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, as well as Part I, Item 1A, "Risk Factors" within our Annual Report on Form 10-K for the year ended December 31, 2023. 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; forward-looking statements are not guarantees of future performance, results, or events. 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 which are not statements of historical fact should be deemed forward-looking statements. Reliance should not be placed on these forward-looking statements as these statements 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 which 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:

• Volatility in capital and credit markets, or other unfavorable changes in economic conditions, either nationally or regionally in one or more of the markets in which we operate, could adversely impact us;

• Short-term leases could expose us to the effects of declining market rents;

• Competition could limit our ability to lease apartments or increase or maintain rental income;

• We could be negatively impacted by the risks associated with land holdings and related activities;

• Development, repositions, redevelopment, and construction risks could impact our profitability;

• Our acquisition strategy may not produce the cash flows expected;

• Changes in rent control or rent stabilization laws and regulations could adversely affect our operations and property values;

• Failure to qualify as a REIT could have adverse consequences;

• Tax laws could continue to change at any time and any such legislative or other actions could have a negative effect on us;

• A cybersecurity incident and other technology disruptions could negatively impact our business;

• We have significant debt which could have adverse consequences;

• Insufficient cash flows could limit our ability to make required payments for debt obligations or pay distributions to shareholders;

• Issuances of additional debt may adversely impact our financial condition;

• We could be unable to renew, repay, or refinance our outstanding debt;

• Rising interest rates could increase our borrowing costs, lower the value of our real estate, and decrease our share price, leading investors to seek higher yields through other investments;

• Failure to maintain our current credit ratings could adversely affect our cost of funds, related margins, liquidity, and access to capital markets;

• Share ownership limits and our ability to issue additional equity securities may prevent takeovers beneficial to shareholders;

• The form, timing, and amount of dividend distributions in future periods may vary and be impacted by economic and other considerations;

• Environmental, social, and governance factors may impose additional costs and/or expose us to new risks;

• Litigation risks could affect our business;

• Damage from catastrophic weather and other natural events could result in losses;

• Competition could adversely affect our ability to acquire properties; and

• We could be adversely impacted due to our share price fluctuations.

These forward-looking statements represent our estimates and assumptions as of the date of this report, and we assume no obligation to update or supplement forward-looking statements because of subsequent events.

Executive Summary

Camden Property Trust and all consolidated subsidiaries are primarily engaged in the ownership, management, development, reposition, redevelopment, acquisition, and construction of multifamily apartment communities. We focus on investing in markets characterized by high-growth economic conditions, strong employment, and attractive quality of life which we believe leads to higher demand for our apartments and retention of our residents. As of March 31, 2024, we owned interests in, operated, or were developing 175 multifamily properties comprised of 59,227 apartment homes across the United States. In addition, we own other land holdings which we may develop into multifamily apartment communities in the future.

Business Environment and Current Outlook

During the three months ended March 31, 2024, our results reflect an increase in same store revenues of approximately 2.5% as compared to the same period in 2023. The increase was primarily due to higher average rental rates, which we believe was primarily attributable to job growth, favorable demographics with a higher propensity to rent versus buy, continued demand for multifamily housing in our markets, and a manageable supply of new multifamily housing.

We believe the levels of new multifamily supply in the submarkets and asset classes in which we operate are elevated in 2024, but should be met with continued demand to absorb these new deliveries. However, if this were to change or other economic conditions were to worsen, our operating results could be adversely affected.

Consolidated Results

Net income attributable to common shareholders was $83.9 million and $41.9 million for the three months ended March 31, 2024 and 2023, respectively. The $42.0 million increase during the three months ended March 31, 2024 as compared to the same period in 2023 was primarily due to a $43.8 million gain on sale of one operating property recognized during the three months ended March 31, 2024, partially offset by a $0.9 million loss on the early retirement of debt. See further discussion of our 2024 operations as compared to 2023 in "Results of Operations," below.

Construction Activity

At March 31, 2024, we had a total of four properties under construction comprising 1,166 apartment homes. As of March 31, 2024, we estimated the total additional cost to complete the construction of these four properties is approximately $97.4 million.

Dispositions

Operating property: In February 2024, we sold one operating property comprised of 592 apartment homes located in Atlanta, Georgia for approximately $115.0 million and recognized a gain of approximately $43.8 million.

Other

In January 2024, we issued $400.0 million of 4.90% senior unsecured notes due January 15, 2034. We utilized a portion of the net proceeds from these notes to repay the outstanding balance on our $300.0 million, 6.21% unsecured term loan due in August 2024. As a result of the early repayment, we expensed approximately $0.9 million of unamortized loan costs, which are reflected in the loss on early retirement of debt in our condensed consolidated statements of income and comprehensive income.

In January 2024, we utilized cash on hand to repay the principal amount of our 4.36% senior unsecured notes payable, which matured on January 15, 2024, for a total of $250.0 million, plus accrued interest.

During the first quarter of 2024, we repurchased 471,282 common shares at an average price of $96.91 per share for approximately $45.7 million under our share repurchase plan. In April 2024, we repurchased 44,692 common shares at an average price of $96.52 per share for approximately $4.3 million under our share repurchase plan. As of the date of this filing, the remaining dollar value of our common equity securities authorized to be repurchased under this plan was approximately $450.0 million.

Future Outlook

Subject to market conditions, we intend to continue to seek opportunities to develop new communities and to redevelop, reposition, and acquire existing communities. We also intend to evaluate our portfolio and plan to continue our practice of selective dispositions as market conditions warrant and opportunities arise. We expect to maintain a strong balance sheet and preserve our financial flexibility by continuing to focus on our core fundamentals which we believe are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs. We intend to meet our near-term liquidity requirements through a combination of one or more of the following: cash flows generated from operations, draws on our unsecured revolving credit facility, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from the ATM program, and other unsecured borrowings or secured mortgages.

As of March 31, 2024, we had no amounts outstanding and had approximately $1.2 billion available under our unsecured revolving credit facility. As of March 31, 2024, and through the date of this filing, we also had common shares having an aggregate offering amount of up to $500.0 million remaining available for sale under our 2023 ATM program and the ability to issue debt and equity under our automatic shelf registration statement. We believe scheduled repayments of debt due during the next 12 months are manageable at approximately $290.0 million which represents approximately 8.2% of our total outstanding debt, and excludes amortization of debt discounts and debt issuance costs. We believe we are well-positioned with a strong balance sheet and sufficient liquidity to fund new development, repositions, redevelopment, and other capital requirements including scheduled debt maturities. We will, however, continue to assess and take further actions we believe are prudent to meet our objectives and capital requirements.

Property Portfolio

Our multifamily property portfolio is summarized as follows:

			March 31, 2024												December 31, 2023
			Number of Homes						Properties						Number of Homes						Properties
Operating Properties
Houston, Texas			9,154						26						9,154						26
Dallas/Fort Worth, Texas			6,224						15						6,224						15
Washington, D.C. Metro			6,192						17						6,192						17
Phoenix, Arizona			4,426						14						4,426						14
Atlanta, Georgia			4,270						14						4,862						15
Orlando, Florida			3,954						11						3,954						11
Austin, Texas			3,686						11						3,686						11
Charlotte, North Carolina			3,510						15						3,491						15
Raleigh, North Carolina			3,252						9						3,252						9
Tampa/St. Petersburg, Florida			3,104						8						3,104						8
Southeast Florida			3,050						9						3,050						9
Denver, Colorado			2,873						9						2,873						9
Los Angeles/Orange County, California			1,811						5						1,811						5
San Diego/Inland Empire, California			1,797						6						1,797						6
Nashville, Tennessee			758						2						758						2
Total Operating Properties			58,061						171						58,634						172
Properties Under Construction
Raleigh, North Carolina			789						2						789						2
Houston, Texas			377						2						377						2
Total Properties Under Construction			1,166						4						1,166						4
Total Properties			59,227						175						59,800						176

Stabilized Communities

We generally consider a property stabilized once it reaches 90% occupancy. During the fourth quarter of 2023, Camden NoDa in Charlotte, North Carolina completed construction of 387 homes and stabilization was achieved during the quarter ended March 31, 2024.

Properties Under Development

Our condensed consolidated balance sheet at March 31, 2024 includes approximately $477.5 million related to properties under development and land. Of this amount, approximately $194.2 million related to our properties currently under construction. In addition, we had approximately $283.3 million primarily invested in land held for future development.

Properties Under Construction. At March 31, 2024, we had four properties in various stages of construction as follows:

($ in millions) Properties and Locations			Number of Homes						Estimated Cost						Cost Incurred						Included in Properties Under Development						Estimated Date of Construction Completion						Estimated Date of Stabilization
Properties Under Construction
Camden Durham (1)
Durham, NC			420						$	145.0					$	133.3					$	59.8					3Q24						4Q25
Camden Woodmill Creek (2)
The Woodlands, TX			189						75.0						70.0						12.1						3Q24						2Q25
Camden Long Meadow Farms (3)
Richmond, TX			188						80.0						52.9						37.9						3Q24						2Q25
Camden Village District
Raleigh, NC			369						138.0						84.4						84.4						2Q25						4Q26
Total			1,166						$	438.0					$	340.6					$	194.2

(1) Property in lease-up and was 41% leased at April 30, 2024.

(2) Property in lease-up and was 35% leased at April 30, 2024.

(3) Property in lease-up and was 12% leased at April 30, 2024.

Development Pipeline Communities. At March 31, 2024, we had the following multifamily communities undergoing development activities:

($ in millions) Properties and Locations			Projected Homes						Total Estimated Cost (1)						Cost to Date
Camden South Charlotte
Charlotte, NC			420						$	153.0					$	37.6
Camden Blakeney
Charlotte, NC			349						145.0						26.9
Camden Baker
Denver, CO			435						165.0						33.9
Camden Nations
Nashville, TN			393						175.0						39.7
Camden Gulch
Nashville, TN			480						260.0						50.0
Camden Paces III
Atlanta, GA			350						100.0						23.0
Camden Highland Village II
Houston, TX			300						100.0						10.6
Camden Arts District
Los Angeles, CA			354						150.0						47.0
Camden Downtown II
Houston, TX			271						145.0						14.6
Total			3,352						$	1,393.0					$	283.3

*(1)*Represents our estimate of total costs we expect to incur on these projects. However, forward-looking estimates are not guarantees of future performance, results, or events. Although we believe these expectations are based upon reasonable assumptions, future events rarely develop exactly as forecast, and estimates routinely require adjustment.

Results of Operations

Changes in revenues and expenses related to our operating properties from period-to-period are due primarily to the performance of stabilized properties in the portfolio, the lease-up of newly-constructed properties, and the impact of acquisitions and dispositions.

Management considers property net operating income ("NOI") to be an appropriate supplemental measure of operating performance to net income because it reflects the operating performance of our communities without an allocation of corporate level property management overhead or general and administrative costs. We define NOI as property revenue less property operating and maintenance expenses less real estate taxes. NOI is further detailed in the Property-Level NOI table as seen below. NOI is not defined by accounting principles generally accepted in the United States of America ("GAAP") and should

not be considered an alternative to net income as an indication of our operating performance. Additionally, NOI as disclosed by other REITs may not be comparable to our calculation.

Reconciliations of net income to NOI for the three months ended March 31, 2024 and 2023 are as follows:

						Three Months Ended March 31,
(in thousands)						2024						2023
Net income						$	85,759					$	43,619
Less: Fee and asset management income						(1,284)						(578)
Less: Interest and other income						(1,768)						(62)
Less: Income on deferred compensation plans						(5,819)						(5,912)
Plus: Property management expense						9,394						8,297
Plus: Fee and asset management expense						443						413
Plus: General and administrative expense						16,693						15,356
Plus: Interest expense						32,537						32,843
Plus: Depreciation and amortization expense						144,802						142,444
Plus: Expense on deferred compensation plans						5,819						5,912
Plus: Loss on early retirement of debt						921						—
Less: Gain on sale of operating property						(43,806)						—
Plus: Income tax expense						905						1,150
Property net operating income						$	244,596					$	243,482

Property NOI (1)

Property NOI, as reconciled above, is detailed further into the following categories for the three months ended March 31, 2024 as compared to the same period in 2023:

($ in thousands)			Homes at						Three Months Ended March 31,												Change
3/31/2024						2024						2023						$						%
Property revenues:
Same store communities			55,866						$	364,478					$	355,618					$	8,860					2.5		%
Non-same store communities			2,195						13,967						10,535						3,432						32.6
Development and lease-up communities			1,166						602						—						602						*
Dispositions/Other			—						4,094						12,010						(7,916)						(65.9)
Total property revenues			59,227						$	383,141					$	378,163					$	4,978					1.3		%
Property expenses:
Same store communities			55,866						$	129,844					$	126,240					$	3,604					2.9		%
Non-same store communities			2,195						4,824						4,365						459						10.5
Development and lease-up communities			1,166						600						3						597						*
Dispositions/Other			—						3,277						4,073						(796)						(19.5)
Total property expenses			59,227						$	138,545					$	134,681					$	3,864					2.9		%
Property NOI:
Same store communities			55,866						$	234,634					$	229,378					$	5,256					2.3		%
Non-same store communities			2,195						9,143						6,170						2,973						48.2
Development and lease-up communities			1,166						2						(3)						5						*
Dispositions/Other			—						817						7,937						(7,120)						(89.7)
Total property NOI			59,227						$	244,596					$	243,482					$	1,114					0.5		%

** Not a meaningful percentage.*

(1) For 2024, same store communities are communities we wholly-owned and were stabilized since January 1, 2023, excluding communities under redevelopment and properties held for sale. Non-same store communities are stabilized communities not owned or stabilized since January 1, 2023, including communities under redevelopment and excluding properties held for sale. We define communities under redevelopment as communities with capital expenditures which improve a community's cash flow and competitive position through extensive unit, exterior building, common area, and amenity upgrades. Management believes same store information is useful as it allows both management and investors to determine financial results over a particular period for the same set of communities. Development and lease-up communities are non-stabilized communities we have developed since January 1, 2023, excluding properties held for sale. Dispositions/Other includes those communities disposed of or held for sale which are not classified as discontinued operations, non-multifamily rental properties, expenses related to land holdings not under active development, and other miscellaneous revenues and expenses, including net below market leases, casualty-related expenses net of recoveries, and severance related costs.

Same Store Analysis

Same store property NOI increased approximately $5.3 million for the three months ended March 31, 2024 as compared to the same period in 2023.

The $5.3 million approximate increase in same store property NOI for the three months ended March 31, 2024 was primarily due to an increase of approximately $8.9 million in same store property revenues which was partially offset by an increase in same store property expenses of approximately $3.6 million as compared to the same period in 2023.

The $8.9 million increase in same store property revenues during the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to an approximate $4.8 million increase in rental revenues, due to an increase in average rental rates, and an increase of approximately $3.6 million driven by lower uncollectible revenue and higher fee income. The increase was also due to approximately $0.5 million of higher income from our utility rebilling and ancillary income programs.

The $3.6 million approximate increase in same store property expenses during the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to higher salaries and benefits of approximately $1.6 million, higher utilities expense of approximately $0.8 million, higher real estate taxes of approximately $0.7 million due to increased tax rates and property valuations, higher marketing and leasing expenses of approximately $0.4 million, higher property general and administrative expenses of approximately $0.3 million, and higher repairs and maintenance expense of approximately $0.3 million. These increases were partially offset by decreased insurance expenses of approximately $0.5 million.

Non-same Store and Development and Lease-up Analysis

Property NOI from non-same store (which includes non-same store stabilized properties and other) and development and lease-up communities increased approximately $3.0 million for the three months ended March 31, 2024 as compared to the same period in 2023 primarily due to the stabilization of two operating properties in 2023 and one operating property in 2024.

The following table details the changes, described above, relating to non-same store and development and lease up NOI:

(in millions)						For the three months ended March 31, 2024 as compared to 2023
Property Revenues:
Revenues from non-same store stabilized properties						$	3.4
Revenues from development and lease-up properties						0.6
Other						—
						$	4.0
Property Expenses:
Expenses from non-same store stabilized properties						$	0.3
Expenses from development and lease-up properties						0.6
Other						0.1
						$	1.0
Property NOI:
NOI from non-same store stabilized properties						$	3.1
NOI from development and lease-up properties						—
Other						(0.1)
						$	3.0

Dispositions/Other Property Analysis

Dispositions/Other property NOI decreased approximately $7.1 million for the three months ended March 31, 2024 as compared to the same period in 2023. The decrease was comprised of lower NOI related to dispositions of approximately $5.8 million and lower other property NOI of approximately $1.3 million for the three months ended March 31, 2024 as compared to the same period in 2023. The decrease in NOI related to dispositions was due to the dispositions of one operating property in each of June of 2023, December of 2023, and February of 2024. The lower other property NOI was primarily due to higher storm-related expenses of approximately $1.4 million during the three months ended March 31, 2024, partially offset by higher business interruption insurance proceeds recognized during the three months ended March 31, 2023 of approximately $0.1 million.

Non-Property Income

($ in thousands)			Three Months Ended March 31,												Change
2024						2023						$						%
Fee and asset management			$	1,284					$	578					$	706					122.1		%
Interest and other income			1,768						62						1,706						*
Income on deferred compensation plans			5,819						5,912						(93)						(1.6)		%
Total non-property income			$	8,871					$	6,552					$	2,319					35.4		%

** Not a meaningful percentage.*

Fee and asset management income from construction and development activities at our third-party construction projects, increased approximately $0.7 million for the three months ended March 31, 2024 as compared to the same period in 2023. The increase was related to higher fees earned on third-party construction projects due to higher activity during the three months ended March 31, 2024 as compared to the same period in 2023.

Interest and other income increased approximately $1.7 million for the three months ended March 31, 2024 as compared to the same period in 2023. The increase was primarily due to higher investment interest income earned due to having higher average cash balances during the three months ended March 31, 2024 as compared to the same period in 2023.

Other Expenses

($ in thousands)			Three Months Ended March 31,												Change
2024						2023						$						%
Property management			$	9,394					$	8,297					$	1,097					13.2		%
Fee and asset management			443						413						30						7.3
General and administrative			16,693						15,356						1,337						8.7
Interest			32,537						32,843						(306)						(0.9)
Depreciation and amortization			144,802						142,444						2,358						1.7
Expense on deferred compensation plans			5,819						5,912						(93)						(1.6)
Total other expenses			$	209,688					$	205,265					$	4,423					2.2		%

Property management expense, which represents regional supervision and accounting costs related to property operations, increased approximately $1.1 million for the three months ended March 31, 2024 as compared to the same period in 2023. The increase was primarily related to higher salaries, benefits, and incentive compensation costs, and higher travel related costs. Property management expenses were approximately 2.5% and 2.2% of total property revenues for the three months ended March 31, 2024 and 2023, respectively.

General and administrative expense increased approximately $1.3 million during the three months ended March 31, 2024 as compared to the same period in 2023. The increase was primarily related to higher salaries, benefits, and incentive compensation costs and higher legal expenses during the three months ended March 31, 2024 as compared to the same period in 2023. Excluding income on deferred compensation plans, general and administrative expenses were approximately 4.3% and 4.1% of total revenues for the three months ended March 31, 2024 and 2023, respectively.

Interest expense decreased approximately $0.3 million for the three months ended March 31, 2024 as compared to the same period in 2023. The decrease was primarily due to the early retirement of $185.3 million of secured variable rate notes in May 2023, the repayment of a $250 million, 5.07% senior unsecured notes payable in June 2023, and the repayment of a $300 million, 6.21% unsecured term loan and a $250.0 million, 4.36% senior unsecured notes payable in January 2024. The decrease was also due to lower interest expense recognized on our unsecured revolving credit facility resulting from lower average balances outstanding during the three months ended March 31, 2024 as compared to the same period in 2023. The increase was

partially offset by an increase in interest expense due to the issuance of $500 million senior unsecured notes in November 2023 and the issuance of $400 million senior unsecured notes in January 2024, which had average interest rates during the quarter of 6.76% and 5.06%, respectively.

Depreciation and amortization expense increased approximately $2.4 million for the three months ended March 31, 2024 as compared to the same period in 2023. The increase during the three months ended March 31, 2024 was primarily due to higher depreciation related to the completion of apartment homes in our development pipeline and the completion of capitalized improvements during 2023 and 2024. The increase was partially offset by the disposition of one operating property in June of 2023, December of 2023, and February of 2024.

Other

			Three Months Ended March 31,												Change
($ in thousands)			2024						2023						$
Loss on early retirement of debt			$	(921)					$	—					$	(921)
Gain on sale of operating property			43,806						—						43,806
Income tax expense			(905)						(1,150)						245

The loss on early retirement of debt for the three months ended March 31, 2024 was due to the write-off of unamortized loan costs related to the early retirement of our $300 million unsecured term loan which was scheduled to mature in August 2024.

The $43.8 million gain on sale during the three months ended March 31, 2024 was due to the disposition of one operating property located in Atlanta, Georgia in February 2024.

Income tax expense decreased approximately $0.2 million for the three months ended March 31, 2024 as compared to the same period in 2023. The decrease was primarily due to lower state and franchise income taxes, partially offset by an increase in taxable income due to higher third-party construction activities in a taxable REIT subsidiary.

Funds from Operations ("FFO"), Core FFO, and Core Adjusted FFO ("Core AFFO")

Management considers FFO, Core FFO, and Core AFFO to be appropriate supplementary measures of the financial performance of an equity REIT. The National Association of Real Estate Investment Trusts ("NAREIT") currently defines FFO as net income (computed in accordance with GAAP), excluding depreciation and amortization related to real estate, gains (or losses) from the sale of certain real estate assets (depreciable real estate), impairments of certain real estate assets (depreciable real estate), gains (or losses) from change in control, and adjustments for unconsolidated joint ventures to reflect FFO on the same basis. Our calculation of diluted FFO also assumes conversion of all potentially dilutive securities, including certain non-controlling interests, which are convertible into common shares. We consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions of depreciable real estate and depreciation, FFO can assist in the comparison of the operating performance of a company's real estate investments between periods or to different companies.

Core FFO represents FFO as further adjusted for items not considered part of our core business operations. We consider Core FFO to be a helpful supplemental measure of operating performance as it excludes not only depreciation expense of real estate assets, but it also excludes certain items which, by nature, are not comparable period over period and therefore tends to obscure actual operating performance. Our definition of Core FFO may differ from other REITs, and there can be no assurance our basis for computing this measure is comparable to other REITs.

Core AFFO is calculated utilizing Core FFO less recurring capitalized expenditures which are necessary to help preserve the value of and maintain the functionality at our communities. We also consider Core AFFO to be a useful supplemental measure because it is frequently used by analysts and investors to evaluate a REIT's operating performance between periods or to different companies. Our definition of recurring capital expenditures may differ from other REITs, and there can be no assurance our basis for computing this measure is comparable to other REITs.

To facilitate a clear understanding of our consolidated historical operating results, we believe FFO, Core FFO, and Core AFFO should be examined in conjunction with net income attributable to common shareholders as presented in the condensed consolidated statements of income and comprehensive income and data included elsewhere in this report. FFO, Core FFO, and Core AFFO are not defined by GAAP and should not be considered alternatives to net income attributable to common shareholders as an indication of our operating performance. Additionally, FFO, Core FFO, and Core AFFO as disclosed by other REITs may not be comparable to our calculation.

Reconciliations of net income attributable to common shareholders to FFO, Core FFO, and Core AFFO for the three months ended March 31, 2024 and 2023 are as follows:

			Three Months Ended March 31,
($ in thousands)			2024						2023
Funds from operations
Net income attributable to common shareholders			$	83,889					$	41,917
Real estate depreciation and amortization			141,847						139,387
Gain on sale of operating property			(43,806)						—
Income allocated to non-controlling interests			1,870						1,702
Funds from operations			$	183,800					$	183,006
Casualty-related expenses, net of (recoveries)			1,523						(42)
Severance			506						—
Legal costs and settlements, net of recoveries			852						84
Loss on early retirement of debt			921						—
Core funds from operations			$	187,602					$	183,048
Less: recurring capitalized expenditures			(22,025)						(17,579)
Core adjusted funds from operations			$	165,577					$	165,469
Weighted average shares – basic			108,706						108,568
Incremental shares issuable from assumed conversion of:
Share awards granted			23						36
Common units			1,594						1,597
Weighted average shares – diluted			110,323						110,201

Liquidity and Capital Resources

Financial Condition and Sources of Liquidity

We intend to maintain a strong balance sheet and preserve our financial flexibility, which we believe should enhance our ability to identify and capitalize on investment opportunities as they become available. We intend to maintain what management believes is a conservative capital structure by:

• extending and sequencing the maturity dates of our debt where practicable;

• managing interest rate exposure using what management believes to be prudent levels of fixed and floating rate debt;

• maintaining what management believes to be conservative coverage ratios; and

• using what management believes to be a prudent combination of debt and equity.

Our interest expense coverage ratio, net of capitalized interest, was approximately 6.9 and 6.7 for the three months ended March 31, 2024 and 2023, respectively. This ratio is a method for calculating the amount of operating cash flows available to cover interest expense and is calculated by dividing interest expense for the period into the sum of property revenues and expenses, non-property income, and other expenses, after adding back depreciation, amortization, and interest expense. Approximately 89.8% and 84.0% of our properties were unencumbered as of March 31, 2024 and 2023, respectively. Our weighted average maturity of debt was approximately 6.6 years at March 31, 2024.

Our primary sources of liquidity is cash flows generated from operations. Other sources may include one or more of the following: availability under our unsecured revolving credit facility, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from our ATM program, and other unsecured borrowings or secured mortgages. We believe our liquidity and financial condition are sufficient to meet all of our reasonably anticipated cash needs during the next twelve months from our filing date including:

• normal recurring operating expenses;

• current debt service requirements including scheduled debt maturities;

• recurring and non-recurring capital expenditures;

• funding of property developments, repositions, redevelopments, and acquisitions;

• the minimum dividend payments required to maintain our REIT qualification under the Code; and

• funding share repurchases.

Factors which could increase or decrease our future liquidity include but are not limited to volatility in capital and credit markets, changes in rent control or rent stabilization laws, sources of financing, the minimum REIT dividend requirements, our ability to complete asset purchases, sales, or developments, the effect our debt level and changes in credit ratings could have on our cost of funds, and our ability to access capital markets.

Cash Flows

The following is a discussion of our cash flows for the three months ended March 31, 2024 as compared to the same period in 2023.

Net cash from operating activities was approximately $135.9 million during the three months ended March 31, 2024 as compared to approximately $139.7 million for the same period in 2023. The decrease was primarily due to lower cash inflows from operating accounts primarily due to lower prepayment of rental income received from our residents, as well as a decrease in cash from property operations due to the sale of two operating properties in 2023 and one operating property in 2024. These decreases were partially offset by the growth attributable to our same store and non-same store communities, and lower interest payments on our debt. See further discussion of our 2024 operations as compared to 2023 in "Results of Operations."

Net cash from investing activities during the three months ended March 31, 2024 totaled approximately $6.9 million as compared to net cash used in investing activities of $93.5 million during the same period in 2023. Cash inflows during the three months ended March 31, 2024 primarily related to net proceeds from the sale of one operating property of approximately $114.5 million. These inflows were partially offset by amounts paid for property development and capital improvements of approximately $106.1 million. Cash outflows during the three months ended March 31, 2023 primarily related to amounts paid for property development and capital improvements of approximately $91.9 million. The increase in property development and capital improvements for the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to higher development, repositions, and capital improvements expenditures in 2024 as compared to 2023. The property development and capital improvements during the three months ended March 31, 2024 and 2023, included the following:

						Three Months Ended March 31,
(in millions)						2024						2023
Expenditures for new development, including land						$	49.6					$	40.5
Reposition expenditures						24.8						21.0
Capital expenditures						22.7						20.6
Direct real estate taxes and capitalized interest and other indirect costs						9.0						9.8
Total						$	106.1					$	91.9

Net cash used in financing activities totaled approximately $309.9 million for the three months ended March 31, 2024 as compared to approximately $36.3 million during the same period in 2023. Cash outflows during the three months ended March 31, 2024 primarily related to the repayment of our $300 million unsecured term loan, and $250 million senior unsecured notes in January 2024. Cash outflows also related to $110.4 million used for distributions to common shareholders and non-controlling interest holders, and $45.7 million used for common share repurchases, partially offset by net proceeds of approximately $396.0 million from the issuance of $400.0 million senior unsecured notes in January 2024. Cash outflows during the three months ended March 31, 2023 primarily related to $103.6 million used for distributions to common shareholders and non-controlling interest holders, partially offset by net proceeds of $66.0 million of borrowings from our unsecured revolving credit facility.

Financial Flexibility

We have a $1.2 billion unsecured revolving credit facility which matures in August 2026, with two options to extend the facility at our election for two consecutive six-month periods and to expand the facility up to three times by up to an additional $500 million upon satisfaction of certain conditions. The interest rates on our unsecured revolving credit facility is based upon, at our option, (a) the daily or the one-, three-, or six-month Secured Overnight Financing Rate ("SOFR") plus, in each case, a spread based on our credit rating, or (b) a base rate equal to the higher of: (i) the Federal Funds Rate plus 0.50%, (ii) Bank of America, N.A.'s prime rate, (iii) Term SOFR plus 1.0%, and (iv) 1.0%. Advances under our unsecured revolving credit facility 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 180 days or less and may not exceed the lesser of $600 million or the remaining amount available under our unsecured revolving credit facility. Our unsecured revolving credit facility is subject to customary financial covenants and limitations. We believe we are in compliance with all such financial covenants and limitations as of March 31, 2024 and through the date of this filing.

Our unsecured revolving credit facility provides us with the ability to issue up to $50 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding under our unsecured revolving credit facility, it does reduce the amount available. At March 31, 2024, we had outstanding letters of credit totaling approximately $27.7 million, and approximately $1.2 billion available under our unsecured revolving credit facility.

In May 2023, we created an ATM share offering program through which we can, but have no obligation to, sell common shares and we may also enter into separate forward sale agreements with forward purchasers for an aggregate offering amount of up to $500.0 million (the "2023 ATM program"), in amounts and at times as we determine, into the existing trading market at current market prices as well as through negotiated transactions. Actual sales from time to time may depend on a variety of factors including, among others, market conditions, the trading price of our common shares, and determinations by management of the appropriate sources of funding for us. We intend to use proceeds from the sale of our common shares under the 2023 ATM program for general corporate purposes, which may include reducing future borrowings under our unsecured revolving credit facility, the repayment of other indebtedness, the redemption or other repurchase of outstanding debt or equity securities, funding for development activities, and financing for acquisitions. As of the date of this filing, we have not sold any shares or entered into any forward sales agreement and have common shares having an aggregate offering amount of up to $500.0 million remaining available for sale under the 2023 ATM program.

We believe our ability to access capital markets is enhanced by our senior unsecured debt ratings by Moody's, Fitch, and Standard and Poor's, which are currently A3 with stable outlook, A- with stable outlook, and A- with stable outlook, respectively. We believe our ability to access capital markets is also enhanced by our ability to borrow on a secured basis from various institutions including banks, Fannie Mae, Freddie Mac, or life insurance companies. However, we may not be able to maintain our current credit ratings and or borrow on a secured or unsecured basis in the future.

Future Cash Requirements and Contractual Obligations

One of our principal long-term liquidity requirements includes the repayment of maturing debt, including any future borrowings under our unsecured revolving credit facility. We believe scheduled repayments of debt due during the next 12 months are manageable at approximately $290.0 million which represents approximately 8.2% of our total outstanding debt, and excludes amortization of debt discounts, and debt issuance costs. See Note 6, "Notes Payable," in the notes to Condensed Consolidated Financial Statements for a further discussion of our scheduled maturities.

As of March 31, 2024, we estimated the additional cost to complete the construction of four properties to be approximately $97.4 million. Of this amount, we expect to incur costs between approximately $70 million and $90 million during the remainder of 2024 and to incur the remaining costs during 2025 through 2026. Additionally, we expect to incur costs between approximately $39 million and $49 million related to the start of new development activities, between approximately $73 million and $77 million of repositions, redevelopment, repurposes, and revenue enhancing expenditures and between approximately $79 million and $83 million of additional recurring capital expenditures.

We anticipate meeting our near-term liquidity requirements through a combination of one or more of the following: cash flows generated from operations, draws on our unsecured revolving credit facility, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from our ATM program, and other unsecured borrowings or secured mortgages. We continue to evaluate our portfolio and plan to continue our practice of selective dispositions as market conditions warrant and opportunities arise.

As a REIT, we are subject to a number of organizational and operational requirements, including a requirement to distribute current dividends to our shareholders equal to a minimum of 90% of our annual taxable income. In order to minimize paying income taxes, our general policy is to distribute at least 100% of our taxable income. In February 2024, our Board of Trust Managers declared a quarterly dividend of $1.03 per common share to our common shareholders of record as of March 29, 2024. The quarterly dividend was subsequently paid on April 17, 2024, and we paid equivalent amounts per unit to holders of the common operating partnership units. Assuming similar quarterly dividend distributions for the remainder of 2024, our annualized dividend rate would be $4.12 per share or unit.

Critical Accounting Policies

Our critical accounting policies have not changed from the information reported in our Annual Report on Form 10-K for the year ended December 31, 2023.