Camden Property Trust Reit (CPT) Q3 2021 Earnings Call Transcript

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Camden Property Trust Reit (CPT 1.05%)
Q3 2021 Earnings Call
Oct 29, 2021, 11:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to Camden Property Trust Third Quarter 2021 Earnings Conference Call. I'm Kim Callahan, Senior Vice President of Investor Relations. Joining me today are Ric Campo, Camden's Chairman and Chief Executive Officer; Keith Oden, Executive Vice Chairman; and Alex Jessett, Chief Financial Officer. If you haven't logged in yet, you can do so now through the Investors section of our website at camdenliving.com. [Operator Instructions] Today's webcast will be available for replay this afternoon, and we are happy to share copies of our slides upon request. Before we begin our prepared remarks, I would like to advise everyone that we will be making forward-looking statements based on our current expectations and beliefs.

These statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from expectations. Further information about these risks can be found in our filings with the SEC, and we encourage you to review them. Any forward-looking statements made on today's call represent management's current opinions, and the company assumes no obligation to update or supplement these statements because of subsequent events. As a reminder, Camden's complete third quarter 2021 earnings release is available in the Investors section of our website at camdenliving.com, and it includes reconciliations to non-GAAP financial measures, which will be discussed on this call. [Operator Instructions]

At this time, I'll turn the call over to Ric Campo.

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Thanks, Kim. The theme for our precall music today was Camden Cares. For many years, our Camden Cares initiatives have provided assistance to people in need among Camden's family or Camden residents as well as the communities where we live and work. Our music today included a song by the late rate Bill Withers with this great wisdom.

"lean on me, when you're not strong, I'll be your friend. I'll help you carry on, for it won't be long till I'm going to need somebody to lean on." These words capture the spirit of all that our Camden associates do for others in need under our Camden Cares banner. Camden's why, our purpose is to improve the lives of our teammates, customers and our shareholders one experience at a time.

At the outset of the pandemic, it was clear that the disruption from COVID-19 was going to be massive and leave millions needing someone to lean on. We encouraged our teams to view the widespread chaos as an opportunity to go big on our pledge to improve people's lives, one experience at a time. And not surprisingly, team Camden responded in truly extraordinary ways that we captured in this brief video. (presentation) Camden's caring culture was recognized by People Magazine this year on their 100 Companies That Care list, ranking Camden at #7. I want to thank all of our Camden team members for all they do to make our communities better every single day. We are pleased to report another very strong quarter of results and another raise to our 2021 earnings guidance. We are seeing high levels of rent growth along with sustained occupancy levels over 97% for our portfolio which bodes well for the remainder of the year. Camden is always focused on operating in markets with high employment and population growth and strong migration patterns, and this strategy has clearly paid off as evidenced by the ULI PwC report that was issued for 2021 real estate trends at the ULI Fall Conference in Chicago last week. Camden's markets -- eight of Camden's markets ranked in the top 10 for 2022 investor demand. We're very fortunate today to be in a really strong apartment market and in the right markets. So at this point, I will go ahead and turn over the call to Keith Oden.

D. Keith Oden -- Executive Vice Chairman of the Board

Thanks, Ric, Now for a few details on our third quarter operating results. Same property revenue growth exceeded expectations yet again at 5.1% for the quarter and was positive in all markets, both year-over-year and sequentially. We posted double-digit growth in Phoenix and South Florida, both at 10.1%, followed by Tampa at 9.5%. Year-to-date, same-property revenue growth is 2.9%, and we expect strong performance in the fourth quarter across our portfolio, resulting in our revised 2021 guidance range of 4% to 4.5% for full year revenue growth.

New lease and renewal gains are still strong with double-digit growth posted in both categories. For 3Q '21, signed new leases were 19.8% and renewals were 12.1% for a blended rate of 16% flat. For leases, which were signed earlier and became effective during the third quarter, new lease growth was 16.6% with renewals at 8.5% for a blended rate of 12.2%. October 2021 remained strong with signed new leases trending at 18.3%, renewals at 13.8% and a blended rate of 16.5%. Renewal offers for November and December were sent out with an average increase of 15% to 16%.

Occupancy has also been very strong and was 97.3% for the third quarter of '21 and is still holding at 97.3% for October to date. Net turnover remains low at 47% for the third quarter of '21 versus 49% in the third quarter of last year. And move-outs to home purchases moderated from 17.7% in the second quarter of '21 to 15% in the third quarter of '21, trending below our long-term average of about 18%. It's worth noting that these strong results have continued into what has historically been a seasonally weaker period for our portfolio.

We want to acknowledge team Camden for continuing to produce outstanding and better-than-forecast results. This marks our third straight quarter in which we increased our same-property NOI and FFO per share guidance. Our team is focused on finishing the year strong, which will position us for another solid year in 2022.

I'll now turn the call over to Alex Jessett, Camden's Chief Financial Officer.

Alex Jesset -- Executive Vice President of Finance and Chief Financial Officer.

Thanks, Keith. Before I move on to our financial results and guidance, a brief update on our recent real estate activities. During the third quarter of 2021, we purchased Camden Central, a recently constructed 368 unit, 15-story community in St. Petersburg, Florida. And subsequent to quarter end, we purchased Camden Greenville, a recently constructed 558 unit mid-rise community in Dallas. The combined purchase price for these two acquisitions is approximately $342 million and both assets were purchased at just under a 4% yield. Also during the quarter, we stabilized Camden Downtown, a 271 unit, $132 million new development in Houston.

And subsequent to quarter end, we stabilized ahead of schedule Camden North End II, a 343-unit, $79 million new development in Phoenix. Additionally, during the quarter, we completed construction on Camden Lake Eola, a $125 million new development in Orlando. Subsequent to quarter end, we purchased five acres of land in Denver for future development purposes. On the financing side, during the quarter, we issued approximately $222 million of shares under our existing ATM program.

We used the proceeds of the issuance to fund in part the previously discussed acquisitions. Turning to financial results. Last night, we reported funds from operations for the third quarter of 2021 of $142.2 million or $1.36 per share, exceeding the midpoint of our guidance range by $0.03 per share, which resulted primarily from approximately $0.01 in higher same-store NOI, resulting from $0.02 of higher revenue driven by higher rental rates, higher occupancy and lower bad debt, partially offset by $0.01 of higher operating expenses entirely driven by higher-than-anticipated amounts of self-insured expenses. -- approximately $0.015 and better-than-anticipated results from our non-same-store development and acquisition communities and approximately $0.01 from the timing of our third quarter acquisition.

This $0.035 aggregate outperformance was partially offset by $0.005 impact from our higher share count resulting from our recent ATM activity. Last night, based upon our year-to-date operating performance and our expectations for the remainder of the year, we also updated and revised our 2021 full year same-store guidance. Taking into consideration our continued significant improvement in new leases, renewals and occupancy and our resulting expectations for the remainder of the year, we have increased the midpoint of our full year same-store revenue guidance from 3.75% to 4.25%. And we have increased the midpoint of our full year same-store NOI guidance from 3.75% to 4.5%. We are maintaining the midpoint of our same-store expense guidance at 3.75% as the higher-than-expected third quarter insurance expenses are anticipated to be entirely offset by lower-than-expected property tax expenses in the fourth quarter.

We are now anticipating that our full year property tax growth rate will be approximately 1.6%, which includes $1.8 million of property tax refunds anticipated in the fourth quarter. Our 4.25% same-store revenue growth assumption is based upon occupancy averaging approximately 97% for the remainder of the year with the blend of new lease and renewals averaging approximately 16%. Last night, we also increased the midpoint of our full year 2021 FFO guidance by $0.10 per share. Our new 2021 FFO guidance is $5.34 to $5.40 with the midpoint of $5.37 per share. This $0.10 per share increase results from -- are anticipated 75 basis points or approximately $0.05 increase in 2021 same-store operating results, $0.01 of this increase already occurred in the third quarter, an approximate $0.05 increase from our non-same-store development and acquisition communities, of which $0.025 already occurred in the third quarter and an approximate $0.02 increase in FFO from later and lower-than-anticipated fourth quarter disposition activities.

We now anticipate approximately $110 million of dispositions in early November and approximately $220 million of dispositions in early December as compared to our previous expectations of $450 million of dispositions, all occurring in early November. This $0.12 aggregate increase in FFO is partially offset by an approximate $0.02 impact from our third quarter ATM activity. Last night, we also provided earnings guidance for the fourth quarter of 2021.

We expect FFO per share for the fourth quarter to be within the range of $1.46 to $1.52. The midpoint of $1.49 represents $0.13 per share improvement from the third quarter, which is anticipated to result from an $0.11 per share or approximate 7.5% expected sequential increase in same-store NOI, driven by both a 2.5% or $0.055 per share sequential increase in same-store revenue, resulting primarily from higher rental rates and a 6.5% decrease in sequential same-store expenses driven primarily by $0.025 fourth quarter decrease in property taxes, combined with a fourth quarter, $0.015 decrease in property insurance expenses and $0.015 third to fourth quarter seasonal decrease in utility, repair and maintenance, unit turnover and personnel expenses, a $0.03 per share increase in NOI from our development communities in lease-up and our nonsame-store communities and $0.02 per share increase in FFO resulting from the full quarter contribution of our recent acquisitions.

This aggregate $0.16 increase is partially offset by $0.015 decrease in NOI from our planned fourth quarter disposition activities and $0.015 per share incremental impact from our third quarter ATM activity. Our balance sheet remains strong with net debt-to-EBITDA at 4.4 times and a total fixed charge coverage ratio at 5.8 times. As of today, we have approximately $1.1 billion of liquidity, comprised of approximately $200 million in cash and cash equivalents and no amounts outstanding under our $900 million unsecured credit facility. At quarter end, we had $242 million left to spend over the next three years under our existing development pipeline. Our current excess cash is invested with various banks, earning approximately 20 basis points

At this time, we will open the call up to questions.

Questions and Answers:

Operator

[Operator Instructions] The first question comes from Neil Malkin with Capital One Securities.

Neil Malkin -- Capital One Securities -- Analyst

Good morning, everyone! Great quarter. First question, maybe higher level in terms of just secular tailwinds. What is, in your opinion, driving historically strong rent growth?

I mean -- is it -- are you continuing to see accelerating in-migration, corporate relocation? Is it a wage growth thing? Because supply is pretty consistent, give or take, over the last couple of years and expected to be next year, maybe a little bit higher.

But if you can just talk about what you think the main drivers there are because you're at 97% and you're pushing double digits. So any thoughts would be great.

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Sure. So when we think about what's going on, it really -- you think about our customer base, right? Our customer base average income is a little over $100,000 a year. And if you think about what's been going on in the economy, the unemployment rate is very low. But when you think about the jobs that haven't been -- or the people that aren't employed today, 75% of those folks are making under $50,000 a year.

So our customer base is really, really in good shape. Number one, they're employed; number two, they have massive savings as a result of the pandemic. And a lot of them that doubled up with parents' homes or doubled up apartments during the pandemic, that's all expanding.

So you really have almost three years of demand hitting the market in 2021 in a very buoyant job market for our customers and then also you just have the financing scenario or you think about wages going up pretty dramatically, plus savings rates going up pretty dramatically, all the government support that these -- that our customers got and probably they didn't spend it.

So what that has done is that, that's allowed a lot of folks that maybe financially had to double up prior to the pandemic who are endoubling. So you now have just normal economic growth plus the unbundling of people that were either living at home or bundled up in roommate scenarios because we know that people generally are -- have roommates, not because they want them, but because they have to have them because of financial issues.

And so we just have a very -- our customers are really in good financial shape today. And I think that's what's sort of driven the demand not just for apartments, but for single-family homes. Anything that's home today is full. And so we've been underbuilding for a long, long time. And I think it's just that we have this unusual situation where everybody has money in their pocket and they're willing to go out and lease apartments.

D. Keith Oden -- Executive Vice Chairman of the Board

I would just add. You mentioned the in-migration and the continuation there. Across Camden's platform, on using Ron Witten's number for 2021, he still estimate over 440,000 net migration across Camden's fifteen markets.

So it is -- I mean, it's an important part of the story as well as the people that have been sort of liberated to live where they choose to live and not where they have to live, making choices and big numbers to continue the migration patterns that started decades ago.

So that -- it is an important part of it. It's 440,000. Folks are going to show up in Camden's markets this year just from in-migration.

Alex Jesset -- Executive Vice President of Finance and Chief Financial Officer.

And Neil, I would add to that. If you look at move-ins from -- in our markets, we saw a 600 basis point improvement in people moving from non-Sunbelt markets to move into our communities in the Sunbelt. So that's the manifestation of Key's immigration numbers.

Neil Malkin -- Capital One Securities -- Analyst

Okay. Yeah, thank you! Yes. Just interesting as some other of your peers are talking about people coming back into the coastal market. So it's like I'm not really sure where the people are coming from, but I think your absolute market rents speak for themselves. Other one for me is, could you just talk about capital allocation priorities, I thought you're going to get pretty aggressive on the development.

I think you only started one this year so far. Can you just talk about how your cost of equity, current market fundamentals and potential supply chain issues weigh into your factors of focusing on ramping the development pipeline versus focusing more on acquisitions? Thanks!

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Well, there are a lot of questions -- kind of in that question. But fundamentally, we think that development is a very good spot to be in today with the construct of rent growth that we're seeing. In spite of supply chain issues. I would say just -- so next year, we'll probably start anywhere between $375 million and $450 million of developments.

Developments take a long time to put in place. So you can't just move on a dime to increase development pipeline. So that's where we'll be development-wise. In terms of supply chain and how that relates to development, supply chain disruptions, and I have a little bit of insider knowledge into this because part of my Camden Cares, my personal Camden Cares as part of my equation is I'm the Chairman of the Port of Houston.

And so it's an unpaid political job. But -- so I'm spending a fair amount of time understanding these supply chain issues. And they're real. And it's not because the supply chain is broken. It's just the supply chain is jammed. We have high -- very, very increased high demand for every kind of product because of the pandemic and there's just too many products coming into the beginning of the supply chain, and they're getting stuck at every level, and that's causing big, big problems.

So what that means for us is that our projects are taking 30 to 60 days longer to build. When you look at price inflation because of supply chain issues. We're looking at 10% to 12% increases in labor and in construction costs. The good news is, is that rental rates have gone up so much over the last six or eight months that we're able to offset that with higher rental -- higher rental rates, obviously.

Just to give you a little tidbit on this, too. So in California, we were releasing up our Hillcrest project and also needing replacement refrigerators, we had to go out and we bought a couple of hundred refrigerators from Best Buy, and -- so we went to Best Buy, after Best Buy, after Best Buy loading up on refrigerators. So it's not going to change anytime soon, and that pressure is going to be there for a long time.

As far as capital allocation to acquisitions, we obviously have bought a lot of acquisitions this year with $633 million so far. We had a budget of about $400 million. When you look at cost of capital, our cost of capital has gone down as a result of just the overall interest rate environment and stock price.

And so that allows us to make a really good spread on both acquisitions and development and that's why we're ramping up the acquisition side of the equation, and we will continue to do that, given the construct of the market. And so it just makes a lot of sense for us to grow in this environment even with low cap rates on a relative basis. Thank you for all the caller.

Operator

The next question comes from John Kim with BMO Capital Markets.

John Kim -- BMO Capital Markets -- Analyst

Thanks, good morning, I was wondering what markets were leading and lagging on the 18% new lease growth? Is it similar to the market performance on same-store revenue. Or are there some markets with stronger momentum than the same-store revenue results.

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

I think the best guide would just be looking at the same-store revenue results, John. I mean, if you look at the sequential numbers on revenues, the big ups were San Diego at over 7%. You got LA Orange County at close to 7%, Phoenix at 4%, Charlotte, South Florida, both at 4%. So I mean there's a lot of strength in sequential numbers like that.

But it's across our entire platform. And the only -- the markets that kind of -- it's hard to even talk about underperformance when they're -- when the numbers are at the levels that they are, but we still have some regulatory headwinds in Washington, D.C. and so Maryland and D.C. proper, we still have some constraints on the ability to push rents, same in California.

Most of the California, most of them, except for Hollywood have lapsed, but that doesn't mean that we're back in a position of the ability to make changes to our resident base immediately. There's a process you have to go through. So that's tough. That will get better over time because the market fundamentals are better then the regulatory environment has allowed us to take advantage of in those two markets. But the rest of the platform, business as usual, and you can see what the kind of unregulated and unconstrained market clearing rents are, and that's what we're getting on our new lease and renewals.

John Kim -- BMO Capital Markets -- Analyst

I was going to ask you about D.C. because that seems like the one market that's underperformed your initial outlook for the year. And I know there are some regulatory concerns in D.C. itself, maybe not so much in the suburban Maryland and Virginia. But I was wondering, do you think there's going to be a catch-up next year and/or are you thinking about decreasing your exposure to D.C. given it's by far your biggest market?

D. Keith Oden -- Executive Vice Chairman of the Board

So I'll take that. It's not the same because at the beginning of the year, we talked about how we were going to sell $450 million of assets and buy $450 million, plus or minus. And and we're going to sell those properties in Houston and D.C. to lower our exposure in our two largest markets. And then reallocate that capital into Nashville and some of the other markets like Tampa that have better constructs from a growth perspective, sort of longer term.

And we're doing that. I mean we'll close the Houston transaction, the D.C. transactions in the next month. But when you look at, D.C., and I'll sort of throw Houston in this bucket, too, because to your question of slower growth, OK, we have slower growth in Houston and in D.C. D.C. is definitely related to the fact that we can't raise rents on renewals because of regulatory constructs there.

And so there's definitely pent-up -- the occupancies are high. If we didn't have the government control on not being able to raise rents through the end of the year, we would be pushing it pretty hard just like the rest country. So fundamentals underlying are great in D.C., but it's just this government construct in the district in Maryland, where you can't raise rents. Houston, on the other hand, is probably our slowest growing market even though we're getting really good rent increases on a relative basis, they're substantially lower than the rest of the country.

And the reason there is that if you look at the sort of the four -- three or four cities in America that haven't added back their jobs from the pandemic, Houston would be one of those, Houston, L.A., New York. And that's primarily driven by oil. We lost 80,000 -- 60,000 jobs in the oil business, and we've added back about 23,000 of those jobs. And so there's only -- we're pushing up toward 70% recovery of the jobs.

But if you look at Dallas, Austin, Charlotte, Raleigh, they're all over 100% recovered from their -- Phoenix, they're 100% recovered from their job losses in the pandemic. So the good news is that even with the kind of drag we're getting from that, we're still putting really good numbers up. And I kind of look at it like this that we have a geographically diverse portfolio, geographically diverse and then product diverse.

And the whole idea is you never know which market's going to give you the best growth in any one year. It just depends on their local economies. And how the supply and demand dynamics work. And so I look at D.C. and Houston as sort of gas in the tank for next year because those markets are improving. And once we get the regulatory construct out of D.C., which should happen by the end of the year, maybe early second or first quarter, then we'll be able to experience the same kind of growth that the rest of the country is doing today.

And then Houston continues to improve and oil is $85 a barrel. And there's a lot of -- after the winter when people pay 30% more for their energy. I think you're going to get back to more investments in the fossil fuel area and Houston will do fine, too.

John Kim -- BMO Capital Markets -- Analyst

Thank you!

Operator

The next question comes from Nick Joseph with Citi.

Nick Joseph -- Citi -- Analyst

Thanks! What's the loss to lease for the portfolio overall? And then I recognize it's somewhat of a moving target, and you touched on some of the regulatory issues. But how long do you think it will take to capture and regain that loss to lease over the next few months -- over the next year?

D. Keith Oden -- Executive Vice Chairman of the Board

So you're right. It certainly is a moving target. Loss to lease today is right around 16%. But now you'll have to remember that the way our pricing works obviously is dynamic pricing. And so this loss to lease has some variability to it.

And if you're trying to sort of think about the impact and how long will it take for us to recoup all of that? You have to remember that we're generally not bringing our renewals up fully to market, and we're doing that in order to make sure that we can keep up our resident retention.

So I wouldn't expect for us to make up that full 16% in 2022. I think it's probably a longer -- it's probably a longer lead time, probably getting you into 2023.

Nick Joseph -- Citi -- Analyst

That's helpful. And then just given where the occupancy is today versus history, how are you thinking about seasonality and kind of the push and pull of rent versus occupancy over the next few months?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Yes. So our -- we do have seasonality and historically have in our portfolio. And if you go back and look at it, throw out the two COVID years and look at the prior -- on average, our occupancy between the third and fourth quarter drops about 40 basis points. So it's -- that's sort of typical in this year between second and third, we actually went up 40 basis points.

And as we sit here today, we're still at 97.3%. So my guess is there will be some seasonality from the 97.3% but maybe not the full forty basis points that we've seen in the past. And then if you look at -- from a rental perspective, it's -- there's also seasonality on our new leases. I mean we typically see 2% to 3% decline from third to fourth quarter.

And as we sit here today, we've actually increased that number so throughout the month of October. So I think we will see some seasonality, maybe not to the extent that we have in the past, but you're talking about seasonal adjustments from the historically high numbers both on occupancy and rents.

Nick Joseph -- Citi -- Analyst

Thank you!

Operator

The next question comes from Amanda Sweitzer with Baird. Thanks, good morning, As you look out into 2022, can you just talk about how you're thinking about the expense outlook today? Is there a level of expense growth that is already known through either kind of in place insurance or tax increases? And then how are you thinking about controllable expense growth?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Yes. So obviously, we are in the midst of our budget process, and so it's a little bit early to give some really detailed information around expenses. What I will tell you is that, obviously, we've had a very -- or anticipate having a very good year in 2021 when it comes to property taxes, which is the largest component of our expenses.

Based upon what we're hearing from our consultants, we think that there will be a slight uptick, but still within a normal range in property taxes. And if you think about the second largest line item, which is salaries and benefits, we're certainly getting some very real efficiencies that hopefully we'll get -- we'll start to see some incremental benefit from in 2022. But hang tight and we'll get you some better information in the next quarter.

Amanda Sweitzer -- Baird -- Analyst

That's helpful. And I appreciate your caution until you give actual guidance. And then just wanted to follow up on your comments about it being an attractive time to grow more aggressively externally.

Can you talk about how you're stack ranking your sources of capital as you look out to 2022? And are you planning to further lighten your exposure in any markets beyond the planned sales you've talked about this year?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Well, in terms of lighting exposure, we will continue to -- the good news is when you grow in smaller markets, that lightens your exposure on a percentage basis in your overweighted market. So we'll continue to trade out assets. When I think about lowering exposure in D.C. and Houston, we can do it two ways, want us to grow outside of their -- and the other is to move assets out of those markets and trade them for other assets.

And we'll do some of that as well. And it's really more of a two- to three-year program. If you think about what we did in 2020, starting in the sort of 2013 kind of time frame, we made a lot of moves. We sold out of Vegas and increased exposure in a lot of other markets. And so we'll continue to do that. When I think about our capital stack, it's pretty simple.

We've talked about for a long time how we're going to keep our debt to EBITDA in the 4% to 5% -- four to five times range. And when you look at weighted average cost of capital, our weighted average cost of capital has gone down as a result of everything that's going on in the market with the tenure being where it is and with equity prices where they are.

And we -- so we're sitting right at four point four times debt to EBITDA today. How did we not issued equity under our ATM program and just bought assets and funded them with debt, we'd be at five point two times debt-to-EBITDA today instead of four point four So the way I think about this -- the kind of times we're in now is that we have a very low cost of capital.

And so we know that our equity cost is the highest cost of capital that we have. And so we are going to continue to balance the capital stack to make sure that we're driving this growth in a very positive way. Today, I haven't seen a time in my business career where we've had AFFO yields lower than our acquisition. If you think about our AFFO yield on our stock relative to what we're buying, we have accretive transactions when we're issuing stock and putting that debt piece on it as well and then buying assets.

So that's, to me, a green light to grow. But it's always about keeping that debt-to-EBITDA in that four to five times range. So today, what we're really doing when we have times like this, is we're bringing that debt-to-EBITDA down to the four times. And that -- what that does is gives us tremendous capacity to lever up if, in fact, the market changes in the future and there are more attractive opportunities when the world sort of changes.

And the question will be how long does this last? And I don't think any of us know. But I do know that good times don't last forever, and that rents don't go up always. And that at some point, our strength and our balance sheet will pay us big dividends in the future. And that's the way we think about our capital stack and sort of the growth opportunities that we have today.

Amanda Sweitzer -- Baird -- Analyst

Thank you I appreciate the comments.

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Sure!

Operator

The next question comes from Rich Anderson with SMBC.

Rich Anderson -- SMBC -- Analyst

Hey thanks good morning. So the stock is up about 65%, 70% this year. And I don't think the value of your portfolio is up that much. Back of the envelope, if I were to cut my cap rate by 100 basis points maybe you could say 30%, 35%, 40% up in terms of property value. So there's a fair amount of enthusiasm driving stock today, enthusiasm toward something that is arguably unsustainable.

You mentioned three times the demand in one year. So I guess the question is, and maybe sort of answered in the last question, but how do you keep people from running from the stock next year and the year after because then they suddenly realize that 20% blended or new lease rates, it's just not something that's going to happen probably next year either. So I'm just wondering what's the bull case for Camden in years 2022 and beyond?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Well, first of all, we don't manage to the stock price, obviously, and stocks can go up and down, and that's just what they do, right? You guys are the ones who figure out what they're going to do. But to your point, if you just take the base, right, in January of this year when we started out at $95 a share and now we're up to $162 or something like that. $95 a share was incredibly cheap.

It was definitely a significant discount to NAV there. So I would argue that from January to now, we've got at least 30% or 40% increase in the real estate value, but we were undervalued to start with, right? And so to me, the -- it's not about 65% growth in stock price versus 30% or 40% growth in the asset value. We started out at a low number.

And so you had to get back to an NAV number. And when you look at our relative to the Street's. I mean it's not that far off of where the stock price is today. Some people have it higher, some people have it lower. In terms of why would somebody -- what's the bull case for Camden next year, I think it's pretty simple. I mean, you're coming off a really big year this year, but you have embedded growth next year that we've never seen in our business' history.

When you look at next year, we have embedded revenue growth of 5%. Just if we do nothing next year, and we just maintain our occupancy in our leases, we have 5% top line revenue growth. And if you think that the loss to lease is -- some of that loss of lease is going to get captured, you're going to have probably one of the best years that multifamily has seen in a very long time for top line growth.

And so the question will be, how long does that last? And I know people get very stressed out about negative second derivatives on revenue. But you have an unusual situation today where there's just more demand than supply and for all the reasons that we talked about before. And then as long as the economy continues to sort of chug along the way, it's chugging along today, then 2022 looks pretty darn good.

And then 2023 could be another interesting year, too. So when you think about how high rents can go, keep in mind at least 20% increases today are on top of pretty much zero increase in 2021, limited increases in -- had maybe a 3% growth in 2019. And so you have a fair amount of pent-up growth that was just catch up for but not like new growth.

And then the new growth is going to come in 2022 with the economy doing what it's doing. So I would make the argument that the bull case for Camden.

Rich Anderson -- SMBC -- Analyst

Okay. Good stuff. And then second question is do you have a locked solid plan from a succession standpoint. I hate to bring this up because I hate to see both -- any of you guys go.

But obviously, it's important for you to do that. Do you expect you'd be here many, many years to come? Or just any kind of comment on succession because obviously, you two guys and Alex and everyone are...

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

So let me take a quick shot at it. So yes, we have a long-term succession plan, and it's a good one because you really have two CEOs here, right? Keith and me, we were co-founders of the company. And so if one of us decides to leave tomorrow or gets hit by a truck or whatever or maybe buy a salad bowl at the Astro game on Game Seven. And then you have the other one.

And we have a very deep bench when it comes to our other team members. And when you think about Alex, I mean you started here when you were in your 30s, now you're still a pretty young dude even though you may -- in the last 20 years, so we have a great plan. We're all good from that perspective. Keith, do you want to add to that?

Rich Anderson -- SMBC -- Analyst

I was just going to say, it's entirely internal?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Yes, absolutely.

D. Keith Oden -- Executive Vice Chairman of the Board

Completely confident that our succession plan is internal.

Operator

The next question comes from Daniel Santos with Piper Sandler.

Daniel Santos -- Piper Sandler -- Analyst

Hey, good morning, guys thank you for taking my question. As you look at sort of submarket mix, how do you rank infill versus suburb versus outer ring from a pricing power perspective in the sort of near to medium term?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

So what I would tell you is that Class B and suburban communities continue to outperform and that is primarily driven by where the supply is. And so I think you would expect to see that at least in the near term, continue that way.

Daniel Santos -- Piper Sandler -- Analyst

Got it. Thank you, And then apologies if you covered this already. Apologies if you covered this already. But can you give us an update on the delinquent rents in Southern California and what's your view on when you might be able to start evicting tenants? Or is your view that internally that the eviction moratorium will be sort of extended kind of indefinitely?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Yes. So if you think about delinquency for us, it was 120 basis points for the quarter. By the way, California was 410 basis points of that -- or was 410 basis points. So if you exclude California, we would have actually had a delinquency number of about 80 bps.

We do not believe that we're going to see any extensions. And obviously, right now, we are looking at how we are going to handle the consumer debt, but we are certainly anticipating that 2022 is going to be a more normal year in terms of California and people being required to be current on current rent. Obviously, the past rent, as you know, turns to consumer debt, and then we'll have to look at our various avenues to collect those amounts.

Daniel Santos -- Piper Sandler -- Analyst

Got it that's it for me. Thanks!

Operator

The next question comes from Rob Stevenson with Janney.

Rob Stevenson -- Janney -- Analyst

Hi good morning, guys! How much redevelopment are you doing these days? And how are you thinking about that business over the next several quarters given the downtime for units and the strong demand for those units in your overall high occupancy?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Yes. So we expect in 2021 that we're going to have about 2,200 units that we'll reposition, that works out to be about $53 million worth. We think it's a fantastic business. We're going to keep doing it as long as we have the opportunities.

Downtime we've gotten really, really efficient about it. And obviously, we go back and we sort of backtrack all this and back check. I mean what we're finding is our repositioned units are outperforming those units that have not been repositioned even in this environment.

So I think it's a great book of business. We're getting very strong return on invested capital, and it's something that we'll keep doing.

Rob Stevenson -- Janney -- Analyst

Okay. And then, obviously, pricing continues to increase, but what was the five-acre land in Denver, was there -- is there something else on that? Is that entitled for multifamily development.

And how would you sort of characterize the pool of entitled multifamily development land in the markets and submarkets that you want to develop in today?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

The Denver property does have some warehouses on it right now and is on multifamily and we've had it under contract for quite a while, and they went through the zoning process to make sure that it was developable as multifamily. So the closing was required once we got our the right entitlements that we wanted.

And then we'll now start our construction drawings and knock the buildings down, and hopefully, we'll be under construction late this year or early next year on that project. In terms of land availability. Land availability is still out there. They -- people talk about OG, and they're not making any more land. But what's happening is there's been a lot of product types that just underutilized lands that are out there that -- so I think that the land availability is still fine.

You're still able to buy it. The big issue is land prices are -- have accelerated along with rents and other costs. So it just makes it more difficult to make numbers work on projects. And that's the challenge. We want to make a certain rate of return IRR and going in yield, and that's the challenge in this environment. Now the good news is rents are helping us make those numbers, obviously, with the significant increases that people are having today or rent increases that is.

Rob Stevenson -- Janney -- Analyst

Okay thanks guys I appreciate it.

Operator

The next question comes from Rich Hightower with Evercore.

Rich Hightower -- Evercore -- Analyst

Hey good morning, guys thanks for the so far. So I want to go back, I think it's been asked a few times, but I'm going to put a twist on it. This sort of three times demand, normal demand figure that, Ric, I think you mentioned in the answer to one of the first questions. So as I think about that, I mean, you're not so much pulling forward future demand, you're sort of clawing it back from an air pocket that existed during the depths of COVID.

And so we might consider that the industry is sort of over earning currently on demand and, therefore, rents at the moment. And so as I think about what next year and beyond are going to look like? I mean would you say that we are going to have a more sort of trend like demand figure in 2022 and beyond? And what does that do to a pricing algorithm, if you're comparing sort of year-over-year and you do see what looks like an air pocket as measured against what's happened in 2021. How do we figure out where the puck is going in that regard?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Yes. So I think when you think about it that way, I don't disagree with that. We've had more demand because people were double up in the past and there's just more household formation and people are choosing more apartments. Part of it is that people are choosing to rent rather than to buy or live in a single-family home, too. And when you look at single-family market, it's full and -- full from a rental perspective, but it's also full from a sales perspective.

I mean you can't build houses fast enough today. And so I think that the clawback, if you want to call it, is going to stay in place, right? So that means that occupancy levels, assuming that you have normal economic activity, right, meaning that we don't go into a recession or there's some black swan event that happens that makes a mistake and it shuts down the economy or COVID or whatever.

And if you have -- if you start out with pretty -- with amazingly strong occupancy and those people stay in place that came out of the market, then what you have is normal demand in a very tight rental market. And so if you have normal demand that is just household formation and population growth and job growth through 2022 and 2023, that you shouldn't have an air pocket.

An air pocket, the only way that, that would happen is if there was some economic dislocation, right? And then that demand that was there goes away or the new demand that normally happens during a normal year doesn't happen. And so you can always come up with scenarios that we don't know about today or like I just said makes a mistake or something like that and you have an air pocket.

And then what happens is if you do lose the demand, then at least our occupancies are higher. And so maybe the rental growth slows some. And with our dynamic pricing model, you would have -- you would definitely see a slowdown in the rate of growth of new leases. But that is -- you need to have a real economic shock to make that air pocket happen, I think.

D. Keith Oden -- Executive Vice Chairman of the Board

So just to add to that, on Witten's numbers for 2022, in Camden's markets, he's got employment growth at $1.2 million and he's got completions across Camden's markets at 160,000 flat with 2021. So I mean that math tells me that we're going to have excess demand in 2022 and in -- probably in 2023 as well because you've got completions picking up a little bit in 2023, but not much.

There's not -- the fact that you see this excess demand right now and you say, well, what's the response to that? Well, the response to it is people will build more but it's two- to three-year process to -- I mean it's not like one of the grocery store and getting corn flakes and to see these projects are long lead time. They're complex, expensive. And so just -- it's the supply response will happen, but it's just -- it's not going to happen until 2020 -- whatever.

It's not under construction already, it's not going to be a factor until the end of 2023. So I think it's -- just by the numbers, it still looks like that we did pull -- that we had some pent-up demand that got into the three times. But going forward, I think you're going to get back to more of a normal situation, but a normal situation demand is going to continue to outstrip supply.

Rich Hightower -- Evercore -- Analyst

Right. Well, my kids can confirm, it's hard to get corn flakes, too, at the moment. I mean, would you say that, that implies that -- if I think about occupancy, I mean, 98% becomes the new 97%, as 97% has become the new 96%. I mean, is that possible next year? Is that optimal?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

There's a lot of friction. People still move in and move out, and that move in, move out is going to limit the ability to get like occupancy in the 98%, 99% kind of range. You might see it tick up a bit, but it's really hard to maintain that because people are still moving around. You look at our -- even though we had a drop in our turnover rate, it's still 47%, right?

Rich Hightower -- Evercore -- Analyst

Yup OK great thanks guys

Operator

The next question comes from Chandni Luthra with Goldman Sachs.

Chandni Luthra -- -Goldman Sachs -- Analyst

Hi thank you for taking my questions. Most of the questions have been answered, so I'll just ask one on cap rates. So what direction do you see cap rates go from here? I mean, obviously, there has been a lot of compression already.

But how do you see this continue into 2020? Or do you think that we are finally at a point where in the second derivative here slows? Just trying to understand that dynamic. If you could throw some light on that.

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

I bet against cap rates compressing sort of every quarter for the last 10 years. So I think the challenge you have in predicting what cap rates are going to do is it's really driven clearly by the massive amount of capital out there that's trying to find a yield. And I -- it sort of hurt my head when cap rates had a three on it, and a high 3. Now it hurts my head that cap rates have a low 3.

But then when you put a 20% growth in embedded rent over a 12-month period, I get that, all right? So until we start to see alternative investments that produce the kind of cash flow growth that multifamily does and it also has an inflation and inflation hedge then I think cap rates are going to stay low and maybe go lower until that dynamic changes.

So if you have a significant negative second derivative, and there's other -- and rates rise where there are other alternatives for investors to get cash flow returns that they need, then that's probably when cap rates rise. But when you think about what -- how do assets price? The #1 reason an asset is going up and value our cap rates are going down, it's liquidity in the market.

And we have the most amazing liquidity that we've had ever in my business career. And then the second reason they go up and down is because of supply and demand dynamics, and we have great supply and demand dynamics, right? And then the third thing is interest rates. And then the fourth thing is inflation -- I'm sorry, it's inflation expectations then interest rates. So until the dynamics of those four things change, cap rates are going to continue to be really low and maybe go lower until that changes.

Chandni Luthra -- -Goldman Sachs -- Analyst

Makes sense. And then my second question, so you just -- on the last one gave some color on supply and talked about how people are building but that's a two to three-year process. So it's not going to be a factor until the end of 2022. But as we think about sort of all the capital that is finding its way into the Sunbelt markets is there a risk of crowding out? I mean just overcrowding at some point.

And then near term, looking into 2022, how do you think about these two opposing forces that on the one hand, all that sort of air pocket that got created in construction last year, perhaps, finally gets to be finished. But on the other hand, we've had construction delays and you, I think, yourself talked about 30 to 60 days delays there. So how do you sort of square those two off? And where do you think 2022 will ultimately shake out the bee from a supply standpoint?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Well, I think the supply is pretty much baked in for 2022 now. And those delays are real. And so that will probably come into 2022 is probably not coming until 2023 because of those issues. As far as overcrowd -- or crowding out, I guess I'm not sure I understand that part of the equation, your question. Are you saying there's not enough room to build? Or there's...

Chandni Luthra -- -Goldman Sachs -- Analyst

Well, I guess just oversupply. Just...

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Yes. So I think the issue on oversupply, markets go up and down from a demand perspective. Right now, we have an excess demand versus supply. And the supply is taking longer to put into the market. So I think an oversupply condition in 2022 is very unlikely. And then you have to start looking out to 2023 and when in 2023, do you have that happen.

So I think it's really hard to go, OK, I think there's going to be a supply problem in 2024. But each market is dynamic and unique in its own way, and you will have some markets that have excess supply and less demand, and that's why we have a geographically diverse portfolio. Right now, Houston, even though we're getting 8% to 10% rent trade out, we're not getting 30 -- like we're getting in Tampa because of supply -- and the supply but related to the demand with job growth.

And so I think we're pretty clear on imbalance of excess supply through 2022 and in the middle of 2023. And after that, it's -- tell me what the economy does. Do we get one million or two million jobs each year for the next two to three years in our markets, we do, you're probably good for another two to three years. But that's the uncertainty.

We know supply is coming. We know it's taking longer, but we just don't know what the demand is in middle of 2023 to 2024 or 2025. That's the crapshoot, I think.

Chandni Luthra -- -Goldman Sachs -- Analyst

Thank you for that answer very helpful.

Operator

The next question comes from Alex Kalmus with Zelman & Associates.

Alex Kalmus -- Zelman & Associates -- Analyst

Hi, thank you for taking the question. Can you talk a little bit about the dynamics in St. Petersburg? There's been a lot of high-profile office relocations and Tampa has, obviously, been doing well maybe talk about the dynamics there and the reason for the acquisition.

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Yes, St. Petersburg as a -- had some of the best market fundamentals of anything across our entire portfolio. And a lot of it has to do with just the reenvisioning and reimagining of what St. Petersburg is. And there have been tremendous growth in terms of commercial assets, retail support. And of course, that's brought with it some very high-end apartment development.

And -- but our rent trade-out right now in St. Petersburg is among the highest in our entire portfolio. Even on the brand-new acquisition we have there, the rent trade-out is crazy. So we love St. Petersburg. We love the market dynamics. We love where it's headed. And ultimately, we'd like to have some additional exposure there, but it's not a real big market. There's not a lot of stuff to trade. As a submarket for us, it's just on fire right now, for sure.

Alex Kalmus -- Zelman & Associates -- Analyst

Great. And is there any data behind move out to single-family rentals in the portfolio? I appreciate the color on the move out to buy there.

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Yes. I mean we track that separately, and it's trended up from 1% five years ago to about 2% today. It's still just not a meaningful number in our portfolio that -- my guess is that it probably will pick up over time. But just because there are more purpose-built single-family kind of for-rental communities that are being built and they are -- that ultimately is probably a better solution for someone that's an apartment renter that doesn't want to have -- doesn't want to own a home, but needs more space than suburbs.

So that asset class purpose-built single-family rental-only developments over time, probably, at the margins we'll make that number tick up. But I don't ever see it being a huge number or a big competitor to our portfolio. I think it's -- our resident base is just more suited to their next move being purchasing a home. And like I said, our numbers right now for the last quarter were about 15%, which is still way below our long-term trend of about 18% for that category.

Operator

The next question comes from Austin Wurschmidt with KeyBanc.

Austin Wurschmidt -- KeyBanc -- Analyst

Sorry if I missed this, but I was curious, did you guys collect any rental assistance in the third quarter, most notably from California. And can you provide what your outstanding receivable balance is today?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Yes, absolutely. So outstanding receivable balance today is about $12.5 million, of which we have reserved about $12 million. So we're almost fully reserved on that front. If you think about in the third quarter for same-store, we collected about $4.2 million. Total portfolio was about $5.3 million. And so that gets us to a year-to-date number, same-store of about $7.5 million in total of about $9.4 million.

Austin Wurschmidt -- KeyBanc -- Analyst

And are you assuming any collections into the fourth quarter?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

We are. Yes, yes. We are assuming some additional collections going into the fourth quarter.

Austin Wurschmidt -- KeyBanc -- Analyst

And then separately, second question. Curious if you can provide kind of an update on how deep the acquisition pipeline is today and maybe how that compares versus six months ago or so.

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

There's a lot acquisition pipeline. You mean the properties available for to acquire is pretty...

Austin Wurschmidt -- KeyBanc -- Analyst

Just properties you guys are underwriting that kind of meet your acquisition criteria? And just how that's scaled up, given your higher propensity to the acquirers?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Sure. It's scaled up quite a bit. I mean, we -- there's a lot of property out there on the market. But what we're looking for, there's -- I might say tons of properties, but what we're looking for is a real specific product type, one where we can add value, one where we can move the rents pretty hard because of either management or some issues that the properties have.

And those are harder to find than just sort of run of the mill, merchant building a deal in the suburbs or urban core. So there is a buoyant market. There's a lot of people that are trying to create value and sell today. And it was sort of interesting because there's a lot of year-end madness kind of going on, right, where people are trying to lock in capital gains rates with all the tax changes that have been bannered about and all that.

And I think that 2022 is going to be another banner year. We're at record sales for multifamily at this point. And we have had a number of transactions that we really wanted to acquire, that we didn't get to the finish line on because we are disciplined on price, and we just didn't see the value proposition to go to the next level on those bids. But we'll get our fair share. It's just -- but it is a very competitive environment, no question.

Operator

The next question comes from Joshua Dennerlein with Bank of America.

Joshua Dennerlein -- Bank of America -- Analyst

Operating stat update for October was great. I just wanted to see if there was any color or thoughts on maybe how we should think about the new lease rate for the date side, just coming off peak levels in 3Q. Everything else seems to be moving up. So just trying to get a sense of where it might be heading in the months ahead?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Yes. So earlier, I think I mentioned that our quality on the lease rates on third and fourth quarter. And this is over a long period of time is 2% to 3% down from third to fourth. So there is seasonality that historically has been in our portfolio.

And so the fact that you saw the wiggle -- like that really's a wiggle down in new lease rates at the end of October is not of any concern and it just -- it's less seasonality than what we would normally see and all the other metrics that we look at, in particular, turnover rate and 97.3% occupancy lead me to believe that we're more strength and probably less seasonality than what we would typically see.

So I think it still looks pretty strong.

Joshua Dennerlein -- Bank of America -- Analyst

Okay. All right. Does renewals follow that typical lag down as well? Or do you think that can kind of keep rising from here?

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

My guess is that I didn't look at it that way, but because new leases is really the market clearing price because a lot of times, we don't take renewals all the way up to the market clearing price for a lot of different reasons.

But -- my guess is that it would be similar, maybe less seasonality, slightly on the renewals and new leases.

Operator

Unfortunately, we are out of time for questions, so this concludes our question-and-answer session. I'll turn it back over to Ric Campo for any closing remarks.

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

Well, thank you. I appreciate your timing on the call today, and we will, I'm sure, be talking to a lot of you in NAREIT coming up. So we look forward to joining that. So take care, and thank you.

Go Astros. The good news is that if the Braves win, we're happy about that, too, because they -- we do have a lot of properties in Atlanta, and we love our Atlanta teams as well. So thanks. Take care. [Operator Closing Remarks]

Duration: 73 minutes

Call participants:

Richard J. Campo -- Chairman of the Board of Trust Managers and Chief Executive Officer

D. Keith Oden -- Executive Vice Chairman of the Board

Alex Jesset -- Executive Vice President of Finance and Chief Financial Officer.

Neil Malkin -- Capital One Securities -- Analyst

John Kim -- BMO Capital Markets -- Analyst

Nick Joseph -- Citi -- Analyst

Amanda Sweitzer -- Baird -- Analyst

Rich Anderson -- SMBC -- Analyst

Daniel Santos -- Piper Sandler -- Analyst

Rob Stevenson -- Janney -- Analyst

Rich Hightower -- Evercore -- Analyst

Chandni Luthra -- -Goldman Sachs -- Analyst

Alex Kalmus -- Zelman & Associates -- Analyst

Austin Wurschmidt -- KeyBanc -- Analyst

Joshua Dennerlein -- Bank of America -- Analyst

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