uploads///C STRATEGY

How Camden Plans to Create Value through Strategic Initiatives

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Nov. 19 2015, Updated 1:06 p.m. ET

Growth strategy

Camden Property Trust’s (CPT) principal objective is to generate consistent earnings growth through property operations, developments and acquisitions, market balance, and recycled capital. To achieve these objectives, the company relies on its property management capabilities and operating strategies.

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Strategic initiatives

Camden Property Trust believes it’s well positioned in its existing markets and has the expertise to take advantage of new opportunities as they arise. These capabilities are expected to allow the company to concentrate its growth efforts on selective opportunities to enhance its strategy of having a geographically diverse portfolio of assets that meets the requirements of its residents.

Focus on core markets

Camden continues to concentrate on its core markets. The company believes that core markets provide many advantages due to economies of scale. The company’s strategy is to operate in these markets with a strong base of properties in order to benefit from the local expertise.

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Redeploying capital

Consistent with its goal of generating sustained earnings growth, Camden intends to selectively dispose of properties and redeploy capital for various strategic reasons, including properties that are not a strategic fit with its long-term earnings growth expectations.

Market exposure

Camden Property Trust’s strategy is to maximize capital appreciation of its properties by investing in markets characterized by conditions favorable to multifamily property appreciation. The company believes that these markets generally have the following characteristics:

  • strong economic growth leading to household formation and job growth, which in turn should support higher demand for apartments
  • an attractive quality of life, which may lead to higher demand and retention for its apartments and allow the company to more readily increase rents

Strategy implications

Camden Property Trust expects its portfolio strategy to generate higher rental income in the years to come. The strategy is also expected to help take on the rising competition from other major players such as AvalonBay Communities (AVB), Equity Residential (EQR), and Essex Property Trust (ESS). Camden Property Trust makes up 1.6% of the holdings of the iShares Cohen & Steers REIT ETF (ICF).

In the next article, we’ll analyze Camden Property Trust’s revenue.

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