Alex Jessett: Well, so the first thing I would tell you is, we think bad debt as it is today is absolutely sustainable. Keith talked about it quite a bit. If you think about Atlanta was one of our problem markets. And obviously, we have legislation there that’s really helpful for us today and making sure that we can enforce contracts. And so we think we are today is certainly sustainable, and that’s why we have it running through the rest of the year. Getting below 50 basis points, which is the long-term average, I think we’ll have to see. What we are trying to figure out today is whether or not consumer behavior has changed for the worse. And if it has, and I think it’s going to be probably a constant battle through the use of technology to offset consumer behavior. But at this point, we are optimistic that we can at least get back to 50 basis points, but certainly not — not putting any bets on getting better than 50%.
Unidentified Analyst: Great. Thanks. [Indiscernible].
Ric Campo: Yes, and let me just add — go ahead, sorry.
Michael Goldsmith: Sorry, go ahead. I was [indiscernible].
Operator: The next question comes from Daniel [indiscernible] with Deutsche Bank. Please go ahead.
Unidentified Analyst: Thanks and thanks for all the [indiscernible], guys. Alex, I just wanted to clarify the second half negative 1% new lease rate growth you mentioned earlier. Does that assume the leases get to flat or positive in the third quarter before normal seasonality kind of takes over in the fourth quarter? Or is there a — is there like a different rent dynamic assumed given the supply backdrop?
Alex Jessett: Yes. No. So if you think about it, right, the negative 1% is fairly consistent from the third quarter and the fourth quarter. So — but the offset to that is obviously renewals. And so we are assuming that renewals are going to be close to 4% for the third and fourth quarter. So that’s the offset, and that’s how you get to the blend that we are talking about. And just once again, the blend that we are assuming in the third quarter is 1.6% and 1.2% in the fourth quarter. So whether or not there comes a point in time where new leases are flat, we do not have that running through our model today.
Unidentified Analyst: Great. Thank you.
Operator: The next question comes from Adam Kramer with Morgan Stanley. Please go ahead.
Adam Kramer: Okay. Thanks for the question. Appreciate it. I wanted to ask about the cadence of supply, really the cadence of deliveries in the coming quarters and really into next year. I think the improvement so far year-to-date in new lease and what you’d be able to do with occupancy at the same time, I think are impressive in the face of kind of this unprecedented supply. Really just want to know as deliveries presumably accelerate over the coming months and quarter or two, kind of how you view absorption kind of in light again on this kind of accelerating delivery cadence?
Keith Oden: Yes. So the — we use — again, Ron Witten’s numbers primarily because I think he does a little bit better work, more detailed work around the pace of deliveries. And across Camden’s portfolio for 20 for this year, Whitten projects about 230,000 of completions. Now if you get into the granularity of how that occurs, there’s probably a slight deceleration to that because Witten’s got deliveries in 2025 at about 200,000. So a decline overall of about 30,000 year-over-year between ’24 and ’25. But the question of that deliveries that are going to happen in 2025, I don’t think there’s any question that that’s going to be front end loaded because you if you go back and look at the start data, the starts data was kind of falling pretty dramatically if you kind of go to reverse engineer it 18 months backwards.
So my guess is that, that’s pretty front end loaded in 2025. And obviously, supply is supply, and we’ll have to deal with it. but I certainly don’t see 2025 being a worse scenario for us than 2024 in terms of just the total number. And so far, because of all the factors Ric mentioned, our absorption rates have been really strong. And if you look at what’s projected under the sort of the status quo scenario for employment growth and then continued in migration to the Sunbelt 2025 looks if all things are equal and no hard landing, 2025 looks like another really good year for absorption of apartments. So front end loaded supply continued really good demand in 2025 sounds to me like a pretty constructive environment.
Operator: Next question comes from [indiscernible] with Baird. Please go ahead.
Unidentified Analyst: Hey, good morning, everyone. Looking at your initial [indiscernible] gate from last call, have any of the expectations changed amongst the markets and which ones are maybe better or worse versus your initial thoughts?
Keith Oden: Yes, I don’t. I always look at that prior to the call, and there’s nothing that jumped out at me. If I were rating the portfolio again today, I can’t tell you that I would have changed any of the letter grades. I suppose maybe I would have been a little bit harsher on Austin and Nashville than I was a quarter ago because we — those are the two — our two worst-performing markets in terms of new lease rates. But we have two assets in Nashville and then we have our Austin exposure. Those are the only two that kind of jump at me and say, probably should — probably a little worse than I thought it was going to be just a quarter out. But the rest of them, I would believe them the same.
Unidentified Analyst: Great. Thank you.
Operator: The next question comes from [indiscernible] with Green Street. Please go ahead.
Unidentified Analyst: Hey, good morning. Thanks for your time. Just wondering, do you expect to enter any new markets or exit any existing markets over the next few years?
Keith Oden: No, we …
Ric Campo: We clearly will — we do — we would like to expand some of the markets like Keith pointed out, we have two properties in Nashville. We definitely need to have more exposure there. And we’ve talked over a long period of time about lowering our exposure in Houston and lowering our exposure in D.C. and increasing our exposure in some of the other markets where we have 3% or 4% of our NOI, and we will continue to monitor and manage our portfolio over the next few years in that regard.
