Camden’s Campo: No Evidence of Overbuilding in Multifamily Sector

Ric Campo, chairman and CEO of Camden Property Trust (NYSE: CPT), joined REIT.com for a CEO Spotlight video interview at REITWorld 2014: NAREIT’s Annual Convention for All Things REIT at the Atlanta Marriott Marquis.

Camden is a Houston-based REIT that owns and operates apartment communities across the United States.

Campo provided an overview of supply fundamentals in the multifamily sector.

“We are definitely not seeing overbuilding at this point,” he said. While construction is at peak levels compared with the recent past, the new supply is acting to replenish the dearth of new accomodation that occurred during the financial crisis, Campo explained.

Campo pointed to a deficit of between 400,000 and 500,000 apartments nationwide as a result of the financial crisis.

“In a lot of markets, like Houston, for example, occupancy levels are at all-time highs, and the supply is really needed to be able to house people that are moving there,” he said.

Campo said oversupply does not appear to be evident in any market.

Meanwhile, Campo discussed the impact of the millennial generation on how Camden operates.

“Millennials are having a major impact on our business. They are the prime target audience for our properties,” Campo said.

“They are definitely changing what we build, how we build it and how we market it,” he added. Campo observed that millennials are not used to sharing bedrooms, they are independent, they prefer urban settings and they are highly focused on technology.

“If you are not totally wired and technology savvy, you’re in trouble with the millennials,” Campo said. 

In terms of design, Camden is building apartments with large social spaces. Camden’s new property in Hollywood, Calif., for example, will have a recording studio and art studio. “You really have to cater to this new customer,” he emphasized.

Campo noted that although peak growth of the millennial generation is expected in 2018 to 2020, “they’re still the biggest consumer out there that’s changing the world.”

Campo also addressed the topic of Camden’s corporate culture, and how it impacts shareholders. Camden was recently named to FORTUNE magazine’s list of the “100 Best Companies to Work For” in America for the seventh consecutive year. Campo noted that companies that have remained on the list have about a 500-basis-point premium compared with the total returns of other companies in the S&P 500 Index.

“It really does translate into higher shareholder returns, Campo said. “If you have a better team in the field, you’ll have a better result in your financial statements.”