Camden Property Trust (NYSE:CPT) Q1 2018 Earnings Conference Call Transcript
May 04, 2018 • 11:00 am ET
all over the country that came to help get apartments ready at record speeds for people in need of housing after Harvey. Our team displayed the true spirit of Houston Strong and how communities can come together when their help is needed.
We acquired two properties during the quarter that Alex will give you more detail on in his remarks. Our guidance for the rest of the year is another $200 million to $400 million in acquisitions. The acquisition environment, however, has become a lot more competitive since the beginning of the year, with cap rates dropping at least 25% -- or, I'm sorry, 25 basis points in our markets, driven by significant buyer interest and strong multifamily fundamentals. Our development business has continued to create significant long-term value. We plan to start $100 million to $300 million of new projects through the rest of this year.
After the end of the quarter, we acquired a shovel-ready, high-rise development site in downtown Orlando from a developer that couldn't get their financing completed. We plan to start construction on this project this summer. Construction cost increases continue to exceed rental rate increases in all of our markets and continue to put pressure on future development returns. All of our current projects under development are substantially bought out and are not subject to the major risk of cost increases.
We maintain the strongest balance sheet in the sector, which gives us maximum financial flexibility in this part of the real estate cycle. And we have a strong Camden team that delivers amazing customer service to our residents that creates long-term shareholder value. I appreciate what our teams do every single day with our residents, and I want to thank them on this call.
I'll now turn the call over to Keith Oden.
D. Keith Oden
Thanks, Ric. Our first quarter revenue results were right in line with our plan, and that bodes well for the balance of 2018. Overall, same-store revenues were up 3.3% and 0.3% sequentially. Most of our markets performed as expected, with 50 basis points or less variance from our first quarter budgets. Two exceptions would be Orlando and South Florida, which had a positive variance of greater than 50 basis points to the original budget. And that was good news, particularly in South Florida, to see some improvement there. The outperformance in Orlando placed it at the top of the revenue growth in the quarter at 6.2%. Tampa, Raleigh and San Diego/Inland Empire each had 5.2% growth, followed by Atlanta at 4.8% and Phoenix at 4.5%.
As we expected, revenue growth was slightly below 2% in three markets, with Houston at 1.9% and Washington, D.C., and D.C. Metro and Austin both at 1.6% growth. We expect better results in Houston and D.C. over the next few quarters and anticipate getting to our full year outlook of roughly 3% growth in each market.
The supply pressure in Austin will continue to be a big headwind throughout 2018, and will likely limit our