Jul 30, 2016
Executives
Kimberly Callahan - SVP IR Richard Campo - Chairman & CEO Keith Oden - President Alexander Jessett - CFO & Treasurer
Analysts
Nicholas Joseph - Citigroup Global Markets Austin Wurschmidt - KeyBanc Capital Markets Wes Golladay - RBC Capital Markets John Pawlowski - Green Street Advisors Richard Anderson - Mizuho Securities Thomas Lesnick - Capital One Securities
Operator
Good day and welcome to the Camden Property Trust Second Quarter Earnings Conference Call. All participants will be in listen-only mode.
[Operator Instructions] Please also note, today's event is being recorded. I would now like to turn the conference over to Kim Callahan, Senior Vice President of Investor Relations.
Please go ahead.
Kimberly Callahan
Good morning and thank you for joining Camden's second quarter 2016 earnings conference call. Before we begin our prepared remarks, I would like to advise everyone that we will be making forward-looking statements based on our current expectations and beliefs.
These statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from expectations. Further information about these risks can be found in our filings with the SEC, and we encourage you to review them.
Any forward-looking statements made on today's call represent management's current opinions, and the company assumes no obligation to update or supplement these statements because of subsequent events. As a reminder, Camden's complete second quarter 2016 earnings release is available in the Investors section of our website at camdenliving.com and it includes reconciliations to non-GAAP financial measures which will be discussed on this call.
Joining me today are Rick Campo, Camden's Chairman and Chief Executive Officer; Keith Oden, President; and Alex Jessett, Chief Financial Officer. We will try to be brief in our prepared remarks and complete the call within one hour as there are other multi-family calls scheduled after us.
We ask that you limit your questions to two then rejoin the queue if you have additional items to discuss. If we are unable to speak with everyone in the queue today, we'll be happy to respond to additional questions by phone or email after the call concludes.
At this time, I'll turn the call over to Rick Campo.
Richard Campo
Thanks, Kim and good morning. Today's on hold music was brought to you by the one and only Prince, unquestionably one of my generation's greatest musical talents.
In addition to being a musical genius we consider him to be a kindred spirit of sorts. 1993 Prince changed his musical identity to the artist formerly known as Prince.
That same year in conjunction with our IPO we changed our name to Camden, the company phone formerly known as Suntech [ph], and the rest as they say is history. Camden strategy of operating in high growth markets, improving the quality of our portfolio through capital recycling and maintaining a strong financial to position continues to create value for shareholders.
Apartment fundamentals remain strong with above average growth expected for the next few years. Revenue growth has slowed from the high growth levels over the last few years but remains above the long term average.
2016 results are in line with expectations and all our markets are performing exactly as we expect. We are maintaining our 2016 guidance ranges for both FFO and same store growth.
Our developments are creating significant long term value for our shareholders. We currently have $850 million of properties currently under construction.
77% of the cost is funded, little less than $200 million left to fund. We expect to start one to two projects up $200 million in the second half of 2016.
As we have discussed, we are reducing the size of our development pipeline at this point in the cycle. I do want to give a shout out to our teams for another great quarter and to our real estate investment group for their adept management in execution of the nearly $1.2 billion in dispositions that we'll complete this year.
We all know it is much harder to buy than it is sell. And at the offset of what we did in the beginning of the year in terms of our disposition activity, I'm really excited that our teams have done a great job.
Keith Oden
Thanks, Rick. We're pleased with our second quarter results aside from the elevated transaction volume in the quarter; this was a relatively routine quarter as operating results were right in line with expectations.
Overall conditions remained above trend and sequential revenue growth was up 1.6% with all markets positive. This seasonal improvement was also in line with our expectations.
With that in mind, I'll keep my prepared remarks brief today to allow more time for what's on your mind. A few highlights on our same store results; second quarter revenue growth was 4.3%.
Our top five markets all grew more than 8% again this quarter. Tampa up 9.6%, Orlando up 9.3%, Dallas up 8.6%, San Diego/Inland Empire up 8.1% and Phoenix up right at 8%.
As expected our two weakest markets were Houston, down 1% and DC down two-tenths of 1%. Houston revenue decline of 1% was in line with their expectations, as well as our commentary from last quarters call.
We still expect full year revenue in Houston to be flat to slightly negative for the full year of 2016. DC revenue growth was slightly negative primarily as a result of a construction related issue in one of our large Maryland communities.
Excluding that community DC revenue growth would have been approximately 50 basis points higher year-to-date or right at seven-tenth growth. We're expecting better performance in the second half of the year and we still forecast to full year revenue growth in the DC metro area in the 1% to 2% range.
Rents on new leases and renewal continue to support our outlook for the full year results. Second quarter new leases were up 2.7% and renewals were up 5.9%.
July new leases are running 3.1% up with renewals up 5.6%, and we're sending out our August and September renewal offers at average increase of 6.3%. Additional operating steps for the quarter continue to support our full year outlook.
Same store occupancy in the second quarter averaged 95.5% versus 95.4% in the first quarter and 96% in the second quarter last year. July occupancy ticked up to 95.7% versus 96% for the same quarter last year.
Net turnover rate for the quarter was down slightly versus last year at 47% year-to-date. Move outs to home purchases were 15.9% for the quarter with an as expected seasonal increase from 14.3% in the first quarter.
Overall, 2016 move outs to purchase homes are running 1% above 2015 but still well below the long-term trend. Finally, our risk income for the quarter was 18% consistent with the 17% to 18% levels we've seen post-recession.
Overall, we continue to be pleased with our portfolios performance. We operated national platform in 15 markets and while macroeconomic influences are strong, each market is subject to its own set of factors that can over shadow the big picture.
These market specific factors explain why our two weakest markets Houston and DC are underperforming our overall portfolio while five of our markets grew revenues better than 8% this quarter. This reminds us that our diversified national footprint has similarities to a balanced stock portfolio where diversification is the only free lunch.
Now I'll turn the call over to Alex Jessett, Camden's Chief Financial Officer.
Alexander Jessett
Thanks, Keith. Before I move on to our financial results, a brief update on our decision activities.
On last quarters call, we discussed the sale of our Las Vegas portfolio for $630 million and the plan disposition of an additional $400 million to $600 million of operating assets during the third quarter. We have since completed $210 million of these additional dispositions and the midpoint of our third quarter and full year earnings guidance assumes another $310 million of sales closing during the third quarter bringing our total expected disposition volume to nearly $1.2 billion for 2016.
To date including Las Vegas, we have sold $840 million of assets at an average AFFO yield of 5% based on trailing 12 month NOI and actual CapEx equating to a nominal NOI cap rate which excludes management fees and CapEx of 6%. Most of these communities were 20 to 30 years in age with lower rents and higher CapEx in the rest of our portfolio.
However, our most recent sales did include two assets in suburban Maryland which were less than 10 years old. We elected to dispose these relatively younger assets to both reduce our exposure to their respective sub-markets and to mitigate the additional DC metro NOI exposure that will result from the new development communities which begin leasing in 2017.
The additional $310 million of dispositions expected in the third quarter consist of older assets, similar in kinds of majority of properties we have sold over the past few years. Since our last call, we have refined our 2016 disposition pool and associated tax planning.
We now anticipate a special dividend in the range of $4 to $4.50 per share as compared to our prior guidance range of $4.25 to $5.25 per share and we expect to pay the full dividend amount during the third quarter. Our balance sheet remains strong.
We ended the quarter with no balances outstanding on our unsecured line of credit, $342 million of cash on hand, and no debt maturing until May of 2017. After completing the sale of our two Maryland assets earlier this month, our cash balances have grown to approximately $450 million.
We do not anticipate prepaying any portion of our current debt. Instead we plan to use our cash balances and future sale proceeds to fund our development pipeline and return capital to shareholders later this year through the previously mentioned special dividends.
Our current development pipeline has approximately $200 million remaining to be spent over the next two years and we are projecting another $100 million to $200 million of developments to begin later this year. Moving on to operate results; for the second quarter we reported FFO of $105.6 million or $1.15 per share, in line with the midpoint of our prior guidance range for the second quarter of $1.13 to $1.17 per share.
Based upon our year-to-date operating performance, we have tightened the ranges for our 2016 full year FFO and same store guidance leaving the midpoints of guidance unchanged. We currently anticipate 2016 full year FFO to be between $4.50 and $4.60.
Same store revenue growth between 3.85% and 4.35%; expense growth between 3.5% and 4% and NOI growth between 4% and 4.5%. Last night we also provided earnings guidance for the third quarter of 2016.
We expect FFO per share for the third quarter to be within the range of $1.07 to $1.11. The midpoint of $1.09 represents a $0.06 decrease in the second quarter of 2016 which is primarily the result of an approximate $0.01 per share increase in same store NOI resulting from an estimated 50 basis point increase in sequential NOI as revenue growth from higher rental and fee income in our peak leasing periods more than offsets our expected increase in property expenses due to normal seasonal summer increases in utilities and repair maintenance costs, an approximate $0.01 per share increase in NOI from our five communities in lease up and an approximate $0.02 per share increase in FFO resulting from lower overhead costs.
This $0.04 per share aggregate improvement in FFO is more than offset by an approximate $0.03 per share decrease in FFO resulting from the April 26 disposition of our Las Vegas portfolio, and approximately $0.03 per share decrease in FFO resulting from the $210 million of additional completed dispositions and approximate $0.03 per share decrease in FFO resulting from the $310 million of anticipated additional thirty quarter dispositions and an approximate $0.01 per share decrease in FFO resulting from lower occupancy at our non-same store student housing community in Corpus Christi, Texas. Occupancy declined significantly from May through August at this community.
At this time we will open the call up to questions.
Operator
Thank you. We will now begin the question-and-answer session.
[Operator Instructions] And today's first question comes from Nick Joseph of Citigroup. Please go ahead.
Nicholas Joseph
Thanks. I'm wondering if you can talk more about what you're seeing in Houston right now, you mentioned that's still in line with your expectations of generally flat same store revenue growth.
So what are you seeing there? And then also how do you see that trending going forward?
And when do you think we'll actually reach a bottom up for our Houston?
Richard Campo
So Nick, we said last quarter that we thought our -- this will be the first negative revenue print in the second. So it's consistent with what we were expecting for this quarter.
And our stabilized portfolio where occupancies have held up fairly well and we continue to be very aggressive on renewals, we did some things in the middle of last year to just kind of stabilize the embedded base in our portfolio, lengthening lease terms and getting a lot more aggressive on renewing and it's paid off for us. I mean we've got heads, we've seen less turnover on our portfolio and the longer lease terms have certainly helped us in terms of count extending the roll down of the rent but really is if we know cadence guys to the fact that we were you know this would be a year where if we could get out of the woods with -- sort of slightly down on revenues and that would be a good day's work.
And as we sit here and almost in August now, it looks you know it looks like that's still achievable. So it's on the stabilized portfolio that's one part of the world.
Obviously there is a lot more stress in the merchant bills arena where people are – to a different game when you're trying to get from 0% occupied to 90% versus trying to sort of hold on to your 95% -- in the range of 94%, 95% occupied. I think typical in the market right now when merchant billed, it's routine to see 6 to 8 months free rent.
In the most impacted area which is out of the energy corridor we had a lot of these supply obviously very weak demand. I think that -- we've heard seen and heard anecdotal evidence so as much as three months free run but I would say what's typical in the merchant build world is 6 to 8 weeks free.
In our world we don't really deal with concessions, it's all the net effective rents and so if you just kind of look at where we are year-to-date. We're about where we thought we would be in and we do expect that things will continue to get more pressure as the merchant bill stuff comes online.
In terms of the kind of singing which is the bottom until, we get or do our bottom-up of budgets for 2015, we won't really have a better handle along that. But as we get closer to year end, we get our budgets rolled out for what we think is going to happen in our stabilized portfolio, we'll give you some more color on that.
Keith Oden
I think the other thing that I would just add is that supply has basically shut down in Houston. If you don't have a development loan now you're not getting the project completed.
The equity requirements and the increase in costs associated with lenders as a result of your buzzle and also technical things that the banks may require to do now. So construction financing basically has dried up and you know unless you're putting 60% in a deal, you're not going to get construction financing.
So when you look at the supply side, the supply coming into the Houston this year is 25,000 units, make sure it can be -- At least half of that, maybe less than half of that. And then 2016 eighteen or you don't see any kind of pipeline at all.
So if you if you have a thesis on recovery in the energy business or at least we think the energy business has stopped hemorrhaging jobs and Houston's actually had flat job growth. So we've been able to add jobs in other sectors while the energy sector is contracting.
So with that said, 2017 is sort of a better year job wise with that without as many energy layoffs and then 2018 -- depending upon on the national economy obviously -- both, the national economy in 2017-2018 along with energy is going to really dictate what happens but the good news is that we know that there is no supply coming in 2018. So you can kind of look at it and say well maybe it's middle of 2017, end of 2017 or really 2018 where you don't have the supply pressure anymore.
Nicholas Joseph
Thanks. And then just on -- I guess the difference between your weighted average monthly rental rate and your weighted average monthly revenue -- it was about 100 bips this quarter.
I wonder what is driving that if it's still bulk cable. And Internet package, and how you expect that spread to trend for the remainder of the year?
Richard Campo
Yes, absolutely. So the main driver is exactly right, it is our tech package.
What you're seeing year-to-date for the incremental impact which is in line with what the guidance we gave at the beginning of the year and is in line what we expect for the full year. So approximately 100 basis points.
Nicholas Joseph
So you'd expect that 100 basis points to hold quarterly through the end of the year?
Richard Campo
Correct.
Nicholas Joseph
Thanks.
Operator
And our next question today comes from Jordan Sadler of KeyBanc Capital Markets. Please go ahead.
Austin Wurschmidt
Hi, it's Austin Wurschmidt for Jordan. I was just wondering if you could give some operating stats for Houston into July, just how things -- in terms of how things are trending across quarter end.
Richard Campo
Yes, so we'll have to grab that for you, don't have those in front of me. I can tell you that it was pretty consistent as I recall from last quarter, we were down about 2% on new leases, renewals were flat to up 1%, and you do that math and you end up about down one which is where we work the quarters.
I think that's still consistent with what we're seeing.
Austin Wurschmidt
Thanks. And then what are you guys assuming in terms of occupancy guidance in the back half the year?
I mean it seems like occupancy is tracking a little bit ahead at this time. Do you kind of expect to hold that level for the rest of the year?
Richard Campo
Yes, I think our rolled up budget for the entire year was about 95.4%. It's about where we are right now.
So yes -- you expect to see just the math of that would mean that we should still in the mid-95%. We're not -- we have never tried to operate our portfolio at 95.5% or above, it occasionally happens but our long-term target is really 95% to 95.5% which is consistent where we've been this year.
Austin Wurschmidt
And then so -- kind of my math is right, it seems like you'd have to do a little bit over 3.5% in the back half of the year to hit the midpoint in guidance. Is that fair?
Richard Campo
Yes.
Austin Wurschmidt
Great, thanks for taking the questions. [Technical Difficulty].
Richard Campo
It has both supply issues and demand, we continue to see decent job growth in all of our markets, we're getting our share of that. And where the deceleration is happening, I do believe it is primarily where you've got assets that are directly competitive with new lease ups and you've got merchant builders who are always a little bit more aggressive in their pricing than we are on our communities.
Austin Wurschmidt
That's helpful. And secondly, the two assets you sold after quarter end in the metro DC area; what net impact do you believe that will have on your same store pool in DC?
The subtraction of those assets help or hurt same store numbers in the near term?
Richard Campo
So both of those assets were relatively in line with our DC portfolio, slightly more positive but relatively in line. So the removal of them is not going to really have any incremental impact.
Austin Wurschmidt
Okay, great. Thank you.
Operator
[Operator Instructions] Our next question comes from Wes Golladay of RBC Capital Markets. Please go ahead.
Wes Golladay
Looking at the camp in Chandler, it looks like leasing velocities slowed a bit. Is there anything special going on there?
Richard Campo
Yes, it's just one of those relatively large unit accounts where you sort of run into yourself on the lease up where you have lease explorations that are happening while you're not yet stabilized. So overall Phoenix was a great market for us for the -- it has been year-to-date and we think it will continue to be.
So we'll get there but it's just one of those phenomenon's that happens when you sort of run yourself on the lease explorations.
Wes Golladay
Okay, and now looking at the DC market, it looks like Pentagon City, Crystal City and then Downtown Logan Circle, the actual metro state is starting to trend higher and you also have some pretty good employment data on relative basis coming out of the city. Are you getting more constructed to pushing new lease rate in the second half or maybe early the next year?
Richard Campo
Yes, our -- you could look at our progression throughout the state and our guidance for where we think we're going to be in DC and we're still pretty firm in our guidance that we're going to get between 1% and 2% revenue growth for the year and obviously from where we are here in -- at the end of the second quarter, that means we've got to see some pretty decent traction on both new leases and renewal and we think we're going to get there. I think the fourth quarter actually sets up pretty well for us and we still think when it's all said and done we'll be in the 1% to 2% percent range.
If you recall our original guidance for DC as a market, we had two C-rated markets, both Houston and DC were C-rated with the difference being DC had a C plus rating but an improving outlook, and I think that where we are here almost in August -- we still see it that way.
Wes Golladay
And then lastly on Houston, we think we're getting a little bit of bottoming out in the rig count. Are any of the -- your contacts on the E&P executive side getting more constructive or just more of a bottoming out process going on?
Richard Campo
Definitely, the CEO's are more constructive about the bottoming happening. It's one of the big suppliers after they've announced the earnings talked about the bottoming and then at the same time we also said they were laying off another 5,000 people worldwide.
So I think what's happening is that definitely the energy. complex is feeling better about the world with oil prices up from their bottom at the beginning of the year, and part of the equation is, is that they don't want to do what they generally do during the big downturn like this which is cut so far to the bone that it really takes him a long time to get back.
I actually had a conversation few weeks ago with the CEO of Shell, and he expressed that sort of fear to me which is that you know we don't want to overdo it like we always do, and all of sudden oil gets back to $60, $70 dollars a barrel and they don't have any employees to get the job done. So I think there is a certain amount of expectation that oil has bottomed.
I think people are sort of cautiously optimistic, and you have seen the rig count go up. The question of what happens long term to oil is really the key, but at least these folks are a little more constructive today.
Wes Golladay
Great, thanks for taking the question.
Operator
And our next question comes from John Pawlowski of Green Street Advisors. Please go ahead.
John Pawlowski
Thank you. Can you share the individual nominal cap rates on the Tampa and two, suburban Maryland dispositions?
Richard Campo
Sure. So on the FFO cap rate on the Tampa asset was just slightly north of six, and it was the same for the two Maryland assets, slightly little bit less but in that range.
That's on an FFO basis, if you go to an AFFO, the -- they were -- the Tampa deal was right at five. And then the other two Maryland deals, obviously our newer assets with slightly lower CapEx, and so their AFFO yields were sort of in the 5.5 range.
John Pawlowski
Great, thanks. And that's on in-place for forward NOI?
Richard Campo
That's trailing.
John Pawlowski
That's trailing.
Richard Campo
And that also doesn't include management fees or property tax increases or that kind of -- those things. Generally you will take the -- so if you're talking in general, sort of broker CapEx or broker cap rate, you have to take 75 bips off these numbers.
John Pawlowski
Great. And then how do these cap rates and the cap rates on your incremental $300 million in dispositions compared to your initial expectations?
Richard Campo
They are right in line. We've -- we had some ups some downs but not much and it was all marginally right in line with what we expected.
John Pawlowski
Okay, last one for me. Do you anticipate purchasing any more land in 2016?
Richard Campo
We do have a land site in Denver in the Rhino neighborhood that we will likely acquire between now and the end of the year. But when you look at our development pipeline, we have -- we have all of our development, if you assume about $200 million start per year, we're out of land in 2018.
So if we are going to keep the development time -- pipeline at least in a position where we can in fact start projects in the future we will have to start looking at new land. One of the things I think is going to be really interesting is going to be -- with all those pressure on the merchant builders from a financing perspective and construction cost perspective, we think that there may be some opportunities to pick up land transactions that developers have -- either already done plans on what have you and aren't able to finance them and we may end up picking up some bargains in that area in the future.
And I think that's an area that could be really interesting.
John Pawlowski
Okay, thank you.
Operator
And our next question comes from Rick Anderson of Mizuho Securities. Please go ahead.
Richard Anderson
Thanks, good morning everyone. So Rick or Keith or anyone; one of you can kind of maybe wax poetic a little bit about M&A or privatizations in this environment.
It seems to me with kind of latter in the real estate cycle, decelerating growth, capital available or debt and cheap to financially worthy entities and still exceptionally low cap rates and high property values being attributed, not just to your space but to a lot of spaces. Is this not like a perfect time to see more, an acceleration of reprivatization as sellers, whoever that may be -- feel like they're getting full value?
Richard Campo
I think -- so let me fit the M&A to start with. So M&A is a social issue related to whether companies really want to sell or not and it's not -- it never has been a financial issue in my view.
It's always been one-off -- if they get pressure or they are just ready to retire or don't think they can create value long-term which most management teams believe they can. So I think M&A is one of those kinds of issues out there that continues to be out there even though there are fewer targets obviously since there has been a lot of take out.
On the private side, the issue of going private is one of those classic sorts of discussions, right. So if our objective is to maximize total return over a long period of time for our shareholders, we're going to be along real estate all the time.
And so if we thought that we were a value-trapped or that we couldn't continue to provide great returns to our shareholders over a long period of time then we would go private and we would sell because at the end of the day there is -- it would be no fun for any of us to be sitting in a situation where we're just limping along and not able to maximize value for the people that own a lot of shares, including our management team but also just shareholders, overall. If you think about it, I remembered during the downturn when I would talk to all the big banks I'd say, why don't you sell me $1 billion of your construction loans that are obviously underwater; and they would look at me and say what kind of rate of return are you trying to make on it.
I'd say, just -- I'm trying to make a mid-teens return if I have to foreclose on some apartment project or what have been -- and there that they threw it back to me and said, guess what we're going to make that 15% return rather than giving it to you. So if you think about privatization today, those private investors have a return hurdle, they have a requirement to return money to their shareholders and why should we give them upside when we can create that value for our shareholders over a long period of time.
So that's kind of my view of the privatization, just because you can sell at a high price doesn't mean that that's going to create value long term.
Keith Oden
Rich, I would add to that just -- and you've been doing this and following this long enough to know this in our 23 years as a public companies there have been four different cycles where at times the fate as it is favoring the public companies, and at times it favors the private companies and the reality is for the last five or six years, the playing field has been tilted pretty steeply in favor of the private guys with sort of unlimited access to pretty cheap debt, and in high leverage and all that comes with that. So ultimately we -- the playing field will flip and we think -- it you could very well be that we're seeing the beginning stages of that but clearly the next level -- sort of the next turn in the cycle is that it would be in the favor -- more in the favor of the public companies.
So if you -- in my mind just looking at it from a macro perspective, it wouldn't be a great time to be making the switch. If the objective was how can you perform over the next five years or how the cycle unfolds; I think the public companies are going to be in favor relative to the private companies and who knows what triggers that it could be something as simple as – right now on everyone's radar screen that is the change in access to capital for the private players versus the public players and whether it's the Basel requirements or clamping down on construction lending for all real estate sources in the private world where they really only can compete, where they are in a development mode and building.
So if that flips and that becomes much more expensive and much more difficult than the private guys are going to be. They are going to be on the short end of the stick again and it will happen, you just don't know when or what causes it to happen.
Richard Anderson
So related to that, Rick at the very beginning you said that you think you'll have above average growth for at least the next few years, I think that's what you said. I mean, first of all, what gives you comfort that you're not kind of trending more quickly to more of -- a kind of CPI based type of growth rate given all the kind of moving parts?
And second, is that -- what's the time horizon for you to belong the -- the publicly traded model, in other words, if you saw that math being more like a year or this was it, would you be more inclined to be a seller today?
Richard Campo
I think that when you think about our above average, we're talking about above average growth and average growth will be defined as 3% sort of NOI growth over a long period time, that's how multi-family generally is delivered over a 20-year period. Obviously, it peaks in values associated with that.
The reason I think that we're going to be above growth -- above trend growth, top line and bottom line for the next couple years is all the macro things that are going on in multi-family are all good. You have the baby boom echo, that's still big, that are big renters you've got; the single family homes have yet to take off and really do well relative to historic measures, it's still hard to get a loan for first-time homebuyers, the homeownership rate continues to be very low and falling.
So multi-family is still in the sweet spot, with the pressure you have on slowing rents today I think it's generally supply driven in all the markets. You had outsized throw over the years as a result of the sort of the shortage of multi-family and now we've gone to the point where we're where we have built enough to sort of take the white hot growth off of the of the market, now it's just above average growth, it's not as strong as it was but I think it's going to be higher than average because of all these other factors and then we can start bringing in the more restrictive financing situation for builders and construction costs increase; you're going to see a flattening to a falling of starts.
And so with that said I think we have a few years at U.S. recession or something like that that could change the dynamics.
We're going to have a very constructive multi-family market over the next couple years. In terms of -- if we thought that the world was coming to an end and we could -- and we really believe that we were headed towards and we had perfect knowledge of a financial crisis or something like that and maybe you would sell but I don't have that kind of knowledge, I just have the knowledge of knowing that every single day I have a lot of Camden employees that are out there trying to create a lot of value for their shareholders and we're in a constructive multi-family environment so I don't feel like we -- we need to even think about that.
I will tell you if you go back in history in our 23 year history back in the mid-90's to the late-90's when everybody was buying tech stocks and multi-family was all of the rich were sort of thrown to the wayside. We ended up buying 16% sixteen percent of the company back throughout stock buybacks; and I remember having this conversation then saying, look if you remodeled [ph] is broken, and I'm always going to trade in 20% to my net asset value.
And I'm going to buy the company back and go private and or sell it to somebody who will pay me a premium and to get that NAV. And I think over time you do have those points in time were you do have disconnect but generally speaking it doesn't last forever and you get back to a few more rational positions so it's kind of -- might be the whole M&A private scenario.
Richard Anderson
Good stuff, Thanks.
Operator
And our next question comes from Tom Lesnick of Capital One Securities. Please go ahead.
Thomas Lesnick
Thanks for taking my questions. First, I just -- observationally looking at your year-over-year occupancy comps, it looked like maybe more so than others quarters, a larger number of them were slightly negative.
I'm just wondering if that's really a function of you guys pushing the rent perhaps a little bit, harder than equilibrium or as you kind of look out towards the next couple of years. How do you guys really view the balance between occupancy and rent in your portfolio?
Richard Campo
The balance that we try to maintain is 95% to 95.5%. And it doesn't mean that we're always in that band, last year we were above that band which is a little unusual for us.
I think what's happened in the last -- there is two things that have happened to the portfolio wide occupancy rate. One is, Houston has had additional softness and as we expected I think worried about 93% occupied in Houston and the overall portfolio is still above 95%.
So that's 12% of your NOI comes from Houston and 2% matters around the edges. The other thing is that in DC we have continued to try to trade-off between rental rates and occupancy rates.
And last year we were definitely much higher than our normal trend on occupancy rates. We're back closer to what we what we view as more of a normal occupancy rate for DC in our overall portfolio but it's not -- it's never been an objective of ours to try to say let's operate at the highest possible occupancy that we can, obviously you can do that, the lever is pricing and we have -- we use a yield star, we have a Group in Houston, five people that manage that process full-time; and we have great -- what we think we have very good visibility into the push and pull of rental rates versus the occupancy rates, and we do a lot of toggling, we do a lot of tweaking, it's not -- it's certainly not autopilot; there is a ton of judgment and experience that goes into pulling those levers and we think that we're about where we need to be.
But I don't -- other than Houston and DC, I don't see anything in our occupancy rates across our portfolio that gives me any pause whatsoever that we're not maximizing pricing and occupancy.
Thomas Lesnick
That's very helpful. And then just a couple quick ones; can you talk at all about the single family rental market in Houston?
And maybe how much competition that is in Houston, specifically relative to some of your other markets? I get a sense that the rents are cohort since you say that is generally younger, in those first two or four years out of college as opposed to maybe late 20's or early 30's especially relative to some of your other markets.
Just wondering if you have any contacts or color you shed on that?
Richard Campo
Sure. I think you hit the nail on the head in terms of demographics.
From a rental perspective, single family rentals are really not major competitions, we have a small amount of people whom about -- move out to -- move into rental houses but it's really minor relative to the world. And part of it is that the single family rental market is out of the suburbs and the product is twice as large from a square footage perspective, as an apartment it has fewer amenities and all that.
And generally moving out to either buy a house or rent a house is a demographic issue, its age, how many people do you have in your household, kids, that sort of thing. We do have -- probably the bigger competition is not rental -- move out to rent houses, its move out to buy houses.
And on an average I think Keith has these numbers.
Keith Oden
Yes, we're about 16% of our total move outs in Houston were to purchase homes which is a little bit higher than our portfolio average but that number two years ago in Houston would have been probably 17%, 18% but it's -- it is -- as Rick said, we do lose more people at 16%. If you look at the percentages that give us as a reason that they moved out to rent a home, that number is in the 2% to 3% percent range versus -- to purchase a home at 16%.
So it's out there, it shows up on our reasons to move out in every market that we're in but nowhere is it more than 2% or 3%.
Richard Campo
I think the -- I've said this bunch of times and people kind of look at me funny when I say this, I think that if single family -- if our move out rate for single family homes, right now it's around 14%, for the year I think it was 15% and some change for the quarter. If it goes back to its normal average over a long period of time which is 18%, I think we have another leg up in the multi-family business because what's happening right now is that there is not enough single family homes being built; the start of the market is pretty abysmal out there.
And if you had starts in the million, 2 million, 3 million for which some folks seem to think we should have -- you would have better job growth, you would have better GDP growth and we would then be in a position where we could -- we would have more people moving in the front door than moving out the back door to go buy a house. And so I think that the whole housing issue is an interesting one, and ultimately the housing market is still trying to recover from the debacle in 2008 and 2009.
Thomas Lesnick
That's really interesting, I appreciate that insight. Just one final one for me and I'm serious on this, both from the perspective of jobs and from the perspective of the renter psyche; which is more influential right now in Houston, the raw oil price or oil volatility?
Richard Campo
I don't think any of the either one. When you think about us -- I think it's -- I think the -- ultimately it is what the real price is, but the volatility actually gets people twisted up as well but you have to think about Houston is 6.5 million people, it's the fourth largest city in the country, there are 3 million jobs that exist there today.
And if you go back to 2014, there was 120,000 jobs, 2015 there was 20,000, and in 2016 it's going to be flat or maybe 2,000 or 3,000. So there is 3 million people working, 6.5 million people live in there, kind of doing what they do; and there is a certain amount of inertia that happens in that economy.
So the bad news about oil and energy lapse, nobody gets -- but the 3 million people that are working are still working to get paychecks, paying the rent and doing the things that they do. So I think that that as oil prices -- when oil prices stabilize, if the psyche of the senior executives that are going to hire people -- I think it's more about what the real price of oil is and what their expectation is over a longer period of time.
Keith Oden
If you're not directly in the oil business, it's sort of background noise; if you are directly in the oil business, it's more likely that your psyche is what determines it is not the day to day spot price of a barrel of crude oil. It's the question we got earlier on rig count because the executives that we talk to they will tell you that whether oil is $45, $55, or $65 is not a game changer for the inputs to what drives their business.
Whether the rig count is falling 20 rigs a week or rising 20 rigs a week is a big deal, and there is a fair amount of evidence that about two months ago we hit the low point on active rigs. And then the last -- I think the last four weeks straight there been small additions to the rig count.
Now four weeks is not a trend make but I think that most people view that as maybe the worst is in -- the bottom is in in terms of the ability to start adding new activity levels because the rig count drives it, almost everything, it's not driven by the price of oil, it's driven by the activity level and that's workers in the field, it's down whole suppliers, services; it's all tools and it ultimately ends up in production. So what's the rig count and then the savvy folks at the oil companies as probably what they tend to look at more than the price of crude as to what the near term future holds for the oil business.
Thomas Lesnick
All right guys, really appreciate it.
Richard Campo
Absolutely.
Operator
And this concludes the question-and-answer session. I'd like to turn the conference back over to Rick Campo for any closing remarks.
Richard Campo
Thank you. We appreciate your time today and we'll see in the fall.
Thank you.
Operator
And thank you, sir. Today's conference has now concluded and we thank you all for attending today's presentation.
You may now disconnect your lines and have a wonderful day.