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Camden Announces Property Buyouts and Disposition for December

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Camden Property Trust (CPT - Free Report) announced a couple of acquisitions in its desired sub-markets as well as dispositions and exit from other markets in December.

The company acquired an apartment community in Raleigh, NC, on Dec 5, 2019. Previously known as The Carolinian on Glenwood, the 186-home community will be renamed Camden Carolinian. The community comprises a luxury mid-rise building completed in 2017 and has more than 20,000 square feet of indoor and outdoor amenity space.

The other purchase comprised a luxury 552-home apartment community, with an adjacent 2.25-acre development site in Houston, TX. Formerly operated as three properties — Aria at Willowick Park, Olympia at Willowick Park, and The Townhomes at Willowick Park — the community will be renamed Camden Highland Village.

Camden shelled out approximately $222 million for the purchase of these properties. Per Richard J. Campo, the company’s chairman and CEO, “We believe the purchase price of these assets is significantly below replacement cost and expect these acquisitions to produce a stabilized yield of approximately 5%.”

Meanwhile, Camden also sold its portfolio based in Corpus Christi, TX, and exited that market. The moves helped it in reaping net proceeds of approximately $75 million. The assets sold comprised two wholly-owned communities with 632 apartment homes, and one joint-venture community with 270 apartment homes.

Notably, the company has been making acquisitions to improve its overall portfolio. In fact, it acquired four communities, comprising 1,380 apartment homes, for a total cost of $440 million and purchased three undeveloped land parcels for $37 million in 2019. Apart from these, Camden’s efforts to shed non-core properties and exit markets will likely enhance its overall portfolio quality, and provide capital for acquisitions.

The company currently has a Zacks Rank #3 (Hold). Shares of Camden have gained 19.6% in the past year, underperforming its industry’s rally of 24.5%.





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Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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