244 $ 21.9 86 % 3Q12 1Q13
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(1) Property reached stabilization subsequent to September 30, 2012.
(2) Property owned through an unconsolidated joint venture in which we own a 20%
interest.
Our condensed consolidated balance sheet at September 30, 2012 included approximately $280.9 million related to properties under development and land. Of this amount, approximately $108.5 million related to our projects currently under construction. In addition, we had approximately $172.4 million primarily invested in land held for future development, which included
approximately $131.2 million related to projects we expect to begin constructing
during the next two years, and approximately $41.2 million related to land
tracts which we may develop in the future.
Communities Under Construction. At September 30, 2012, we had five consolidated
properties and one of our unconsolidated joint ventures had one property in
various stages of construction as follows:
Included in Estimated
($ in millions) Number of Properties Date of Estimated
Property and Apartment Estimated Cost Under Construction Date of
Location Homes Cost Incurred Development Completion Stabilization
Camden Town Square
(1)
Orlando, FL 438 $ 66.0 $ 58.4 $ 7.9 4Q12 3Q13
Camden City Centre
II
Houston, TX 268 36.0 22.3 22.3 2Q13 3Q14
Camden NOMA
Washington, DC 320 110.0 60.7 60.7 2Q14 2Q15
Camden Lamar
Heights
Austin, TX 314 47.0 7.8 7.8 2Q14 3Q15
Camden Flatirons
Denver, CO 424 78.0 9.8 9.8 4Q14 4Q16
Consolidated total 1,764 $ 337.0 $ 159.0 $ 108.5
Camden South
Capitol (2)
Washington, DC 276 $ 88.0 $ 58.3 $ 58.3 4Q13 3Q14
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(1) Property in lease-up as of September 30, 2012.
(2) Property owned through an unconsolidated joint venture in which we own a 20% interest.
Development Pipeline Communities. At September 30, 2012, we had the following communities undergoing development activities:
($ in millions) Total Estimated Property and Location Projected Homes Cost (1) Cost to Date Camden Glendale Triangle Glendale, CA 303 $ 115.0 $ 28.2 Camden Boca Raton Boca Raton, FL 261 54.0 7.2 Camden Paces (Phase 1) Atlanta, GA 379 (2) 110.0 (2) 48.0 (3) Camden La Frontera Austin, TX 300 32.0 3.6 Camden Victory Park Dallas, TX 425 70.0 14.2 Camden Hollywood Los Angeles, CA 299 125.0 18.0 Camden Lincoln Station Denver, CO 275 48.0 5.1 Camden McGowen Station Houston, TX 251 40.0 6.9 Total 2,493 $ 594.0 $ 131.2 |
(1) Represents our best estimate of the total costs we expect to incur on these
projects. However, forward-looking statements are not guarantees of future
performances, results, or events. Although we believe these expectations are
based upon reasonable assumptions, future events rarely develop exactly as
forecasted, and the best estimates routinely require adjustment.
(2) This development will be developed in two phases. The estimated cost and
projected homes are for phase one only.
(3) Represents cost to date for both phases.
Land Holdings. At September 30, 2012, we had the following land tracts:
($ in millions)
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