Edgar Filing: CAMDEN PROPERTY TRUST

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Form 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2011

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

For the transition period from to

Commission file number: 1-12110

CAMDEN PROPERTY TRUST

(Exact name of registrant as specified in its charter)


Texas		76-6088377
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3 Greenway Plaza, Suite 1300 Houston, Texas		77046
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (713) 354-2500

Securities registered pursuant to Section 12(b) of the Act:


Title of each class		Name of each exchange on which registered
Common Shares of Beneficial Interest, $.01 par value		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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

Indicate by check mark whether the registrant is a shell company (as defined in the Rule 12b-2 of the Act). Yes ¨ No x

The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was $4,418,001,069 based on a June 30, 2011 share price of $63.62.

On February 10, 2012, 78,804,181 common shares of the registrant were outstanding, net of treasury shares and shares held in our deferred compensation arrangements.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement in connection with its Annual Meeting of Shareholders to be held May 11, 2012 are incorporated by reference in Part III.

TABLE OF CONTENTS


		Page
PART I

Item 1.	Business		1

Item 1A.	Risk Factors		3

Item 1B.	Unresolved Staff Comments		10

Item 2.	Properties		10

Item 3.	Legal Proceedings		15

Item 4.	Mine Safety Disclosures		15

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		16

Item 6.	Selected Financial Data		18

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		38

Item 8.	Financial Statements and Supplementary Data		39

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		39

Item 9A.	Controls and Procedures		39

Item 9B.	Other Information		42

PART III

Item 10.	Directors, Executive Officers and Corporate Governance		42

Item 11.	Executive Compensation		42

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		42

Item 13.	Certain Relationships and Related Transactions, and Director Independence		43

Item 14.	Principal Accounting Fees and Services		43

PART IV

Item 15.	Exhibits and Financial Statement Schedules		44

SIGNATURES			51

PART I

Item 1. Business

General

Formed on May 25, 1993, Camden Property Trust, a Texas real estate investment trust (“REIT”), is primarily engaged in the ownership, management, development, acquisition, and construction of multifamily apartment communities. Unless the context requires otherwise, “we,” “our,” “us,” and the “Company” refer to Camden Property Trust and its consolidated subsidiaries. Our multifamily apartment communities are referred to as “communities,” “multifamily communities,” “properties,” or “multifamily properties” in the following discussion.

Our corporate offices are located at 3 Greenway Plaza, Suite 1300, Houston, Texas 77046 and our telephone number is (713) 354-2500. Our website is located at www.camdenliving.com. On our website we make available free of charge our annual, quarterly, and current reports, and amendments to such reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”). We also make available, free of charge on our website, our Guidelines on Governance, Code of Business Conduct and Ethics, Code of Ethical Conduct for Senior Financial Officers, and the charters of each of our Audit, Compensation, Nominating, and Corporate Governance Committees.

Our annual, quarterly, and current reports, proxy statements, and other information are electronically filed with the SEC. You may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Please contact the SEC at 1-800-SEC-0330 for further information about the operation of the SEC’s Public Reference Room. The SEC also maintains a website at www.sec.gov which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Financial Information about Segments

We are primarily engaged in the ownership, management, development, acquisition, and construction of multifamily apartment communities. As each of our communities has similar economic characteristics, residents, amenities, and services, our operations have been aggregated into one reportable segment. See our consolidated financial statements and notes included thereto in Item 15 of this Annual Report on Form 10-K for certain information required by Item 1.

Narrative Description of Business

As of December 31, 2011, we owned interests in, operated, or were developing 206 multifamily properties comprising 69,794 apartment homes across the United States. Of these 206 properties, ten properties were under development and when completed will consist of a total of 2,797 apartment homes. In addition, we own land parcels we may develop into multifamily apartment communities.

Operating and Business Strategy

We believe producing consistent earnings growth through property operations, development and acquisitions, achieving market balance, and recycling capital are crucial factors to our success. We rely heavily on our sophisticated property management capabilities and innovative operating strategies to help us maximize the earnings potential of our communities.

Real Estate Investments and Market Balance. We believe we are well positioned in our current markets and have the expertise to take advantage of new opportunities as they arise. These capabilities, combined with what we believe is a conservative financial structure, should allow us to concentrate our growth efforts toward selective opportunities to enhance our strategy of having a geographically diverse portfolio of assets which meet the requirements of our residents.

We continue to operate in our core markets which we believe provides an advantage due to economies of scale. We believe, where possible, it is best to operate with a strong base of properties in order to benefit from the personnel allocation and the market strength associated with managing multiple properties in the same market. However, consistent with our goal of generating sustained earnings growth, we intend to selectively dispose of properties and redeploy capital for various strategic reasons, including if we determine a property cannot meet long-term earnings growth expectations.

We try to maximize capital appreciation of our properties by investing in markets characterized by conditions favorable to multifamily property appreciation. These markets generally feature one or more of the following:

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Strong economic growth leading to household formation and job growth, which in turn leads to high demand for our apartments; and

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High barriers to entry where, because of land scarcity or government regulation, it is difficult or costly to build new apartment properties leading to low supply;

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High single family home prices making our apartments a more economical housing choice;

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An attractive quality of life leading to high demand and retention and allowing us to more readily increase rents.

Subject to market conditions, we intend to continue to look for opportunities to acquire existing communities, expand our development pipeline, and complete selective dispositions. We have two discretionary investment funds (the “Funds”), one of which is closed to future investment and the other of which will close to future investment at the earlier of April 2012 or at such time as 90% of its committed capital is invested, subject to certain exceptions.

We intend to continue to focus on strengthening our capital and liquidity positions by generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs. We intend to meet our liquidity requirements through available cash balances, the availability under our unsecured credit facility and other short-term borrowings, proceeds from dispositions of property and secured mortgage notes, equity issued from our 2011 at-the-market share offering program, and the use of debt and equity offerings under our automatic shelf registration statement.

Sophisticated Property Management. We believe the depth of our organization enables us to deliver quality services, promote resident satisfaction, and retain residents, thereby reducing operating expenses. We manage our properties utilizing a staff of professionals and support personnel, including certified property managers, experienced apartment managers and leasing agents, and trained apartment maintenance technicians. Our on-site personnel are trained to deliver high quality services to our residents. We strive to motivate our on-site employees through incentive compensation arrangements based upon property operational results, rental rate increases, occupancy levels, and level of lease renewals achieved.

Operations. We believe an intense focus on operations is necessary to realize consistent, sustained earnings growth. Ensuring resident satisfaction, increasing rents as market conditions allow, maximizing rent collections, maintaining property occupancy at optimal levels, and controlling operating costs comprise our principal strategies to maximize property financial results. We believe our web-based property management and revenue management systems strengthen on-site operations and allow us to quickly adjust rental rates as local market conditions change. Lease terms are generally staggered based on vacancy exposure by apartment type so lease expirations are matched to each property's seasonal rental patterns. We generally offer leases ranging from six to fifteen months with individual property marketing plans structured to respond to local market conditions. In addition, we conduct ongoing customer service surveys to ensure timely response to residents' changing needs and a high level of satisfaction.

Investments in Joint Ventures. We have entered into, and may continue in the future to enter into, joint ventures through which we own an indirect economic interest of less than 100% of the community or land owned directly by the joint venture. See Note 8, “Investments in Joint Ventures,” and Note 14, “Commitments and Contingencies,” in the Notes to Consolidated Financial Statements for further discussion of our investments in joint ventures.

Competition

There are numerous housing alternatives which compete with our communities in attracting residents. Our properties compete directly with other multifamily properties as well as with condominiums and single-family homes which are available for rent or purchase in the markets in which our communities are located. This competitive environment could have a material adverse effect on our ability to lease apartment homes at our present communities or any newly developed or acquired community, as well as at the rents charged.

Employees

At December 31, 2011, we had approximately 1,885 employees, including executive, administrative, and community personnel. Our employee headcount does not vary significantly throughout the year.

Qualification as a Real Estate Investment Trust

As of December 31, 2011, we met the qualification of a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, we, with the exception of our taxable REIT subsidiaries, will not be subject to federal income tax to the extent we continue to meet certain requirements of the Code.

Item 1A. Risk Factors

In addition to the other information contained in this Form 10-K, the following risk factors should be considered carefully in evaluating our business. Our business, financial condition, or results of operations could be materially adversely affected by any of these risks. Additional risks not presently known to us, or which we currently consider immaterial, may also impair our business and operations.

Risks Associated with Real Estate, Real Estate Capital, and Credit Markets

Volatility in capital and credit markets, or other unfavorable changes in economic conditions, could adversely impact us.

The capital and credit markets are subject to volatility and disruption, as particularly experienced in the latter half of 2008 through most of 2010, during which spreads on prospective debt financings fluctuated and made it more difficult to borrow money. In the event of renewed market disruption and volatility, we may not be able to obtain new debt financing or refinance our existing debt on favorable terms or at all, which would adversely affect our liquidity, our ability to make distributions to shareholders, acquire and dispose of assets and continue our development pipeline. Other weakened economic conditions, including job losses and high unemployment rates, could adversely affect rental rates and occupancy levels. Unfavorable changes in economic conditions may have a material adverse impact on our cash flows and operating results.

Additional key economic risks which may adversely affect conditions in the markets in which we operate include the following:

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local conditions, such as an oversupply of apartments or other housing available for rent, or a reduction in demand for apartments in the area;

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declines in the financial condition of our tenants, which may make it more difficult for us to collect rents from some tenants;

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declines in market rental rates;

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low mortgage interest rates and home pricing, making alternative housing more affordable;

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government or builder incentives which enable home buyers to put little or no money down, making alternative housing options more attractive;

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regional economic downturns which affect one or more of our geographical markets; and

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increased operating costs, if these costs cannot be passed through to residents.

Short-term leases expose us to the effects of declining market rents.

Substantially all of our apartment leases are for a term of fifteen months or less. As these leases generally permit the residents to leave at the end of the lease term without penalty, our rental revenues are impacted by declines in market rents more quickly than if our leases were for longer terms.

We face risks associated with land holdings and related activities.

We hold land for future development and may in the future acquire additional land holdings. The risks inherent in purchasing, owning, and developing land increase as demand for apartments, or rental rates, decrease. Real estate markets are highly uncertain and, as a result, the value of undeveloped land has fluctuated significantly and may continue to fluctuate. In addition, carrying costs can be significant and can result in losses or reduced profitability. As a result, we hold certain land, and may in the future acquire additional land, in our development pipeline at a cost we may not be able to fully recover or at a cost which precludes our developing a profitable multifamily community. If there are subsequent changes in the fair value of our land holdings which we determine is less than the carrying basis of our land holdings reflected in our financial statements plus estimated costs to sell, we may be required to take future impairment charges which would reduce our net income.

Difficulties of selling real estate could limit our flexibility.

We intend to continue to evaluate the potential disposition of assets which may no longer meet our investment objectives. When we decide to sell an asset, we may encounter difficulty in finding buyers in a timely manner as real estate investments generally cannot be disposed of quickly, especially when market conditions are poor. These factors may limit our ability to vary our portfolio promptly in response to changes in economic or other conditions and may also limit our ability to utilize sales proceeds as a source of liquidity, which would adversely affect our ability to make distributions to shareholders or repay debt. In addition, the provisions of the Code relating to REITs limit our ability to earn a gain on the sale of property (unless we own the property through a subsidiary which will incur a taxable gain upon sale) if we have held the property less than two years, and this limitation may affect our ability to sell properties without adversely affecting returns to shareholders.

We could be negatively impacted by the condition of Fannie Mae or Freddie Mac.

Fannie Mae and Freddie Mac are a major source of financing for secured multifamily real estate. We and other multifamily companies depend heavily on Fannie Mae and Freddie Mac to finance growth by purchasing or guaranteeing apartment loans. There have been discussions of reducing or eliminating Fannie Mae and Freddie Mac and a final decision by the government to eliminate Fannie Mae or Freddie Mac, or reduce their acquisitions or guarantees of apartment loans, may adversely affect interest rates, capital availability, and the development of multifamily communities.

Compliance or failure to comply with laws, including those requiring access to our properties by disabled persons, could result in substantial cost.

The Americans with Disabilities Act (“ADA”), the Fair Housing Amendments Act of 1988 (“FHAA”), and other federal, state, and local laws, rules, and regulations, generally require public accommodations and apartment homes be made accessible to disabled persons. Noncompliance could result in the imposition of fines by the government or the award of damages to private litigants. These laws may require us to modify our existing properties. These laws may also restrict renovations by requiring improved access to such buildings by disabled persons or may require us to add other structural features which increase our construction costs. Legislation or regulations adopted in the future may impose further costs and obligations or restrictions on us with respect to improved access by disabled persons. We may incur unanticipated expenses which may be material to our financial condition or results of operations to comply with ADA, FHAA, and other federal, state, and local laws, or in connection with lawsuits brought by the government or private litigants.

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

There are numerous housing alternatives which compete with our properties in attracting residents. Our properties compete directly with other multifamily properties as well as condominiums and single family homes which are available for rent or purchase in the markets in which our properties are located. This competitive environment could have a material adverse effect on our ability to lease apartment homes at our present properties or any newly developed or acquired property, as well as on the rents realized.

Risks Associated with Our Operations

Development and construction risks could impact our profitability.

We intend to continue to develop and construct multifamily apartment communities for our portfolio, and expect increased levels of development activity in 2012. Our development and construction activities may be exposed to a number of risks which may increase our construction costs and decrease our profitability, including the following:

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inability to obtain, or delays in obtaining, necessary zoning, land-use, building, occupancy, and other required permits and authorizations;

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increased materials and/or labor costs, problems with subcontractors, or other costs due to errors and omissions which occur in the design or construction process;

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inability to obtain financing with favorable terms for the development of a community;

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inability to complete construction and lease-up of a community on schedule;

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the expected occupancy and rental rates may differ from the actual results; and

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incurring costs related to the abandonment of development opportunities which we have pursued and subsequently deemed unfeasible.

Our inability to successfully implement our development and construction strategy could adversely affect our results of operations and our ability to satisfy our financial obligations and pay distributions to shareholders.

One of our wholly-owned subsidiaries is engaged in the business of providing general contracting services under construction contracts entered into between it and third-parties (including nonconsolidated subsidiaries). The terms of those construction contracts generally require this subsidiary to estimate the time and costs to complete a project, and to assume the risk the time and costs associated with its performance may be greater than anticipated. As a result, profitability on those contracts is dependent on the ability to accurately predict such factors. The time and costs necessary to complete a project may be affected by a variety of factors, including those listed above, many of which are beyond this subsidiary’s control. In addition, the terms of those contracts generally require this subsidiary to warrant its work for a period of time during which it may be required to repair, replace, or rebuild non-conforming work. Further, trailing liabilities, based on various legal theories such as claims of negligent construction, may result from such projects, and these trailing liabilities may go on for a number of years depending on the length of the statutes of repose in various jurisdictions.

Our acquisition strategy may not produce the cash flows expected.

We may acquire additional operating properties on a selective basis. Our acquisition activities are subject to a number of risks, including the following:

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we may not be able to successfully integrate acquired properties into our existing operations;

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our estimates of the costs, if any, of repositioning or redeveloping the acquired property may prove inaccurate;

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the expected occupancy and rental rates may differ from the actual results; and

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we may not be able to obtain adequate financing.

With respect to acquisitions of operating properties, we may not be able to identify suitable candidates on terms acceptable to us and may not achieve expected returns or other benefits as a result of integration challenges, such as personnel and technology.

Competition could adversely affect our ability to acquire properties.

We expect other real estate investors, including insurance companies, pension and investment funds, private investors, and other multifamily REITs, will compete with us to acquire additional operating properties. This competition could increase prices for the type of properties we would likely pursue and adversely affect our ability to acquire these properties or the profitability of such properties upon acquisition.

Losses from catastrophes may exceed our insurance coverage.

We carry comprehensive property and liability insurance on our properties, which we believe is of the type and amount customarily obtained on similar real property assets by similar types of owners. We intend to obtain similar coverage for properties we acquire or develop in the future. However, some losses, generally of a catastrophic nature, such as losses from floods, hurricanes, or earthquakes, may be subject to coverage limitations. We exercise our discretion in determining amounts, coverage limits, and deductible provisions of insurance to maintain appropriate insurance on our investments at a reasonable cost and on suitable terms. If we suffer a catastrophic loss, our insurance coverage may not be sufficient to pay the full current market value or current replacement value of our lost investment, as well as the anticipated future revenues from the property. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also may reduce the feasibility of using insurance proceeds to replace a property after it has been damaged or destroyed.

Investments through joint ventures involve risks not present in investments in which we are the sole investor.

We have invested and may continue to invest as a joint venture partner in joint ventures. These investments involve risks, including the possibility the other joint venture partner may have business goals which are inconsistent with ours, possess the ability to take action or withhold consent contrary to our requests, or become insolvent and require us to assume and fulfill the joint venture’s financial obligations. We and our joint venture partner may each have the right to initiate a buy-sell arrangement, which could cause us to sell our interest, or acquire our joint venture partner’s interest, at a time when we otherwise would not have entered into such a transaction. Each joint venture agreement is individually negotiated, and our ability to operate, finance, and/or dispose of a community in our sole discretion may be limited to varying degrees depending on the terms of the joint venture agreement.

We face risks associated with investments in and management of discretionary funds.

We have formed the Funds which, through wholly-owned subsidiaries, we manage as the general partner and advisor. Each of the Funds has total capital commitments of $187.5 million or $375 million in the aggregate. We have committed to invest 20% of the total equity interest in each of the Funds, up to $75 million in the aggregate. As of December 31, 2011, one of the Funds was closed for future investments. We have contributed approximately $33.0 million to this Fund and it had a combined equity capital investment of $165.0 million at December 31, 2011. As of December 31, 2011, our capital contribution to the remaining open Fund was approximately $23.7 million and it had a combined equity capital investment of approximately $118.4 million. There are risks associated with the investment in and management of the Funds, including:

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investors in the remaining open Fund may fail to make their capital contributions when due and, as a result, the Fund may be unable to execute its investment objectives;

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the general partner of the Funds, our wholly-owned subsidiary, has unlimited liability for the third-party debts, obligations, and liabilities of the Funds pursuant to partnership law;

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investors in the Funds (other than us), by majority vote, may remove our subsidiary as the general partner of the Funds with or without cause and the Funds’ advisory boards, by a majority vote of their members, may remove our subsidiary as the general partner of the Funds at any time for cause;

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while we have broad discretion to manage the Funds and make investment decisions on behalf of the Funds, the investors or the advisory boards must approve certain matters, and as a result we may be unable to cause the Funds to make certain investments or implement certain decisions we consider beneficial;

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we are permitted to acquire land and develop communities outside of the remaining open Fund, but are generally prohibited from acquiring fully developed multifamily properties outside of this Fund until the earlier of (i) April 8, 2012, or (ii) such time as 90% of the remaining open Fund’s committed capital is invested, subject to certain exceptions;

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our ability to dispose of all or a portion of our investments in the Funds is subject to significant restrictions; and

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we may be liable if the Funds fail to comply with various tax or other regulatory matters.

Tax matters, including failure to qualify as a REIT, could have adverse consequences.

We may not continue to qualify as a REIT in the future. The Internal Revenue Service may challenge our qualification as a REIT for prior years and new legislation, regulations, administrative interpretations, or court decisions may change the tax laws or the application of the tax laws with respect to qualification as a REIT or the federal tax consequences of such qualification.

For any taxable year we fail to qualify as a REIT and do not qualify under statutory relief provisions:

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we would be subject to federal income tax on our taxable income at regular corporate rates, including any applicable alternative minimum tax;

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we would be disqualified from treatment as a REIT for the four taxable years following the year in which we failed to qualify, thereby reducing our net income, including any distributions to shareholders, as we would be required to pay significant income taxes for the year or years involved; and

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our ability to expand our business and raise capital would be impaired, which may adversely affect the value of our common shares.

We may face other tax liabilities in the future which may impact our cash flow. These potential tax liabilities may be calculated on our income or property values at either the corporate or individual property levels. Any additional tax expense incurred would decrease the cash available for cash distributions to our common shareholders, perpetual preferred unit holders, and noncontrolling interest holders.

We depend on our key personnel.

Our success depends in part on our ability to attract and retain the services of executive officers and other personnel. There is substantial competition for qualified personnel in the real estate industry, and the loss of several of our key personnel could have an adverse effect on us.

Changes in litigation risks could affect our business.

As a large publicly-traded owner of multifamily properties, we may become involved in legal proceedings, including consumer, employment, tort, or commercial litigation, which if decided adversely to or settled by us, could result in liability which is material to our financial condition or results of operations.

Risks Associated with Our Indebtedness and Financing

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

Substantially all of our income is derived from rental and other income from our multifamily communities. As a result, our performance depends in large part on our ability to collect rent from residents, which could be negatively affected by a number of factors, including the following:

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delay in resident lease commencements;

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decline in occupancy;

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failure of residents to make rental payments when due;

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the attractiveness of our properties to residents and potential residents;

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our ability to adequately manage and maintain our communities;

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competition from other available apartments and housing alternatives; and

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changes in market rents.

Cash flow could be insufficient to meet required payments of principal and interest with respect to debt financing. In order for us to continue to qualify as a REIT we must meet a number of organizational and operational requirements, including a requirement to distribute annual dividends to our shareholders equal to a minimum of 90% of our REIT taxable income, computed without regard to the dividends paid deduction and our net capital gains. This requirement limits the cash available to meet required principal payments on our debt.

We have significant debt, which could have important adverse consequences.

As of December 31, 2011, we had outstanding debt of approximately $2.4 billion. This indebtedness could have important consequences, including:

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if a property is mortgaged to secure payment of indebtedness, and if we are unable to meet our mortgage obligations, we could sustain a loss as a result of foreclosure on the mortgaged property;

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our vulnerability to general adverse economic and industry conditions is increased; and

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our flexibility in planning for, or reacting to, changes in business and industry conditions is limited.

The mortgages on our properties subject to secured debt, our unsecured credit facility, and the indentures under which our unsecured debt was issued contain customary restrictions, requirements, and other limitations, as well as certain financial and operating covenants including maintenance of certain financial ratios. Maintaining compliance with these provisions could limit our financial flexibility. A default in these provisions, if uncured, could require us to repay the indebtedness before the scheduled maturity date, which could adversely affect our liquidity and increase our financing costs.

We may be unable to renew, repay, or refinance our outstanding debt.

We are subject to the risk that indebtedness on our properties or our unsecured indebtedness will not be renewed, repaid, or refinanced when due or the terms of any renewal or refinancing will not be as favorable as the existing terms of such indebtedness. If we are unable to refinance our indebtedness on acceptable terms, or at all, we might be forced to dispose of one or more of the properties on disadvantageous terms, which might result in losses to us. Such losses could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt. Furthermore, if a property is mortgaged to secure payment of indebtedness and we are unable to meet mortgage payments, the mortgagee could foreclose on the property, appoint a receiver and exercise rights under an assignment of rents and leases, or pursue other remedies, all with a consequent loss of our revenues and asset value. Foreclosures could also create taxable income without accompanying cash proceeds, thereby hindering our ability to meet the REIT distribution requirements of the Code.

Variable rate debt is subject to interest rate risk.

We have mortgage debt with varying interest rates dependent upon various market indexes. In addition, we have a revolving credit facility bearing interest at a variable rate on all amounts drawn on the facility. We may incur additional variable rate debt in the future. Increases in interest rates on variable rate debt would increase our interest expense, unless we make arrangements which hedge the risk of rising interest rates, which would adversely affect net income and cash available for payment of our debt obligations and distributions to shareholders.

We may incur losses on interest rate hedging arrangements.

Historically, we have entered into agreements to reduce the risks associated with changes in interest rates, and we may continue to do so in the future. Although these agreements may partially protect against rising interest rates, they may also reduce the benefits to us if interest rates decline. If a hedging arrangement is not indexed to the same rate as the indebtedness which is hedged, we may be exposed to losses to the extent which the rate governing the indebtedness and the rate governing the hedging arrangement change independently of each other. Additionally, nonperformance by the other party to the hedging arrangement may subject us to increased credit risks.

Issuances of additional debt may adversely impact our financial condition.

Our capital requirements depend on numerous factors, including the rental and occupancy rates of our multifamily properties, dividend payment rates to our shareholders, development and capital expenditures, costs of operations, and potential acquisitions. If our capital requirements vary materially from our plans, we may require additional financing earlier than anticipated. If we issue more debt, we could become more leveraged, resulting in increased risk of default on our obligations and an increase in our debt service requirements, both of which could adversely affect our financial condition and ability to access debt and equity capital markets in the future.

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

Moody’s and Standard & Poor’s, the major debt rating agencies, routinely evaluate our debt and have given us ratings of Baa1 and BBB, respectively, with stable outlooks, on our senior unsecured debt. These ratings are based on a number of factors, which include their assessment of our financial strength, liquidity, capital structure, asset quality, and sustainability of cash flow and earnings. Due to changes in market conditions, we may not be able to maintain our current credit ratings, which could adversely affect our cost of funds and related margins, liquidity, and access to capital markets.

Risks Associated with Our Shares

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

For us to maintain our qualification as a REIT, we must have 100 or more shareholders during the year and not more than 50% in value of our outstanding shares may be owned, directly or indirectly, by five or fewer individuals. As defined for federal income tax purposes, the term “individuals” includes a number of specified entities. To minimize the possibility of us failing to qualify as a REIT under this test, our declaration of trust includes restrictions on transfers of our shares and ownership limits. The ownership limits, as well as our ability to issue other classes of equity securities, may delay, defer, or prevent a change in control. These provisions may also deter tender offers for our common shares which may be attractive to you or limit your opportunity to receive a premium for your shares which might otherwise exist if a third party were attempting to effect a change in control transaction.

Our share price will fluctuate.

The market price and trading volume of our common shares are subject to fluctuation due to general market conditions, the risks discussed in this report and other matters, including the following:

•

operating results which vary from the expectations of securities analysts and investors;

•

investor interest in our property portfolio;

•

the reputation and performance of REITs;

•

the attractiveness of REITs as compared to other investment vehicles;

•

the results of our financial condition and operations;

•

the perception of our growth and earnings potential;

•

dividend payment rates;

•

increases in market interest rates, which may lead purchasers of our common shares to demand a higher yield; and

•

changes in financial markets and national economic and general market conditions.

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

The form, timing and/or amount of dividend distributions will be declared at the discretion of our Board of Trust Managers and will depend on actual cash from operations, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and other factors as the Board of Trust Managers may consider relevant. The Board of Trust Managers may modify the form, timing and/or amount of dividends from time to time.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The Properties

Our properties typically consist of mid-rise buildings or two and three story buildings in a landscaped setting and provide residents with a variety of amenities. Most of the properties have one or more swimming pools and a clubhouse and many have whirlpool spas, weight room facilities, and controlled-access gates. Many of the apartment homes offer additional amenities common to multifamily rental properties.

Operating Properties (including properties held through unconsolidated joint ventures)

The 196 operating properties in which we owned interests and operated at December 31, 2011 averaged 928 square feet of living area per apartment home. For the year ended December 31, 2011, no single operating property accounted for greater than 1.5% of our total revenues. Our operating properties had a weighted average occupancy rate of approximately 94.5% and 93.3% for the years ended December 31, 2011 and 2010, respectively, and an average annual rental revenue per apartment home of $970 and $928 for the years ended December 31, 2011 and 2010, respectively. Resident lease terms generally range from six to fifteen months. One hundred and seventy-one of our operating properties have over 200 apartment homes, with the largest having 904 apartment homes. Our operating properties have an average age of 12 years (calculated on the basis of investment dollars). Our operating properties were constructed and placed in service as follows:

		September 30,
Year Placed in Service		Number of Operating Properties
2006-2011		36
2001-2005		32
1996-2000		57
1991-1995		19
1986-1990		34
Prior to 1986		18

Property Table

The following table sets forth information with respect to our 196 operating properties at December 31, 2011:

		September 30,		September 30,		September 30,		September 30,			September 30,
	OPERATING PROPERTIES
Property and Location	Year Placed In Service		Average Apartment Size (Sq. Ft.)		Number of Apartments		2011 Average Occupancy (1)			2011 Average Monthly Rental Rate per Apartment
ARIZONA
Phoenix
Camden Copper Square		2000		786		332		92.8	%	$	803
Camden Fountain Palms (2)		1986/1996		1,050		192		90.4			672
Camden Legacy		1996		1,067		428		94.3			887
Camden Pecos Ranch (2)		2001		924		272		94.1			796
Camden San Paloma		1993/1994		1,042		324		94.0			927
Camden Sierra (2)		1997		925		288		90.2			663
Camden Towne Center (2)		1998		871		240		91.2			669
Camden Vista Valley (3)		1986		923		357		91.4			626
CALIFORNIA
Los Angeles/Orange County
Camden Crown Valley		2001		1,009		380		94.5			1,532
Camden Harbor View		2004		975		538		94.7			1,904
Camden Main & Jamboree (4)		2008		1,011		290		95.8			1,756
Camden Martinique		1986		794		714		94.7			1,276
Camden Parkside (2)		1972		836		421		94.1			1,186
Camden Sea Palms		1990		891		138		96.6			1,452
San Diego/Inland Empire
Camden Old Creek		2007		1,037		350		93.2			1,564
Camden Sierra at Otay Ranch		2003		962		422		93.2			1,494
Camden Tuscany		2003		896		160		94.2			1,900
Camden Vineyards		2002		1,053		264		92.3			1,222
COLORADO
Denver
Camden Caley		2000		925		218		95.0			923
Camden Centennial		1985		744		276		93.2			701
Camden Denver West (5)		1997		1,015		320		94.1			1,083
Camden Highlands Ridge		1996		1,149		342		93.7			1,146
Camden Interlocken		1999		1,022		340		94.3			1,145
Camden Lakeway		1997		932		451		93.7			910
Camden Pinnacle		1985		748		224		93.6			725
WASHINGTON DC METRO
Camden Ashburn Farms		2000		1,062		162		97.1			1,412
Camden Clearbrook		2007		1,048		297		96.6			1,296
Camden College Park (4)		2008		942		508		94.3			1,556
Camden Dulles Station		2009		984		366		96.0			1,550
Camden Fair Lakes		1999		1,056		530		96.3			1,571
Camden Fairfax		2006		934		488		95.6			1,603
Camden Fallsgrove		2004		996		268		96.1			1,613
Camden Grand Parc		2002		674		105		95.2			2,430
Camden Lansdowne		2002		1,006		690		96.2			1,349
Camden Largo Town Center		2000/2007		1,027		245		93.8			1,586
Camden Monument Place		2007		856		368		95.7			1,464
Camden Potomac Yard		2008		835		378		94.8			1,912
Camden Roosevelt		2003		856		198		97.7			2,331
Camden Russett		2000		992		426		93.3			1,386
Camden Silo Creek		2004		975		284		96.5			1,362
Camden Summerfield		2008		957		291		93.7			1,546
FLORIDA
Southeast Florida
Camden Aventura		1995		1,108		379		93.5			1,432
Camden Brickell		2003		937		405		96.2			1,500
Camden Doral		1999		1,120		260		94.7			1,501
Camden Doral Villas		2000		1,253		232		94.3			1,615
Camden Las Olas		2004		1,043		420		95.1			1,606
Camden Plantation		1997		1,201		502		94.6			1,277

		September 30,		September 30,		September 30,		September 30,			September 30,
	OPERATING PROPERTIES
Property and Location	Year Placed In Service		Average Apartment Size (Sq. Ft.)		Number of Apartments		2011 Average Occupancy (1)			2011 Average Monthly Rental Rate per Apartment
Camden Portofino		1995		1,112		322		94.4	%	$	1,310
Orlando
Camden Club		1986		1,077		436		95.1			837
Camden Hunter’s Creek		2000		1,075		270		95.6			952
Camden Lago Vista		2005		955		366		94.8			863
Camden Landings		1983		748		220		95.0			654
Camden Lee Vista		2000		937		492		95.5			831
Camden Orange Court		2008		817		268		94.8			1,056
Camden Renaissance		1996/1998		899		578		93.9			789
Camden Reserve		1990/1991		824		526		94.2			700
Camden World Gateway		2000		979		408		94.9			927
Tampa/St. Petersburg
Camden Bay		1997/2001		943		760		94.8			841
Camden Bay Pointe		1984		771		368		94.5			677
Camden Bayside		1987/1989		748		832		95.5			737
Camden Citrus Park		1985		704		247		94.8			654
Camden Lakes		1982/1983		732		688		93.5			663
Camden Lakeside		1986		729		228		93.5			719
Camden Live Oaks		1990		1,093		770		94.0			768
Camden Preserve		1996		942		276		94.6			999
Camden Providence Lakes		1996		1,024		260		93.1			886
Camden Royal Palms		2006		1,017		352		93.2			830
Camden Visconti (6) (7)		2007		1,125		450		96.2			1,080
Camden Westshore		1986		728		278		95.3			807
Camden Woods		1986		1,223		444		95.4			817
GEORGIA
Atlanta
Camden Brookwood		2002		912		359		95.3			950
Camden Deerfield		2000		1,187		292		93.1			917
Camden Dunwoody		1997		1,007		324		96.7			860
Camden Ivy Hall (6) (8)		2010		1,181		110		94.0			1,639
Camden Midtown Atlanta		2001		935		296		93.1			953
Camden Peachtree City		2001		1,027		399		95.0			884
Camden Phipps (6) (7)		1996		1,018		234		94.1			1,123
Camden River		1997		1,103		352		94.9			862
Camden Shiloh		1999/2002		1,143		232		94.7			837
Camden St. Clair		1997		999		336		93.5			876
Camden Stockbridge		2003		1,009		304		93.2			742
Camden Sweetwater		2000		1,151		308		93.0			710
MISSOURI
Kansas City
Camden Passage (9)		1989/1997		834		596		92.2			663
St. Louis
Camden Cedar Lakes (9)		1986		852		420		92.3			641
Camden Cove West (9)		1990		828		276		96.2			835
Camden Cross Creek (9)		1973/1980		947		591		94.9			764
Camden Westchase (9)		1986		945		160		97.3			869
NEVADA
Las Vegas
Camden Bel Air		1988/1995		943		528		91.6			716
Camden Breeze		1989		846		320		93.0			721
Camden Canyon		1995		987		200		94.8			846
Camden Commons		1988		936		376		91.3			741
Camden Cove		1990		898		124		93.1			713
Camden Del Mar		1995		986		560		95.4			890
Camden Fairways		1989		896		320		95.8			868
Camden Hills		1991		439		184		88.7			499
Camden Legends		1994		792		113		93.6			818
Camden Palisades		1991		905		624		91.9			725
Camden Pines (2)		1997		982		315		92.0			795
Camden Pointe		1996		983		252		93.5			732

		September 30,		September 30,		September 30,		September 30,			September 30,
	OPERATING PROPERTIES
Property and Location	Year Placed In Service		Average Apartment Size (Sq. Ft.)		Number of Apartments		2011 Average Occupancy (1)			2011 Average Monthly Rental Rate per Apartment
Camden Summit (2)		1995		1,187		234		94.0	%	$	1,088
Camden Tiara (2)		1996		1,043		400		93.3			847
Camden Vintage		1994		978		368		91.9			715
Oasis Bay (10)		1990		876		128		96.4			752
Oasis Crossings (10)		1996		983		72		93.5			749
Oasis Emerald (10)		1988		873		132		92.7			627
Oasis Gateway (10)		1997		1,146		360		91.6			782
Oasis Island (10)		1990		901		118		91.3			636
Oasis Landing (10)		1990		938		144		92.5			693
Oasis Meadows (10)		1996		1,031		383		91.1			734
Oasis Palms (10)		1989		880		208		91.7			674
Oasis Pearl (10)		1989		930		90		91.6			711
Oasis Place (10)		1992		440		240		87.6			499
Oasis Ridge (10)		1984		391		477		84.0			421
Oasis Sierra (10)		1998		923		208		93.8			786
Oasis Springs (10)		1988		838		304		90.8			590
Oasis Vinings (10)		1994		1,152		234		90.1			733
NORTH CAROLINA
Charlotte
Camden Ballantyne		1998		1,045		400		95.8			866
Camden Cotton Mills		2002		905		180		97.9			1,079
Camden Dilworth		2006		857		145		97.0			1,099
Camden Fairview		1983		1,036		135		96.2			805
Camden Forest		1989		703		208		91.6			571
Camden Foxcroft (13)		1979		940		156		96.0			743
Camden Grandview		2000		1,057		266		97.2			1,205
Camden Habersham		1986		773		240		95.8			630
Camden Park Commons		1997		861		232		92.7			645
Camden Pinehurst		1967		1,147		407		95.5			747
Camden Sedgebrook		1999		972		368		96.0			796
Camden Simsbury		1985		874		100		96.3			745
Camden South End Square		2003		882		299		97.1			1,003
Camden Stonecrest		2001		1,098		306		95.0			906
Camden Touchstone		1986		899		132		96.8			729
Raleigh
Camden Crest		2001		1,013		438		94.5			773
Camden Governor’s Village		1999		1,046		242		93.4			879
Camden Lake Pine		1999		1,066		446		94.9			806
Camden Manor Park		2006		966		484		95.7			835
Camden Overlook		2001		1,060		320		95.2			887
Camden Reunion Park		2000/2004		972		420		93.0			701
Camden Westwood		1999		1,027		354		95.9			800
PENNSYLVANIA
Camden Valleybrook		2002		992		352		94.1			1,323
TEXAS
Austin
Camden Amber Oaks (6)		2009		862		348		94.4			809
Camden Brushy Creek (6) (7)		2008		882		272		96.9			800
Camden Cedar Hills		2008		911		208		94.5			975
Camden Gaines Ranch		1997		955		390		94.3			995
Camden Huntingdon		1995		903		398		95.0			754
Camden Laurel Ridge		1986		702		183		94.0			600
Camden Ridgecrest		1995		855		284		94.8			699
Camden Shadow Brook (6) (7)		2009		909		496		96.3			885
Camden South Congress (6)		2001		975		253		94.8			1,424
Camden Stoneleigh		2001		908		390		95.9			898
Corpus Christi
Camden Breakers		1996		868		288		96.2			930
Camden Copper Ridge		1986		775		344		94.4			694
Camden Miramar (11)		1994-2010		488		855		80.7			948
Camden South Bay (6)		2007		1,055		270		95.1			1,060

		September 30,		September 30,		September 30,		September 30,			September 30,
	OPERATING PROPERTIES
Property and Location	Year Placed In Service		Average Apartment Size (Sq. Ft.)		Number of Apartments		2011 Average Occupancy (1)			2011 Average Monthly Rental Rate per Apartment
Dallas/Fort Worth
Camden Addison (2)		1996		942		456		96.1	%	$	790
Camden Buckingham		1997		919		464		95.8			804
Camden Centreport		1997		911		268		95.1			794
Camden Cimarron		1992		772		286		95.8			809
Camden Design District (6) (7)		2009		939		355		92.9			1,120
Camden Farmers Market		2001/2005		932		904		94.8			910
Camden Gardens		1983		652		256		96.4			548
Camden Glen Lakes		1979		877		424		95.4			755
Camden Legacy Creek		1995		831		240		96.4			855
Camden Legacy Park		1996		871		276		96.4			869
Camden Panther Creek (6) (7)		2009		946		295		94.9			952
Camden Riverwalk (6) (7)		2008		982		600		95.4			1,096
Camden Springs		1987		713		304		95.4			564
Camden Valley Park		1986		743		516		94.3			748
Camden Westview		1983		697		335		93.2			603
Houston
Camden Baytown		1999		844		272		91.0			786
Camden City Centre		2007		932		379		96.7			1,293
Camden Creek		1984		639		456		92.4			587
Camden Cypress Creek (6) (7)		2009		993		310		96.4			1,039
Camden Downs at Cinco Ranch (6) (7)		2004		1,075		318		96.3			1,006
Camden Grand Harbor (6) (7)		2008		959		300		96.9			984
Camden Greenway		1999		861		756		94.2			1,056
Camden Heights (6) (7)		2004		927		352		96.8			1,154
Camden Holly Springs (2)		1999		934		548		93.9			899
Camden Lakemont (6) (7)		2007		904		312		96.3			862
Camden Midtown		1999		844		337		96.0			1,252
Camden Northpointe (6) (7)		2008		940		384		95.4			922
Camden Oak Crest		2003		870		364		92.4			835
Camden Park (2)		1995		866		288		94.3			792
Camden Piney Point (6) (7)		2004		919		318		96.5			988
Camden Plaza (4)		2007		915		271		94.0			1,281
Camden Royal Oaks		2006		923		236		89.8			1,145
Camden Spring Creek (6) (7)		2004		1,080		304		92.1			981
Camden Steeplechase		1982		748		290		91.6			633
Camden Stonebridge		1993		845		204		94.7			806
Camden Sugar Grove (2)		1997		921		380		93.2			855
Camden Travis Street (12)		2010		819		253		96.1			1,289
Camden Vanderbilt		1996/1997		863		894		95.6			1,139
Camden Whispering Oaks		2008		934		274		95.0			989
Camden Woodson Park (6) (7)		2008		916		248		97.0			944
Camden Yorktown (6)		2008		995		306		94.0			915
San Antonio
Camden Braun Station (6) (7)		2006		827		240		95.2			828
Camden Westover Hills (6) (7)		2010		959		288		96.3			1,029

(1)

Represents average physical occupancy for the year except as noted.

(2)

Properties owned through a joint venture in which we own a 20% interest. The remaining interest is owned by an unaffiliated private investor. In January 2012, we acquired the remaining 80% ownership interest from this unaffiliated private investor.

(3)

Property was included in properties held for sale at December 31, 2011. We sold this property in January 2012.

(4)

Property owned through a fully-consolidated joint venture in which we own a 99.99% interest. The remaining interest is owned by an unaffiliated private investor.

(5)

Property owned through a joint venture in which we own a 50% interest. The remaining interest is owned by an unaffiliated private investor.

(6)

Properties owned through a joint venture in which we own a 20% interest. The remaining interest is owned by an unaffiliated pension fund.

(7)

Property acquired during 2011—average occupancy calculated from date at which property was acquired, unless otherwise noted.

(8)

Development property stabilized during 2011—average occupancy calculated from date at which occupancy exceeded 90% through year-end.

(9)

Properties owned through a joint venture in which we own a 15% interest. The remaining interest is owned by an unaffiliated private investor.

(10)

Properties owned through a joint venture in which we own a 20% interest. The remaining interest is owned by an unaffiliated pension fund.

(11)

Miramar is a student housing project for Texas A&M at Corpus Christi. Average occupancy includes summer which is normally subject to high vacancies.

(12)

Property owned through a fully-consolidated joint venture in which we own a 25% interest. The remaining interest is owned by an unaffiliated private investor.

(13)

Property owned through a fully-consolidated joint venture in which we own a 75% interest. The remaining interest is owned by an unaffiliated private investor.

Item 3. Legal Proceedings

For discussion regarding legal proceedings, see Note 14, “Commitments and Contingencies,” in the Notes to Consolidated Financial Statements.

Item 4. Mine Safety Disclosures

None.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The high and low closing prices per share of our common shares, as reported on the New York Stock Exchange composite tape under the symbol “CPT,” and distributions per share declared for the quarters indicated are as follows:

		September 30,		September 30,		September 30,
	High		Low		Distributions
2011 Quarters:
First	$	59.17	$	53.47	$	0.49
Second		65.26		56.40		0.49
Third		69.32		55.26		0.49
Fourth		62.35		53.09		0.49

2010 Quarters:
First	$	43.94	$	36.77	$	0.45
Second		51.50		40.85		0.45
Third		49.90		39.15		0.45
Fourth		54.13		48.18		0.45

LOGO

This graph assumes the investment of $100 on December 31, 2006 and quarterly reinvestment of dividends. (Source: SNL Financial LC)

		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	Years Ended December 31,
Index	2006		2007		2008		2009		2010		2011
Camden Property Trust		100.00		68.24		47.71		69.16		91.62		109.26
FTSE NAREIT Equity		100.00		84.31		52.50		67.20		85.98		93.11
S&P 500		100.00		105.49		66.46		84.05		96.71		98.76
Russell 2000		100.00		98.43		65.18		82.89		105.14		100.75
MSCI US REIT (RMS) Index		100.00		83.18		51.60		66.36		85.26		92.67

As of February 10, 2012, there were 553 shareholders of record and approximately 29,039 beneficial owners of our common shares.

In March 2010, we announced the creation of an at-the-market (“ATM”) share offering program through which we could, but had no obligation to, sell common shares having an aggregate offering price of up to $250 million (“2010 ATM program”), in amounts and at times as we determined, into the existing trading market at current market prices as well as through negotiated transactions. During the year ended December 31, 2010, we issued approximately 4.9 million common shares at an average price of $48.37 per share for total net consideration of approximately $231.7 million. During the year ended December 31, 2011, we issued approximately 0.3 million common shares at an average price of $55.81 per share for total net consideration of approximately $13.8 million. The 2010 ATM program was terminated and no further common shares are available for sale under the 2010 ATM program.

In May 2011, we created a second ATM share offering program through which we can sell common shares having an aggregate offering price of up to $300 million (“2011 ATM program”) from time to time into the existing trading market at current market prices as well as through negotiated transactions. We may, but have no obligation to, sell common shares through the 2011 ATM share offering program in amounts and at times as we determine. 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 determination of the appropriate sources of funding for us. During the year ended December 31, 2011, we issued approximately 1.5 million common shares at an average price of $62.98 per share for total net consideration of approximately $92.7 million. In January 2012, we issued approximately 0.1 million common shares at an average price of $62.41 per share for total net consideration of approximately $3.2 million. As of the date of this filing, we had common shares having an aggregate offering price of up to $202.4 million remaining available for sale under the 2011 ATM program.

See Part III, Item 12, for a description of securities authorized for issuance under equity compensation plans.

In January 2008, our Board of Trust Managers approved an increase of the April 2007 repurchase plan to allow for the repurchase of up to $500 million of our common equity securities through open market purchases, block purchases, and privately negotiated transactions. Under this program, we have repurchased 4.3 million shares for a total of approximately $230.2 million from April 2007 through December 31, 2011. The remaining dollar value of our common equity securities authorized to be repurchased under the program was approximately $269.8 million as of December 31, 2011. There were no repurchases of our equity securities during the years ended December 31, 2011, 2010 and 2009.

Item 6. Selected Financial Data

The following table provides selected financial data relating to our historical financial condition and results of operations as of and for each of the years ended December 31, 2007 through 2011. This data should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes. Prior year amounts have been reclassified for discontinued operations.

COMPARATIVE SUMMARY OF SELECTED FINANCIAL AND PROPERTY DATA

		September 30,			September 30,			September 30,			September 30,			September 30,
	Year Ended December 31,
(in thousands, except per share amounts and property data)	2011			2010			2009			2008			2007

Operating Data (a)
Total property revenues	$	655,868		$	601,450		$	602,648		$	602,932		$	568,060
Total property expenses		256,679			242,912			237,599			230,275			209,042
Total non-property income (loss)		21,395			28,337			25,443			(19,540	)		25,002
Total other expenses		367,008			367,523			370,660			325,469			333,838
Income (loss) from continuing operations attributable to common shareholders		22,546			8,242			(75,201	)		(20,340	)		35,480
Net income (loss) attributable to common shareholders		49,379			23,216			(50,800	)		70,973			148,457

Income (loss) from continuing operations attributable to common shareholders per share:
Basic	$	0.30		$	0.11		$	(1.19	)	$	(0.37	)	$	0.60
Diluted		0.30			0.11			(1.19	)		(0.37	)		0.59
Net income (loss) attributable to common shareholders per share:
Basic	$	0.67		$	0.33		$	(0.80	)	$	1.28		$	2.54
Diluted		0.66			0.33			(0.80	)		1.28			2.50

Distributions declared per common share	$	1.96		$	1.80		$	2.05		$	2.80		$	2.76

Balance Sheet Data (at end of year)
Total real estate assets, at cost (e)	$	5,875,515		$	5,675,309		$	5,505,168		$	5,491,593		$	5,527,403
Total assets		4,622,075			4,699,737			4,607,999			4,730,342			4,890,760
Notes payable		2,432,112			2,563,754			2,625,199			2,832,396			2,828,095
Perpetual preferred units		97,925			97,925			97,925			97,925			97,925
Equity		1,827,768			1,757,373			1,609,013			1,501,356			1,653,340

Other Data
Cash flows provided by (used in):
Operating activities	$	244,834		$	224,036		$	217,688		$	216,958		$	223,106
Investing activities		(187,364	)		35,150			(69,516	)		(37,374	)		(346,798	)
Financing activities		(172,886	)		(152,767	)		(91,423	)		(173,074	)		123,555
Funds from operations – diluted (b)		207,535			194,309			109,947			169,585			227,153

Property Data
Number of operating properties (at the end of year)(c)		196			186			183			181			182
Number of operating apartment homes (at end of year) (c)		66,997			63,316			63,286			62,903			63,085
Number of operating apartment homes (weighted average) (c)(d)		50,905			50,794			50,608			51,277			53,132
Weighted average monthly total property revenue per apartment home	$	1,098		$	1,030		$	1,045		$	1,067		$	1,032
Properties under development (at end of period)		10			2			2			5			11

(a)

Excludes discontinued operations.

(b)

Management considers Funds from Operations (“FFO”) to be an appropriate measure 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 accounting principles generally accepted in the United States of America (“GAAP”)), excluding gains (or losses) associated with the sale of previously depreciated operating properties, real estate depreciation and amortization, and adjustments for unconsolidated joint ventures. Our calculation of diluted FFO also assumes conversion of all potentially dilutive securities, including certain noncontrolling 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 operating properties and excluding depreciation, FFO can assist in the comparison of the operating performance of a company’s real estate between periods or as compared to different companies.

(c)

Includes discontinued operations.

(d)

Excludes apartment homes owned in joint ventures.

(e)

Includes properties held for sale.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and notes appearing elsewhere in this report. Historical results and trends which might appear in the 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 performances, 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 they are subject to known and unknown risks, uncertainties, and other factors beyond our control and could differ materially from our actual results and performance.

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

•

volatility in capital and credit markets, or other unfavorable changes in economic conditions, could adversely impact us;

•

short-term leases expose us to the effects of declining market rents;

•

we face risks associated with land holdings and related activities;

•

difficulties of selling real estate could limit our flexibility;

•

we could be negatively impacted by the condition of Fannie Mae or Freddie Mac;

•

compliance or failure to comply with laws, including those requiring access to our properties by disabled persons, could result in substantial cost;

•

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

•

development and construction risks could impact our profitability;

•

our acquisition strategy may not produce the cash flows expected;

•

competition could adversely affect our ability to acquire properties;

•

losses from catastrophes may exceed our insurance coverage;

•

investments through joint ventures involve risks not present in investments in which we are the sole investor;

•

we face risks associated with investments in and management of discretionary funds;

•

tax matters, including failure to qualify as a REIT, could have adverse consequences;

•

we depend on our key personnel;

•

changes in litigation risks could affect our business;

•

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

•

we have significant debt, which could have important adverse consequences;

•

we may be unable to renew, repay, or refinance our outstanding debt;

•

variable rate debt is subject to interest rate risk;

•

we may incur losses on interest rate hedging arrangements;

•

issuances of additional debt may adversely impact our financial condition;

•

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;

•

our share price will fluctuate; and

•

the form, timing and/or amount of dividend distributions in future periods may vary and be impacted by economic or other considerations.

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

We are primarily engaged in the ownership, management, development, acquisition and construction of multifamily apartment communities. As of December 31, 2011, we owned interests in, operated, or were developing 206 multifamily properties comprising 69,794 apartment homes across the United States as detailed in the following Property Portfolio table. In addition, we own other land parcels we may develop into multifamily apartment communities.

Property Operations

Our results for the year ended December 31, 2011 reflect an increase in rental revenue as compared to 2010, which we believe was primarily due to a gradually improving economy, favorable demographics, a modest supply of new multifamily housing, and a decrease in home ownership rates, which have resulted in increases in realized rental rates and average occupancy levels. Same store revenues increased 5.5% as compared to 2010. We believe economic and employment conditions will improve slightly during 2012 and the supply of new multifamily homes will continue to be modest. However, we believe significant risks to the economy remain prevalent, and while there has been a slight increase in employment levels in the majority of our markets, the unemployment rate remains at higher than historical levels. If economic conditions in the United States were to worsen, our operating results could be adversely affected.

Development Activity

During the year ended December 31, 2011, we began construction on eight development projects including two development projects in our discretionary funds, in which we own a 20% ownership interest (the “Funds”). These eight projects contain 2,190 units, with initial occupancy expected throughout 2012 and 2013. At December 31, 2011, we had a total of ten development projects under construction containing 2,797 units with initial occupancy expected between 2011 and 2013. Excluding the two Fund development projects containing 520 units, we have remaining anticipated construction expenditures of approximately $180.0 million on the eight consolidated projects under construction as of December 31, 2011.

Acquisitions and Dispositions

In August 2011, we acquired 30.1 acres of land located in Atlanta, Georgia for approximately $40.1 million. In December 2011, we acquired 2.2 acres of land in Glendale, California for approximately $21.4 million. We intend to utilize these land holdings for development of multiple multifamily apartment communities, subject to, among other matters, market conditions.

During the fourth quarter of 2011, we sold two properties consisting of 788 units located in Dallas, Texas for approximately $39.7 million and recognized a gain of approximately $24.6 million on the sale. During January 2012, we sold one property consisting of 357 units located in Phoenix, Arizona for approximately $24.5 million.

In April 2011, we sold one of our land parcels to one of the Funds for approximately $9.4 million and we were reimbursed for previously written-off third-party development costs, resulting in a gain of approximately $4.7 million. In June 2011, we sold another land parcel to this Fund for approximately $3.1 million, resulting in a gain of approximately $0.1 million. Development of 520 units on these two parcels commenced in 2011.

During the year ended December 31, 2011, the Funds acquired eighteen multifamily properties totaling 6,076 units located in the Houston, Dallas, Austin, San Antonio, Tampa, and Atlanta metropolitan areas. In January 2012, one of the Funds acquired one multifamily property comprised of 350 units located in Raleigh, North Carolina.

In January 2012, we issued approximately 6.6 million common shares in a public equity offering and received approximately $391.6 million in net proceeds. We utilized these proceeds to fund the acquisition of the 80% interest not owned by us in twelve related joint ventures for approximately $99.5 million and the repayment of approximately $272.6 million in mortgage debt associated with these joint ventures. In connection with this acquisition of the joint venture interests, we acquired twelve operating properties consisting of 4,034 units located in Dallas, Houston, Las Vegas, Phoenix and Southern California.

During the fourth quarter of 2011, one of our unconsolidated joint ventures sold four operating properties consisting of 1,194 units located in Louisville, Kentucky. Our proportionate share of the gain was approximately $6.4 million.

In March 2011, we sold our ownership interests in three unconsolidated joint ventures for total proceeds of approximately $19.3 million and recognized a gain of approximately $1.1 million. Two of these joint ventures owned multifamily properties in Houston comprised of 459 units, and the remaining joint venture owned 6.1 acres of land in Houston.

Future Outlook

Subject to market conditions, we intend to continue to look for opportunities to expand our development pipeline, acquire existing communities, and complete selective dispositions. We also intend to continue to strengthen our capital and liquidity positions by continuing to focus on our core fundamentals, which are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs. We intend to meet our liquidity requirements through available cash balances, cash flows generated from operations, draws on our unsecured credit facility, proceeds from property dispositions and secured mortgage notes, equity issued from our 2011 at-the-market share offering program, and the use of debt and equity offerings under our automatic shelf registration statement.

As of December 31, 2011, we had approximately $55.2 million in cash and cash equivalents and no balances outstanding on our $500 million unsecured line of credit; we recently extended the maturity date of our unsecured line of credit to September 2015, with options to extend the maturity to September 2016. Additionally, we now have the option to increase this credit facility to $750 million by either adding additional banks to the credit facility or obtaining the agreement of existing banks to increase their commitments. We believe payments on debt maturing in 2012 are manageable at $294.2 million, which represents approximately 12% of our total outstanding debt. Included in these maturities are four debt instruments of approximately $102.1 million which have automatic one year extensions which we may or may not exercise at our election. We also believe we are well-positioned with a strong balance sheet and sufficient liquidity to cover near-term debt maturities and new development funding requirements. We will, however, continue to assess and take further actions where we believe prudent to meet our objectives and capital requirements.

Property Portfolio

Our multifamily property portfolio is summarized as follows:

		September 30,		September 30,		September 30,		September 30,
	December 31, 2011				December 31, 2010
	Apartment				Apartment
	Homes		Properties		Homes		Properties
Operating Properties
Houston, Texas (1)		9,354		26		6,967		19
Las Vegas, Nevada		8,016		29		8,016		29
Dallas, Texas		5,979		15		5,517		14
Tampa, Florida		5,953		13		5,503		12
Washington, D.C. Metro		5,604		16		5,604		16
Charlotte, North Carolina		3,574		15		3,574		15
Orlando, Florida		3,564		9		3,557		9
Atlanta, Georgia		3,546		12		3,312		11
Austin, Texas		3,222		10		2,454		8
Raleigh, North Carolina		2,704		7		2,704		7
Southeast Florida		2,520		7		2,520		7
Los Angeles/Orange County, California		2,481		6		2,481		6
Phoenix, Arizona (2)		2,433		8		2,433		8
Denver, Colorado		2,171		7		2,171		7
San Diego/Inland Empire, California		1,196		4		1,196		4
Other		4,680		12		5,307		14

Total Operating Properties		66,997		196		63,316		186

		September 30,		September 30,		September 30,		September 30,
	December 31, 2011				December 31, 2010
	Apartment				Apartment
	Homes		Properties		Homes		Properties
Properties Under Development
Orlando, Florida		858		2		420		1
Washington, D.C. Metro		783		3		187		1
Tampa, Florida		540		2		—		—
Houston, Texas		372		2		—		—
Austin, Texas		244		1		—		—

Total Properties Under Development		2,797		10		607		2

Total Properties		69,794		206		63,923		188

Less: Unconsolidated Joint Venture Properties (3)
Houston, Texas		4,368		13		1,981		6
Las Vegas, Nevada		4,047		17		4,047		17
Dallas, Texas		1,706		4		456		1
Austin, Texas		1,613		5		601		2
Phoenix, Arizona		992		4		992		4
Tampa, Florida		450		1		—		—
Los Angeles/Orange County, California		421		1		421		1
Denver, Colorado		320		1		320		1
Atlanta, Georgia		344		2		110		1
Washington, D. C. Metro		276		1		—		—
Other		2,841		8		3,507		10

Total Joint Venture Properties (4)		17,378		57		12,435		43

Total Properties Fully Consolidated		52,416		149		51,488		145

(1)

Includes a fully consolidated joint venture Camden Travis Street, of which we retain a 25%ownership.

(2)

Includes one property consisting of 357 apartment homes located in Phoenix, which was included in properties held for sale at December 31, 2011. This property was sold in January 2012.

(3)

Refer to Note 8, “Investments in Joint Ventures,” in the Notes to Consolidated Financial Statements for further discussion of our unconsolidated joint venture investments.

(4)

In January 2012, we acquired the remaining equity interests of twelve joint venture properties consisting of 4,034 apartments homes located in Dallas, Houston, Las Vegas, Phoenix and Southern California. Refer to Note 8, “Investments in Joint Ventures” in the Notes to Consolidated Financial Statements for further discussion of this transaction.

Stabilized Communities

We generally consider a property stabilized once it reaches 90% occupancy at the beginning of a period. During the year ended December 31, 2011, stabilization was achieved at one of our joint venture properties as follows:

September 30,

Property and Location

Number of
Apartment
Homes

Date of
Construction
Completion

Date of
Stabilization

Camden Ivy Hall – joint venture

Atlanta, GA

110

4Q10

3Q11

Acquisitions

During the year ended December 31, 2011, the Funds acquired eighteen multifamily properties comprised of 2,846 units located in Houston, Texas, 1,250 units located in Dallas, Texas, 768 units located in Austin, Texas, 450 units located in Tampa, Florida, 528 units located in San Antonio, Texas, and 234 units located in Atlanta, Georgia. In January 2012, one of the Funds acquired one multifamily property comprised of 350 units located in Raleigh, North Carolina.

In January 2012, we purchased the remaining 80% ownership interest in twelve unconsolidated joint ventures for approximately $99.5 million and repaid approximately $272.6 million in mortgage debt associated with these joint ventures. In connection with this acquisition of the joint venture interests, we acquired twelve operating properties consisting of 4,034 units located in Dallas, Houston, Las Vegas, Phoenix and Southern California. We funded this acquisition and debt repayment with net proceeds raised through a public equity offering completed in January 2012.

Partial Sales, Dispositions to Joint Ventures and Dispositions by Joint Ventures

In April 2011, we sold one of our land parcels in Washington, D.C. to one of the Funds, in which we have a 20% interest, for approximately $9.4 million and we were reimbursed for previously written off third-party development costs, resulting in a gain of approximately $4.7 million. In June 2011, we sold one of our development properties in Austin, Texas, to this Fund for approximately $3.1 million, resulting in a gain of approximately $0.1 million.

During March 2011, we sold our ownership interests in three unconsolidated joint ventures for total proceeds of approximately $19.3 million and recognized a gain of approximately $1.1 million. Two of these joint ventures own multifamily properties in Houston, Texas with 459 units, and one joint venture owns 6.1 acres of land in Houston, Texas.

There were no partial sales or dispositions to joint ventures for the years ended December 31, 2010 or 2009.

Discontinued Operations

We intend to maintain a long-term strategy of managing our invested capital through the selective sale of properties and to utilize the proceeds to reduce our outstanding debt and leverage ratios and fund investments with higher anticipated growth prospects in our markets. Income from discontinued operations includes the operations of properties sold during the year ended December 31, 2011. The components of earnings classified as discontinued operations include separately identifiable property-specific revenues, expenses, depreciation, and interest expense, if any. Any gain or loss on the disposal of the properties held for sale is also classified as discontinued operations.

A summary of our 2011 dispositions is as follows:

September 30,

Property and Location

Number of
Apartment
Homes

Date of
Disposition

Year Placed in
Service

Camden Valley Creek

Dallas, TX

380

4Q11

1984

Camden Valley Ridge

Dallas, TX

408

4Q11

1987

During the fourth quarter of 2011, we received net proceeds of approximately $38.2 million and recognized a gain of approximately $24.6 million from the sale of the two wholly owned operating properties above, containing 788 apartment homes, to unaffiliated third parties. During the year ended December 31, 2010, we received net proceeds of approximately $101.9 million and recognized a gain of approximately $9.6 million from the sale of two operating properties containing 1,066 apartment homes to an unaffiliated third party. During the year ended December 31, 2009, we received net proceeds of approximately $28.0 million and recognized a gain of approximately $16.9 million from the sale of one operating property, containing 671 apartment homes, to an unaffiliated third party.

During the year ended December 31, 2010, we recognized a gain of approximately $0.2 million from the sale of land in Houston, Texas. The gain on this sale was not included in discontinued operations as the operations and cash flows of this asset was not clearly distinguished, operationally or for reporting purposes, from the adjacent assets.

Development and Lease-Up Properties

At December 31, 2011, we had eight consolidated properties in various stages of construction as follows:

		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
($ in millions) Property and Location	Number of Apartment Homes		Estimated Cost		Cost Incurred		Included in Properties Under Development		Estimated Date of Construction Completion		Estimated Date of Stabilization

Camden LaVina (1) Orlando, FL		420	$	60.0	$	54.8	$	6.4		2Q12		1Q13
Camden Summerfield II (1) Landover, MD		187		30.0		24.3		10.0		1Q12		4Q12
Camden Royal Oaks II (2) Houston, TX		104		14.0		11.1		11.1		2Q12		3Q13
Camden Montague Tampa, FL		192		23.0		13.4		13.4		3Q12		2Q13
Camden Town Square Orlando, FL		438		66.0		28.7		28.7		3Q13		4Q14
Camden Westchase Park Tampa, FL		348		52.0		29.6		29.6		1Q13		4Q13
Camden City Centre II Houston, TX		268		36.0		10.1		10.1		2Q13		3Q14
Camden NOMA Washington, D. C. Metro		320		110.0		39.0		39.0		2Q14		2Q15

Total		2,277	$	391.0	$	211.0	$	148.3

(1)

Property in lease-up as of December 31, 2011.

(2)

Property in lease-up as of January 2012.

Our consolidated balance sheet at December 31, 2011 included approximately $299.9 million related to properties under development and land. Of this amount, approximately $148.3 million related to our projects currently under development. In addition, we had approximately $151.6 million primarily invested in land held for future development, which included approximately $84.8 million related to projects we expect to begin constructing during the next two years, and approximately $66.8 million invested in land tracts for which we may develop in the future.

At December 31, 2011, we had investments in unconsolidated joint ventures which were developing the following multifamily communities:

		September 30,			September 30,		September 30,
($ in millions) Property and Location	Ownership %			Number of Apartment Homes		Total Cost Incurred
Under Construction:
Camden South Capitol Washington, DC		20	%		276	$	29.8
Camden Amber Oaks II Austin, TX		20	%		244		8.6

Total Under Construction					520	$	38.4

Refer to Note 8, “Investments in Joint Ventures” in the Notes to Consolidated Financial Statements for further discussion of our joint venture investments.

Geographic Diversification

At December 31, 2011 and 2010, our investments in various geographic areas, excluding depreciation, investments in joint ventures and properties held for sale, were as follows:

		September 30,	September 30,			September 30,	September 30,
(in thousands)	2011				2010

Washington, D.C. Metro	$	1,234,401	21.2	%	$	1,214,165	21.5	%
Southeast Florida		462,384	8.0			456,127	8.1
Houston, Texas		452,830	7.8			432,697	7.7
Los Angeles/Orange County, California		452,451	7.8			426,527	7.5
Tampa, Florida		436,922	7.5			404,718	7.2
Orlando, Florida		422,811	7.3			381,642	6.8
Atlanta, Georgia		369,107	6.3			322,741	5.7
Dallas, Texas		302,299	5.2			329,222	5.8
Charlotte, North Carolina		331,518	5.7			321,838	5.7
Las Vegas, Nevada		315,330	5.4			311,186	5.5
Raleigh, North Carolina		243,114	4.2			239,840	4.2
San Diego/Inland Empire, California		228,582	3.9			227,784	4.0
Denver, Colorado		193,285	3.3			189,644	3.4
Austin, Texas		156,833	2.7			155,714	2.8
Phoenix, Arizona		98,698	1.7			119,826	2.1
Other		118,975	2.0			114,006	2.0

Total	$	5,819,540	100.0	%	$	5,647,677	100.0	%

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, acquisitions, and dispositions. Where appropriate, comparisons of income and expense on communities included in continuing operations are made on a dollars-per-weighted average apartment home basis in order to adjust for such changes in the number of apartment homes owned during each period. Selected weighted averages for the years ended December 31 are as follows:

		September 30,			September 30,			September 30,
	2011			2010			2009
Average monthly property revenue per apartment home	$	1,098		$	1,030		$	1,045
Annualized total property expenses per apartment home	$	5,155		$	4,992		$	4,944
Weighted average number of consolidated operating apartment homes		49,793			48,656			48,061
Weighted average occupancy of consolidated operating apartment homes*		94.6	%		93.7	%		94.8	%

*	The student housing community is excluded from this calculation.

Property-level operating results

The following tables present the property-level revenues and property-level expenses, excluding discontinued operations, for the year ended December 31, 2011 as compared to 2010 and for the year ended December 31, 2010 as compared to 2009:

		September 30,		September 30,		September 30,		September 30,			September 30,
	Apartment Homes		Year Ended December 31,				Change
($ in thousands)	at 12/31/11		2011		2010		$			%
Property revenues:
Same store communities		46,164	$	595,217	$	564,218	$	30,999			5.5	%
Non-same store communities		3,618		54,887		32,967		21,920			66.5
Development and lease-up communities		2,277		715		—		715			—
Other		—		5,049		4,265		784			18.4

Total property revenues		52,059	$	655,868	$	601,450	$	54,418			9.0	%


Property expenses:
Same store communities		46,164	$	231,925	$	225,072	$	6,853			3.0	%
Non-same store communities		3,618		20,571		12,922		7,649			59.2
Development and lease-up communities		2,277		222		—		222			—
Other		—		3,961		4,918		(957	)		(19.5	)

Total property expenses		52,059	$	256,679	$	242,912	$	13,767			5.7	%

Same store communities are communities we owned and which were stabilized as of January 1, 2010. Non-same store communities are stabilized communities we have acquired, developed, or re-developed after January 1, 2010. Development and lease-up communities are non-stabilized communities we have acquired or developed after January 1, 2010. Other includes results from non-multifamily rental properties and expenses primarily relating to land holdings not under active development.

		September 30,		September 30,		September 30,		September 30,			September 30,
	Apartment Homes		Year Ended December 31,				Change
($ in thousands)	at 12/31/10		2010		2009		$			%
Property revenues:
Same store communities		45,148	$	548,588	$	559,564	$	(10,976	)		(2.0	)%
Non-same store communities		4,588		48,596		38,265		10,331			27.0
Development and lease-up communities		607		—		—		—			—
Other		—		4,266		4,819		(553	)		(11.5	)

Total property revenues		50,343	$	601,450	$	602,648	$	(1,198	)		(0.2	)%


Property expenses:
Same store communities		45,148	$	218,940	$	218,217	$	723			0.3	%
Non-same store communities		4,588		18,987		15,954		3,033			19.0
Development and lease-up communities		607		—		—		—			—
Other		—		4,985		3,428		1,557			45.4

Total property expenses		50,343	$	242,912	$	237,599	$	5,313			2.2	%

Same store communities are communities we owned and which were stabilized as of January 1, 2009. Non-same store communities are stabilized communities we have acquired, developed, or re-developed after January 1, 2009. Development and lease-up communities are non-stabilized communities we have developed or acquired after January 1, 2009. Other includes results from non-multifamily rental properties and expenses primarily relating to land holdings not under active development.

Same store analysis:

Same store property revenues for the year ended December 31, 2011 increased approximately $31.0 million, or 5.5%, from 2010. Same store rental revenues increased approximately $25.3 million for the year ended December 31, 2011 as compared to 2010, primarily due to a 4.6% increase in average rental rates and a 0.7% increase in average occupancy for our same store portfolio. During the year ended December 31, 2011, average rental rates on new leases were 3.6% higher than expiring lease rates and average renewal rates were 7.9% higher than expiring lease rates. We believe the increases to rental revenue were due in part to the continued decline in home ownership rates and the limited supply of new rental housing. Additionally, there was a $5.7 million increase in other property revenue during the year ended December 31, 2011 as compared to 2010 primarily due to increases in revenues from our utility rebilling programs and miscellaneous fees and charges.

Same store property revenues for the year ended December 31, 2010 decreased approximately $11.0 million, or 2.0%, from 2009. Same store rental revenues decreased approximately $11.4 million, or 2.4%, from 2009 primarily due to a 2.3% decline in average rental rates partially offset by a slight increase in average occupancy. The decline in average rental rates was due to the continuation of the recession through the first quarter of 2010, offset by improving rental rates and slight improvements in average occupancy levels for the last three quarters of 2010 which we believe is due in part to the continued decline in home ownership rates and the limited supply of new rental housing. The decrease was also partially offset by a $0.4 million increase in other property revenue primarily due to increases in revenue from our utility rebilling programs.

Property expenses from our same store communities increased approximately $6.9 million, or 3.0%, for the year ended December 31, 2011 as compared to 2010. The increase was primarily due to increases in utility expenses relating to costs associated with our utility rebilling programs mentioned above, and higher water costs, increased salaries and benefits due to increases in annual compensation and higher medical benefit costs, and higher repairs and maintenance expenses. The increase was also due to slightly higher real estate taxes as a result of increasing property valuations and property tax rates at a number of our communities. Excluding the expenses associated with our rebilling programs, same store property expenses for the year ended December 31, 2011 increased approximately $5.6 million, or 2.7%, as compared to 2010.

Property expenses from our same store communities increased approximately $0.7 million, or 0.3%, for the year ended December 31, 2010, as compared to 2009. The increase was primarily due to expenses related to our utility rebilling programs discussed above, higher salaries, and increases in property insurance and repair and maintenance costs. These increases were partially offset by lower real estate taxes as a result of declining rates and valuations at a number of our communities. Excluding the expenses associated with our utility rebilling programs, same store property expenses for 2010 decreased approximately $1.0 million, or 0.5%, from 2009.

Non-same store and development and lease-up analysis:

Property revenues from non-same store and development and lease-up communities increased approximately $22.6 million for the year ended December 31, 2011 as compared to 2010 and increased approximately $10.3 million for the year ended December 31, 2010 as compared to 2009. The increase in 2011 was primarily due to $18.0 million of revenues during 2011 relating to three joint venture communities we consolidated during the second half of 2010, which were previously accounted for in accordance with the equity method of accounting. The increase in revenues was also related to two properties in our development and re-development pipelines reaching stabilization during the second and third quarters of 2010. One of these properties is owned by a fully consolidated joint venture, of which we hold a 25% ownership interest. The increase in 2010 as compared to 2009 was primarily due to seven consolidated properties in our development and re-development pipelines reaching stabilization during 2009 and 2010, in addition to approximately $2.6 million of revenues recognized in the second half of 2010 related to the three joint venture communities we consolidated as discussed above.

Property expenses from non-same store and development and lease-up communities increased approximately $7.9 million for the year ended December 31, 2011 as compared to 2010 and increased approximately $3.0 million for 2010 as compared to 2009. The increase in 2011 was primarily due to $7.1 million of expenses during 2011 relating to three joint venture communities we consolidated during the second half of 2010. The increase in 2010 was due to a number of consolidated properties in our development and re-development pipelines reaching stabilization during 2009 and 2010. The increase in 2010 was also due to approximately $1.1 million of expenses recognized in the second half of 2010 related to the three joint venture communities we consolidated as discussed above.

Other property analysis:

Other property revenues increased approximately $0.8 million for the year ended December 31, 2011 as compared to 2010 and decreased $0.5 million for the year ended December 31, 2010 as compared to 2009. The increase in 2011 was primarily related to increases in rental income from our non-multifamily rental properties as compared to 2010. The decrease in 2010 as compared to 2009 was due to lower rental income from our non-multifamily rental properties.

Other property expenses decreased approximately $1.0 million for the year ended December 31, 2011 as compared to 2010 and increased $1.6 million for the year ended December 31, 2010 as compared to 2009. The decrease in 2011 was primarily related to decreases in property taxes expensed on land holdings for projects which were approved during 2011 and the second half of 2010 for development activities. As a result, we started

capitalizing expenses, including property taxes, on these development projects. The increase in 2010 as compared to 2009 primarily related to increases in property taxes expensed on land holdings for eight projects for which we decided in 2009 to postpone development. As a result, we ceased capitalization of expenses, including property taxes.

Non-property income

		September 30,		September 30,		September 30,			September 30,			September 30,		September 30,		September 30,			September 30,
	Year Ended December 31,				Change						Year Ended December 31,				Change
($ in thousands)	2011		2010		$			%			2010		2009		$			%
Fee and asset management	$	9,973	$	8,172	$	1,801			22.0	%	$	8,172	$	8,008	$	164			2.0	%
Interest and other income		4,649		8,584		(3,935	)		(45.8	)		8,584		2,826		5,758			203.8
Income on deferred compensation plans		6,773		11,581		(4,808	)		(41.5	)		11,581		14,609		(3,028	)		(20.7	)

Total non-property income	$	21,395	$	28,337	$	(6,942	)		(24.5	)%	$	28,337	$	25,443	$	2,894			11.4	%

Fee and asset management income, increased approximately $1.8 million for the year ended December 31, 2011 as compared to 2010 and increased approximately $0.2 million for the year ended December 31, 2010 as compared to 2009. The increase for 2011 was primarily due to an increase in property management, development and construction fees due to acquisitions by our Funds during 2011 and the fourth quarter of 2010. The increase was partially offset by a decrease due to our consolidation of three joint venture communities during the second half of 2010, which were previously accounted for in accordance with the equity method of accounting. The increase was further offset by a decrease in construction fees due to a reduction in third-party construction activities during 2011 as compared to 2010.

The increase in fee and asset management income for 2010 as compared to 2009 was primarily related to an increase in third-party construction activities, offset by decreases in development and construction fees earned on our development joint ventures as compared to 2009 due to the completion of construction activities during 2009 and 2010. The increase was further offset by decreases in fees earned on our stabilized joint ventures due to declines in property revenues.

Interest and other income decreased approximately $3.9 million for 2011 as compared to 2010 and increased approximately $5.8 million for 2010 as compared to 2009. Interest income decreased approximately $1.2 million in 2011 as compared to 2010 and decreased approximately $0.9 million in 2010 as compared to 2009. The decreases were primarily due to a decline in interest income on our mezzanine loan portfolio due to lower balances of outstanding mezzanine loans due in part to the conversion of mezzanine loans into additional equity interests in certain of our joint ventures in 2010 and 2009.

Other income decreased approximately $2.8 million in 2011 as compared to 2010 and increased approximately $6.7 million for 2010 as compared to 2009. The changes between periods were due to approximately $2.7 million recognized in 2010 relating to the expiration of an indemnification provision in an operating joint venture agreement which expired in January 2010, and approximately $4.2 million recognized in 2010 as a result of the dissolution of a joint venture and purchase by our joint venture partner of the third-party debt made by this joint venture from the note holder, which relieved us from our guarantee of our proportionate interest of this debt; we had previously recorded a charge for this indemnification. During the first quarter of 2011, we recognized approximately $4.3 million in other income from the sale of an available-for-sale investment.

Our deferred compensation plans earned income of approximately $6.8 million, $11.6 million and $14.6 million in 2011, 2010 and 2009, respectively. The changes were related to the performance of the investments held in the deferred compensation plans for plan participants and were directly offset by the expense related to these plans, as set forth in the table below.

Other expenses

		September 30,		September 30,		September 30,			September 30,			September 30,		September 30,		September 30,			September 30,
	Year Ended December 31,				Change						Year Ended December 31,				Change
($ in thousands)	2011		2010		$			%			2010		2009		$			%
Property management	$	20,686	$	19,982	$	704			3.5	%	$	19,982	$	18,864	$	1,118			5.9	%
Fee and asset management		5,935		4,841		1,094			22.6			4,841		4,878		(37	)		(0.8	)
General and administrative		35,456		30,762		4,694			15.3			30,762		31,243		(481	)		(1.5	)
Interest		112,414		125,893		(13,479	)		(10.7	)		125,893		128,296		(2,403	)		(1.9	)
Depreciation and amortization		179,867		170,362		9,505			5.6			170,362		168,845		1,517			0.9
Amortization of deferred financing costs		5,877		4,102		1,775			43.3			4,102		3,925		177			4.5
Expense on deferred compensation plans		6,773		11,581		(4,808	)		(41.5	)		11,581		14,609		(3,028	)		(20.7	)

Total other expenses	$	367,008	$	367,523	$	(515	)		(0.1	%)	$	367,523	$	370,660	$	(3,137	)		(0.8	%)

Property management expense, which represents regional supervision and accounting costs related to property operations, increased approximately $0.7 million for the year ended December 31, 2011 as compared to 2010 and increased approximately $1.1 million for 2010 as compared to 2009. The increases as compared to the prior year periods were primarily due to higher salaries, benefits and incentive compensation for our property management personnel. Property management expenses were 3.2%, 3.3%, and 3.1% of total property revenues for the years ended December 31, 2011, 2010, and 2009, respectively.

Fee and asset management expense, which represents expenses related to third-party construction projects and development projects and property management of our joint venture communities, increased approximately $1.1 million for the year ended December 31, 2011 as compared to 2010. This increase was primarily due to an increase in expenses resulting from the acquisitions completed by our Funds during 2011 and the fourth quarter of 2010. These increases were partially offset by a decrease in expenses resulting from our consolidation of three joint venture communities during the second half of 2010, which were previously accounted for in accordance with the equity method of accounting. Fee and asset management expense was relatively flat in 2010 as compared to 2009 due in part to an increase in fees earned on third-party construction activities, offset by decreases in development and construction fees related to our development joint ventures as compared to 2009 due to the completion of construction activities during 2009 and 2010.

General and administrative expenses increased approximately $4.7 million during the year ended December 31, 2011 as compared to 2010 and decreased approximately $0.5 million during the year ended December 31, 2010 as compared to 2009. General and administrative expenses were 5.3%, 5.0% and 5.1% of total revenues, excluding income on deferred compensation plans, for the years ended December 31, 2011, 2010 and 2009, respectively. The increase in 2011 was primarily due to awards of $2.1 million in one-time bonuses to all non-executive employees in the first quarter of 2011 and increases in salaries, benefits and incentive compensation of approximately $3.2 million, offset partially by approximately $0.5 million decrease in other discretionary expenses. The decrease in 2010 as compared to 2009 was primarily due to a decrease in legal costs and other discretionary expenses, $1.6 million in severance payments made in connection with a reduction in force of certain construction and development staff in January 2009, and separation costs relating to the retirement of one executive officer during the fourth quarter of 2009. These decreases were partially offset by an increase in long-term incentive compensation of approximately $1.6 million as compared to 2009.

The decrease in interest expense in 2011 as compared to 2010 was due to the retirement of unsecured notes payable during 2010 and 2011 and the repayment of our $500 million term loan in June 2011. Additionally, the decrease was due to higher capitalized interest of approximately $3.1 million as compared to 2010 primarily due to higher average balances in our development pipeline. These decreases were partially offset by additional interest expense related to the issuance of $500 million in senior unsecured notes in June 2011. These decreases were also partially offset by an increase in secured notes payable relating to debt assumed in connection with the consolidation of two joint venture communities during the second half of 2010, which were previously accounted for using the equity method of accounting.

The decrease in interest expense in 2010 as compared to 2009 was primarily due to using the net proceeds of $272.1 million from the equity offering completed during the second quarter of 2009 and approximately $231.7 million in net proceeds from our ATM program during 2010 to retire outstanding debt, prior to its maturity, of approximately $325.0 million during the first six months of 2009 and repay maturing secured and unsecured notes

during 2009 and 2010, as well as reduce the balances outstanding on our unsecured line of credit. The decrease was partially offset by additional interest expense incurred on our $420 million credit facility entered into during the second quarter of 2009 and additional interest expense relating to secured debt assumed in connection with the consolidation of two joint venture communities during the second half of 2010, which were previously accounted for using the equity method of accounting. The decrease was also partially offset by lower capitalized interest of approximately $4.6 million in 2010 as compared to 2009 primarily due to the completion of communities in our development pipeline and our decision in fiscal year 2009 to postpone the development of land holdings for eight future projects.

Depreciation and amortization expense increased approximately $9.5 million during the year ended December 31, 2011 as compared to 2010 and increased approximately $1.5 million during the year ended December 31, 2010 as compared to 2009. The increases were primarily due to depreciation on capital improvements placed in service throughout 2011, 2010 and 2009. The increases were also due to the consolidation of three joint venture communities during the second half of 2010, which were previously accounted for using the equity method of accounting.

Amortization of deferred financing costs increased approximately $1.8 million during the year ended December 31, 2011 as compared to 2010 and increased approximately $0.2 million during the year ended December 31, 2010 as compared to 2009. The increase for 2011 was due to the amortization of additional financing costs incurred on our $500 million unsecured credit facility we entered into in August 2010 and on our offering of $500 million senior unsecured notes completed in June 2011. The increase was also due to the write-off of approximately $0.5 million of unamortized loan costs associated with the $500 million term loan we repaid in June 2011. The increase for 2010 as compared to 2009 was primarily due to additional financing costs incurred on our $500 million unsecured credit facility entered into in August 2010, and on our $420 million credit facility entered into the second quarter of 2009. These increases were partially offset by lower amortization of deferred financing costs related to the repurchase and retirement of certain series of notes during 2010 and 2009.

Our deferred compensation plans incurred expenses of approximately $6.8 million, $11.6 million and $14.6 million in 2011, 2010 and 2009, respectively. The changes were related to the performance of the investments held in the deferred compensation plans for plan participants and were directly offset by the income related to these plans, as discussed above.

Other

		September 30,			September 30,			September 30,			September 30,			September 30,			September 30,			September 30,			September 30,
	Year Ended December 31,						Change						Year Ended December 31,						Change
($ in thousands)	2011			2010			$			%			2010			2009			$			%
Loss on discontinuation of hedging relationship	$	(29,791	)	$	—		$	(29,791	)		*	%	$	—		$	—		$	—			—
Gain on sale of properties, including land		4,748			236			4,512			*			236			—			236			*
Gain on sale of unconsolidated joint venture interests		1,136			—			1,136			*			—			—			—			—
Loss on early retirement of debt		—			—			—			—			—			(2,550	)		2,550			100.0
Impairment associated with land development activities		—			—			—			—			—			(85,614	)		85,614			100.0
Impairment provision on technology investment		—			(1,000	)		1,000			100.0			(1,000	)		—			(1,000	)		*
Equity in income (loss) of joint ventures		5,679			(839	)		6,518			*			(839	)		695			(1,534	)		(220.7	)
Income tax expense – current		(2,220	)		(1,581	)		(639	)		(40.4	)		(1,581	)		(967	)		(614	)		(63.5	)

*	Not a meaningful percentage.

The loss on discontinuation of hedging relationship was due to the discontinuation of a cash flow hedge associated with the repayment of our $500 million term loan in June 2011. Refer to Note 10, “Derivative Instruments and Hedging Activities” in the notes to condensed consolidated financial statements for further discussion.

The $4.7 million gain on sale of properties, including land, in 2011 was due to a sale of one of our land development properties located in Washington, DC in April 2011 to one of the Funds and the sale of one of our development properties located in Austin, Texas to this Fund in June 2011. The $0.2 million gain in 2010 was due to a gain on the sale of a land parcel in Houston, Texas to an unaffiliated third-party.

Gain on sale of unconsolidated joint venture interests totaled approximately $1.1 million for the year ended December 31, 2011 due to the sale of our ownership interests in three unconsolidated joint ventures in March 2011.

Loss on early retirement of debt was approximately $2.6 million for the year ended December 31, 2009 due to the repurchase and retirement of approximately $325.0 million of various unsecured and secured notes from unrelated third parties for approximately $327.5 million during the first two quarters of 2009. The loss on early retirement of debt for these transactions also includes reductions for the write-off of applicable loan costs.

The impairment associated with land development activities for the year ended December 31, 2009 of approximately $85.6 million includes approximately $72.2 million related to land holdings for eight projects, and approximately $13.4 million related to a land development joint venture we put on hold. These impairment charges for land are the difference between each parcel’s estimated fair value and the carrying value. There were no impairments associated with land development activities for the years ended December 31, 2011 and 2010.

During the fourth quarter of 2010, we wrote-off a $1.0 million investment associated with a technology investment which we determined was no longer recoverable.

Equity in income (loss) of joint ventures increased approximately $6.5 million for the year ended December 31, 2011 as compared to 2010, and decreased approximately $1.5 million for the year ended December 31, 2010 as compared to 2009. The increase in 2011 was primarily due to a $6.4 million gain recognized in equity in income (loss) of joint ventures relating to the sale of four operating properties by one of our unconsolidated joint ventures during the fourth quarter of 2011. The increase was also due to two development properties held by our joint ventures which were sold in March 2011. These two development properties reached stabilization in late 2010 and early 2011 and we recognized our proportionate interest in losses in 2010 during the lease-up phase of operations. These increases were partially offset by our proportionate interest in overall losses recognized by the Funds relating to acquisitions of operating properties during 2010 and 2011, which resulted in additional amortization expense for in-place leases over the underlying lease term. The decrease for 2010 as compared to 2009 was primarily the result of decreases in earnings by our stabilized operating joint ventures due to declines in rental income, and the recognition of net operating losses by certain development joint ventures during the lease-up phase of operations. The decreases were further impacted by the consolidation of three operating joint ventures during the second half of 2010, which were previously accounted for in accordance with the equity method of accounting. These decreases were partially offset by increases in earnings in development joint ventures reaching or nearing stabilization during 2009 and 2010.

We had current income tax expense of approximately $2.2 million, $1.6 million, and $1.0 million for the tax years ended December 31, 2011, 2010, and 2009, respectively. The increase in income tax during 2011 was due to approximately $1.0 million associated with income taxes from the gain recognized on the sale of our available-for-sale investment during the first quarter of 2011 by a taxable REIT subsidiary. This increase was partially offset by a decrease in taxable income related to our third-party construction activities conducted in a taxable REIT subsidiary. The increase in taxes in 2010 as compared to 2009 primarily related to an increase in federal income taxes resulting from increased profitability in our third-party construction activities conducted in a taxable REIT subsidiary.

Noncontrolling interests

		September 30,			September 30,			September 30,		September 30,			September 30,			September 30,			September 30,		September 30,
	Year Ended December 31,						Change					Year Ended December 31,						Change
($ in thousands)	2011			2010			$		%			2010			2009			$		%
(Income) loss allocated to noncontrolling interests from continuing operations	$	(3,582	)	$	(926	)	$	2,656		286.8	%	$	(926	)	$	403		$	1,329		329.8	%
(Income) allocated to perpetual preferred units		(7,000	)		(7,000	)		—		—			(7,000	)		(7,000	)		—		—

Income allocated to noncontrolling interests from continuing operations increased approximately $2.7 million in 2011 as compared to 2010, and increased approximately $1.3 million in 2010 as compared to 2009. The increase for 2011 was primarily due to an increase in earnings from a fully-consolidated joint venture which reached stabilization during the third quarter of 2010, of which we hold a 25% ownership. The increase was also due to increased earnings associated with properties held by our operating partnerships durin

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