Greetings and welcome to the Camden Property Trust ThirdQuarter 2007 Earnings Conference Call. At this time all participants are in alisten-only mode. A brief question and answer session will follow the formalpresentation (Operator Instructions). As a reminder, this conference is beingrecorded. It is now my pleasure to introduce your host, Ms. KimCallahan, Vice President of Investor Relations for Camden Property Trust. Thankyou. You may begin.

Good morning and thank you for joining Camden's thirdquarter 2007 earnings conference call. We hope you enjoyed the music thismorning, which featured several songs by our in-house band, the Camden Birds.Before we begin our prepared remarks I would like to advice everyone that wewill be making forward-looking statements based on our current expectations andbeliefs. These statements are not guarantees of future performance and involverisks and uncertainties that could cause actual results to differ materiallyfrom expectations. Further information about these risks can be found in ourfilings with the SEC and we encourage you to review them. As a reminder,Camden's complete third quarter 2007 earnings release is available in theInvestor Relations section of our Web site at camdenliving.com, and it includesreconciliation’s to non-GAAP financial measures, which may be discussed on thiscall. Joining me today are Richard Campo, Camden's Chairman andChief Executive Officer, Keith Oden, President and Chief Operating Officer, andDennis Steen, Chief Financial Officer. At this time, I’d like to turn the call over to Rick Campo.

Good morning. I’d like to thank the Camden Birds as well forproviding our pre-conference call music. And for the part they play insupporting Camden's culture. As many of you know, having fun is one of Camden'score values. With the uncertainties and challenges that our business facestoday, it is more important than ever for people to have fun. Without smiles onthe faces of our Camden team members, it is impossible to provide livingexcellence to our customers. Overall, earnings growth for the quarter were in line withour expectations. Same property revenue and net operating income growth werenot. Pricing power declined across many of our markets, primarily as a result ofincreased competition from single-family home rentals, while the magnitude ofthe oversupply in the single-family rental markets is hard to get your armsaround and varies by market. We know that apartment demand is being muted byincreased rental home competition. How long this situation lasts is amuch-debated topic. I will talk about that going forward on the call. At this point, I would like to call on Keith Oden tocontinue this discussion.

Thanks, Rick. I want to address three areas in my remarkstoday. First, I’ll provide my thoughts on the overall market conditions, andhow they're being reflected in our fourth quarter guidance. Second, I’llprovide some additional details of our third quarter and year-to-dateperformance, and finally, I will address the recent SEC ruling regardingexclusive access agreements. Let's start with the current market conditions. For the lasttwo quarters we have experienced decelerating revenue growth and we had said weexpected that to continue throughout 2007, so nothing new there. What is new inCamden's world is that our fourth quarter re-forecasts, which were completed aspart of our 2008 budget process, indicates that the slowdowns will likelyaccelerate in the fourth quarter. What makes the forecast slowdown significant is that it isbeing felt in all six of our geographically diversified operating regions. As apoint of reference, in the first quarter, all six of our regions exceededbudgeted NOI In the second quarter; two regions fell short of plan. For thethird quarter, five were short of plan, and in the most recent re-forecast, allsix operating regions are projecting fourth quarter NOI to fall short of ouroriginal budget for the fourth quarter. Some of the misses are relatively minor but in Camden'scompensation structure, a miss is as good as a mile. The deceleration in thefourth quarter forecast is sufficiently widespread that its explanation must gowell beyond condo-mania, which we believe has had some impact in markets suchas Orlando, Tampa, Las Vegas, and Washington, D.C. We believe that there are two major culprits, one, thecontinued deterioration in the single-family home market, which is bringingmore home rentals into competition with apartments. And oversupply of unsold single-familyhomes is a condition that exists in all 15 of Camden's core markets. This condition will continue as a headwind for multi-familyuntil the inventory of unsold homes begins…

Thanks, Keith. I will begin this morning with a review ofour third quarter results. Camden reported FFO for the quarter of $56.3million, or $0.91 per diluted share, at the midpoint of our prior guidance of$0.89 to $0.93 per share. We achieved the midpoint of our third quarter FFO guidanceas moderating revenue growth in our market as Keith just discussed produced a$1.1 million, or 0.9% unfavorable variance to our same store revenueexpectations for the third quarter. This unfavorable variance was completely offset by favorablevariances in other income, property management expense and property operatingexpense. One additional item of note on our operating results,interest expense for the third quarter totaled $27.7 million, in line with ourexpectations, but down $1.5 million from the second quarter of 2007. Thedecline from the second quarter is the result of the reversal of interestaccruals, totaling $2.5 million in the year to date period, relating to taxpositions we inherited in the Summit merger. The reversal more than offset the increase in interest expenseon higher debt balances incurred in the third quarter to fund our increase inreal estate assets and share repurchases. On the transaction front, we completed no acquisitions ordispositions during the third quarter. Nine assets classified as held for saleat quarter end, the two Fort Worth communities, Camden Terrace and Ridge, weresold in October for $24.2 million in line with our expectations. Six communities, Camden Ridgeview in Austin, CamdenEastchase in Timber Creek in Charlotte, Camden Glenn in Landover, our twoassets in Greensboro and Camden Isles in Tampa are all currently under contractand expected to close during the fourth quarter. Camden Pinnacle, the last of the nine in Denver, iscurrently being marketed but not expected to close until 2008. Assuming thefourth quarter closing on the six assets currently under contract, our 2007disposition volume will be approximately $180 million of…

Thank you. Ladies and gentlemen, we will be now conducting aquestion-and-answer session (Operator Instructions). Our first question is fromJonathan Litt with Citigroup. Please state your question.

Hi, it is Craig Melcher here with Jon. I just wanted to geta little more color on the 4Q cautionary statements, and how has October shapedup? Has that been softer than the 3Q average or is this purely on what you'reexpecting based on the lease numbers?

Craig, the results in October are consistent with ourreforecast, which was a basis for us moving our guidance on same store NOIresults. So yes, the October results are consistent with that. We don't havefinal results, but we have enough insight into the revenue expense componentsto know that it is consistent with our forecast.

And how is YieldStar incorporating the renting out of thesingle family homes into the numbers which would be causing the rents comingdown a bit more than you're seeing, the competitors?

It is a good question, Craig. There is really not any, thereis no direct comping that we can do as we can do with our multifamilycompetitors, but where it shows up in is in reduced traffic and reduced overalldemand at our communities and our competitor's communities. So while there is no direct link in the model, clearly thatis part of the background of what is going on from on the supply side of theequation, and it shows up in the model through reduced traffic numbers, andthen also weaker results at our communities and our competitors.

The last question is just on the development pipeline. Doesthis revision impact your views on any development activity or developmentstarts going forward?

Craig, our investment committee reviews all of ourdevelopments on a periodic basis, and pretty much every couple of weeks ormonths, in terms of where we are on the various starts. And at the end of the day, each project is evaluated and weevaluate it given its current marketing conditions if it hasn't started alreadyand I can tell you, we have delayed a couple of projects, based on currentmarket conditions in Florida and we may delay some more. But it just depends on sort of what is happening in themarkets, and the answer is yes, we're reviewing our developments on an ongoingbasis, and we are dealing with them appropriately.

Thank you.

Thank you. The next question is from Alex Goldfarb with UBS.Please state your question.

Good morning.

Good morning Alex.

Maybe I missed it in the opening discussion, but could youjust give us your thoughts on cap rates? A number of your peers have commented,essentially it has been maybe a 25 basis points shift plus or minus, dependingon location and quality but just curious on your thoughts.

Right. I think we're in that same camp, I mean we have -- weare active in the market with all of our folks and in our various regions,looking at properties, and trying to, ferret out value out there. And you really haven't seen any major moves in cap rates. Ithink that most people are talking, 25 bits plus or minus and I think we havesort of evidence based on some sales we just completed, the two properties thatsold in Fort Worth actually closed in the last week or so. They were originally put under contract in August, wentthrough their due diligence period. This is a small example, but the originalprice under contract was around 24.7 or 24.8, something like that, and weultimately took a reduction in the price of $600,000. Closed the deal at a $24.2 million number, which effectivelyincreased the return by about 18 basis points to the investor, and theyfinanced the project with a Freddie Mac 77% loan to value mortgage, so there isfinancing out there, it was closed. And the effective cap rate was in the sort of mid sixes, ifyou use sort of standard underwriting, which is 250 a door and 3% managementfees. If you put actual CapEx that we were experiencing, the cap rate was 5.4,5.5, something like that, so we have seen actual deals close. But yes, the cap rates have gone up slightly, but again inthat particular example, that was in the range of our target from our low toour high, in terms of what we thought the property would trade for. So we were happy to get the deal done at an 18-debt increasein cap rate. It was within our tolerance zone of where we thought the propertyshould trade at.

Okay. The second question is just your thoughts on where --on the term market, term loan market, versus the unsecured market, just want toget your sense of what you see as a tradeoff between rates and covenants, andthen also, are you seeing any openings in the unsecured debt market that youmay be willing to -- to go back to issuing unsecured in the near term?

Well, first, as it relates to covenants, the covenants underour term note are identical to the covenants that we actually have under ourline of credit. So we were already operating under those covenants, so there isreally no impact to us. As it relates to the term loan market itself, when we closedthe transaction, it was probably 60 to 70 basis points inside of what we coulddo in an unsecured bond offering. That probably has narrowed a little bit,probably more in the 50 to 60 basis points difference. So there still is a premium that the unsecured bond marketis getting over the term loan market itself.

I think at the end of the day, the term loan just shows thatthere are additional pockets of liquidity out there for well-run companies togo tap and it is because of the issues in the other part of the unsecuredmarket, it just was more -- cheaper to go out and deal with the term loan asopposed to going to the unsecured market. The other thing that is out there for multifamily that isvery different than other commercial real estate is Freddie and Fanny. I meanthey are a tremendous fours in the multifamily market and they are out therefinancing lots of different borrowers currently.

So you're not inclined to back to the unsecured market inthe near term.

Only through our joint ventures, but we are very happy towork with Freddy, and fanny on our joint ventures and we will continue to dothat. We will not put secured financing on Camden's balance sheet, but we willthrough our joint ventures.

But unsecured, the unsecured debt market.

Oh, I'm sorry, absolutely, we will be back in the unsecureddebt market when it makes sense to go back in there. I think at the end of theday, I think it’s come back some from the sort of -- some of the uncertainty inthe summer and after Labor Day. But, when you can execute a transaction like our financialteam did on the term loan, there is no reason to go into the unsecured market.So we will go -- we will be an unsecured borrower, we will issue bonds in thefuture. And when the market settles down, and you can have lessuncertainty in that marketplace, and less volatility, we will be back. But itis sort of the -- at the end of the day, it’s all about where you can get thebest pricing for your financing, and the term loan was a much better option todo.

Thank you.

The next question is from Jonathan Habermann with GoldmanSachs. Please state your question.

Hey guys its Mark Biffertok. First question I guess over thefew years, the talk is been about the gap between the cost rankers is own inthe market. And given that you're now saying that housing is becoming much morecompetitive, can you just talk a little bit about where that spread iscurrently? And you know, are people willing to pay more to be in a house if itis a smaller gap?

Yes. The gap is still -- I mean the numbers that we look at,which Ron Witten employs and I think most people look at them that way, the gapfrom rent to own is still significantly, from an historical standpoint, abenefit, to the benefit of renting. Now the gap has narrowed, there is no question about it. Andthat’s primarily come from the decline in single-family home prices. Butoffsetting that in the last six months has been the increase in the interestrates that people have to pay. So there has been some narrowing. But from the standpoint ofcompetitiveness, the rent to buy issue with regard to single-family homepurchases is still a significant advantage. The difference and the distinctionis what’s going on, on the single-family rental side of the equation. And the fact that people -- that the underlying rents onvacant single-family homes did not necessarily bear any relation to what thecost of a homeowner to own that home would be. It would be is sort of whateverthe market-clearing price is in that rental. So, the change of the competitive balance in our portfoliohas been primarily the result of the influx of rental inventory of single-familyhomes. Not necessarily a narrowing of the rent to own spread for single-familyhousing.

We've seen the percentage of people moving out to buy homesgo to a very low level, 17% during the quarter, compared to 20s two or three orfour quarters ago. So it’s not about people wanting to go buy a home, but whenyou have inventory when you can rent a home relatively cheap because somebodyis not covering their mortgage payment and they really don't care about, thatthey're just trying to get the best amount of cash flow they can, that’s wherethe competition is. It is not the psychology changing from people to go buyhomes again.

And Mark, also, one of the things that is very differentwith regard to the single-family home situation that we are seeing right now,is that it is also an issue for qualifying. What was going on previously wasn'tso much about the competitive pricing and can someone, can they affordultimately the payment on the mortgage that they took out. But all of the -- the fallout from the sub prime borrowing,and the no doc loans, et cetera, that piece of the puzzle is where we weregetting hit the hardest with regard to move-out and home purchases out of ourrental inventory. And that, regardless of what happens on home prices in thefuture, I think for the most part, that era is behind us, at least until thenext time.

Okay. And the unit types that were hit the hardest, is thatyour three and two bedroom?

Yes, absolutely. Three bedrooms, those are always going tofeel the impact first, but most of -- we don't have a large percentage of threebedrooms in our inventory, somewhere around 5% in the total portfolio. But we definitely are seeing the impact. And if you look atthe vacancy and you stratify it, we have a much higher percentage of twobedrooms vacant right now than what you would typically see. So I think that’s consistent with the underlying theory thata lot of these folks are ending up in a rental home.

Okay. So if you look at the fourth quarter guidance that youguys have given, what puts you had the top end of that range versus the lowend? Are there any land sale gains or things that would potentially coming inthe fourth quarter that would push it to the high end or is it simply a matterof maintaining occupancy?

I don't think there is anything unusual in the fourthquarter so hitting our occupancy number is the key driver for the fourthquarter.

Okay. Thanks.

The next question is from David Bragg with Merrill Lynch.Please go ahead with your question.

Hi, good morning. Just want to follow up on Alex's questionearlier, and touch on the assets that are under contract right now. Where mightwe see cap rates come out there versus your expectations of a few months ago?Would it be in line with that 25 basis point move?

Well, actually the projects that are contract right now werenegotiated post summer. So, we put the properties on the market during thesummer, and then had a very widely marketed situation, and the pricing forthose that came in where we fix those or sign those contracts about maybe lessthan a month ago, we're negotiating the current market. So, we didn't expect a lot of changes from where we were inthese particular assets, because the market was the market. By the time theywere sold. Or they were put under contract. So what we did get, pretty much inthe middle of the zone of where we thought we would get pricing on theseproperties, when we put them out for sale at the beginning of, sort of themiddle of the summer. So, we haven't, at the end of the day, we still feel reallygood about the pricing on those properties, and are hitting right in the middleof the range of our expectations.

Okay. And then after closing on those, just as we lookdispositions going forward, where might we see just market-wise that activitycoming from? Is there any change to your thinking on what markets to sell in?And then also given that, could you just provide your updated thoughts onbuying back the stock at these levels?

Our dispositions, once the kind of non-core markets havebeen dealt with and included in these asset packages of transactions inGreensboro, which cleans up the non-core, markets. Our disposition strategy will continue to be looking at theassets that are scheduled and slated in our world to have the lowestyear-over-year change in return on invested capital, and those are almostalways going to be the assets that tend to be older, that have more CapExrequirements, and then the second consideration is always maintaining ourmarket balance. So, where we have a significant development pipeline, a newsupply coming, we're always looking at those markets for recycling capital, butat the end of the day, our disposition strategy absent the core markets andexiting the non-core markets is driven by our expectations of future changes inreturn on invested capital.

As far as the stock buyback, we will continue to be in themarket on a selective basis. At the end of the day, it is about where we canmake the best return on our investment. And today, with the current sort of uncertainty in the stockmarket, and financial stocks, and REIT stocks in general, and oursspecifically, we think that the stock at this level is a good value relative towhat properties sell on Main Street for, and as evidenced by sort of ourdetermination in the last sort of cycle where we had this happen, in the sortof '98, '99 time frame, where we bought back nearly 20% of the outstandingshares. So far, we bought back 86 or $87 million. We have a $200million authorization from our board. As long as we can continue to sell assetson Main Street for a dollar, buy them back from Wall Street for a discount onthat dollar, and maintain our balance sheet flexibility, and our sort ofleveraged neutral situation with buying the stock, we will continue to do that.

Okay. Just the last question for you, at your investor day,you touched on your efforts targeting foreclosed homeowners, but what othermarketing activities are you looking into? For example we noticed a couple of weeks ago on your websiteyou were highlighting a deal of the century in Tampa offering no fees. Whattype of activities such as those are you pursuing and how are those beingreceived so far?

Well, the one that you mentioned is kind of interestingbecause it started as an initiative here in Houston, the Deal of the Century,and that's something that we, as we develop national marketing programs withour marketing group here, we make them available to our regional operators, anddepending on what their needs are, they will either access them or not, butthat is one in particular that we've had great success with. We are a marketing-driven company. And we are heavilyoriented towards outreach marketing. It is a requirement of all of our on-sitemarketing professionals, that they engage in systematic outreach marketing tothe businesses in the communities that we serve, and so that is never going tochange. Now, as the market changes, different opportunities willpresent themselves. The one that you mentioned about marketing specifically tothose unfortunate homeowners who are facing a foreclosure, that's going to bean issue in more and more of our markets. If our view of what is going on inthe single family housing markets continues to unfold. Right now, that program is actively engaged in Las Vegas andTampa, which are probably two of the more challenged markets with regard tosingle family inventory, but I would expect that over as the foreclosures pileup in some of these other markets, it is going to be an initiative that we'regoing to utilize there as well. We are constantly seeking ways to make sure that we are atthe forefront of marketing our communities and now more than ever is theappropriate time to be doing those kinds of things so we will continue alongthose lines.

Okay. Thank you.

You bet.

The next question is from Matt Ostrower with Morgan Stanley.Please go ahead with your question.

Good morning. Just, can you guys comment on the degree thatthis, it is very hard to quantify the rental market from the single familyperspective, but can you talk about the degree to which that is being affectedby price point in your communities? Are you finding that the lower rent part of your communitiesare somehow less affected by this than some of the higher rent communities?

I don't really, as you look at the results in ourre-forecast for the fourth quarter, I would have to tell you that it is acrossthe board. Because while you might be intuitive to say well, if you stratifiedyour portfolio, and you had a price point of X, and Y market, the problem withdoing that is the price point for the entry level to the rental market is verydifferent market to market. And you know, southern California is a totallydifferent experience than Denver, which is completely different than Orlando. But I can just tell you that the anecdotal evidence from ouron-site staff and that is kind of supported by the top-down macro view is thatthis is probably the largest, and we think the largest culprit in the weakdemand, and then second to that would be the moderating job growth. But it is -- I think it is across the board and clearlythere is probably a little bit of bias towards if are you in a Tampa, maybethere is a bias towards the higher end of our portfolio, but as I look at ourmove-outs to home purchases, across our entire portfolio, in the last quarter,it ranged from a high of 27% in Charlotte, to a low of 8% in L.A. So there isquite a bit of variation in those numbers, but overall, I think the trend ispretty intransigent.

I would add, though, that even though it is hard to get yourarms around some of this data about people moving out for home, the demandbeing siphoned off the top for home, we do have a higher vacancy in our twobedrooms than our one bedrooms and that would indicate that price point isdefinitely an issue, the two bedrooms are going to be more expensive than theone bedroom, so you have people who are in the one bedrooms, and the lowerprice point product that where we have our best occupancy. So, I think that when you look at the components of wherewe're struggling, it is definitely in the more expensive apartments by virtueof them being bigger. So I think that you could draw some inference to that beingthat the lower price point folks are not moving into houses as much as thehigher price point people, and then the higher price point people perhaps arefolks that require extra space, and then get pushed even further into a singlefamily home option because they want more space for a lower price, if you will.

Okay. Thanks. And then on the timing that you talked about,you talked about potentially the starting to abate in mid '08. It just seems tome that a lot of the forecasts out there really aren't calling, that a lot ofthese sort of recovery numbers are being pushed way out, right? Especially given all of the re-sets that start to happennext year. Why would you be saying '08 instead of '09 or even 2010.

My mention of '08 in my comments is strictly the inflectionpoint of the difference between the addition to new, the incremental additionof new homes to the inventory, through completions, and the projectedsingle-family home sales rate. That is not a resolution of the plus or minus $1.5 millionto $2 million unsold homes that are out there. It is simply saying we thinkthat is probably the peak of the unsold inventory.

The other thing I think you add to that too is that when yougo market-by-market-by-market, you look at Las Vegas as an example, I mean theyclearly are one of the poster markets for foreclosed homes and excess and allof that. And the complication in Las Vegas, however, is that thetiming of new casinos coming online, it just so happens that there is not a lotof new casinos this year, but there are a bunch under construction that opennext year, so the job outlook for Las Vegas, which has fallen off from - LasVegas for the last 15 years, has been in the top two or three markets on apercentage basis for job growth, this year it has had very anemic job growthbecause there haven't been any new hotels opening; they are in the pipeline,but they haven't been opening and next year the Las Vegas job growth isprojected to be a lot better than this year. So, along with sort of a moderating, sort of a peaking ofthe home inventory, you are also having a pick-up in jobs. The same thing canbe argued about Orlando as well. Even though it looks like Orlando has sort ofperhaps turned the corner and maybe should improve sort of towards the secondand third quarter of 2008 and it is definitely job related. And so you have to sort of take both the inventory numbers,the single-family home overhang and then what is going to happen to the jobmarket. Again, that is really the driver.

Okay. Great. And then just in terms of the timing of yourre-forecast, did you do that re-forecast before or after your investor meeting?

After.

Okay. Great. Thank you very much.

We also did one before the conference as well, but everyquarter, we re-forecast, so it is not like we re-forecasted because we wereworried about the world. We just re-forecast as a general rule.

The next question is from John Stewart with Credit SuisseGroup. Please state your question.

Thank you. Rick, can you give us a sense for how much of theportfolio that you think, what's kind of non-core that you would expect to movethrough in 2008?

The question is non-core?

Yes. In other words, I'm trying to get a sense for whatlevel of dispositions we might look for next year?

Our level of dispositions, generally, are going to runanywhere from if we just in a perfect world, they're going to run anywhere from200 to $300 million.

Okay. And can you kind of speak briefly to your investmentphilosophy going forward? I guess that particularly given your comments aboutthe leverage neutral share buyback any additional share repurchases wouldprobably be funded with proceeds from asset sales, but you're obviously kind ofpulling in the reins on development a little bit. How do you think about where you might be inquisitive givenwhere you see cap rates going forward? And to what extent do you think you needto keep your powder dry in this environment?

I think keeping your powder dry sort of right now is a goodthing to do. And just given the uncertainty of cap rates and those kinds ofissues, so we are not a very aggressive buyer of properties or acquisitions atthis point. We are being definitely more selective on our developmentside. I think at the end of the day, it really will be -- we will just have tosee how it plays out and if the arbitrage between the private market and thepublic market continues and we see the opportunity to sell more assets and buystock, we will do that. On the other hand, you always have to be in the market,we're in the business of buying, selling and developing real estate, and whenit makes sense to buy, we will buy, and when it makes sense to develop, we willdevelop and when it makes sense to do nothing, we will do nothing. And that issort of the philosophy. It is hard for me to imagine the value in terms of beingable to its my investment decision is buying the stock at these levels, orbuying an asset from Main Street at a dollar, I just can't see us doing that.Now, that doesn't necessarily mean we wouldn't do a joint venture or wewouldn't have a structured type of transaction, maybe we will be in themezzanine business again. And there is a lot of opportunity out there in thisdislocation. With the lower leverage that is required in this currentmarketplace, there are definitely, when there are dislocations, there areopportunities for people with the powder dry.

Okay. That's helpful, thank you. Keith, you mentioned thatyou guys are the only publicly traded multi-family REIT that has had a revenuemanagement system really through the cycle. What are you doing to stay ahead ofthe curve, tracking the single-family shadow market?

Well, the single-family shadow market, as we talked about, alittle bit, is very hard to get your hands around. But what you can do, though,is you can look at market-by-market and you can look at the historical levelsof kind of the normal level of unsold inventory and then you sort of comparethat to what excess inventory is in the markets today, relative to historicalnorms and if you just go down the list, there is not a; I think we have onemarket of ours that currently has less single-family home inventory than whatthe historical norm is. And that happens to be Raleigh, which interestingly enoughis only market that had a positive forecast in the fourth quarter. So, the factis, is that the unsold inventory well above historical levels, we know thatthat is going to find a home, whether it is a single-family home sale, kind ofat a fire sale price or where people are going to hang on and put them in somekind of a rental mode. What percentage of that falls into which camp, that is areally hard one to tell, but I can just tell that you the anecdotal evidencefrom our on-site staff is pretty compelling that when they're losing, peoplegive their notice of non-renewal and our community managers as part of ourdiscipline call them up and say what's the deal and more and more, they'rehearing, we have an opportunity to rent a really great home. And the pricing of those rental homes has become very, verycompetitive in the markets that we operate in. So, it’s hard to quantify it.What we know, though, is when we see our traffic rates down and we see theanecdotal evidence from our community managers that that is in fact occurring,you just put two and two together and the conclusion is kind of self evident,but I think it will be interesting to see how it plays out in the next coupleof quarters.

Okay. Thank you.

You bet.

The next question is from Richard Paoli with ABP Investments.Please state your question.

Hi, guys. I'm curious to recall the treatment of concessionsthrough the Yield Star system, I think that you basically do upfront rightpricing and not really a lot of concessions and contrast that with what youused to do in the past before this. Is it just that we're maybe seeing, the real effects of sortof softening rents faster because they're up front versus sort of kind ofburning down concessions, building up concessions over time and amortizingthat?

Rich, the short answer to your question on revenuemanagement is, is that we do it completely on net effective pricing. So, in ourworld today, if were you to look at it, the amount of concessions and it only wouldbe fee concessions and those type things is trivial, so the answer is yes, wedo net pricing. It is a very interesting point you raised though and it is withregard to what behavior would have been among our regional staffs and ouron-site community managers in the old world and by the order world, I meanabsent revenue management. In the old scenario, without the discipline of a revenuemanagement system, where people make decisions, pretty much on an emotionalbasis and are almost always driven by what their current occupancy or forecast,60-day out occupancy is, the bad behavior that comes from that, which isimpossible to administer in any kind of disciplined way, the bad behavior thatcomes from that is, if you see that your projected NOI is might fall below whatis in your budget, then there are all kinds of things and machinations andhoops that people will jump through in order to maintain currently above NOI orbudgeted NOI, because there are great incentives built into our process and ourculture and our bonus structure, with regard to making your monthly NOI number. So, the bad behavior of the old days, which is make in orderto maintain occupancy at all costs, is you see heavy discounting of rents orconcessioning. And in a revenue management world, that is not possible. It is amarket-clearing rent. But it leads to me that conversation leads to the next one,which is there is unquestionable, in my mind, that what many of our competitorsare doing right now, and I'm not necessarily talking about the publiccompanies, I'm just talking, it is a very small percentage of the overalluniverse, I'm talking about the world out there, and the lowest commondenominator. There is no question in my mind that what they're doing isexactly the bad old behavior from the bad old days, which is heavilydiscounting units that don't need to be discounted in order to plug a hole inan occupancy which only creates a bigger problem six and 12 months out. So in a revenue management world, yes, you're going to seethe impact of that slowdown sooner, but you're going to maintain a disciplinethat will allow you to maintain the integrity of your overall rental structureso that when things do turn around, and stop declining, then we will be in aposition with a well-positioned rent role to take advantage of that. So that is also in my mind part of the explanation for whyyou kind of look at the competitive set today, and their NER performance versusours I think that is part of the answer and really the next six months willtell.

So if we as onlookers need to get a little more accustomedto I guess both reported rent volatility on both the down side and the up sidebecause of the smoothing nature of the concessions.

What I think you should be looking for, as more people takeon revenue management, you should look for a closer fit to the underlyingmarket conditions. So, whatever if there is a real hard up-tick, as we saw in2005. You should see a hard up-tick in revenues. If there is areally hard downtick, the revenue management system will recognize that andrespond accordingly. But what you also can expect is that over the period of acycle, both up and down, that the total revenues will be maximized.

Right.

You may get there in a really different way than what yousaw in the past, which is this lagging behavior, as people try to figure out ifthe market was really getting better, and then this incredibly lagging behavioras people hung on to last month's pricing in the face of a declining market.

My only other question is, and forgive me if I missed this,on the sequential operating expense increase, I know seasonality played a bigfactor but I think just in my own mind's eye the number looks a little largerthan normal. Is there any sort of unusual items that drove that?

Yes, we had some big tax adjustments in the quarter, Rich,which is other than the seasonality that we normally see, because of the turncosts in the quarter, and some higher utility costs, it is all explained bysome relatively significant tax adjustments in the quarter. And again, I would caution and guide people back to the yearto date expenses, which are year to dates 3.8 and if you strip out the utilitycomponent of the expense items that we have to run through for our PerfectConnection and Valet Waste, it is closer to 2% year-over-year and that's thenumber that we're very happy with.

Does the higher and I know you're not officially getting '08and haven't probably finished the budget but the higher tax adjustments portenda little higher level of expense growth next year?

Rich, I don't think so. We have in the past three or fouryears, when the dust all settles on revaluations and rates and our protests andlawsuits, we consistently come in around the 3% year-over-year expenseadjustment. And I don't think that our '08 budgets will be materially differentfrom that. But it is a fight every year. And you start out withvaluations that always scare everybody around here, and then we work throughthe process, and somehow or another, it always ends up at about a 3% expenseincrease on the taxes.

I see. So this was -- these are sort of new tax bills comingin for the future year, and not necessarily a win or a loss on stuff that youare fighting on this year?

It is a combination of both.

Okay.

It is a combination of both. But I think when it is all saidand done this year on tax, we had some adjustments earlier in the year that wetook a positive adjustments, and we had some give-back in this quarter, butoverall, to plan, taxes are not going to be a big part of the problem.

Great. Thank you.

You bet, Rich.

The next question is from Haendel St. Juste from GreenStreet Advisors. Please state your question.

Thanks, guys. Actually, my questions have been asked. But Ithink Craig has a question.

Yes, Keith, just from your prepared remarks and yourcomments about an accelerating slowdown in the fourth quarter, I kind of workedthrough your numbers for full-year guidance versus year to date, and it lookslike you're kind of implying a fourth quarter year-over-year revenue growthnumber in the low 3% range. And I know you guys haven't provided guidance for '08, but Imean that is a pretty negative trend coming from 3.6 in the third quarter whereyou guys were in the first half of the year. Do you think that carries out tofurther deceleration in '08 or is there some level of seasonality in thatfourth quarter number? And I'm trying to sort of contrast where you guys are andsort of your negative comments versus the only other two companies that areproviding guidance for '08 at all on a revenue side are kind of in the high 3%to low 4% range for next year.

First of all, you're very quick with your math, althoughthere is a way to move, when you're using the midpoint of the guidance, I thinkwhat we will end up with at our midpoint of our guidance is about a 3.4%revenue growth versus the 3 that your numbers indicated. So I don't think that the deceleration is quite what you hadin mind. But as you look out into 2008, we're going to go through our process,and we're in the midst of that right now. And with regard to kind of thinkingthrough where '08, puts us, we will just have to see, and we will provide youwith real detailed guidance on that when we have it. But I think that the fourth quarter will be interesting. Notonly for us, but also some of our other competitors, and I think as you look atthe fourth quarter of '07, and out into the first quarter of '08, I think theywill be real instructive for what the direction of the market is.

How much of that, though, might reflect seasonality? Or isthis really kind of more market trend as opposed to….

Craig, there is always seasonality in the fourth quarter,but we also budget for seasonality in the fourth quarter, so what is -- thething that has got our attention that is very unusual for us is to have all sixoperating regions with a reforecast that is below fourth quarter originalbudgets. I mean that is just -- I can't tell you -- I mean I've beendoing this for 15 years and I don't think I've ever seen that happen before.Except in the year where we -- I think we had one year where we revisedguidance and everybody missed, but heck, that was evident by the second quarterthat everybody was going to miss. So that is a little bit unusual for us. And so yes, there issome seasonality in it. But we also -- we plan for some seasonality. So it issomething different than that.

Okay. Thanks.

You bet.

The next question is from Karin Ford with KeyBanc CapitalMarkets. Please state your question.

Hi, good morning. If I'm looking at my numbers correctly, Ithink sequentially from the third to the fourth quarter last year, you guyslost about 90 basis points of occupancy. Do you think you could see the sametype of sequential decline in occupancy sequentially again this year? Or do you think that because you're starting from a lowerbase, that number won't be quite so dramatic?

Yes, I don't think we will see that kind of decline, Karen.We ended the third quarter was 94.5 on average and we're slightly below that aswe stand here today. But the decline last year was really the unusual part ofthat was the third quarter occupancy number. So I don't think we will see anything like that. I think wewill see some -- potentially see some moderation from the 94.5, but I don't seeit anything like it was in the third and fourth quarter and last year.

Second question, I wanted to ask you about your comments onthe SEC. I think you said the commission viewed your bulk purchase arrangementin Perfect Connection positively. But just given the rationale behind the ruling was to giverenters more choices and to provide more competition among the providers, I'mcurious as to whether or not you think the commission at some point would wantto modify the sort of the forced purchase of the requirement that residentspurchase cable in Perfect Connection in the future.

The only specific comments, and these were in conversationsthat Greg McDonald, who heads up all of our cable initiatives, and deals withall of the regulatory matters, he actually had a conversation with one of thecommissioners, and in the course of the conversation, there were some publiclyreported positive comments about bulk agreements. But the rationale behind the positive view on bulkagreements is simply what you just said which is, the commission, at least thisone commissioner, viewed that, that is a way for consumers to aggregate theirpurchasing power and actually get a better bargain with the cable companies. Because, if you think about the Perfect Connection, in themarkets where we are operate, in every case, we are offering our residents alower monthly cable rate than what they could get individually as subscribers. So the SEC's view of that is I think, ultimately it is aconsumer friendly arrangement as long as we are passing on what in effect is abulk discount and some portion of that to our consumers. So I think there is atotally different political question or concept with regard to the bulkagreements. With regard to the exclusive access, the reality is, is thatour agreements right now do not preclude, and would not in the future precludeAT&T or Verizon or some one who has the technology to transmit cableprogramming over a phone line from doing so. In fact that is no different than the situation we haveright now with regard to satellite dishes. We still, believe it or not, westill have quite a few people in our portfolio, we have fewer, which is a goodthing, but we still have quite a few who have a satellite dish attached totheir railing outside their apartment. But they're making the choice to say, yes, they're going topay for not only Perfect Connection, but they want to pay for whateverprogramming they're getting from a dish that they can't get through theincumbent provider. And most cases, there are a lot of foreign language channelsthat aren't available through the incumbent providers. But the point is that isthe reality that we have right now with regard to satellite dishes. And peoplecan choose to do that. Now, the question of saying, yes, but you're requiring thebulk arrangement, well, that's true, we're requiring the bulk arrangement,because that's the only way that business model works and that's the only waywe can guarantee the discount to our existing customers.

Okay.

But I think it is a different thing than what they've tryingto get at right now, which is the exclusive access agreements that there reallyanti-competitive, and we've seen said that and we've been screaming at foryears and we have three agreements that we would love to get rid of. So anyway,I think it is a different set of facts.

SEC aside, given the direction the market looks to beheading, do you think that could affect your ability to have people acceptthings like the Perfect Connection in the future?

That's not even, I could tell you it is not even on theradar screens of the questions that we are having right now with our, andconversations we're having with our on-site staff. It really has not been anissue with regard to rolling it out. We continue to roll it out in new markets. We just kicked offLas Vegas here about three months ago. And we're way ahead on our penetrationrates of what we expected in every case. So, I think people, that's a value proposition, cablepenetration rates on most of our communities are in the 80, 90% range. People arepaying for it now, with Perfect Connection, they get it, they pay less.

Okay. Thanks.

You bet.

The next question is from Rich Anderson with BMO CapitalMarkets. Please state your question.

Hi, good morning still for you guys. I guess, the firstquestion is I listen to this and it is like Yield Star has been around for twoyears, has two years of history, and we're really hanging our hat on somethingthat doesn't have the history that you guys have, as real estate professionals. So, I mean is there a chance that it could be wrong?

Rich, that is a very interesting question.

I'm picturing you guys going to work every morning and likekneeling in front of the Yield Star terminal and bowing to it or something.

No, look, Yield Star is a tool, okay? It has to be managedby people. And people have to ask the question every day, on-site manager, yourdistrict managers and we have Yield Star pricing specialists that deal withissues that come up, and so it is in fact a tool, not a panacea. It is not on autopilot. It is managed every single day by thepeople running their properties. The different in the past was you didn't havean ability to forecast and you didn't have an ability to run all of the numbersthat Yield Star runs. What it does simply is forecast and figure out all of thepermutations that you need to understand as you're marketing, as you're runninga property. Now, I will tell that you, we have had a lot of discussionin-house about okay, what about Yield Star, we question it all the time, weanalyze it, we have people running numbers, on what it is doing and when it isdoing it and how it is doing it. And so it is not just on autopilot and we run our businessand don't look at what it is doing every day. The issue you get is you have toremember that in the past, and what a lot of people are still doing today thatdon't use yield management is they're using their emotions to drive theirdecisions. And when a manager gets to 93 or 94% occupied and they'remissing their budgets, it is easy for them to discount units. And you have to thinkabout the math on discounting units. If you drive occupancy up 100 basis points by giving a monthor two free and then amortize in that month or two free over the life of thatlease, you are much better off letting your occupancy drop and having a lowerrental rate to make that deal as opposed to giving two months away that affectsyour cash flow stream over a much longer period.

I understand that it is not, as you described. I mean thereis a lot of thought that goes into it, but I think it was Keith who sort ofsaid we're the only company that are using revenue management over an X periodof time and you think that that is the reason, why you guys are seeing it andother people aren't seeing it.

I think that's right, because our people aren't giving twomonths free and jacking their occupancy up.

But what happens next quarter, or the quarter after that,your peers aren't seeing this single-family rental, in fact, could we thenconclude that this is just a Camden thing?

I think that is a very good question, because that’s thequestion that we debate in-house. Because we obviously look at all of themarket data, we look at all of the competitors with that information and wecompare it to our properties and we go, let's scratch our head, what's going onand when you start looking at the net effect of rents and you also haveconference calls with all of our regional people. And when regional people tell us that their competitorsacross the street are giving a month free or two months free and we're not, weknow what is going on and when you start looking at the net effect of rents andyou also have conference calls with all of our regional people and whenregional people tell us that their competitors across the street are giving amonth free or two months free and we're not, we know what is going on. And so I would say that if we see that Camden is underperforming over the next two or three quarters compared to our competitors thenwe have to say, well we have something else going on other than the marketfalling apart or the market being weak because of home sales or something likethat. But if you take key sort of went through these numbers andwe don't want to say, well, look at last year when we under performed thisyear, but if you take the rental rates that people are charging at thebeginning of 2006, and you take the rental growth in the markets and put a topset together of the same markets to our competitors. Our average rent per apartment is higher now than ourcompetitors if you take rent to rent from 2006 to where it is today. Now, wegot a lot of our growth in 2006, and our growth moderated in 2007, but the absoluterent that we're collecting on our properties is higher today than ourcompetitors. Now the issue you have now, however is that our rentalrevenues are moderating. And if our rental rates or rental revenues continue tomoderate and our competitors don't, then we have a bigger discussion and abigger question to ask. But a quarter or two doesn't make a trend. We will seewhat happens.

To your point it will be interesting.

It will be very interesting and we absolutely believe thatrevenue management is something that helps our people operate their businessesa lot more effectively than the emotional roller coaster that they're onwithout any kind of help.

Okay. The second question is, on buying back stock, if youknew that your stock was going to be unaffected in sort of the next year or so,from a buyback program, you knew it was going to go down, or somehow, you hadthe foresight would you still buy back stock? The question is, are you buying back stock to support yourstock price or are you buying back stock because you think it is the rightinvestment?

We are not buying back stock to support the stock price.There is no way you can buy enough stock with the current rules that you haveand when you can buy…

Send a signal.

To support your stock price in any way. So our investmentdecision, on buying stock, has nothing to do with our ability to affect thestock price. It is a real simple calculation. Basically, whether you think thatreasonable investments at that price relative to the alternative investmentsthat you have.

Understood. I just wanted to send some strong signals aboutbuying back stock, and so are others, and it clearly is probably the rightinvestment, but, you are eating up dry powder in the process, and it is notgetting anywhere in the stock.

Well, as long as a disconnect exists on Main Street and wecan buy stock at good prices and sell it cheaper than we can assets and thenmake sense.

Thanks, guys.

You bet.

The next question is Michael Salinsky from RBC Capital.Please state your question.

Good morning, guys. With your reduction in NOI and revenuegrowth expectations, have you seen any movement in development yields or havecost moderations basically, specifically on the garden side, products, helpedoffset this? I know you had mentioned pushing back a couple of projects inFlorida.

From a development perspective, our current pipeline, wehaven't seen any real erosion of our yields and our current pipeline that isunder construction today an I think you're exactly right and less pressure oncosts and we're not having big cost overruns now which is a good thing. Obviously, and I think where the pressure is, and from adevelopment perspective, is the pipeline that hasn't started today, and yes, wehave delayed a couple of projects, as a result of pressure in the markets thatwe didn't anticipate. So we don't need to start projects tomorrow. We're not we'redriven by total return on our projects, and at the end of the day, we willevaluate them as the market goes, and if they don't make sense, we won't buildthem.

Secondly, with regard to the land parcels that have you forsale, have you seen any moderation in land prices to date?

We have seen some moderation in land prices. No question.The homebuilders and condo buyers that were running land prices are up clearlynot doing that now and they're marking to market some of their land portfolios.We as a matter of fact have had a number of land parcels under contract, fornew development pipelines that we have renegotiated and dropped or cut priceson and what have you. So yes, land prices have moderated. And the properties we'reholding for sale have moderated some. But we have pretty big profits built intothese land sales so we don't have any diminution of any land on our balancesheet or anything like that.

Okay then final question, at your investor day, you hadmentioned that you had sent out some pamphlets to some of the peopleessentially that are under pressure, the single-family markets. Have you seenany change in credit quality or have you seen any demand pickup or positiveresults from that?

We haven't seen any diminution of credit quality. The keypoint to the marketing program is that we are still underwriting credit, and aslong as the people, if they have a foreclosure, getting ready to be foreclosed,we will ignore that as part of the credit, but we will not ignore bad credit. So if the people were not paying their credit card bills, orpaying their phone bills or whatever, then they're still not going to be ableto lease a Camden apartment. If they just have happen to be the unfortunate oneand didn't read fine print on the mortgage and it went up and doubled and can'tmake that payment. We're okay. Or we have seen leases in Las Vegas and I thinkin Tampa with the program. And it is working. How much, we just started a fewmonths ago, so we haven't been able to get a big fix on how many actual leaseswe're getting but we know we are getting leases.

Thanks, guys.

Absolutely.

There are no further questions in queue. I would like toturn the call back over to Mr. Campo for closing remarks.

Great. We appreciate the time everyone spent on the calltoday and we look forward to seeing a lot of you at NAREIT in a couple ofweeks. So thank you very much and we'll talk to you next quarter, and see youat NAREIT.

This concludes today’s teleconference. You may disconnectyour lines at this time. Thank you for your participation.