Camden Property Trust (NYSE:CPT) Q4 2023 Earnings Call Transcript

Operator: The next question will come from Omotayo Okusanya with Deutsche Bank.

Omotayo Okusanya: Yes. Just thoughts on bad debt expense. The forecast was $24 million, 1.1% of total revenues doesn’t really change that much from where you were in 4Q. So just wondering why we’re not seeing incremental improvement kind of post all the moratoriums and improvements on the fraud management side.

Alex Jessett: So I think we’re sort of in unprecedented times right now where we’re trying to figure out what is the new normal. And so at this point, what we’re assuming is that the first and second quarter look a lot like the fourth quarter. And then we have some slight improvements as we go into the latter part of the year. Clearly, if we return to 50 basis points which is what our historic norm had been before all of this, then we got some potential upside sort of running through the math. But at this point, we’re just being patient and seeing how it plays out.

Omotayo Okusanya: Fair enough.

Operator: The next question will come from Robin Lu with Green Street.

Robin Lu: Alex, just a question for you. There was a step up in CapEx budget for the year, particularly in nonrecurring CapEx. Can you provide more detail as to what’s driving the high spend?

Alex Jessett: Yes, absolutely. So we’ve got a couple of things that are running through the nonrecurring side. And they’re mainly focused around a couple of communities we have that have some large exterior projects and foundational projects that we need to do. So that’s what you’ve got going through the math.

Robin Lu: Do you expect that to extend to other properties in like ’25 or ’26 as well.

Alex Jessett: No, I don’t think so. We go through and we look at all of our communities, really do a deep dive every year, as you would expect. And so these were a couple of communities that have been identified — as I said, they did have the foundational and exterior challenges that we knew we needed to fix. And so our intention is to get it done in 2024 and I wouldn’t expect to see a number like this in ’25.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Ric Campo for any closing remarks. Please go ahead, sir.

Ric Campo: Great. Well, thank you for being on the call today. We appreciate the opportunity to go through what 2024 looks like to be an interesting year. So we’ll see you in the conference circle in circuit here in the next month or two. So, take care and thank you.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.