cpt-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to _______________

Commission file number: 1-12110

CAMDEN PROPERTY TRUST

(Exact Name of Registrant as Specified in Its Charter)

76-6088377

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

11 Greenway Plaza, Suite 2400

Houston,

Texas

77046

(Address of principal executive offices)

(Zip Code)

(713) 354-2500

(Registrant's Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Shares of Beneficial Interest, $.01 par value	CPT	NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of "large accelerated filer", "accelerated filer", and "small reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer

Accelerated filer

☐

Non-accelerated filer

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected to not use the extended transition period for complying with any new or revised financial accounting standards provided pursuant of Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

On October 21, 2022, 106,528,035 common shares of the registrant were outstanding, net of treasury shares and shares held in our deferred compensation arrangements.

Table of Contents

CAMDEN PROPERTY TRUST

Table of Contents


		Page
PART I	FINANCIAL INFORMATION	1

Item 1	Financial Statements	1

	Condensed Consolidated Balance Sheets (Unaudited) as of September 30, 2022 and December 31, 2021	1

	Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30, 2022 and 2021	2

	Condensed Consolidated Statements of Equity (Unaudited) for the Three and Nine Months Ended September 30, 2022 and 2021	3

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2022 and 2021	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3	Quantitative and Qualitative Disclosures About Market Risk	35

Item 4	Controls and Procedures	35

PART II	OTHER INFORMATION	35

Item 1	Legal Proceedings	35

Item 1A	Risk Factors	35

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 3	Defaults Upon Senior Securities	35

Item 4	Mine Safety Disclosures	35

Item 5	Other Information	35

Item 6	Exhibits	36

SIGNATURES

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(in thousands, except per share amounts)	September 30, 2022		December 31, 2021
Assets
Real estate assets, at cost
Land	$	1,706,396	$	1,349,594
Buildings and improvements	10,574,820		8,624,734
	$	12,281,216	$	9,974,328
Accumulated depreciation	(3,709,487)		(3,358,027)
Net operating real estate assets	$	8,571,729	$	6,616,301
Properties under development, including land	529,076		474,739
Investments in joint ventures	—		13,730



Total real estate assets	$	9,100,805	$	7,104,770
Accounts receivable – affiliates	13,258		18,664
Other assets, net	231,645		234,370

Cash and cash equivalents	62,027		613,391
Restricted cash	6,390		5,589
Total assets	$	9,414,125	$	7,976,784
Liabilities and equity
Liabilities
Note Payable
Unsecured	$	3,173,198	$	3,170,367
Secured	514,843		—
Accounts payable and accrued expenses	212,558		191,651
Accrued real estate taxes	125,210		66,673
Distributions payable	103,620		88,786
Other liabilities	176,334		193,052
Total liabilities	$	4,305,763	$	3,710,529
Commitments and contingencies (Note 11)

Equity
Common shares of beneficial interest; $0.01 par value per share; 175,000 shares authorized; 117,727 and 114,668 issued; 115,627 and 112,578 outstanding at September 30, 2022 and December 31, 2021, respectively	1,156		1,126
Additional paid-in capital	5,893,623		5,363,530
Distributions in excess of net income attributable to common shareholders	(525,127)		(829,453)
Treasury shares, at cost (9,099 and 9,236 common shares at September 30, 2022 and December 31, 2021, respectively)	(329,027)		(333,974)
Accumulated other comprehensive loss	(2,632)		(3,739)
Total common equity	$	5,037,993	$	4,197,490
Non-controlling interests	70,369		68,765
Total equity	$	5,108,362	$	4,266,255
Total liabilities and equity	$	9,414,125	$	7,976,784

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2022		2021		2022		2021



Property revenues	$	373,772	$	294,130	$	1,046,847	$	838,221
Property expenses
Property operating and maintenance	$	84,649	$	71,337	$	234,504	$	200,360
Real estate taxes	48,182		38,731		136,448		113,611
Total property expenses	$	132,831	$	110,068	$	370,952	$	313,971
Non-property income
Fee and asset management	$	617	$	3,248	$	4,257	$	7,717
Interest and other income	88		443		2,881		1,032
Income/(loss) on deferred compensation plans	(6,275)		(843)		(28,450)		9,183
Total non-property income/(loss)	$	(5,570)	$	2,848	$	(21,312)	$	17,932
Other expenses
Property management	$	6,732	$	6,640	$	21,228	$	19,200
Fee and asset management	556		1,159		2,090		3,310
General and administrative	14,002		14,960		44,526		44,428
Interest	29,192		24,987		82,756		72,715
Depreciation and amortization	158,877		111,462		429,749		304,189

Expense/(benefit) on deferred compensation plans	(6,275)		(843)		(28,450)		9,183
Total other expenses	$	203,084	$	158,365	$	551,899	$	453,025

Gain on sale of operating property	—		—		36,372		—
Gain on acquisition of unconsolidated joint venture interests	—		—		474,146		—

Equity in income of joint ventures	—		2,540		3,048		6,652
Income from continuing operations before income taxes	$	32,287	$	31,085	$	616,250	$	95,809
Income tax expense	(737)		(480)		(2,213)		(1,292)



Net income	$	31,550	$	30,605	$	614,037	$	94,517
Less income allocated to non-controlling interests	(1,706)		(1,122)		(6,133)		(3,508)

Net income attributable to common shareholders	$	29,844	$	29,483	$	607,904	$	91,009




Earnings per share – basic	$	0.27	$	0.29	$	5.66	$	0.90



Earnings per share – diluted	$	0.27	$	0.29	$	5.62	$	0.90




Weighted average number of common shares outstanding – basic	108,466		103,071		107,314		101,119
Weighted average number of common shares outstanding – diluted	108,506		103,171		108,099		101,199
Condensed Consolidated Statements of Comprehensive Income
Net income	$	31,550	$	30,605	$	614,037	$	94,517
Other comprehensive income

Reclassification of net loss on cash flow hedging activities, prior service cost and net loss on post retirement obligation	369		372		1,107		1,117
Comprehensive income	$	31,919	$	30,977	$	615,144	$	95,634
Less income allocated to non-controlling interests	(1,706)		(1,122)		(6,133)		(3,508)

Comprehensive income attributable to common shareholders	$	30,213	$	29,855	$	609,011	$	92,126

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

For the nine months ended September 30, 2022


	Common Shareholders
(in thousands, except per share amounts)	Common shares of beneficial interest		Additional paid-in capital		Distributions in excess of net income		Treasury shares, at cost		Accumulated other comprehensive (loss)/income		Non-controlling interests		Total equity
Equity, December 31, 2021	$	1,126	$	5,363,530	$	(829,453)	$	(333,974)	$	(3,739)	$	68,765	$	4,266,255
Net income					607,904						6,133		614,037
Other comprehensive income									1,107				1,107
Common shares issued	30		516,728										516,758
Net share awards			13,207				4,797						18,004
Employee share purchase plan			575				177						752




Cash distributions declared to equity holders ($2.82 per common share)					(303,578)						(4,529)		(308,107)
Other			(417)				(27)						(444)
Equity, September 30, 2022	$	1,156	$	5,893,623	$	(525,127)	$	(329,027)	$	(2,632)	$	70,369	$	5,108,362

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

For the three months ended September 30, 2022


	Common Shareholders
(in thousands, except per share amounts)	Common shares of beneficial interest		Additional paid-in capital		Distributions in excess of net income		Treasury shares, at cost		Accumulated other comprehensive (loss)/income		Non-controlling interests		Total equity
Equity, June 30, 2022	$	1,156	$	5,890,792	$	(452,865)	$	(328,975)	$	(3,001)	$	70,173	$	5,177,280
Net income					29,844						1,706		31,550
Other comprehensive income									369				369

Net share awards			2,824				(25)						2,799
Employee share purchase plan			122										122




Cash distributions declared to equity holders ($0.94 per common share)					(102,106)						(1,510)		(103,616)
Other			(115)				(27)						(142)
Equity, September 30, 2022	$	1,156	$	5,893,623	$	(525,127)	$	(329,027)	$	(2,632)	$	70,369	$	5,108,362

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(Unaudited)

For the nine months ended September 30, 2021


	Common Shareholders
(in thousands, except per share amounts)	Common shares of beneficial interest		Additional paid-in capital		Distributions in excess of net income		Treasury shares, at cost		Accumulated other comprehensive (loss)/income		Non-controlling interests		Total equity
Equity, December 31, 2020	$	1,069	$	4,581,710	$	(791,079)	$	(341,412)	$	(5,383)	$	71,682	$	3,516,587
Net income					91,009						3,508		94,517
Other comprehensive income									1,117				1,117
Common shares issued	43		579,475										579,518
Net share awards			11,359				6,450						17,809
Employee share purchase plan			2,472				896						3,368



Conversion of operating partnership units	1		5,935								(5,936)		—
Cash distributions declared to equity holders ($2.49 per common share)					(254,810)						(4,117)		(258,927)
Other	1		(168)										(167)
Equity, September 30, 2021	$	1,114	$	5,180,783	$	(954,880)	$	(334,066)	$	(4,266)	$	65,137	$	3,953,822

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

For the three months ended September 30, 2021


	Common Shareholders
(in thousands, except per share amounts)	Common shares of beneficial interest		Additional paid-in capital		Distributions in excess of net income		Treasury shares, at cost		Accumulated other comprehensive (loss)/income		Non-controlling interests		Total equity
Equity, June 30, 2021	$	1,098	$	4,953,703	$	(897,761)	$	(334,161)	$	(4,638)	$	67,967	$	3,786,208
Net income					29,483						1,122		30,605
Other comprehensive income									372				372
Common shares issued	14		220,661										220,675
Net share awards			3,876				95						3,971
Employee share purchase plan			33										33



Conversion of operating partnership units			2,619								(2,619)		—
Cash distributions declared to equity holders ($0.83 per common share)					(86,602)						(1,333)		(87,935)
Other	2		(109)										(107)
Equity, September 30, 2021	$	1,114	$	5,180,783	$	(954,880)	$	(334,066)	$	(4,266)	$	65,137	$	3,953,822

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended September 30,
(in thousands)	2022		2021
Cash flows from operating activities
Net income	$	614,037	$	94,517

Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	429,749		304,189


Gain on sale of operating property	(36,372)		—
Gain on acquisition of unconsolidated joint venture interests	(474,146)		—
Distributions of income from joint ventures	3,015		6,553
Equity in income of joint ventures	(3,048)		(6,652)

Share-based compensation	9,676		12,148

Net change in operating accounts and other	33,619		25,267


Net cash from operating activities	$	576,530	$	436,022
Cash flows from investing activities
Development and capital improvements, including land	$	(342,532)	$	(279,698)
Acquisition of operating properties, including joint venture interests, net of cash acquired	(1,066,051)		(464,000)

Proceeds from sale of operating property	70,536		—




Increase in non-real estate assets	(3,948)		(4,685)



Other	(6,083)		(7,371)



Net cash from investing activities	$	(1,348,078)	$	(755,754)
Cash flows from financing activities
Borrowings on unsecured credit facility	$	640,000	$	—
Repayments on unsecured credit facility	(640,000)		—
Proceeds from issuance of common shares	516,758		579,518
Distributions to common shareholders and non-controlling interests	(293,231)		(255,120)






Payment of deferred financing costs	(10,165)		(1,037)


Other	7,623		5,385
Net cash from financing activities	$	220,985	$	328,746
Net increase/(decrease) in cash, cash equivalents, and restricted cash	(550,563)		9,014
Cash, cash equivalents, and restricted cash, beginning of period	618,980		424,533
Cash, cash equivalents, and restricted cash, end of period	$	68,417	$	433,547
Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Balance Sheets
Cash and cash equivalents	$	62,027	$	428,226
Restricted cash	6,390		5,321
Total cash, cash equivalents, and restricted cash, end of period	$	68,417	$	433,547
Supplemental information
Cash paid for interest, net of interest capitalized	$	73,158	$	64,794
Cash paid for income taxes	3,090		2,221
Supplemental schedule of noncash investing and financing activities
Distributions declared but not paid	103,620		87,919
Value of shares issued under benefit plans, net of cancellations	21,650		18,858
Conversion of operating partnership units to common shares	—		5,936
Accrual associated with construction and capital expenditures	23,277		25,137
Acquisition of joint venture interests:
Mortgage debt assumed	514,554		—
Other liabilities	39,168		—

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

CAMDEN PROPERTY TRUST

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Description of Business

Business. Formed on May 25, 1993, Camden Property Trust ("CPT"), a Texas real estate investment trust ("REIT"), and all consolidated subsidiaries are primarily engaged in the ownership, management, development, reposition, redevelopment, acquisition, and construction of multifamily apartment communities. Our multifamily apartment communities are referred to as "communities," "multifamily communities," "properties," or "multifamily properties" in the following discussion. As of September 30, 2022, we owned interests in, operated, or were developing 178 multifamily properties comprised of 60,652 apartment homes across the United States. Of the 178 properties, seven properties were under construction as of September 30, 2022, and will consist of a total of 2,219 apartment homes when completed. We also own land holdings which we may develop into multifamily communities in the future.

2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements

Principles of Consolidation. Our condensed consolidated financial statements include our accounts and the accounts of other subsidiaries and joint ventures (including partnerships and limited liability companies) over which we have control. All intercompany transactions, balances, and profits have been eliminated in consolidation. Investments acquired or created are evaluated based on the accounting guidance relating to variable interest entities ("VIEs"), which requires the consolidation of VIEs in which we are considered to be the primary beneficiary. If the investment is determined not to be a VIE, then the investment is evaluated for consolidation primarily using a voting interest model. In determining if we have a controlling financial interest, we consider factors such as ownership interests, decision making authority, kick-out rights and participating rights. As of September 30, 2022, two of our consolidated operating partnerships were VIEs. We are considered the primary beneficiary of both consolidated operating partnerships and therefore consolidate these operating partnerships. As of September 30, 2022, we held between approximately 93% and 95% of the outstanding common limited partnership units and the sole 1% general partnership interest in each of these consolidated operating partnerships.

Interim Financial Reporting. We have prepared these unaudited financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial statements and the applicable rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, these statements do not include all information and footnote disclosures required for annual statements. While we believe the disclosures presented are adequate for interim reporting, these interim unaudited financial statements should be read in conjunction with the audited financial statements and notes included in our 2021 Annual Report on Form 10-K.

Acquisitions of Real Estate. Upon an acquisition of real estate, we determine the fair value of tangible and intangible assets, which includes land, buildings (as-if-vacant), furniture and fixtures, the value of in-place leases, including above and below market leases, and acquired liabilities. In estimating these values, we apply methods similar to those used by independent appraisers of income-producing property. Estimates of fair value of acquired debt are based upon interest rates available for the issuance of debt with similar terms and remaining maturities. Depreciation is computed on a straight-line basis over the remaining useful lives of the related tangible assets. The value of in-place leases and above or below market leases is amortized over the estimated average remaining life of leases in place at the time of acquisition; the net carrying value of in-place leases are included in other assets, net and the net carrying value of above or below market leases are included in other liabilities, net in our condensed consolidated balance sheets.

We recognized amortization expense related to in-place leases of approximately $19.3 million and $8.4 million for the three months ended September 30, 2022 and 2021, respectively, and approximately $44.9 million and $10.9 million for the nine months ended September 30, 2022 and 2021, respectively. The unamortized value of in-place leases at September 30, 2022 was approximately $5.6 million, and is expected to be fully amortized by December 31, 2022. We recognized revenue related to net below-market leases of $3.4 million and $7.8 million for the three and nine months ended September 30, 2022, respectively, and approximately $0.2 million of revenue related to net below-market leases for each of the three and nine months ended September 30, 2021.

During the three and nine months ended September 30, 2022, the weighted average amortization periods for in-place leases were approximately nine months and eight months, respectively, and were approximately ten months for each of the three and nine months ended September 30, 2021. During the three and nine months ended September 30, 2022, the weighted average amortization periods for net below-market leases were approximately eight months and seven months, respectively, and were approximately ten months for each of the three and nine months ended September 30, 2021.

Table of Contents

Asset Impairment. Long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment may exist if estimated future undiscounted cash flows associated with long-lived assets are not sufficient to recover the carrying value of such assets. We consider projected future undiscounted cash flows, trends, strategic decisions regarding future development plans, and other factors in our assessment of whether impairment conditions exist. While we believe our estimates of future cash flows are reasonable, different assumptions regarding a number of factors, including market rents, economic conditions, and occupancies, could significantly affect these estimates. When impairment exists, the long-lived asset is adjusted to its fair value. In estimating fair value, management uses appraisals, management estimates, and discounted cash flow calculations which utilize inputs from a marketplace participant's perspective. We did not record any impairment charges for the three or nine months ended September 30, 2022 or 2021.

The value of our properties under development depends on market conditions, including estimates of the project start date, projected construction costs, and demand for multifamily communities. We have reviewed market trends and other marketplace information and incorporated this information as well as our current outlook into the assumptions we use in our impairment analyses. Due to the judgment and assumptions applied in the impairment analyses, it is possible actual results could differ substantially from those estimated.

We believe the carrying value of our operating real estate assets, properties under development, and land is currently recoverable. However, if market conditions deteriorate or if changes in our development strategy significantly affect any key assumptions used in our fair value estimates, we may need to take material charges in future periods for impairments related to existing assets. Any such material non-cash charges could have an adverse effect in our consolidated financial position and results of operations.

Cost Capitalization. Real estate assets are carried at cost plus capitalized carrying charges. Carrying charges are primarily interest and real estate taxes which are capitalized as part of properties under development. Capitalized interest is generally based on the weighted average interest rate of our unsecured debt and was approximately $5.0 million and $3.5 million for the three months ended September 30, 2022 and 2021, respectively, and was approximately $13.5 million and $12.8 million for the nine months ended September 30, 2022 and 2021, respectively. Capitalized real estate taxes were approximately $1.0 million and $0.2 million for the three months ended September 30, 2022 and 2021, respectively, and were approximately $3.5 million and $2.7 million for the nine months ended September 30, 2022 and 2021, respectively.

Expenditures directly related to the development and improvement of real estate assets are capitalized at cost as land and buildings and improvements. Indirect development costs, including salaries and benefits and other related costs directly attributable to the development of properties, are also capitalized. We begin capitalizing development, construction, and carrying costs when the development of the future real estate asset is probable and certain activities necessary to prepare the underlying real estate for its intended use have been initiated. All construction and carrying costs are capitalized and reported in the balance sheet as properties under development until the apartment homes are substantially completed. As apartment homes within development properties are substantially completed the total capitalized development cost of each apartment home is transferred from properties under development including land to buildings and improvements.

Depreciation and amortization is computed over the expected useful lives of depreciable property on a straight-line basis with lives generally as follows:


			Estimated Useful Life
Buildings and improvements			5-35 years
Furniture, fixtures, equipment, and other			3-20 years
Intangible assets/liabilities (in-place leases and above and below-market leases)			underlying lease term

Fair Value. For financial assets and liabilities recorded at fair value on a recurring or non-recurring basis, fair value is the price we would expect to receive to sell an asset, or pay to transfer a liability, in an orderly transaction with a market participant at the measurement date under current market conditions. In the absence of such data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction.

In determining fair value, observable inputs reflect market data obtained from independent sources while unobservable inputs reflect our market assumptions; preference is given to observable inputs. These two types of inputs create the following fair value hierarchy:

•Level 1: Quoted prices for identical instruments in active markets.

Table of Contents

•Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

•Level 3: Significant inputs to the valuation model are unobservable.

Recurring Fair Value Measurements. The following describes the valuation methodologies we use to measure different financial instruments at fair value on a recurring basis:

Deferred Compensation Plan Investments. The estimated fair values of investment securities classified as deferred compensation plan investments are based on quoted market prices utilizing public information for the same transactions. Our deferred compensation plan investments, excluding the value of Company shares, are recorded in other assets in our condensed consolidated balance sheets. The inputs associated with the valuation of our recurring deferred compensation plan investments are included in Level 1 of the fair value hierarchy.

Non-Recurring Fair Value Measurements. Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. These assets primarily include long-lived assets which are recorded at fair value when they are acquired, including the remeasurement of previously held ownership interests, using fair value methodologies described above at "Acquisitions of Real Estate," or if the long-lived assets are impaired using the fair value methodologies used to measure long-lived assets described above at "Asset Impairment." The inputs associated with the valuation of long-lived assets are generally included in Level 3 of the fair value hierarchy, unless a quoted price for a similar long-lived asset in an active market exists, at which time they are included in Level 2 of the fair value hierarchy.

Financial Instrument Fair Value Disclosures. As of September 30, 2022 and December 31, 2021, the carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and distributions payable represented fair value because of the short-term nature of these instruments. The carrying value of restricted cash approximates its fair value based on the nature of our assessment of the ability to recover these amounts. In calculating the fair value of our notes payable, interest rate and spread assumptions reflect current credit worthiness and market conditions available for the issuance of notes payable with similar terms and remaining maturities. These financial instruments utilize Level 2 inputs.

Income Recognition. The majority of our revenues are derived from real estate lease contracts and presented as property revenues, and include rental revenue as well as revenue from amounts received under contractual terms for other services provided to our customers. As a lessor, we have also elected practical expedients to: i) not separate the lease and non-lease components by class of underlying assets and account for the combined components as a single component under certain conditions, and ii) exclude from lease revenues the sales taxes collected from lessees and certain lessor costs paid directly by the lessee. Our other revenue streams include fee and asset management income in accordance with other revenue guidance, ASC 606, Revenues from Contracts with Customers. Details of our material revenue streams are discussed below:

Property Revenues: We earn rental revenue from operating lease contracts for the use of dedicated spaces within owned assets, which is our only underlying asset class. We recognize rental revenues from these lease contracts on a straight-line basis over the applicable lease term, net of amounts related to lease contracts identified as uncollectible. We also earn revenues from amounts received under contractual terms for other services considered non-lease components within a lease contract, primarily consisting of utility rebillings and other transactional fees. These amounts received under contractual terms for other services are charged to our residents and recognized monthly as earned. Any identified uncollectible amounts related to individual lease contracts are presented as an adjustment to property revenue. Any renewal options of real estate lease contracts are considered a new and separate contract which will be recognized at the time the option is exercised on a straight-line basis over the renewal period.

As of September 30, 2022, our average residential lease term was approximately fourteen months with all non-residential commercial leases averaging longer lease terms. We currently anticipate property revenue from existing leases as follows:

Table of Contents


(in millions)
Year ended December 31,	Operating Leases
Remainder of 2022	$	327.5
2023	646.7
2024	10.4
2025	3.3
2026	3.0
Thereafter	8.5
Total	$	999.4

Credit Risk. In management’s opinion, due to the number of residents, the types and diversity of submarkets in which our properties operate, and the collection terms, there is no significant concentration of credit risk.

3. Per Share Data

Basic earnings per share is computed using net income attributable to common shareholders and the weighted average number of common shares outstanding. Diluted earnings per share reflects common shares issuable from the assumed conversion of common share options and unvested share awards, and units convertible into common shares. Only those items having a dilutive impact on our basic earnings per share are included in diluted earnings per share. Our unvested share-based awards are considered participating securities and are reflected in the calculation of basic and diluted earnings per share using the two-class method. Common shares under a forward sale agreement will be considered in our calculation for diluted earnings-per-share until settlement, using the if-converted method. The number of common share equivalent securities excluded from the diluted earnings per share calculation were approximately 1.7 million and 1.0 million for the three and nine months ended September 30, 2022, respectively, and approximately 1.7 million and 1.8 million for the three and nine months ended September 30, 2021, respectively. These securities, which include share awards granted and units convertible into common shares, were excluded from the diluted earnings per share calculations as they are anti-dilutive. The following table presents information necessary to calculate basic and diluted earnings per share for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2022		2021		2022		2021
Earnings per common share calculation – basic
Income from continuing operations attributable to common shareholders	$	29,844	$	29,483	$	607,904	$	91,009
Amount allocated to participating securities	(40)		(30)		(933)		(122)


Net income attributable to common shareholders – basic	$	29,804	$	29,453	$	606,971	$	90,887



Total earnings per common share – basic	$	0.27	$	0.29	$	5.66	$	0.90

Weighted average number of common shares outstanding – basic	108,466		103,071		107,314		101,119

Table of Contents


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2022		2021		2022		2021
Earnings per common share calculation – diluted
Income from continuing operations attributable to common shareholders, net of amount allocated to participating securities	$	29,804	$	29,453	$	606,971	$	90,887
Income allocated to common units from continuing operations	—		—		1,056		—


Net income attributable to common shareholders – diluted	$	29,804	$	29,453	$	608,027	$	90,887



Total earnings per common share – diluted	$	0.27	$	0.29	$	5.62	$	0.90

Weighted average number of common shares outstanding – basic	108,466		103,071		107,314		101,119
Incremental shares issuable from assumed conversion of:
Share awards granted	40		100		52		80
Common units	—		—		733		—
Weighted average number of common shares outstanding – diluted	108,506		103,171		108,099		101,199

4. Common Shares

In May 2022, we created an at-the-market ("ATM") share offering program through which we can, but have no obligation to, sell common shares for an aggregate offering amount of up to $500.0 million (the "2022 ATM program"), in amounts and at times as we determine, into the existing trading market at current market prices as well as through negotiated transactions. Actual sales from time to time may depend on a variety of factors including, among others, market conditions, the trading price of our common shares, and determinations by management of the appropriate sources of funding for us. The proceeds from the sale of our common shares under the 2022 ATM program are intended to be used for general corporate purposes, which may include reducing future borrowings under our unsecured line of credit, the repayment of other indebtedness, the redemption or other repurchase of outstanding debt or equity securities, funding for development activities, and financing for acquisitions.

The 2022 ATM program also permits the use of forward sale agreements which allows us to lock in a share price on the sale of common shares at the time the agreement is executed, but defer receiving the proceeds from the sale of the applicable shares until a later date. If we enter into a forward sale agreement, we expect the applicable forward purchasers will borrow from third parties and, through the applicable sales agent acting in its role as forward seller, sell a number of common shares equal to the number of shares underlying the applicable agreement. Under this scenario, we would not initially receive any proceeds from any sale of borrowed shares by the forward seller. We expect to physically settle each forward sale agreement with the relevant forward purchaser on or prior to the maturity date of a particular forward sale agreement by issuing our common shares in return for the receipt of aggregate net cash proceeds at settlement equal to the number of common shares underlying the particular forward sale agreement multiplied by the relevant forward sale price. However, at our sole discretion, we may also elect to cash settle or net share settle a particular forward sale agreement, in which case we may not receive any proceeds from the issuance of common shares, and we will instead receive or pay cash (in the case of cash settlement) or receive or deliver common shares (in the case of net share settlement). As of the date of this filing, we have not entered into any forward sales agreement and have common shares having an aggregate offering amount of up to $500.0 million remaining available for sale under this ATM program.

In August 2021, we created an ATM share offering program through which we could, but had no obligation to, sell common shares having an aggregate offering amount of up to $500.0 million (the "2021 ATM program"). During the three months ended March 31, 2022, we sold an aggregate of approximately 0.2 million common shares at an average price per share of $165.01, for aggregate net consideration of approximately $26.2 million under the 2021 ATM program. In May 2022, we terminated the 2021 ATM program with an aggregate offering amount of approximately $71.3 million remaining available for sale and, upon termination, no further common shares were available for sale. There were no additional shares sold under the 2021 ATM program from March 31, 2022 through the date of the applicable termination agreements.

In June 2020, we created an ATM share offering program through which we could, but had no obligation to, sell common shares having an aggregate offering amount of up to $362.7 million (the "2020 ATM program"). During the three and six months ended June 30, 2021, we sold an aggregate of approximately 2.9 million common shares at an average price per share of $126.64, for aggregate net consideration of approximately $358.8 million. In August 2021, we terminated the 2020 ATM program with an aggregate offering amount of approximately $0.2 million not sold. There were no additional shares sold under the 2020 ATM program from June 30, 2021 through the date of the applicable termination agreements.

Table of Contents

We have a share repurchase plan approved by our Board of Trust Managers which allows for the repurchase of up to $500.0 million of our common equity securities through open-market purchases, block purchases, and privately negotiated transactions. There were no repurchases during the three and nine months ended September 30, 2022. In October 2022, our Board of Trust Managers approved to increase the authorization for our common equity securities of approximately $269.5 million remaining under our share repurchase plan to $500.0 million. There were no repurchases subsequent to September 30, 2022 through the date of this filing, and the remaining dollar value of our common equity securities authorized to be repurchased under this program is $500.0 million.

We currently have an automatic shelf registration statement which allows us to offer common shares, preferred shares, debt securities, or warrants, and our Amended and Restated Declaration of Trust provides we may issue up to 185 million shares of beneficial interest, consisting of 175 million common shares and 10 million preferred shares. In April 2022, we issued 2.9 million common shares in a public equity offering and received approximately $490.3 million in net proceeds, which we used to reduce borrowings under our unsecured line of credit. At September 30, 2022, we had approximately 106.5 million common shares outstanding, net of treasury shares and shares held in our deferred compensation arrangements, and no preferred shares outstanding.

5. Acquisitions and Dispositions

Acquisition of Land. During the nine months ended September 30, 2022, we acquired for future development purposes two parcels of land totaling approximately 42.6 acres in Charlotte, North Carolina for an aggregate consideration of approximately $32.7 million, approximately 3.8 acres of land in Nashville, Tennessee for approximately $30.5 million, and approximately 15.9 acres of land in Richmond, Texas for approximately $7.8 million. During the nine months ended September 30, 2021, we acquired for future development purposes approximately 14.6 acres of land in The Woodlands, Texas for approximately $9.3 million and approximately 0.2 acres of land in St. Petersburg, Florida for approximately $2.1 million. We did not acquire any land during the three months ending September 30, 2022 or 2021.

Asset Acquisition of Operating Properties. On April 1, 2022, we purchased the remaining 68.7% ownership interests in two unconsolidated discretionary investment funds (collectively, the "Funds") for cash consideration of approximately $1.1 billion, after adjusting for our assumption of approximately $515 million of existing secured mortgage debt of the Funds which remained outstanding. As a result of this acquisition, we now own 100% ownership interests in 22 multifamily communities comprised of 7,247 units located in Houston, Austin, Dallas, Tampa, Raleigh, Orlando, Washington D.C., Charlotte, and Atlanta. After obtaining 100% of the ownership interests, we consolidated the Funds as of April 1, 2022. Prior to the acquisition, we accounted for our 31.3% ownership interests in each of these Funds in accordance with the equity method of accounting.

We accounted for this transaction as an asset acquisition and remeasured our previously held 31.3% ownership interests in the Funds to fair value at the acquisition date. As a result of this remeasurement, we recognized a gain of approximately $474.1 million. Upon consolidation, the total consideration was allocated to assets and liabilities based on relative fair value, resulting in an increase in assets comprised of $2.1 billion of real estate assets, $44.0 million of in-place leases and $24.7 million of other assets and an increase in liabilities made up of $514.6 million of secured debt, $39.2 million of other liabilities, and approximately $7.6 million of net below market leases.

In August 2021, we acquired one operating property comprised of 368 apartment homes located in St. Petersburg, Florida for approximately $176.3 million. During the nine months ended September 30, 2021, we also acquired one operating property comprised of 328 apartment homes located in Franklin, Tennessee for approximately $105.3 million and one operating property comprised of 430 apartment homes located in Nashville, Tennessee for approximately $186.3 million.

Sale of Operating Property. During the nine months ended September 30, 2022, we sold one operating property comprised of 245 apartment homes located in Largo, Maryland for approximately $71.9 million and recognized a gain of approximately $36.4 million. We did not sell any operating properties during the three months ended September 30, 2022 or the three or nine months ended September 30, 2021.

6. Investments in Joint Ventures

On April 1, 2022, the Company obtained 100% of the ownership interests in the Funds and, as discussed in Note 5, "Acquisitions and Dispositions," above, consolidated the Funds as of the acquisition date. Prior to the acquisition, we held a 31.3% ownership interest in the Funds, and accounted for these investments under the equity method. The following table summarizes the combined balance sheets and statements of income data for the Funds as of and for the periods presented:

Table of Contents


(in millions)	September 30, 2022		December 31, 2021
Total assets	$	—	$	679.1
Total third-party debt	—		513.8
Total equity	—		131.9


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022 (1)		2021		2022		2021
Total revenues	$	—	$	35.4	$	37.2	$	102.6

Net income	—		5.4		7.1		13.8
Equity in income (2)	—		2.5		3.0		6.7

(1)We consolidated the operations of the Funds as of April 1, 2022 and therefore results are $0 for the three months ended September 30, 2022.

(2)Equity in income excludes our ownership interest of fee income from various services provided by us to the Funds.

Prior to the acquisition of the Funds, we earned fees for property and asset management, construction, development, and other services related to the Funds, and we eliminated fee income for services provided to the Funds to the extent of our ownership. Fees earned for these services, net of eliminations, were approximately $1.7 million for the nine months ended September 30, 2022, and approximately $1.8 million and $4.9 million for the three and nine months ended September 30, 2021, respectively. There were no fees earned during the three months ended September 30, 2022 due to the acquisition on April 1, 2022.

7. Notes Payable

The following is a summary of our indebtedness:


(in millions)	September 30, 2022		December 31, 2021
Commercial banks
4.25% Term Loan, due 2024	$	40.0	$	39.9





Senior unsecured notes

3.15% Notes, due 2022	$	349.9	$	349.3
5.07% Notes, due 2023	249.7		249.3
4.36% Notes, due 2024	249.7		249.5
3.68% Notes, due 2024	249.1		248.8
3.74% Notes, due 2028	398.1		397.8
3.67% Notes, due 2029 (1)	595.3		594.9
2.91% Notes, due 2030	744.6		744.1
3.41% Notes, due 2049	296.8		296.8
	$	3,133.2	$	3,130.5

Total unsecured notes payable	$	3,173.2	$	3,170.4

Secured notes
Master Credit Facilities
3.78% - 4.04% Conventional Mortgage Notes, due 2026 - 2028	$	291.2	$	—
4.58% Variable Rate Notes, due 2026	166.2		—




4.95% Variable Rate Construction Note, due 2024	18.8		—
3.87% note, due 2028	38.6		—
Total secured notes payable	$	514.8	$	—

Total notes payable (2)	$	3,688.0	$	3,170.4

(1) The 2029 Notes have an effective annual interest rate of approximately 3.84% through June 2026, which includes the effect of a settled forward interest rate swap, and approximately 3.28% thereafter, for an all-in average effective rate of approximately 3.67%.

Table of Contents

(2) Unamortized debt discounts, debt issuance costs and fair market value adjustments of $18.9 million and $19.6 million are included in notes payable as of September 30, 2022 and December 31, 2021, respectively.

In August 2022 we amended and restated our existing credit facility (the "Credit Agreement"), to among other things, add a $300 million unsecured term loan facility with a delayed draw feature that matures in August 2024 (which may be extended at the Company's option to August 2025), and increase the capacity of our existing unsecured revolving credit facility from $900 million to $1.2 billion which may be expanded, upon the satisfaction of certain conditions, by up to three times and $500 million in the aggregate by requesting increases to the revolving credit facility and term loan facility or requesting additional term loans. The Credit Agreement also amended the maturity date of the revolving credit facility from March 2023 to August 2026, with two options to further extend the facility at our election for two additional consecutive six-month periods. The interest rates on our unsecured revolving credit facility and delayed term loan are based upon the Secured Overnight Financing Rate ("SOFR") plus a spread which is subject to change as our credit ratings change. Advances under our revolving credit facility may be priced at the scheduled rates, or we may enter into bid rate loans with participating banks at rates below the scheduled rates. These bid rate loans have terms of 180 days or less and may not exceed the lesser of $600 million or the remaining amount available under our revolving credit facility. Our revolving credit facility and delayed term loan are subject to customary financial covenants and limitations. We believe we are in compliance with all such financial covenants and limitations as of September 30, 2022 and through the date of this filing.

Our unsecured revolving credit facility provides us with the ability to issue up to $50 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding under our revolving credit facility, it does reduce the amount available. At September 30, 2022, we had no borrowings outstanding on our $1.2 billion revolving credit facility or our delayed term loan, and we had outstanding letters of credit totaling approximately $14.2 million.

In September 2022, we extended the maturity date of our $40 million unsecured floating rate term loan with an unrelated third party from September 2022 to September 2024. Additionally, the interest rate on the term loan was changed from LIBOR plus a margin to SOFR plus a margin.

As a result of the acquisition of the Funds on April 1, 2022, we assumed approximately $514.6 million of secured mortgage loans with maturity dates ranging from 2024 to 2028 and effective interest rates on date of acquisition ranging from 2.47% to 4.04%. These secured mortgage loans consist of a variable rate construction loan, a fixed rate cross-collateralized and cross-defaulted note between three operating properties, and two cross-collateralized and cross-defaulted master credit facilities with Fannie Mae.

In connection with the assumed secured mortgage loans discussed above, we recorded an approximate $2.4 million fair value adjustment which is being amortized over the respective debt terms as an increase to interest expense. We recorded amortization of the fair value adjustment of approximately $0.1 million and $0.3 million during the three and nine months ended September 30, 2022, respectively.

We had outstanding floating rate debt of approximately $225.0 million and $39.9 million at September 30, 2022 and 2021, respectively. The weighted average interest rate on such debt was approximately 4.6% and 1.9% for the nine months ended September 30, 2022 and 2021, respectively.

Our indebtedness had a weighted average maturity of approximately 6.4 years at September 30, 2022. The table below is a summary of the maturity dates of our outstanding debt and principal amortizations, and the weighted average interest rates on such debt, at September 30, 2022:


(in millions)	Amount (1)		Weighted Average Interest Rate (2)
Remainder of 2022	$	349.0	3.2	%
2023	246.7		5.1
2024	556.5		4.1
2025	(2.2)		—
2026	188.9		4.5
Thereafter	2,349.1		3.5
Total	$	3,688.0	3.7	%

(1) Includes amortization of debt discounts, debt issuance costs, and fair market value adjustments.

(2) Includes the effects of the applicable settled forward interest rate swaps.

Table of Contents

8. Derivative Financial Instruments and Hedging Activities

Risk Management Objective of Using Derivatives. We are exposed to certain risks arising from both our business operations and economic conditions. We manage economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we may enter into derivative financial instruments to manage exposures arising from business activities resulting in differences in the amount, timing, and duration of our known or expected cash payments related to our borrowings.

Cash Flow Hedges of Interest Rate Risk. Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we periodically use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps involve the receipt of variable rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

Designated Hedges. The gain or loss on derivatives designated and qualifying as cash flow hedges is reported as a component of other comprehensive income or loss, and subsequently reclassified into earnings in the period the hedged forecasted transaction affects earnings and is presented in the same line item as the earnings effect of the hedged item. At September 30, 2022 and 2021, we had no designated hedges outstanding.

As of each of the three and nine months ended September 30, 2022 and 2021, there were no unrealized gains or losses recognized in other comprehensive income related to derivative financial instruments. During each of the three months ended September 30, 2022 and 2021, approximately $0.3 million was reclassified from accumulated other comprehensive income (loss) as an increase to interest expense and approximately $1.0 million was reclassified from accumulated other comprehensive income (loss) as an increase to interest expense during each of the nine months ended September 30, 2022 and 2021, for derivative financial instruments settled in prior periods.

9. Share-Based Compensation and Non-Qualified Deferred Compensation Plan

Incentive Compensation. We currently maintain the 2018 Share Incentive Plan (the “2018 Share Plan”) and the 2011 Share Incentive Plan (the “2011 Share Plan”), although no new awards may be granted under the 2011 Plan. Each of these plans were approved by our shareholders. The shares available for awards under the 2018 Share Plan are, subject to certain other limits under the plan, generally available for any type of award authorized under the 2018 Share Plan including stock options, stock appreciation rights, restricted stock awards, stock bonuses and other stock-based awards. Persons eligible to receive awards under the 2018 Share Plan include our and our subsidiaries' officers and employees, Trust Managers, and certain of our and our subsidiaries' consultants and advisors. A total of 9.7 million shares (“Share Limit”) was authorized under the 2018 Share Plan. Shares issued or to be issued are counted against the Share Limit as (1) 3.45 to 1.0 for every share award, excluding stock options and share appreciation rights, granted, and (2) 1.0 to 1.0 for every share of stock option or share appreciation right granted. As of September 30, 2022, there were approximately 5.9 million common shares available under the 2018 Share Plan, which would result in approximately 1.7 million shares which could be granted pursuant to full value awards conversion ratios as defined under the plan.

Total compensation cost for share awards charged against income was approximately $3.5 million and $4.1 million for the three months ended September 30, 2022 and 2021, respectively, and approximately $10.6 million and $12.5 million for the nine months ended September 30, 2022 and 2021, respectively. Total capitalized compensation costs for share awards were approximately $1.1 million and $1.0 million for the three months ended September 30, 2022 and 2021, and approximately $3.2 million and $2.8 million for the nine months ended September 30, 2022 and 2021, respectively.

A summary of activity under our share incentive plans for the nine months ended September 30, 2022 is shown below:


	Nonvested Share Awards Outstanding	Weighted Average Exercise / Grant Price
Nonvested share awards outstanding at December 31, 2021	184,128	$	107.57
Granted	136,919	161.91
Vested	(151,361)	128.45
Forfeited	(4,088)	130.14
Total nonvested share awards outstanding at September 30, 2022	165,598	$	132.96

Share Awards and Vesting. Share awards for employees generally vest over three years and are valued at the market value of the shares on the grant date. In the event the holder of the share awards attains at least age 65, and with respect to employees, also attain at least ten or more years of service ("Retirement Eligibility") before the term in which the awards are scheduled to

Table of Contents

vest, the value of the share awards is amortized from the date of grant to the individual's Retirement Eligibility date. All new share awards granted after reaching Retirement Eligibility vest on the date of grant.

The weighted average fair value of share awards granted during the nine months ended September 30, 2022 and 2021 was $161.91 per share and $105.63 per share, respectively. The total fair value of shares vested was approximately $19.4 million and $23.6 million during the nine months ended September 30, 2022 and 2021, respectively. At September 30, 2022, the unamortized value of previously issued unvested share awards was approximately $15.0 million which is expected to be amortized over the next two years.

10. Net Change in Operating Accounts

The effect of changes in the operating and other accounts on cash flows from operating activities is as follows:


	Nine Months Ended September 30,
(in thousands)	2022		2021
Change in assets:
Other assets, net	$	(16,969)	$	(18,233)
Change in liabilities:
Accounts payable and accrued expenses	(4,207)		17,899
Accrued real estate taxes	52,560		19,247
Other liabilities	(885)		3,551
Other	3,120		2,803
Change in operating accounts and other	$	33,619	$	25,267

11. Commitments and Contingencies

Construction Contracts. As of September 30, 2022, we estimated the total additional cost to complete the seven properties currently under construction to be approximately $348.4 million. We expect to fund this amount through a combination of one or more of the following: cash and cash equivalents, cash flows generated from operations, draws on our unsecured credit facility and unsecured term loan facility, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from our ATM programs, and other unsecured borrowings or secured mortgages.

Other Commitments and Contingencies. In the ordinary course of our business, we issue letters of intent indicating a willingness to negotiate for acquisitions, dispositions, or joint ventures and also enter into arrangements contemplating various transactions. Such letters of intent and other arrangements are non-binding as to either party unless and until a definitive contract is entered into by the parties. Even if definitive contracts relating to the purchase or sale of real property are entered into, these contracts generally provide the purchaser with time to evaluate the property and conduct due diligence, during which periods the purchaser will have the ability to terminate the contracts without penalty or forfeiture of any deposit or earnest money. There can be no assurance definitive contracts will be entered into with respect to any matter covered by letters of intent or we will consummate any transaction contemplated by any definitive contract. Furthermore, due diligence periods for real property are frequently extended as needed. An acquisition or sale of real property becomes probable at the time the due diligence period expires and the definitive contract has not been terminated. We are then at risk under a real property acquisition contract, but generally only to the extent of any earnest money deposits associated with the contract, and are obligated to sell under a real property sales contract. At September 30, 2022, we had approximately $1.1 million of earnest money deposits for potential acquisitions of land which are included in other assets in our condensed consolidated balance sheet, of which approximately $0.5 million is non-refundable.

Lease Commitments. Substantially all of our lessee operating leases, which are recorded within other liabilities in our condensed consolidated balance sheets, are related to office facility leases. We had no significant changes to our lessee lease commitments for the nine months ended September 30, 2022. The lease and non-lease components, excluding short-term lease contracts with a duration of 12 months or less, are accounted for as a combined single component based upon the standalone price at the time the applicable lease is commenced and is recognized as a lease expense on a straight-line basis over the lease term. Most of our office facility leases include options to renew and generally are not included in the operating lease liabilities or right-of-use assets as they are not reasonably certain of being exercised. If an option to renew is exercised, it would be considered a separate contract and recognized based upon the standalone price at the time the option to renew is exercised. Variable lease payments which values are not known at lease commencement, such as executory costs of real estate taxes, property insurance, and common area maintenance, are expensed as incurred. Rental expense totaled approximately $1.0

Table of Contents

million and $1.1 million for the three months ended September 30, 2022 and 2021, respectively, and approximately $3.0 million and $3.3 million for the nine months ended September 30, 2022 and 2021, respectively. The following is a summary of our maturities of our lease liabilities as of September 30, 2022:


(in millions)
Year ended December 31,	Operating Leases
Remainder of 2022	$	0.8
2023	3.3
2024	3.1
2025	2.3
2026	0.4
Thereafter	0.1
Less: discount for time value	(1.0)
Lease liability as of September 30, 2022	$	9.0

12. Income Taxes

We have maintained and intend to maintain our election as a REIT under the Internal Revenue Code of 1986, as amended. In order for us to continue to qualify as a REIT we must meet a number of organizational and operational requirements, including a requirement to distribute annual dividends to our shareholders equal to a minimum of 90% of our adjusted taxable income. As a REIT, we generally will not be subject to federal income tax on our taxable income at the corporate level to the extent such income is distributed to our shareholders annually. If our taxable income exceeds our dividends in a tax year, REIT tax rules allow us to designate dividends from the subsequent tax year in order to avoid current taxation on undistributed income. If we fail to qualify as a REIT in any taxable year, we may be subject to federal and state income taxes for such year. In addition, we may not be able to requalify as a REIT for the four subsequent taxable years and may be subject to federal and state income taxes in those years as well. Historically, we have incurred only state and local income, franchise, and excise taxes. Taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to applicable federal, state, and local income taxes. Our consolidated operating partnerships are flow-through entities and are not subject to federal income taxes at the entity level.

We have recorded income, franchise, sales, and excise taxes in the condensed consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2022 and 2021 as income tax expense. Income taxes for the three and nine months ended September 30, 2022 primarily related to state income tax and federal taxes on the taxable income of certain of our taxable REIT subsidiaries. We have no significant temporary or permanent differences or tax credits associated with our taxable REIT subsidiaries.

We believe we have no uncertain tax positions or unrecognized tax benefits requiring disclosure as of and for the nine months ended September 30, 2022.

13. Fair Value Measurements

Recurring Fair Value Measurements. The following table presents information about our financial instruments measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 using the inputs and fair value hierarchy discussed in Note 2, "Summary of Significant Accounting Policies and Recent Accounting Pronouncements."

Table of Contents

Financial Instruments Measured at Fair Value on a Recurring Basis


	September 30, 2022								December 31, 2021
(in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Other Assets
Deferred compensation plan investments (1)	$	111.1	$	—	$	—	$	111.1	$	137.3	$	—	$	—	$	137.3

(1)Approximately $3.3 million and $10.6 million of participant cash was withdrawn from our deferred compensation plan investments during the nine months ended September 30, 2022 and the year ended December 31, 2021, respectively.

Non-Recurring Fair Value Disclosures. The nonrecurring fair value disclosure inputs under the fair value hierarchy are discussed in Note 2, "Summary of Significant Accounting Policies and Recent Accounting Pronouncements." During the nine months ended September 30, 2022, we acquired the remaining 68.7% ownership interests in the Funds, which owned 22 multifamily communities. We consolidated these properties upon obtaining 100% ownership interests and recorded the real estate assets and identifiable above and below-market and in-place leases at their relative fair values based upon methods similar to those used by independent appraisers of income-producing properties. Our previously held 31.3% equity interests in the Funds were also remeasured to fair value utilizing these same techniques and the fair value measurements associated with the valuation of these acquired assets represent Level 3 measurements within the fair value hierarchy. See Note 5, "Acquisitions and Dispositions" and Note 2, "Summary of Significant Account Policies and Recent Accounting Pronouncements" for further discussion about this acquisition.

Financial Instrument Fair Value Disclosures. The following table presents the carrying and estimated fair values of our notes payable at September 30, 2022 and December 31, 2021, in accordance with the policies discussed in Note 2, "Summary of Significant Accounting Policies and Recent Accounting Pronouncements."


	September 30, 2022				December 31, 2021
(in millions)	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Fixed rate notes payable	$	3,463.1	$	3,125.0	$	3,130.5	$	3,363.7
Floating rate notes payable	225.0		222.6		39.9		40.1

Table of Contents

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes appearing elsewhere in this report, as well as Part I, Item 1A, "Risk Factors" within our Annual Report on Form 10-K for the year ended December 31, 2021. Historical results and trends which might appear in the condensed consolidated financial statements should not be interpreted as being indicative of future operations.

We consider portions of this report to be "forward-looking" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to our expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions, or other items relating to the future; forward-looking statements are not guarantees of future performance, results, or events. Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, we can give no assurance our expectations will be achieved. Any statements contained herein which are not statements of historical fact should be deemed forward-looking statements. Reliance should not be placed on these forward-looking statements as these statements are subject to known and unknown risks, uncertainties, and other factors beyond our control and could differ materially from our actual results and performance.

Factors which may cause our actual results or performance to differ materially from those contemplated by forward-looking statements include, but are not limited to, the following:

•Volatility in capital and credit markets, or other unfavorable changes in economic conditions, either nationally or regionally in one or more of the markets in which we operate, could adversely impact us;

•Short-term leases could expose us to the effects of declining market rents;

•Competition could limit our ability to lease apartments or increase or maintain rental income;

•We could be negatively impacted by the risks associated with land holdings and related activities;

•A pandemic and measures intended to prevent its spread could have a material adverse effect on our business, results of operations, cash flows, and financial condition;

•Development, repositions, redevelopment and construction risks could impact our profitability;

•Our acquisition strategy may not produce the cash flows expected;

•Changes in rent control or rent stabilization laws and regulations could adversely affect our operations and property value;

•Failure to qualify as a REIT could have adverse consequences;

•Tax laws may continue to change at any time and any such legislative or other actions could have a negative effect on us;

•A cybersecurity incident and other technology disruptions could negatively impact our business;

•We have significant debt, which could have adverse consequences;

•Insufficient cash flows could limit our ability to make required payments for debt obligations or pay distributions to shareholders;

•Issuances of additional debt may adversely impact our financial condition;

•We may be unable to renew, repay, or refinance our outstanding debt;

•Rising interest rates could both increase our borrowing costs, thereby adversely affecting our cash flows and the amounts available for distribution to our shareholders, and decrease our share price, if investors seek higher yields through other investments;

•Failure to maintain our current credit ratings could adversely affect our cost of funds, related margins, liquidity, and access to capital markets;

•We may be adversely affected by the phase out of LIBOR;

•Share ownership limits and our ability to issue additional equity securities may prevent takeovers beneficial to shareholders;

•The form, timing and amount of dividend distributions in future periods may vary and be impacted by economic and other considerations;

•Competition could adversely affect our ability to acquire properties;

•Litigation risks could affect our business;

•Damage from catastrophic weather and other natural events could result in losses; and

•We could be adversely impacted due to our share price fluctuations.

These forward-looking statements represent our estimates and assumptions as of the date of this report, and we assume no obligation to update or supplement forward-looking statements because of subsequent events.

Table of Contents

Executive Summary

Camden Property Trust and all consolidated subsidiaries are primarily engaged in the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. We focus on investing in markets characterized by high-growth economic conditions, strong employment, and attractive quality of life which we believe leads to higher demand for our apartments and retention of our residents. As of September 30, 2022, we owned interests in, operated, or were developing 178 multifamily properties comprised of 60,652 apartment homes across the United States. In addition, we own other land holdings which we may develop into multifamily apartment communities in the future.

Business Environment and Current Outlook

During the three and nine months ended September 30, 2022, our results reflect an increase in same store revenues of approximately 11.7% and 11.6%, respectively, as compared to the same periods in 2021. These increases were primarily due to higher average rental rates, which we believe were primarily attributable to improving job growth, favorable demographics with a higher propensity to rent versus buy, higher demand for multifamily housing in our markets, and a manageable supply of new multifamily housing.

We currently believe U.S. economic and employment growth are likely to continue during 2022 and the supply of multifamily homes will remain at manageable levels. If economic conditions were to worsen, our operating results could be adversely affected.

Consolidated Results

Net income attributable to common shareholders was $29.8 million and $29.5 million for the three months ended September 30, 2022 and 2021, respectively, and $607.9 million and $91.0 million for the nine months ended September 30, 2022 and 2021, respectively. The increase during the nine months ended September 30, 2022 as compared to the same period in 2021 was primarily due to a $474.1 million gain recognized as a result of the remeasurement of our previously held 31.3% ownership interest in two unconsolidated Funds upon our acquiring the remaining ownership interests on April 1, 2022, and a $36.4 million gain on sale of an operating property in Largo, Maryland during the first quarter of 2022 and an increase in property operations. See further discussion of our 2022 operations as compared to 2021 in "Results of Operations," below. The increase was partially offset by higher depreciation expense and amortization of in-place leases related to the consolidation of 22 properties upon acquiring the Funds and the acquisition of four operating properties during 2021.

Construction Activity

At September 30, 2022, we had a total of seven properties under construction comprising 2,219 apartment homes. As of September 30, 2022, we estimated the total additional cost to complete the construction of these seven properties is approximately $348.4 million.

Acquisitions

Operating properties: On April 1, 2022, we purchased the remaining 68.7% ownership interests in the Funds for cash consideration of approximately $1.1 billion, after adjusting for our assumption of approximately $515 million of existing secured mortgage debt of the Funds which remained outstanding. We funded this transaction with cash on-hand. These Funds own 22 multifamily communities comprised of 7,247 units located in Houston, Austin, Dallas, Tampa, Raleigh, Orlando, Washington D.C., Charlotte, and Atlanta. After obtaining 100% of the ownership interests, we consolidated the Funds as of April 1, 2022, and no longer recognize fee and asset management income from property management, construction, and development activities, related expenses or equity in income for these Funds.

Land: During the nine months ended September 30, 2022, we acquired for future development purposes two parcels of land totaling approximately 42.6 acres in Charlotte, North Carolina for an aggregate consideration of approximately $32.7 million, approximately 3.8 acres of land in Nashville, Tennessee for approximately $30.5 million, and approximately 15.9 acres of land in Richmond, Texas for approximately $7.8 million.

Dispositions

Operating property: During the nine months ended September 30, 2022, we sold one operating property comprised of 245 apartment homes located in Largo, Maryland for approximately $71.9 million and recognized a gain of approximately $36.4 million.

Table of Contents

Other

In April 2022, we issued 2.9 million common shares in a public equity offering and received approximately $490.3 million in net proceeds; we used these net proceeds to reduce borrowings under our unsecured line of credit.

During the nine months of 2022, we issued approximately 0.2 million common shares under our at-the-market ("ATM") programs and received approximately $26.2 million in net proceeds. As of the date of this filing, we had common shares having an aggregate offering amount of up to $500.0 million remaining available for sale under our 2022 ATM program.

In August 2022 we amended and restated our existing credit facility to (i) add a $300 million unsecured term loan facility with a delayed draw feature with a maturity date of August 2024 (which may be extended at the Company's option to August 2025), (ii) increase our existing facility from $900 million to $1.2 billion, which may be expanded by up to three times and up to an additional $500 million upon satisfaction of certain conditions, (iii) amend the maturity date of the revolving credit facility from March 2023 to August 2026, which may be extended at the Company's option for two additional consecutive six-month periods, and (iv) change the interest rate from London Interbank Offered Rate ("LIBOR") to Secured Overnight Financing Rate ("SOFR"), subject to customary benchmark replacement provisions.

In October 2022, our Board of Trust Managers approved to increase the authorization for our common equity securities of approximately $269.5 million remaining under our share repurchase plan to $500.0 million. There were no repurchases subsequent to September 30, 2022 through the date of this filing, and the remaining dollar value of our common equity securities authorized to be repurchased under this program is $500.0 million.

Future Outlook

Subject to market conditions, we intend to continue to seek opportunities to develop new communities and to redevelop, reposition, and acquire existing communities. We also intend to evaluate our portfolio and plan to continue our practice of selective dispositions as market conditions warrant and opportunities arise. We expect to maintain a strong balance sheet and preserve our financial flexibility by continuing to focus on our core fundamentals which we believe are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs. We intend to meet our near-term liquidity requirements through a combination of one or more of the following: cash and cash equivalents, cash flows generated from operations, draws on our unsecured credit facility and unsecured term loan facility, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from the ATM programs, and other unsecured borrowings or secured mortgages.

As of September 30, 2022, we had approximately $1.2 billion available under our unsecured credit facility and also a $300 million unsecured term loan facility, with a delayed draw feature. As of September 30, 2022 and through the date of this filing, we had common shares having an aggregate offering amount of up to $500.0 million remaining available for sale under our 2022 ATM program, and the ability to issue debt and equity under our automatic shelf registration statement. We believe scheduled repayments of debt due during the next 12 months are manageable at approximately $595.7 million which represents approximately 16.2% of our total outstanding debt, and includes amortization of debt discounts, and debt issuance costs. We believe we are well-positioned with a strong balance sheet and sufficient liquidity to fund new development, repositions, redevelopment, and other capital requirements including scheduled debt maturities. We will, however, continue to assess and take further actions we believe are prudent to meet our objectives and capital requirements.

Property Portfolio

Our multifamily property portfolio is summarized as follows:


	September 30, 2022		December 31, 2021
	Apartment Homes	Properties	Apartment Homes	Properties
Operating Properties
Houston, Texas	9,154	26	9,154	26
Dallas, Texas	6,224	15	6,224	15
Washington, D.C. Metro	6,192	17	6,437	18
Atlanta, Georgia	4,862	15	4,496	14
Phoenix, Arizona	4,029	13	4,029	13

Table of Contents


	September 30, 2022		December 31, 2021
	Apartment Homes	Properties	Apartment Homes	Properties
Orlando, Florida	3,954	11	3,954	11
Austin, Texas	3,686	11	3,686	11
Raleigh, North Carolina	3,252	9	3,248	9
Charlotte, North Carolina	3,104	14	3,104	14
Tampa, Florida	3,104	8	3,104	8
Denver, Colorado	2,873	9	2,865	9
Southeast Florida	2,781	8	2,781	8
Los Angeles/Orange County, California	2,663	7	2,663	7
San Diego/Inland Empire, California	1,797	6	1,797	6
Nashville, Tennessee	758	2	758	2
Total Operating Properties	58,433	171	58,300	171
Properties Under Construction
Raleigh, North Carolina	789	2	354	1
Phoenix, Arizona	397	1	397	1
Charlotte, North Carolina	387	1	387	1
Houston, Texas	377	2	—	—
Southeast Florida	269	1	269	1
Atlanta, Georgia	—	—	366	1



Total Properties Under Construction	2,219	7	1,773	5
Total Properties	60,652	178	60,073	176
Less: Unconsolidated Joint Venture Properties (1)
Houston, Texas	—	—	2,756	9
Austin, Texas	—	—	1,360	4
Dallas, Texas	—	—	1,250	3
Tampa, Florida	—	—	450	1
Raleigh, North Carolina	—	—	350	1
Orlando, Florida	—	—	300	1
Washington, D.C. Metro	—	—	281	1
Charlotte, North Carolina	—	—	266	1
Atlanta, Georgia	—	—	234	1

Total Unconsolidated Joint Venture Properties	—	—	7,247	22
Total Properties Fully Consolidated	60,652	178	52,826	154

(1)In April 2022, we acquired the remaining 68.7% ownership interests of the Funds which owned these properties. After obtaining 100% of the ownership interests, we consolidated the Funds as of April 1, 2022. Refer to Note 5, “Acquisitions and Dispositions” in the Notes to Condensed Consolidated Financial Statements for further discussion of this transaction.

Table of Contents

Stabilized Communities

We generally consider a property stabilized once it reaches 90% occupancy. During the quarter ended September 30, 2022, stabilization was achieved at two consolidated operating properties as follows:

($ in millions)
Stabilized Property and Location

Number of
Apartment
Homes

Date of
Construction
Completion

Date of
Stabilization

Camden Buckhead

Atlanta, GA

366

2Q22

3Q22

Camden Hillcrest

San Diego, CA

132

4Q21

3Q22

Total

498

Properties Under Development

Our condensed consolidated balance sheet at September 30, 2022 includes approximately $529.1 million related to properties under development and land. Of this amount, approximately $295.6 million related to our properties currently under construction. In addition, we had approximately $229.1 million invested primarily in land held for future development related to projects we currently expect to begin construction, and approximately $4.4 million invested in land which we may develop in the future.

Properties Under Construction. At September 30, 2022, we had seven properties in various stages of construction as follows:


($ in millions) Property and Location	Number of Homes	Estimated Cost		Cost Incurred		Included in Properties Under Development		Estimated Date of Construction Completion	Estimated Date of Stabilization
Properties Under Construction
Camden Atlantic (1)
Plantation, FL	269	$	100.0	$	98.3	$	33.6	4Q22	4Q23
Camden Tempe II (2)
Tempe, AZ	397	115.0		97.6		48.3		3Q23	1Q25
Camden NoDa
Charlotte, NC	387	105.0		85.0		85.0		3Q23	1Q25
Camden Durham
Durham, NC	420	145.0		73.5		73.5		2Q24	4Q25
Camden Village District
Raleigh, NC	369	138.0		30.7		30.7		2Q25	4Q26
Camden Woodmill Creek
The Woodlands, TX	189	75.0		14.0		14.0		3Q24	4Q24
Camden Long Meadow Farms
Richmond, TX	188	80.0		10.5		10.5		3Q24	4Q24
Total	2,219	$	758.0	$	409.6	$	295.6

(1) Property in lease-up and was 40% leased at October 24, 2022.

(2) Property in lease-up and was 33% leased at October 24, 2022.

Table of Contents

Development Pipeline Communities. At September 30, 2022, we had the following multifamily communities undergoing development activities:


($ in millions) Property and Location	Projected Homes	Total Estimated Cost (1)		Cost to Date
Camden Nations
Nashville, TN	393	$	175.0	$	32.0
Camden Paces III
Atlanta, GA	350	100.0		19.6
Camden Blakeney
Charlotte, NC	349	120.0		20.2
Camden South Charlotte
Charlotte, NC	420	135.0		23.4
Camden Baker
Denver, CO	435	165.0		28.4
Camden Highland Village II
Houston, TX	300	100.0		9.6
Camden Gulch
Nashville, TN	480	260.0		42.2
Camden Arts District
Los Angeles, CA	354	150.0		40.4
Camden Downtown II
Houston, TX	271	145.0		13.3
Total	3,352	$	1,350.0	$	229.1

(1)Represents our estimate of total costs we expect to incur on these projects. However, forward-looking estimates are not guarantees of future performance, results, or events. Although we believe these expectations are based upon reasonable assumptions, future events rarely develop exactly as forecast, and estimates routinely require adjustment.

Land Holdings. At September 30, 2022, we had the following land holdings:

($ in millions)

Location

Acres

Cost to Date

St. Petersburg, FL

0.2

$4.4

Table of Contents

Results of Operations

Changes in revenues and expenses related to our operating properties from period to period are due primarily to the performance of stabilized properties in the portfolio, the lease-up of newly constructed properties, and the impact of acquisitions and dispositions. Selected weighted averages for the three and nine months ended September 30, 2022 and 2021 are as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Average monthly property revenue per apartment home	$	2,132		$	1,922		$	2,082		$	1,855
Annualized total property expenses per apartment home (1)	$	9,094		$	8,631		$	8,851		$	8,339
Weighted average number of operating apartment homes owned 100%	58,427			51,011			55,881			50,202
Weighted average occupancy of operating apartment homes owned 100%	96.5		%	97.7		%	96.7		%	97.1		%

(1) Includes approximately $1.0 million of storm related expenses relating to Hurricane Ian. If these expenses had been excluded, the annualized property expenses would have been $9,025 and $8,827 for the three and nine months ended September 30, 2022, respectively.

Management considers property net operating income ("NOI") to be an appropriate supplemental measure of operating performance to net income because it reflects the operating performance of our communities without an allocation of corporate level property management overhead or general and administrative costs. We define NOI as property revenue less property operating and maintenance expenses less real estate taxes. NOI is further detailed in the Property-Level NOI table as seen below. NOI is not defined by accounting principles generally accepted in the United States of America ("GAAP") and should not be considered an alternative to net income as an indication of our operating performance. Additionally, NOI as disclosed by other REITs may not be comparable to our calculation.

Reconciliations of net income to NOI for the three and nine months ended September 30, 2022 and 2021 are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Net income	$	31,550	$	30,605	$	614,037	$	94,517
Less: Fee and asset management income	(617)		(3,248)		(4,257)		(7,717)
Less: Interest and other income	(88)		(443)		(2,881)		(1,032)
Less: (Income)/loss on deferred compensation plans	6,275		843		28,450		(9,183)
Plus: Property management expense	6,732		6,640		21,228		19,200
Plus: Fee and asset management expense	556		1,159		2,090		3,310
Plus: General and administrative expense	14,002		14,960		44,526		44,428
Plus: Interest expense	29,192		24,987		82,756		72,715
Plus: Depreciation and amortization expense	158,877		111,462		429,749		304,189
Plus: Expense/(benefit) on deferred compensation plans	(6,275)		(843)		(28,450)		9,183

Less: Gain on sale of operating property	—		—		(36,372)		—
Less: Gain on acquisition of unconsolidated joint venture interests	—		—		(474,146)		—

Less: Equity in income of joint ventures	—		(2,540)		(3,048)		(6,652)
Plus: Income tax expense	737		480		2,213		1,292


Net operating income	$	240,941	$	184,062	$	675,895	$	524,250

Property-Level NOI (1)

Property NOI, as reconciled above, is detailed further into the following categories for the three and nine months ended September 30, 2022 as compared to the same periods in 2021:

Table of Contents


($ in thousands)	Apartment Homes at	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	9/30/2022	2022		2021		$		%		2022		2021		$		%
Property revenues:
Same store communities	46,151	$	292,151	$	261,519	$	30,632	11.7	%	$	850,167	$	761,731	$	88,436	11.6	%
Non-same store communities	12,282	78,725		23,877		54,848		*		187,598		51,472		136,126		*
Development and lease-up communities	2,219	407		—		407		100.0		427		—		427		100.0

Dispositions/Other	—	2,489		8,734		(6,245)		(71.5)		8,655		25,018		(16,363)		(65.4)
Total property revenues	60,652	$	373,772	$	294,130	$	79,642	27.1	%	$	1,046,847	$	838,221	$	208,626	24.9	%

Property expenses:
Same store communities	46,151	$	100,873	$	97,033	$	3,840	4.0	%	$	294,538	$	282,909	$	11,629	4.1	%
Non-same store communities	12,282	29,746		9,499		20,247		*		71,690		20,669		51,021		*
Development and lease-up communities	2,219	177		—		177		100.0		197		(8)		205		*
Hurricane expenses	—	1,000		—		1,000		100.0		1,000		—		1,000		100.0
Dispositions/Other	—	1,035		3,536		(2,501)		(70.7)		3,527		10,401		(6,874)		(66.1)
Total property expenses	60,652	$	132,831	$	110,068	$	22,763	20.7	%	$	370,952	$	313,971	$	56,981	18.1	%

Property NOI:
Same store communities	46,151	$	191,278	$	164,486	$	26,792	16.3	%	$	555,629	$	478,822	$	76,807	16.0	%
Non-same store communities	12,282	48,979		14,378		34,601		*		115,908		30,803		85,105		*
Development and lease-up communities	2,219	230		—		230		100.0		230		8		222		*
Hurricane expenses	—	(1,000)		—		(1,000)		(100.0)		(1,000)		—		(1,000)		(100.0)
Dispositions/Other	—	1,454		5,198		(3,744)		(72.0)		5,128		14,617		(9,489)		(64.9)
Total property NOI	60,652	$	240,941	$	184,062	$	56,879	30.9	%	$	675,895	$	524,250	$	151,645	28.9	%

* Not a meaningful percentage.

(1) Same store communities are communities we wholly-owned and were stabilized since January 1, 2021, excluding communities under redevelopment and properties held for sale. Non-same store communities are stabilized communities not owned or stabilized since January 1, 2021, including communities under redevelopment and excluding properties held for sale. We define communities under redevelopment as communities with capital expenditures which improve a community's cash flow and competitive position through extensive unit, exterior building, common area, and amenity upgrades. Management believes same store information is useful as it allows both management and investors to determine financial results over a particular period for the same set of communities. Development and lease-up communities are non-stabilized communities we have developed since January 1, 2021, excluding properties held for sale. Hurricane expenses include storm-related damages related to Hurricane Ian in September 2022. Dispositions/Other includes those communities disposed of or held for sale which are not classified as discontinued operations, non-multifamily rental properties, expenses related to land holdings not under active development, and other miscellaneous revenues and expenses.

Same Store Analysis

Same store property NOI increased approximately $26.8 million for the three months ended September 30, 2022 and increased approximately $76.8 million for the nine months ended September 30, 2022, as compared to the same periods in 2021.

The $26.8 million increase in same store property NOI for the three months ended September 30, 2022 as compared to the same period in 2021, was primarily due to an increase of approximately $30.6 million in same store property revenues which was partially offset by an increase in property expenses of approximately $3.8 million.

The $30.6 million increase in same store property revenues during the three months ended September 30, 2022, as compared to the same period in 2021, was primarily due to a $28.8 million increase in rental revenues comprised of a 13.8% increase in average rental rates and higher other rental income, partially offset by lower occupancy and reletting fees, net of uncollectible revenue. The increase was also due to an increase of approximately $1.3 million in income from our utility and other rebilling programs and an increase of $0.5 million related to fees and other income.

The $3.8 million increase in same store property expenses during the three months ended September 30, 2022, as compared to the same period in 2021, was primarily due to higher real estate taxes of approximately $1.8 million as a result of higher valuations at a number of our communities. The increase was also due to higher repairs and maintenance of $1.1 million,

Table of Contents

higher utilities and other property expenses of $1.0 million, and higher property insurance expense of approximately $0.5 million. These increases were partially offset by lower salaries of $1.8 million offset by an increase in property general and administrative expenses of approximately $1.2 million primarily related to centralizing our workforce to manage certain responsibilities for all of our communities.

The $76.8 million increase in same store property NOI for the nine months ended September 30, 2022 as compared to the same period in 2021 was primarily due to an increase of approximately $88.4 million in same store property revenues which was partially offset by an increase of approximately $11.6 million in same store property expenses.

The $88.4 million increase in same store property revenues during the nine months ended September 30, 2022, as compared to the same period in 2021, was primarily due to a $82.7 million increase in rental revenues comprised of a 12.3% increase in average rental rates, higher other rental income, and higher reletting income, net of uncollectible revenue. The increase was also due to an increase of approximately $4.0 million from our utility and other rebilling programs, and approximately $1.7 million increase in fees and other income.

The $11.6 million increase in same store property expenses during the nine months ended September 30, 2022, as compared to the same period in 2021, was primarily due to higher repairs and maintenance of $3.4 million, higher real estate taxes of approximately $2.9 million as a result of increased property valuations at a number of our communities, higher property insurance of approximately $2.5 million, and higher utilities and other property expenses of approximately $1.4 million. The increase was also due to an increase of property general and administrative expense of $3.2 million primarily due to centralizing our workforce to manage certain responsibilities for all of our communities, partially offset by a decrease in salaries of $1.8 million.

Non-same Store and Development and Lease-up Analysis

Property NOI from non-same store and development and lease-up communities increased approximately $34.8 million and $85.3 million for the three and nine months ended September 30, 2022 as compared to the same periods in 2021. These increases in Property NOI were comprised of increases from non-same store communities of approximately $34.6 million and $85.1 million for the three and nine months ended September 30, 2022, respectively, as compared to the same periods in 2021 and increases from development and lease-up communities of approximately $0.2 million for both the three and nine months ended September 30, 2022, as compared to the same periods in 2021. The increases in property NOI from our non-same store communities were primarily due to our acquiring and consolidating the Funds on April 1, 2022, and the acquisition of four operating properties in 2021. The increases were also due to six operating properties which reached stabilization in 2021 and 2022.

The following table details the changes, described above, relating to non-same store and development and lease up NOI:

Table of Contents


(in millions)	For the three months ended September 30, 2022 as compared to 2021		For the nine months ended September 30, 2022 as compared to 2021

Property Revenues:
Revenues from acquisitions	$	49.2	$	114.0
Revenues from non-same store stabilized properties	4.4		18.4
Revenues from development and lease-up properties	0.4		0.4
Other	1.2		3.7
	$	55.2	$	136.5
Property Expenses:
Expenses from acquisitions	$	18.2	$	43.5
Expenses from non-same store stabilized properties	1.9		7.1
Expenses from development and lease-up properties	0.2		0.2
Other	0.1		0.4
	$	20.4	$	51.2
Property NOI:
NOI from acquisitions	$	31.0	$	70.5
NOI from non-same store stabilized properties	2.5		11.3
NOI from development and lease-up properties	0.2		0.2
Other	1.1		3.3
	$	34.8	$	85.3

Hurricane Expenses

Our communities impacted by Hurricane Ian in September 2022 incurred approximately $1.0 million of storm related expenses, with no insurance recoveries anticipated during the three and nine months ended September 30, 2022.

Dispositions/Other Property Analysis

Dispositions/Other property NOI decreased approximately $3.7 million and $9.5 million for the three and nine months ended September 30, 2022 as compared to the same periods in 2021. These decreases were primarily due to the disposition of three operating properties during the fourth quarter of 2021 and one operating property in March 2022.

Non-Property Income


($ in thousands)	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2022		2021		$		%		2022		2021		$		%
Fee and asset management	$	617	$	3,248	$	(2,631)	(81.0)	%	$	4,257	$	7,717	$	(3,460)	(44.8)	%
Interest and other income	88		443		(355)		(80.1)	%	2,881		1,032		1,849		*
Income/(loss) on deferred compensation plans	(6,275)		(843)		(5,432)		*		(28,450)		9,183		(37,633)		*
Total non-property income/(loss)	$	(5,570)	$	2,848	$	(8,418)	(295.6)	%	$	(21,312)	$	17,932	$	(39,244)	(218.8)	%

* Not a meaningful percentage.

Fee and asset management income from property management, asset management, construction, and development activities at our joint ventures and our third-party construction projects, decreased approximately $2.6 million and $3.5 million for the three and nine months ended September 30, 2022, respectively, as compared to the same periods in 2021. These decreases were primarily due to the consolidation of the Funds on April 1, 2022, and no longer having any related fee and asset management income. These decreases were also due to lower fees earned related to decreases in third-party construction activity during the three and nine months ended September 30, 2022 as compared to the same periods in 2021.

Table of Contents

Interest and other income decreased approximately $0.4 million and increased $1.8 million for the three and nine months ended September 30, 2022, respectively, as compared to the same periods in 2021. The increase during the nine months ended September 30, 2022 was primarily due to an earn-out received related to a technology joint venture sold in September 2020.

Our deferred compensation plans incurred a loss of approximately $6.3 million and $28.5 million during the three and nine months ended September 30, 2022, respectively, as compared to incurring a loss of approximately $0.8 million and recognizing income of approximately $9.2 million during the three and nine months ended September 30, 2021, respectively. The changes were related to the performance of the investments held in deferred compensation plans for participants and were directly offset by the expense/(benefit) related to these plans, as discussed below.

Other Expenses


($ in thousands)	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2022		2021		$		%		2022		2021		$		%
Property management	$	6,732	$	6,640	$	92	1.4	%	$	21,228	$	19,200	$	2,028	10.6	%
Fee and asset management	556		1,159		(603)		(52.0)		2,090		3,310		(1,220)		(36.9)
General and administrative	14,002		14,960		(958)		(6.4)		44,526		44,428		98		0.2
Interest	29,192		24,987		4,205		16.8		82,756		72,715		10,041		13.8
Depreciation and amortization	158,877		111,462		47,415		42.5		429,749		304,189		125,560		41.3
Expense/(benefit) on deferred compensation plans	(6,275)		(843)		(5,432)		*		(28,450)		9,183		(37,633)		*
Total other expenses	$	203,084	$	158,365	$	44,719	28.2	%	$	551,899	$	453,025	$	98,874	21.8	%

* Not a meaningful percentage.

Property management expense, which represents regional supervision and accounting costs related to property operations, increased approximately $0.1 million and $2.0 million for the three and nine months ended September 30, 2022, respectively, as compared to the same periods in 2021. The increase for the nine months ended September 30, 2022 was primarily related to higher salaries, benefits, and incentive compensation costs primarily due to higher regional salary related costs which were previously allocated to fee and asset management expense and now recognized in property management expense upon our consolidating the Funds on April 1, 2022. Property management expenses were 1.8% and 2.0% of total property revenues for the three and nine months ended September 30, 2022, respectively, and were 2.3% of total property revenues for each of the three and nine months ended September 30, 2021.

Fee and asset management expense from property management, asset management, construction, and development activities at our joint ventures and our third-party projects decreased approximately $0.6 million and $1.2 million during the three and nine months ended September 30, 2022, respectively, as compared to the same periods in 2021. These decreases were primarily due to our consolidating the Funds on April 1, 2022, and no longer having any related fee and asset management expenses.

General and administrative expense decreased approximately $1.0 million during the three months ended September 30, 2022 and was relatively flat for the nine months ended September 30, 2022 as compared to the same periods in 2021. Excluding income/(loss) on deferred compensation plans, general and administrative expenses were 3.7% and 4.2% of total revenues for the three and nine months ended September 30, 2022, respectively, and were 5.0% and 5.2% of total revenues for the three and nine months ended September 30, 2022, respectively.

Interest expense increased approximately $4.2 million and $10.0 million for the three and nine months ended September 30, 2022, respectively, as compared to the same periods in 2021. These increases were primarily due to an increase in interest expense related to our assuming approximately $515 million of secured mortgage debt upon completion of the acquisition of the Funds on April 1, 2022. These increases were also due to higher interest expense recognized on our unsecured credit facility resulting from an increase in average balances outstanding. These increases were partially offset by higher capitalized interest during the three and nine months ended September 30, 2022 resulting from higher average balances in our development pipeline.

Depreciation and amortization expense increased approximately $47.4 million and $125.6 million for the three and nine months ended September 30, 2022, respectively, as compared to the same periods in 2021. These increases were primarily due to higher depreciation and amortization related to our acquisition of the Funds on April 1, 2022, and higher depreciation related to the acquisition of two operating properties in June 2021, one operating property in August 2021, and one operating property in October 2021. These increases were also due to the completion of units in our development pipeline and the completion of repositions during 2021 and 2022, and were partially offset by lower depreciation expense related to the disposition of three operating properties during the fourth quarter of 2021 and one operating property during the first quarter of 2022.

Table of Contents

Our deferred compensation plans recognized a benefit of approximately $6.3 million and $28.5 million for the three and nine months ended September 30, 2022, respectively, as compared to recognizing a benefit of approximately $0.8 million and incurring expenses of approximately $9.2 million during the three and nine months ended September 30, 2021, respectively. The changes were related to the performance of the investments held in deferred compensation plans for participants and were directly offset by the income/(loss) related to these plans, as discussed in the non-property income section above.

Other


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
($ in thousands)	2022		2021		$		%		2022		2021		$		%

Gain on sale of operating property	$	—	$	—	$	—	—	%	$	36,372	$	—	$	36,372	100.0	%
Gain on acquisition of unconsolidated joint venture interests	$	—	$	—	$	—	—	%	$	474,146	$	—	$	474,146	100.0	%
Equity in income of joint ventures	$	—	$	2,540	$	(2,540)	(100.0)	%	$	3,048	$	6,652	$	(3,604)	(54.2)	%
Income tax expense	$	(737)	$	(480)	$	(257)	53.5	%	$	(2,213)	$	(1,292)	$	(921)	71.3	%

The $36.4 million gain on sale during the nine months ended September 30, 2022 was due to the disposition of one operating property located in Largo, Maryland.

On April 1, 2022, we acquired the remaining 68.7% ownership interest in the Funds. We had previously owned a 31.3% interest in each of these Funds and accounted for the joint ventures under the equity method. As a result of acquiring the remaining ownership interests, we consolidated the Funds and recorded a gain of approximately $474.1 million which represented the difference between the fair market value and the cost basis of our previously owned equity interests.

Equity in income of joint ventures decreased approximately $2.5 million and $3.6 million for the three and nine months ended September 30, 2022, respectively, as compared to the same periods in 2021. These decreases were primarily due to our consolidating the Funds on April 1, 2022.

Income tax expense increased approximately $0.3 million and $0.9 million for the three and nine months ended September 30, 2022, respectively, as compared to the same periods in 2021. These increases were primarily due to higher state income taxes due to our acquiring the Funds on April 1, 2022, partially offset by a decrease in taxable income due to lower third-party construction activities in a taxable REIT subsidiary.

Funds from Operations ("FFO") and Adjusted FFO ("AFFO")

Management considers FFO and AFFO to be appropriate supplementary measures of the financial performance of an equity REIT. The National Association of Real Estate Investment Trusts ("NAREIT") currently defines FFO in accordance with the 2018 NAREIT FFO White Paper which defines FFO as net income (computed in accordance with GAAP), excluding depreciation and amortization related to real estate, gains (or losses) from the sale of certain real estate assets (depreciable real estate), impairments of certain real estate assets (depreciable real estate), gains (or losses) from change in control, and adjustments for unconsolidated joint ventures to reflect FFO on the same basis. Our calculation of diluted FFO also assumes conversion of all potentially dilutive securities, including certain non-controlling interests, which are convertible into common shares. We consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions of depreciable real estate and depreciation, FFO can assist in the comparison of the operating performance of a company's real estate investments between periods or to different companies.

AFFO is calculated utilizing FFO less recurring capitalized expenditures which are necessary to help preserve the value of and maintain the functionality at our communities. We also consider AFFO to be a useful supplemental measure because it is frequently used by analysts and investors to evaluate a REIT's operating performance between periods or to different companies. Our definition of recurring capital expenditures may differ from other REITs, and there can be no assurance our basis for computing this measure is comparable to other REITs.

To facilitate a clear understanding of our consolidated historical operating results, we believe FFO and AFFO should be examined in conjunction with net income attributable to common shareholders as presented in the condensed consolidated statements of income and comprehensive income and data included elsewhere in this report. FFO and AFFO are not defined by GAAP and should not be considered alternatives to net income attributable to common shareholders as an indication of our operating performance. Additionally, FFO and AFFO as disclosed by other REITs may not be comparable to our calculation.

Reconciliations of net income attributable to common shareholders to FFO and AFFO for the three and nine months ended September 30, 2022 and 2021 are as follows:

Table of Contents


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2022		2021		2022		2021
Funds from operations
Net income attributable to common shareholders (1)	$	29,844	$	29,483	$	607,904	$	91,009
Real estate depreciation and amortization	156,065		108,931		421,808		296,760
Adjustments for unconsolidated joint ventures	—		2,674		2,709		7,903

Gain on sale of operating property	—		—		(36,372)		—
Gain on acquisition of unconsolidated joint venture interests	—		—		(474,146)		—
Income allocated to non-controlling interests	1,706		1,122		6,133		3,508
Funds from operations	$	187,615	$	142,210	$	528,036	$	399,180

Less: recurring capitalized expenditures	(26,001)		(19,717)		(61,682)		(51,205)
Adjusted funds from operations	$	161,614	$	122,493	$	466,354	$	347,975

Weighted average shares – basic	108,466		103,071		107,314		101,119
Incremental shares issuable from assumed conversion of:
Common share options and awards granted	40		100		52		80
Common units	1,606		1,641		1,606		1,680
Weighted average shares – diluted	110,112		104,812		108,972		102,879

(1) Net income attributable to common shareholders for the three and nine months ended September 30, 2022 included approximately $1.0 million of storm- related expenses related to Hurricane Ian.

Liquidity and Capital Resources

Financial Condition and Sources of Liquidity

We intend to maintain a strong balance sheet and preserve our financial flexibility, which we believe should enhance our ability to identify and capitalize on investment opportunities as they become available. We intend to maintain what management believes is a conservative capital structure by:

•extending and sequencing the maturity dates of our debt where practicable;

•managing interest rate exposure using what management believes to be prudent levels of fixed and floating rate debt;

•maintaining what management believes to be conservative coverage ratios; and

•using what management believes to be a prudent combination of debt and equity.

Our interest expense coverage ratio, net of capitalized interest, was approximately 7.6 and 6.6 for the three months ended September 30, 2022 and 2021, respectively, and 7.4 and 6.4 for the nine months ended September 30, 2022 and 2021. This ratio is a method for calculating the amount of operating cash flows available to cover interest expense and is calculated by dividing interest expense for the period into the sum of property revenues and expenses, non-property income, and other expenses, after adding back depreciation, amortization, and interest expense. Approximately 83.8% and 100% of our properties were unencumbered as of September 30, 2022 and 2021, respectively. Our weighted average maturity of debt was approximately 6.4 years at September 30, 2022.

Our primary sources of liquidity are cash and cash equivalents, and cash flows generated from operations. Other sources may include one or more of the following: availability under our unsecured credit facility and unsecured term loan facility, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from our ATM programs, and other unsecured borrowings or secured mortgages. We believe our liquidity and financial condition are sufficient to meet all of our reasonably anticipated cash needs during the next twelve months from our filing date including:

•normal recurring operating expenses;

•current debt service requirements including scheduled debt maturities;

•recurring and non-recurring capital expenditures;

Table of Contents

•reposition expenditures;

•funding of property developments, repositions, redevelopments, acquisitions, and joint venture investments; and

•the minimum dividend payments required to maintain our REIT qualification under the Code.

Factors which could increase or decrease our future liquidity include but are not limited to volatility in capital and credit markets, changes in rent control or rent stabilization laws, sources of financing, the minimum REIT dividend requirements, our ability to complete asset purchases, sales, or developments, the effect our debt level and changes in credit ratings could have on our cost of funds, and our ability to access capital markets.

Cash Flows

The following is a discussion of our cash flows for the nine months ended September 30, 2022 and 2021:

Net cash from operating activities was approximately $576.5 million during the nine months ended September 30, 2022 as compared to approximately $436.0 million for the same period in 2021. The increase was primarily due to the increase in cash from property operations due to our acquiring the Funds, and the growth attributable to our same store, non-same store and development and lease-up communities. See further discussion of our 2022 operations as compared to 2021 in "Results of Operations."

Net cash used in investing activities during the nine months ended September 30, 2022 totaled approximately $1.3 billion as compared to $755.8 million during the same period in 2021. Cash outflows during the nine months ended September 30, 2022 primarily related to the acquisition of the Funds for cash consideration of approximately $1.1 billion, and amounts paid for property development and capital improvements of approximately $342.5 million. These outflows were partially offset by net proceeds from the sale of one operating property of approximately $70.5 million. Cash outflows during the nine months ended September 30, 2021 primarily related to the acquisition of three operating properties for approximately $464.0 million, and amounts paid for property development and capital improvements of approximately $279.7 million. The increase in property development and capital improvements for the nine months ended September 30, 2022, as compared to the same period in 2021, was primarily due to the acquisition of four development properties, as well as higher reposition and capital expenditures, partially offset by the timing and completion of four consolidated operating properties in 2022 and 2021. The property development and capital improvements during the nine months ended September 30, 2022 and 2021, included the following:


	Nine Months Ended September 30,
(in millions)	2022		2021
Expenditures for new development, including land	$	203.2	$	163.6
Capital expenditures	75.3		63.4
Reposition expenditures	37.2		30.4
Direct real estate taxes and capitalized interest and other indirect costs	26.8		22.3

Total	$	342.5	$	279.7

Net cash from financing activities totaled approximately $221.0 million for the nine months ended September 30, 2022 as compared to $328.7 million during the same period in 2021. Cash inflows during the nine months ended September 30, 2022 primarily related to net proceeds of $516.8 million from the issuance of approximately 2.9 million common shares from our equity offering and approximately 0.2 million common shares from our ATM programs, partially offset by $293.2 million used for distributions to common shareholders and non-controlling interest holders. Cash inflows during the nine months ended September 30, 2021 primarily related to net proceeds of $579.5 million from the issuance of approximately 4.4 million common shares from our ATM programs. These cash inflows during 2021 were partially offset by $255.1 million used for distributions to common shareholders and non-controlling interest holders.

Financial Flexibility

Table of Contents

2026, with two options to further extend the facility at our election for two additional consecutive six-month periods. The interest rate on our unsecured credit facility is based upon SOFR plus a spread which is subject to change as our credit ratings change. Advances under our credit facility may be priced at the scheduled rates, or we may enter into bid rate loans with participating banks at rates below the scheduled rates. These bid rate loans have terms of 180 days or less and may not exceed the lesser of $600 million or the remaining amount available under our revolving credit facility. Our revolving credit facility and delayed term loan are subject to customary financial covenants and limitations. We believe we are in compliance with all such financial covenants and limitations as of September 30, 2022 and through the date of this filing.

Our unsecured revolving credit facility provides us with the ability to issue up to $50 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding under our revolving credit facility, it does reduce the amount available. At September 30, 2022, we had no borrowings outstanding on our credit facility or our delayed term loan, and we had outstanding letters of credit totaling approximately $14.2 million.

In May 2022, we created an ATM share offering program through which we can, but have no obligation to, sell common shares and we may also enter into separate forward sale agreements with forward purchasers for an aggregate offering amount of up to $500.0 million (the "2022 ATM program"), in amounts and at times as we determine, into the existing trading market at current market prices as well as through negotiated transactions. Actual sales from time to time may depend on a variety of factors including, among others, market conditions, the trading price of our common shares, and determinations by management of the appropriate sources of funding for us. The proceeds from the sale of our common shares under the 2022 ATM program are intended to be used for general corporate purposes, which may include reducing future borrowings under our unsecured line of credit, the repayment of other indebtedness, the redemption or other repurchase of outstanding debt or equity securities, funding for development activities, and financing for acquisitions. As of the date of this filing, we have not entered into any forward sales agreement and have common shares having an aggregate offering amount of up to $500.0 million remaining available for sale under this ATM program.

We believe our ability to access capital markets is enhanced by our senior unsecured debt ratings by Moody's, Fitch, and Standard and Poor's, which are currently A3 with stable outlook, A- with stable outlook, and A- with stable outlook, respectively. We believe our ability to access capital markets is also enhanced by our ability to borrow on a secured basis from various institutions including banks, Fannie Mae, Freddie Mac, or life insurance companies. However, we may not be able to maintain our current credit ratings and may not be able to borrow on a secured or unsecured basis in the future.

Future Cash Requirements and Contractual Obligations

One of our principal long-term liquidity requirements includes the repayment of maturing debt, including any future borrowings under our unsecured credit facility. We believe scheduled repayments of debt due during the next 12 months are manageable at approximately $595.7 million which represents approximately 16.2% of our total outstanding debt, and includes amortization of debt discounts, and debt issuance costs. See Note 7, "Notes Payable," in the notes to Condensed Consolidated Financial Statements for a further discussion of our scheduled maturities.

As of September 30, 2022, we estimated the additional cost to complete the construction of seven properties to be approximately $348.4 million. Of this amount, we expect to incur costs between approximately $50 million and $60 million during the remainder of 2022 and to incur the remaining costs during 2023 through 2025. Additionally, we expect to incur costs between approximately $26 million and $28 million related to the start of new development activities, between approximately $23 million and $25 million of repositions, redevelopment, repurposes, and revenue enhancing expenditures and between approximately $28 million and $32 million of additional recurring capital expenditures.

We anticipate meeting our near-term liquidity requirements through a combination of one or more of the following: cash and cash equivalents, cash flows generated from operations, draws on our unsecured credit facility and unsecured term loan facility, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from our ATM programs, and other unsecured borrowings or secured mortgages. We continue to evaluate our portfolio and plan to continue our practice of selective dispositions as market conditions warrant and opportunities arise.

As a REIT, we are subject to a number of organizational and operational requirements, including a requirement to distribute current dividends to our shareholders equal to a minimum of 90% of our annual taxable income. In order to minimize paying income taxes, our general policy is to distribute at least 100% of our taxable income. In September 2022, our Board of Trust Managers declared a quarterly dividend of $0.94 per common share to our common shareholders of record as of September 30, 2022. The quarterly dividend was subsequently paid on October 17, 2022, and we paid equivalent amounts per unit to holders of the common operating partnership units. Assuming similar quarterly dividend distributions for the remainder of 2022, our annualized dividend rate would be $3.76 per share or unit.

Table of Contents

Off-Balance Sheet Arrangements

As of September 30, 2022, we had no outstanding guarantees or other off-balance sheet arrangements.

Inflation

Our apartment leases are for an average term of approximately fourteen months. In an inflationary environment, we may realize increased rents at the commencement of new leases or upon the renewal of existing leases. We believe the short-term nature of our leases generally minimizes our risk from the adverse effects of inflation.

Critical Accounting Policies

Our critical accounting policies have not changed from the information reported in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

No material changes to our exposures to market risk have occurred since our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. We carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Securities Exchange Act ("Exchange Act") Rules 13a-15(e) and 15d-15(e). Based on the evaluation, the Chief Executive Officer and Chief Financial Officer concluded the disclosure controls and procedures as of the end of the period covered by this report are effective to ensure information required to be disclosed by us in our Exchange Act filings is accurately recorded, processed, summarized, and reported within the periods specified in the Securities and Exchange Commission's rules and forms and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls. There were no changes in our internal control over financial reporting (identified in connection with the evaluation required by paragraph (d) in Rules 13a-15 and 15d-15 under the Exchange Act) during our most recent fiscal quarter which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

There have been no material changes to the Risk Factors previously disclosed in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of our equity securities for the three months ended September 30, 2022.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

None

Table of Contents

Item 6. Exhibits


(a) Exhibits



10.1						Fourth Amended and Restated Credit Agreement, dated August 31, 2022, among Camden Property Trust, as the Borrower, Bank of America, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., PNC Bank, National Association, Regions Bank, Truist Bank, and U.S. Bank National Association, as Syndication Agents, BMO Harris Bank, N.A., Mizuho Bank, Ltd., TD Bank, N.A., and The Bank of Nova Scotia, as Documentation Agents, and the other lenders party thereto, BofA Securities, Inc., JPMorgan Chase Bank N.A., PNC Capital Markets LLC, Regions Capital Markets, Truist Securities Inc., and U.S. Bank National Association, as Joint Lead Arrangers, BofA Securities, Inc., and JPMorgan Chase Bank N.A., as Joint Bookrunners (incorporated by reference to Exhibit 99.1 to the Company's current Report on Form 8-K filed on September 1, 2022 (File No. 1-12110))

*31.1						Certification pursuant to Rule 13a-14(a) of Chief Executive Officer dated October 28, 2022

*31.2						Certification pursuant to Rule 13a-14(a) of Chief Financial Officer dated October 28, 2022

*32.1						Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes – Oxley Act of 2002

*101.INS						XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

*101.SCH						XBRL Taxonomy Extension Schema Document

*101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document

*101.DEF						XBRL Taxonomy Extension Definition Linkbase Document

*101.LAB						XBRL Taxonomy Extension Label Linkbase Document

*101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document

*104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on our behalf by the undersigned thereunto duly authorized.



						CAMDEN PROPERTY TRUST

/s/ Michael P. Gallagher						October 28, 2022
Michael P. Gallagher						Date
Senior Vice President – Chief Accounting Officer