Good day, and welcome to the Camden Property Trust fourth quarter 2020 earnings conference call. I would now like to turn the conference over to Kim Callahan, Senior Vice President, Investor Relations. Please go ahead. Good morning, thank you for joining Camden's fourth quarter 2020 earnings conference call. Before we begin our prepared remarks, I would like to advise everyone that we will be making forward-looking statements based on our current expectations and beliefs. These statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from expectations. Further information about these risks can be found in our filings with the SEC, and we encourage you to review them. Any forward-looking statements made on today's call represent management's current opinions, and the company assumes no obligation to update or supplement these statements because of subsequent events. As a reminder, Camden's complete fourth quarter 2020 earnings release is available in the Investors section of our website at camdenliving.com, and it includes reconciliations to non-GAAP financial measures, which will be discussed on the call. Joining me today are Ric Campo, Camden's Chairman and Chief Executive Officer, Keith Oden, Executive Vice Chairman, and Alex Jessett, Chief Financial Officer. We will attempt to complete our call within one hour, seriously, as we know that another multi-family company is holding their call right after us. We ask that you limit your questions to two, then rejoin the queue if you have additional items to discuss. If we are unable to speak with everyone in the queue today, we'd be happy to respond to additional questions by phone or email after the call concludes. At this time, I'll turn the call over to Ric Campo. Thanks, Kim. Good morning, and thank you for joining our call today. The theme for our on-hold music this morning was change. The COVID pandemic has brought with it sweeping changes in the lives of every American, including how they work, where they work, and whether they can even work. Every business has had to change and adapt to this unprecedented pandemic. In thinking about the scope of these changes, I recall the quote from Jack Welch that I heard years ago, which is, "Change before you have to." With only five words, Jack perfectly captured what has separated many companies' abilities to successfully navigate through the past year. Throughout our history, we have grown and maintained a culture that encourages and rewards efforts by Team Camden to change before we have to. Examples include migrating to cloud-based financial systems over 18 months ago, making work from home seamless for most of our employees. Creating a technology package for Camden communities that provides discounted high-speed internet, creating a more robust work-from-home experience for our residents. Implementing a resident package delivery program that requires packages to be delivered directly to each resident's front door, creating the same flexibility and convenience enjoyed by most single-family homeowners, and developing Chirp, a mobile access solution, which we sold to RealPage last fall. When fully rolled out in 2021, this product will enhance our on-demand virtual leasing and self-guided tours while enabling unassisted tours and leasing outside of our normal office hours. Residents will also be able to schedule package and grocery deliveries directly to their apartments when they're away from home. We will continue to find ways to change before we have to in everything we do. For the past year, we have utilized virtual meeting platforms like Zoom and Microsoft Teams for investor and analyst meetings, industry conferences, and internal Camden meetings. Beginning next quarter, we hope to offer our quarterly earnings calls on a more interactive virtual platform as well, so stay tuned. As we start 2021, our outlook is optimistic. Our assumptions are based on the first half of the year enduring a continued battle against the COVID virus, with ongoing difficulties for many businesses and workers until the country's vaccination rates accelerate. We hope that the second half of the year will show improvement as more businesses reopen and more people ultimately get back to work. Fortunately, many of our Sunbelt markets in which we operate have already reopened businesses and added back many of the jobs that were lost early in the pandemic, setting the stage for a recovery in the second half of 2021 and beyond. I want to thank Team Camden for a great 2020. While the operating environment we faced was one of the toughest ever, you had made sure that we improved the lives of our teammates, customers, and stakeholders one experience at a time. Well done, and thank you. Keith, your chance for change. Yeah. Thanks, Ric. On the idea of change before you have to, I think Henry Ford was onto something when he said, "If I had asked my customers what they wanted, they would've said faster horses." Consistent with prior years, I'm going to use my time on today's call to review the market conditions that we expect to encounter in Camden's markets during 2021. I'll address the markets in the order of best to worst by assigning a letter grade to each one, as well as our view on whether we believe that market is likely to be improving, stable, or declining in the year ahead. Following the market overview, I'll provide additional details on our fourth quarter operations and 2021 same-property guidance. We anticipate overall same-property revenue growth this year in the range of down 25 basis points to up 1.75% for our portfolio, with the majority of our markets falling within that range. The outliers on the positive side would be Phoenix, San Diego, Inland Empire, and Tampa, which should produce revenue growth in the 3%-4% range. At the low end of that range would be Houston, which will likely remain in the down 2% range. Expected same-property revenue growth for 2021 is 75 basis points at the midpoint of our guidance range. All markets received a grade of C or higher, with an average rating of B for the overall portfolio. Our outlook for supply and demand in 2021 is based on multiple third-party economic forecasts, and in general, most firms project a recovery in job growth in Camden's markets, along with a steady amount of new supply. We typically mention estimates provided by Witten Advisors on this call, and they anticipate over 1 million new jobs for our 14 major markets in 2021, along with roughly 150,000 new completions. Other economists have projected up to 1.9 million jobs and 175,000 completions. The outlook seems to be manageable regardless of which estimates prove to be correct. For 2021, our top ranking once again goes to Phoenix, with an average of 5% revenue growth over the past three years and expected revenue growth of 3%-4% this year. We give this market an A rating with a stable outlook. Supply and demand metrics for 2021 look strong in Phoenix, with estimates calling for over 90,000 new jobs and roughly 9,000 new units coming online this year. Up next are San Diego, Inland Empire, and Tampa, both earning A- ratings and improving outlooks, with 2021 revenue growth also projected in a 3%-4% range, both markets produced 1%-2% revenue growth last year, but are budgeted to accelerate in 2021 given recent trends. Similar to Phoenix, the San Diego Inland Empire market projects nearly 100,000 new jobs in 2021, with new supply of only around 7,000 apartments. Tampa should deliver around 7,000 new units, with roughly 50,000 new jobs being created, providing a good balance of supply and demand in both of those markets. Atlanta and Raleigh round out our top five with budgeted revenue growth of around 2% for 2021 and ratings of A- and stable. In Atlanta, job growth is expected to rebound to over 100,000, with only 7,000 new apartment completions. In Raleigh, projections call for 40,000 additional jobs, with completions in the 4,000 to 5,000-unit range. Denver, D.C. Metro, and Austin all received a B+ rating, with declining outlooks. All of these markets have been strong performers for us over the past several years, averaging nearly 3% annual property revenue growth over the last three years and 2% last year. We do expect market conditions to moderate over the course of 2021, given steady levels of new supply and increasing competition for new renters. Supply-demand ratios in Denver and D.C. remain steady, with 65,000 and 90,000 new jobs anticipated, respectively, during 2021, with new supply coming in at roughly 8,000 and 12,000 new units, respectively, scheduled for delivery this year. In Austin, new supply has been coming online steadily for several years, with over 15,000 new units expected this year, offset by roughly 60,000 new jobs. In Southeast Florida, market conditions rate a B, an improving outlook. After ranking at a B- or C+ for the past two years, we're starting to see some improvement on the horizon and prospects for positive growth in 2021. New supplies remain steady over the past few years at roughly 10,000 new units, but 2021 estimates call for 70,000 new jobs in that market this year. Competition from for-sale and rental condominiums is still an issue in that market, but we expect slightly better operating conditions in 2021 and an improvement from the down 0.4% same-property revenue growth achieved last year. Orlando earns a B rating with a stable outlook. Job growth has moderated in Orlando given their exposure to travel and hospitality industries. That trend should continue in 2021. New development activity remains strong, so the level of supply should be steady this year, with roughly 8,000-10,000 completions versus 25,000-30,000 new jobs. Charlotte and Dallas both received B- grades with a stable outlook. Our 2020 performance in Charlotte was slightly better than average for our portfolio, but the ongoing high levels of supply, particularly in the downtown and in-town submarkets, will challenge our pricing power in 2021. Approximately 7,500 new units are anticipated this year versus roughly 8,000 that came online last year. The city should add over 50,000 new jobs. Conditions in Dallas are similar, with 17,000 new deliveries expected this year. Job growth estimates are much stronger, with over 110,000 new jobs expected. A healthy economy in 2021 should help Dallas absorb the over 20,000 units it's delivered in each of the past few years. Once again, competition will be strong and pricing power likely to be limited. We gave L.A. Orange County a C+ rating with an improving outlook. Our portfolio in L.A. County saw higher delinquencies in bad debt in 2020 than most of our other markets, but we're hopeful that conditions will begin to improve, particularly in the back half of 2021. Orange County should perform slightly better, but still not as well as our Southern California markets, including San Diego and Inland Empire. L.A. Orange County faces healthy operating conditions with balanced supply and demand metrics. Job growth should be around 130,000 new jobs, with completions of roughly 18,000 apartments expected this year. Houston received a C rating this year with a stable outlook, as we expect to see negative rent growth again this year. Estimates for new supply are once again over 20,000 apartments coming online this year. We do expect Houston will continue to struggle with many new lease-ups giving high levels of concessions. However, Houston's job growth may post decent recovery this year with nearly 100,000 new jobs expected, which would certainly help absorb some of the new inventory in our market. Overall, our portfolio rating this year is a B, with most of our markets expected to moderate slightly in revenue growth for 2021 compared to 2020. As I mentioned earlier, all of our markets should achieve between a -2% and a +4% revenue growth this year, and we expect our 2021 total portfolio same-property revenue growth to be 0.75% at the midpoint of our guidance range. Now, a few details of our 2020 operating results. Same-property revenue growth was 0.1% for the Q4 and 1.1% for the full-year of 2020. Our top performers for the quarter were Phoenix at 5.7%, Tampa at 2.9%, Raleigh at 1.5%, and Atlanta at 1.3% growth. Rental rate trends for the Q4 were as expected, with both signed and effective leases down around 4%, renewals in the mid to high 2% range for a blended rate of roughly down 1%. Our preliminary January results indicate a slight improvement across the board for new leases, renewals, and blended growth. February and March renewal offerings are being sent out on an average of roughly 3% increase. Occupancy averaged 95.5% during the fourth quarter, compared to 95.6% last quarter and 96.2% in the fourth quarter of 2019. January 2021 occupancy has averaged 95.7%, compared to 96.2% last January, and is slightly up from 4Q 2020 levels. Annual net turnover for 2020 was 200 basis points lower than 2019 at 41% versus 43%. As expected, move-outs to purchase homes rose seasonally for the quarter to about 19%, but we're still at about 15% for the full-year of 2020, which compares to an average full-year move-out rate of about 15% over the last four years. At this point, I'll turn the call over to Alex Jessett, Camden's Chief Financial Officer. Thanks, Keith. Before I move on to our financial results and guidance, a brief update on our recent real estate activities. During the fourth quarter of 2020, we completed construction on both Camden RiNo, a 233-unit, $79 million new development in Denver, and Camden Cypress Creek II, a 234-unit, $32 million joint venture new development in Houston. Also during the quarter, we began leasing at Camden North End II, a 343-unit, $90 million new development in Phoenix. We acquired four acres of land in downtown Durham, North Carolina, for the future development of approximately 354 apartment homes. In the quarter, we collected 98.6% of our scheduled rents, with only 1.4% delinquent. Once again, this compares favorably to the fourth quarter of 2019, when we collected 97.9% of our scheduled rents with an actually higher 2.1% delinquency. We do typically see a slight seasonal uptick in delinquency. Turning to bad debt. In accordance with GAAP, certain uncollected rent is recognized by us as income in the current month. We evaluate this uncollected rent and establish what we believe to be an appropriate bad debt reserve, which serves as a corresponding offset to property revenues in the same period. When a resident moves out owing us money, we typically have previously reserved 100% of the amounts owed as bad debt, and there will be no future impact to the income statement. We reevaluate our bad debt reserves monthly for collectability. Last night, we reported funds from operations for the fourth quarter of 2020 of $122.4 million, or $1.21 per share, $0.03 below the midpoint of our prior guidance range of $1.21-$1.27. This $0.03 per share variance to the midpoint resulted entirely from an approximate $0.035, or $3.5 million, non-cash adjustment to retail straight-line rent receivables during the fourth quarter. This adjustment represents retail revenue, which, under straight-line accounting, we had previously recognized but not yet received, and whose ultimate collectability is now uncertain. Over 95% of this amount is from one retail tenant we have been in negotiations with since the summer. As the fourth quarter progressed, it became apparent that significant lease restructuring might be necessary, and we made the appropriate accounting adjustments. Same-store net operating income was in line with expectations for the fourth quarter, as a slight outperformance in occupancy was offset by the timing of repair and maintenance expenses, higher property tax rates in Houston, and the timing of certain property tax refunds in Washington, D.C. For 2020, we delivered full-year same-store revenue growth of 1.1%, expense growth of 3.8%, and an NOI decline of 0.4%. The midpoint of our 2021 FFO and same-store guidance is predicated upon a return to a more normal operating environment by mid-2021. You can refer to page 28 of our fourth quarter supplemental package for details on the key assumptions driving our financial outlook. We expect our 2021 FFO per diluted share to be in the range of $4.80-$5.20, with a midpoint of $5, representing a $0.10 per share increase from our 2020 results. After adjusting for the fourth quarter 2020, $0.035 write-off of retail straight-line rent receivables, and the 2020 full-year $0.15 COVID-19 related impact, which included approximately $0.095 of resident relief funds, $0.03 of frontline bonuses, and $0.02 of other directly related COVID expenses, the midpoint of our 2021 guidance represents an $0.08 per share core year-over-year FFO decrease, which results primarily from an approximate $0.08 per share decrease in FFO due to higher net interest expense, which results primarily from the full-year impact of our April 2020 bond offering and actual and projected 2020 and 2021 net acquisition and development activity. An approximate $0.06 per share decrease in FFO resulting primarily from the combination of higher general and administrative, property management, and fee and asset management expenses, combined with lower interest income resulting from lower cash balances and rates. An approximate $0.055 per share decrease in FFO related to the performance of our same store portfolio. At the midpoint, we are expecting a same-store net operating income decline of 0.85%, driven by revenue growth of 0.75% and expense growth of 3.5%. Each 1% change in same store NOI is approximately $0.06 per share in FFO. An approximate $0.04 per share decrease in FFO from an assumed $450 million of pro forma dispositions towards the end of 2021. An approximate $0.02 per share decrease in FFO from our retail portfolio. An approximate $0.015 decrease in FFO due to the non-recurrence of our third quarter 2020 gain on sale of our Chirp investment. An approximate $0.01 per share decrease in FFO from lower fee and asset management income. This $0.28 cumulative decrease in anticipated FFO per share is partially offset by an approximate $0.11 per share net increase in FFO related to operating income from our non-same store properties, resulting primarily from the incremental contribution of our six development communities in lease-up during either 2020 and/or 2021. Finally, an approximate $0.09 per share increase in FFO due to an assumed $450 million of pro forma acquisitions mid-year. Our 3.5% budgeted expense growth at the midpoint assumes insurance expense will increase by approximately 30% due to the continued unfavorable insurance market. Property insurance comprises approximately 4% of our total operating expenses. The remainder of our property-level expense categories are anticipated to grow at approximately 2.5% in the aggregate. Page 28 of our supplemental package also details other assumptions, including the plan for $120 million-$320 million of on-balance sheet development starts spread throughout the year. We expect FFO per share for the first quarter of 2021 to be within the range of $1.20-$1.26. After excluding the $0.035 per share fourth quarter 2020 write-off of retail straight-line receivables, the midpoint of $1.23 for the first quarter represents a $0.015 per share decrease from the fourth quarter of 2020, which is primarily the result of a combination of lower fee and asset management income and higher overhead expenses, attributable in part to the timing of our annual salary increases. We anticipate sequential quarterly same store NOI growth will be flat as the reset of our annual property tax accrual on January 1st of each year and the typical seasonal trends of other expenses, including the timing of on-site salary increases, will be offset by anticipated property tax refunds in Washington, D.C., and Atlanta. As of today, we have just over $1.2 billion of liquidity, comprised of approximately $320 million in cash and cash equivalents, and no amounts outstanding on our $900 million unsecured credit facility. At quarter end, we had $325 million left to spend over the next three years under our existing development pipeline, and we have no scheduled debt maturities until 2022. Our current excess cash is invested with various banks, earning approximately 30 basis points. Finally, as I have discussed on prior calls, in 2019 and 2020, we set in play important technological advancements. 2021 will be the transition year that will lead to realized efficiencies in 2022, 2023, and beyond. From cloud-based financial systems to virtual leasing, to mobile access, to AI technologies that allow us to meet residents on their schedule, we are poised very well for the recovery. At this time, we'll open the call up to questions. Our first question today will come from Alua Askarbek with Bank of America. Please go ahead. Hi, everyone. Thank you for taking the questions today. I just wanted to start off quickly, talking about your guidance for acquisitions and dispositions for this year. I was just wondering, what are the chances that you're actually able to get to that acquisition amount, and kind of what markets are you guys looking at? There's a lot of activity in 4Q, and I guess a little bit more about pricing? Sure. The acquisition disposition program is balanced, right? We have a midpoint of $450 million of acquisitions and $450 million of dispositions. We feel pretty confident we'll be able to execute on those transactions. The private market is very buoyant, in spite of new protocol for how you underwrite properties today, given the COVID environment. The strategy this year is going to be very similar to what we did in the last cycle. If you think about the last cycle, we disposed of roughly $3 billion of properties that were average age of over 20 years, and we acquired properties that were on average at the time, five or six years old. The thing that was really interesting about those transactions, is that the negative spread on old properties versus new properties was like 21 basis points, in terms of AFFO. We think the same thing is going on right now, where we'll be able to sell older non-core properties with higher CapEx, and then buy newer properties with lower CapEx and better growth scenarios. We'll be buying in markets we're underweighting. If you look at some of the markets that we have an underweight in, it would be Tampa, Raleigh, potentially Dallas, as well Denver. The dispositions will come from our more concentrated markets, and those would be Washington, D.C., and Houston. Got it. Great, thank you. Just a quick question on collections for 4Q. What were collections like in L.A. and Orange County this past quarter? Just any other markets that were at the top range for collections. Sure. Obviously, L.A. County and California in general had higher amounts of delinquency. If you look in the fourth quarter, L.A., Orange County was 7.2% delinquent. San Diego was 5.4% delinquent. That got us to a 6.4% delinquency for California. On the other side of that equation, Houston was 0.4% delinquent. Denver, 0.5% delinquent. Orlando, 0.6%. Phoenix, 0.5%. Tampa, 0.4%. Yeah, I would just add to that California is just a classic example of people can pay, they just won't. It's not a function of the California markets are more negatively impacted. It's just a function of the government, both the state and local governments have just kind of put in the brains of folks that they just don't have to pay. All the various legislation and moratoriums and what have you, just have a group of people that look at it like getting a free loan from Camden. Ultimately they will have to pay or their credit will be destroyed. That'll be interesting to see how that all plays out and how the government responds to that going forward. Got it. Thank you. Our next question will come from Neil Malkin with Capital One. Please go ahead. Hey, everyone. Good morning. Good morning. First question, can you just talk about what you've seen or the sort of progression or change kind of the step to your metrics, with regard to in-migration from coastal markets? MAA talked about sort of the highest, I think, in history, new leases from people out of state. Just curious, what kind of action you're seeing there. That'd be great. Thanks. Yeah, absolutely. As you know, migratory patterns have long since favored the Sunbelt, and we're certainly seeing an acceleration of that trend in this current environment. There are a couple things that we look at. For instance, our markets score very well when we look at one-way U-Haul data, which is certainly an indicator of which markets are attracting and retaining residents. In fact, six out of the top 10 states for one-way U-Haul traffic are where we operate, while traditional, maybe we should call them outflow states like New York, New Jersey and Massachusetts, are ranking towards the bottom. Along those lines, although most of our new residents, in fact, do move within the Sunbelt markets, New York is actually our number one non-Sunbelt provider of new Camden residents. Finally, when we look at Google search patterns, there is a clear uptick in New York residents looking to move south into certain of our markets. For instance, from February of 2020 through December of 2020, there was an approximate 60% uptick in New York residents searching for Atlanta apartments. The search volume of New York residents looking for Miami apartments almost doubled over that same period. We certainly are seeing some very favorable trends. Which now keep in mind, as I said in the very beginning, these migratory patterns or the direct funnel out of the East Coast, West Coast, and Middle America into the Sunbelt has been going on for quite some time, it certainly does look like it is accelerating even more currently. If you look at announcements, for example, of moves of major companies, not only is Austin picking up a ton, including a $10 billion Samsung chip plant that just got announced recently, but 85% of all the office space in Austin is being leased by the FANGs, which is pretty amazing when you think about that. Especially when you start thinking about West Coast migration to Austin, and even Houston got a big number as well. Hewlett Packard Enterprise, their software and enterprise group just moved and announced a move to Houston as well. Like Alex says, it's been going on for a long time, but it's definitely accelerating now. Yeah. Oh, that's weird, I thought the tech guys only live in California. Guess not anymore. No, not anymore. Last one. Yeah, right. Last one, kind of going back to the first line of questioning. It is surprising that acquisitions are in your guidance, just given the sort of sub-four cap environment. I know that the last cycle, your balance sheet wasn't in as good as a position as you wanted to be aggressive. I guess, is that kind of going into the calculus of why you are being, I guess, aggressive here and, I guess, could you talk about just from an FFO standpoint, what kind of EBITDA yields do you think you are going to be selling, not AFFO, but EBITDA yields, and then versus what you think you can buy at? We think that, as I said before, the negative spread on the last cycle was 21 basis points on just We just look at real cash flow that I'm trading from one property to another. The challenge with FFO and even AFFO is a better way to look at it. Generally speaking, probably the widest spread we had in the last cycle was 60-70 basis points. Even though our budgets are conservative in that they're showing probably the higher end of that negative spread. Ultimately what I think is happening out there is that when we start selling older properties, the biggest bid in the market today is for value add and for older properties as opposed to newer development, recently leased up. We think that the spread is going to be similar in terms of negative spread. The bottom line is, if you look at what we did last time, we had $3 billion of dispositions, $2 billion of acquisitions, and then over $1 billion of development. When you sort of bring the development alongside the disposition acquisition program, you end up with a positive FFO contribution and AFFO contribution in spite of the negative spread. The way I kind of look at the acquisition disposition market today is, the pricing is definitely very, very robust. There's a huge private capital bid, and as long as we're taking advantage of that huge bid on our older properties, then we're fine being a top bidder on the newer properties as well. It's sort of like you're selling low cap rate, older properties and buying low cap rate, higher properties or newer properties. That's exactly what we did in the last cycle. To the extent we can keep that spread pretty narrow on the negative spread between the cash flow that we're selling versus we're buying, we're going to do as much of that as we can to improve the quality of our portfolio long-term. Keep in mind, there is a timing differential in our model. Once again, we're assuming the acquisitions will be mid-year with the dispositions towards the latter part of the year. Thank you, guys. Our next question will come from Derek Johnston with Deutsche Bank. Please go ahead. Hi, everyone. Good morning. Morning. We're looking for a little more granular update on private markets. Has your team seen elevated levels of distressed asset deals? We were surprised not to see any opportunistic acquisitions in Q4 outside of the land parcel. I guess the question, is this environment one where these potential opportunistic deals are still too risky until the labor market stabilizes? Do you believe private markets still need to adjust lower? Well, when you look at the public markets' cap rates relative to private market cap rates, there's a massive disconnect. I guess if you believe that the private markets are right and the public markets are wrong, then there'll be an adjustment in the private market, right? When you look at what's going on in the private markets with the 10-year at 1% with a reasonable spread, when you think about fundamentally negative interest rates and the ability for people to finance what is going to be a growing cash flow going forward. Even if you're worried about inflation, this is a great asset class to own. I think at the end of the day, there are no distressed assets out there. When you talk about distress, for example, we did pick up a development. We knew there was going to be shovel-ready developments that we could pick up, and we did one of those. The Durham project is a good example of that. We have some decent land purchases that we've been able to do. As far as distressed multifamily assets in America, they don't exist. If you think about the last cycle, most of the merchant builders, most of anybody who's buying properties from the private side, have a ton of equity in their capital stacks. There's not a lot of high-leverage, complicated structural deals out there that you can get, maybe now and then, but nothing of any significance. Okay. Thank you, t hat's helpful. Switching gears, how impactful has the new administration's energy policy been on market fundamentals in Houston, which historically has well absorbed excess supply, and that's especially for your best-in-class Houston portfolio and given the migration trends you highlighted. Are current energy policies creating a possibly more longer-term headwind in the Houston market, which is especially surprising given that crude is in the high 50s right now? Thanks. Yeah. I spend a fair amount of time with my energy friends, debating this issue, and most of them believe that the Biden administration's short-term executive orders and view is going to drive energy prices up, not down, and improve their businesses sooner rather than later. Part of it is, when you think about the ban on new leases for drilling. In Texas, for example, I think we have less than 10% of the entire drilling community is on federal land. You go to New Mexico, it's a different animal. What people think are going to happen is, in New Mexico, it's nearly 50%, I believe, or maybe even higher than that. The shale goes into New Mexico from the Permian Basin. What people are thinking in Texas is that people are going to abandon federal land in New Mexico and move over to Texas. When you think about Biden administration and its climate change issues, it's definitely going to have a positive effect on the price of oil, which will have a positive effect on Houston recovery. The other thing I think that is happening is that the energy transition, the idea that these energy companies, they know they have to transition to clean energy at some point. We all also know that you're not going to get rid of fossil fuels for the next 20 years because there's just no way you can flip a switch and get electrification of the entire highway system and all that. That's going to take decades to get done or maybe a decade or two. The Biden administration actually is a positive, not a headwind for a Houston and energy recovery, in my view. Thank you. Our next question will come from Nick Yulico with Scotiabank. Please go ahead. Hi, good morning. This is Sumit here in for Nick. I'll keep our question to just one because we're running up against the hour, and I want to have everyone ask questions. Really, if you could walk us through what drove the sequential declining rents and occupancy, quarter-over-quarter, particularly in Houston and D.C.? I'm trying to understand whether the competition is offering more concessions than you do, or is there something more seasonal about the decline? It doesn't seem to be reflected when you compare it to last year. I'm inquisitive about that. Then when we think about the dispositions that are focused on Houston or D.C., at least, you mentioned a couple of questions later this earlier at the start of the call, is that improvement contemplated in your SS rev growth range, for the year? Technically, that's two questions. On the decline sequentially in Houston, we had 20,000 apartments delivered last year. We're in the process of delivering another 20,000 apartments this year, and that's into an already pretty weak environment given what's going on, even though I think Ric is right, and I agree with the fact that incrementally, what's going on right now is probably going to be a positive for Houston. The damage was already done in the last two years with the decline in the rig count from almost 900 rigs working to about 200 working. The job losses that were associated with that fall off have already, kind of worked their way through the system. The bottom line is that 40,000 apartments being delivered in Houston, at any kind of a normal absorption rate would require 200,000 jobs to be able to take up that slack. It just obviously hasn't happened. It looks like on our data providers, they're expecting a much better result this year, maybe as much as 100,000 jobs, which would be great, and that would take up the 20,000 apartments that are being delivered this year. We still have stuff that's kind of working its way through the system from the completions in 2020 that we've got to work through. I think it's just as simple as that we have got way too much supply. It's hand-to-hand combat on the stuff that's either downtown or inside close in assets, which makes up a decent part of Camden's portfolio. It's just a lot of competition we got to work through. the only other thing I'd add to that is, although Typically, we do see a sequential decrease from the third to the fourth quarter. 2019 was unusual because we actually had higher occupancy than typical. A lot of this is also seasonality. What was the second part of your question? I guess, you mentioned that your dispositions would be focused on Houston and D.C. It's related, it's not a second question. I'm just saying. Is there any improvement in your assets statistics contemplated in your range, towards perhaps the more optimistic side from the dispositions or no? Yes. We believe that both D.C. and Houston will be better in the second half of the year, and that's why we're going to be selling in the second half and not in the first half. It's clearly our strategy is based on that thought. If you look at what's actually in our model, we are assuming 150 basis point negative spread, and we absolutely anticipate that we're going to be able to do better than that. Right. Okay, great. Thank you. Our next question will come from Alexander Goldfarb with Piper Sandler. Please go ahead. Morning down there. The first question is, just going on the capital, I'm not going to use the word capital allocation because it's getting overused, but as you guys underwrite both new deals and developments, just speaking to every private guy next to industrial, Sunbelt apartments are the hottest asset class. Unfortunately, construction costs seem to be unabated. Labor, materials, all that fun stuff just continue to go up. As you guys think about trying to invest in where people are paying three caps or develop where lumber's through the roof, a constant part of your prior investment attempts have been just inability to find deals that pencil. Do you anticipate anything changing this time? Previously, where you had commented that Southern Cal was a discount to the Sunbelt, hence why you were hesitant to sell Southern Cal, is that now changing where maybe there is a positive arb there to sell Southern Cal, and maybe that's one of the boosts that will help you make some of the numbers work? Just trying to think about how you're viewing the investment world, because it definitely seems to just get harder and harder. Well, I think you're exactly right. It gets harder and harder. I don't think there's an arb between Southern California and any other market. I think there's still a very robust bid for Southern California in terms of pricing. I can't sell a Southern California for a higher cap rate and then buy somewhere else. It's more from our perspective, it is hard, and our people have done a really great job, our development team in manufacturing transactions that work. Again, it's $150 million-$300 million it starts at, and that's pretty much all we have been able to figure out at this point. When we start talking about the buy and the sell, that's a whole lot easier because, and as long as we're selling at what we think is really good cap rates, we can always buy. You just have to be the highest bidder, right? Okay. Ric, if you're saying though the Southern Cal's a good bid, does that mean you'd finally start to prune there and recycle out of the drudgery of dealing with Southern Cal? We're in the best parts of California. Okay? Maybe ex- L.A. When you look at a recovery scenario, I think those markets are going to do pretty darn well. When we start thinking about longer term, how we want to sort of position ourselves from a geographic diversification, I'm still good with California recovering in the next two or three years. The question of longer term, do you want to put up with the people who don't think they have to pay their rent and the government issues? That's a longer debate. Every time when I'm looking at future cash flow growth, I think Southern California, especially where we are, is going to recover and do really well. Yeah. The dispositions are going to I think Ric mentioned earlier, we're looking for the dispositions to come from Houston and Washington, D.C. That's based on The assets are dear in every one of our markets, including Houston. We're overweight in both of those markets. At the margins, that's where the dispositions are going to come from. Okay. That's fine. The second question is, Alex, in your comments, you mentioned that the guidance is predicated on sort of a return to normalcy by mid-year. Sort of looking at the economic data, in the Sunbelt, you guys have a much better situation to start from than us in the coasts. How much change are you really expecting? I assume that Atlanta, Houston are not like San Francisco or New York, where everyone's still at home. Can you just give a sense of relativeness of what you mean by 'return to normal' versus what we're experiencing here on the Coast? Yeah, absolutely. A lot of it circles around bad debt. Our belief is that bad debt will start to curtail in the latter part of 2021 to be more in line with what we see in a typical year, and sort of using 2019 as our guide. That's one item, and then the second item, is our ability to really sort of push new leases. If you think about it, renewals, we've started pushing those again, but we have not been pushing new leases. Our hope and w hat's in our models is that we're going to be able to start really sort of pushing there in the latter part of the year. Obviously, not to huge numbers, but that's the perspective. Okay, thank you. Our next question will come from Austin Wurschmidt with KeyBanc. Please go ahead. Yeah. Thanks, guys. Just a little more on the investment side. I'm curious if the assets in Houston and D.C. that you're targeting to sell, is it more of an age focus, or are you considering selling any more of your infill assets that may be exposed to new supply? What's sort of the thinking around the product type that you're looking to dispose of in those markets you mentioned that you're already overweight? It definitely, it's more age driven. What we do is we force rank all of our portfolio, every year, and we look at it every quarter, and we look at total return on invested capital and what the growth rate on that return on invested capital will be for the next two or three years and try to pick properties that are high CapEx with slower growth profiles. If you have to put in CapEx, it doesn't give you a return, then that obviously lowers that return on invested capital in the future. Bottom line is that generally speaking, properties that are older with higher CapEx fall into that category. When you think about recovery, even in Houston, generally speaking, when you have a recovery, the higher end urban assets recover at a much faster rate, from that perspective. We don't look at it as, "Gee, there's going to be a lot of pressure on lease-ups and what have you in the urban core, so let's sell those assets and keep our sort of older, higher CapEx assets." It's more about what we believe the next three years, sort of the trajectory of return on invested capital is after CapEx. Makes sense. On the flip side, I guess, are there any smaller secondary markets you're not in today that have good demand trends from some of these in-migration trends to the Sunbelt, where maybe you could be more competitive from a pricing standpoint or earn a premium yield and even tuck it into the portfolio without much added overhead? Have you considered that at all? Yeah, the one market that we've talked about in the past that's Sunbelt market that we have spent a lot of time in, trying to make sure that we just understand the lay of the land. We've done all the due diligence that we need to do to kind of know where things trade and have the right relationships, is in Nashville. It's right down the fairway of Camden's markets. It's high growth, highly educated population. There's been a ton of new construction in Nashville, but so far that hasn't really shown up in pricing. It's as expensive as most of our other cities are. That market would be one that is going to get a lot of attention as we kind of look for, is there an opportunity to expand, and do we want to make a bet in Nashville or two as part of this rollout. Other than that, we're really happy with our footprint, as you might well know from the geography and how it's performed through this part of the pandemic. We'd love to add some assets in Nashville over time and make that one of Camden's core markets, because it's got all the other characteristics that we look for. Just a quick follow-up, is development as well as acquisitions on the table? Are you thinking sort of one-offs and building over time, or maybe something more on a portfolio or more scaling up a little quicker? Yeah. It'll be acquisitions first. Obviously, if we could find a multiple asset, small portfolio that would be the ideal situation. Those are like chasing a unicorn these days in markets like Nashville. Understood. Thank you. Our next question will come from Nick Joseph with Citi. Please go ahead. Thanks, appreciate the comments on migration trends. I'm wondering for the new residents that you've seen move from New York or California or any of the other kind of higher tax states, number one, are they working remotely or are they typically relocating for a job? Number two, are you seeing any differences in income levels? I ask if there's just an opportunity that ultimately you may be able to get higher rents, if there's kind of a difference on the income side? Thanks. Yeah, absolutely. We do not pull that data specific to where they're from and their income. What I do know, from all of my friends in New York City, that every single time they come to our markets and realize what they can rent, and the price of it, my gut is that they are probably used to paying a whole lot more in rent, and that gives them the capacity to lease with us, and it also gives them the capacity to absorb rental rate increases every time. Yeah, I think there is some anecdotal evidence that people are more mobile and working from home and are renting apartments here and not coming for jobs per se, but already have jobs in other markets, and they're just continuing to work at those jobs. I'll add to that. We have a banker of ours who has relocated permanently from New York to Houston. When I spoke with him and went through his daily expenses, as he put it, he has no expenses in Houston. As compared to what was costing him in New York City. It is a dramatic uptick in the quality of life. That's the reason why people have been attracted to Sunbelt markets for so long. Yeah, I think the issue of whether people are making more money, can they pay more rent? I think the answer is yes. Right now, the idea that the market is soft enough where you can't push rents today no matter what people make. Right? Ultimately, as the markets firm up, then the resident bases are higher income and can then take rental increases once we have pricing power to be able to do that. Right now, we just don't, given the pandemic and supply and all that kind of stuff. One banker doesn't make a trend of everybody. There's still a lot of us here that love New York City for all the things it provides. Yeah, look, I think New York City is going to be fine long term. I just think it's going to take longer to get back, and same with San Francisco. You can never write off those urban markets because people want what the urban markets give. I think the urban markets, one of the things I think is really fascinating is the urban in the Sunbelt compared to urban in San Francisco, New York, and L.A., for example. We leased 20 units in our downtown project property last month. That was the highest we've leased in a long time. Even though there's only 16% of the workers that are working in downtown Houston, people are leasing apartments in downtown Houston. I wouldn't write New York off or San Francisco, for sure. Thank you. Our next question will come from Rich Hightower with Evercore. Please go ahead. Hey, guys. Hi, Rich. Hope everybody's doing well. I'll try to keep it quick. I know that there was some new lease-up pressure on rents in the fourth quarter, as we roll forward to 2021 here, can you give us a sense of whether the supply pressure is first half weighted, back half weighted, as far as you can sort of peg those precisely? Yeah, I don't think it will have any meaningful distinction. I say that because whatever has been forecast or put in people's models as far as the actual month of delivery, they've been wrong for the last three years, and that's going to continue. It takes longer. There's still a lot of pressure on skilled labor. The process of going through inspections and getting the city officials to sign off is slower. Everything that can go against a schedule is going against the schedule right now. My guess is that even if you had a month-by-month roll, I wouldn't put much stock in it as far as accuracy is concerned. When you get in a market like Houston, where you're going to get 20,000 apartments, does it matter if 2,000 of them move from February to November? The answer is no. Right. Okay. Thank you. You bet. Our next question will come from Haendel St. Juste with Mizuho. Please go ahead. Hey, guys. Quick one from me here. What's the thinking on Dallas here? It's your number four market. It's been fairly soft the last couple of years. Sounds like more of the same this year. Maybe can you pair that with some comments on Atlanta with just leapfrog Houston as your number two market. Are you going to continue to add more there, or are you pretty happy with your exposure? We like Dallas long term, we definitely can move some of our exposure up there. We also like that when you look at their growth profile, looks really good over the next two or three years. We think that Dallas is going to be a top quartile revenue growth market here in the next few years. As far as Atlanta goes, yeah, Atlanta is a large market for us right now. We have acquired properties there, we've been more of a developer in Atlanta, we'll probably stay that way for a bit. Our acquisitions, if you look at our markets like Austin, we have 3% or 4% of our portfolio there. In Tampa, it's like 4.5%, in Raleigh, it's 5%. Those are the markets we're going to try to spend more time in from an acquisition perspective so we can get that balance a little bit more. When you start looking at the growth profiles of Tampa and Orlando, or Tampa and Raleigh, and Austin even, those are all really good, strong growth markets long term. Got it, thanks. Forgive me if I missed this, but where are the $320 million of development starts you've outlined for this year, and what type of yields are you underwriting? The new starts this year are- If you look in our supplemental package, we actually, under the development pipeline, we always put them in order. The first one we have, which is Camden Durham, which is the site that we just purchased in the fourth quarter, and it was shovel-ready. That's $120 million. Preceding that is, or following that is Arts District or Cameron Village. Some subset of that. Durham is the one that we expect to get started pretty soon. Yeah, Durham is classic. It's an urban project, but it's more urban in Durham is not urban in L.A. Those yields are going to be in California, are going to be in the low 5%, and the sort of middle of the country are going to push on 6%. Got it. Thank you. Next question will come from John Kim with BMO Capital Markets. Please go ahead. Thank you. On the 30% increase in insurance costs you expect, can you provide any more color on why it's such a big increase, and if there's any particular market that's impacted more? What I will tell you is just a couple of sort of facts before we start that discussion. In 2020, the U.S. set a record for $20+ billion natural disasters. Globally, there were $69 billion natural disasters in 2020. That is causing a global insurance challenge. To give you an idea, our property insurance, we do our renewals in May, on May 1st, but we are being told that property insurance for us will be up on the premium side about 40%, and that GL will be up almost 100%. This is not a Camden-specific issue, this is 100% an issue of the global insurance market. Therein lies the challenge. It's interesting because I talk to all of my peers. We all have the same problems. As I said, it's not a Camden issue. In fact, what I will tell you is that Camden's going to do better than most because number one, we actually developed the vast majority of our real estate. On the property side, we know exactly what's behind the walls, and that's very helpful if you're trying to insure. On the GL side, we have fantastic loss claims, so that's going to be very helpful for us too. That's the real issue, and that's what we're all facing. Is it fair to say Miami, Houston, California, those are the markets that are impacted more than some of the others? No. You have to remember, once again, I said this is a global issue, and when they underwrite us, we do not go out and get property-specific insurance. They're looking at our entire book of business. By the way, for habitational, which is one of the least favorite for insurance providers, we score very well because of the quality of our real estate and the fact that we've had very limited losses, and we've survived natural disasters exceptionally well. We score very well. This is not market-specific issues. This is across-the-board habitational, in addition to all people who are seeking either property or general liability insurance. Okay. My second question is on your ability to push renewal rates. You mentioned pushing new rates in the second half of this year once things normalize. What's your ability to push or increase renewal rates given you typically don't provide concessions? Yeah. We're at running about from 2%-3% right now on renewals, and we've got renewals that have gone out through February and March, and we think we're going to realize somewhere in the 3% range up on renewals. That's been true. We've been in that range now since we reinstated raising rates on renewals. I think we've proven that that's kind of what the market will allow right now in terms of renewal rates without giving up occupancy, and our retention rates are still at historic highs in terms of the ability to maintain a residence. It's clear that we're not forcing any vacancy by where we are on renewal rates right now, which is going to be in the 2%-3% range. If you look at what's in our budget for the full-year, we are anticipating renewals to increase by 3% and new leases to be down about 2%. This all comes back to the original question that our guidance is predicated upon a recovery in the second part of the year. If we get a strong recovery, obviously we can push those rents further, we can push those renewals further. To Keith's point, what we're currently doing is 3%. Great. Thank you. Our next question will come from John Pawlowski with Green Street. Please go ahead. Thanks. Just one final question from me. Alex, in terms of other revenue, like fee revenue hitting same-store revenue, parking, late fees, common areas, when you put it all together, what's the kind of year-over-year lift or drag on same-store revenue versus 2020? Yeah. No, absolutely. Here's how I would sort of break out the difference between 2020 and 2021 when it comes to revenue. The first thing is that we are anticipating lower bad debt in 2021, and that was the other component of that our guidance is predicated upon a recovery. We think we'll pick up about $2 million for lower bad debt. We think we'll pick up about another $2 million for lower fee concessions. What we think is higher utility income should be about $1.5 million to us. Chirp, on the revenue side should be about $1.2 million for us. Renters insurance, and we've got a new renters insurance program that we're rolling out, should be about $0.5 million. That pretty much makes up the delta between our 2020 actual revenue and our 2021 budgeted revenue. All right. Great, thanks so much. Our next question will come from Rob Stevenson with Janney. Please go ahead. Pardon me, your line may be muted. Our next question will be Alex Kalmus with Zelman & Associates. Please go ahead. Hi, thank you for taking the question. Given that we're shifting in from the late stage of last cycle into this recovery, have you given thought about the balance sheet and potentially expanding the leverage profile to expand in those A quality markets, especially given just sort of the wall of capital supporting multifamily in the transaction market these days? The answer is no. Well, the answer is yes, we think about our balance sheet all the time. The answer to are we going to increase our leverage profile beyond the sort of the metrics that we have been talking about for a long time, which is keeping our debt to EBITDA between 4% and 5% or 4x and 5x. That's where we're going to stay, we think that given we are at the start of a new cycle, I think. On the other hand, I remember I was at my last conference in March, the first week of March of 2020, and that question came up multiple times. People sort of maybe criticizing us for our low debt profile. They kept asking me, "Well, what's going to be the problem? What do you think is going to happen? Why do you need a strong balance sheet? Then two weeks later, we have the pandemic. All of a sudden, stock price goes to $62 from $120. The capital markets shut down dramatically, including the unsecured debt market. All of a sudden, people started talking about Camden's amazing strong balance sheet, best in the sector, and gee, they were going to be defensive and who's got too much debt. So we're going to continue to keep it one of the strongest balance sheets in the sector. Just because there's the potential of a recovery, which I think is going to happen, we are going to keep our strong balance sheet with us for a long time. That's a fundamental Camden thing you can take to the bank, I think. For sure. Yeah, I guess it was just predicated on the limited distress we're seeing and p otentially maybe there's some more room, but understood and very prudent. Then this could be a yes or no question, given how late we are, but just looking at the land purchases from last year at the beginning of the year, sort of the same market rally you're on. The land price tag was a little higher in November. Is that something that is happening throughout the market, or is this because the deal was more urban and ground-ready, as you mentioned earlier? Yeah. If you look at our land acquisition in the fourth quarter, this was a shovel-ready site. We effectively bought permits, we bought plans, we bought all of these other things that go along with getting a deal ready to go. It really is an apple and an orange. Got it, thank you very much. Okay, I don't think we have any other questions. We appreciate your time today, and we will visit with you on our new interactive virtual platform next quarter. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.