The Houston Business Journal's Paul Takahashi takes a look at the second quarter results for apartment giant Camden Property Trust, which showed revenue of $221.5 million, exceeding the street's expectations of $220 million.
But the blemish in its otherwise stellar earnings was the declining apartment revenue in Houston, where oil prices are producing empty units. The firm's revenue from its local portfolio fell 1%--not precipitous, but quite a contrast to the company's strongest markets, which posted gains in the 8% range.
“The revenue decline is in line with our expectations,” said Keith Oden, Camden’s president and trust manager. “We predicted (Houston) would be flat or slightly negative this year.”
However, Houston has an oversupply of new Class A apartments and falling demand amid energy layoffs. During the second quarter, new apartment leases were down about 2 percent and renewals are up about one percent in Houston, Oden said.
As a result, overall occupancy rates in Camden’s Houston properties were 93 percent, lower than the company’s overall portfolio occupancy rate of 95 percent. Houston represents 12 percent of Camden’s net operating income, Oden said.