Welcome to the Camden Property Trust third quarter 2008 Earnings Call. (Operator Instructions). Now, I would like to turn the conference over to Ms. Kim Callahan, Vice President of Investor Relations. Ms. Callahan, you may begin.

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Good morning and happy Halloween. It's appropriate that our call is on Halloween, relative to the tricks and treats that we are experiencing in our markets, and the general state of the capital markets. ': Given the challenging economy and job losses today we are pleased with the third quarter property operations. Our on site teams are doing a great job navigating these uncertain times, and I thank them for their continued commitment to provide living excellence to our residence. We measure our on-site teams quarterly performance relative to MPF published market data. Our teams consistently outperformed the local markets. For the quarter, we outperformed 13 of our 16 markets; our charge to our on-site teams continues to be that we ask them to outperform the market in spite of market conditions. We will not be providing 2009 guidance on this call, we will provide 2009 guidance on our fourth quarter conference call. ': ': You might be surprised by these numbers. If you put them in perspective, during 2002 to 2004, recession our net operating income declined from peak to trough to about 11.5%. So, why would the NOI decline be less in this recession? First, our view is that we have been in recession in our challenged markets since the first quarter, but there are essentially three economic drivers that are significantly different this time around, I worry about saying, this time its different, but there are lot of specific things that are different. First the supply of multi family housing is 45% less, going into this recession compared to the last recession. Supply was peaking at a time of significant demand declines in the last recession. Given what has happened in the credit markets, the fact that new developments and financing have essentially dried up, we expect…

': ': The third quarter is always our highest turnover quarter, but 78% for the quarter was higher than we had anticipated. We are still well below plan on expenses for the year. The 3.4% increase in expenses year-to-date, adjusted for the impact of our cable and valet waste initiatives, is slightly less than 1%. So we continue to see good expense controls on sites. We expect to finish the year at the low end of our original expense guidance, however, our fourth quarter expenses will likely show a significant increase over the prior year, due to the $1.6 million in property tax reductions that we had in the fourth quarter of 2007. We averaged 94.9% occupancy for the quarter, as our revenue management systems maintained rents flat to the second quarter, in order to hold occupancy. ': The largest revisions among our markets occurred in Atlanta, which went from a projected 16,000 gain, in the second quarter, to what is now projected as a 3,000 job loss. Los Angeles was projected at 14,000 job losses is currently projected at 56,000 losses. Phoenix was revised from a loss estimate of 12,000 jobs to 39,000 jobs, and Tampa was revised from flat to down 13,000. This 123,000 downward revision to the employment outlook in our markets in the second half of this year will continue to create challenges. Consistent with our expectations for slowing demand as jobs are lost, we experienced a 7% decline in traffic from the third quarter of 2007, and our closing percentage fell from 34% in Q2, to 32% in this quarter. Since quarter end, our occupancy rate has come down to right at 94%, which is higher by 20 basis points than our historical seasonal decline from second to third quarter. ': The largest revisions among our markets occurred in Atlanta, which went from a projected 16,000 gain, in the second quarter, to what is now projected as a 3,000 job loss. Los Angeles was projected at 14,000 job losses is currently projected at 56,000 losses. Phoenix was revised from a loss estimate of 12,000 jobs to 39,000 jobs, and Tampa was revised from flat to down 13,000. This 123,000 downward revision to the employment outlook in our markets in the second half of this year will continue to create challenges. Consistent with our expectations for slowing demand as jobs are lost, we experienced a 7% decline in traffic from the third quarter of 2007, and our closing percentage fell from 34% in Q2, to 32% in this quarter. Since quarter end, our occupancy rate has come down to right at 94%, which is higher by 20 basis points than our historical seasonal decline from second to third quarter. ': ': ': ': ': ': ': ': ': ': ': ': ': ':

': Excluding these non-recurring items that were not included in our prior guidance, FFO for the third quarter would have been $51.2 million, or $0.87 per diluted share at the midpoint of our prior guidance range of $0.85 to $0.89 per share. Our FFO, excluding the non-recurring items, achieved the midpoint of our FFO guidance range for the third quarter of 2008, based on the following: Moderating same store revenue growth and slightly higher than anticipated same store operating expenses, as Keith just discussed, produced $1.3 million or $1.6 million unfavorable variance to our same store net operating income expectations for the third quarter. This unfavorable variance was offset by a $400,000 favorable variance in net operating income from communities in our development pipeline as all communities under lease-up are progressing positively towards stabilization and a $700,000 favorable variance in general and administrative expenses due to lower salary and benefits, incentive compensation and legal expense. During the third quarter, we continued to make significant progress towards the execution of our 2008 disposition program. During the quarter, we sold five operating assets to third parties, generating total proceeds of $115.6 million and resulting in a gain on sale of $65.6 million. This brings our year-to-date disposition volume of operating real estate assets up to approximately 2,400 units, which had an average age of 24 years, generating $140 million in proceeds. The average cap rate on our 2008 dispositions was 6%. Using 2008 annualized NOI and CapEx per unit of $650 and the unlevered IRR was approximately 12%. We are currently marketing for sales seven additional communities with an average age of over 20 years. Three of the communities are currently under contract but we do not expect any to close in 2008. Additionally, in August, we sold Camden South Congress, a…

(Operator Instructions). Our first question comes from David Bragg with Merrill Lynch. Please go ahead.

Hi, good morning.

Good morning. David.

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': ': ': ': ': So those would be the three that I would think would be most likely candidates to move, based on projected job losses from one category to the other. Going the other direction, in our northern Virginia market, we think it has seen pretty decent stabilization. Our DC Metro has held up well, the Maryland has held up well. The big challenge has been northern Virginia. ':

': From an underwriting perspective, we are definitely tightening our underwriting up, lowering growth rates and actually putting recession scenarios, the numbers that I of went through in my prepared remarks. We are using those from an underwriting perspective today. ':

Okay. So just generally speaking, the, NOI growth figures that, from Woodland that you indicated seem appropriate for 2009, 2010 and 2011 as you look forward for acquisitions?

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Okay. Thanks a lot.

Sure.

Our next question will come from Dustin Pizzo from Banc of America Securities. Please go ahead.

Hi, thanks. Good morning, everyone.

Good morning.

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Yes.

Okay.

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Right, just on more like core, core product.

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Okay. Thank you.

You bet.

Our next question comes from Lou Taylor from Deutsche Bank. Please go ahead.

Thanks. Good morning, guys.

Good morning. .

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Okay. And then how about development in leasing, how is the pace going, and what are you having to do there from a pricing standpoint to maintain the leasing pace?

It depends on where you are. The pace is going reasonably well. We have seen some degradation in lease rates by virtue of having to provide a little more concession than we do, we do concessions in the development side of the house versus the stabilized operating side of the house that uses revenue management. We are doing well in terms of getting the projects leased up. I think in our last call I talked about probably a degradation of 25 basis points at least from just slower rent side of the equation in the original yields.

And then how about just in terms of what are the markets or projects are the concessions running a little heavier than, say, some other regions?

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Great. Thank you.

Our next question comes from Jay Habermann from Goldman Sachs. Please go ahead.

Hi, guys. Good morning. Jay Habermann here with [Slone] as well.

Hi Jay.

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Well, Jay, I think the good news is that the starts continued to plummet. The second piece of it is that, in some of these markets you have seen real spikes new home sales. I saw the other day that in California for the reporting period for one month, now one month is not a trend, but year-over-year the sales were actually up almost 100% from the same period a year ago, the bad news is, is that the price was off about 35% from the prior year. ': ': ': ': ': ': ': ': ': ':

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Okay, great. Just last question. You mentioned seven additional assets for sale. Is that something you look to expand upon or is that do you feel comfortable with the asset sales than obviously the liquidity measures that Dennis spoke to?

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Great. Thank you.

Our next question comes from Michelle Ko from UBS. Please go ahead.

Hi, good morning.

Good morning.

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We have got seen any in Dallas. We saw a little bit weakness relative, I mean, Austin has been an incredibly strong market for us for the last two-years. But I would say that we did see a little bit of weakness in our numbers in Austin but again you are talking about from a level that has been really strong for us. The interesting thing is that on the job growth revisions that I was mentioning earlier and I was giving you the ones where there were negative job revisions, but there were also positive job revisions from the second quarter, and the biggest ones occurred in Dallas. It went from a projected 20,000 to a projected now 37,000. Houston went from a projected 37 to a projected 41. And Austin actually came down from a projected 16,000 to a projected 11.4, still a decent number, but less than the projection even in the second quarter. ':

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Okay. And also in terms of your revised same store revenue guidance for 2008, are you anticipating that the fourth quarter NOI growth is going to deteriorate from the third quarter?

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It actually is going to decline slightly because of decrease in occupancy and decrease in other income due to lower turn over and the fees relating to that turn over.

Okay, great. Thank you very much.

Our next question will come from Michael Bilerman from Citigroup. Please go ahead.

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Okay.

But again, over in my initial comments, traffic in the third quarter year-over-year was down 7%.

All right. Also could you provide a little bit of color with regard to discussions the board had relative to buying back that and your appetite for more, going forward?

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Okay. And then, did I miss a few comments on your expectations for the timing and the proceeds related to the land sales?

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Yes.

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Any rough idea of proceeds or amounts?

About 10 million. If it happens, it will be about $10 million on our land dispositions.

Just land or our total dispositions?

Just the land.

Just the land, yes, 10 million.

Okay. And then lastly, Rick, can you give us a little bit of a view of your take on capital markets recovery? How this would play out? And how you guys are underrating or underwriting interest rates going forward.

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Our next question will come from Rob Stevenson from Fox-Pitt Kelton. Please go ahead.

Good morning, guys. Just to follow up on that last question. What are the thoughts about, with the stock at a five-year low about accelerating the disposition program and buying back stock?

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': ': ': ': ': And so that was a big win for National Multi Housing Council. And if you go back to that Bill, the homebuilders were really upset about it, because they got nothing out of the Bill. They actually wanted to expand the ability of homebuilders to go back two years and take operating losses back more than two years, which would have been basically just the Treasury writing the homebuilders a check, and we were effective in lobbying and negotiating that away, and it was a big win for apartments and a loss for homebuilders. ': ': ':

Okay. Thanks, guys.

Our next question will come from Rich Anderson from BMO Capital Markets. Please go ahead.

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Bad?

Another song he wrote.

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Okay. The next question was going to be, sold at 6% cap rate this quarter, and I was going to ask, if you would be a buyer for good assets at 6%?

No.

Okay. Then just a quick one, could you foresee anything in your future where you guys would have to reconsider your dividend policy and cut the dividend, noticing you are not getting paid for almost a 10% yield and conserving capital that way?

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Okay. Great. Thank you.

Our next question will come from Alexander Goldfab, a private investor, please go ahead.

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No.

Okay. Thank you.

Our next question will come from Karen Ford from KeyBanc Capital Markets. Please go ahead.

Just a couple quick ones. The $4 million cost savings, is that 2/3, 1/3 split good as far as splitting it between the G&A and the operating expense line items?

No. Because the positions that were corporate would have been a higher average than salary than the on site.

Got it. So more heavily weighted towards G&A.

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Okay.

Our next question will come from Michael Salinsky from RBC capital markets. Please go ahead.

Good afternoon: Looking at your operating performance by market, it looks like Florida seemed to actually show some improvement just from a quarter-to-quarter basis. Was that a function of just using your comps or anything you switched gears doing down there or what are you seeing basically in that market?

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Okay. I was referring more towards Tampa and Orlando where it seem like the rate of negative growth, and both of those markets seemed to actually decelerate essentially from the first quarter.

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Okay. You talked about turn over. Has your ability to push for insider renewals decelerated materially from last quarter?

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Okay. And finally, a question for you Keith, just given your guidance here, as far as the Eagles, can you specify, which song will be on the next conference call?

No. But before the call I can get you a set list.

Probably in the long run or something.

Long run.

Not Hotel California. Thanks.

May be Witchy Woman.

Thank you.

Thank you.

Our next question will come from Paula Poskon from Robert W Baird. Please go ahead.

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And we currently have availability at Dallas Station. So send them our way.

And just on this quarter, in particular, it looks like expenses were up at a higher rate than usual in the metro area. Is that attributable to something specific?

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': Our take on that is that its really not all that different, because the, at the, at the margins, $70 or $65, $70 oil if we can stabilize in that range, still is very attractive for the Gulf operations, the on-shore operations, in terms of finding new, doing exploration and development. And obviously the refining piece of it, which is a huge component of the oil and gas industry in the Houston Metro area, I suppose at $2 gas is better than a $4 gas for them.

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You bet.

Our next question will come from Haendel St. Juste from Green Street Advisors. Please go ahead.

Thanks, Keith. You actually took my question. I was going to ask you; at what level do you begin to worry about jobs in Houston and Dallas with how oil has traded lately?

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Okay. Looking at those markets, the Dallas, the Houston, the Austin markets, how would you grade those markets to their near term outlook using your grading system?

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Okay. Guys. Thank you.

Thank you, Del.

Our next question will come from Eileen See from Credit Suisse. Please go ahead.

Hi, thank you. What was the NOI decline in your weakest market in the last recession? And second question, regarding your balance sheet structure are you planning to move toward a higher percentage of secured debt, as a percentage of your total debt and if credit market did you do (Inaudible) Would you move back to lowering the percent secured debt.

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Oh. My other question was, regarding the balance sheet structure, are you planning to move towards a higher percent of secured debt if the credit markets continue to be challenged? And then conversely if credit markets improve, would you then move toward lowering the percent of secured debt?

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And then when credit markets improve would you move back towards lowering the percent of secured debt?.

Sure. I mean, based upon the differential and the actual spreads on those two products, but we would look on that based upon current market conditions.

Okay. Thank you.

The answer to your first question. The worst market in the recession on a one year basis was Austin, Texas. And it was down, NOI was down 16.3%. And Austin is really a good example, because what was happening in Austin in 2001, as you recall, it was the hotbed of the tech industry in Houston or in Texas. They call Austin the silicone valley of Texas basically. You had Dell Computer there, you had Intel building a plant. So what happened in Austin that supply peaked right in 2001, and then all of a sudden a tech bust hit and you had massive job losses, because of tech, and you had peak in the supply and then a big drop off of NOI during that period. So Austin was the worst market, and in the peak one year decline was Austin at 16%.

Do you think that any of your current markets could experience that big of a decline?

No.

Okay. Thank you very much.

Thank you.

Certainly.

Okay. Great. That was the last call. So we appreciate the lengthy call, and all the questions, and support. We will talk to you next quarter and see you there. Thanks.

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