UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

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

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

For the transition period from _______ to _______

Commission file number: 1-12110

CAMDEN PROPERTY TRUST

(Exact name of registrant as specified in its charter)

Texas (State or other jurisdiction of incorporation or organization)		76-6088377 (I.R.S. Employer Identification No.)
3 Greenway Plaza, Suite 1300 Houston, Texas (Address of principle executive offices)		77046 (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 þ No o

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 o No þ

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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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. o

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):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

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

The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was $2,271,950,779 based on a June 30, 2008 share price of $44.26.

On February 17, 2009, the number of outstanding common shares of the registrant’s was 53,321,917.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement in connection with its Annual Meeting of Shareholders to be held May 6, 2009 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			16
Item 4. Submission of Matters to a Vote of Security Holders			16
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			17
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			39
Item 8. Financial Statements and Supplementary Data			39
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			40
Item 9A. Controls and Procedures			40
Item 9B. Other Information			43
PART III
Item 10. Directors, Executive Officers and Corporate Governance			43
Item 11. Executive Compensation			43
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			43
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
Exhibit 12.1
Exhibit 21.1
Exhibit 23.1
Exhibit 24.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

PART I

Item 1. Business

General Development of Business

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

Our executive 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. This information is also available in print, free of charge to any person who requests it, by contacting us at Camden Property Trust, 3 Greenway Plaza, Suite 1300, Houston, Texas 77046, attention: Investor Relations.

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, N.E., 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 engaged in the ownership, development, construction, and management of multifamily apartment communities. As each of our apartment communities has similar economic characteristics, residents, and products 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, 2008, we owned interests in, operated, or were developing 186 multifamily properties comprising 64,329 apartment homes across the United States. We had 1,426 apartment homes under development at five of our multifamily properties, including 1,060 apartment homes at four multifamily properties owned through joint ventures, in which we own an interest, in addition to other sites we may develop into multifamily apartment communities. Additionally, one property comprised of 671 apartment homes was designated as held for sale.

Operating 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 to produce earnings growth.

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 have historically focused our operating strategy on capturing greater market share, selectively disposing of properties, and redeploying capital in new multifamily communities while also maintaining a strong balance sheet. We have also actively evaluated acquisition opportunities as they arose, some of which were consummated and contributed to our growth and profitability.

We continue to operate in our core markets in which we believe we have an advantage due to economies of scale. We feel, 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 several 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.

Due to weakness and unpredictability in the capital and credit markets and real estate fundamentals, we believe our revenues may decline in 2009 as compared to 2008. Although we believe our business and long-term fundamentals which support increased revenues, such as population growth, remain strong and the current difficult conditions will moderate over time, the timing of an economic recovery is unclear and these conditions may not improve quickly. Consequently, our near-term primary focus is to strengthen our capital and liquidity position by selectively disposing of properties, controlling and reducing construction and overhead costs, generating positive cash flows from operations, and reducing outstanding debt and leverage ratios. While we expect development to continue to be important to the growth of our portfolio in the long term, we expect decreasing levels of development activity in 2009 as compared to prior years. Please review the “Risk Factors” section for a further discussion of the potential impact on us of current economic conditions.

We believe the current economic downturn may provide us with opportunities to acquire selective multifamily assets at attractive valuations. In certain instances, such acquisitions may provide us with benefits we would not be able to achieve by developing our own multifamily communities, such as the avoidance of incurring development or construction expenses. We intend to seek to limit the risks associated with such acquisitions by targeting those opportunities we believe will have a positive impact on our earnings within an acceptable period of time.

In the fourth quarter of 2007, we had the final closing of our discretionary investment vehicle, Camden Multifamily Value Add Fund, L.P. (the “Fund”), followed by the final closing of a co-investment limited partnership (the “Co-Investment Vehicle” and, together with the Fund, the “Funds”) in the second quarter of 2008. During the investment period (ending no later than December 2011), the Funds will be our exclusive vehicles for acquiring apartment communities, subject to certain exceptions. Over the next several years, we expect to increase our acquisition activity through the Funds, focusing on communities that can benefit from redevelopment, repositioning, or market cycle opportunities. Please review the “Risk Factors” section for a discussion of risks associated with acquisitions and the Funds.

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, 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 net operating income. 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 or partnerships (including limited liability companies) through which we own an indirect economic interest of less than 100% of the community or communities owned directly by the joint venture or partnership. See Note 7, “Investments in Joint Ventures,” and Note 14, “Commitments and Contingencies,” of 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 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 charged.

Employees

At December 31, 2008, we had approximately 1,800 employees, including executive, administrative, and community personnel.

Qualification as a Real Estate Investment Trust

As of December 31, 2008, 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 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. Please note 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 could adversely impact us.

The capital and credit markets have been experiencing extreme volatility and disruption, which has caused the spreads on prospective debt financings to widen considerably and made it more difficult to borrow money. If current levels of market disruption and volatility continue or worsen, 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 and our ability to make distributions to shareholders. This market turmoil and tightening of credit have led to an increased lack of consumer confidence and widespread reduction of business activity generally, which have adversely impacted and may continue to adversely impact us, including our ability to acquire and dispose of assets and continue our development pipeline.

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 rental real estate. We and other multifamily companies depend heavily on Fannie Mae and Freddie Mac to finance growth by purchasing apartment loans. In September 2008, the U.S. government assumed control of Fannie Mae and Freddie Mac and placed both companies into a government conservatorship under the recently created Federal Housing Finance Agency. The U.S. government has not determined which of Fannie Mae’s and Freddie Mac’s businesses to retain and which to dissolve. A decision by the government to reduce Fannie Mae’s or Freddie Mac’s acquisitions of apartment loans could adversely affect interest rates, capital availability, and the development of multifamily communities. Governmental actions could also make it easier for individuals to finance loans for single-family homes, which would make renting a less attractive option and adversely affect our occupancy or rental rates.

Unfavorable changes in economic conditions could adversely impact occupancy or rental rates.

Weakened economic conditions, including decreased job growth and job losses, have affected and continue to significantly affect apartment home occupancy and rental rates. Significant decreases in occupancy or rental rates in the markets in which we operate, in turn, may have a material adverse impact on our cash flows and operating results. The risks which may affect conditions in these markets include the following:

	•		changes in the national, regional, and local economic climates;
	•		local conditions, such as an oversupply of apartments or other housing available for rent, or a reduction in demand for apartments in the area;
	•		a continued economic downturn which simultaneously effects one or more of our geographical markets; and
	•		increased operating costs, if these costs cannot be passed through to residents.

We may experience a decrease in rental revenues, an increase in operating expenses, or a combination of both, which may adversely affect our results of operations and our ability to satisfy our financial obligations and to pay distributions to shareholders.

We face risks associated with land holdings.

We hold land for future development and may in the future acquire additional land holdings. The risks inherent in owning or purchasing 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 as a result of changing market conditions. In addition, carrying costs can be significant and can result in losses or reduced margins in a poorly performing project. 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 recover fully or on which we cannot build and develop into a profitable multifamily community. Also, real estate markets are highly uncertain and, as a result, the value of undeveloped land has fluctuated significantly and may continue to fluctuate as a result of changing market conditions. Under current market conditions, we have recorded impairment charges on certain of our land held for development and may have future impairments of our land. These impairment charges are based on estimates of fair value. Given the current environment, the amount of market information available to estimate fair value is less than usual; if additional market information becomes available in future periods we may take additional impairment charges in the future.

Difficulties of selling real estate could limit our flexibility.

We intend to evaluate the potential disposition of assets that may no longer help us meet our 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 difficulties have been exacerbated in the current credit environment because buyers have experienced difficulty in obtaining the necessary financing. 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, in order to maintain our status as a REIT, the Code imposes restrictions on our ability to sell properties held fewer than two years, which may cause us to incur losses thereby reducing our cash flows and adversely impacting our ability to make distributions to shareholders or repay debt.

Compliance or failure to comply with laws 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 generally require public accommodations 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 burdens 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 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 charged.

Risks Associated with Our Operations

Development and construction risks could impact our profitability.

Although we expect decreasing levels of development activity in 2009, as compared to prior years, in the long term we intend to continue to develop and construct multifamily apartment communities for our property portfolio. Our development and construction activities may be exposed to a number of risks which may increase our construction costs including the following:

	•		inability to obtain, or delays in obtaining, necessary zoning, land-use, building, occupancy, and other required permits and authorizations, or problems with subcontractors could result in increased costs;
	•		incurring construction costs exceeding our original estimates due to increased materials, labor, or other costs, or due to errors and omissions which occur in the design or construction process;
	•		experiencing fluctuations in occupancy rates and rents at a newly completed property which may not be adequate to make the property profitable;
	•		inability to obtain financing with favorable terms for the development of a community;
	•		inability to complete construction and lease-up of a community on schedule, resulting in increased costs;
	•		incurring costs related to the abandonment of development opportunities which we have pursued and deemed unfeasible; and
	•		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.

We also serve as the general contractor on a limited number of development and construction projects related to properties owned by unrelated third parties pursuant to guaranteed maximum price contracts. The terms of these contracts require us to estimate the time and costs to complete a project, and we assume the risk the time and costs associated with our performance may be greater than was anticipated. As a result, our profitability on guaranteed maximum price contracts is dependent on our ability to accurately predict these factors. The time and costs may be affected by a variety of factors, including those listed above, many of which are beyond our control. In addition, the terms of these contracts generally require a warranty period, which may have a duration of up to ten years, during which we may be required to repair, replace, or rebuild a project in the event of a material defect.

Our acquisition strategy may not produce the cash flows expected.

Subject to the requirements of the Funds, we may acquire additional operating properties on a select basis. Our acquisition activities are subject to a number of risks, including the following:

	•		we may not be able to successfully integrate acquired properties into our existing operations;
	•		our estimates of the costs of repositioning or redeveloping the acquired property may prove inaccurate;
	•		the expected occupancy and rental rates may differ from the actual results; and
	•		we may not be able to obtain adequate financing.

With respect to acquisitions of operating companies, we may not be able to identify suitable candidates on terms acceptable to us, or may not achieve expected returns and 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 apartment REITs, will compete with us to acquire new 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. 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 substantial 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 and partnerships involve risks not present in investments in which we are the sole investor.

We have invested and may continue to invest as a partner in joint ventures or partnerships. These investments involve risks, including the possibility our partner may have business goals which are inconsistent with ours, be in a position to take action or withhold consent contrary to our requests, or become insolvent and require us to assume and fulfill the joint venture’s or partnership’s financial obligations. We and our partner may each have the right to initiate a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner’s interest, at a time when we otherwise would not have entered into such a transaction. Each joint venture or partnership agreement is individually negotiated, and our ability to operate and/or dispose of a community in our sole discretion may be limited to varying degrees depending on the terms of the joint venture or partnership 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 and to which we have committed 20% of the total equity interest, up to $75 million in the aggregate. As of December 31, 2008, the Funds had total capital commitments of $375 million. There are risks associated with the investment in and management of the Funds, including the following:

	•		investors in the Funds may fail to make their capital contributions when due and, as a result, the Funds may be unable to execute their investment objectives;
	•		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 general partnership law;

	•		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;
	•		while we have broad discretion to manage the Funds and make investment decisions on behalf of the Funds, the investors or the advisory committees 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;
	•		we are permitted to acquire land and develop communities but are generally prohibited from acquiring fully developed multifamily properties outside of the Funds until the earlier of (i) December 31, 2011 or (ii) such time as 90% of the Funds’ committed capital is invested, subject to certain exceptions;
	•		our ability to redeem all or a portion of our investments in the Funds is subject to significant restrictions; and
	•		we may be liable if the Funds fail to comply with various tax or other regulatory matters.

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 laws and 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.

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

We may not continue to qualify in the future as a REIT. 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:

	•		we would be subject to federal income tax on our taxable income at regular corporate rates, including any applicable alternative minimum tax;
	•		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 earnings available for operations, including any distributions to shareholders, as we would be required to pay significant income taxes for the year or years involved; and
	•		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 at either the corporate or individual property levels. Any additional tax expense incurred would decrease the cash available for distribution to our shareholders.

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:

	•		delay in resident lease commencements;
	•		decline in occupancy;
	•		failure of residents to make rental payments when due;
	•		the attractiveness of our properties to residents and potential residents;
	•		our ability to adequately manage and maintain our properties;
	•		competition from other available apartments and housing alternatives; and
	•		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 are required to distribute annual dividends equal to a minimum of 90% of our REIT taxable income, computed without regards to the dividends paid deduction and our net capital gains. This requirement limits the cash flow available to meet required principal payments on our debt.

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

As of December 31, 2008, we had outstanding debt of approximately $2.8 billion. This indebtedness could have important consequences, including:

	•		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 mortgage;
	•		our vulnerability to general adverse economic and industry conditions is increased; and
	•		our flexibility in planning for, or reacting to, changes in business and industry 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, which could severely 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 unsecured indebtedness, will not be able to 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 upon 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 Internal Revenue 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.

Periodically, 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 or equity may adversely impact our financial condition.

Our capital requirements depend on numerous factors, including the occupancy rates of our apartment 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. Accordingly, 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, 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. In light of the difficulties in the real estate industry and the volatile financial markets, 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.

Stock markets in general and our common shares have experienced significant price volatility over the past year. The market price and volume of our common shares may continue to be subject to significant fluctuations due not only to general stock market conditions but also to the risk factors discussed in this report and 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 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.

We may reduce dividends on our equity securities or elect to pay a portion of the dividend in common shares.

On November 24, 2008, we announced our Board of Trust Managers had declared a fourth quarter dividend of $0.70 per common share, totaling $2.80 per share for the year ended December 31, 2008. In order for us to continue to qualify as a REIT we are required to distribute annual dividends equal to a minimum of 90% of our REIT taxable income, computed without regards to the dividends paid deduction and our net capital gains. However, in the event of, among other factors, continued material future deterioration in business conditions, or continuing tightening in the credit markets, our Board of Trust Managers may decide to reduce our dividend while ensuring compliance with the requirements of the Code related to REIT qualification. In December 2008, the Internal Revenue Service announced it would treat a cash option share dividend as satisfying a public REIT’s distribution requirements for 2008 and 2009 so long as certain requirements are met. We may elect to pay dividends during this period in part in our common shares which would cause dilution to our earnings per share given the additional shares outstanding.

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, tennis courts, and controlled-access gates. Many of the apartment homes offer additional features such as fireplaces, vaulted ceilings, microwave ovens, covered parking, icemakers, washers and dryers, and ceiling fans.

Operating Properties

The 181 operating properties, including properties held through joint ventures, which we owned interests in and operated at December 31, 2008, averaged 915 square feet of living area per apartment home. For the year ended December 31, 2008, no single operating property accounted for greater than 2.2% of our total revenues. Our operating properties, including properties held through joint ventures, had a weighted average occupancy rate of 93.9% and 93.7% for 2008 and 2007, respectively. Resident lease terms generally range from six to fifteen months. One hundred and fifty-six of our operating properties have over 200 apartment homes, with the largest having 904 apartment homes. Our operating properties have an average age of 9.6 years (calculated on the basis of investment dollars). Our operating properties were constructed and placed in service as follows:

Year Placed in Service		Number of Operating Properties
2001-2008			46
1996-2000			57
1991-1995			19
1986-1990			39
1980-1985			15
Prior to 1980			5

Property Table

The following table sets forth information with respect to our operating properties at December 31, 2008.

OPERATING PROPERTIES

		Number of				Year Placed				Average Apartment		2008 Average
Property and Location		Apartments				In Service				Size (Sq. Ft.)		Occupancy (1)
ARIZONA
Phoenix
Camden Copper Square			332				2000			786			93.1	%
Camden Fountain Palms (8)			192				1986/1996			1,050			91.5
Camden Legacy			428				1996			1,067			93.7
Camden Pecos Ranch (8)			272				2001			924			93.6
Camden San Paloma			324				1993/1994			1,042			94.0
Camden Sierra (8)			288				1997			925			91.4
Camden Towne Center (8)			240				1998			871			92.2
Camden Vista Valley			357				1986			923			91.1
CALIFORNIA
Los Angeles/Orange County
Camden Crown Valley			380				2001			1,009			95.1
Camden Harbor View			538				2004			975			94.8
Camden Main & Jamboree (2) (12)			290				2008			1,011		Lease-Up
Camden Martinique			714				1986			794			93.8
Camden Parkside (8)			421				1972			836			92.9
Camden Sea Palms			138				1990			891			95.4
San Diego/Inland Empire
Camden Old Creek (3)			350				2007			1,037			92.8
Camden Sierra at Otay Ranch			422				2003			962			94.6
Camden Tuscany			160				2003			896			96.4
Camden Vineyards			264				2002			1,053			91.3
COLORADO
Denver
Camden Caley			218				2000			925			95.9
Camden Centennial			276				1985			744			94.2
Camden Denver West (9)			320				1997			1,015			95.4
Camden Highlands Ridge			342				1996			1,149			96.0
Camden Interlocken			340				1999			1,022			96.7
Camden Lakeway			451				1997			932			94.1
Camden Pinnacle			224				1985			748			92.7
WASHINGTON DC METRO
Camden Ashburn Farms			162				2000			1,062			95.7
Camden Clearbrook			297				2007			1,048			94.9
Camden College Park (2) (12)			508				2008			942		Lease-Up
Camden Fair Lakes			530				1999			1,056			95.0
Camden Fairfax Corner			488				2006			934			96.5
Camden Fallsgrove			268				2004			996			97.8
Camden Grand Parc			105				2002			674			95.9
Camden Lansdowne			690				2002			1,006			96.0
Camden Largo Town Center			245				2000/2007			1,027			91.3
Camden Monument Place (3)			368				2007			856			93.2
Camden Potomac Yard (2)			378				2008			835		Lease-Up
Camden Roosevelt			198				2003			856			96.1
Camden Russett			426				2000			992			95.3
Camden Silo Creek			284				2004			975			95.2
Camden Summerfield (2)			291				2008			957		Lease-Up
Camden Westwind			464				2006			1,036			95.9
FLORIDA
Southeast Florida
Camden Aventura			379				1995			1,108			94.7
Camden Brickell			405				2003			937			96.4
Camden Doral			260				1999			1,120			97.3
Camden Doral Villas			232				2000			1,253			97.4
Camden Las Olas			420				2004			1,043			92.8
Camden Plantation			502				1997			1,201			93.7
Camden Portofino			322				1995			1,112			96.1

OPERATING PROPERTIES (CONTINUED)

		Number of				Year Placed				Average Apartment		2008 Average
Property and Location		Apartments				In Service				Size (Sq. Ft.)		Occupancy (1)
Orlando
Camden Club			436				1986			1,077			94.1	%
Camden Hunter’s Creek			270				2000			1,075			96.7
Camden Lago Vista			366				2005			955			93.8
Camden Landings			220				1983			748			93.6
Camden Lee Vista			492				2000			937			92.8
Camden Orange Court (2)			261				2008			812		Lease-Up
Camden Renaissance			578				1996/1998			899			93.3
Camden Reserve			526				1990/1991			824			93.6
Camden World Gateway			408				2000			979			95.4
Tampa/St. Petersburg
Camden Bay			760				1997/2001			943			93.2
Camden Bay Pointe			368				1984			771			93.8
Camden Bayside			832				1987/1989			748			94.7
Camden Citrus Park			247				1985			704			93.3
Camden Lakes			688				1982/1983			732			93.4
Camden Lakeside			228				1986			729			93.8
Camden Live Oaks			770				1990			1,093			94.2
Camden Preserve			276				1996			942			94.2
Camden Providence Lakes (4)			260				1996			1,024			92.2
Camden Royal Palms			352				2006			1,017			88.5
Camden Westshore (4)			278				1986			728			92.4
Camden Woods			444				1986			1,223			93.8
GEORGIA
Atlanta
Camden Brookwood			359				2002			912			93.7
Camden Deerfield			292				2000			1,187			93.5
Camden Dunwoody			324				1997			1,007			95.1
Camden Midtown Atlanta			296				2001			935			94.1
Camden Peachtree City			399				2001			1,027			95.5
Camden River			352				1997			1,103			94.4
Camden Shiloh			232				1999/2002			1,143			95.3
Camden St. Clair			336				1997			999			94.1
Camden Stockbridge			304				2003			1,009			92.2
Camden Sweetwater			308				2000			1,151			92.4
KENTUCKY
Louisville
Camden Brookside (10)			224				1987			732			96.4
Camden Meadows (10)			400				1987/1990			746			95.7
Camden Oxmoor (10)			432				2000			903			95.6
Camden Prospect Park (10)			138				1990			916			95.9
MISSOURI
Kansas City
Camden Passage (10)			596				1989/1997			834			95.3
St. Louis
Camden Cedar Lakes (10)			420				1986			852			92.6
Camden Cove West (10)			276				1990			828			95.6
Camden Cross Creek (10)			591				1973/1980			947			95.4
Camden Westchase (10)			160				1986			945			96.3

OPERATING PROPERTIES (CONTINUED)

		Number of				Year Placed				Average Apartment		2008 Average
Property and Location		Apartments				In Service				Size (Sq. Ft.)		Occupancy (1)
NEVADA
Las Vegas
Camden Bel Air			528				1988/1995			943			94.2	%
Camden Breeze			320				1989			846			94.7
Camden Canyon (4)			200				1995			987			94.7
Camden Commons			376				1988			936			92.9
Camden Cove			124				1990			898			96.1
Camden Del Mar (4)			560				1995			986			91.2
Camden Fairways (4)			320				1989			896			92.8
Camden Hills			184				1991			439			96.3
Camden Legends			113				1994			792			92.9
Camden Palisades			624				1991			905			94.1
Camden Pines (8)			315				1997			982			96.8
Camden Pointe			252				1996			983			95.5
Camden Summit (8)			234				1995			1,187			96.6
Camden Tiara (8)			400				1996			1,043			95.2
Camden Vintage			368				1994			978			93.7
Oasis Bay (11)			128				1990			876			94.9
Oasis Crossings (11)			72				1996			983			95.9
Oasis Emerald (11)			132				1988			873			95.9
Oasis Gateway (11)			360				1997			1,146			94.3
Oasis Island (11)			118				1990			901			93.5
Oasis Landing (11)			144				1990			938			95.4
Oasis Meadows (11)			383				1996			1,031			94.3
Oasis Palms (11)			208				1989			880			92.9
Oasis Pearl (11)			90				1989			930			97.5
Oasis Place (11)			240				1992			440			95.5
Oasis Ridge (11)			477				1984			391			89.6
Oasis Sierra (11)			208				1998			923			94.9
Oasis Springs (11)			304				1988			838			93.0
Oasis Vinings (11)			234				1994			1,152			93.4
NORTH CAROLINA
Charlotte
Camden Ballantyne			400				1998			1,045			92.3
Camden Cotton Mills			180				2002			905			95.0
Camden Dilworth			145				2006			857			95.9
Camden Fairview			135				1983			1,036			95.5
Camden Forest			208				1989			703			92.7
Camden Foxcroft (5)			156				1979			940			Redevelopment
Camden Grandview			266				2000			1,057			93.7
Camden Habersham			240				1986			773			94.8
Camden Park Commons			232				1997			861			91.5
Camden Pinehurst			407				1967			1,147			93.2
Camden Sedgebrook			368				1999			972			94.3
Camden Simsbury			100				1985			874			95.7
Camden South End Square			299				2003			882			92.8
Camden Stonecrest			306				2001			1,098			93.7
Camden Touchstone (4)			132				1986			899			94.6

OPERATING PROPERTIES (CONTINUED)

		Number of				Year Placed				Average Apartment		2008 Average
Property and Location		Apartments				In Service				Size (Sq. Ft.)		Occupancy (1)
Raleigh
Camden Crest			438				2001			1,013			94.1	%
Camden Governor’s Village			242				1999			1,046			91.8
Camden Lake Pine			446				1999			1,066			94.4
Camden Manor Park			484				2006			966			94.6
Camden Overlook			320				2001			1,060			95.6
Camden Reunion Park			420				2000/2004			972			92.7
Camden Westwood			354				1999			1,027			94.3
PENNSYLVANIA
Camden Valleybrook			352				2002			992			96.3
TEXAS
Austin
Camden Cedar Hills (2)			208				2008			911		Lease-Up
Camden Gaines Ranch			390				1997			955			93.8
Camden Huntingdon			398				1995			903			95.7
Camden Laurel Ridge			183				1986			702			92.9
Camden Ridgecrest			284				1995			855			95.1
Camden South Congress (13)			253				2001			975			92.4
Camden Stoneleigh			390				2001			908			95.1
Corpus Christi
Camden Breakers (4)			288				1996			868			92.9
Camden Copper Ridge			344				1986			775			93.4
Camden Miramar (7)			778				1994-2004			482			80.8
Dallas/Fort Worth
Camden Addison (8)			456				1996			942			94.8
Camden Buckingham			464				1997			919			95.3
Camden Centreport			268				1997			911			93.8
Camden Cimarron			286				1992			772			95.5
Camden Farmers Market			904				2001/2005			932			94.8
Camden Gardens			256				1983			652			94.5
Camden Glen Lakes (4)			424				1979			877			91.7
Camden Legacy Creek			240				1995			831			96.2
Camden Legacy Park			276				1996			871			95.7
Camden Oasis			602				1986			548			83.6
Camden Springs			304				1987			713			92.6
Camden Valley Creek			380				1984			855			93.9
Camden Valley Park (5)			516				1986			743			Redevelopment
Camden Valley Ridge			408				1987			773			93.6
Camden Westview			335				1983			697			94.4

OPERATING PROPERTIES (CONTINUED)

		Number of				Year Placed				Average Apartment		2008 Average
Property and Location		Apartments				In Service				Size (Sq. Ft.)		Occupancy (1)
Houston
Camden Baytown			272				1999			844			95.8	%
Camden City Centre (3)			379				2007			932			94.0
Camden Creek			456				1984			639			92.4
Camden Greenway			756				1999			861			96.3
Camden Holly Springs (8)			548				1999			934			95.1
Camden Midtown			337				1999			844			97.4
Camden Oak Crest			364				2003			870			95.9
Camden Park (8)			288				1995			866			96.4
Camden Plaza (3) (12)			271				2007			915			94.4
Camden Royal Oaks (3)			236				2006			923			90.0
Camden Steeplechase			290				1982			748			93.5
Camden Stonebridge			204				1993			845			97.2
Camden Sugar Grove (8)			380				1997			921			95.1
Camden Vanderbilt (4)			894				1996/1997			863			94.3
Camden West Oaks (6)			671				1982			726			94.7
Camden Whispering Oaks (2)			274				2008			934		Lease-Up

Item 3. Legal Proceedings

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

Item 4. Submission of Matters to a Vote of Security Holders

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, and distributions per share declared for the quarters indicated are as follows:

		High				Low				Distributions
2008 Quarters:
First		$	54.65			$	42.18			$	0.70
Second			55.35				44.08				0.70
Third			54.87				41.79				0.70
Fourth			44.95				18.96				0.70
2007 Quarters:
First		$	79.26			$	68.09			$	0.69
Second			75.32				66.97				0.69
Third			68.74				54.96				0.69
Fourth			66.82				45.78				0.69

As of February 17, 2009, there were 659 shareholders of record and approximately 22,500 beneficial owners of our common shares.

The following table summarizes repurchases of our equity securities during the quarter ended December 31, 2008:

										Total Number of				Approximate
										Shares Purchased				Dollar Value of
		Total Number of								as Part of Publicly				Shares That May Yet
		Shares				Average Price				Announced				Be Purchased Under
		Purchased				Paid per Share				Programs				the Program (1)
Month ended October 31, 2008			—			$	—				—			$	269,869,000
Month ended November 30, 2008			4,400				22.97				4,400				269,768,097
Month ended December 31, 2008			—				—				—				269,768,097
Total (2)			4,400			$	22.97				4,400

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 ending December 31, 2004 through 2008. 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

		Year Ended December 31,
(in thousands, except per share amounts and property data)		2008				2007				2006				2005(e)				2004
Operating Data (a)
Total property revenues		$	624,016			$	588,319			$	561,029			$	485,696			$	347,174
Total property expenses			238,915				217,350				210,621				184,566				138,700
Total non-property income (loss)			(19,540	)			25,002				35,530				50,912				27,884
Total other expenses			331,278				339,548				345,908				338,520				206,022
Income (loss) from continuing operations			(13,705	)			41,721				119,953				147,022				18,815
Net income			70,973				148,457				232,846				199,086				41,341
Income (loss) from continuing operations per share
Basic		$	(0.25	)		$	0.72			$	2.12			$	2.83			$	0.45
Diluted			(0.25	)			0.71				2.06				2.64				0.44
Net income per share
Basic		$	1.28			$	2.55			$	4.11			$	3.83			$	1.00
Diluted			1.28				2.51				3.96				3.58				0.98
Distributions declared per common share		$	2.80			$	2.76			$	2.64			$	2.54			$	2.54
Balance Sheet Data (at end of year)
Total real estate assets, at cost		$	5,491,593			$	5,527,403			$	5,141,467			$	5,039,007			$	3,159,077
Total assets			4,730,342				4,890,760				4,586,050				4,487,799				2,629,364
Notes payable			2,832,396				2,828,095				2,330,976				2,633,091				1,576,405
Minority interests			187,787				219,952				223,511				221,023				159,567
Shareholders’ equity			1,411,494				1,531,313				1,734,356				1,370,903				738,515
Other Data
Cash flows provided by (used in):
Operating activities		$	216,958			$	223,106			$	231,569			$	200,845			$	156,997
Investing activities			(37,374	)			(346,798	)			(52,067	)			(207,561	)			(65,321	)
Financing activities			(173,074	)			123,555				(180,044	)			6,039				(92,780	)
Funds from operations — diluted (b)			169,585				227,153				237,790				195,290				143,669
Property Data
Number of operating properties (at the end of year) (c)			181				182				186				191				144
Number of operating apartment homes (at end of year) (c)			62,903				63,085				63,843				65,580				51,456
Number of operating apartment homes (weighted average) (c)(d)			51,277				53,132				55,850				55,056				47,118
Weighted average monthly total property revenue per apartment home		$	1,055			$	1,025			$	970			$	888			$	792
Properties under development (at end of period)			5				11				11				9				3

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 could adversely impact us;
	•		We could be negatively impacted by the condition of Fannie Mae or Freddie Mac;
	•		Unfavorable changes in economic conditions could adversely impact occupancy or rental rates;
	•		We face risks associated with land holdings;
	•		Difficulties of selling real estate could limit our flexibility;
	•		Compliance or failure to comply with laws 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 and partnerships 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;
	•		We depend on our key personnel;
	•		Changes in laws and litigation risks could affect our business;
	•		Tax matters, including failure to qualify as a REIT, could have adverse consequences;
	•		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 or equity may adversely impact our financial condition;
	•		Failure to maintain 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
	•		We may reduce dividends on our equity securities or elect to pay a portion of the dividend in common shares.

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.

Unless the context requires otherwise, “we,” “our,” “us,” and the “Company,” refer to Camden Property Trust and Camden’s consolidated subsidiaries and partnerships, collectively.

Executive Summary

Our fiscal year 2008 results reflect the challenges the multifamily industry faced during the year. During fiscal year 2008, the factors adversely affecting demand for and rents received in our multifamily communities became more intense and pervasive across the United States. As a result, the already difficult conditions within the industry became progressively more challenging. High inventory levels of single-family homes and condominiums in the markets in which we operate, overall weak consumer confidence, and fears of a prolonged recession, among other factors, have persisted throughout fiscal year 2008. The effects of these factors have been further magnified by credit tightening in the financial markets, increasing home foreclosures, and severe shortages of liquidity in the financial markets.

Based on our results for fiscal year 2008, the deteriorating market conditions discussed above, and our belief these conditions may not improve quickly, we expect negative growth in property revenues during fiscal year 2009. Current factors which may negatively affect our future performance include recent and expected future job losses, liquidity disruptions in the capital markets, recessionary concerns, uncertainty in the financial markets, and a continued oversupply of single-family homes and condominiums in many of the markets in which we operate. However, positive impacts on our performance may result from reductions in the U.S. home ownership rate, more stringent lending criteria for prospective home-buyers, and long-term growth prospects for population, employment, and household formations in our markets, although there can be no assurance any of these factors will continue or will positively impact our operating results.

Due to the instability experienced during the current economic downturn, we believe the timing of an economic recovery is unclear and these conditions may not improve quickly. Our near term primary focus is to strengthen our capital and liquidity position by selectively disposing of properties, controlling and reducing construction and overhead costs, generating positive cash flows from operations, and reducing outstanding debt and leverage ratios.

We intend to continue to look for opportunities to acquire existing communities through our investment in and management of discretionary investment funds. Until the earlier of (i) December 31, 2011 or (ii) such time as 90% of its committed capital is invested, subject to two one-year extensions, the Fund and the Co-Investment Vehicle will be our exclusive investment vehicles for acquiring fully developed multifamily properties, subject to certain exceptions. Our portfolio of apartment communities is geographically diverse, which we believe mitigates risks such as changes in demographics or job growth which may occur within individual markets, although may not mitigate such risks with respect to more wide spread economic declines. In the long term, we also intend to continue focusing on our development pipeline which currently contains twelve properties in various stages of construction, lease-up, and pre-development. The commencement of future developments has and may continue to be impacted by macroeconomic issues, increasing construction costs, and other factors. We expect decreasing levels of development activity in 2009 as compared to prior years.

We review our assets for impairment on an annual basis or whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Our impairment evaluations reflected our expectation of continued and increased challenges in the development of future multifamily communities, our belief these challenges will persist for some time, and our decision to not continue with five future development projects. Based on our evaluations, we recorded significant impairment charges in the fourth quarter to our land valuations, which materially affected our operating results during fiscal year 2008. Land valuations may continue to have significant fluctuations due to, among other things, the current economic environment and, as a result, there can be no assurance we will not have further impairments in the future.

The continuation of the current economic environment and capital market disruptions have and could continue to have a negative impact on us and adversely affect our future results of operations.

Property Portfolio

Our multifamily property portfolio, excluding land and joint venture properties which we do not manage, is summarized as follows:

		December 31, 2008								December 31, 2007
		Apartment								Apartment
		Homes				Properties				Homes				Properties
Operating Properties
Las Vegas, Nevada			8,016				29				8,064				30
Houston, Texas			6,620				16				6,346				15
Dallas, Texas			6,119				15				7,225				18
Washington, D.C. Metro			5,702				16				4,525				13
Tampa, Florida			5,503				12				5,503				12
Charlotte, North Carolina			3,574				15				3,574				15
Orlando, Florida			3,557				9				3,296				8
Atlanta, Georgia			3,202				10				3,202				10
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				2,191				5
Phoenix, Arizona			2,433				8				2,433				8
Denver, Colorado			2,171				7				2,529				8
Austin, Texas			2,106				7				2,778				9
San Diego/Inland Empire, California			1,196				4				1,196				4
Other			4,999				13				4,999				13
Total Operating Properties			62,903				181				63,085				182
Properties Under Development
Houston, Texas			712				3				733				3
Washington, D.C. Metro			366				1				1,543				4
Austin, Texas			348				1				556				2
Los Angeles/Orange County, California			—				—				290				1
Orlando, Florida			—				—				261				1
Total Properties Under Development			1,426				5				3,383				11
Total Properties			64,329				186				66,468				193
Less: Joint Venture Properties (1)
Las Vegas, Nevada			4,047				17				4,047				17
Houston, Texas (2)			2,199				7				1,946				6
Phoenix, Arizona			992				4				992				4
Los Angeles/Orange County, California			711				2				711				2
Austin, Texas			601				2				—				—
Washington, D.C. Metro			508				1				508				1
Dallas, Texas			456				1				456				1
Denver, Colorado			320				1				320				1
Other			3,237				9				3,237				9
Total Joint Venture Properties			13,071				44				12,217				41
Total Properties Owned 100%			51,258				142				54,251				152