Camden Eyes $300M Equity Raise for Value-Adds

The Multifamily Value Add Fund LP's leveraged investment power, based on a $300 million fund raising, would total $1 billion. Richard J. Campo, chairman and CEO of the locally based Camden, told shareholders and analysts that the company plans to commit up to $60 million to the fund for a 20% ownership stake. He said the fund received a $150-million commitment Dec. 31, 2007.

According to an SEC filing last Thursday, one of Camden's wholly owned subsidiaries is the fund's general partner. The fund's term is eight years, with the goal to acquire fully developed multifamily assets nationwide. The filing said funding is anticipated to close sometime this year.

In the earnings call, Campo reported Camden's balance sheet is strong despite the prevailing uncertain market. He also discussed more stock buybacks and problem markets. He indicated overall fundamentals of the business are good, with multifamily supply nationwide manageable and not too much in the way of overbuilding. "The wild card is the shadow supply of single-family homes and what effect they'll have on multifamily demand," he said. "That will unfold during 2008."

Camden's FFO for fourth quarter 2007 totaled $57.1 million in comparison to $54.7 million for the same period in 2006. For the 12 months ending Dec. 31, 2007, FFO totaled $227.2 million compared to $237.8 million in 2006. Net income for 2007 totaled $148.5 million versus $323.8 million in 2006.

Keith Oden, president and COO, pointed out that the crumbling housing market was having a definite impact on Camden's bottom line in some regions. Las Vegas, Phoenix, Orlando, Tampa and Southeast Florida were the hardest hit areas, with shrinking demand and excess supply.

"We received 26% of NOI from these markets in the last quarter," Oden explained. "These are the five markets of most concern when it comes to too many single-family homes and declining demand for multifamily as well as too much supply." On the flip side of the coin, he said Austin, Dallas and Houston and Denver were considered excellent markets with sound fundamentals.

Oden added that Camden will continue its stock repurchasing program. During Q4 2007, Camden repurchased 2.2 million common shares for a total of $115 million. Prior to the quarter's end, Camden spent $30 million for additional 690,400 common shares.

On Jan. 30, Camden's board approved an additional $250-million repurchase of common shares. Oden said that as the company continues to sell assets, it will reinvest in the purchase of stock.