Dive Brief:
- Houston-based Camden has put all of its California properties on the market and seeks to exit the state, according to a report from Real Estate Alert. The REIT acknowledged in a statement to Multifamily Dive that it was marketing properties for sale, but couldn’t comment further due a blackout before earnings.
- The REIT owns 11 properties totaling 3,600 units in Los Angeles, Orange County, San Diego and the Inland Empire, according to a report Alexander Goldfarb, managing director and senior research analyst for investment bank and financial services company Piper Sandler, shared with Multifamily Dive.
- If a sale were to occur in the estimated $1.5 million range, Haendel St. Juste, managing director of REITs for investment bank Mizuho Securities, estimates a 5.8% cap rate for Camden and a low 5% cap rate for the buyer, according to a report shared with Multifamily Dive.
Dive Insight:
If Camden leaves California, it won’t be the first major multifamily firm to exit the state. In 2024, apartment developer Wood Partners told Multifamily Dive that it was no longer pursuing opportunities in the state, according to a statement from CEO Joe Keough.
Though Keough didn’t provide a reason for the exit, apartment firms routinely cite California’s regulatory environment, including lengthy eviction moratoriums, as obstacles.
“You're always going to have the – what's the next bullet in California from a regulatory standpoint?,” Camden Executive Vice Chairman of the Board Keith Oden said on the REIT’s 2025 first-quarter earnings call in May.
St. Juste also noted Camden executives’ criticism of the state. “We would not be surprised for CPT to sell out of CA given their historical and well-discussed frustration with the state's regulatory backdrop, cost of doing business, and renter ‘behavior’ during/post-COVID,” St. Juste wrote.
Like other California apartment owners, Camden dealt with high levels of bad debt stemming from the COVID-era eviction moratoriums in Southern California. The firm saw improvement in the market going into last year.
“Southern California's story has been pretty good as well, and a lot of that is driven by the cessation and the working through all of the COVID-related initiatives to include coming down on bad debts, etc.,” Oden said on the REIT’s fourth-quarter 2024 earnings call.
However, apartment owners noted that Southern California weakened as 2025 progressed, and that could continue this year. “We also expect LA MSA to be a net laggard this year and 2027, given tougher comps, softening demand and urban core [ICE, quality of life] concerns,” St. Juste wrote.
If California were to sell its Southern California properties, analysts seem to approve of the decision.
“On balance, we would view this potential trade positively given strategic and core growth implications,” because the trade would lower the REIT’s “exposure to regulatory-heavy” state, simplify its story and be a net positive to 2026 and 2027 same-store revenue, according to St. Juste.
Goldfarb expressed similar sentiments. “While our math suggests minimal impact to earnings, the positive is reducing exposure from a heavily regulated state versus CPT's broader Sunbelt investment focus,” he wrote.
Still, St. Juste said the use of proceeds would be dilutive in the near term to Camden’s funds from operations and net asset value, while the low tax basis of the assets would limit the REIT’s ability to buy back a meaningful amount of stock.
“Despite being very early in the marketing phase, we're watching the trade closely for signs of changes in buyer demand/cap rates [esp in coastal urban locations],” St. Juste wrote.
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