Good morning, and welcome to Camden Property Trust's first quarter 2023 earnings conference call. I'm Kim Callahan, Senior Vice President of Investor Relations. Joining me today are Ric Campo, Camden's Chairman and Chief Executive Officer; Keith Oden, Executive Vice Chairman and President; and Alex Jessett, Chief Financial Officer. Today's event is being webcast through the investors section of our website at camdenliving.com, and a replay will be available this afternoon. We will have a slide presentation in conjunction with our prepared remarks, and those slides will also be available on our website later today or by email upon request. If you are joining us by phone and need assistance during the call, please signal a conference specialist by pressing the star key followed by zero. All participants will be in listen-only mode during the presentation with an opportunity to ask questions afterward. Please note this event is being recorded. Before we begin our prepared remarks, I would like to advise everyone that we will be making forward-looking statements based on our current expectations and beliefs. These statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from expectations. Further information about these risks can be found in our filings with the SEC, and we encourage you to review them. Any forward-looking statements made on today's call represent management's current opinions, and the company assumes no obligation to update or supplement these statements because of subsequent events. As a reminder, Camden's complete first quarter 2023 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 this call. We would like to respect everyone's time and complete our call within one hour. Please limit your initial question to one, 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. Good morning. Culture matters. This year, we are celebrating Camden's 30th anniversary as a public company, and last week, we wrapped up a 12-city celebration tour that included all 1,600 Camden team members. The tour is an annual Camden event, but we usually split up our executive team to cover the events. This year, Alex and Laurie Baker joined Keith and me at all 12 stops to celebrate our team's 2022 accomplishments and Camden's 30th birthday. Each celebration featured our teams in vintage 1990s attire and demonstrating one of Camden's 9 core values to have fun. I'm gonna share an inside baseball look at Camden's unique culture set to a 1990s classic, All Star. While we were on tour, we got word that for the 16th straight year, Camden was included on Fortune's list of the 100 best companies to work for. We claim this honor on behalf of our Camden team and the entire REIT world. It is a testament to just how much progress we have made over the last 3 decades. That culture really does matter. Operating fundamentals continue to be good. We are on track to meet or exceed our 2023 plan. Multifamily transactions have slowed dramatically. Activity for the first quarter was down 74% from last year as buyers and sellers try to recalibrate the increase in their cost of capital and what the future market dynamics may look like. New starts continue to be elevated, with only legacy projects with committed capital starting. We expect the lag in Federal Reserve policy will start to have its desired effect with a significant reduction in new starts beginning in the second quarter and throughout the next year or two. I'm betting the over on a 60% reduction in starts once monetary policy and the banking crisis make their way through the system. I wanna thank and congratulate Team Camden for their hard work in staying true to our commitment to improving the lives of our team members, our customers, and our stakeholders one experience at a time. Next up is Keith Oden. Thanks, Ric. Some details on our first quarter 2023 operating results and April trends. Same-property revenue growth for the quarter was ahead of our expectations at 8%. We've raised the midpoint of our 2023 revenue guidance as a result. Once again, we saw the highest growth rates in our three Florida markets: Tampa, Orlando, and Southeast Florida, with Nashville also posting strong results. First quarter signed leases grew by a blended rate of 4%, with new leases up 1.8% and renewals up 6.7%. Our preliminary April results are trending at a similar level for blended rate growth, with slightly higher new lease rate growth and moderating renewal rate growth. Renewal offers for May and June were sent out in the mid-6% range. While these growth rates were down from the record levels seen in the first four months of 2022, our 2023 year-to-date performance is actually stronger than what we would historically expect to achieve during the first four months of the year. Occupancy averaged 95.3% during the first quarter of 2023 and is trending slightly better to date in April. Net turnover for the first quarter of 2023 was 36%, in line with the first quarter of 2022, and move-outs to purchase homes dropped to 10.1% for the first quarter, one of the lowest levels on record in our 30-year history. I'll now turn the call over to Alex Jessett, Camden's Chief Financial Officer. Thanks, Keith. Our new development lease-ups remained stronger than usual as we averaged approximately 45 leases per month at Camden Atlantic, a 269 unit, $101 million community in Plantation, Florida, which stabilized during the quarter. Approximately 40 leases per month at Camden Noda, a 387 unit, $108 million community in Charlotte, which began leasing during the quarter and is now over 35% leased. Approximately 30 units per month at Camden Tempe II, a 397 unit, $115 million community in Phoenix, which continued leasing during the quarter and is now over 70% leased. Turning to our financial results, over the years, Camden has fully supported the Nareit definition for funds from operations, or FFO, we will continue to report that metric going forward. However, in an effort to improve comparability and alignment with the current reporting practices of our peers in the multifamily REIT sector, we will now also report Core FFO to adjust for items not considered to be part of our core business operations. We presented both metrics in our earnings release last night for our actual performance during the first quarter and have included both metrics in our guidance for the second quarter 2023 and full year 2023. Any property level adjustments we make to derive Core FFO, which primarily are unusual or large casualty events, severance charges in 2022 related to changes to our on-site staffing model, and the amortization, if any, of below or above market leases associated with acquisitions, will also be adjusted from our same store results. These property level adjustments will be located in the other section of our components of NOI in our supplement. For the first quarter, we reported both Nareit FFO and Core FFO of $1.66 per share, $0.01 ahead of the midpoint of our prior quarterly guidance, resulting primarily from better results from our same store communities. These results represent a 12% per share core increase from the first quarter of 2022. Our first quarter outperformance was primarily driven by $0.02 per share in lower than anticipated levels of bad debt as we experienced a higher than anticipated level of move-outs by non-paying residents during the quarter. All the municipalities in which we operate have now lifted their restrictions on our ability to enforce rental contracts. The resulting move-outs of non-paying residents happened earlier than we anticipated, with twice the amount of move-outs in the first quarter of this year as compared to the first quarter of last year. Although these early move-outs of delinquent residents do put some pressure on physical occupancy, we reserve for effectively 100% of delinquent balances. Therefore, there is no net negative impact when non-paying residents leave. Rather, we receive the benefit of having our real estate back, the opportunity to commence a lease with a resident who abides by their rental contract, and lower bad debt from having a new resident who actually pays. Our outperformance was also driven by half a cent in slightly higher than anticipated net market rents and $0.01 in higher other property income, primarily driven by elevated levels of utility rebilling, which was entirely offset by higher utility expenses. Our three and a half cents per share of positive same-store revenue results was partially offset by two and a half cents of higher same-store property expenses, primarily driven by much higher than anticipated levels of property insurance claims resulting from an unusual spike in smaller claims, generally under $25,000 per occurrence, which did not count towards our aggregate $3 million dollar exposure. To illustrate the spike, in the first quarter of this year, we experienced the same number of claims that we experienced cumulatively in the first quarter of the prior 3 years. At this time, we believe the volume of claims is an anomaly, but we have made a resulting partial increase to our insurance forecast for the rest of the year, which I'll discuss later. Our original 2023 same-store guidance called for revenue growth of 5.1%, expense growth of 5.5%, and NOI growth of 5%. Included within our 2022 results, which drove this original guidance, was approximately $900,000 of first quarter 2022 revenue associated with the amortization of below-market leases from previously acquired communities and approximately $900,000 of first quarter 2022 severance costs associated with changes to our on-site staffing model. These offsetting amounts are now considered non-core and have been removed from our 2022 same-store for 2023 comparison purposes. Additionally, our full year 2022 results included a net $1 million of non-core casualty losses, primarily in the back half of 2022, which will also be removed from our 2022 same-store results for 2023 comparison purposes. The effect solely from this adjustment would be to increase our original 2023 same-store revenue guidance from 5.1% to 5.2% and increase our original same-store expense guidance from 5.5% to 5.9%. Last night, we further increased the midpoint of our full year revenue growth to 5.65%. This additional increase is based upon our first quarter revenue outperformance, which primarily resulted from the previously mentioned acceleration of move-outs of non-paying residents and our slightly higher net market rents and other property income. Additionally, we further increased the midpoint of our same-store expense growth to 6.85%, almost entirely driven by actual and anticipated higher insurance costs. Insurance represents approximately 6% of our total operating expenses and, after taking into account the previously mentioned adjustments for 2022 non-core casualty events, was originally anticipated to increase by 18% in 2023. After taking into consideration the higher first quarter claims, we have increased our anticipated monthly losses in our forecast. We have also updated our May first anticipated premium increase from 15%-20% as insurance providers continue to face large global losses. We now anticipate our total insurance expense will increase by approximately 35% in 2023. These insurance increases for the remainder of the year are partially offset by anticipated slightly lower salaries and property taxes. After taking into effect the increases in both revenue and expenses and the adjustments for non-core property level events in 2022, the midpoint of our 2023 same-store NOI guidance is 5%. The midpoint of our full year 2023 Core FFO is $6.86. At the midpoint of our guidance range, we are still assuming $250 million of acquisitions, offset by $250 million of dispositions with no net accretion or dilution and $250 million-$600 million of development starts spread throughout the year with approximately $290 million of annual development spend. We also provided earnings guidance for the second quarter of 2023. We expect Core FFO per share for the second quarter to be within the range of $1.66-$1.70, representing a $0.02 per share sequential increase at the midpoint, primarily resulting from an approximate $0.03 sequential increase in same-store NOI, resulting from higher expected revenues during our peak leasing periods, partially offset by the seasonality of certain repair and maintenance expenses and the timing of our annual merit increases, and a half cent sequential increase related to additional NOI from our development and non-same-store communities. This three and a half cent cumulative increase in Core FFO is partially offset by a half cent decrease from higher second quarter G&A resulting from the timing of various public company fees and a $0.01 decrease from higher floating at rate interest expense. Our balance sheet remains strong with net debt to EBITDA for the first quarter at 4.3 times, and at quarter end, we had $268 million left to spend over the next three years under our existing development pipeline. At this time, we will open the call up to questions. We will now begin the question and answer session. To ask a question, you may press Star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star then two. Once again, that was Star, then one to ask a question. At this time, we will pause momentarily to assemble the roster. Our first question will come from Jamie Feldman of Wells Fargo. Please go ahead. Great. Thank you, thanks for taking my question. I guess I was hoping to focus on rent growth in April versus the first quarter. It looks like it moderated down to 3.9% from 4.5% on a blended basis. Can you just talk about if that seems to be a trend heading into spring leasing, if there's anything else to read into there? Then maybe across the different markets, what drove the decline? I, we did see a slight decrease, overall, we think this is April. The March to April transition to us looks a lot like previous years to COVID. We do expect to see and have seasonality back in our leasing activity. It's certainly a different feel than what we had in the last 2 years of transition into the spring leasing season. I don't see that. I think we'll have a normal seasonality. I think that we're on track to beat our original plan. I think at the end of the first quarter in every single market, with the exception of 1 of the 15, we're actually ahead on budgeted revenues. From our perspective, it looks like, A, more normal, and B, on track and slightly better than what we originally anticipated going into the second quarter. Jamie, I think I'd focus more on the signed leases rather than the effective, because the signed is more an indication of the direction we're going. Signed leases went from 4% in the first quarter to 4.2% in April. That actually increased. Okay. That's very helpful. Thank you. The next question comes from Josh Dennerlein of Bank of America. Please go ahead. Yeah. Hey, guys. Maybe just one follow-up on your comment there. You said one market is underperforming your budget. What market is that? Maybe on the flip side, what markets are performing the best? Yeah. So Atlanta was actually below on revenues, was below our original budget in the first quarter, and it's primarily due to, you know, skips and evictions are pretty elevated. We also had some challenges with an elevated level of fraud, which, you know, pops up from time to time in several of our markets. It was just, it was sort of Atlanta's turn for that to happen, and we did see a fair amount of that in the quarter. Across the board, other than Atlanta, everyone, every single market, outperformed our original plan. You know, we had continued strength in the Tampa, Orlando, South Florida markets. Nashville had a great quarter relative to plan. I think overall, at the footprint, it really looks like it performed very well in the first quarter, and I think we're off to a really good start in the second quarter as well. Thank you. The next question comes from Derek Johnston of Deutsche Bank. Please go ahead. Hi, everyone. Thank you. You mentioned in your opening remarks a possible 60% drop in new development given the macro. You know, I'd ask, you know, what are you seeing in input costs for development? You know, given it takes a couple of years to complete, does second half 2023 become interesting to Camden given the balance sheet from a starts perspective and the land bank, so that you really have new product as deliveries decline as in the downturn? Absolutely. When you think about what's going on, the only deals that are getting done now are legacy deals that have debt and equity already sort of committed to. Any new development or, you know, sort of second- and third-tier developers are not getting their deals done. There will be a significant decline in, we believe, in starts beginning in the second quarter and probably all the way through into the first part, maybe second half of 2024. Which definitely sets up a, you know, a pretty interesting environment in 2025 and 2026 because obviously, as you point out, that development takes a long time to, you know, to bring to the market. Given our strength and our balance sheet and our pipeline, we definitely will look at delivering, starting new projects when other people can't and delivering into a what could be a really good market in 2025 and 2026. I think the input costs, the good news is that they are flat. We haven't started to see major decreases in cost. Lumber is at a, you know, at a very low level today, that's good news. Rather than in our pro formas, we would usually put a 1% per month inflation, let's say if we were doing it last year at this time. Now we're at least flat. Potentially once the, I think the subcontractors start working through the inventory they have today and they start looking out on their horizon, they're gonna have to squeeze their margins to be able to get new business because there's gonna be more competition, I think, for, you know, less projects getting built, therefore more competitive set with the subcontractors and which should, you know, constrain their margins and perhaps have costs go down more from here. The big input that hasn't gone down yet are salaries. At the end of the day, you know, you just haven't had a lot of pressure on construction workers or folks that are in that side of the business. That could happen depending upon, you know, we know starts are gonna come down. The question is, how fast will the margins compress for the subcontractors? That's where the largest part of the, you know, input cost on construction is. Thank you. Mm-hmm. The next question comes from Alexander Goldfarb of Piper Sandler. Please go ahead. Hey, good morning. Morning down there. Ric and Keith, I have to ask you guys have been a standout in Nareit discipline on FFO, and pretty upfront in taking all of your lumps, positive or negative over the years. Sort of curious why you guys chose to move when Core FFO is not an official metric. There's no standardized definition, everyone sort of dines à la carte and, you know, I mean, we just did a study of it, and most of the items that people back out are actually recurring in business: legal expense, storms, debt prepay. I mean, all these are normal parts of the business. I'm just sort of curious why you guys chose to go down this route. Yeah. We chose this because our competitors are doing it. The challenge we have, we've been sort of coached by other investors and shareholders that they were getting confused about numbers. I'll give you exact example of that. When we produced our, you know, our initial guidance for 2023, probably half or two-thirds of analysts missed the mark-to-market on rents from our acquisition of the Texas Teachers portfolio. We just wanted to codify it in a way where people could actually see it in specific financials and not have to look through footnotes and try to figure out, okay, yeah, they have this item and that item. We're trying to just make it, you know, more simple for people to understand what's going on in those numbers. I think, having to have people scour through the financial statements and try to understand, where the variations are is complicated, and we're trying to make it more simple for people. We still have Nareit FFO definition, obviously, and then we just give folks more information, about adjustments to Nareit so they can. So they don't. It makes it easier for people, I think, to, you know, model, future, you know, future, earnings. I mean, for 30 years it worked, and it's our job as analysts to go through the financial statements, right? I mean, that's. It doesn't create comparability only because you guys may have certain items you pick out, other companies have others. It arguably makes it more confusing, not easier, appreciate the feedback. Based on the conversations that we have with people after they missed these, this really big item in 2022 relative to 2023. You know, now all you have to do is go in and look at the reconciliation between Nareit and core, and you can see all the items there, and you don't have to go digging through financial statements. Unfortunately, I know you guys are pretty, you know, analysts are pretty, you know, overworked, if you wanna call it that, in terms of being able to find stuff. It may be the job of a lot of folks, but we just wanna make it easier for those who, you know, don't have the time to go through and read every footnote. Thank you. Mm-hmm. The good news, Alex, is that for people who wanna use the original Nareit definition, it's there for anybody to use. It just... I think more information is generally better. Thanks. The next question comes from Haendel St. Juste of Mizuho. Please go ahead. Hey, guys. Why don't we go back to the commentary on getting some of the long-term delinquents out of the portfolio. I think we assume you're primarily referring to SoCal. I guess, can you remind us, what's in the full year 23 same-store revenue guide from a net bad debt impact perspective, and what's your updated expectation? Thanks. Yeah, absolutely. Originally we anticipated about 140 basis points for the full year, and today we've got it about 120 basis points. Yeah, let me just give you a little color too on skips and evictions. Skips and evictions are basically double in Q1 what they normally are, and 80% of those skips and evictions were people that owed us significant amounts of money. The good news is, while our occupancy is not as high as it was and our skips and evictions have doubled, we're getting people out that aren't paying rent. From an economic occupancy perspective, it's a really good thing to have that happen. We're hoping that it accelerates in markets like Southern California. As soon as we can get our real estate back, you know, with paying customers, the better for us. Haendel, just as. And- As a data point reminder, for 27 plus years, our bad debt ran roughly 50 basis points. Then in COVID, we went up to about 150 basis points. It's clearly we've peaked, and we're coming back down that curve. You know, Is it a new world order where we don't ever get back to 50? I hope not, but I certainly don't have any reason to sit here and believe that we don't get back to 50 basis points of bad debt once all of the bad actors that have been cycled through. Certainly it's our hope and expectation that we will get a lot closer to 50 basis point of bad debt expense from where we are today at 120. No, that's helpful. A follow-up, if I could. I guess, the plan to go after the 80% who skipped, what's your expectation or plan there? Then with the turnover picking up from these, getting people, I'm assuming CapEx turnover... Some of the OpEx costs are going up. Just curious if that's already embedded in your expectations well? Thanks. The offset on the turnover is that we've had very low move-outs to purchase homes, so that's been the benefit on that side. We're not really seeing a significant uptick on CapEx or repair and maintenance costs associated with turns. And then the folks who move out with balances, obviously we're gonna do what we can legally to try and make them pay what they owe us. Fair enough. Thank you, guys. Mm-hmm. The next question comes from Eric Wolfe of Citi. Please go ahead. Thanks, good morning. It sounds like a piece of the same-store revenue increase was due to higher rate growth in 1Q than expected. Could you just talk about sort of how much higher it came in than what you were thinking, which markets drove the improvement, and whether you still expect overall market rent growth to be 3% this year? Yeah, we think overall market rent's gonna be just a hair north of 3%. That's what we've got that we've got baked into our numbers. What I will tell you is that we did see slightly higher market rent really across the board in every one of our markets. So that's a good trend. Obviously one quarter is, you know, makes us a little optimistic, but we'll see how it continues as we go through our peak leasing periods. Okay, thank you. Mm-hmm. The next question comes from Ami Probandt of UBS. Please go ahead. Hi, everyone. I was just hoping to touch on Houston. It's been a bit of an underperforming market, and I was wondering if you thought that that was more due to a muted level of demand, or if you're seeing good demand but supply is just making the conditions challenging. What are your expectations for Houston going forward? Houston is going to be, I think, a really good long-term market. It definitely has supply challenges. You know, what's interesting is that when you compare Houston to, say, Dallas or Austin, Houston was slower to add back jobs primarily because of energy. The energy companies have not added back all the jobs that were cut during COVID. They've figured out how to be much more efficient. When you start looking at other metrics like, for example, the current census data that came out just recently for 2021 versus 2022, ending June 30th, 2022, Houston had Houston was the 5th or the 2nd largest growth in population of roughly 125,000 people moved to Houston during that 1-year period. The only other city that was higher than that was Dallas at 170,000 units. To give you kind of a sense of the, you know, of this migration issue, it helps Houston, it helps Dallas. Because of the oil, energy or the energy jobs that weren't replaced and also supply, we haven't seen the same kind of pop like we did in Dallas or Austin. It's more of a steady steadiness in Houston than a big increase like we saw in a lot of other markets versus, you know, Houston. I think Houston continues to be steady growth and, with the supply side getting ready to shut down, pretty dramatically over the next year or 2, it should be positioned really well to grow. You know, when you think about the population growth, the top 20 cities in America, 10 of which were in Camden's market, our markets gained roughly 80,000 people net. If you look at the 3 other major markets that lost were New York, L.A., and San Francisco lost 300,000 in population at the same time that we gained, you know, in our markets, you know, almost 600,000 job, population base. While it's not white hot here, obviously, like it is in Tampa, Orlando, South Florida, it's still pretty respectable. Okay. Would you say then it's more of a supply impact? I would say that, yeah. I think it's more of a supply impact than it is. Yeah, I mean, because We didn't have the white hot job growth like Dallas and Austin did because of energy. It's been more of a go along, get along. It's a little less jobs and a little, and supply combining that to take the sort of the sizzle out of the market, if you wanna call it that. just to put some numbers. Okay, thank you. Just to kind of put some context around that. In Houston in the first quarter, our actual, the average monthly rental rate grew by 6.4%. If our, you know, the overall portfolio, of course, grew at much higher than that. If this were, you know, If you were comparing trends in today in Houston versus looking backwards over the last 30 years, you'd say, "Oh my gosh, that was a really good quarter for rental rate growth." We had a little slip in occupancy that we think corrects itself in the second quarter, is related again to some kind of one-off challenges around skips and evictions and a few cases of fraud that we have to. It seemed to be more prevalent in today's world than they were at pre-COVID days, but we're working through that. Overall, I think Houston's gonna be fine and is well ahead of plan from what we thought it would be at this time of the year. I think we're gonna be fine. The next question comes from John Kim of BMO Capital Markets. Please go ahead. Thank you. Rohan Kapoor here sitting in for John. One of your peers acquired a lease up in Atlanta at a 6.6% cap rate, 5.7% tax adjusted. Do you think you'll see more deals in lease up transacted at these levels? I do. I think that as the market continues to evolve, cap rates have obviously moved up given the very low volume in acquisitions. I think there will be a point in time where merchant builders need to sell to be able to pay their debts off and I think that there's gonna be a fair amount of that going on. If we continue to keep rates, especially short rates as high as they are now, which I don't see any, you know, any light at that end of that tunnel anytime soon, given the Fed's position, then it's putting pressure on those merchant builders. I think there's gonna be likely more transactions once they get to the point where they, you know, where hope is maybe dashed a bit more for them. Then, the, you know, Pricing will come more towards buyers pricing rather than sellers pricing and there should be some opportunities there. Got it. How opportunistic would you like to be there? We're positioned really well with a strong balance sheet. I guess the real question will be, you know, when do we get to that sort of tipping point where cap rates really look attractive? I mean, when you can buy a property for lower than replacement cost today at a cash-on-cash return in the mid-5s% to 6%, that's a pretty attractive opportunity, depending on the market. I think you are gonna have some softness going forward in certain markets given the, you know, supply side of the equation. That should, you know, position buyers, including Camden, to take advantage of that. Okay. Thank you. Mm-hmm. The next question comes from Chandni Luthra of Goldman Sachs. Please go ahead. Hi. Good morning. Thank you for taking my question. Could you talk about how concessions are tracking across your market? You know, perhaps where are the markets where the use of concessions has inched up a bit since fourth quarter? Thank you. You know, we don't use concessions. Except in the case of where we're doing a new lease up because it's always just sort of been the consumer's expectation. Where we have lease ups going on, fortunately, the lease up rates have been pretty phenomenal on our new lease up. We're actually using much less concessions than we normally would. We are having... You know, at our Atlantic product in South Florida, averaged almost 45 leases per month through the entire lease up, which is kind of insane. Again, we're having great success at our other lease ups as well. In our broad portfolio, our stabilized assets, we just... We've, with revenue management, we use a net pricing model. We don't really make it easier for the consumer, so they don't have to do the math. We don't really use concessions. Although I would tell you that. Great. In certain sub-markets, our competitors, you know, you see that it comes and goes. Primarily they tend to be very reactionary. They see some softness, and then they offer concessions, and if it continues soft, then they double the concession. That's just not part of our pricing discipline. Great. In the past you've talked about new supply in, you know, some markets being more pronounced than others. Perhaps you could just give us a refresher there. You know, what are the markets, where you're seeing more supply pressure and what are you seeing on the ground from that standpoint? Thank you. Sure. Without running through all 15 markets, let me just kind of give you some macro, a macro look, and we can go into the details after the call if you'd like market by market. If you go up to Camden's markets combined, the completions that we had across Camden's platform in 2022 were about 127,000 apartments. We expect that to. These are Ron Whitten's numbers. We do expect that to jump this year to about 188,000. About a 50% increase in completions across Camden's markets in 2023. Again, based on Ron Whitten's numbers, that number jumps to about 228,000 in 2024, and that would be the peak at least, using his numbers for this cycle. We are gonna continue to have supply pressure across our portfolio over the next 2 years for sure. You know, It's Completions and new supply is very location dependent. Just because you have X thousand apartments being delivered in Houston or in Austin or any city, They're, you know, they're large metropolitan areas, and you have to really drill down and say, okay, What of this supply that's being built and delivered is gonna actually be competitive where Camden's portfolio is located? If you go through that across our portfolio, all 15 markets of the total supply that's coming in 2023 and 2024, there's only about 40% of that product that is locationally competitive with Camden's existing portfolio. If you go one step further and say on a price point basis, you know, that if our assets in those sub-markets are average 15 years old and you're delivering new construction, there's just a different price point that it's that makes some of this non-competitive as well. If you screen it for both location and price point, there's only about 20% of the new assets that are being delivered across Camden's portfolio that we are probably gonna experience direct competition with. When you look at it in that regard, it becomes much less daunting. I would say that based on our first quarter results and kind of what we're looking at for the balance of this year, even in light of the increased completions that we know are coming across our platform, if we were gonna see a lot of impact, if a lot of this stuff was truly competitive with Camden's products, we'd be seeing it right now. The reality is, only about 20% of it turns out to be truly competitive. I think we're in pretty good shape at a macro level for Camden's markets. The next question comes from Robin Lu of Green Street. Please go ahead. Hi. Can you provide more color on the lower property tax expectations? Is this a result of more successful appeals? How many more appeals do you expect to finalize in the coming quarters? Yeah, absolutely. Originally we thought we were gonna be up 6.5%, now we think we're gonna be up 6.2%. The primary driver of that is that we've gotten some preliminary valuations that came in a little bit lower than we expected. Keep in mind that we contest basically everything. We anticipate that we will contest almost all of these valuations. We'll work through that as we go through the rest of the year. A lot of the values that we're gonna contest this year, we actually won't get the benefit of until 2024, but that certainly is our process. If you think about what we're anticipating in terms of refunds, we're actually anticipating, you know, a pretty significant amount of refunds in 2023. Most of those, once again, are driven by 2022 sort of actions. That's where we are. Tax refunds in 2023 are estimated to be $4.8 million. That's up $600,000 on a year-over-year basis. Really the main ticket that's out there and that we have to wait for is rates, and we'll get most of our rates in really starting in August of this year and running through October. Great call out. Thank you. Mm-hmm. The next question comes from Austin Wurschmidt of KeyBanc Capital Markets. Please go ahead. Hey, good morning. Just curious. Turnover had increased in the first quarter, but you've talked about how move-outs to purchase a home are down pretty significantly, which makes some sense given... I'm just curious kind of where you think residents are going. You know, do you think people are trading down in price due to several years of outsized rent increases? Is it, you know, into single family rentals or, you know, people potentially bundling up? Just kinda curious what your take is on, you know, the move-out piece. I'll address the first item, which is exactly right, is move-outs to purchase homes have come down pretty significantly. We have doubled our early move-outs that are related with non-paying residents. That's sort of the trade-off on that side. When we look at where or the reasons for move-out, we really haven't seen other than those two, we haven't seen any changes. The number one reason why people typically move out is a relocation, and it's usually associated with where they're finding jobs. It's moving within the market and moving with outside of the market. Yeah. It's skips and evictions. I mean, that's the bottom line is that we had almost double skips and evictions in the first quarter this year than we had in the last couple of years in the first quarter. That, you know, the 10% is. I mean, We're near an all-time low for move-outs to purchase homes in our portfolio. My guess is that probably trends back up in the second quarter. There's a little bit of seasonality to that number. Yeah, the fact that we're flat year over year on turnover is almost exclusively an increase in skips and evictions. Got it. Just a clarification. You mentioned you're sending out renewals for May and June in the mid-6% range, and the renewals you signed in April were, you know, closer to that high 5% range. Just curious if that's the difference between the take rate versus asking or, you know, did something give you the confidence to kind of, you know, bump up renewals again, a little bit higher as you get into the peak leasing season? No, you're correct. That's the difference between the take rate and the asking. You know, there's always some flexibility around the renewal process. You know, if a community is off their target, then you know, the way that we can, you know, make sure that we're maintaining our occupancy target is to make sure that we keep the back door closed. That's the difference. Understood. Thank you. Mm-hmm. The next question is a follow-up from Alexander Goldfarb of Piper Sandler. Please go ahead. Hey, thank you. Just circling back on the insurance, a two-parter. Alex, you mentioned 20% increase in your expectation for premiums, but you also mentioned 35% overall. I'm guessing the latter includes your claims in addition to the premiums. The second part is, Ric and Keith Do you anticipate that potentially competitors like in Florida or Texas would be unable to get insurance and therefore those properties would sort of have to close and that would put, you know, more demand on your properties? I'm just sort of curious what happens with, you know, properties that can't fill their insurance book this year just given everything that's going on in Florida and Texas? Alex, you're right on the first part. That's exactly what it is. We've got our premium is higher than we anticipated, and we're actually gonna bind that on Monday. But the offsets of that or excuse me, the addition to that is just the much higher amount of claims. Yeah. To the second question on, people shutting down their properties 'cause they can't get insurance, I don't think that's gonna happen. I think what happens is that it creates an opportunity for, folks like us who broadly insure, you know, a very large portfolio. Our insurance cost is gonna be lower than a standalone insurance, policy that somebody can get in Florida. I don't think you're gonna see properties closed down, but what I do think you're gonna see is that that will put more pressure on people to sell, and the pricing will be reflective of, you know, what the cost is from an insurance perspective. Yeah. we are Thank you. ... of further new developments in Florida that are not able to start in part because of very large insurance increases. Obviously that's a net positive for us. Thank you. The next question is a follow-up from Eric Wolfe of Citi. Please go ahead. Thanks. Just wanted to follow up on your comment around expecting a 60% reduction starts. Obviously, it's a bold prediction. I think you said that you expect to start seeing it in the second quarter, which is now. I'm assuming. Maybe you could just help us sort of understand why we haven't seen a bigger drop-off so far and what's gonna sort of happen over the next sort of three to six months in the data to sort of result in that large drop that you're expecting. Sure. First of all, the starts that are happening today are starts that are legacy starts, or maybe in the first quarter were legacy starts, meaning that the deals were teed up, they were fully funded with equity, they had a bank loan, and they're looking at the same thing we're looking at. If you deliver in 2026, it probably is gonna be a really constructive market given the current environment. Legacy deals are already funded. What's happening today, however, which is being exacerbated by the banking crisis, is that banks are pulling loans. I mean, I'll give you an anecdotal example of a developer in Florida, called me and said, that they had a fully funded deal with 35% equity, or 40% equity, 6% debt, and the lender pulled the debt after the Silicon Valley Bank situation. They walked their earnest money and lost significant amount of money because the bank pulled the debt. When I talk to my friends at regional banks, I mean, they're not funding deals that they thought they would fund in the future. I think not only has the higher interest rates, and rental rates moderating, with construction costs hasn't come down enough and land prices haven't come down enough where the numbers just don't work. I think that, you will start to see that in the, in the second quarter. We think starts might be, you know, at the level for the entire quarter, what March was, which was around 49,000 units. I just think that developers are crafty enough to keep their legacy deals in place, and that's why you haven't seen a dramatic fall-off in starts. It's starting to happen, especially since the banking crisis has created in essence, almost another 25 or 50 basis point rate increase as a result of those banks just pulling out of the market altogether. Got it. Yeah. I guess that was gonna be my follow-up is why, you know, why they're pulling debt now versus, say, you know, five, six months ago, 'cause we've just been in a very volatile capital markets environment for a while. Rates have been high for a while, moved up in north of four last year. It's just interesting to see them pulling debt now. It sounds like your thought is really that it's a response to what happened with Silicon Valley Bank and some of the regional banking issues that more recently has created, the sort of tighter lending environment, and that's what's gonna potentially drive some lower starts going forward. Yeah. I think, I think it's twofold, right? First of all, the, the banking crisis is in fact tightening lending. There's no question about that. You know, there's lots of anecdotal, you know, information out there on that. The other part of the equation is that, you know, developers are a very optimistic group, you know, and they'll project into 2026, but they also have, you know, a math problem. I mean, you have, cost of capital has gone up, you know, by 30% for most people. When you then try to figure out, okay, I have my input costs versus what I think the cash flows are gonna be, and then you put, you know, higher interest rates and higher cost of capital on the equity, and the math just doesn't work. So, until unless there's a big shift in thinking where you start seeing major, you know, declines in starts, which you think is gonna happen, you will... Then people think, "Okay, I'm gonna go ahead and bet on 2026," the challenge is you've got to Bet on, you know, massive rent increases to cover your cost of capital increase and your debt increases, assuming that construction costs stay sort of flat. I think it's just a pretty simple math problem. While developers will always build if they have capital, right now both the equity and the debt markets are saying, "Whoa. Let's try to figure out what happens in the future." Because, you know, starts are. I'll emphasize this again, developers build because they can. When they can't, they don't, and that's what's going on right now. Understood. Thanks for the detail. Mm-hmm. The next question is a follow-up from Jamie Feldman of Wells Fargo. Please go ahead. Great. Thank you. Along those same lines, you made the comment before about, you know, maybe ramping up starts to deliver into a good market in 2025 and 2026. I mean, what's the magnitude that you would even consider and, you know, when do you have to make a go or no-go decision on really throttling up the development pipeline? Similarly, when you think about the markets, I mean, where is there the right balance of not too much supply, and, you know, an opportunity to deliver something into what you know will be a pretty good market? Yeah. I think that, we have a decent pipeline. We, you know, I think it's, our pipeline's now $1.3 billion or $1.4 billion that we haven't started. We have a decent pipeline to start. We have generally been anywhere from $300 million-$500 million of annual starts. You know, the question will be, you know, how do we feel about the market, and how do we feel about construction costs, and then how do the numbers work, right? When you get down to those are the ultimate questions. In terms of markets, you know, you look at our portfolio and we have some really nice sites in Nashville and nice sites in the Carolinas and in Florida. Those are all really, you know, good viable markets. When you look at all the dynamics that go into those markets from a, you know, in-migration, population growth, job growth, all that, are all positive in those markets. The negative would be in Nashville, for example, is, you know, either the top market under construction or the second top, maybe followed by Austin. You know, that's, those are the dynamics that we'll look at. If we don't think that the numbers work, we won't build a project. You know, we'll just wait and see what happens. Okay. I guess in terms of the balance sheet, you know, how much more than your typical average annual starts do you think you could do or would be willing to do? Yeah. I I mean, we've got tremendous capacity under our balance sheet. It ultimately all comes down to, if you think about acquisitions, we could basically put about $1 billion on our balance sheet and still keep our rates where they are. If you look at developments, obviously they don't contribute EBITDA at the beginning, but our rating agencies would understand that they will over time. I think you could have, if you really wanted to, you could have sort of a swell of starts with in, you know, corresponding increase in leverage that could then come back down. We've got plenty of capacity. Okay. All right. Great. Thanks so much for the color. Mm-hmm. This concludes our question and answer session. I would like to turn the conference back over to Ric Campo for any closing remarks. Great. Well, we appreciate you being on the call today, and look forward to seeing you either in the next month or at Nareit in June. Thank you very much. Take care. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.