Camden Property Trust (CPT) Earnings Call Transcript & Summary

Good afternoon, everyone. Welcome to Citi's 2026 Global Property CEO Conference. I'm Eric Wolfe with Citi Research, and we are pleased to have with us Camden Property Trust and CEO, Ric Campo. This session is for Citi clients only and disclosures have been made available at the corporate access desk. To ask a question, you can raise your hand or go to liveqa.com and enter code GPC 26 to submit questions. Ric, I'll turn it over to you to introduce your team, give some opening remarks and tell people the top reasons to buy your stock today.

Great. Thanks. Appreciate for you hosting and being here today. With me today, I have Alex Jessett, our President and CFO. I also have Kim Callahan, our Senior Vice President of Investor Relations, and her team Connie Chao here as well. So thank you for being here. For those of you who are not familiar with Camden, we are a multifamily company with over 58,000 apartment homes located in 15 major markets across the U.S., primarily in the Sunbelt. We are an S&P 500 company with a total market cap of $16 billion and have been operating as a public company since 1993. We were asked by the Citi REIT team of why you should buy our stock. We have two main reasons. The first is because it's extremely cheap and undervalued right now on a private market versus public market basis. That's why we've been buying it. We've completed $473 million of stock repurchases over the last 6 months. The second reason and as important is because we're in the right markets and the right product. We have -- we're in high-growth markets, high demand Sunbelt markets that lead the nation in job growth and population growth in migration and overall demand for apartment homes, and they are positioned to outperform the overall market once the remaining apartment inventory is fully absorbed. I'm sure we'll talk about that here in a second and that when pricing power returns, which we think is going to happen very soon, and we'll have an acceleration of net operating income growth and revenue growth after that happens. So with that, one last thing, I guess people are going to -- have been asking us today about our Southern California disposition. I'll just get right out in front of that. Why now? The reason is we believe that when you look at California, it's 10% of our operating income. We get more than 10% of our time spent talking about 10% of the portfolio. We think it's an opportune time to reinvest the capital in the sale, which should be in the $1.5 billion to $2 billion range into the Sunbelt markets. We think the Sunbelt markets are going to grow very well once the supply is taken up in the next 12 months, plus or minus. We also created a really interesting opportunity to buy the stock back. So we've announced that we're going to reinvest about $1.1 billion in Sunbelt real estate, and we're going to acquire $650 million of the stock. The ability to do that creates a really opportunity for us to do basically a flat deal. So it's not dilutive or accretive in the first year, but we think it's going to be accretive once the market starts growing. With that said, we have already completed $473 million of the share purchase buybacks already. And we have -- the timing is going to be pretty much the summer. We already have a number of properties that we're working on to backfill the portfolio, and we think we'll be able to do 1031 exchanges to make that happen sometime in the summer. When you look at just fundamental supply and demand recap, we've talked a lot about that and the excess supply that's in our markets. So the supply peaked in 2024 and has fallen dramatically, creating a pretty constructive multifamily operating environment for the next few years. Demand for quality apartment homes is strong. 2025 had the highest absorption rate of apartments in 20 years in spite of a very weak job growth, which we were really happy about. Resident retention is very high. Turn remains low. Move-outs to buy purchase of homes is below 10%, given the cost aspects of rent versus owned today. We think that a large portion of our portfolio residents are going to continue to be residents of choice and will be that way for quite a while. At this point, I'm happy to open it up to questions so that we can get to what's on your minds today. So thank you, Eric.

So you mentioned one of the reasons to buy the stock is the accelerating growth profile and NOI and revenue. You look at last year and things started really, really strong. And then we had, of course, Liberation Day, and I think it sort of took down everybody because you saw sort of job growth recede a bit after that, given uncertainty. At the same time, you've also had some questions about impact of AI on job growth and whether that sort of structurally leads to a bit lower job growth going forward. Why do you think now is the time that we're going to start seeing that recovery? And can you get that recovery if you don't see a rebound in jobs in the short term?

Well, the first important part is that supply continues to fall. And so that -- the headwind that we've had has been just the massive excess supply or 50-year high in supply because we had free money in the world post-COVID. So supply is definitely going down. We know that, that's a fact. I think the interesting part of the reason why we think '26 could be very constructive is that you think about '25, you mentioned the Liberation Day, and we started out. We started out very strong in '25 and then the peak leasing season ended at 4th of July rather than at the end of the summer. And we were sort of puzzled by that because the construct was pretty good given the job numbers that were being produced. However, we found out in September that those jobs were elusive and they really weren't there, 911 (sic) [ 911,000 ] reduction in jobs in the September report that came out. So in spite of being a pretty weak job year, we still had a 20-year high in absorption for multifamily and absorbed a lot of multifamily units. When you think about 2026, the uncertainty that was created by Liberation Day, the lack of a tax bill being completed, the tariff issues, what -- whether the Fed was going to start cutting rates or how much they're going to cut rates were created a massively uncertain market, and I think that's what happened to job growth as people just didn't hire because they were too worried about what was going on in the economy. If you think about today, however, in 2026, we have a tax bill. We know that between now and April 15, $75 billion to $100 billion of excess tax refunds are going to John Q. Public in America. We know that the other aspects of the tax bill are in place. We also know tariffs are what they are. They didn't create an inflationary environment. They didn't really cause the job market to do what -- to be weaker really. And the Fed has been cutting interest rates. The other thing that I don't think people talk about is that the regulatory reductions that have happened in the first year of the administration have been significant. A senior airline executive was telling me just recently that airline regulation is down, and they haven't seen this kind of deregulation in 15 years, and that's improving their ability to operate and improving operating margins. So that doesn't include energy, manufacturing and trucking and other areas of deregulation that's happened. So you have an ability to, in fact -- those are tailwinds that are happening in the economy that we didn't have in 2025. So with those tailwinds, we should have a reasonably constructive 2026. On the AI question, I'm going to let Alex answer that.

Yes, I'll hit AI. But first, I also want to point out that we've actually seen this before. If you think about coming out of the GFC that time was known as the jobless recovery, and we had 3 years of the best revenue growth we've ever had as a company. What was similar to then is that we had supply drop off considerably. So we've certainly had a situation before where we've had very, very strong growth without that much job creation. When it comes to AI, I would tell you, I'm extremely bullish about AI, and I'm very bullish that AI will end up benefiting the 25- to 34-year olds. If you think about people who will do well with AI, there are folks who are generally more innovative, more creative, more curious, more tech savvy. What does that start to sound like? That starts to sound like 25- to 34-year-olds. And what will likely happen is that the young folks are the ones that companies are going to want to hire because they can come in and they can use this new technology and they can create real value. The folks who I think should actually be concerned are the 50-year-olds who might want to stick their head in the sand and say, I don't want to be part of this. I think those folks are likely to be displaced because if you can bring in two 25-year-olds for less than the price of a 50-year-old and that 25-year-old can create real value through this technology, I think that's a good thing. And ultimately, that's going to benefit our renters.

One thing I'll add to AI is I sit on the Houston branch of the Dallas Federal Reserve Bank, and that gives me an opportunity to see all the Fed research and every Fed meeting that I've had, including one that I had about 3 weeks ago, talks about AI because the Fed's mandate, obviously, is dual mandate employment and price stability. And so they are looking at this issue a lot. And everything that I've seen in the last year that comes out of the Federal Reserve, they do not have a massive worry about the displacement of near-term jobs. They think ultimately, what's going to happen is it's going to create more productivity and additional jobs that don't exist today that we don't really know about. And then ultimately, there might be some dislocation here and there, but not massive dislocation. They're not thinking about it as a threat to current employment growth in the near term.

That's helpful. And then I'm right in the middle of those 2 age groups, so we'll see where I land, right? Can you talk us through sort of what's happened year-to-date through operations, any sort of forward signs of the early part of the peak leasing season? I think as part of your revenue management system, you can typically not see 60 to 70 days forward, but you're certainly pricing 60 to 70 days forward. So just give us an update on sort of what you're seeing in the recovery in your markets thus far.

Yes. So what I said on the call is that we expect the first quarter to be a slight improvement from the fourth quarter. So far, everything is trending in line with our expectations. Keep in mind, though, that there is a tremendous amount of seasonality in our business in the fourth quarter and the first quarter are the 2 slowest. And so at this point, it's a little early to see exactly what we're going to -- what's going to happen during the peak leasing. Certainly look forward to getting back in front of everybody. Once we have some more information, once we've really started gone through part of the second quarter, we'll have some new updates for everybody. But so far, it's looking in line with our expectations.

Okay. And can I just ask where generally renewals going out and if you have an expectation around retention and turnover staying relatively the same?

Yes. So renewals are going out in the mid-3%. Remember, we don't traditionally have a lot of negotiations around that. So it's generally accepted pretty close to that. And then you have to look at retention. We've had record level retention improving every single year really since coming out of COVID. Our expectations and what we've modeled is a slight sort of give back in that just because it's been so good that you don't want to assume it's going to continue. But that's what we've assumed that we'll have slightly higher turnover in 2026.

And I imagine on the demand front, you were probably partly impacted by weather and some of the bad weather that we saw. But I guess as we got into sort of the better weather sort of demand as you define it, whether that's leads, conversions, anything else that you use internally, is that sort of normal on a year-over-year basis? Are you seeing the sort of typical seasonal trends?

So far, we're seeing typical seasonal trends. Now our expectations for the full year are that we'll follow a typical seasonal trend until you get to the third quarter. And then we're assuming that we start to see some uptick as you have all the excess supply that's been there for the last several years continue to get absorbed.

And I know it's still very early, but I guess on the market side, it seems like seeing a little bit more pricing power in places like Atlanta, Dallas. Maybe just talk through sort of where you're starting to see the green shoots of pricing power emerge and then sort of what you really need to see happen this peak leasing season before you get that sort of real pricing power, like where you'd like to see concessions among some of your private competitors go down to? Just anything that you're sort of watching out for that you think would give you increased pricing power as we get into that peak leasing season?

Yes. So when it comes to green shoots, you hit 2 of the markets. So clearly, we're seeing green shoots in Atlanta. We're seeing them in Dallas. We're actually seeing them in Nashville. And if any of you guys saw the Wall Street Journal article that came out last week about Austin, shockingly, we're starting to see some green shoots in Austin. But none of that is really surprising. If you think about all of our markets, our markets are incredibly high demand markets. And so everything that sort of tempered the growth has been a matter of supply. So as long as the demand stays constant, we know that supply peaked to Ric's earlier point, we know supply peaked in the third quarter of '24. And so it's just been a steady absorption from then through today. And so as long as that continues, we would expect to see some more green shoots on a go-forward basis. If you think about concessions, the great thing about concessions, remember that we don't give concessions, but the great thing about concessions from our competitors is that traditionally, what they do is they give 2 months free or they give 1 month free. Nobody who's giving 2 months free, all of a sudden says, well, this week, I'm going to give 1 month and 3 weeks free. It's not how it works. It's usually a pretty steady step down. And so if you go from 2 months free to 1 month free, all of a sudden realize that that's an 8.3% embedded growth or implied growth across the Board without even seeing any top line rental rate increases. So we're certainly starting to see concessions come down. That's obviously really helpful. We should see a lot more once we get into the peak leasing. We'll see what our peers or competitors are doing around the concession side. And as soon as we are able to get to a point where new leases can turn positive, that's what we need. That's the real momentum that will allow us to keep pushing rents and keep pushing renewals.

And one thing I'll add to that is that when you think about our consumer because people worry about the consumer and how the strength of the consumer is, especially when you think about a K-shaped economy. And our consumer is really strong. On average, they make $118,000 a year. They're paying 19% of their income to rent, which is the lowest in the sector, and it's the lowest we've had for a long time. So you -- if you think about what's happened over the last 30-plus months, you've had flat to down rent growth in certain markets, and you've had 4% to 5% wage growth in the consumer environment. So what's happened is renters have been growing their incomes at the same time where rents have been flat. So there's a fair amount of room to be able to absorb rental increases for these renters and for our customers. And at the end of the day, when you think about concessions going -- they're around 8% in our markets right now. On average, they're usually around 3% when you don't have a supply and demand imbalance. And that change immediately drives 5 percentage points to the bottom line when you don't have or the top line, which is better on the bottom line with our leverage. So you're in a situation where that could change really quickly. That's why I think Alex mentioned earlier the 3 years after the financial crisis where you had the jobless recovery, but you had top line growth that was better than 5% for 3 years straight.

And we had an investor question. So obviously, feel free to ask questions. And in your markets, are operators still offering concessions on renewals. And I think the question effectively is trying to get at the point that for the stuff that has delivered over the last couple of years, obviously, they probably had concessions in place. When it comes time for that resident to renew, are they sort of reoffering that concession? Is that person moving out? Just trying to understand for those that have already delivered and kind of stabilized, are they able to get that sort of 8% jump that you just talked about a moment ago?

Yes. So concessions on renewals is very rare. We do have some circumstances where we've seen in Austin, a few circumstances where we've seen it in Nashville and in other very, very high supply sort of pockets in a market. So it's not very common. What is far more common is that the -- to the original point is that the concession is given upfront and then the renter then starts to pay the higher rate on a go-forward basis. So if it's 1 month free, the first month, they don't pay, second month through the 12 months, they're paying the market price. And so on the renewal side, then you absolutely would be able to see that type of increase because the concession has then gone.

And then you made this point on the call that normally when you see things recover, it's not like you just go 1%, 1.5%, 2%, like it moves quickly once it starts going. I guess my question is, do you think the same can happen this time, just given that unemployment is sort of already pretty low at 4.3%. I think in some instances in the past, right, you've had a little bit of a rebound in sort of demand along the same time because it's either triggered by job losses or something else. But just curious sort of the speed at which you think things can recover once you start seeing that pricing power.

Yes. I think it could be quickly. The question will be what is net absorption in the first half of 2026 because we know we have lower supply. The question will be, will that supply get to a point where you do have an inflection point in the market. And I'll give you an example of Austin. Austin was along with Nashville, the #1 overbuilt market, right? Not because they didn't have demand. They just had a lot of demand early on and same thing with Nashville, and it was just a place where builders could get deals done. And so we have a property in Rainey Street, which is a pretty hot area. It's very funky, cool area that had massive supply come in. Property was -- we had real trouble over the last 2 years keeping the property at 90%. We had big concessions, lots of issues with construction and getting people in and out of the Rainey Street area with all the buildings getting built. Today, the property is 98% leased. They're occupied. There's no concessions at Rainey Street today. And that happened over about a 2- or 3-month period. It went from 92% to 98% and then concessions went away period. And so that's happening in Austin. That's why the Wall Street Journal wrote an article about it. You get this -- I think we have the recency effect that humans have if everything is going high to the right, it always goes to high to the right. There's never an inflection point down, right? And the same thing goes with multifamily and with how the concessions work. So you're seeing that happen. And ultimately, whether we get to that inflection point in the summer will really just depend on the spring leasing season and then how strong it is. And like I said before, the reason it didn't happen in '25 was we just had so much supply and we needed a little bit more job growth to get it to that inflection point. So we'll see if the tailwinds help us in '26.

And I guess one of the fears that some investors have had is that if you look at your turnover, it's gone down to historically low levels, which obviously is good, but creates a little bit of a tougher comp there. At the same time, you have the Trump administration really trying to push for affordability on housing going into a midterm election. Have you seen any signs yet that turnover is starting to rise, the retention is going lower? And then are there any policies that you've seen out there either proposed or those that have been put in place that sort of worry you and think that this could be something that's a bit more stimulative for the for-sale market at the expense of rentals?

Go ahead.

Well, I'll hit the first part of that. So if you think about turnover, turnover for us so far is in line with expectations. When you start to talk about turnover that's associated with home purchases, right, if you look at our historical move-outs for home purchase, it's about 14%. Today, it's about 10%. But remember that, that 14% is of the 50% who move out. So you're talking about 7% of our tenants or our residents typically will move out to buy a home. So today, it's 5%. So there's a 2% delta. First of all, 2% is really not that significant of a number. The second thing you have to realize is that the entire profile of renters is changing system-wide and really across the country, not just with Camden. If you look at our average renter today, our median renter is 32 years old. Our average renter is 35 years old. That's a 2-year increase in the past 10 years. And part of that increase is that folks are making lifestyle decisions or choices or changes at a later point in time. Typically, in our markets, why somebody moves out to go to single family is that they got married and they had their first child and they start to think about school districts and all those other factors. So our folks are getting older. 75% of our folks are single. So they've got a long way to go before they hit that. They've got to find somebody first. And then they have to get married and then they have to have children. So we've got a pretty long runway on that. And then the other thing that I always think about is if you really did have a bunch of folks that were living with us that really said, my lifestyle has made it such that I should be in single-family, but I cannot afford single-family. If that was really the case, then we would see an increase in people who are moving out to rent single-family. Our percentage of our move-out to rent single-family is 2%. Last year, it was 2%. The year before, it was 2%. It has never changed from that number. So I don't really think we have this sort of embedded cohorts of humans that are just waiting for something to change to go out and buy a home. And then even when you start to look at interest rates, and obviously, we saw the 30-year made some movement, but you have to recognize that the price of single-family homes is up 60% since COVID. So even if interest rates came down dramatically, it still prices out so many of the consumers out there. And I do think that, that price challenge is part of the reason why people are, in fact, delay and you're getting married later because it's expensive to get married. They're having children later because it's expensive to have children. Ric, you want to add...

Yes. On the policy side, there's really nothing that the administration could do to stimulate housing demand going forward. There's really even the ban on single-family home ownership for big companies is just not going to move the needle. And the stimulative things that are in place that I talked about earlier are in place. And that's really the only thing that the administration can really do. And they've done a lot, clearly. The question is whether it's enough. And when you get down to policies like I'll give an example, the 50-year mortgage. The 50-year mortgage marginally improves the ability for somebody to buy a house. But let's face it. Homebuilders have been squeezing their margins. Our margins have been compressing dramatically, primarily because they're buying rates down. So buying rates down was what needed to happen to stimulate the market, you would think that homebuilders wouldn't have had declines in sales last year relative to the previous year. So there's really not much that the administration can do to hurt our business from a policy perspective when it comes to the demand side. The only thing that really could hurt the multifamily and delay the recovery is something that happens to the job market that we don't expect if you had a recession or something really will happen in the next 3 or 4 months as a result of what's going on in the world, perhaps. But as far as other policy that's out there, there's really nothing that's going to -- that could change multifamily trajectory at this point.

Got it. And then I would say the other fear that people generally have, especially with the Sunbelt is that there's this fear that if things start improving, right, and things start improving, you see rent growth go up and all of a sudden, you're going to see a flood of supply come back in 1 to 2 years. I've heard from some of your peers that construction costs have come down anywhere between 5% to 10%. I guess how sustainable do you think it is that we're going to see a sort of a long period of slow low and slow supply? Like how long do you think this sort of low supply can last?

I think can last at least 2 or 3 years because there's -- when you think about the folks that supported the 50-year high in supply, so supply just to put that in perspective, it went from 300,000 units to over 600,000 units. So if you started a project in 2024 in Austin, Texas, and you were supposed to get a rate of return or even '23 in Austin, Texas or Nashville or anyone else where else in America, you're not making your rates of return you thought you were going to make. Because rents didn't go up and actually, you're having to give concessions. And so at the end of the day, investors are -- equity investors are on -- are protesting multifamily development today because they're not making the returns that they were supposed to make in the last cycle. So I think there is a very low probability that you'll have a massive increase in supply. And people are still waiting for the inflection point on rents. And so when you think about trying to pro forma a development today, even though rent -- the costs are down 5% to 8%, plus or minus, but rents are not up in any market. So you have to really believe in trending and you have to trend pretty aggressively to make any numbers work dramatically. It doesn't mean anything that there's not going to be anything built. A lot of what's being built today is COVID money and tax credit money that is being basically government funded for affordable housing that really isn't competitive with our housing, which is 60% of AMI type of transactions. And I know Alex has some comments on this, too. Go ahead.

Yes. So to add to that, if you think about it, there's really 3 things that have to happen in order for starts to start again. The first thing is that you have to see construction costs come down. And obviously, you did allude to the fact that we're seeing -- we're seeing 5% to 8%, maybe some folks are saying 5% to 10%. So construction costs have to come down. Additionally, you have to get top line rental rate growth that has not happened. And then you need to see some stability or decreases in the short-term rate. When that all occurs, and my gut is that will occur sometime in 2026. When that does occur, then all of a sudden, developments will start to look like they make some more sense. But you have to remember that as soon as you get the green light on a development, you then have to go out and get your plans and your permits done. And what I'll tell you is one of the things I track very closely is the ABI, which is the Architectural Billing Index, and that shows our architects working on plans. And if you track that index, you'll see that, that index has actually come down cumulatively every single month for the past 30 months. So we know that the architects aren't even working on things. So as soon as you get the green light and equity providers say, yes, we're willing to do some deals, you're going to spend a year. So let's say this starts at the end of '26. You're going to spend all of '27 getting your plans and your permits ready, then you're going to start a transaction, then it's going to take you to 2030 or 2031 before you deliver. So my gut is that you will see an increase in supply, but I don't think it's an issue until 2030 or 2031. I also don't think it's ever going to look like the supply that we just came off of. Remember, to Ric's point about the recency impact, every single time people now talk about supply, they think that we're going to do what we just did. Remember that, that supply was created by free money, right? Unless you think interest rates are going to go back down to effectively 0, we are not going to see that level of supply again. We will see a typical level of an uptick in supply, as I said, probably 2030, 2031.

And then maybe switching to capital allocation. We talked about the SoCal portfolio sale in good length, but on the call, I guess what has the interest been like thus far? Are you seeing different buyer profiles than you expected or sort of the normal names? And then what's a good estimate for thinking about like the selling costs, the transaction costs on a portfolio that's $1.5 billion to $2 billion. Is there a sort of like percentage like 1.5%, 2% that accounts for like transfer taxes, broker costs?

Yes. So first is this is the preeminent portfolio on the market in America today. And because of that, we are getting unprecedented interest. We have almost 400 confidentiality agreements signed. Now here's what's interesting is apparently, companies have multiple CAs signed for some reason. So let's just break it down to companies. We have 230 unique companies that have signed confidentiality agreements. To put that in a frame of reference, when we exited Las Vegas, we had about 30 to 40. So 230 versus 30 to 40. So hopefully, that translates into some really good pricing. Time will tell. So that's point one. And if you think about the timing, and Ric alluded to this earlier, the timing is that over the next couple of weeks, we'll start to get some indications of interest. And then we hope to get this whole thing closed by the summer. When it comes to selling costs, it's really -- for a portfolio of this size, it's really not that significant. Identified selling costs that we know of is around a $10 million range.

Okay. And then in terms of buybacks, I mean, it's good to see you active. I guess one of the things I was confused on the call is why there's just no accretion built in because it seems like some of the buybacks are occurring early in the year, you're selling the portfolio in the middle of the year, acquisitions if they occur a little bit thereafter. Like why wouldn't there be accretion associated with that? Is that just a conservative placeholder assumption in case it doesn't happen? Or is there something that's actually reducing that accretion from the buyback?

So there are two things to look at. The first thing is that we're selling a portfolio that's 19 years old and it has about a 30 basis point Prop 13 adjustment baked into it. We're turning around and we're taking $1 billion of that capital, and we're going to buy assets that are 5 years old. So there is a negative spread between the disposition and the acquisition. Now clearly, getting all of the share repurchases done upfront is accretive. But then the other side of it is for the $1 billion that we're going to do in 1031 exchanges, the way a 1031 exchange works is if we sell an asset and we're going to do a 1031 exchange, we do not get the proceeds. The proceeds go to an exchange accommodator, and they sit with that exchange accommodator, and exchange accommodator pays us a very small interest rate because that's how the exchange accommodator makes money. So the delay between selling and buying any delay, even if it's a month or 2, has a dilutive impact.

Got it. And I guess what do you think is -- what's built in your guidance in terms of the negative spread from what you're selling versus buying?

Yes. So we anticipate that for Camden, we're going to say that the California disposition is a mid-5%. Now the buyer will probably say it's a 5% because remember, you have that Prop 13 impact. The assets that we're looking at to buy are in the high 4%. Now keep in mind, though, this is important, that's on FFO. AFFO is very different because we're talking about a 19-year-old portfolio that has high CapEx versus new assets with very low CapEx.

That's an example. I don't think that -- I think there is a decent shot that the number will be in the 4%.

Yes. I mean I was going to -- we only have a minute left, so -- but I was going to ask about -- you said there was like a negative spread, I think, last year and it ended up being quite as big as you guided conservatively on it and it worked out. But -- so that's good to hear. I guess maybe just quickly, we don't have much time, but I was going to ask you like why buy in the high 4% in the Sunbelt, I guess, if you have -- maybe we'll make a rapid fire. Why buy in the high 4% in the Sunbelt?

Because we think that the Sunbelt is going to outperform the rest of the country once we have the pivot point, we'll get above 5% growth in NOI or 5% growth in revenue for a few years straight, and we want to be into that. The other issue is that if we don't 1031 exchange, we'd have to do a very large special dividend in the $600 million to $700 million range. We'd rather buy the stock rather than giving us -- than doing a special dividend.

Right. Rapid fire. What will same-store NOI growth be for the apartment sector in 2027?

3.5%.

Will there be the same fewer or more apartment companies at this time next year in the public space?

No, fewer.

Great. Thank you.

Thank you.