CAMDEN PROPERTY TRUST

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and notes appearing elsewhere in this report. Historical results and trends which might appear in the consolidated financial statements should not be interpreted as being indicative of future operations.

Discussion of our year-to-date comparisons between 2023 and 2022 is presented below. Year-to-date comparisons between 2022 and 2021 can be found in "Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

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;

•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 values;

•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 increase our borrowing costs, lower the value of our real estate, and decrease our share price, leading investors to 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;

•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;

•Environmental, social, and governance factors may impose additional costs and/or expose us to new risks;

•Litigation risks could affect our business;

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

•Competition could adversely affect our ability to acquire properties; 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.

Executive Summary

We are primarily engaged in the ownership, management, development, reposition, redevelopment, acquisition, and construction of multifamily apartment communities. Overall, 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 and retention of our apartments. As of December 31, 2023, we owned interests in, operated, or were developing 176 multifamily properties comprised of 59,800 apartment homes across the United States as detailed in the Property Portfolio table below. In addition, we own other land holdings which we may develop into multifamily apartment communities in the future.

Business Environment and Current Outlook

Our results for the year ended December 31, 2023, reflect an increase in same store revenues of approximately 5.1% as compared to the same period in 2022. The increase was primarily due to higher average rental rates which we believe was primarily attributable to job growth, favorable demographics with a higher propensity to rent versus buy, continued demand for multifamily housing in our markets, and a manageable supply of new multifamily housing.

We believe the levels of new multifamily supply in the submarkets and asset classes in which we operate will likely rise in 2024, but should be met with continued demand to absorb these new deliveries. However, if this were to change or other economic conditions were to worsen, our operating results could be adversely affected.

Consolidated Results

Net income attributable to common shareholders was $403.3 million and $653.6 million for the years ended December 31, 2023 and December 31, 2022, respectively. The decrease during the year ended December 31, 2023 as compared to the same period in 2022 was primarily due to a $474.1 million gain recognized in 2022 as a result of the remeasurement of our previously held 31.3% ownership interest in two unconsolidated Funds (collectively, "the Funds" or "the acquisition of the Funds") upon our acquiring the remaining ownership interests on April 1, 2022. The decrease was also due to higher interest expense incurred during the year ended December 31, 2023 as compared to the same period in 2022. The decrease was partially offset by recognizing a higher gain on sale of two operating properties during the year ended December 31, 2023 of approximately $225.3 million as compared to a gain on sale of one operating property during the year ended December 31, 2022 of approximately $36.4 million. The decrease was further offset by an increase in property operations during the year ended December 31, 2023 as compared to the same period in 2022. See further discussion of our 2023 operations as compared to 2022 in"Results of Operations," below.

Construction Activity

At December 31, 2023, we had a total of four projects under construction to be comprised of 1,166 apartment homes. Initial occupancies of these four projects are currently scheduled to occur within the next nine months. We estimate the additional cost to complete the construction of the four projects to be approximately $137.6 million.

Dispositions

Operating Properties: During the year ended December 31, 2023, we sold two operating properties comprised of an aggregate of 852 apartment homes located in Costa Mesa, California for an aggregate of approximately $293.1 million and recognized a gain of approximately $225.3 million.

Other

In May 2023, we created an at-the market ("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 price of up to $500.0 million (the "2023 ATM program"). As of the date of this filing, we have $500.0 million available for sale under this program.

In May 2023, we utilized draws our unsecured revolving credit facility to retire our $185.2 million secured variable rate notes due in 2024 and 2026. As a result of the early repayments, we recorded a $2.5 million loss on early retirement of debt in our consolidated statements of income and comprehensive income, which was comprised of approximately $1.7 million of prepayment penalties and fees and approximately $0.8 million for the write-off of unamortized fair value adjustments.

In June 2023, we utilized draws on our unsecured revolving credit facility to repay the principal amount of our 5.07% senior unsecured notes payable, which matured on June 15, 2023, for a total of $250.0 million, plus accrued interest.

In November 2023, we issued $500.0 million of 5.85% senior unsecured notes due November 3, 2026. We utilized an interest rate swap with a notional amount of $500.0 million which exposes us to interest rate fluctuations on these notes. This interest rate swap was designated and qualified as a fair value hedging instrument.

Subsequent Events

In January 2024, we issued $400.0 million of 4.90% senior unsecured notes due January 15, 2034. We utilized a portion of the net proceeds from these notes to repay the outstanding balance on our $300 million, 6.21% unsecured term loan due in August 2024.

In January 2024, we utilized cash on hand to repay the principal amount of our 4.36% senior unsecured notes payable, which matured on January 15, 2024, for a total of $250.0 million, plus accrued interest.

In February 2024, we sold one operating property comprised of 592 apartment homes located in Atlanta, Georgia for approximately $115.0 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 operating property and land development 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 currently are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs. We intend to meet our short-term and long-term liquidity requirements through a combination of one or more of the following: cash flows generated from operations, draws on our unsecured revolving credit facility, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from our ATM programs, other unsecured borrowings, or secured mortgages.

As of December 31, 2023, we had approximately $1.2 billion available under our unsecured revolving credit facility. As of December 31, 2023 and through the date of this filing, we also had common shares having an aggregate offering price of up to $500.0 million remaining available for sale under our 2023 ATM program. We believe the remaining scheduled payments of debt over the next 12 months are manageable at approximately $290.0 million, which excludes the amortization of debt discounts and debt issuance costs as well as the $550 million of debt we repaid in January 2024, as discussed above. We also believe we are well-positioned with a strong balance sheet and sufficient liquidity to fund new development, redevelopment, and other capital funding requirements. 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:

Stabilized Communities

We generally consider a property stabilized once it reaches 90% occupancy. During the year ended December 31, 2023, stabilization was achieved at two operating properties as follows:

Completed Construction in Lease-Up

At December 31, 2023, we had one completed operating property in lease-up as follows:

(1)Excludes leasing costs, which are expensed as incurred.

Properties Under Development

Our consolidated balance sheet at December 31, 2023 included approximately $486.9 million related to properties under development and land. Of this amount, approximately $214.0 million related to our projects currently under construction. In addition, we had approximately $272.9 million primarily invested in land held for future development related to projects we currently expect to begin construction.

Communities Under Construction. At December 31, 2023, we had four properties in various stages of construction as follows:

(1)Property in lease-up and was 17% leased at January 31, 2024.

(2)Property in lease-up and was 15% leased at January 31, 2024.

Development Pipeline Communities. At December 31, 2023, we had the following communities undergoing development activities:

(1)Represents our estimate of total costs we expect to incur on these projects. However, forward-looking statements 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 forecasted and estimates routinely require adjustment.

Geographic Diversification

At December 31, 2023 and 2022, our real estate assets by various markets, excluding depreciation, were as follows: