NAREIT Takeaways; Upgrading KRC To Outperform

Research evidence excerpt

NAREIT Takeaways; Upgrading KRC To Outperform

Apartment Takeaways

Camden (CPT)

▪ CPT’s NAREIT update pointed to improving but still uneven operating momentum, with May occupancy at 95.8%

vs 95.1% in 1Q26 and QTD occupancy at 95.6%, ahead of our previous 95.3% estimate. Management indicated

that the portfolio has reached an occupancy level that allows it to begin pushing rents across markets, although

not all markets have turned positive. Pre-leased occupancy six weeks out is approximately 30bp better than last

year, renewals are tracking better than 1Q26 and low turnover continues to support revenue growth despite only

a gradual recovery in new lease rents.

▪ New lease growth remains the key swing factor for guidance. Management expects portfolio new lease growth to

turn positive in 3Q26 and improve further in 4Q26, making the next three months pivotal, but we remain a bit

skeptical on this point and stay more conservative in our forecasts. Per CPT, there are early green shoots,

including one Austin community with roughly 7% new lease growth and two Nashville communities that turned

positive in May, while Washington, D.C. remains weaker and Denver is “flashing yellow” due partly to common-

area utility recoverability pressure that reduced revenue by 19bp. Concessions are beginning to decline during

peak leasing season as new supply moderates, and the portfolio has roughly 1% gain-to-lease today, though

market dispersion remains meaningful.

▪ Management pushed back on the idea that bigger is inherently better following recent multifamily consolidation.

CPT believes it already has sufficient data to make strong operating decisions, sees no material loss of insight

from reduced RealPage data availability, and does not see a clear correlation between size and TSR. The