Good morning and welcome to Camden Property Trust's Third Quarter 2024 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 Alex Jessett, President and 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 shortly after the call ends. 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 Third Quarter 2024 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, so please limit your initial question to one, then rejoin the queue if you have a follow-up question or 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. The theme for our on-hold m usic today is Coming Together and Getting Along. With our national elections just four days away and what looks like an even split among voters, a message of unity seems appropriate. To all of our Camden associates, if you haven't already done so, please use the time off Camden allows for you to get out and vote. And whether your preferred candidate wins or loses on Tuesday, please remember Tim McGraw's advice: "When the dreams you've been dreaming come to you, when the work you put in is realized, let yourself feel the pride, but always stay humble and kind." We had a good third quarter with earnings ahead of expectations, and the rest of the year is playing out as we anticipated. Apartment absorption in our markets has been the best in 20 years, excluding 2021. Strong multifamily demand continues to be driven by strong job growth. Camden markets are growing faster than the U.S., in- migration to Camden markets, and fewer consumers choosing homeownership and are renting well-managed apartments from Camden. Apartment rents continue to be more affordable than buying a home. High prices for homes, mortgage rates, property taxes, and insurance continue to support rental demand, and this is not changing anytime soon. A recent Wall Street Journal article on October 27th titled "This Year's Housing Turnaround Ended Before It Started" reports that 2024 sales of existing homes is on track to be the worst year for housing since 1995. New apartment supply is at an all-time high, 50-year peak, as we all know, and while absorption has been great, filling these apartments has limited meaningful rent growth in most of our markets. Trailing 12-month starts are off 35%, with monthly starts off 49% from the highs. This backdrop should put new multifamily starts in the mid-200,000 range next year. Witten Advisors projects rents bottoming out in 2024 and through the first half of 2025, and then starting to accelerate through 2026 and 2027. We look forward to sharing additional details on our strategic plan and future market concentration goals, along with our 2025 guidance when we report fourth quarter and full results next year. I want to give a big shout-out to our Camden teams. Thank you for a great quarter and knowing that they are ready for a strong finish to the year. And thank you for improving the lives of our teammates, our residents, and our shareholders one experience at a time. Keith Oden is up next. Thanks, Ric. Our third quarter same-property results had revenues in line with expectations, with slightly lower than anticipated operating expenses. Our top markets for same-property revenue growth this quarter were the same as last quarter and included Southern California, Washington, D.C. Metro, Southeast Florida, Denver, and Houston, all with revenue growth above the portfolio average of 0.6% and ranging from up 1% to up 5% for the quarter. Rental rates for the third quarter showed signed new leases down 2.8% and renewals up 3.6% for a blended rate of up 0.1%, with an average occupancy of 95.5%. Preliminary results for October reflect moderation in both new lease and renewal pricing and in overall occupancy levels. Renewal offers for November and December were sent out with an average increase of 3.5%. Resident retention remains high and turnover remains low, with less than 10% of our third-quarter move-outs attributed to home purchases. Net turnover for the third quarter of 2024 was 46% compared to 51% in the third quarter of 2023. Year-to-date net turnover was 41% compared to 44% in 2023. I would also like to encourage all of Team Camden to do three things. Number one, get out there and vote. Number two, finish the year strong. And number three, always stay humble and kind. I'll now turn the call over to Alex Jessett, Camden's President and Chief Financial Officer. Thanks, Keith. Recently, the Southeast United States experienced two hurricanes, Helene and Milton. And although our thoughts and prayers are with those affected, we are very thankful that our team members and residents were safe and that we have only minor property damages reported. We issued a press release shortly after Hurricane Milton, with a preliminary assessment leading one of our analysts to ask if Camden communities are built like Fort Knox, to which we replied that we attribute our minimal damage to quality construction, great preparation, and a healthy serving of luck. Quality construction really does matter, and we built over 60% of our Southeast portfolio. And great preparation matters, including making sure trees are appropriately trimmed, drains are clear, pools are drained, and roofs are strong. Solid vendor and supplier relationships to ensure mitigation is prepositioned, and great communication with our residents and staff to ensure the communities are storm ready. So thank you, Camden team members, for doing such an amazing job to enable us to fare so well through the storms, allowing us to continue to provide quality housing in the incredibly high-demand, high-growth Southeast markets. Moving on to our development activities, in the second half of 2024, we commenced construction on approximately $320 million worth of new developments. We anticipate starting an additional $375 million of new developments in the early part of 2025, and we plan on starting our remaining owned land parcel, which is a $300 million development, in either late 2025 or early 2026, and finally, we have additional land parcels under contract, which may lead to future starts in either 2025 or 2026. Turning to our financial results, for the third quarter, we reported Core FFO of $1.71 per share, $0.03 ahead of the midpoint of our prior quarterly guidance. This outperformance was driven in large part by $0.015 per share and lower than anticipated operating expenses, resulting primarily from continued lower core insurance claims. Additionally, during the third quarter, we had $0.015 per share of favorability, resulting primarily from higher fee income, lower interest expense, and lower income tax expense. These favorable line items were driven by the combination of cost savings and additional fee income from our third-party construction business, higher interest income from our cash balances, lower line of credit interest expense, and lower franchise taxes in Tennessee, resulting from recently enacted legislative changes to the applicable calculation. Property revenues for the quarter were in line with our expectations. Last night, we maintained the midpoint of our full-year same-store NOI guidance at 0.75%, but narrowed the ranges and slightly adjusted the components. We now anticipate full-year same-store revenue growth will be within the range of 1.1%-1.5%, with a midpoint of 1.3%, and full-year same-store expense growth will be within the range of 2.1%-2.5%, with a midpoint of 2.3%. Our 20 basis point reduction in full-year revenue guidance is carried by slightly lower blended lease trade-out in line with typical seasonality. We are assuming fourth quarter occupancy will be in the range of 95.2%-95.4%. Blended lease trade-outs will be slightly negative, and bad debt will be within the range of 75 - 85 basis points in line with the full year. Our 55 basis points reduction in full-year expense guidance is driven primarily by the assumption of continued lower than anticipated insurance and property taxes. We are increasing the midpoint of our full-year Core FFO from $6.79 - $6.81, which results entirely from the non-property components of our third quarter outperformance. We also provided earnings guidance for the fourth quarter of 2024. We expect Core FFO per share for the fourth quarter to be within the range of $1.68-$1.72, representing a $0.01 per share sequential decline at the midpoint, primarily resulting from an approximate $0.01 in higher property NOI, resulting from $0.025 in decreased revenue, driven primarily by the typical seasonality of occupancy, offset entirely by $0.035 in lower property expenses, resulting from typical seasonal declines. This $0.01 per share increase in sequential property NOI is entirely offset by a combined $0.015 per share decrease in interest and other income, as we are no longer in a net cash position, and fee and asset management income due to the timing of our third-party construction activity, and an approximate $0.005 per share increase in net interest expense, driven by an approximate $0.01 per share impact of no longer capitalizing interest on development sites that we have decided to not move forward with at the present time, offset by $0.005 in lower interest rates on our floating-rate debt. As of today, approximately 80% of our debt is fixed rate. We have less than $200 million outstanding on our $1.2 billion credit facility, only $65 million of maturities over the next 24 months, and less than $270 million left to fund under our existing development pipeline. Our balance sheet remains incredibly strong, with Net Debt to EBITDA at 3.9 x. At this time, we'll open the call up to questions. Thank you. 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, you may press star then two. We will pause momentarily to assemble our roster. Today's first question comes from Eric Wolfe with Citi. Please go ahead. Hey, thanks. Good morning. If you think about the four pre-development projects that you paused, how much would rents have needed to be up from current levels before those projects made sense? And then more generally, how much do you think rents need to rise relative to construction costs for development to be more economic? Let me just start out broadly first, and then I'll answer the question about what rents need to do. Because clearly, what's happened in the development market today is that construction costs have not come down, and rents have come down. And clearly, the supply that is coming into the market has had a muting effect on rents in all markets, right? And so we, as part of our planning process for 2025 and 2026 capital deployment, we review all of our properties and decide what we're going to start and what we're not going to start. And we've operated over the years with, and maybe this is the old CPA in me and Keith, and that is that we employ conservative financial policies. And when we reviewed those projects, the four projects that we wrote down, it was about making sure that we focused on proper capital allocation. These properties today do not meet our investment criteria. Then more than that, when you think about the four properties specifically, it's sort of three categories. One is California, and we have been reducing our exposure in California, and there's lots of California issues that we all talk about. The second issue would be Houston. In Houston, we talked for a long time about wanting to lower our exposure in Houston and also wanting to have less urban and more suburban exposure in Houston. The two projects in Houston are both urban projects, and we would much rather deploy capital in the suburbs rather than the urban core. Then the Atlanta project, we have two projects that we did. We bought this land in the financial crisis. The interesting thing is the land that we're holding on our books today, when you look at the total purchase price for the land in Atlanta, is substantially less than what we have this one on our balance sheet for, which is pretty amazing. In Atlanta, we just have concentration issue in Buckhead. We have 700+ units that are really high-end units with two high-rises or three high-rises and a mid-rise and a stick- construction build. We just don't want more exposure in Buckhead like that. The highest and best use could be a condo or hotel or something which would actually benefit the neighborhood, including our properties as well. It's really about capital allocation, and we're disciplined in our capital allocation. We think 2025 and 2026 is going to be a really interesting year. A couple of years, you have $650 billion worth of multifamily debt coming due. You have merchant builders who have prefs that are eating into their profits, banks who want their loans paid down. And so there'll be, I think, a very robust transaction market over the next couple of years. And we're going to take advantage of that to increase our market balance, try to move the portfolio from more to less urban and more suburban. And we just think that capital allocation makes sense rather than starting developments today. You could raise rents maybe when you look at long-term growth. When we do underwriting, we look at a seven-year unlevered IRR. And most of the time, we use anywhere from 3%-3.5% compounded growth rates in our rents to make those numbers. And we don't want to have to take that number up much more than the long-term average rent growth. To get these four developments to work in today's market, you probably have to have 100 basis points of growth wide of that. And I guess if you look at the wide of average, so call it four and a half, maybe plus or minus, when you look out at the projections out there, I mean, Witten Advisors has markets like most of our markets growing at 4%- 6% in 2026 and 2027. So theoretically, if you had to build, you could do a pro forma that showed outsized rent growth in the second, third, fourth, fifth years that could get those IRRs to work. The challenge that we have is we just don't want to push the edge of the envelope that hard today. We don't have to build. We would rather deploy the capital in markets they want to grow in and buy existing properties at below replacement cost that don't have the lease-up risk. That doesn't mean we're not going to be in the development business. Alex mentioned we're going to start two properties in 2025, and we still have additional development pipeline coming. I'll just put this big caveat on this. If you look at the last write-down that we did, we did a write-down of multiple properties right after the financial crisis because nothing underwrote right after the financial crisis, right? So interestingly enough, we never sold one of those land parcels, and we developed all of them. And today, if you take the written-down value of the land at the time plus the value we had on the books, those properties are all probably worth 50% - 70% more today than the cost plus the write-offs that we did before. So at the end of the day, it's really just about capital allocation, and we want to allocate capital to some of our smaller markets and build up that net operating income from there. Thank you. The next question is from Alexander Goldfarb with Piper Sandler. Please go ahead. Hey, morning down there. Ric, maybe just keeping with that merchant developer theme, you guys for the past number of years and the industry overall has been waiting to capitalize on developers that have to sell. The financial clock is ticking. They need to pay back, etc. And yet all these developers seem to get lifelines. The banks don't pressure them. The rents come back or something happens. So do you have confidence, or what gives you confidence that in the next few years you'll see more opportunity from these sort of forced sales? Or your comments more just in general that, hey, it's one area that we think that's going to provide opportunity rather than we think there's a huge opportunity from these merchant guys? Yeah, I don't know. I think the huge opportunity is just there's going to be more transaction volume. I don't think you're going to find distressed transactions. I mean, you could find distressed transactions that they're properties that we don't want. I mean, a lot of the syndicators that bought really substandard properties or C&D properties are definitely having serious trouble. You can go buy those at a discount, but I wouldn't want to take you on a tour of those properties, and you wouldn't want a tour as well. And so the merchant builder model, when you think about it, it's merchant builder, right? You build, you lease up, you sell. You build, you lease up, you sell. And it's a cycle. And that's their profit motivation is to build and lease up and sell. In order to reload their pipeline in the future, we know that with development starts going below 200,000, that I think the reason multifamily is so desirable today on the private side of the ledger is because people can look at maybe end of 2025 and into 2026 and 2027 and see above average rent growth. They're willing to buy today. The merchant builders don't have a gun at their head to sell, but when you have an 8% pref eating into your profit and every month you stay and you haven't sold and paid those investors back plus their pref, the developer profit goes down. The developers are incented to maximize their profits, and they can't do that if they don't sell. Banks, on the other hand, if you look at 2023 and 2024, there was a lot of multifamily debt that came due, and banks kicked the can down the road. Banks let people, if you had a maturing loan, they renewed the loan and moved it into the future under the theory that the Feds are going to cut rates and rates will come down, and therefore you won't have to put as much equity in the project. So the $650 billion worth of debt that's coming due, a lot of that is from 2023 and 2024 where lenders moved the maturities into 2025 and 2026. And so the market is just a natural market that needs to move. Now, on the acquisition side, people have been holding tons of dry powder. People have been holding their powder waiting for the signs, right, that the 50-year supply is going to start going down, and there'll be an inflection point where rents will have a positive second derivative and start rising again, and I guess in the first, if you look at sales in multifamily assets in our markets, they're pretty much at the same level they were in 2022. They're still below 2021, but the market is starting to thaw, and people are starting to come into the market, so I think the reason you're going to have a real distressed scenario is there's just a massive wall of capital that needs to get deployed, and it's going to deploy into multifamily. Thank you. The next question comes from Austin Wurschmidt with KeyBanc Capital Markets. Please go ahead. Hey, good morning, everybody. Hasn't really come up for a while about Houston, so just kind of revisiting the comment about reducing exposure to this market. I think it's around 13% of NOI today. I guess how much of a decrease makes sense to you today when you kind of revisit strategically, taking a look at the portfolio? And could dispositions from this market be a source of funds to redeploy into some of the investment opportunities you just spoke about to the earlier questions? Absolutely. We've talked about wanting to lower exposure in D.C. and Houston, and Houston right now and D.C. are actually two of the best markets, which is kind of good for us. On the other hand, we've been painted with Houston. When oil prices fall, people think they can or investors either buy or sell Camden based on Texas and oil prices, and that's been a challenge over the years, so clearly, we can grow in other markets, and we have a very low levered balance sheet, so we don't necessarily have to sell a lot to grow or to lower the exposure, but we've continued to trim our portfolio in Houston over a period of time, and we'll continue to do that. We'll sell assets that are growing slower than the rest of the portfolio. I think when you think about market balance, anywhere from 6%, 8%, 9% of assets in a certain market is probably the right place to be. One of the things we also do is weight the weighting of where we want our markets, our balance to be based on population and inventory in that market because you don't want to be too overexposed to that market. Houston, given that it's an 800,000-unit market and the fourth largest city in the country, you can have a little bit of overexposure relative to, say, maybe a Tampa, which is much smaller. Thank you. The next question is from Brad Heffern with RBC Capital Markets. Please go ahead. Yeah, thanks. Morning, everybody. You maintain leasing spreads higher through September than your Sunbelt peers, but then it seems like there was a significant falloff for October both effective leases and the signed leases. Was there a strategy change there moving towards occupancy? Was that more of an impact from supply? Or what would you attribute that to? Yeah, what you saw in the third quarter was absolutely a drive more towards occupancy, and you're seeing that impact roll over into the fourth quarter. So that's exactly what it is. Thank you. The next question comes from Steve Sakwa with Evercore ISI. Please go ahead. Yes, thanks. Good morning. I guess I wanted to go back on the development. A couple of things. I noticed that the projects that are currently in lease-up didn't seem to have a huge movement in percent leased from kind of the mid-July to mid-October. So I was just wondering if you could comment on that. And then for the projects that it looks like you're going to start in the near future, the cost went up quite a bit. I realized the Nashville project got more units, but I think the cost went up considerably versus the number of units. So can you maybe just talk about the cost creep and whether those yields really still hit your return thresholds? Yeah, absolutely. So we'll talk about leasing first. So we've got the three developments that we have in lease-up. If you look at the two that are single-family rental communities, we've said all along those generally lease-up slower than a typical multifamily, and somewhere in the range of, call it 10 - 15 units a month, whereas with a typical multi, we'd say somewhere between 20 - 30 units a month. If you look at our Durham development, that one's actually leasing up 25 units a month. So that one's doing in line with what we would expect, if not even a little bit better. So we feel good with all of the leasing trends. And as I said, they're really pretty much in line with what we had expected. When you think about the overall construction costs of our pipeline, as Ric said in the very beginning, we did a full analysis of all of our developments as we do on a periodic basis. We got the most up-to-date pricing that we've seen, and that is what's represented on the development pipeline page. I will tell you that at this point in time, we think that all of these yields work, and that's why we said that we anticipate starting one of the Nashville deals and the Denver deal in the first part of 2025 and why we anticipate starting the remaining Nashville deal in either late 2025 or early 2026. So we think all of those returns still work for us. Thank you. The next question comes from Rich Anderson with Wedbush. Please go ahead. Hey, thanks. Good morning, so a question on cap rates, and Ric, you mentioned the opportunity set with debt coming due and merchant developers being stretched in a few years. If there's sort of a lack of transaction activity, but when we do see something, it's a five or lower, perhaps. Is that just a function of the moment something does hit, there's a wave of capital? And I use the example of senior housing, which the opportunity set in front of it right now is very positive, yet cap rates are 7.5%, 8%. The opportunity set in front of multifamily, at least in your markets, may get positive soon, but for the time being, it's a little bit of a question, and yet cap rates are still in the fives. Is it just there's just so many people that want so few deals? That's kind of question number one. Corollary to that is, do cap rates need to adjust for you to be active on that opportunity set I described earlier, or are you willing to sort of take a little bit of a hit up front to get a deal that will make sense for you two or three years later? Thanks. Sure, so I think that multifamily has come to the forefront again of investment choice for institutional investors. At the beginning of the year, there were a lot of sort of surveys of what properties you want to invest in, and multifamily was down on the list at the beginning of the year, and people wanted retail, and they wanted industrial, more multifamily. Now, if you take third-quarter numbers, whether it be from Axiometrics, a lot of different groups that look at investor preference, multifamily is now number one in terms of commercial real estate that people want to buy. It's multifamily, industrial, retail, and then office is a way distant fourth, and what's happened is that we've gotten closer to what people think is going to be an inflection point in the supply and demand equation. When you think about, we're at a 50-year high in terms of deliveries, and yet when you look at our markets, only two of our markets on a year-to-date basis have negative rent growth, and that's Austin and Nashville. The reason Austin and Nashville are definitely the two most overbuilt cities in America and double the supply of all the rest of the markets. All the rest of our markets are either flat or up, even in spite of massive supply relative to historical norms, right? I think what's happened is private investors are now pivoting towards multifamily. You're exactly right. The developers out there who still have, they don't have a gun to their head to sell. And so they believe also that as the supply picture continues to improve and when you get that first sort of positive second derivative on revenues, that there's going to be a flood of buyers in the market. And the thing that's really interesting too is our last 60 days, cap rates were in the fives. Then they went into the fours. The last few deals that we've looked at, you've had multiple buyers, and the cap rates are mid-fours today, not five or five and a half. And the reason for that is there's more buyers than sellers. And ultimately, the only way that you make a seven unlevered IRR, which is what people are trying to get, I think generally, is you have to have outsized growth two, three years, four years out, which most people are pretty comfortable in underwriting. Now, the last 30 days has been a different animal, right? You've had the 10-year go up 50 basis points or more in the last 30 days. And that's kind of changed that changes the calculus a little bit. And so the question will be, in order to get your because you're back to negative leverage when you start with 10-year the way it is today. So the question will be, will the 10-year or will the Treasury stabilize? And then how will people underwrite? And will that drive cap rates back to 5%? But from our perspective, as long as we can buy below replacement cost in that 4.5%-5% zone, and we believe that we can improve operations, we believe that we can catch that above-average long-term rental rate growth in 2026, 2027, 2028, we'll transaction in that environment. We'll also sell properties to fund it and continue to sort of try to rebalance our portfolio where we want it. We'll spend a lot of time on that in the first quarter call because we're going to lay out kind of where we want our markets to be, but we haven't done that yet exactly. We'll get that to y'all in the first quarter. Thank you. The next question comes from Haendel St. Juste with Mizuho. Please go ahead. Mr. St. Juste, would you like to mute it? Maybe come back to him. I think so. The next question comes from Jamie Feldman with Wells Fargo. Please go ahead. Great. Thanks for taking my question. So maybe one for Alex. As you think about, I think you and several of your peers, the course of this year has been reducing your top-line outlook, but getting nice cost savings to keep your NOI outlook. So I guess two questions here. Number one, can you talk about where you probably were most conservative to start the year and where you got the benefit throughout the year? And then secondly, as we think about 2025, I mean, do you think there's still enough juice and expense savings to have a similar outcome given there is so much uncertainty around top-line revenue where you could start the year on a conservative basis and get some upside? Yeah. So clearly, where we were the most conservative, although I didn't think we were at the time, was insurance and taxes. Those have been the two really bright spots for us. We think that taxes for us for the full year for 2024 are going to be basically flat. And keep in mind that taxes make up about 36% of our total expenses. And when we started the year, I thought they were going to be up 3%. So obviously, that was an incredibly pleasant surprise. And then on the insurance side, keep in mind, insurance last year was up something like 40%, and this year it's going to be down something like 10%. So you really have a couple of factors that drove that. Number one, we had a flat renewal, which was fantastic. But then number two is we were very, very proactive in addressing sort of the root causes of some of our insurance claims and making sure that we were putting the appropriate R&M and CapEx in to make sure that we could minimize those risks on a go-forward basis. And we're absolutely getting the sort of the positive results from those actions in our insurance numbers today. If you're looking at 2025, it's a little early. We're still in our budgeting process. What I would tell you is getting another year of property taxes flat is probably unlikely. Over a long period of time, property taxes are generally up about 3%. Now, the good news is that if you go back and you look at real values today and you compare them to two to three years ago, there's no doubt that real values are down. And so hopefully, we still have a little more juice that we can squeeze out of that, and we'll fight as best we can against the taxing authorities. And then when it comes to insurance, our policy renews at the beginning of May. And so we'll have to see what the rest of this year and the early part of next year does in terms of global insurance claims because this is the global market. And if we have light claims, then we may have another productive year on the insurance side. When I think about the rest of our expenses, the rest of our expenses, it's a 3% business, and I think that's what you'd expect to see. Thank you. The next question comes from Haendel St. Juste with Mizuho. Please go ahead. Well. The next question comes from John Kim with BMO Capital Markets. Please go ahead. I'm afraid to talk. Maybe it's a Halloween hangover. Very scary. I wanted to follow up on Austin's question on Houston. If you look on your presentation, page six, the migration trends for Houston seems like it's going to accelerate quite a bit over the next couple of years. I'm wondering what's driving that. And also, I mean, we do have a chance that we'll have another Trump presidency. He's been very supportive of the oil and gas industry. Can you remind us if that's a positive for the Houston economy? And if either of those items come into fruition, the acceleration of migration or Trump wins the presidency, will that impact your decision to reduce your exposure to the market? Yeah. So Houston continues to be very much impacted by what goes on in the oil and gas industry. And higher oil prices historically have been great for Houston. Lower oil prices have not been great. So anything that is good for the oil and gas business ends up being good for Houston and ends up being good for Houston real estate. So without prognosticating on outcomes of elections, our strategy to lower our exposure in Houston predated Trump's first election. So it's been out there for a long time. We've made some progress. Obviously, we had a fairly sizable acquisition that increased our exposure to Houston, but we're still committed to getting it more in line with our other markets. For a long time, when we were in nine to 10 markets, we talked about having a market balance that would be no double digits in any single market. And I think you'll see that that's the direction that we're heading in the markets that we have that are double-digit concentration. It's Houston and Washington, D.C. Metro, and those obviously will be part of the rebalancing effort that we do. The next question is from Michael Goldsmith with UBS. Please go ahead. Hi, this is Ami. I'm with Michael. I was just curious, was there anything that changed on the demand side that led to blended spreads in the third quarter and fourth quarter coming in really well before? Good about what we did in terms of maximizing revenue in the third quarter, which is why our third-quarter revenue results were in line with expectations. When you look at what we're going to see in the fourth quarter, clearly, when you do push occupancy, rates are going to come down a little bit, and that's what you're seeing rolling through the fourth-quarter numbers. But keep in mind, we started the year thinking that at the midpoint, that revenue was going to be up 1.5%, and we're within 20 basis points of our initial guidance despite record levels of supply. So we feel very good about the way that we've worked through this year. Ami, to your question on 2025, if you look at Witten's numbers for employment growth across Camden's markets in 2024, he's got us at about 460,000. I'm not sure what he modeled for the most recent report, but it probably wasn't 10 grand. In any case, he's got that number at about 440,000 in job growth across Camden's markets in 2025. On the supply side, 2025 is going to look a lot like 2024 across most of Camden's markets in terms of new delivery. So supply-demand dynamics in 2025 are going to look fairly similar to what they've been in 2024. Thank you. The next question is from Haendel St. Juste with Mizuho. Please go ahead. Hey, guys. Sorry about the technical difficulties. Hey, so I wanted to ask, I know you're not giving guidance at this point, but was hoping you could perhaps give some color on some of the building blocks, like the estimated earnings for next year, like some of your peers have provided, and maybe some thoughts on where you think you can get bad debt to overall by the end of next year, and maybe some thoughts on Atlanta and L.A. specifically. Thanks. Yeah, absolutely. So if our plan works out for the next two months of the year, our earnings for 2025 should be, call it flat to slightly positive. If you think about bad debt, I think it's very reasonable to anticipate that bad debt's going to be back down to about 50 basis points by the end of 2025. If you think about our portfolio in the whole, once you strip out Atlanta and you strip out California, that's pretty much where we are. We're pretty much back to the 50 basis points. And the good news is that we can work through, and we are working through Atlanta and L.A. County in particular, because that's where most of the issues in California are. We've completely shut down the front door, so we know that we're not getting any bad actors in currently. And so we've got some folks that came in from fraud in the past. We're working them through the system, and we feel pretty good that we're going to get this problem solved by the end of 2025. Keith, you want to take Atlanta and L.A.? Yeah. So L.A. is. You got to kind of put it into the three communities that we have there in L.A. County, and they all have their challenges that started, some of them started back in COVID, and some of them continue today. But the biggest challenge that we continue to have in L.A. is just the time component between when somebody first becomes delinquent and when you can get it processed for them to move on. And it's still way too long. And so we have seen improvement, and we hope to continue to see improvement both in L.A. and Atlanta. In Atlanta, it's the same story. It's really a processing issue with regard to just how long it takes to get someone from delinquency through to a new home address. Again, both of them have made progress. There's room to go. I think Alex is right that in 2025, we'll work through that. Both L.A. and Atlanta will be able to get back to more of a normal cadence for processing evictions. And so I'm certainly hopeful that we can make good progress. And as Alex mentioned, most of our other markets are back to regular order with regard to processing delinquencies. I think the issue in L.A. from a revenue perspective is L.A. has a demand problem, not a supply problem. And we look at, just to put a couple of points in this, since February 2020, Houston added 268,000 jobs, and L.A. is down 16,000 jobs from that point in time. Dallas added 467,000 jobs. San Francisco has lost nearly 50,000 jobs. Even though you have low supply in those markets and their revenues are growing a bit better than the supply markets, they're basically just growing because they went down so much to start with, right? So they had a bigger hole to climb out of. And the demand is the real issue there in long term. I don't see that changing dramatically. The next question comes from Julien Blouin with Goldman Sachs. Please go ahead. Thank you for the question. Just wanted to ask, what do you expect for trajectory of new lease rates into November and December relative to the - 4.8% you saw in October? It does seem like comps year- over- year seem to get a bit easier in November and December, and then on the renewal side, I guess you said you sent out offers in sort of the mid-threes for November and December. Where do you think that actually shakes out? Could it be like 100 basis points lower? Any sort of guidance you can give us on that side? Yeah. So I think the fourth quarter is going to look probably pretty similar to what you see effectively for October, right? So if you look at October, the effective new lease rates is down 4.4%. That feels about right. Effective renewal rates up 3.4%. Once again, I think that's going to be right. The difference, and there's going to be a slight difference, is that when you get to November and December, you start to have more renewals than new leases, and so the blend changes a little bit. And so if you look at what we had for October of an effective blended lease rate of down 0.8%, I think it's going to get a little bit better than that for November and December, just because, as I said, just the weighting changes with more renewals versus leases. Okay. Great. The next question is from Michael Lewis with Truist Securities. Please go ahead. Great. Thank you. Ric, you mentioned keeping some land parcels that you had written down in past downturns, and those eventually recovered in value or the development viability came back. The parcels that you're writing down now, do you intend to sell those? And then also related to land, I think Alex mentioned that you have some additional parcels under contract. So maybe where are you looking to buy land now? If the development numbers don't pencil before we sell land, we'll sell land. It's not a great time to sell land today. When you think about the transaction environment, we don't have to sell land, so we don't need to sell land. We'll just hold on our books until we think that it's the right time to sell it. Then we'll look at an analysis again and decide whether we should build it or sell it. There's no pressure on us to sell. When you think about the merchant builder market today, starts are going to be down significantly. Part of that is deals don't pencil. Two, they're stuck in deals that they already have, and they haven't sold them yet, so they don't have new capital to be able to put in new deals. So if you're selling land today, it's probably not a great land sale market, and that could create opportunities for us to buy shovel-ready deals. We've definitely bought a lot of shovel-ready deals over the years. The transactions we have under contract right now are in Tampa, and we have a large land parcel that's a suburban, three-story, four-story stick construction project, and we will continue to, you're going to see us move more from urban mid-rise to more suburban simple construction. That's just a direction that we have been moving, and that's why the four projects that we have identified, those were all urban projects, and if they were suburban walk-ups, we probably wouldn't have written them down. We'd probably started them by now. Thank you. The next question is from Adam Kramer with Morgan Stanley. Please go ahead. Hey, thanks for the time. I was just wondering, obviously, with the development kind of shift, I was wondering kind of where you would rank acquisitions versus developments versus maybe other uses of capital if you were to kind of rank the different capital allocation possibilities here. I noticed you guys haven't bought anything in some time. Maybe if you could also just kind of categorize the state of the acquisition market and maybe early expectations for kind of deal flow in the coming quarter or two. We think there's going to be big deal flow in 2025 from an acquisition perspective for all the reasons that I've already gone through. It gets down to, when you think about capital allocation, it's all about driving cash flow growth. When we look at our weighted average cost of capital, and we're going to invest in new transactions that will give us a reasonable spread over our weighted average cost of capital, development makes sense. That's why we've started $300+ million this year. We'll start $375 million next year. The balance between how much development and how much acquisitions you'll do will really be just a function of what the market allows. So far this year, we just didn't see a great amount of opportunity in the acquisition side, and that's why we didn't really do anything. But you can expect us to be more active in 2025 and 2026 for sure. And I guess one of the, when you think about capital allocation, if stock prices get to the point where they were when we bought 50 million of shares at $97, today's stock price is pushing up on a six cap rate. And it's hard for me to find us going in six that's existing today or a development going in six. So if the public markets don't believe the private markets that cap rates are four and a half, we can buy our stock at six, you can expect more of that. Thank you. The next question comes from Wes Golladay with Baird. Please go ahead. Hi everyone. I want to go back to that comment about the construction costs increasing. Was that a market-specific labor thing? Was that pretty broad-based? And can you comment on how land pricing is versus the peak? I'm sorry. The first question was. Go ahead, Alex. No, I was just trying to make sure I heard the first question. Construction costs going up, but they're really not going up. They're flat. No, they're not going up. Looking at the Camden Baker and the Camden Gulch, the cost, not for the active construction, but the shadow pipeline, the Baker and the Gulch went up. I didn't know if that was market-specific labor that went up or just construction costs overall. Then the follow-up question was, how is land pricing versus the peak? Okay. Absolutely. So if you look at what's in our pipeline, we have gone through and substantially redesigned those sites. And we've come up with most of what you're seeing on cost changes is really, you call it, enhancements. We're building a much better product than what we originally had laid out. And so that's what you're really seeing there. Land prices today, Ric, on that, if you want to hit that one. Yeah. Land prices today are lower than they were at the peak, probably 15%-20%, maybe more. But landholders are just like merchant-builder holders. If you don't have to sell, why would you sell into a weak market? And most people don't have to sell. So there hasn't been a lot of major land transactions getting done. And it's just a sit-and-wait kind of scenario. So it's hard to kind of put a pin in, is it down 15%-20%, or what? Because there really hasn't been a lot of land transactions out there. Thank you. The next question is from Linda Tsai with Jefferies. Please go ahead. Thanks for taking my question. Given your comments about the quality of your construction, building a better product, and luck helping you avoid the worst of some of the recent hurricane impacts, the average age of your portfolio is also lower. Is there any way to quantify the resiliency of your portfolio versus the surrounding multifamily buildings in the regions in which your portfolio operates? I think it's very hard to quantify other than to say that clearly when we were, once Milton went through and our teams were out on our sites assessing, what they would report back is that our neighbors certainly looked a lot different than we do, and a lot of that is, we talked about the quality of the real estate, but it's also the upkeep, right? It's very important that you put the money in and you make sure that the trees are appropriately trimmed, that you do the things to make sure that your drains are clear. We go through and we'll drain all of our pools to make sure that we don't have overflow from that. There's just a lot of factors that we do because, quite frankly, we look after our real estate. I will tell you that when you drive around and you look at the neighborhood, it's not always the same. I'll just give you, go ahead. Can you talk about Harvey and the portfolio here and how we fare? Yeah. I mean, just to follow up on Alex's comment, our hometown is Houston, Texas. We've had a lot of experience with dodging hurricanes and making sure that we're prepared. And then in the aftermath of hurricanes, making sure that our residents are taken care of. But in Harvey, which is the flood of record in Harris County, probably by most people's estimation of 500-year flood, we had one building or one community that actually had flood water damage. And it was only two buildings within that community. And we're spread all over Harris County. So first of all, it starts with making sure that you buy communities that are out of the floodplain and out of the floodplain by some measure. And so that when the storm does happen, the things that we have to deal with most of the time are things that deal with the quality of the asset that you've built. And that's windstorm damage. But it doesn't make any difference what kind of quality you've built if you have rising water damage to your community. There's just no way to mitigate that either before or during a storm event. So it starts with knowing where to own real estate in the markets that we're in. And then it runs all the way through the things that Alex talked about is great preparation in the event that you are going to have a windstorm event. Thank you. The next question is from David Segall with Green Street. Please go ahead. Hi. I was curious what kind of difference in performance do you see between your urban and suburban assets and sub-markets? Is it just driven by rent growth? Is there an element of CapEx differences? And I was also curious if you're thinking on the urban-suburban divide is consistent across markets or are there any exceptions? Yeah. I mean, what I'll tell you is suburban continues to outperform. And when we look at revenue growth, our suburban assets in the aggregate are doing about 80 basis points better than our urban assets. And by the way, that's across our entire portfolio. When you look at demographics, 2/3 of our sort of demographic target lives, or more than 2/3, like 75% of the demographic target, that mid-30s, 21 to 32-year-old resident live in suburbs, so that's where the customers are. That's why suburbs tend to be better than urban, and if you think about the development mindset over the last 10 years, everybody wanted to do urban, and urban was driven by institutional investor appetite, and so urban markets had more supply put in them, which created more downward pressure on rents from the urban core versus suburban, and that's changed some, but because the last slug of supply, there's definitely more in the suburbs, but there's still plenty of urban, so I think suburban is going to continue to outperform urban over a long period of time. Thank you. Today's last question comes from Alex Kim with Zelman & Associates. Please go ahead. Hey, thanks for taking my question. I wanted to ask about turnover quickly, which was down 4% year- over- year in the third quarter. Could you talk about some of the drivers there and your expectations moving forward? Thanks. Yeah. So one of the biggest changes in the turnover rate goes straight back to move-outs to home purchases. We were in the 9% range and have been for the entire year, which is historic for us. We had normally averaged somewhere between 15%-20% move-outs to home purchases, depending on where you are in the cycle. So a 9% rate over an extended period of time makes a huge difference. That's 5%-8% differential in residents that historically would have purchased a home who are not doing so because of the conditions in the housing markets is a difference maker. So we've seen results on retention. And that's been really for the last couple of years. We certainly expect that that will continue into 2025 because, as Ric said, there's really no short-term solution or change that's coming in the single-family home market that's going to change that dynamic. Thank you. This concludes our question and answer session. I would like to turn the call back over to Ric Campo for any closing remarks. Thank you. I appreciate your being on the call today. And we will see you in Nareit in Las Vegas here in a couple of weeks. Thanks. Y'all take care. The conference has now concluded. Thank you for your participation. You may now disconnect your lines.