Camden Property Benefits From Apartment Demand Boom

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Real estate investment trust firms came under fire following the Federal Reserve meeting Wednesday after Fed chief Janet Yellen signaled that interest rates could be heading higher sooner than expected.

While selling was broad-based in the REIT group earlier in the week,Camden Property Trust ( CPT ) held up pretty well.

The company acquires and develops multifamily apartment communities. It owns interests in and operates 168 properties in the U.S., with more than 59,000 apartment homes. Fourteen properties are under development.


Demand for apartments is still strong four years into the sector's recovery, although questions remain about how long the apartment market can sustain momentum as inventories rise.

Of the 937,000 total housing starts in January, 309,000 were for multifamily units with five or more units, according to the U.S. Department of Commerce.

When the company reported fourth-quarter results in January, funds from operations (FFO) rose 11% from a year ago to $1.08 a share. Sales rose 12% to $210.3 million. Over the past seven quarters, year-over-year sales growth at Camden Property Trust has ranged from 12% to 16%.

In the fourth quarter, construction began at two new wholly owned communities: the Camden in Los Angeles, a $145 million project with 287 apartment homes, and Camden Victory Park in Dallas, an $82 million undertaking with 423 apartment homes.

As part of its fourth-quarter earnings release, Camden raised its quarterly dividend to 66 cents a share. The dividend is payable on April 17 to shareholders of record March 31. Camden currently yields 3.9% annually.

Two other apartment REITs are listed in today's REIT Leaders screen to the left:Home Properties ( HME ) andMid-America Apartment Communities ( MAA ).



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: CPT , HME , MAA

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