The soundtrack before Camden’s Property Trust’s fourth quarter earnings call in late January included James Taylor’s “How Sweet It Is.” For CEO Ric Campo’s, the song’s inclusion was appropriate. 

“We include James Taylor's 'How Sweet It Is,' not as a reference to light sweet crude oil, but rather to point out that despite all the understandable anxiety about how Houston will be impacted by low oil prices, our geographic diversified portfolio will deliver another year of strong results for our shareholders,” Campo said in a transcript provided by SeekingAlpha. “How sweet it is.”

As he did in his third quarter call, Campo met the issue of declining oil prices in Houston, which holds 13% of the company’s net operating income, before analysts even peppered him with questions. His message was clear: Houston is a diversified market with major job drivers, like the Texas Medical Center and the Port of Houston. And, he contends the jobs being lost in Houston are on the oil rigs, not the corporate office dwellers more likely to live in his apartments. So, despite the pressures from the oil market, Camden still expects same store revenue growth of 3.4% in Houston. 

“We think management did a good job of detailing all the strengths of diversity in the Houston economy while acknowledging that oil/material office job reductions remain a wild-card,” said Sandler O'Neill + Partners in a report about Camden’s call.

But if oil prices stay in the $40 a barrel range into the future, things could change. “If you have a scenario that you want to run and say, let's say, for grins, oil prices stay in the $40s for another--throughout '15 and throughout '16, I think you're dealing with a different set of facts then,” said Camden’s President Keith Oden. 

Overall, Camden is budgeting more revenues than last year in 10 of its 15 markets. In many of those markets, including Dallas and Austin, the REIT sees gas prices as a positive for its portfolio because it gives consumers more money in their wallet every month.

Like DC?

While Houston is in the news, Camden sees bigger short-term issues in DC. Camden expects Washington D.C. to once again be its weakest market in 2015 with expected revenue growth of 0.9% as 12,000 new completions come online.

As far the transaction market, there are similarities between the two cities. Campo says sellers are holding on to their assets because they don’t want to sell in an uncertain climate. And investors are expressing trepidation as well.

“Houston has definitely been redlined by a lot of investors,” Campo says. “But other markets have not. So people are still getting equity deals done, and acquisitions are robust in the other markets. We do think Houston sales will fall off next year just because sellers don't really want to sort of try to see what the market will do today. But on the other hand, I have heard some folks talking about maybe this is the opportunity to go in because some institutional investors will pull out, maybe you don't have as much competition.”

Camden’s CEO said he’s starting to see land deals drop 20% or 30% because of the development side, which he means the REIT will be looking for opportunistic deals. In a way, it’s similar to D.C. “The interesting thing in D.C., and this is, I think, going to happen in Houston as well, is that construction costs have moderated in D.C.,” he says.