UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2007

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 1-12110

CAMDEN PROPERTY TRUST

TEXAS (State or Other Jurisdiction of Incorporation or Organization)		76-6088377 (I.R.S. Employer Identification Number)

3 Greenway Plaza, Suite 1300, Houston, Texas 77046
(Address of Principal Executive Offices) (Zip Code)

(713) 354-2500
(Registrant’s Telephone Number, Including Area Code)

N/A
(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ          Accelerated filer o           Non-accelerated filer o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o           No þ

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

As of April 24, 2007, there were 56,821,759 shares of Common Shares of Beneficial Interest, $0.01 par value, outstanding.

 

 

CAMDEN PROPERTY TRUST
Table of Contents

		Page
PART I            FINANCIAL INFORMATION
Item 1 Financial Statements
Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2007 and December 31, 2006			3
Condensed Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2007 and 2006			4
Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2007 and 2006			5
Notes to Condensed Consolidated Financial Statements (Unaudited)			7
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3 Quantitative and Qualitative Disclosures About Market Risk			29
Item 4 Controls and Procedures			29
PART II            OTHER INFORMATION
Item 1 Legal Proceedings			30
Item 1A            Risk Factors			30
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds			30
Item 3 Defaults Upon Senior Securities			30
Item 4 Submission of Matters to a Vote of Security Holders			30
Item 5 Other Information			30
Item 6 Exhibits			30
SIGNATURES			31
Certification of CEO Pursuant to Rule 13a-14(a)
Certification of CFO Pursuant to Rule 13a-14(a)
Certification Pursuant to Section 1350

PART I. FINANCIAL INFORMATION

CAMDEN PROPERTY TRUST

		March 31,				December 31,
(In thousands)		2007				2006
ASSETS
Real estate assets, at cost
Land		$	703,850			$	693,312
Buildings and improvements			4,108,955				4,036,286
			4,812,805				4,729,598
Accumulated depreciation			(799,624	)			(762,011	)
Net operating real estate assets			4,013,181				3,967,587
Properties under development, including land			410,002				369,861
Investments in joint ventures			8,321				9,245
Properties held for sale, including land			32,879				32,763
Total real estate assets			4,464,383				4,379,456
Accounts receivable — affiliates			34,854				34,170
Notes receivable
Affiliates			43,507				41,478
Other			11,565				3,855
Other assets, net			118,329				121,336
Cash and cash equivalents			1,470				1,034
Restricted cash			5,772				4,721
Total assets		$	4,679,880			$	4,586,050
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Notes payable
Unsecured		$	1,897,865			$	1,759,498
Secured			568,731				571,478
Accounts payable and accrued expenses			110,486				124,834
Accrued real estate taxes			16,036				23,306
Distributions payable			45,137				43,068
Other liabilities			110,684				105,999
Total liabilities			2,748,939				2,628,183
Commitments and contingencies
Minority interests
Perpetual preferred units			97,925				97,925
Common units			102,217				115,280
Other minority interests			10,335				10,306
Total minority interests			210,477				223,511
Shareholders’ equity
Common shares of beneficial interest			654				650
Additional paid-in capital			2,199,713				2,183,622
Distributions in excess of net income			(243,786	)			(213,665	)
Employee notes receivable			(2,025	)			(2,036	)
Treasury shares, at cost			(234,092	)			(234,215	)
Total shareholders’ equity			1,720,464				1,734,356
Total liabilities and shareholders’ equity		$	4,679,880			$	4,586,050

See Notes to Condensed Consolidated Financial Statements.

CAMDEN PROPERTY TRUST

		Three Months
		Ended March 31,
(In thousands, except per share amounts)		2007				2006
Property revenues
Rental revenues		$	137,381			$	133,255
Other property revenues			15,267				12,559
Total property revenues			152,648				145,814
Property expenses
Property operating and maintenance			40,447				38,371
Real estate taxes			16,534				16,317
Total property expenses			56,981				54,688
Non-property income
Fee and asset management			2,386				2,477
Interest and other income			1,562				753
Income on deferred compensation plans			2,306				50
Total non-property income			6,254				3,280
Other expenses
Property management			4,728				4,226
Fee and asset management			1,620				1,366
General and administrative			8,054				7,414
Interest			27,908				31,037
Depreciation and amortization			40,321				36,681
Amortization of deferred financing costs			916				1,047
Expense on deferred compensation plans			2,306				50
Total other expenses			85,853				81,821
Income from continuing operations before gain on sale of properties, equity in income of joint ventures, minority interests and income taxes			16,068				12,585
Gain on sale of properties, including land			—				499
Equity in income of joint ventures			735				2,317
Income allocated to minority interests
Distributions on perpetual preferred units			(1,750	)			(1,750	)
Income allocated to common units and other minority interests			(904	)			(1,256	)
Income from continuing operations before income taxes			14,149				12,395
Income tax expense — current			(1,905	)			—
Income from continuing operations			12,244				12,395
Income from discontinued operations			946				2,476
Gain on sale of discontinued operations			—				27,392
Income from discontinued operations allocated to common units			(153	)			(820	)
Net income		$	13,037			$	41,443
Earnings per share — basic
Income from continuing operations		$	0.21			$	0.23
Income from discontinued operations, including gain on sale			0.01				0.53
Net income		$	0.22			$	0.76
Earnings per share — diluted
Income from continuing operations		$	0.21			$	0.23
Income from discontinued operations, including gain on sale			0.01				0.52
Net income		$	0.22			$	0.75
Distributions declared per common share		$	0.69			$	0.66
Weighted average number of common shares outstanding			58,813				54,290
Weighted average number of common and common dilutive equivalent shares outstanding			59,994				55,474

See Notes to Condensed Consolidated Financial Statements.

CAMDEN PROPERTY TRUST

		Three Months
		Ended March 31,
(in thousands)		2007				2006
Cash flows from operating activities
Net income		$	13,037			$	41,443
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization, including discontinued operations			40,321				37,399
Amortization of deferred financing costs			916				1,047
Equity in income of joint ventures			(735	)			(2,317	)
Distributions of income from joint ventures			282				—
Gain on sale of properties, including land			—				(499	)
Gain on sale of discontinued operations			—				(27,392	)
Income allocated to common units and other minority interests			1,057				2,076
Accretion of discount on unsecured notes payable			155				177
Amortization of share-based compensation			1,723				1,936
Interest on employee notes receivable			(26	)			(4	)
Net change in operating accounts			(18,063	)			3,621
Net cash provided by operating activities			38,667				57,487
Cash flows from investing activities
Increase in real estate assets			(120,021	)			(153,311	)
Proceeds from sales of properties, including land and discontinued operations			—				40,231
Proceeds from partial sales of assets to joint ventures			—				7,813
Distributions of investment of joint ventures			1,858				6,886
Investment in joint ventures			—				(308	)
Issuance of notes receivable — other			(8,710	)			—
Payments received on notes receivable — other			1,000				—
Issuance of notes receivable — affiliates			(2,029	)			(22,668	)
Earnest money deposits on potential transactions			(420	)			(1,190	)
Payment of merger related liabilities			—				(4,315	)
Change in restricted cash			(1,051	)			(180	)
Increase in non-real estate assets and other			(1,753	)			(690	)
Net cash used in investing activities			(131,126	)			(127,732	)

CAMDEN PROPERTY TRUST
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

		Three Months
		Ended March 31,
(in thousands)		2007				2006
Cash flows from financing activities
Net increase in unsecured line of credit and short-term borrowings		$	139,000			$	162,000
Repayment of notes payable			(3,535	)			(53,615	)
Distributions to shareholders and minority interests			(43,099	)			(38,925	)
Net (increase) decrease in accounts receivable — affiliates			(526	)			873
Common share options exercised			834				1,280
Payment of deferred financing costs			(583	)			(2,233	)
Other			804				545
Net cash provided by financing activities			92,895				69,925
Net increase (decrease) in cash and cash equivalents			436				(320	)
Cash and cash equivalents, beginning of period			1,034				1,576
Cash and cash equivalents, end of period		$	1,470			$	1,256
Supplemental information
Cash paid for interest, net of interest capitalized		$	23,886			$	28,540
Supplemental schedule of noncash investing and financing activities
Acquisition of Summit:
Fair value of assets acquired		$	—			$	1,881
Liabilities assumed			—				1,881
Value of shares issued under benefit plans			15,837				15,827
Cancellation of notes receivable — affiliate in connection with property acquisition			—				12,053
Distributions declared but not paid			45,139				40,640
Conversion of operating partnership units to common shares			11,638				170
Contribution of real estate assets to joint ventures			—				3,173
Decrease in liabilities in connection with property transactions, net			—				101
Common units issued in connection with joint venture transaction			—				1,900

See Notes to Condensed Consolidated Financial Statements.

CAMDEN PROPERTY TRUST

1. Description of Business

     Business. Formed on May 25, 1993, Camden Property Trust, a Texas real estate investment trust (“REIT”), is engaged in the ownership, development, construction and management of multifamily apartment communities. Our multifamily apartment communities are referred to as “communities,” “multifamily communities,” “properties,” or “multifamily properties” in the following discussion. As of March 31, 2007, we owned interests in, operated or were developing 198 multifamily properties comprising 68,090 apartment homes located in 13 states. We had 3,574 apartment homes under development at 11 of our multifamily properties, including 1,528 apartment homes at five multifamily properties owned through joint ventures, and several sites we intend to develop into multifamily apartment communities.

2. Summary of Significant Accounting Policies

     Principles of Consolidation. The condensed consolidated financial statements include our assets, liabilities and operations and those of our wholly-owned subsidiaries and partnerships. We also assess whether consolidation of any entity in which we have an equity interest is necessary based on applicable accounting guidance. Any entities that do not meet the criteria for consolidation, but where we exercise significant influence are accounted for using the equity method. Any entities that do not meet the criteria for consolidation where we do not exercise significant influence are accounted for using the cost method. All significant intercompany accounts and transactions have been eliminated in consolidation.

     Interim Financial Reporting. We have prepared these financial statements in accordance with Accounting Principles Generally Accepted in the United States of America (“GAAP”) for interim financial statements and the applicable rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all information and footnote disclosures normally included for complete financial statements. While we believe the disclosures presented are adequate for interim reporting, these interim financial statements should be read in conjunction with the financial statements and notes included in our 2006 Form 10-K.

     Use of Estimates. The preparation of our financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, results of operations during the reporting periods and related disclosures. Our more significant estimates relate to determining the allocation of the purchase price of our acquisitions, estimates supporting our impairment analysis related to the carrying value of our real estate assets, estimates of the useful lives of our assets, reserves related to co-insurance requirements under our property, general liability and employee benefit insurance programs and estimates of expected losses of variable interest entities. Future events rarely develop exactly as forecast, and the best estimates routinely require adjustment.

     Reportable Segments. Our multifamily communities are geographically diversified throughout the United States and management evaluates operating performance on an individual property level. However, as each of our apartment communities has similar economic characteristics, residents, and products and services, our apartment communities have been aggregated into one reportable segment with activities related to the ownership, development, construction and management of multifamily communities. Our multifamily communities generate rental revenue and other income through the leasing of apartment homes, which comprised 96% and 98% of our total consolidated revenues for the three months ended March 31, 2007 and 2006, respectively.

     Real Estate Assets, at Cost. Real estate assets are carried at cost plus capitalized carrying charges. Carrying charges, principally interest and real estate taxes, of land under development and buildings under construction are capitalized as part of properties under development subject to impairment consideration. Expenditures directly related to the development, acquisition and improvement of real estate assets, excluding internal costs relating to acquisitions of operating properties, are capitalized at cost as land, buildings and improvements. Indirect development costs, including salaries and benefits and other related costs that are clearly attributable to the development of properties, are also capitalized. All construction and carrying costs are capitalized and reported on the balance sheet in properties under development until the apartment homes are substantially completed. Upon completion of the apartment homes, the total cost for the apartment homes and the associated land is transferred to buildings and improvements and land, respectively, and the assets are depreciated over their estimated useful lives using the straight-line method of depreciation.

     Upon the acquisition of real estate, we allocate the purchase price between tangible and intangible assets, which includes land, buildings, furniture and fixtures, the value of in-place leases, including above and below market leases, and

acquired liabilities. When allocating the purchase price to acquired properties, we allocate costs to the estimated intangible value of in-place leases and above or below market leases and to the estimated fair value of furniture and fixtures, land and buildings on a value determined by assuming the property was vacant by applying methods similar to those used by independent appraisers of income-producing property. Depreciation and amortization is computed on a straight-line basis over the remaining useful lives of the related assets. The value of in-place leases and above or below market leases is amortized over the estimated average remaining life of leases in-place at the time of acquisition. Estimates of fair value of acquired debt are based upon interest rates available for the issuance of debt with similar terms and remaining maturities.

     Depreciation and amortization is computed over the expected useful lives of depreciable property on a straight-line basis as follows:

		Estimated
		Useful Life
Buildings and improvements		5-35 years
Furniture, fixtures, equipment and other		3-20 years
Intangible assets (in-place leases and above and below market leases)		6-13 months

     As discussed above, carrying charges are principally interest and real estate taxes capitalized as part of properties under development. Capitalized interest was $5.1 million and $5.2 million for the three months ended March 31, 2007 and 2006, respectively. Capitalized real estate taxes were $0.7 million for each of the three months ended March 31, 2007 and 2006. All operating expenses associated with completed apartment homes are expensed.

     Costs recorded as repair and maintenance includes all costs which do not alter the primary use, extend the expected useful life or improve the safety or efficiency of the related asset. Our largest repair and maintenance expenditures related to landscaping, interior painting and floor coverings. Property operating and maintenance expense and income from discontinued operations included repair and maintenance expenses totaling $10.3 million and $9.3 million for the three months ended March 31, 2007 and 2006, respectively.

     Capital expenditures totaled $18.4 million and $8.7 million during the three months ended March 31, 2007 and 2006, respectively. Included in the $18.4 million for 2007 is $9.0 million of non-recurring capital improvements on renovation and rehabilitation projects at certain of our multifamily properties.

     Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge equal to the difference between the carrying value and the estimated fair value is recognized.

     Recent Accounting Pronouncements. In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. (“FIN”) 48, “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109.” FIN 48 prescribes a two-step process for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The first step involves evaluation of a tax position to determine whether it is more likely than not the position will be sustained upon examination, based on the technical merits of the position. The second step involves measuring the benefit to recognize in the financial statements for those tax positions that meet the more-likely-than-not recognition threshold.

     We adopted FIN 48 as of January 1, 2007. If various tax positions related to certain real estate dispositions are not sustained upon examination, we would be required to pay a deficiency dividend and associated interest for prior years. We have decreased distributions in excess of net income as of January 1, 2007 for the adoption impact of FIN 48 by approximately $2.5 million and have recorded interest expense of approximately $0.3 million for the three months ended March 31, 2007 for the interest related to the deficiency dividend for these transactions. Our period of uncertainty with respect to these real estate dispositions will expire within the next twelve months, at which time we would reverse the recorded liability to current period operations. We have no unrecognized tax benefits.

     In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. The statement does not require new fair value measurements, but is applied to the extent other accounting pronouncements require or permit fair value measurements. The statement emphasizes fair value as a market-based measurement which should be determined based on assumptions market participants would use in pricing an asset or liability. We will be required to disclose the extent to which fair value is used to measure assets and liabilities, the inputs used to develop the

measurements, and the effect of certain of the measurements on earnings (or changes in net assets) for the period. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007.

     In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” which gives entities the option to measure eligible financial assets, financial liabilities and firm commitments at fair value on an instrument-by-instrument basis (i.e., the fair value option), which are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability or upon entering into a firm commitment. Subsequent changes in fair value must be recorded in earnings. Additionally, SFAS No. 159 allows for a one-time election for existing positions upon adoption, with the transition adjustment recorded to beginning retained earnings. This statement is effective for fiscal years beginning after November 15, 2007. We do not anticipate the adoption of this statement will have a material impact on our financial position, results of operations or cash flows.

3. Per Share Data

     Basic earnings per share are computed using income from continuing operations and the weighted average number of common shares outstanding. Diluted earnings per share reflect common shares issuable from the assumed conversion of common share options and awards granted and units convertible into common shares. Only those items that have a dilutive impact on our basic earnings per share are included in diluted earnings per share. For the three months ended March 31, 2007 and 2006, 3.0 million and 3.5 million units convertible into common shares were excluded from the diluted earnings per share calculation as they were not dilutive.

     The following table presents information necessary to calculate basic and diluted earnings per share for the three months ended March 31, 2007 and 2006:

		Three Months
		Ended March 31,
(in thousands, except per share amounts)		2007				2006
Basic earnings per share calculation
Income from continuing operations		$	12,244			$	12,395
Income from discontinued operations, including gain on sale			793				29,048
Net income		$	13,037			$	41,443
Diluted earnings per share calculation
Income from continuing operations		$	12,244			$	12,395
Income allocated to common units			3				4
Income from continuing operations, as adjusted			12,247				12,399
Income from discontinued operations, including gain on sale			793				29,048
Net income, as adjusted		$	13,040			$	41,447
Weighted average common shares outstanding			58,813				54,290
Incremental shares issuable from assumed conversion of:
Common share options and awards granted			673				660
Common units			508				524
Weighted average common shares outstanding, as adjusted			59,994				55,474

4. Property Acquisitions, Dispositions and Assets Held for Sale

     Acquisitions. In January 2007, we purchased 1.6 acres of undeveloped land located in Washington D.C. for $43.8 million. We intend to utilize this land for the development of multifamily apartment communities.

     Discontinued Operations and Assets Held for Sale. For the three months ended March 31, 2007 and 2006, income from discontinued operations included the results of operations for three operating properties, containing 930 apartment homes, classified as held for sale. For the three months ended March 31, 2006, income from discontinued operations also included the results of operations of eight operating properties sold during 2006. As of March 31, 2007, the three operating properties held for sale had a net book value of $18.0 million.

     The following is a summary of income from discontinued operations for the three months ended March 31, 2007 and 2006:

		Three Months
		Ended March 31,
(in thousands)		2007				2006
Property revenues		$	1,833			$	6,599
Property expenses			887				3,405
Net operating income			946				3,194
Depreciation			—				718
Income from discontinued operations		$	946			$	2,476

     During the three months ended March 31, 2006, we recognized gains of $27.4 million from the sale of two operating properties, containing 525 apartment homes, to unaffiliated third parties. These sales generated net proceeds of approximately $40.2 million.

     At March 31, 2007, we had several undeveloped land parcels classified as held for sale as follows:

($ in millions)						Net Book
Location		Acres				Value
Southeast Florida			3.1			$	12.3
Dallas			2.6				2.5
Total land held for sale						$	14.8

5. Investments in Joint Ventures

     The joint ventures described below are accounted for using the equity method. The joint ventures in which we have an interest have been funded with secured, third-party debt. We have guaranteed our proportionate interest on construction loans in four of our development joint ventures. Additionally, we eliminate fee income from property management services to the extent of our ownership.

     Our contributions of real estate assets to joint ventures at formation where we receive cash are treated as partial sales and, as a result, the amounts recorded as gain on sale of assets to joint ventures represent the change in ownership of the underlying assets. Our initial investment is determined based on our ownership percentage in the net book value of the underlying assets on the date of the transaction.

     As of March 31, 2007, our equity investments in unconsolidated joint ventures accounted for under the equity method of accounting consisted of:

	•		A 20% interest in 12 apartment communities containing 4,034 apartment homes located in the Las Vegas, Phoenix, Houston, Dallas and Orange County, California markets. We are providing property management services to the joint ventures and fees earned for these services totaled $0.3 million for the three months ended March 31, 2007 and 2006. At March 31, 2007, the joint ventures had total assets of $385.1 million and had third-party secured debt totaling $272.6 million.
	•		A 15% interest in G&I V Midwest Residential LLC to which we partially sold nine apartment communities containing 3,237 apartment homes located in Kentucky and Missouri in September 2006. We are providing property management services to the joint venture, and fees earned for these services totaled $0.2 million during the three months ended March 31, 2007. At March 31, 2007, the joint venture had total assets of $241.9 million and had third-party secured debt totaling $169.0 million.
	•		A 20% interest in Sierra-Nevada Multifamily Investments, LLC (“Sierra-Nevada”), which owns 14 apartment communities with 3,098 apartment homes located in Las Vegas. We are providing property management services to Sierra-Nevada and fees earned for these services totaled $0.2 million for the three months ended March 31, 2007 and 2006. At March 31, 2007, Sierra-Nevada had total assets of $134.2 million and third-party secured debt totaling $179.9 million.
	•		A 50% interest in Denver West Apartments, LLC (“Denver West”), which owns Camden Denver West, a 320-apartment home community located in Denver, Colorado. We are providing property management

			services to Denver West and fees earned for these services totaled $20,000 and $19,000 for the three months ended March 31, 2007 and 2006, respectively. At March 31, 2007, Denver West had total assets of $21.7 million and third-party secured debt totaling $16.9 million.
	•		A 30% interest in Camden Plaza, LP to which we partially sold undeveloped land located in Houston, Texas in January 2006. The joint venture is developing a 271-apartment home community at a total estimated cost to complete of $42.9 million. We are providing construction and development services to this joint venture and received fees for such services which totaled $0.4 million and $0.2 million during the three months ended March 31, 2007 and 2006, respectively. Concurrent with this transaction, we provided a $6.4 million mezzanine loan to the joint venture which had a balance of $7.6 million at March 31, 2007, and is reported as “Notes receivable — affiliates” as discussed in Note 7, “Notes Receivable.” At March 31, 2007, the joint venture had total assets of $35.7 million and had third-party secured debt totaling $23.5 million.
	•		A 30% interest in Camden Main & Jamboree, LP to which we contributed $1.4 million in cash and $1.9 million in Camden Operating Series B common units in March 2006. The joint venture purchased Camden Main & Jamboree, a 290-apartment home community located in Irvine, California, which is currently under development and has a total estimated cost to complete of $107.1 million as of March 31, 2007. We provided construction management services to this joint venture and received fees for such services which totaled $0.2 million for the three months ended March 31, 2006. Concurrent with this transaction, we provided a mezzanine loan totaling $15.8 million to the joint venture, which had a balance of $18.3 million at March 31, 2007, and is reported as “Notes receivable — affiliates” as discussed in Note 7, “Notes Receivable.”. At March 31, 2007, the joint venture had total assets of $100.3 million and had third-party secured debt totaling $70.4 million.
	•		A 30% interest in Camden College Park, LP to which we partially sold undeveloped land located in College Park, Maryland in August 2006. The joint venture is developing a 508-apartment home community and has a total estimated cost to complete of $139.9 million as of March 31, 2007. We are providing construction and development services to this joint venture and received fees for such services which totaled $0.6 million for the three months ended March 31, 2007. Concurrent with this transaction, we provided a mezzanine loan totaling $6.7 million to the joint venture, which had a balance of $7.4 million at March 31, 2007, and is reported as “Notes receivable — affiliates” as discussed in Note 7, “Notes Receivable.” At March 31, 2007, the joint venture had total assets of $84.4 million and had third-party secured debt totaling $63.0 million.
	•		A 30% interest in two development joint ventures to which we contributed an aggregate of $2.3 million in cash in 2006. Each joint venture is developing a multifamily community, one with 340 apartment homes and the other with 119 apartment homes both in Houston, Texas. Concurrent with this transaction, we provided mezzanine loans totaling $9.3 million to the joint ventures, which had a balance of $10.2 million at March 31, 2007, and are reported as “Notes receivable — affiliates” as discussed in Note 7, “Notes Receivable.” We are committed to funding an additional $8.3 million under the mezzanine loans. At March 31, 2007, the joint ventures had total assets of $18.1 million and had third-party secured debt totaling $1.1 million.

6. Third-party Construction Services

     At March 31, 2007, we were under contract on third-party construction projects ranging from $2.5 million to $35.0 million. We earn fees on these projects ranging from 3.4% to 9.3% of the total contracted construction cost, which we recognize as earned. Fees earned from third-party construction projects totaled $0.4 million and $0.7 million for the three months ended March 31, 2007 and 2006, respectively, and are included in “Fee and asset management income” in our condensed consolidated statements of operations. We recorded warranty and repair related costs on third-party construction projects of $0.7 million and $0.4 million during the three months ended March 31, 2007 and 2006, respectively. These costs are first applied against revenues earned on each project and any excess is included in “Fee and asset management expenses” in our condensed consolidated statements of operations.

7. Notes Receivable

     We have a mezzanine financing program under which we provide secured financing to owners of real estate properties. As of March 31, 2007, we had $11.6 million of secured notes receivable due from unrelated third parties. These notes, which mature through 2009, accrue interest at rates ranging from the London Interbank Offered Rate (“LIBOR”) + 2%

to 9.25% per annum, which is recognized as earned. We have reviewed the terms and conditions underlying the outstanding notes receivable and believe these notes are collectible, and no impairment existed at March 31, 2007.

     The following is a summary of our notes receivable under the mezzanine financing program during the periods presented, excluding notes receivable from affiliates:

($ in millions)						March 31,				December 31,
Location		Current Property Type		Current Status		2007				2006
Houston, Texas		Multifamily		Stabilized		$	8.7			$	—
Houston, Texas		Multifamily		Predevelopment			2.9				3.9
		Total				$	11.6			$	3.9

     We provided mezzanine construction financing in connection with certain of our joint venture transactions as discussed in Note 5, “Investments in Joint Ventures.” As of March 31, 2007 and December 31, 2006, the balance of “Notes receivable — affiliates” totaled $43.5 million and $41.5 million, respectively. The notes outstanding as of March 31, 2007 accrue interest at rates ranging from LIBOR + 3% to 14% per year and mature through 2010. Additionally, we eliminate interest and other income to the extent of our ownership.

8. Notes Payable

     The following is a summary of our indebtedness:

(in millions)		March 31, 2007				December 31, 2006
Unsecured line of credit and short-term borrowings		$	345.0			$	206.0
Senior unsecured notes
$50.0 million 4.30% Notes, due 2007			50.6				51.0
$150.0 million 5.98% Notes, due 2007			150.0				149.9
$100.0 million 4.74% Notes, due 2009			99.9				99.9
$250.0 million 4.39% Notes, due 2010			249.9				249.9
$100.0 million 6.77% Notes, due 2010			99.9				99.9
$150.0 million 7.69% Notes, due 2011			149.7				149.7
$200.0 million 5.93% Notes, due 2012			199.4				199.4
$200.0 million 5.45% Notes, due 2013			199.2				199.1
$250.0 million 5.08% Notes, due 2015			248.7				248.6
			1,447.3				1,447.4
Medium-term notes
$15.0 million 7.63% Notes, due 2009			15.0				15.0
$25.0 million 4.64% Notes, due 2009			26.4				26.6
$10.0 million 4.90% Notes, due 2010			11.1				11.2
$14.5 million 6.79% Notes, due 2010			14.5				14.5
$35.0 million 4.99% Notes, due 2011			38.6				38.8
			105.6				106.1
Total unsecured notes			1,897.9				1,759.5
Secured notes
4.55% - 8.50% Conventional Mortgage Notes, due 2007 — 2013			503.9				506.4
3.96% - 7.29% Tax-exempt Mortgage Notes, due 2025 - 2028			64.8				65.1
			568.7				571.5
Total notes payable		$	2,466.6			$	2,331.0
Floating rate debt included in unsecured line of credit (5.54% - 5.74%)		$	345.0			$	206.0
Floating rate tax-exempt debt included in secured notes (3.96% - 4.29%)			58.4				58.6

     We have a $600 million unsecured credit facility which matures January 2010. The scheduled interest rate is based on spreads over LIBOR or the Prime Rate and the scheduled interest rate spreads are subject to change as our credit ratings change. Advances under the line of credit may be priced at the scheduled rates, or we may enter into bid rate loans with participating banks at rates below the scheduled rates. These bid rate loans have terms of six months or less and may not exceed the lesser of $300 million or the remaining amount available under the line of credit. The line of credit is subject to customary financial covenants and limitations, all of which we were in compliance with at March 31, 2007.

     Our line of credit provides us with the ability to issue up to $100 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding under our line, it does reduce the amount available. At March 31, 2007, we had outstanding letters of credit totaling $29.0 million, and had $226.0 million available under our unsecured line of credit.

     At March 31, 2007 and 2006, the weighted average interest rate on our floating rate debt, which includes our unsecured line of credit, was 5.4% and 4.9%, respectively.

Our indebtedness, excluding our unsecured line of credit, had a weighted average maturity of 4.5 years. Scheduled repayments on outstanding debt, including our line of credit, and the weighted average interest rate on maturing debt at March 31, 2007 are as follows:

(In millions)

						Weighted Average
Year		Amount				Interest Rate
2007		$	216.5				5.6	%
2008			200.7				4.8
2009			198.2				5.0
2010			797.8				5.3
2011			248.4				6.5
2012 and thereafter			805.0				5.3
Total		$	2,466.6				5.4	%

9. Related Party Transactions

     We perform property management services for properties owned by joint ventures in which we own an interest. Management fees earned on these properties amounted to $0.7 million and $0.5 million during the three months ended March 31, 2007 and 2006, respectively. See further discussion of fees earned from joint ventures for construction management and development services in Note 5, “Investments in Joint Ventures.”

     In conjunction with our merger with Summit, we acquired employee notes receivable from nine former employees of Summit totaling $3.9 million. Subsequent to the merger, five employees repaid their loans totaling $1.8 million. At March 31, 2007, the notes receivable had an outstanding balance of $2.0 million. As of March 31, 2007, the employee notes receivable were 100% secured by Camden common shares.

10. Share-based Compensation

     Share Awards. Share awards have a vesting period of five years. The compensation cost for share awards is based on the market value of the shares on the date of grant and is amortized over the vesting period. To determine our estimated future forfeitures, we used actual forfeiture history. At March 31, 2007, the unamortized value of share awards totaled $29.2 million.

     Valuation Assumptions. The weighted average fair value of options granted in 2007 was $11.04. We calculated the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The following assumptions were used for March 31, 2007:

Expected volatility			17.1	%
Risk-free interest rate			4.6	%
Expected dividend yield			3.7	%
Expected life (in years)			6

     Our computation of expected volatility for 2007 is based on the historical volatility of our common shares over a time period equal to the expected term of the option and ending on the grant date. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield on our common shares is calculated using the annual dividends paid in the prior year. Our computation of expected life was determined using historical experience of similar awards, giving consideration to the contractual terms of the share-based awards.

     Share-based Compensation Award Activity. The total intrinsic value of options exercised was $0.8 million during the three months ended March 31, 2007. As of March 31, 2007, there was approximately $0.3 million of total unrecognized compensation cost related to unvested options, which is expected to be amortized over the next twelve months.

     The following table summarizes share options outstanding and exercisable at March 31, 2007:

		Outstanding Options								Exercisable Options
Range of						Weighted								Weighted				Remaining
Exercise						Average								Average				Contractual
Prices		Number				Price				Number				Price				Life
$24.88-$41.90			357,069			$	35.63				357,069			$	35.63				4.6
$42.90-$43.90			400,018				43.03				400,018				43.03				6.6
$44.00-$62.32			466,360				49.49				399,694				50.15				6.6
Total options			1,223,447			$	43.33				1,156,781			$	43.21				6.0

     The following table summarizes activity under our 1993 and 2002 Share Incentive Plans for the three months ended March 31, 2007:

						Weighted				Weighted
		Options /				Average				Average Remaining				Aggregate
		Share Awards				Exercise / Grant				Contractual Term				Intrinsic
		Outstanding				Price				(in years)				Value(1)
Outstanding at January 1, 2007			3,452,711			$	38.25
Granted			234,687				78.10
Exercised			(50,428	)			34.06
Forfeited			(47,935	)			59.10
Outstanding at March 31, 2007			3,589,035			$	40.38				6.0			$	107,419,818
Vested share awards			1,825,131			$	34.14

11. Net Change in Operating Accounts

     The effect of changes in the operating accounts on cash flows from operating activities is as follows:

		Three Months
		Ended March 31,
(in thousands)		2007				2006
Decrease (increase) in assets:
Other assets, net		$	6,143			$	(1,672	)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses			(16,171	)			6,630
Accrued real estate taxes			(7,270	)			(8,209	)
Distributions payable			1,997				1,985
Other liabilities			(2,762	)			4,887
Change in operating accounts		$	(18,063	)		$	3,621

12. Commitments and Contingencies

     Construction Contracts. As of March 31, 2007, we were obligated for approximately $118.5 million of additional expenditures on our recently completed projects and those currently under development. We expect to fund a substantial portion of this amount with our unsecured line of credit.

     Summit Merger Contingencies. On December 19, 2003, Camden Summit Partnership received notice of a demand for arbitration asserted by Bermello, Ajamil & Partners, Inc. (“Bermello”) against Coral Way, LLC for unpaid architectural fees. In this demand, Bermello alleged they were entitled to an increased architectural fee as a result of an increase in the cost of the project. Camden Summit Partnership asserted a counter-claim against Bermello for damages related to the cost to

correct certain structural and other design defects, and delay damages. On October 31, 2006, the parties entered into a settlement of Bermello’s claims for unpaid architectural fees and its claims were dismissed. On February 22, 2007, the parties entered into a settlement of Camden Summit Partnership’s counter-claims for damages and its claims were released.

     Other Contingencies. In the ordinary course of our business, we issue letters of intent indicating a willingness to negotiate for acquisitions, dispositions or joint ventures and also enter into arrangements contemplating various transactions. Such letters of intent and other arrangements are non-binding, and neither party is obligated to pursue negotiations unless and until a definitive contract is entered into by the parties. Even if definitive contracts are entered into, the letters of intent relating to the purchase and sale of real property and resulting contracts generally contemplate such contracts will provide the purchaser with time to evaluate the property and conduct due diligence, during which periods the purchaser will have the ability to terminate the contracts without penalty or forfeiture of any deposit or earnest money. There can be no assurance definitive contracts will be entered into with respect to any matter covered by letters of intent or we will consummate any transaction contemplated by any definitive contract. Furthermore, due diligence periods for real property are frequently extended as needed. An acquisition or sale of real property becomes probable at the time the due diligence period expires and the definitive contract has not been terminated. We are then at risk under a real property acquisition contract, but only to the extent of any earnest money deposits associated with the contract, and are obligated to sell under a real property sales contract.

     We are currently in the due diligence period for certain acquisitions and dispositions and other various transactions. No assurance can be made we will be able to complete the negotiations or become satisfied with the outcome of the due diligence or otherwise complete the proposed transactions.

     We are subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance. While the resolution of these matters cannot be predicted with certainty, management believes the final outcome of such matters will not have a material adverse effect on our consolidated financial statements.

     Lease Commitments. At March 31, 2007, we had long-term operating leases covering certain land, office facilities and equipment. Rental expense totaled $0.8 million and $0.7 million for the three months ended March 31, 2007 and 2006, respectively. Minimum annual rental commitments for the remainder of 2007 are $2.5 million and for the years ending December 31, 2008 through 2011 are $2.4 million, $2.1 million, $1.9 million and $1.5 million, respectively, and $5.0 million in the aggregate thereafter.

13. Income Taxes

     We have maintained and intend to maintain our election as a REIT under the Internal Revenue Code of 1986, as amended. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement we distribute at least 90% of our taxable income to our shareholders. As a REIT, we generally will not be subject to federal income tax on distributed taxable income. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income taxes at regular corporate rates, including any applicable alternative minimum tax. Historically, we have only incurred state and local income, franchise and margin taxes. Taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to applicable federal, state and local income taxes. We have provided for income, franchise and margin taxes in the condensed consolidated statements of operations for the three months ended March 31, 2007 primarily for state and local taxes associated with property dispositions, entity level taxes for our taxable operating partnerships and federal taxes on certain of our taxable REIT subsidiaries. We have no significant temporary differences or tax credits associated with our taxable REIT subsidiaries.

14. Subsequent Events

     In April 2007, our Board of Trust Managers approved a program to repurchase up to $250 million of our common equity securities through open market purchases, block purchases and privately negotiated transactions. Proceeds from asset sales and borrowings under our secured line of credit will be used to fund any share repurchases. No purchases have been made under this program.

     In April 2007, we acquired Camden South Congress, a 253 apartment home community located in Austin, Texas for $42.8 million using proceeds from our unsecured line of credit.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following discussion should be read in conjunction with the condensed consolidated financial statements and notes appearing elsewhere in this report. Historical results and trends which might appear in the condensed consolidated financial statements should not be interpreted as being indicative of future operations.

     We consider portions of this report to be “forward-looking” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to our expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items relating to the future. Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, we can give no assurance our expectations will be achieved. Any statements contained herein that are not statements of historical fact should be deemed forward-looking statements. Reliance should not be placed on these forward-looking statements as they are subject to known and unknown risks, uncertainties and other factors beyond our control and could differ materially from our actual results and performance.

     Factors that may cause our actual results or performance to differ materially from those contemplated by forward-looking statements include, but are not limited to, the following:

	•		Insufficient cash flows could limit our ability to make required payments for debt obligations or pay distributions to shareholders and create refinancing risk;
	•		Unfavorable changes in economic conditions could adversely impact occupancy or rental rates;
	•		Development and construction risks could impact our profitability;
	•		Our property acquisition strategy may not produce the cash flows expected;
	•		Difficulties of selling real estate could limit our flexibility;
	•		We have significant debt, which could have important consequences;
	•		Our variable rate debt is subject to interest rate risk;
	•		Issuances of additional debt or equity may adversely impact our financial condition;
	•		Losses from catastrophes may exceed our insurance coverage;
	•		Potential liability for environmental contamination could result in substantial loss;
	•		Tax matters, including failure to qualify as a real estate investment trust (“REIT”), could have adverse consequences;
	•		Investments through joint ventures and partnerships involve risks not present in investments in which we are the sole investor;
	•		Compliance or failure to comply with laws requiring access to our properties by disabled persons could result in substantial costs;
	•		Competition could limit our ability to lease apartments or increase or maintain rental income;
	•		We depend on our key personnel; and
	•		Changes in laws and litigation risks could affect our business.

These forward-looking statements represent our estimates and assumptions as of the date of this report.

Executive Summary

     Based on our results for the three months ended March 31, 2007 and the projected economic conditions, we expect moderate growth during the remainder of 2007 from the revenue generated by our stabilized communities. The economic factors affecting our revenue growth include continued job growth and population growth in a number of markets in which we operate, as well as decreased housing affordability due to rising interest rates resulting in multifamily apartment communities being an economically attractive alternative to purchasing a single-family home which positively affects apartment housing demand.

     We intend to focus on our market balance investment strategy and to improve our portfolio mix through the acquisition and disposition of real estate assets. We expect market concentration risk to be mitigated as our property operations are not centralized in any one market.

     In positioning for future growth, we intend to continue focusing on our development pipeline and maintain approximately $2.0 billion to $2.5 billion in our current and future development pipelines. Total projected capital costs and the commencement of future developments may be impacted by increasing construction costs and other factors. Additionally, the use of technology, including our web-based property management and revenue management systems, is expected to increase revenues and improve our operating efficiencies.

Property Portfolio

     Our multifamily property portfolio, excluding land held for future development, is summarized as follows:

		March 31, 2007								December 31, 2006
		Apartment								Apartment
		Homes				Properties				Homes				Properties
Operating Properties
Las Vegas, Nevada			8,064				30				8,064				30
Dallas, Texas (1)			7,773				20				7,773				21
Houston, Texas			5,696				13				5,696				13
Tampa, Florida			5,635				12				5,635				12
Charlotte, North Carolina			4,146				17				4,146				17
Washington, D.C. Metro			4,157				12				3,834				11
Orlando, Florida			3,296				8				3,296				8
Atlanta, Georgia			3,202				10				3,202				10
Raleigh, North Carolina			2,704				7				2,704				7
Denver, Colorado			2,529				8				2,529				8
Austin, Texas			2,525				8				2,525				8
Southeast Florida			2,520				7				2,520				7
Phoenix, Arizona			2,433				8				2,433				8
Los Angeles/Orange County, California			2,191				5				2,191				5
St. Louis, Missouri			2,123				6				2,123				6
Louisville, Kentucky			1,448				5				1,448				5
Corpus Christi, Texas			1,410				3				1,410				3
San Diego/Inland Empire, California			1,196				4				846				3
Other			1,468				4				1,468				4
Total Operating Properties			64,516				187				63,843				186
Properties Under Development
Washington, D.C. Metro			1,914				5				2,237				6
Houston, Texas			1,109				4				650				2
San Diego/Inland Empire, California			—				—				350				1
Los Angeles/Orange County, California			290				1				290				1
Orlando, Florida			261				1				261				1
Total Properties Under Development			3,574				11				3,788				11
Total Properties			68,090				198				67,631				197
Less: Joint Venture Properties (2)
Las Vegas, Nevada			4,047				17				4,047				17
Dallas, Texas			456				1				456				1
Houston, Texas			1,946				6				1,487				4
Washington, D.C. Metro			508				1				508				1
Denver, Colorado			320				1				320				1
Phoenix, Arizona			992				4				992				4
Los Angeles/Orange County, California			711				2				711				2
St. Louis, Missouri			1,447				4				1,447				4
Louisville, Kentucky			1,194				4				1,194				4
Other			596				1				596				1
Total Joint Venture Properties			12,217				41				11,758				39
Total Properties Owned 100%			55,873				157				55,873				158

Stabilized Communities

     We consider a property stabilized once it reaches 90% occupancy, or generally one year from opening the leasing office, with some allowances for larger than average properties. During the three months ended March 31, 2007, stabilization was achieved at one recently completed property as follows:

Number of

Apartment

Date of

Date of

Property and Location

Homes

Completion

Stabilization

Camden Fairfax Corner

Fairfax, VA

488

3Q06

1Q07

Acquisitions

     In January 2007, we purchased 1.6 acres of undeveloped land located in Washington D.C. for $43.8 million. We intend to utilize this land for the development of multifamily apartment communities.

     Subsequent to March 31, 2007, we acquired Camden South Congress, a 253 apartment home community located in Austin, Texas for $42.8 million.

Discontinued Operations and Assets Held for Sale

     Income from discontinued operations includes the operations of properties, including land, sold during the period or classified as held for sale as of March 31, 2007. The components of earnings classified as discontinued operations include separately identifiable property-specific revenues, expenses, depreciation and interest expense, if any. The gain or loss on the disposal of the held for sale properties is also classified as discontinued operations. We intend to maintain a strategy of managing our invested capital through the selective sale of properties and to utilize the proceeds to fund investments with higher anticipated growth prospects in our markets.

     A summary of our properties held for sale as of March 31, 2007 is as follows:

Number of

($ in millions)

Apartment

Date of

Net Book

Property and Location

Homes

Disposition

Year Built

Value (1)

Held for Sale

Camden Trace Maryland Heights, MO

372

n/a

1972

$

6.9

Camden Taravue St. Louis, MO

304

n/a

1975

5.9

Camden Downs Louisville, KY

254

n/a

1975

5.2

Total apartment homes held for sale

930

     During the three months ended March 31, 2006, we recognized gains of $27.4 million from the sale of two operating properties, containing 525 apartment homes, to unaffiliated third parties. These sales generated net proceeds of approximately $40.2 million.

     At March 31, 2007, we had several undeveloped land parcels classified as held for sale as follows:

($ in millions)						Net Book
Location		Acres				Value
Southeast Florida			3.1			$	12.3
Dallas			2.6				2.5
Total land held for sale.						$	14.8

Development and Lease-Up Properties

     At March 31, 2007, we had five completed properties in lease-up as follows:

		Number of								% Leased								Estimated
($ in millions)		Apartment				Cost to				at				Date of				Date of
Property and Location		Homes				Date				4 /22/07				Completion				Stabilization
In Lease-Up: Wholly-Owned
Camden Westwind Ashburn, VA			464			$	95.0				76	%			2Q06				3Q07
Camden Manor Park Raleigh, NC			484				49.2				87	%			3Q06				3Q07
Camden Royal Oaks Houston, TX			236				20.8				52	%			3Q06				1Q08
Camden Clearbrook Frederick, MD			297				45.3				91	%			1Q07				3Q07
Camden Old Creek San Marcos, CA			350				91.7				61	%			1Q07				4Q07
Total — wholly-owned			1,831			$	302.0

     At March 31, 2007, we had several properties, which we were developing, in various stages of construction as follows:

														Included in
		Number of												Properties				Estimated				Estimated
($ in millions)		Apartment				Estimated				Cost				Under				Date of				Date of
Property and Location		Homes				Cost				Incurred				Development				Completion				Stabilization
Under Construction:
Wholly-Owned
Camden Monument Place Fairfax, VA			368			$	64.0			$	53.1			$	53.1				4Q07				2Q08
Camden Potomac Yards Arlington, VA			379				110.0				83.5				83.5				4Q07				4Q08
Camden City Centre Houston, TX			379				54.0				42.7				42.7				4Q07				3Q08
Camden Summerfield Landover, MD			291				68.0				33.2				33.2				4Q08				1Q09
Camden Orange Court Orlando, FL			261				49.0				21.7				21.7				3Q08				1Q09
Camden Dulles Station Oak Hill, VA			368				77.0				29.6				29.6				1Q09				3Q09
Total — wholly-owned			2,046			$	422.0				263.8			$	263.8
Under Construction — Joint Ventures
Camden Main & Jamboree Irvine, CA			290			$	107.1			$	99.3								2Q07				4Q07
Camden Plaza Houston, TX			271				42.9				35.3								3Q07				2Q08
Camden College Park College Park, MD			508				139.9				82.2								1Q09				4Q09
Total — joint ventures			1,069			$	289.9			$	216.8

     At March 31, 2007, we had two joint venture properties under construction which were being developed by a third party, as follows:

		Number of
($ in millions)		Apartment				Estimated				Cost
Property and Location		Homes				Cost				Incurred
Braeswood Place Houston, TX			340			$	48.0			$	13.3
Belle Meade Houston, TX			119				30.0				5.9

     Our condensed consolidated balance sheet at March 31, 2007 included $410.0 million related to wholly-owned properties under development. Of this amount, $263.8 million related to our wholly-owned projects currently under development. Additionally, at March 31, 2007, we had $146.2 million invested in land held for future development, which includes $103.6 million related to projects we expect to begin constructing during the next twelve months. We also had $35.8 million invested in land tracts adjacent to development projects, which are being utilized in conjunction with those projects. Upon completion of these development projects, we may utilize this land to further develop apartment homes in these areas. We may also sell certain parcels of these undeveloped land tracts to third parties for commercial and retail development.

Results of Operations

     Changes in revenues and expenses related to our operating properties from period to period are due primarily to acquisitions, dispositions, the performance of stabilized properties in the portfolio, and the lease-up of newly constructed properties. Where appropriate, comparisons of income and expense on communities included in continuing operations are made on a dollars-per-weighted average apartment home basis in order to adjust for such changes in the number of apartment homes owned during each period. Selected weighted averages for the three months ended March 31, 2007 and 2006 are as follows:

		2007				2006
Average monthly property revenue per apartment home		$	975			$	909
Annualized total property expenses per apartment home		$	4,369			$	4,093
Weighted average number of operating apartment homes owned 100%			52,167				53,448
Weighted average occupancy of operating apartment homes owned 100%			94.3	%			96.0	%

Property-level operating results

     The following tables present the property-level revenues and property-level expenses, excluding discontinued operations, for the three months ended March 31, 2007 as compared to the same period in 2006:

		Apartment				Three Months Ended
		Homes				March 31,								Change
($ in thousands)		at 3/31/07				2007				2006				$				%
Property revenues
Same store communities			44,604			$	128,324			$	122,075				6,249				5.1	%
Non-same store communities			6,462				18,814				15,393				3,421				22.2
Development and lease-up communities			3,877				4,378				576				3,802				660.1
Dispositions/other			—				1,132				7,770				(6,638	)			(85.4	)
Total property revenues			54,943			$	152,648			$	145,814				6,834				4.7	%
Property expenses
Same store communities			44,604			$	47,898			$	45,863				2,035				4.4	%
Non-same store communities			6,462				6,607				5,578				1,029				18.4
Development and lease-up communities			3,877				1,954				268				1,686				629.1
Dispositions/other			—				522				2,979				(2,457	)			(82.5	)
Total property expenses			54,943			$	56,981			$	54,688				2,293				4.2	%

Same store communities are communities we owned and were stabilized as of January 1, 2006. Non-same store communities are stabilized communities we have acquired, developed or re-developed after January 1, 2006. Development and lease-up communities are non-stabilized communities we have acquired or developed after January 1, 2006. Dispositions primarily represent communities we have partially sold to joint ventures in which we retained an ownership interest.

Same store analysis

     Same store property revenues for the three months ended March 31, 2007 increased $6.2 million, or 5.1%, from the same period in 2006 resulting primarily from higher rental income per apartment home and increases in other property income, partially offset by declines in average occupancy. Other property income increased due to utility rebillings primarily resulting from our implementation of CamdenTV, which provides cable services to our residents. Our revenue growth is partially the result of improving market fundamentals including growth in employment and population in the majority of our markets, the increasing cost of ownership versus rental, and rising interest rates and construction costs limiting new supply. In addition, we continue to believe our strong operating performance is not only the result of improving operating fundamentals, but also the continued enhancements we are making to many of our operational components, such as our web-based property management and revenue management systems. We believe these enhancements have created efficiencies within our business and have allowed us to take advantage of improvements in the rental market.

     Total property expenses from our same store communities increased $2.0 million, or 4.4%, for the three months ended March 31, 2007 as compared to the same period in 2006. The increases in same store property expenses per apartment home were primarily due to increases in repair and maintenance, utilities and property insurance expenses. These three

expense categories represent an aggregate of approximately 38.6% of total property expenses for the three months ended March 31, 2007.

Non-same store analysis and other analysis

     Property revenues from non-same store, development and lease-up communities increased $7.2 million for the three months ended March 31, 2007 as compared to the same period in 2006. The increase during the period was primarily due to the completion and lease-up of properties in our development pipeline.

     Property revenues from dispositions/other decreased $6.6 million for the three months ended March 31, 2007 as compared to the same period in 2006. Dispositions/other property revenues earned during the three months ended March 31, 2007 primarily related to retail lease income of $1.0 million. For the three months ended March 31, 2006, dispositions/other property revenues earned primarily related to properties partially sold into joint ventures in 2006 of $6.7 million and retail lease income of $0.9 million.

     Property expenses from non-same store, development and lease-up communities increased $2.7 million for the three months ended March 31, 2007 as compared to 2006. The increase in expenses during the period was primarily due to the completion and lease-up of properties in our development pipeline.

     Property expenses from dispositions/other decreased $2.5 million for the three months ended March 31, 2007 as compared to the same period in 2006. The decrease during the three months ended March 31, 2007 as compared to the same period in 2006 was due to the disposition of properties partially sold to joint ventures during 2006.

Non-property income

		Three Months
		Ended
($ in thousands)		March 31,								Change
		2007				2006				$				%
Fee and asset management		$	2,386			$	2,477			$	(91	)			(3.7	)%
Interest and other income			1,562				753				809				107.4
Income on deferred compensation plans			2,306				50				2,256				*
Total non-property income		$	6,254			$	3,280			$	2,974				90.7	%