Importance of acquisitions and dispositions
Camden Property Trust’s (CPT) focus on property acquisitions and dispositions bodes well for its healthy growth. The company’s average monthly revenue has improved significantly over the past several years. This is mainly due to strong growth from its operating communities, dispositions of older assets, and the addition of many new high-quality communities through acquisitions and development.
Other major apartment REITs such as Equity Residential (EQR), Essex Property Trust (ESS), and AvalonBay Communities (AVB) are also active in property acquisition and disposition activities. The iShares US Real Estate ETF (IYR) invests 0.79% of its portfolio in Camden Property Trust.
Size of acquisitions and dispositions
Acquisitions for both Camden and its joint venture funds totaled nearly $1.3 billion over the past four years, adding 9,934 apartment homes to its portfolio with an average age of seven years. Dispositions and land sales by Camden and its joint ventures over the same period totaled $1.7 billion and were comprised of 19,210 apartment homes with an average age of 22 years.
In fiscal 2014, Camden acquired one operating property for $62.6 million. The property, located in Atlanta, Georgia, is comprised of 276 apartment homes. The company also acquired two land parcels totaling 10.5 acres in Houston, Texas, and Rockville, Maryland, for $39.4 million.
In fiscal 2014, Camden sold five operating properties comprised of 1,847 apartment homes located in Atlanta, Georgia; Dallas, Texas; Orlando, Florida; Tampa, Florida; and Charlotte, North Carolina, for $218.3 million. The company recognized a gain of $155.7 million from these property sales.
In January 2015, Camden sold two operating properties comprised of 1,116 apartment homes located in Tampa, Florida, and Austin, Texas, for $114.4 million.
Camden also sold four land holdings comprised of 29.3 acres located adjacent to current operating and development communities in Dallas, Houston, and Atlanta for $23.7 million. The company recognized a gain of $3.6 million from these land sales.
The company plans to continue its practice of selective dispositions in the future when market conditions are favorable and as opportunities arise.
In the next article, we’ll take a closer look at Camden’s strategy.