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FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 333-24637
SUBJECT TO COMPLETION, DATED JULY 7, 1997
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED APRIL 21, 1997)
[LOGO OF CAMDEN PROPERTY 3,200,000 SHARES
APPEARS HERE] CAMDEN PROPERTY TRUST
COMMON SHARES OF BENEFICIAL INTEREST
Camden Property Trust (the "Company") is a fully integrated, self-
administered and self-managed real estate investment trust (a "REIT") which
owns, operates and develops multifamily properties in six states primarily in
the Southwest, Southeast and Midwest regions of the United States. The Company
is one of the largest publicly-traded REIT owners of multifamily properties
(based on the number of apartment units owned) in the United States. As of June
26, 1997, following the acquisition of Paragon Group, Inc., the Company owned,
or had interests in, and operated 102 multifamily properties containing 32,730
units with a weighted average occupancy rate of 94.3%. The Company also had
five newly constructed multifamily properties containing 1,524 units which are
in the lease-up phase and three multifamily properties under development which
will, when completed, add 1,110 units to its portfolio. Upon completion of the
development properties, the Company's portfolio will consist of 110 multifamily
properties containing 35,364 units.
All of the Common Shares of the Company offered hereby are being offered by
the Company (the "Offering"). The Common Shares are listed on the New York
Stock Exchange (the "NYSE") under the symbol "CPT." On June 24, 1997, the last
reported sale price of the Common Shares on the NYSE was $30 7/8 per share.
SEE "RISK FACTORS" ON PAGE S-5 FOR CERTAIN FACTORS THAT SHOULD BE CONSIDERED
BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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PRICE UNDERWRITING PROCEEDS
TO THE DISCOUNTS AND TO THE
PUBLIC COMMISSIONS(1) COMPANY(2)
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Per Share.............................. $ $ $
Total(3)............................... $ $ $
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(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting estimated expenses of $ payable by the Company.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
an aggregate of 480,000 additional Common Shares on the same terms and
conditions as set forth above, solely to cover over-allotments, if any. If
such option is exercised in full, the total Price to the Public,
Underwriting Discounts and Commissions and Proceeds to the Company will be
$ , $ , and $ , respectively. See "Underwriting."
The Common Shares are offered by the Underwriters, subject to prior sale,
when, as and if delivered to and accepted by the Underwriters, and subject to
their right to reject orders in whole or in part. It is expected that delivery
of the Common Shares offered hereby will be made in New York on or about July
, 1997.
DONALDSON, LUFKIN & JENRETTE MERRILL LYNCH & CO.
SECURITIES CORPORATION
The date of this Prospectus Supplement is July , 1997.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT IS SUBJECT TO COMPLETION +
+PURSUANT TO RULE 424 UNDER THE SECURITIES ACT OF 1933. A REGISTRATION +
+STATEMENT RELATING TO THESE SECURITIES HAS BEEN DECLARED EFFECTIVE BY THE +
+SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 415 UNDER THE SECURITIES +
+ACT OF 1933. A FINAL PROSPECTUS SUPPLEMENT AND PROSPECTUS WILL BE DELIVERED +
+TO PURCHASERS OF THESE SECURITIES. THIS PROSPECTUS SUPPLEMENT AND THE +
+PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN +
+OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN +
+WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO +
+REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
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Camden's Principal Markets
[U.S. MAP APPEARS HERE]
Apartments Units Owned Geographic Distribution
of Properties*
[GRAPH APPEARS HERE] [GRAPH APPEARS HERE]
*As of June 26, 1997 *Based on 1997 Budgeted Revenues
THE UNDERWRITERS MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR
OTHERWISE AFFECT THE PRICE OF THE COMMON SHARES OFFERED HEREBY. SUCH
TRANSACTIONS MAY INCLUDE STABILIZING TRANSACTIONS AND THE PURCHASE OF COMMON
SHARES TO COVER SYNDICATE SHORT POSITIONS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING" HEREIN.
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SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information appearing elsewhere in this
Prospectus Supplement and the accompanying Prospectus or incorporated herein or
therein by reference. This Prospectus Supplement and the accompanying
Prospectus, including incorporated documents, contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Company's actual results could differ
materially from those set forth in the forward-looking statements. Certain
factors, among others, which may cause such a difference are set forth under the
caption "Risk Factors" in this Prospectus Supplement.
THE COMPANY
Camden Property Trust (the "Company") is a fully integrated, self-
administered and self-managed real estate investment trust (a "REIT") which
owns, operates and develops multifamily properties in six states primarily in
the Southwest, Southeast and Midwest regions of the United States. The Company
is one of the largest publicly-traded REIT owners of multifamily properties
(based on the number of apartment units owned) in the United States. As of June
26, 1997, the Company owned, or had interests in, 110 multifamily properties
(the "Properties") containing 35,364 units located in 12 metropolitan markets.
The Properties include 102 stabilized properties, which had a weighted average
occupancy rate of 94.3% (the "Stabilized Properties"), five newly-constructed
multifamily properties containing 1,524 units in the lease-up phase (the "Lease-
Up Properties," and collectively with the Stabilized Properties, the "Operating
Properties"), and three multifamily properties under development in Houston and
Dallas which will, when completed, add 1,110 units to the Company's portfolio
(the "Development Properties"). In addition to the Properties, the Company has
one site in Denver which it intends to develop. The Company is vertically
integrated, with operations that encompass multifamily property acquisition,
development, construction services, marketing, finance, leasing, brokerage and
asset management.
As a result of the Offering, the Company's ratio of debt-to-total-market-
capitalization (defined as the ratio of total consolidated debt to the current
market value of all the common shares of beneficial interest, par value $0.01
per share (the "Common Shares") (including Common Shares issuable upon
conversion of limited partnership units ("OP Units") in Camden Operating, L.P.
(the "Operating Partnership")), plus total consolidated debt), will be reduced
to approximately 31.5%, compared to a ratio of 32.7% before the Paragon
Acquisition (as defined below) and a ratio as of June 24, 1997 of 38.0% (each
such ratio based on the June 24, 1997 last reported sale price of the Common
Shares on the NYSE of $30 7/8 per share). After giving effect to the Offering,
the Company will have approximately $114 million of availability under its $150
million unsecured revolving credit facility (the "Unsecured Credit Facility").
RECENT DEVELOPMENTS
. The Paragon Acquisition. On April 15, 1997, the Company completed the
acquisition of Paragon Group, Inc. ("Paragon"), a Maryland corporation
(the "Paragon Acquisition"). The Paragon Acquisition was valued at
approximately $620 million and increased the size of the Company's
portfolio from 53 to 110 multifamily properties and from 19,389 to 35,364
units. The Company believes that the Paragon Acquisition represents the
acquisition of a solid portfolio of multifamily properties in strong
markets at a favorable yield and also provides the Company with
opportunities to improve the operating performance of the acquired assets
through operating efficiencies, implementation of renovation programs and
enhancement of marketing efforts. The Company believes that, in addition
to being accretive on a funds from operations per share basis during the
first year following the Paragon Acquisition, the Paragon Acquisition
provided a unique opportunity for geographic expansion into attractive
growth-oriented markets in the Southeast and Midwest.
. Issuance of Reset Notes. On May 9, 1997, the Company completed an
offering of Remarketed Reset Notes due May 9, 2002 in an aggregate
principal amount of $75 million (the "Reset Notes"). The interest rate on
the Reset Notes will be reset on a periodic basis and as of June 24, 1997
was 6.10% per annum. The net proceeds of approximately $74.8 million from
the sale of the Reset Notes were used to reduce indebtedness outstanding
under the Unsecured Credit Facility.
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. Issuance of Medium Term Notes. On June 20, 1997, the Company issued $25
million principal amount of 7.17% notes due June 21, 2004 from its $196
million Medium Term Notes program. The net proceeds of approximately $24.9
million were used to reduce indebtedness outstanding under the Unsecured
Credit Facility.
. Property Acquisitions. In June 1997, the Company purchased for $3.9
million a 96-unit apartment property in Tampa, Florida, adjacent to a
property acquired in the Paragon Acquisition. The Company is currently in
negotiations to acquire other properties consistent with its pursuit of
acquisitions in the ordinary course of its business.
. Development Activity. Two of the Lease-Up Properties, containing 668
units, were completed in 1997, for a total investment of $35.3 million.
The Company acquired the remaining three Lease-Up Properties, which
represent a total investment of $44.0 million in 856 units, in the Paragon
Acquisition. The Lease-Up Properties are expected to stabilize in the
third and fourth quarters of 1997. The Development Properties are expected
to be completed and stabilized in 1998 and represent a total investment of
$64.1 million in 1,110 units.
. Increased Distributions. As a result of the Company's improved
operating performance, in March 1997 the Company announced a 3.2% increase
in its regular quarterly distribution, commencing with the Company's
distribution with respect to the first quarter of 1997, from $0.475 per
Common Share to $0.49 per Common Share (equivalent to $1.96 per Common
Share on an annualized basis). This represents the fourth consecutive
annual increase since becoming a public company in 1993.
RISK FACTORS
An investment in the Common Shares involves various risks. Prospective
investors should carefully consider the matters discussed in detail elsewhere in
this Prospectus Supplement under the caption "Risk Factors."
THE OFFERING
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SECURITIES OFFERED......... 3,200,000 Common Shares
COMMON SHARES OUTSTANDING
AFTER THE OFFERING........ 29,982,733 (1)
USE OF PROCEEDS............ The net cash proceeds to the Company of approximately $ million
(approximately $ million if the Underwriters' over-allotment option
is exercised in full) will be used as follows: (i) approximately $66.0 million
to retire secured indebtedness assumed in the Paragon Acquisition which
bears interest at a rate of 8.36% per annum; and (ii) the balance to repay
amounts drawn under the Unsecured Credit Facility to fund Lease-Up
Properties completed in the first quarter of 1997. As a result of the
Offering, the Company's ratio of debt-to-total-market-capitalization will be
reduced to 31.5%. In addition, the Offering will result in the Company's
total secured indebtedness being reduced from $238.8 million to $173.1
million. See "Use of Proceeds."
NYSE SYMBOL................ CPT
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(1) Does not include (i) 897,733 Common Shares reserved for issuance upon
the exercise of outstanding options granted pursuant to the Company's 1993 Share
Incentive Plan (the "Plan"), (ii) 2,352,161 Common Shares issuable upon
conversion of OP Units, (iii) 312,500 Common Shares issuable upon conversion of
the Company's outstanding convertible debentures, and (iv) 183,434 Common Shares
awarded under the Plan to certain executive officers of the Company and held in
trust by the Company.
Unless otherwise indicated, the information in this Prospectus Supplement
assumes no exercise of the Underwriters' option to purchase up to 480,000
additional Common Shares to cover over-allotments, if any.
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RISK FACTORS
An investment in the Common Shares involves various risks. Prospective
investors should carefully consider the following information in conjunction
with the other information contained or incorporated by reference in this
Prospectus Supplement and the attached Prospectus before making a decision to
purchase Common Shares. This Prospectus Supplement and the accompanying
Prospectus, including incorporated documents, contain forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act. The Company's actual results could differ materially from those
set forth in the forward-looking statements. Certain factors, among others,
which may cause such a difference are set forth below.
REAL ESTATE INVESTMENT RISKS
GENERAL.
Real property investments are subject to varying degrees of risk. The
yields from equity investments in real estate depend upon the amount of income
generated and expenses incurred. If the Company's multifamily property portfolio
does not generate income sufficient to meet operating expenses, debt service and
capital expenditures, the Company's ability to make distributions to its
shareholders will be adversely affected. Income from multifamily properties may
be adversely affected by the general economic climate, local conditions such as
oversupply of apartments or a reduction in demand for apartments in the area,
the attractiveness of the properties to residents, competition from other
available apartments, inability to collect rent from residents, changes in
market rental rates, the need to periodically repair, renovate and relet space,
and the ability of the owner to pay for adequate maintenance and insurance and
increased operating costs (including real estate taxes). Certain significant
expenditures associated with each equity investment (such as mortgage payments,
if any, real estate taxes and maintenance costs) are generally not reduced when
circumstances cause a reduction in income from the investment. In addition,
income from properties and real estate values also are affected by such factors
as applicable laws, including tax laws, interest rate levels and the
availability of financing.
ACQUISITION RISKS.
As a result of the Paragon Acquisition, the Company increased its portfolio
of apartment units owned from 19,389 to 35,364, an increase of over 82%.
Several of the properties acquired by the Company through the Paragon
Acquisition are in markets where the Company has not historically managed
properties. Due primarily to the number and relative geographic diversity of
the Properties after the Paragon Acquisition, the Company may not have adequate
management or other personnel or adequate systems or other resources to manage
its portfolio or the Properties to the same level of efficiency as before the
Paragon Acquisition, which could adversely affect operations and result in less
cash available for distributions to shareholders. Though the Company believes
that through operating efficiencies, implementation of renovation programs and
enhancement of marketing efforts, a significant cost savings in operating costs
and general and administrative expenses can be achieved, there can be no
assurance as to the timing or extent of such savings.
The Company, in the normal course of its business, is continually
evaluating a number of potential acquisitions and entering into non-binding
letters of intent and may at any time, or from time to time, enter into
contracts to acquire and may acquire additional properties. No assurance can be
given, however, that the Company will have the opportunity to continue to make
suitable property acquisitions on terms favorable to the Company.
DEPENDENCE ON GEOGRAPHICAL REGIONS.
The Properties are located primarily in the Southwest, Southeast and
Midwest regions of the United States. A decline in the economic conditions in
those regions and in the market for apartments therein may have an adverse
impact on the performance of the Company's property portfolio.
S-5
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DEVELOPMENT RISKS.
Risks associated with the Company's development and construction activities
include: development opportunities may be abandoned; construction costs of a
multifamily property may exceed original estimates, possibly making the
multifamily property uneconomical; occupancy rates and rents at a newly
completed multifamily property may not be sufficient to make the multifamily
property profitable; financing may not be available on favorable terms for
development of a multifamily property; and construction and lease-up may not be
completed on schedule, resulting in increased debt service and construction
costs. Development activities are also subject to risks relating to the
inability to obtain, or delays in obtaining, all necessary zoning, land-use,
building, occupancy, and other required governmental permits and authorizations.
There can be no assurance that the Company will undertake to develop any
particular site or that it will be able to complete such development if it is
undertaken.
FINANCING OF DEVELOPMENT AND ACQUISITIONS.
The Company anticipates that future development and acquisitions will be
financed, in whole or in part, under existing unsecured credit facilities,
unsecured medium term notes or other forms of unsecured financing or through the
issuance of additional equity by the Company. The use of equity financing,
rather than debt, for future developments or acquisitions could have a dilutive
effect on the interests of existing shareholders of the Company. If new
developments are financed under existing unsecured lines of credit, there is a
risk that, unless substitute financing is obtained, further availability under
the lines of credit for new development may not be available or may be available
only on disadvantageous terms.
ILLIQUIDITY OF REAL ESTATE.
Real estate investments are relatively illiquid and, therefore, will tend
to limit the ability of the Company to vary its portfolio promptly in response
to changes in economic or other conditions. In addition, the Internal Revenue
Code of 1986, as amended (the "Code"), places limits on a REIT's ability to sell
properties held for fewer than four years, which may affect the Company's
ability to sell properties without adversely affecting returns to shareholders.
NO LIMITATION ON AMOUNT OF DEBT THAT MAY BE INCURRED AND POSSIBLE INABILITY TO
REPAY DEBT
NO LIMITATION ON DEBT AND INCREASED INDEBTEDNESS.
The Company intends to adhere to a policy of maintaining a debt-to-total-
market-capitalization ratio of less than 50% and has maintained on a quarterly
basis a financial structure with no more than 40% debt-to-total-market-
capitalization since July 1993. However, the organizational documents of the
Company do not limit the amount or percentage of indebtedness that it may incur.
Therefore, the Company's Board of Trust Managers (the "Board") may alter or
eliminate this policy without shareholder approval. Accordingly, the Company
could become more leveraged, resulting in an increased risk of default on its
obligations and in an increase in its debt service requirements, both of which
could adversely affect the financial condition of the Company. An increase in
the Company's total debt-to-total-market-capitalization ratio may adversely
affect the Company's ability to access debt as well as equity capital markets in
the future due to the resulting decreased ability to service debt.
DEBT FINANCING AND EXISTING DEBT MATURITIES.
The Company is subject to the risks normally associated with debt
financing, including the risk that the Company's funds from operations might be
insufficient to meet required payments of principal and interest, the risk that
existing indebtedness on the Properties (which in all cases will not have been
fully amortized at maturity) might not be able to be refinanced or that the
terms of such refinancing might not be as favorable as the terms of the existing
indebtedness.
The Company incurred and expects in the future to incur floating rate
indebtedness in connection with the construction of multifamily properties, as
well as for other purposes. In addition, additional indebtedness that the
Company incurs under the Company's Unsecured Credit Facility also bears interest
at a floating rate. Accordingly, increases in interest rates would increase the
Company's interest costs (to the extent that the related indebtedness was not
protected by interest rate protection arrangements).
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OWNERSHIP LIMITS
In order to maintain its qualification as a REIT, not more than 50% in
value of the outstanding shares of the Company may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year, and such shares must
be beneficially owned by 100 or more persons during at least 335 days of a
taxable year of 12 months, or during a proportionate part of a shorter taxable
year. In order to protect the Company against the risk of losing its status as
a REIT due to a concentration of ownership among its shareholders, the Company's
Declaration of Trust (the "Declaration of Trust") authorizes the Board to take
such action as may be required to preserve the Company's qualification as a
REIT. Additionally, the Declaration of Trust provides that, subject to certain
exceptions, no holder may own, or be deemed to own, more than 9.8% of the total
outstanding capital stock of the Company. The Board is not permitted to waive
this restriction. Shares acquired or transferred in breach of this limitation
will automatically be deemed to be Excess Securities held by the Company in
trust and not entitled to vote or to participate in dividends or other
distributions. Additionally, shares acquired or transferred in breach of this
limitation may be purchased by the Company for the lesser of the price paid or
the market price (as determined in the manner set forth in the Declaration of
Trust).
These ownership limits, as well as the ability of the Company to issue
other classes of equity securities, may delay, defer or prevent a change in
control of the Company and may also deter tender offers for the Common Shares,
which offers may be attractive to the shareholders, or limit the opportunity of
shareholders to receive a premium for their Common Shares that might otherwise
exist if an investor were attempting to effect a change in control of the
Company.
COMPETITION
All of the Properties are located in developed areas. There are numerous
other multifamily properties and real estate companies within the market areas
of the Properties that compete with the Company for residents and development
and acquisition opportunities, some of whom may have greater resources than the
Company. The number of competitive multifamily properties and real estate
companies in such areas could have a material effect on the Company's ability to
rent its apartments, its ability to raise or maintain the rents charged and its
development and acquisition opportunities.
ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT
The Company believes that it has operated so as to qualify as a REIT under
the Code since its formation. Although management of the Company believes that
the Company is organized and is operating in such a manner, no assurance can be
given that the Company will be able to continue to operate in a manner so as to
qualify or remain so qualified. Qualification as a REIT involves the application
of highly technical and complex Code provisions for which there are only limited
judicial or administrative interpretations and the determination of various
factual matters and circumstances not entirely within the Company's control. For
example, in order to qualify as a REIT, at least 95% of the Company's gross
income in any year must be derived from qualifying sources and the Company must
make distributions to shareholders aggregating annually at least 95% of its REIT
taxable income (excluding net capital gains). In addition, no assurance can be
given that new legislation, regulations, administrative interpretations or court
decisions will not change the tax laws with respect to qualification as a REIT
or the federal income tax consequences of such qualification. The Company is not
aware, however, of any currently pending tax legislation that would adversely
affect its ability to continue to qualify as a REIT.
For any taxable year that the Company fails to qualify as a REIT, the
Company will be subject to federal income tax (including any applicable
alternative minimum tax) on its taxable income at corporate rates. In addition,
unless entitled to relief under certain statutory provisions, the Company also
will be disqualified from treatment as a REIT for the four taxable years
following the year during which qualification is lost. This treatment would
reduce the net earnings of the Company available for investment or distribution
to shareholders because of the additional tax liability to the Company for the
year or years involved. In addition, distributions no longer would be required
to be made. To the extent that distributions to shareholders would have been
made in anticipation of the Company's qualifying as a REIT, the Company might be
required to borrow funds or to liquidate certain of its investments to pay the
applicable tax.
Prior to the Paragon Acquisition, Paragon represented to the Company that,
since its formation, it had operated so as to qualify as a REIT under the Code.
Under certain circumstances, the Company's qualification as a REIT could depend
upon Paragon's qualification as a REIT for periods prior to the Paragon
Acquisition, and in any event, the
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liabilities that the Company assumed in the Paragon Acquisition include
Paragon's liability for any unpaid taxes, including taxes resulting if Paragon
failed to qualify as a REIT for any period prior to the Paragon Acquisition.
EFFECT OF MARKET INTEREST RATES ON PRICE OF COMMON SHARES
The market value of the Common Shares could be substantially affected by
general market conditions, including changes in interest rates, government
regulatory action and changes in tax laws. An increase in market interest rates
may lead prospective purchasers of the Common Shares to demand a higher
anticipated annual yield from future dividends. Such an increase in the
required anticipated dividend yield may adversely affect the market price of
outstanding Common Shares.
CHANGES IN POLICIES
The major policies of the Company, including its policies with respect to
acquisitions, financings, growth, operations, development, debt capitalization
and distributions, are determined by the Board. The Board may from time to time
amend or revise these and other policies without a vote of the shareholders of
the Company. Accordingly, shareholders will have no control over changes in
these and similar policies of the Company, and changes in the Company's policies
may not fully serve the interest of all shareholders.
UNINSURED AND UNDERINSURED LOSSES COULD RESULT IN LOSS OF VALUE OF PROPERTY
The Company carries comprehensive liability, fire, flood, extended coverage
and rental loss insurance with respect to its properties and management believes
such coverage is of the type and amount customarily obtained for or by an owner
of real property assets. Similar coverage will be obtained for properties
acquired in the future. The Company exercises its discretion in determining
amounts, coverage limits and deductibility provisions of insurance, with a view
to maintaining appropriate insurance on the Company's investments at a
reasonable cost and on suitable terms. This may result in insurance coverage
that in the event of a substantial loss would not be sufficient to pay the full
current market value or current replacement cost of the Company's lost
investment. Inflation, changes in building codes and ordinances, environmental
considerations and other factors also might make it infeasible to use insurance
proceeds to replace the property after such property has been damaged or
destroyed.
POSSIBLE ENVIRONMENTAL LIABILITIES
Under various federal, state and local laws, ordinances and regulations, a
current or previous owner of real estate is liable to a governmental entity or
third party for the costs of removal or remediation of certain hazardous or
toxic substances or petroleum product releases on or in such property. Such laws
often impose such liability without regard to whether the owner knew of, or was
responsible for, the presence of such hazardous or toxic substances or petroleum
product releases. The presence of such substances, or the failure to properly
remediate such substances, may adversely affect the owner's ability to sell or
rent such property or to borrow using such property as collateral. All of the
Properties have been subjected to Phase I or similar environmental audits (which
involve inspection without soil sampling or ground water analysis) by
independent environmental consultants. None of the environmental audit reports
have revealed any significant environmental liability, nor is the Company aware
of any environmental liability with respect to the Properties that management
believes would have a material adverse effect on the Company's business, assets
or results of operations. No assurance can be given that existing environmental
studies with respect to the Properties reveal all environmental liabilities or
that any prior owner of any of the Properties did not create any material
environmental condition not known to the Company.
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COSTS OF COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT, FAIR HOUSING
AMENDMENTS ACT AND SIMILAR LAWS
Under the Americans with Disabilities Act of 1990 (the "ADA"), whose
requirements became effective in 1992, all places of public accommodation are
required to meet certain federal requirements related to access and use by
disabled persons. Although the ADA does not consider residential properties,
such as multifamily properties, to be public accommodations or commercial
facilities, except to the extent portions of such facilities are open to the
public, and management of the Company believes that the Company's multifamily
properties are substantially in compliance with the present requirements of the
ADA, the Company may incur additional costs of complying with final ADA
regulations.
Failure to comply with the ADA could result in an imposition of fines or
the award of damages to private litigants. If required changes involve greater
expenditures than the Company currently anticipates, or if the changes must be
made on a more accelerated basis than it anticipates, the Company's ability to
make expected distributions could be adversely affected. The Company believes
that its competitors face similar costs in complying with the requirements of
the ADA.
The Fair Housing Amendments Act of 1988 (the "FHAA") imposes certain
requirements related to access by physically handicapped persons on multifamily
properties first occupied after March 13, 1990 or for which construction permits
were obtained after June 15, 1990. Noncompliance with the FHAA could result in
the imposition of fines or the award of damages to private litigants. The
Company believes that the Properties that are subject to the FHAA are in
compliance with such law.
A number of federal, state and local laws exist that may require
modifications to the Properties, or restrict certain further renovations
thereof, with respect to access thereto by disabled persons. Additional and
future legislation may impose other burdens or restrictions on owners with
respect to access by disabled persons. The ultimate costs of complying with the
ADA, FHAA and other similar legislation are not currently ascertainable and,
while such costs are not expected to have a material effect on the Company, such
costs could be substantial. Limitations or restrictions on the completion of
certain renovations may limit application of the Company's investment strategy
in certain instances or reduce overall returns on the Company's investments.
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THE COMPANY
The Company is a fully integrated, self-administered and self-managed REIT
which owns, operates and develops multifamily properties in six states primarily
in the Southwest, Southeast and Midwest regions of the United States. The
Company is one of the largest publicly-traded REIT owners of multifamily
properties (based on the number of apartment units owned) in the United States.
As of June 26, 1997, the Company owned, or had interests in 110 Properties
containing 35,364 units located in 12 metropolitan markets. The Properties
include 102 Stabilized Properties that had a weighted average occupancy rate of
94.3%, five Lease-Up Properties containing 1,524 units and three Development
Properties in Houston and Dallas which will, when completed, add 1,110 units to
the Company's portfolio. In addition to the Properties, the Company has one
site in Denver which it intends to develop. As a result of the Paragon
Acquisition, the Company also owns indirect minority ownership interests in
three commercial properties, which the Company does not manage. The Company is
vertically integrated, with operations that encompass multifamily property
acquisition, development, construction services, marketing, finance, leasing,
brokerage and asset management.
As a result of the Offering, the Company's ratio of debt-to-total-market-
capitalization (defined as the ratio of total consolidated debt to the current
market value of all the Common Shares (including Common Shares issuable upon
conversion of OP Units) plus total consolidated debt) will be reduced to
approximately 31.5%, compared to a ratio of 32.7% before the Paragon Acquisition
and a ratio as of June 24, 1997 of 38.0% (each such ratio based on the June 24,
1997 closing price for the Common Shares on the NYSE of $30 7/8 per share).
After giving effect to the Offering, the Company will have approximately $114
million of availability under the Unsecured Credit Facility.
The Company has approximately 1,190 employees. The Company's principal
executive office is located at 3200 Southwest Freeway, Suite 1500, Houston,
Texas 77027 and its phone number is (713) 964-3555.
RECENT DEVELOPMENTS
THE PARAGON ACQUISITION
On April 15, 1997, the Company completed the Paragon Acquisition, which was
valued at approximately $620 million and increased the size of the Company's
portfolio from 53 to 110 multifamily properties and from 19,389 to 35,364 units.
In the Paragon Acquisition, each outstanding share of common stock of Paragon
was converted into the right to receive 0.64 Common Shares of the Company and a
total of 9,466,346 Common Shares were issued by the Company (not including
2,352,161 Common Shares issuable in the future upon conversion of OP Units). As
a result of the Paragon Acquisition, the Company owns and operates its portfolio
in part directly and in part through the Operating Partnership (an umbrella
partnership). See "Properties -- Property Ownership Structure."
The Company believes that the Paragon Acquisition will have an accretive
effect on the Company's funds from operations per Common Share in the first year
following the Paragon Acquisition, as well as increase the Company's
capitalization and market equity. The Company's increased size as a result of
the Paragon Acquisition should result in greater liquidity for holders of Common
Shares. The Company believes that institutional investors prefer larger
capitalization companies when making investment decisions, due to greater
liquidity which allows the purchase and sale of larger volumes of securities
such as the Common Shares without disrupting the market for such securities.
The Company believes that the Paragon Acquisition represents the
acquisition of a solid portfolio of multifamily properties in strong markets at
a favorable yield and also provides the Company with opportunities to improve
the operating performance of the acquired assets through operating efficiencies,
implementation of renovation programs and enhancement of marketing efforts. The
Paragon Acquisition also provided a unique opportunity for geographic expansion
into attractive growth-oriented markets in the Southeast and Midwest, resulting
in increased strength and predictability of the Company's cash flows.
Geographic diversification reduces the vulnerability of the Company to economic
cycles in any particular region.
Management believes that the Paragon Acquisition also provided the Company
with several operational and financial benefits, including but not limited to,
elimination of several redundant positions and activities, the integration of
office facilities, information systems, and public company expenses, and the
realization of economics of scale by
S-10
<PAGE>
spreading costs over a large number of units, thereby improving the Company's
profit margins. The Company believes that it will be able to achieve savings in
operating costs and general and administrative expenses of approximately $6.0
million in the first 12 months after the Paragon Acquisition.
Due to the benefits of increased size, scope and diversification,
management believes that the Company is in a better position to receive a
potential upgrade from credit rating agencies which could result in a lower
relative cost of debt.
ISSUANCE OF RESET NOTES
On May 9, 1997, the Company completed the offering of the Reset Notes in an
aggregate principal amount of $75 million. The interest rate on the Reset Notes
will be reset quarterly during the one-year period ending May 11, 1998 and will
be the 90-day LIBOR plus 0.32% during such period. The interest rate on the
Reset Notes as of June 24, 1997 was 6.10% per annum. After the initial one-year
period, interest on the Reset Notes will be as agreed periodically between the
Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, acting as
remarketing underwriter, pursuant to the terms of the Reset Notes and a related
remarketing agreement and may be reset to either fixed or floating rates. The
Reset Notes are redeemable after May 11, 1998 at the option of the Company, in
whole or in part, at 100% of the principal amount. The net proceeds of
approximately $74.8 million from the sale of the Reset Notes were used to reduce
indebtedness outstanding under the Unsecured Credit Facility, most of which had
been drawn to reduce secured debt assumed in the Paragon Acquisition.
ISSUANCE OF MEDIUM TERM NOTES
On June 20, 1997, the Company issued $25 million principal amount of 7.17%
notes due June 21, 2004 from its $196 million Medium Term Notes program. The net
proceeds of approximately $24.9 million were used to reduce indebtedness
outstanding under the Unsecured Credit Facility, portions of which were drawn to
fund development activities.
PROPERTY ACQUISITIONS
In June 1997, the Company purchased for $3.9 million a 96-unit apartment
property located in Tampa, Florida, adjacent to a property acquired in the
Paragon Acquisition. The Company is currently in negotiations to acquire other
properties consistent with its pursuit of acquisitions in the ordinary course of
its business. There is no assurance that any of these pending acquisitions will
result in definitive contracts or completed acquisitions.
DEVELOPMENT ACTIVITY
During 1997, the Company completed two of the Lease-Up Properties
containing 668 units, which represent a total investment of $35.3 million.
These properties are currently in the lease-up phase and are expected to be
stabilized during the third and fourth quarters of 1997. The Company acquired
the remaining three Lease-Up Properties in the Paragon Acquisition. These
properties represent a total investment of $44.0 million in 856 units and are
expected to be stabilized in the fourth quarter of 1997. The Development
Properties in Houston and Dallas, when completed, will add 1,110 units and
represent a total projected investment of $64.1 million. Completion and
stabilization of the Development Properties are expected to be achieved during
1998. There can be no assurance that the Company's expectations with respect to
completion and stabilization will be realized. See "Risk Factors." The
following table lists certain information regarding the Lease-Up Properties and
the Development Properties:
S-11
<PAGE>
<TABLE>
<CAPTION>
Number Estimated Cost % Leased Date of Estimated
Property/Location of Units (millions) at 6/26/97 Completion Stabilization
----------------- --------- -------------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lease-Up Properties
Sugar Grove 380 $19.3 88% 1Q97 3Q97
Houston, TX
Arrowhead Springs 288 16.0 73 1Q97 4Q97
Phoenix, AZ
Park Commons/(1)/ 232 11.3 56 2Q97 4Q97
Charlotte, NC
Brassfield Park/(1)/ 336 17.1 72 2Q97 4Q97
Greensboro, NC
Camden Passage
Phase II /(1)/ 288 15.6 75 2Q97 4Q97
Kansas City, MO
------- -------
Total 1,524 $79.3
Development Properties
Buckingham 464 $25.5 11 1Q98 /(2)/ 3Q98
Dallas, TX
Centre Port 268 14.0 0 1Q98 /(2)/ 3Q98
Dallas, TX
Vanderbilt Phase II 378 24.6 32 1Q98 /(2)/ 3Q98
Houston, TX
-------- -------
Total 1,110 $64.1
- ----------------------
</TABLE>
(1) Acquired in Paragon Acquisition.
(2) Estimated date of completion.
The Company is in negotiations to acquire additional development sites in
various cities for a potential total investment of up to $150 million in new
development. Construction on these sites is expected to commence during the
next six to twelve months. There can be no assurance that any of these
negotiations will result in definitive contracts or that all required pre-
construction permits can be obtained.
INCREASED DISTRIBUTIONS
As a result of the Company's improved operating performance, in March 1997
the Company announced a 3.2% increase in its regular quarterly distribution,
commencing with the Company's distribution with respect to the first quarter of
1997, from $0.475 per Common Share to $0.49 per Common Share (equivalent to
$1.96 per Common Share on an annualized basis). The first quarter dividend was
paid on April 17, 1997. This represents the fourth consecutive annual increase
since becoming a public company in 1993. The Company expects to continue to
increase the dividend annually at a rate less than its estimated rate of growth
in funds from operations per share.
S-12
<PAGE>
PROPERTIES
GENERAL
The Operating Properties typically consist of two- and three-story buildings
in a landscaped setting. The Operating Properties' units average 792 square
feet of living area and provide residents with a variety of amenities. Most of
the Operating Properties have one or more swimming pools and a clubhouse and
many have whirlpool spas, tennis courts and controlled access gates. Many of
the units offer additional features such as fireplaces, vaulted ceilings,
microwave ovens, covered parking, icemakers, washers and dryers and ceiling
fans.
No single Stabilized Property accounts for greater than 5% of the Company's
total revenues. The Stabilized Properties had a weighted average occupancy rate
of 94.3% at June 26, 1997. Resident leases are generally for six-month to
thirteen-month terms and require security deposits. Ninety-four of the
Stabilized Properties have in excess of 200 units, with the largest having 804
units. Twenty-one of the Stabilized Properties were placed in service in the 10
years since 1988, 67 were placed in service between 1978 and 1987 and 14 were
placed in service before 1978. The Company currently has five Lease-Up
Properties and three Development Properties.
The Company's multifamily property portfolio at December 31, 1996 and June
26, 1997, after giving effect to the Paragon Acquisition, is summarized as
follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1996 JUNE 26, 1997
-------------------------------- -------------------------------
NUMBER NUMNBER OF NUMBER NUMBER OF
OF UNITS PROPERTIES %/(1)/ OF UNITS PROPERTIES %/(1)/
-------- ---------- ------- -------- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
LOCATION
Texas
Houston 7,745 20 40% 7,745 20 22%
Dallas 6,777 18 35 9,381 26 27
Austin 1,745 6 9 1,745 6 5
Other 1,585 5 8 1,585 5 4
------ -- ----- ------ --- ----
Total Texas Properties 17,852 49 92 20,456 57 58
Arizona 1,537 4 8 1,537 4 4
Florida/(2)/ - - - 6,007 21 17
Kentucky - - - 1,142 5 3
Missouri - - - 3,487 13 10
North Carolina - - - 2,735 10 8
------ -- ----- ------ --- ----
Total Properties 19,389 53 100% 35,364 110 100%
</TABLE>
____________________________________
(1) Based on units.
(2) Does not include a 96-unit multifamily property in Tampa, Florida
purchased on June 27, 1997.
PRINCIPAL MARKETS
The Company's current business is focused on the acquisition and development
of multifamily properties located in the Southwest, Southeast and Midwest
regions of the United States which have one or more of the following
characteristics: (i) a history of poor management, are in need of rehabilitation
and/or are experiencing occupancy and financial problems, (ii) owners who are
experiencing significant financial difficulties which adversely affect their
ability to own and operate the property, (iii) a location in regions where
geographic factors or governmental policies restrict or reduce competition, (iv)
a location in previously depressed regions that are showing signs of economic
growth, and (v) institutional owners who may be predisposed to sell properties
at lower valuation levels.
S-13
<PAGE>
The following table shows historical market-wide average occupancy rates and
average market rents for multifamily properties in markets in which the Company
owns more than 1,500 units:
<TABLE>
<CAPTION>
Market Data for Primary Markets
-------------------------------
Fourth Quarter 1994 Fourth Quarter 1995 Fourth Quarter 1996
------------------------- ------------------------------- --------------------
Avg. Avg. Avg. Avg. % Change Avg. Avg. % Change
Occupancy Rent in Occupancy Rent in in Avg. Occupancy Rent in in Avg.
Market in Market Market in Market Market Rent in Market Market Rent
- ------ ---------- --------- ----------- -------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dallas, TX 95.0% $521 95.7% $544 4.4% 94.9% $606 11.4%
Houston, TX 91.5 475 93.9 500 5.3 93.8 517 3.4
Tampa, FL 94.0 586 92.4 618 5.5 93.8 605 (2.1)
St. Louis, MO 94.0 564 94.2 580 2.8 92.3 557 (4.0)
Orlando, FL 91.0 570 95.0 589 3.3 94.5 625 6.1
Charlotte, NC 94.6 557 93.3 606 8.8 92.8 627 3.5
Austin, TX 96.1 587 95.5 600 2.2 91.9 602 0.3
</TABLE>
____________________
Source: M/PF Research, Inc. 1996 U.S. Apartment Market Report.
PROPERTY OWNERSHIP STRUCTURE
Before the Paragon Acquisition, the Company owned all of its assets directly
or through wholly-owned subsidiaries. Paragon had conducted substantially all
of its business, however, through an operating partnership structure. As a
result of the Paragon Acquisition, the Company now owns 45.2% of its assets
through the Operating Partnership, which the Company controls through a wholly-
owned subsidiary which serves as the general partner (owning 1% of the Operating
Partnership) (the "General Partner") and by the ownership of 79.1% of the OP
Units. The other holders of OP Units include entities controlled by former
Paragon executive officers and other prior owners of interests in properties or
assets owned by Paragon. The OP Units are redeemable for cash or, at the
election of the Company, Common Shares on the basis of one OP Unit for one
Common Share. Holders of OP Units are not entitled to rights as shareholders of
the Company prior to redemption of their OP Units. No member of the Company's
management team owns OP Units, and only two of the seven Trust Managers of the
Company own OP Units (such Trust Managers being former Paragon directors).
Accordingly, management of the Company believes that potential conflicts of
interest associated with the Operating Partnership are minimal.
Generally, all management powers over the business and affairs of the
Operating Partnership are exclusively vested in the General Partner, and
consequently, the exercise of such powers is controlled by the Company without
the consent of holders of OP Units, subject to certain limitations. The General
Partner may engage in certain transactions with the Company or affiliates of the
Company on behalf of the Operating Partnership, such as the sale or purchase of
property or the borrowing or lending of funds, as long as such transactions are
fair and reasonable to the Operating Partnership.
The General Partner has the power at any time to dissolve and liquidate the
Operating Partnership, and in connection therewith, to sell or otherwise dispose
of all or substantially all of the assets of the Operating Partnership with the
consent of holders of two-thirds or more of the OP Units (including OP Units
controlled by the Company). Since the Company currently controls 79.1% of the
OP Units, it would be able to control the outcome of such a vote. However, the
consent of holders of a majority of the OP Units (excluding OP Units controlled
by the Company) is required in connection with a sale of all or substantially
all of the assets, other than pursuant to the liquidation of the Operating
Partnership, or a merger in which the holders of OP Units do not receive the
same consideration as shareholders of the Company.
S-14
<PAGE>
USE OF PROCEEDS
The net cash proceeds from the Offering, after deduction of underwriting
discounts and commissions and the estimated expenses of the Offering, are
estimated to be approximately $ million (approximately $
million if the Underwriters' over-allotment option is exercised in full). See
"Underwriting." The Company intends to apply such net proceeds as follows: (i)
approximately $66.0 million to repay secured indebtedness assumed in the Paragon
Acquisition, which bears interest at 8.36% per annum (the "Secured
Indebtedness"); and (ii) the balance to repay amounts drawn under the Unsecured
Credit Facility to fund the Lease-Up Properties completed in the first quarter
of 1997.
The Secured Indebtedness matures in July 2000. A $4 million prepayment
penalty must be paid in connection with the prepayment of the Secured
Indebtedness. The Unsecured Credit Facility matures in July 2000 and bears
interest at varying spreads over LIBOR. The Company will, in the ordinary
course of business, borrow under the Unsecured Credit Facility to fund
acquisition and development costs and satisfy general working capital
requirements, but does not intend to use secured debt for new borrowings in the
future. No prepayment penalties are required in connection with the repayment
of the Unsecured Credit Facility.
PRICE RANGE OF COMMON SHARES AND DISTRIBUTIONS
The Common Shares have been listed on the NYSE under the symbol CPT since
1993. The following table sets forth for the periods indicated, the high and
low closing sale prices of the Common Shares as reported on the NYSE Composite
Tape and the distribution paid or payable by the Company:
Price Range of
Common Shares Distribution
--------------- Paid/Payable
High Low Per Share
---- --- -------------
1997:
2nd Quarter...................... $31 1/8/(1)/ $26 5/8/(1)/ $0.490
1st Quarter...................... 28 1/2 27 0.490
1996:
4th Quarter...................... 29 1/4 25 5/8 0.475
3rd Quarter...................... 26 1/2 22 3/4 0.475
2nd Quarter...................... 25 21 3/4 0.475
1st Quarter...................... 24 3/4 22 3/4 0.475
1995:
4th Quarter...................... 24 20 1/8 0.460
3rd Quarter...................... 23 1/4 20 7/8 0.460
2nd Quarter...................... 23 5/8 20 1/4 0.460
1st Quarter...................... 25 20 3/4 0.460
__________________
(1) Through June 24, 1997.
The Company has paid quarterly distributions to its shareholders continuously
since 1993, its first year of operation as a public company, and has increased
its distributions four times during such period. The current annualized
distribution is $1.96 per Common Share. The Company's current policy is to
review the distributions in February of each year, increasing the dividend at a
rate which is less than the projected rate of growth in funds from operations
per share for the coming year. The amount of such distributions will not be
less than such amounts as may be necessary to continue the Company's
qualification as a REIT under the Code. The quarterly distribution of $0.49 per
share for the second quarter of 1997 is to be paid on July 17, 1997, to
shareholders of record as of the close of business on June 30, 1997. Purchasers
of the Common Shares offered hereby will not participate in this distribution.
S-15
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company at March 31,
1997, on a historical basis and as adjusted to reflect: (i) the issuance of 9.5
million Common Shares and 2.4 million OP Units at a price of $27.75 per share in
connection with the Paragon Acquisition; (ii) the assumption of $249.6 million
of secured debt and retirement of a $42.7 secured line of credit in connection
with the Paragon Acquisition; (iii) the issuance of $75 million of Reset Notes
and $25 million of unsecured seven year notes used to retire the Unsecured
Credit Facility, most of which had been drawn to reduce secured debt assumed in
the Paragon Acquisition and to fund development activities; and (iv) the
conversion into Common Shares of $14.4 million principal amount of the Company's
7.33% Convertible Subordinated Debentures, all subsequent to March 31, 1997.
These amounts are further adjusted to reflect the sale by the Company of the
Common Shares in the Offering, and the application of the assumed net proceeds
from the Offering. See "Use of Proceeds."
<TABLE>
<CAPTION>
MARCH 31, 1997
-------------------------------------------------------------------
CAMDEN
PROPERTY AS AS FURTHER
TRUST ADJUSTMENT ADJUSTED ADJUSTED
---------- ---------- ---------- ----------
(In thousands)
<S> <C> <C> <C> <C>
Notes Payable:
Unsecured credit facility and short term notes $ 53,000 $ (8,104 ) $ 44,896 $ 16,946
Mortgage notes.................................. 37,946 200,850 238,796 173,086
Senior unsecured notes.......................... 173,834 100,000 273,834 273,834
-------- ------- ---------- ----------
Total notes payable......................... 264,780 292,746 557,526 463,866
-------- ------- ---------- ----------
7.33% Convertible Subordinated Debentures............. 21,922 (14,422) 7,500 7,500
Minority Interests -- 65,268 65,268 65,268
Shareholders' Equity:
Preferred Shares, $0.01 par value; 10,000 authorized;
no Preferred Shares issued and outstanding........... -- -- -- --
Common Shares, $0.01 par value; 100,000 authorized
16,876 issued and outstanding............... 169 101 270 302
Additional paid-in capital...................... 357,033 276,592 633,625 727,253
Distributions in excess of net income........... (53,597) -- (53,597) (53,597)
Unearned restricted share awards................ (5,990) -- (5,990) (5,990)
-------- ------- ---------- ----------
Total shareholders' equity.............. 297,615 276,693 574,308 667,968
-------- ------- ---------- ----------
Total capitalization........................ $584,317 $ 620,285 $ 1,204,602 $ 1,204,602
======== ======= ========== ==========
</TABLE>
S-16
<PAGE>
SELECTED FINANCIAL DATA
The following tables set forth the summary historical financial data for
the Company and the unaudited pro forma combined financial data for the Company
and Paragon as a combined entity, giving effect to the Paragon Acquisition as if
it had occurred on the dates indicated herein, after giving effect to the pro
forma adjustments and further adjustments described in the notes to the
unaudited pro forma combined financial statements appearing in the Company's
Form 8-K dated April 15, 1997, as amended by the Form 8-K/A on June 16, 1997,
which is incorporated herein by reference (the "Paragon Form 8-K"), as well as
additional adjustments to reflect (i) the conversion of the Company's 7.33%
Convertible Subordinated Debentures into Common Shares subsequent to December
31, 1996 and through May 25, 1997, and (ii) the issuance of the $75 million of
Reset Notes. The unaudited pro forma combined financial data do not reflect any
adjustments for (i) this Offering or (ii) the issuance of $25 million of
unsecured seven year notes. The summary historical operating, balance sheet and
cash flow data for each of the years ended December 31, 1994, 1995 and 1996 are
derived from the audited financial statements of the Company as reported in its
Annual Reports on Form 10-K.
The unaudited pro forma combined operating and other data are presented as if
the Paragon Acquisition had occurred on January 1, 1996. The unaudited pro
forma combined balance sheet data at December 31, 1996 is presented as if the
Paragon Acquisition had occurred on December 31, 1996. In the opinion of
management, all adjustments necessary to reflect the effects of these
transactions have been made. The Paragon Acquisition has been accounted for
under the purchase method of accounting in accordance with Accounting Principles
Board Opinion No. 16.
The pro forma financial information should be read in conjunction with, and is
qualified in its entirety by, the respective historical audited financial
statements and notes thereto of the Company and Paragon incorporated by
reference into this Prospectus Supplement and the unaudited pro forma financial
statements and notes thereto appearing in the Paragon Form 8-K.
The unaudited pro forma combined operating and other data are presented for
comparative purposes only and are not necessarily indicative of what the actual
combined results of operations of the Company and Paragon would have been for
the year ended December 31, 1996 if the Paragon Acquisition and other
adjustments had occurred on January 1, 1996, nor does such data purport to
represent the results of future periods. The unaudited pro forma combined
balance sheet data is presented for comparative purposes only and is not
necessarily indicative of what the actual combined financial position of the
Company and Paragon would have been at December 31, 1996, nor does it purport to
represent the future combined financial position of the Company and Paragon.
S-17
<PAGE>
<TABLE>
<CAPTION>
CAMDEN PROPERTY TRUST
-----------------------------------------------------
PRO FORMA
YEAR ENDED
DECEMBER 31, YEARS ENDED DECEMBER 31,
1996 -----------------------------------
(UNAUDITED) 1996 1995 1994
---------------- ----------- ----------- ---------
(In thousands, except per share and property data amounts)
<S> <C> <C> <C> <C>
OPERATING DATA:
Revenues:
Rental income $ 196,822 $ 105,785 $ 92,275 $ 71,468
Other income 14,758 5,821 4,999 3,988
---------- --------- --------- --------
Total revenues 211,580 111,606 97,274 75,456
Expenses:
Property operating and maintenance 79,981 40,604 37,093 29,352
Real estate taxes 21,548 13,192 11,481 8,962
General and administrative 8,466 2,631 2,263 2,574
Interest 36,570 17,336 13,843 8,807
Depreciation and amortization 45,910 23,894 20,264 16,239
Minority interest in consolidated
partnerships 106
---------- --------- --------- --------
Total expenses 192,581 97,657 84,944 65,934
---------- --------- --------- --------
Income before gain on sales of proerties
and business, extinguishment of hedges
upon debt refinancing and minority
interest 18,999 13,949 12,330 9,522
Gain on sales of properties and business 22,097 115
Extinguishment of hedges upon debt
refinancing (5,351) (5,351)
---------- --------- --------- --------
Income before minority interest 35,745
Minority interest of unitholders in
Operating Partnership (5,851)
Net income $ 29,894 $ 8,713 $ 12,330 $ 9,522
Preferred share dividends (4) (4) (39) (20)
---------- --------- --------- --------
Net income to common shareholders $ 29,890 $ 8,709 $ 12,291 $ 9,502
========== ========= ========= ========
Net income per common and common
equivalent share $ 1.18 $ 0.58 $ 0.85 $ 0.77
Distributions per common share $ 1.90 $ 1.90 $ 1.84 $ 1.76
Weighted average number of common
and common equivalent shares
outstanding 25,246 14,940 14,424 12,311
BALANCE SHEET DATA (AT END OF PERIOD):
Real estate assets $ 1,291,492 $ 646,545 $ 607,598 $ 510,324
Accumulated depreciation (56,369) (56,369) (36,800) (17,731)
Total assets 1,267,577 603,510 582,352 504,284
Notes payable 562,204 244,182 235,459 149,547
Series A preferred shares 1,950 1,950
Shareholders'/partners' equity 572,797 295,428 267,829 277,604
Common shares outstanding 26,827 16,521 14,514 14,273
</TABLE>
S-18
<PAGE>
<TABLE>
<CAPTION>
CAMDEN PROPERTY TRUST
-----------------------------------------------------
PRO FORMA
YEAR ENDED
DECEMBER 31, YEARS ENDED DECEMBER 31,
1996 -----------------------------------
(UNAUDITED) 1996 1995 1994
---------------- ----------- ----------- ---------
(In thousands, except per share and property data amounts)
<S> <C> <C> <C> <C>
OTHER DATA:
Cash flows provided by (used in):
Operating activities N/A $ 41,267 $ 37,594 $ 33,560
Investing activities N/A (41,697) (97,003) (198,087)
Financing activities N/A 2,560 59,404 159,388
Funds from operations(1) N/A 36,895 31,629 25,741
Funds from operations assuming N/A 39,999 35,260 28,604
conversions of convertible securities(1)
PROPERTY DATA:
Number of operating properties
(at end of period) 105 48 50 48
Number of operating units
(at end of period) 33,565 17,611 16,742 15,783
Number of operating units
(weighted average) 32,968 17,362 16,412 13,694
Weighted average monthly revenue per unit $ 535 $ 536 $ 494 $ 459
Properties under development
(at end of period) 9 6 9 8
</TABLE>
______________________
(1) Funds from operations ("FFO") is considered an appropriate measure of the
performance of an equity REIT. FFO, as currently defined by the National
Association of Real Estate Investment Trusts ("NAREIT"), represents net income
(computed in accordance with generally accepted accounting principles ("GAAP")),
excluding gains (or loss) from debt restructuring and sales of property, plus
real estate depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. In addition, extraordinary or
unusual items, along with significant non-recurring events that materially
distort the comparative measure of FFO, should be disregarded in its
calculation. Prior to March 1995, the NAREIT definition of FFO required the add
back of non-real estate depreciation and amortization, such as loan cost
amortization. The Company has historically reported FFO according to the
definitions prescribed by NAREIT. FFO does not represent cash flows from
operating activities as defined by GAAP and should not be considered as an
alternative to net income as an indicator of the Company's operating
performance. FFO is not a measure of liquidity, nor is it indicative of cash
available to fund other cash flow needs, including principal amortization,
capital improvements and distributions to shareholders. Further, FFO as
disclosed by other REITs may not be comparable to the Company's calculation of
FFO.
S-19
<PAGE>
MANAGEMENT
The Company's executive management team has not significantly changed since
the Paragon Acquisition. No former Paragon director or employee presently
serves as an executive officer of the Company, while two former directors of
Paragon now serve as Trust Managers of the Company. The following table and
biographical information set forth certain information concerning the officers
and Trust Managers of the Company:
<TABLE>
<CAPTION>
Name Age Position Trust Manager/Officer Since
- ---------------- ---- -------- ---------------------------
<S> <C> <C> <C>
Richard J. Campo 42 Chairman of the Board of Trust May 1993
Managers and Chief Executive Officer
D. Keith Oden 40 President, Chief Operating May 1993
Officer and Trust Manager
William R. Cooper 60 Trust Manager April 1997
George A. Hrdlicka 65 Trust Manager October 1993
Lewis A. Levey 55 Trust Manager April 1997
F. Gardner Parker 55 Trust Manager July 1993
Steven A. Webster 45 Trust Manager July 1993
Michael W. Biggs 46 Senior Vice President - Asset May 1993
Management
G. Steven Dawson 39 Senior Vice President - Finance, May 1993
Chief Financial Officer, Treasurer
and Assistant Secretary
Alison L. Dimick 34 Senior Vice President - April 1997
Acquisitions and Dispositions
James M. Hinton 40 Senior Vice President - Development December 1993
Elizabeth Pringle 39 Senior Vice President - General May 1993
Johnson Counsel, Secretary and Assistant
Treasurer
H. Malcolm Stewart 45 Senior Vice President - December 1993
Construction
</TABLE>
Richard J. Campo has been the Chairman of the Board of Trust Managers and
Chief Executive Officer of the Company since it was formed in May 1993. From
June 1993 through December 1993, Mr. Campo also was the President of the
Company. Mr. Campo co-founded the Centeq group of companies ("Centeq") and its
predecessor entities in 1982 and has been continuously involved as a principal
executive officer and director of Centeq and its predecessors since 1982.
D. Keith Oden has been the President and Chief Operating Officer of the
Company since December 1993. From July 1993 through December 1993, Mr. Oden was
a consultant to the Company. Mr. Oden co-founded Centeq and its predecessor
entities in 1982 and has been continuously involved as a principal executive
officer and director of Centeq and its predecessors since 1982.
S-20
<PAGE>
William R. Cooper is currently a private investor who prior to April 1997
had served for 30 years in a variety of capacities with Paragon or its
predecessor. Most recently, Mr. Cooper served as Chairman of the Board of
Directors and Chief Executive Officer of Paragon and Paragon Group Holdings,
Inc. Mr. Cooper is a member of the Board of Directors for the Advisory Board of
the Society of Industrial and Office Realtors, the Presbyterian Healthcare
System and the National Realty Committee.
George A. Hrdlicka is a founding partner of the law firm of Chamberlain
Hrdlicka White Williams & Martin and has been primarily involved in the practice
of tax law since 1965. He is a regular lecturer on tax subjects at institutes
and seminars around the country and is Board Certified as a tax lawyer by the
Texas Board of Legal Specialization. He currently serves as a member of the
Texas Board of Legal Specialization staff.
Lewis A. Levey is currently a private investor who prior to April 1997 had
served for 26 years in a variety of capacities with Paragon or its predecessor
entity. Most recently, Mr. Levey served as Vice Chairman of the Board of
Directors and as a director of Paragon and Paragon G.P. Holdings, Inc. Mr.
Levey is currently a member of the Board of Directors of the National Multi-
Housing Council, and a Council member of the Urban Land Institute.
F. Gardner Parker is a private investor and has been involved in
structuring private and venture capital investments for the past twelve years.
Mr. Parker was with Ernst & Young from 1970 to 1984 and was a partner with the
firm from 1977 to 1984. Mr. Parker is Chairman of the Board of three privately
held companies and is a director of three additional privately held companies.
Steven A. Webster currently serves as Chairman and Chief Executive Officer
of Falcon Drilling Company, Inc., a publicly-held oil and gas drilling
contractor. Mr. Webster also serves as managing general partner of a group of
affiliated venture capital investment partnerships. Mr. Webster is a director
of Crown Resources Corporation, a precious metals mining concern, and DI
Industries, Inc., an onshore drilling contractor, both of which are publicly
held.
Michael W. Biggs has been the Senior Vice President--Asset Management of
the Company since May 1993. Prior to the formation of the Company, from 1992 to
1993, Mr. Biggs was President of Centeq's property management division and
responsible for managing properties owned by Centeq. Prior thereto, Mr. Biggs
was Vice President of The Dickson Group (a real estate property management
company) from 1989 to 1992.
G. Steven Dawson has been the Senior Vice President--Finance, Chief
Financial Officer and Treasurer of the Company since May 1993 and Assistant
Secretary of the Company since December 1993. Prior to the formation of the
Company, from 1990 to 1993, Mr. Dawson was Senior Vice President--Finance and
Chief Financial Officer of Centeq.
Alison L. Dimick joined the Company in April 1997 as Senior Vice President-
- -Acquisitions & Dispositions. Prior to joining the Company, Ms. Dimick was Vice
President of Acquisitions for MIG Realty Advisors, a pension fund advisor
specializing in multifamily properties. From 1986 to 1991, she served in a
variety of capacities with Grubb & Ellis Realty Advisors, most recently as Vice
President of Portfolio Management.
James M. Hinton has been the Senior Vice President--Development of the
Company since June 1996. Mr. Hinton was Vice President of Development for Camden
Development, Inc. from December 1993 to May 1996. Prior thereto, Mr. Hinton was
the National Multifamily Asset Manager for J.E. Robert Company from February
1991 to November 1993.
Elizabeth Pringle Johnson has been the Senior Vice President--General
Counsel and Secretary of the Company since May 1993 and Assistant Treasurer
since December 1993. Prior to the formation of the Company, Ms. Johnson was
General Counsel to Centeq from 1992 to 1993. Prior thereto, Ms. Johnson was a
shareholder in the law firm of Winstead Sechrest & Minick P.C. from 1991 to
1992.
H. Malcolm Stewart has been the Senior Vice President--Construction since
December 1993. Mr. Stewart was the President of Centeq's construction division
from 1989 to December 1993.
S-21
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of the material federal income tax
considerations to the Company based on current law and is for general
information only. The following discussion is not exhaustive of all possible
tax considerations and is not tax advice. Moreover, this summary does not deal
with all tax aspects that might be relevant to a particular prospective holder
of Common Shares in light of its individual investment or tax circumstances; nor
does it deal with particular types of holders that are subject to special
treatment under the Code, such as insurance companies, financial institutions
and broker-dealers. The Code provisions governing the federal income tax
treatment of REITs are highly technical and complex, and this summary is
qualified in its entirety by the applicable Code provisions, rules and
regulations promulgated thereunder, and administrative and judicial
interpretations thereof.
EACH PROSPECTIVE PURCHASER IS URGED TO CONSULT HIS OR HER OWN TAX ADVISOR
WITH RESPECT TO SUCH PURCHASER'S SPECIFIC FEDERAL, STATE, LOCAL, FOREIGN AND
OTHER TAX CONSEQUENCES OF THE PURCHASE, HOLDING AND SALE OF COMMON SHARES AND OF
POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
The Company has elected to be taxed as a REIT under the Code. The Company
believes that is has been organized, has operated and will operate in such a
manner as to qualify for taxation as a REIT under the Code. No assurance can be
given, however, that such requirements will be met in the future.
FEDERAL INCOME TAXATION OF THE COMPANY
If and as long as the Company qualifies for taxation as a REIT, it
generally will not be subject to federal corporate income taxes on that portion
of its ordinary income or capital gain that is currently distributed to
shareholders. The REIT provisions of the Code generally allow a REIT to deduct
dividends paid to its shareholders. This deduction for dividends paid to
shareholders substantially eliminates the federal "double taxation" on earnings
(once at the corporate level and once again at the shareholder level) that
usually results from investments in a corporation.
Even if the Company qualifies for taxation as a REIT, the Company will be
subject to federal income tax, however, as follows:
First, the Company will be taxed at regular corporate rates on its
undistributed REIT taxable income, including undistributed net capital
gains.
Second, under certain circumstances, the Company may be subject to the
"alternative minimum tax" as a consequence of its items of tax preference
to the extent that such tax exceeds its regular tax.
Third, if the Company has net income from the sale or other
disposition of "foreclosure property" that is held primarily for sale to
customers in the ordinary course of business or other non-qualifying income
from foreclosure property, it will be subject to tax at the highest
corporate rate on such income.
Fourth, if the Company has net income from prohibited transactions
(which are, in general, certain sales or other dispositions of property
held primarily for sale to customers in the ordinary course of business,
but excluding foreclosure property), such income will be subject to a 100%
tax.
Fifth, if the Company should fail to satisfy certain gross income
tests, but has nonetheless maintained its qualification as a REIT because
certain other requirements had been met, it will be subject to a 100% tax
on the net income attributable to the greater of the amount by which the
Company fails such tests, multiplied by a fraction intended to reflect the
Company's profitability.
Sixth, if the Company fails to distribute during each year at least
the sum of (i) 85% of its REIT ordinary income for such year, (ii) 95% of
its REIT capital gain net income for such year and (iii) any undistributed
taxable income from prior periods, the Company will be subject to a 4%
excise tax on the excess of such required distributions over the
distributed amount.
S-22
<PAGE>
Seventh, if the Company should acquire any asset from a C corporation
(i.e., a corporation subject to full corporate-level tax) in a carryover-
basis transaction and the Company subsequently recognizes gain on the
disposition of such asset during the ten-year period (the "Recognition
Period") beginning on the date on which the asset was acquired by the
Company, then the excess of (a) the fair market value of the asset as of
the beginning of the applicable Recognition Period over (b) the Company's
adjusted basis in such asset as of the beginning of such Recognition Period
will be subject to tax at the highest regular corporate rate, pursuant to
guidelines issued by the IRS.
FAILURE TO QUALIFY
If the Company fails to qualify for taxation as a REIT in any taxable year
and certain relief provisions do not apply, the Company will be subject to tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates. Distributions to shareholders in any year in which the
Company fails to qualify as a REIT will not be deductible by the Company nor
will they be required to be made. In such event, to the extent of current and
accumulated earnings and profits, all distributions to shareholders will be
dividends, taxable as ordinary income, and subject to certain limitations of the
Code, corporate distributees may be eligible for the dividends-received
deduction. Unless the Company is entitled to relief under specific statutory
provisions, the Company also will be disqualified from taxation as a REIT for
the four taxable years following the year during which qualification was lost.
It is not possible to state whether in all circumstances the Company would be
entitled to such statutory relief. For example, if the Company fails to satisfy
the gross income tests because nonqualifying income that the Company
intentionally incurs exceeds the limit on such income, the IRS could conclude
that the Company's failure to satisfy the tests was not due to reasonable cause.
UNDERWRITING
Subject to the terms and conditions of an Underwriting Agreement, dated
July , 1997 (the "Underwriting Agreement"), Donaldson, Lufkin & Jenrette
Securities Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated
have severally agreed to purchase from the Company the respective number of
Common Shares set forth opposite their names below:
Number of
Underwriters Common Shares
- ------------ -------------
Donaldson, Lufkin & Jenrette Securities Corporation...........
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................
-----------
TOTAL 3,200,000
===========
The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase and accept delivery of the Common Shares offered hereby
are subject to approval by their counsel of certain legal matters and to certain
other conditions. The Underwriters are obligated to purchase and accept
delivery of all the Common Shares offered hereby (other than those Common Shares
covered by the over-allotment option described below) if any are purchased.
The Underwriters initially propose to offer the Common Shares in part
directly to the public at the public offering price set forth on the cover page
of this Prospectus Supplement and in part to certain dealers (including the
Underwriters) at such price less a concession not in excess of $ per
share. The Underwriters may allow, and such dealers may re-allow, to certain
other dealers a concession not in excess of $ per share.
The Company granted to the Underwriters an option exercisable within 30
days after the date of this Prospectus Supplement to purchase, from time to
time, in whole or in part, up to an aggregate of 480,000 additional Common
Shares at the public offering price less underwriting discounts and commissions.
The Underwriters may exercise such option solely to cover over-allotments, if
any, made in connection with the Offering. To the extent that the Underwriters
S-23
<PAGE>
exercise such option, each Underwriter will become obligated, subject to certain
conditions, to purchase their pro rata portion of such additional Common Shares
based on such Underwriter's percentage underwriting commitment as indicated in
the preceding table.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Underwriters may be required to make in respect thereof.
Each of the Company, its executive officers and its Trust Managers has
agreed, subject to certain exceptions, not to (i) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any Common Shares or OP Units or
any securities convertible into or exercisable or exchangeable for Common Shares
or OP Units or (ii) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
Common Shares or OP Units (regardless of whether any of the transactions
described in clause (i) or (ii) is to be settled by the delivery of Common
Shares or OP Units, or such other securities, in cash or otherwise) for a period
of 90 days after the date of this Prospectus Supplement (with certain
exceptions) without the prior written consent of Donaldson, Lufkin & Jenrette
Securities Corporation. Additionally, during such period, the Company also has
agreed not to file any registration statement with respect to, and each of its
executive officers and Trust Managers has agreed not to make any demand for, or
exercise any right with respect to, the registration of any Common Shares or any
securities convertible into or exchangeable for Common Shares without the prior
written consent of Donaldson, Lufkin & Jenrette Securities Corporation.
Other than in the United States, no action has been taken by the Company or
the Underwriters that would permit a public offering of the Common Shares
offered hereby in any jurisdiction where action for that purpose is required.
The Common Shares offered hereby may not be offered or sold, directly or
indirectly, nor may this Prospectus Supplement or any other offering material or
advertisements in connection with the offer and sale of any such Common Shares
be distributed or published in any jurisdiction, except under circumstances that
will result in compliance with the applicable rules and regulations of such
jurisdiction. Persons into whose possession this Prospectus Supplement comes are
advised to inform themselves about and to observe any restrictions relating to
the Offering of the Common Shares and the distribution of this Prospectus
Supplement. This Prospectus Supplement does not constitute an offer to sell or a
solicitation of an offer to buy any Common Shares offered hereby in any
jurisdiction in which such an offer or a solicitation is unlawful.
In connection with the Offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Shares. Specifically, the Underwriters may over-allot the Offering,
creating a syndicate short position. Underwriters may bid for and purchase
Common Shares in the open market to cover such syndicate short positions and to
stabilize the price of the Common Shares. These activities may stabilize or
maintain the market price of the Common Shares above independent market levels.
The Underwriters are not required to engage in these activities, and may end any
of these activities at any time.
LEGAL MATTERS
Certain legal matters with respect to the Common Shares offered hereby will
be passed upon for the Company by Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.,
Dallas, Texas, and for the Underwriters by Goodwin, Procter & Hoar LLP, Boston,
Massachusetts.
EXPERTS
The consolidated financial statements and the related financial statement
schedule of the Company as of December 31, 1996 and 1995 and for each of the
three years in the period ended December 31, 1996 included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996 and incorporated
by reference in this Prospectus Supplement have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.
S-24
<PAGE>
The consolidated and combined financial statements and the related
financial statement schedule of Paragon for the years ended December 31, 1996,
1995, and 1994 as restated, included in the Paragon Form 8-K, and incorporated
by reference in this Prospectus Supplement have been audited by Ernst & Young
LLP, independent auditors, as stated in their reports which are incorporated
herein by reference, and have been so incorporated in reliance upon the reports
of such firm given upon their authority as experts in accounting and auditing.
S-25
<PAGE>
(This page intentionally left blank)
S-26
<PAGE>
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- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCOR-
PORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PRO-
SPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY THE SHARES BY ANYONE IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON
MAKING THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIV-
ERY OF THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS NOR ANY SALE MADE HEREUN-
DER OR THEREUNDER SHALL CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED
OR INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUB-
SEQUENT TO ITS DATE.
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT PAGE
<S> <C>
Summary.................................................................... S-3
Risk Factors............................................................... S-5
The Company................................................................ S-10
Recent Developments........................................................ S-10
Properties................................................................. S-13
Use of Proceeds............................................................ S-15
Price Range of Common Shares and Distributions............................. S-15
Capitalization............................................................. S-16
Selected Financial Data.................................................... S-17
Management................................................................. S-20
Certain Federal Income Tax Considerations.................................. S-22
Underwriting............................................................... S-23
Legal Matters.............................................................. S-24
Experts.................................................................... S-24
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by
Reference................................................................. 2
The Company................................................................ 3
Use of Proceeds............................................................ 4
Description of Common Shares............................................... 4
Description of Preferred Shares............................................ 6
Description of Securities Warrants......................................... 10
Description of Debt Securities............................................. 12
Ratio of Earnings to Fixed Charges......................................... 21
Plan of Distribution....................................................... 22
Legal Matters.............................................................. 23
Experts.................................................................... 23
</TABLE>
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3,200,000 SHARES
[LOGO OF CAMDEN PROPERTY TRUST APPEARS HERE]
COMMON SHARES
OF BENEFICIAL INTEREST
----------------
PROSPECTUS SUPPLEMENT
----------------
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.
, 1997
- -------------------------------------------------------------------------------
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