Camden prepares for slower year in Houston area

The chairman and CEO of Camden Property Trust, the Houston-based owner and developer of large apartment complexes across the country, said Thursday that the local multifamily market will take a hit from falling oil prices, but the decline for the company is likely to be minimal.

"We expect our revenue growth to slow in Houston. We don't expect it to crash," Ric Campo said during a conference call after the company released its fourth-quarter earnings.

Campo said Houston has two key economic drivers beyond the energy industry that will help the economy through the downturn: the medical sector and the port.

Campo echoed earlier statements about how multifamily construction will slow considerably as financial backers once keen on Houston real estate are now red-lining the area because of the downturn in the energy industry.

Still, the company is bucking that trend with at least one project it is planning to start this year. The development, the $90 million, 315-unit McGowen Station in Midtown, is expected to open in 2017. At that time, Campo said, Houston should have little new supply, as others are now pulling back.

"When the market has a hole in it in 2017, we'll be there to fill it," he said.

Falling land prices here are causing the company to closely consider its acquisition strategy.

"We are definitely going to be scouring the market for opportunistic activity, and land might be the thing that's the opportunity as opposed to existing assets," Campo said.

The company reported fourth-quarter funds from operations of $90.3 million, or 99 cents per diluted share, compared with $96.9 million, or $1.08 per diluted share, in the same period a year earlier.

The company took a charge of $10 million, or 11 cents per diluted share, in the most recent quarter related to incentive compensation as a result of joint venture restructuring.

Fourth-quarter net income was $178.5 million, and earnings per share was $1.98, compared with earnings per share of $1.46 for the same period in 2013, the company said.

Camden's president, Keith Oden, gave the Houston market a 'B' rating as the company expects conditions to decline in 2015.

But recent growth has been off the charts, and despite the ups and downs, "Houston has consistently performed for Camden," Oden said.

Camden's stock closed Thursday at $79.39, off 47 cents.