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

For the fiscal year ended December 31, 2007

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

For the transition period from                      to                     

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

Indicated 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 the 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 $3,449,575,611 based on a June 30, 2007 share price of $66.97.

On February 15, 2008, the number of outstanding common shares of the registrant’s was 52,693,750 (net of 12,828,468 treasury shares).

Portions of the registrant’s Proxy Statement in connection with its Annual Meeting of Shareholders to be held May 6, 2008 are incorporated by reference in Part III.

 

 

TABLE OF CONTENTS

		Page
PART I
Item 1. Business			1
Item 1A. Risk Factors			4
Item 1B. Unresolved Staff Comments			9
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			16
Item 6. Selected Financial Data			17
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			18
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			36
Item 8. Financial Statements and Supplementary Data			37
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			37
Item 9A. Controls and Procedures			37
Item 9B. Other Information			40
PART III
Item 10. Directors, Executive Officers and Corporate Governance			40
Item 11. Executive Compensation			40
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			40
Item 13. Certain Relationships and Related Transactions, and Director Independence			40
Item 14. Principal Accounting Fees and Services			40
PART IV
Item 15. Exhibits and Financial Statement Schedules			41
SIGNATURES			49
Exhibit 12.1
Exhibit 21.1
Exhibit 23.1
Exhibit 23.2
Exhibit 24.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 99.1
Exhibit 99.2
Exhibit 99.3
Exhibit 99.4
Exhibit 99.5
Exhibit 99.6
Exhibit 99.7
Exhibit 99.8
Exhibit 99.9
Exhibit 99.10
Exhibit 99.11
Exhibit 99.12
Exhibit 99.13
Exhibit 99.14

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. 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, NE., Washington, D.C. 20549. Please contact the SEC at 1-800-SEC-0330 for further information about the operation of the SEC’s Public Reference Room. The SEC also maintains a website at www.sec.gov which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Financial Information about Segments

We are 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, 2007, we owned interests in, operated or were developing 193 multifamily properties comprising 66,468 apartment homes located in 13 states. We had 3,383 apartment homes under development at 11 of our multifamily properties, including 1,257 apartment homes at four multifamily properties owned through joint ventures and several sites we intend to develop into multifamily apartment communities. Additionally, two properties comprised of 391 apartment homes were 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 produce consistent 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 opportunities in new markets which have healthy long-term fundamentals and strong growth projections. These capabilities, combined with what we believe is a conservative financial structure, allow us to concentrate our growth efforts toward selective opportunities to achieve our strategy of having a geographically and physically diverse portfolio of assets which meet the requirements of our residents.

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 consistent earnings growth, we intend to selectively dispose of properties and redeploy capital if we determine a property cannot meet long-term earnings growth expectations.

We believe we have a strong development pipeline, and we expect selective development of new apartment properties will continue to be important to the growth of our portfolio for the next several years. We use experienced on-site construction superintendents, operating under the supervision of project managers and senior management, to control the construction process. Risks inherent to developing real estate include zoning changes, environmental matters and changes in economic conditions during the development process. See further discussion of risks associated with development and construction in our “Risk Factors” section.

We typically make physical improvements at our acquired properties, such as new or enhanced landscaping design, new or upgraded amenities and redesigned building structures, which, coupled with a strong focus on property management, branding and marketing, have resulted in attractive yields on acquired properties.

Our expertise in development and redevelopment allow us to selectively acquire apartment communities. In the fourth quarter of 2007, we had the first closing of our discretionary investment vehicle, which during its investment period (ending no later than December 2011) will be our exclusive vehicle for acquiring apartment communities, subject to certain exceptions. Over the next several years, we expect to increase our acquisition activity through the discretionary investment vehicle, focusing on communities in our markets 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 our discretionary investment vehicle.

Sophisticated Property Management. We believe the depth of our organization enables us to deliver quality services, promote resident satisfaction and improve resident retention, 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 their residents. We strive to motivate our on-site employees through incentive compensation arrangements based upon operational results produced at their property, 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 (including limited liability companies) or partnerships through which we would own an indirect economic interest in less than 100% of the community or communities owned directly by the joint venture or partnership. Our decision whether to hold the entire interest in an apartment community ourselves, or to have an indirect interest in the community through a joint venture or partnership, is based on a variety of factors and considerations, including: (i) our projection, in some circumstances, we will achieve higher returns on our invested capital or reduce our risk if a joint venture or partnership vehicle is used; (ii) our desire to diversify our portfolio of communities by market; (iii) our desire at times to preserve our capital resources to maintain liquidity or balance sheet strength; and (iv)  the economic and tax terms required by a seller of land or of a community, who may prefer or who may require less payment if the land or community is contributed to a joint venture or partnership. Investments in joint ventures or partnerships are not limited to a specified percentage of our assets. 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 have formed the Camden Multifamily Value Add Fund, L.P., (the “Fund”), a discretionary investment vehicle to make direct and indirect investments in multifamily real estate throughout the United States, primarily through acquisitions of operating properties and certain land parcels which we will contribute to the Fund for development. The Fund will serve, until the earlier of (i) four years from the date of the final closing of the Fund or (ii) such time as 90% of the Fund’s committed capital is invested, as the exclusive vehicle through which we will acquire fully-developed multifamily properties, subject to certain exceptions. These exceptions include properties acquired in tax-deferred transactions, follow-on investments made with respect to prior investments, significant transactions which include the issuance of our securities, significant individual asset and portfolio acquisitions, significant merger and acquisition activities, acquisitions which are inadvisable or inappropriate for the Fund, transactions with our existing ventures, contributions or sales of properties to or entities in which we remain an investor and transactions approved by the Fund’s advisory board. The Fund will not restrict our development activities and will terminate after a term of eight years from the final closing, subject to two one-year extensions. As of December 31, 2007, we have acquired two communities with the intent of being owned by the Fund, but which are currently consolidated and included in our operating results. We are currently targeting acquisitions for the Fund where value creation opportunities are present through one or more of the following: redevelopment activities, market cycle opportunities or improved property operations. We expect the Fund to have equity commitments of up to $300 million, and the ability to employ leverage through debt financings up to 70% on a stabilized portfolio basis, which would enable the Fund to invest up to approximately $1 billion. One of our wholly-owned subsidiaries is the general partner of the Fund, and we have committed 20% of the total equity of the Fund, up to $60 million. We have received commitments from an unaffiliated investor of $150 million as of December 31, 2007. We expect the final closing of the Fund to occur during 2008. There can be no assurance as to the timing of such closing, the size or investment performance of the Fund.

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, 2007, we had approximately 1,900 employees, including executive, administrative and community personnel.

Qualification as a Real Estate Investment Trust

As of December 31, 2007, 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

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

Economic conditions may significantly affect apartment home occupancy or rental rates. Occupancy and 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 future economic downturn which simultaneously effects more than one of our geographical markets; and
	•		increased operating costs, if these costs cannot be passed through to residents.

National, regional and local economic climates may be adversely affected should population or job growth continue to slow. Certain of the markets in which we operate have recently experienced a decrease in job growth. To the extent this worsens, market rental rates will likely be adversely affected. We could also face challenges of adequately managing and maintaining our properties due to increasing operating costs associated with resident turnover and other factors. As a result, we may experience a decrease in rental revenues, which may adversely affect our results of operations and our ability to satisfy our financial obligations and to pay distributions to shareholders.

Difficulties of selling real estate could limit our flexibility.

Real estate investments generally cannot be disposed of quickly, especially when market conditions are poor. This may limit our ability to vary our portfolio promptly in response to changes in economic or other conditions. In addition, in order to maintain our status as a REIT, the Code imposes restrictions on our ability to sell properties held fewer than four years, which may cause us to incur losses thereby reducing our cash flows and adversely impacting distributions to shareholders.

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 that 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.

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

We also develop and construct properties for 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 property acquisition strategy may not produce the cash flows expected.

Subject to the requirements of the Fund, 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; and
	•		the expected occupancy and rental rates may differ from the actual results.

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 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 deductibility 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.

Potential liability for environmental contamination could result in substantial costs.

Under various federal, state and local laws, ordinances and regulations, we are liable for costs to investigate and remove or remediate hazardous or toxic substances on or in our properties, in some cases, regardless of whether we knew of or were responsible for the presence of these substances. These costs, and other costs of investigation, remediation or removal of hazardous substances, may be substantial. Also, the presence of hazardous or toxic substances on a property, or the failure to properly remediate such substances, may adversely affect our ability to sell or rent the property or use the property as collateral.

Additionally, we occasionally develop, manage, lease and/or operate various properties for third parties. Consequently, we may be considered to have been or to be an operator of these properties and, therefore, potentially liable for removal or remediation costs or other potential costs which could relate to hazardous or toxic substances.

Over the past several years, there have been an increasing number of lawsuits against owners and managers of multifamily properties alleging personal injury and property damage caused by the presence of mold in residential real estate. Some of these lawsuits have resulted in substantial monetary judgments or settlements. Insurance carriers have subsequently excluded mold related claims from standard policies and increased the pricing of mold endorsements. Therefore, should we be named in a lawsuit regarding mold infiltration, the amount of damages may not be fully covered under insurance.

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

Instead of acquiring or developing apartment communities directly, we have invested and may continue to invest in a joint venture or partnership as a partner. These investments involve risks, including the possibility our partner may become insolvent, our partner may have business goals which are inconsistent with ours, or our partner may be in a position to take action or withhold consent contrary to our requests. We and our partner may each have the right to trigger 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 initiated 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 an investment in and management of a discretionary fund.

We have formed the Fund 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 $60 million. As of December 31, 2007, the Fund had total capital commitments of $187.5 million. There are risks associated with the investment in and management of the Fund, including the following:

	•		investors in the Fund may fail to make their capital contributions when due and, as a result, the Fund may be unable to execute its investment objectives;
	•		our subsidiary which is the general partner of the Fund is generally liable, under partnership law, for the debts and obligations of the Fund, subject to certain exculpation and indemnification rights pursuant to the terms of the partnership agreement of the Fund;

	•		investors in the Fund (other than us), by majority vote, may remove our subsidiary as the general partner of the Fund with or without cause and the Fund’s advisory board, by a majority vote of its members, may remove our subsidiary as the general partner of the Fund at any time for cause;
	•		while we have broad discretion to manage the Fund and make investment decisions on behalf of the Fund, the investors or the advisory committee must approve certain matters, and as a result we may be unable to cause the Fund 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 Fund until the earlier of (i) four years from the date of the final closing of the Fund or (ii) such time as 90% of the Fund’s committed capital is invested, subject to certain exceptions;
	•		our ability to redeem all or a portion of our investment in the Fund is subject to significant restrictions; and
	•		we may be liable if the Fund fails 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.

Risks Associated with Our Indebtedness and Financing

Volatility in debt markets could adversely impact future acquisitions and values of real estate assets

The commercial real estate debt markets are currently experiencing volatility as a result of certain factors including the tightening of underwriting standards by lenders and credit rating agencies and the significant inventory of unsold Collateralized Mortgage Backed Securities in the market. The volatility has resulted in lenders decreasing the availability of debt financing as well as increasing the cost of debt financing. As a result, we may not be able to obtain debt financing in the future on favorable terms, or at all. This may result in future acquisitions generating lower overall economic returns, which may adversely affect our results of operations and distributions to shareholders. In addition, the volatility in debt markets could adversely impact the overall amount of capital investing in real estate, which may result in price or value decreases of real estate assets and in turn negatively impact the current value of our existing assets.

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

Substantially all of our income is derived from rental income from our multifamily communities. As a result, our performance depends 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. 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 gain, in order for us to continue to qualify as a REIT; this requirement limits the cash flow available to meet required principal and interest payments on our debt. We may need to refinance all or a portion of our outstanding debt as it matures. We may not be able to refinance existing debt or a refinancing may not occur on favorable terms, either of which may have a material adverse effect on our financial condition and results of operations.

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

As of December 31, 2007, 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.

Variable rate debt is subject to interest rate risk.

We have mortgage debt with varying interest rates dependent upon the market index. 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 that 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 increases in interest rates, and may continue to do so. Although these agreements may partially protect against rising interest rates, they also may 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. Finally, 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 sooner 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.

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 we will fail 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 that might otherwise exist if a third party were attempting to effect a change in control transaction.

Various changes could adversely impact the market price of our common shares.

The market price of our publicly traded common shares depends on various conditions. The risks which may affect this market price include the following:

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

Risks Associated with Income Tax Laws

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:

	•		we would be subject to federal income tax on our taxable income at corporate rates, subject to 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.

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 182 operating properties, including properties held through joint ventures, which we owned interests in and operated at December 31, 2007, averaged 914 square feet of living area per apartment home. For the year ended December 31, 2007, no single operating property accounted for greater than 2.1% of our total revenues. Our operating properties, including properties held through joint ventures, had a weighted average occupancy rate of 93.7% and 95.2% for 2007 and 2006, respectively. Resident lease terms generally range from six to fifteen months. One hundred and fifty-four of our operating properties have over 200 apartment homes, with the largest having 904 apartment homes. Our operating properties have an average age of 9.4 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
2001-2007		39
1996-2000		58
1991-1995		19
1986-1990		40
1980-1985		21
Prior to 1980		5

Property Table

The following table sets forth information with respect to our operating properties at December 31, 2007.

OPERATING PROPERTIES

		Number of				Year Placed				Average Apartment				2007 Average
Property and Location		Apartments				In Service				Size (Sq. Ft.)				Occupancy (1)
ARIZONA
Phoenix
Camden Copper Square			332				2000				786				94.2	%
Camden Fountain Palms (2)			192				1986/1996				1,050				93.5
Camden Legacy			428				1996				1,067				93.0
Camden Pecos Ranch (2)			272				2001				924				95.5
Camden San Paloma			324				1993/1994				1,042				95.4
Camden Sierra (2)			288				1997				925				94.6
Camden Towne Center (2)			240				1998				871				94.1
Camden Vista Valley			357				1986				923				94.1
CALIFORNIA
Los Angeles/Orange County
Camden Crown Valley			380				2001				1,009				95.0
Camden Harbor View			538				2004				976				93.5
Camden Martinique			714				1986				795				92.2
Camden Parkside (2)			421				1972				836				94.7
Camden Sea Palms			138				1990				891				94.8
San Diego/Inland Empire
Camden Old Creek (4)			350				2007				1,036			Lease-up
Camden Sierra at Otay Ranch			422				2003				962				95.1
Camden Tuscany			160				2003				891				95.0
Camden Vineyards			264				2002				1,053				91.9
COLORADO
Denver
Camden Arbors			358				1986				792				94.1
Camden Caley			218				2000				925				96.2
Camden Centennial			276				1985				744				95.7
Camden Denver West (3)			320				1997				1,015				96.8
Camden Highlands Ridge			342				1996				1,149				95.9
Camden Interlocken			340				1999				1,022				96.6
Camden Lakeway			451				1997				932				95.9
Camden Pinnacle (11)			224				1985				748				92.4
WASHINGTON DC METRO
Camden Ashburn Farms			162				2000				1,061				96.4
Camden Clearbrook (7)			297				2007				1,049				95.1
Camden Fair Lakes			530				1999				996				94.7
Camden Fairfax Corner (7)			488				2006				934				95.2
Camden Fallsgrove			268				2004				996				96.1
Camden Grand Parc			105				2002				904				96.6
Camden Lansdowne			690				2002				1,006				95.4
Camden Largo Town Center			245				2000/2007				1,028				92.8
Camden Monument Place (4)			368				2007				865			Lease-up
Camden Roosevelt			198				2003				856				97.1
Camden Russett			426				2000				1,025				94.4
Camden Silo Creek			284				2004				971				95.5
Camden Westwind (7)			464				2006				1,036				92.6
FLORIDA
Southeast Florida
Camden Aventura			379				1995				1,106				94.5
Camden Brickell			405				2003				937				97.1
Camden Doral			260				1999				1,172				95.7
Camden Doral Villas			232				2000				1,253				96.4
Camden Las Olas			420				2004				1,043				94.3
Camden Plantation			502				1997				1,152				94.3
Camden Portofino			322				1995				1,307				95.8

OPERATING PROPERTIES (CONTINUED)

		Number of				Year Placed				Average Apartment				2007 Average
Property and Location		Apartments				In Service				Size (Sq. Ft.)				Occupancy (1)
Orlando
Camden Club			436				1986				1,077				93.6	%
Camden Hunter’s Creek			270				2000				1,082				94.2
Camden Lago Vista			366				2005				954				93.6
Camden Landings			220				1983				748				93.0
Camden Lee Vista			492				2000				937				92.5
Camden Renaissance			578				1996/1998				899				92.7
Camden Reserve			526				1990/1991				824				93.3
Camden World Gateway			408				2000				979				93.2
Tampa/St. Petersburg
Camden Bay			760				1997/2001				943				93.1
Camden Bay Pointe			368				1984				771				94.6
Camden Bayside			832				1987/1989				748				94.5
Camden Citrus Park			247				1985				704				95.0
Camden Lakes			688				1982/1983				728				93.2
Camden Lakeside			228				1986				728				93.5
Camden Live Oaks			770				1990				1,093				94.2
Camden Preserve			276				1996				942				95.1
Camden Providence Lakes (12)			260				1996				1,024				87.3
Camden Royal Palms (8)			352				2006				1,017				84.3
Camden Westshore (12)			278				1986				728				81.3
Camden Woods			444				1986				1,223				94.3
GEORGIA
Atlanta
Camden Brookwood			359				2002				906				94.1
Camden Deerfield			292				2000				1,187				95.0
Camden Dunwoody			324				1997				1,007				95.3
Camden Midtown Atlanta			296				2001				953				94.0
Camden Peachtree City			399				2001				1,026				95.5
Camden River			352				1997				1,103				94.8
Camden Shiloh			232				1999/2002				1,151				93.6
Camden St. Clair			336				1997				969				94.6
Camden Stockbridge			304				2003				1,009				93.7
Camden Sweetwater			308				2000				1,151				94.2
KENTUCKY
Louisville
Camden Brookside (5)			224				1987				732				96.5
Camden Meadows (5)			400				1987/1990				746				95.8
Camden Oxmoor (5)			432				2000				903				95.9
Camden Prospect Park (5)			138				1990				916				94.5
MISSOURI
Kansas City
Camden Passage (5)			596				1989/1997				832				94.3
St. Louis
Camden Cedar Lakes (5)			420				1986				852				94.3
Camden Cove West (5)			276				1990				828				95.8
Camden Cross Creek (5)			591				1973/1980				947				95.5
Camden Westchase (5)			160				1986				945				96.1

OPERATING PROPERTIES (CONTINUED)

		Number of				Year Placed				Average Apartment				2007 Average
Property and Location		Apartments				In Service				Size (Sq. Ft.)				Occupancy (1)
NEVADA
Las Vegas
Camden Bel Air			528				1988/1995				943				93.5	%
Camden Breeze			320				1989				846				95.6
Camden Canyon (12)			200				1995				987				94.4
Camden Commons			376				1988				936				95.0
Camden Cove			124				1990				898				96.2
Camden Del Mar (12)			560				1995				986				89.2
Camden Fairways (12)			320				1989				896				90.1
Camden Hills			184				1991				579				96.2
Camden Legends			113				1994				792				94.5
Camden Palisades			624				1991				905				94.7
Camden Pines (2)			315				1997				1,005				97.3
Camden Pointe			252				1996				985				96.9
Camden Summit (2)			234				1995				1,187				96.0
Camden Tiara (2)			400				1996				1,043				95.5
Camden Vintage			368				1994				978				93.2
Oasis Bay (6)			128				1990				876				95.9
Oasis Crossings (6)			72				1996				983				95.7
Oasis Emerald (6)			132				1988				873				95.3
Oasis Gateway (6)			360				1997				1,146				93.9
Oasis Island (6)			118				1990				901				93.1
Oasis Landing (6)			144				1990				938				93.8
Oasis Meadows (6)			383				1996				1,031				96.2
Oasis Palms (6)			208				1989				880				93.8
Oasis Pearl (6)			90				1989				930				96.8
Oasis Place (6)			240				1992				440				95.9
Oasis Ridge (6)			477				1984				391				92.2
Oasis Sands			48				1994				1,125				93.8
Oasis Sierra (6)			208				1998				922				94.6
Oasis Springs (6)			304				1988				838				93.9
Oasis Vinings (6)			234				1994				1,152				93.1
NORTH CAROLINA
Charlotte
Camden Ballantyne			400				1998				1,053				94.9
Camden Cotton Mills			180				2002				906				96.7
Camden Dilworth			145				2006				857				96.4
Camden Fairview			135				1983				1,036				96.1
Camden Forest			208				1989				703				93.3
Camden Foxcroft (12)			156				1979				940				93.7
Camden Grandview			266				2000				1,145				95.5
Camden Habersham			240				1986				773				95.7
Camden Park Commons			232				1997				859				94.0
Camden Pinehurst			407				1967				1,147				95.5
Camden Sedgebrook			368				1999				1,017				95.2
Camden Simsbury			100				1985				874				95.9
Camden South End			299				2003				883				95.1
Camden Stonecrest			306				2001				1,169				94.7
Camden Touchstone (12)			132				1986				899				90.0

OPERATING PROPERTIES (CONTINUED)

		Number of				Year Placed				Average Apartment				2007 Average
Property and Location		Apartments				In Service				Size (Sq. Ft.)				Occupancy (1)
Raleigh
Camden Crest			438				2001				1,129				94.4	%
Camden Governor’s Village			242				1999				1,134				92.7
Camden Lake Pine			446				1999				1,075				93.1
Camden Manor Park (7)			484				2006				966				93.2
Camden Overlook			320				2001				1,056				94.2
Camden Reunion Park			420				2000/2004				972				92.4
Camden Westwood			354				1999				1,112				95.2
PENNSYLVANIA
Camden Valleybrook			352				2002				992				95.0
TEXAS
Austin
Camden Briar Oaks			430				1980				711				92.8
Camden Gaines Ranch			390				1997				955				93.5
Camden Huntingdon			398				1995				903				95.7
Camden Laurel Ridge			183				1986				702				94.3
Camden Ridgecrest			284				1995				851				94.9
Camden Ridgeview (11)			167				1984				859				95.7
Camden South Congress (8)			253				2001				975				91.2
Camden Stoneleigh			390				2001				908				94.7
Camden Woodview			283				1984				644				94.7
Corpus Christi
Camden Breakers (12)			288				1996				868				90.5
Camden Copper Ridge			344				1986				775				92.7
Camden Miramar (9)			778				1994/2004				468				77.2
Dallas/Fort Worth
Camden Addison (2)			456				1996				942				94.8
Camden Buckingham			464				1997				919				95.2
Camden Centreport			268				1997				910				94.4
Camden Cimarron			286				1992				772				95.8
Camden Farmers Market			904				2001/2005				933				94.9
Camden Gardens			256				1983				652				94.1
Camden Glen Lakes (12)			424				1979				877				83.6
Camden Lakeview			476				1985				853				92.5
Camden Legacy Creek			240				1995				831				96.0
Camden Legacy Park			276				1996				871				96.7
Camden Oasis			602				1986				548				87.0
Camden Place			442				1984				772				93.7
Camden Springs			304				1987				713				93.2
Camden Towne Village			188				1983				735				93.7
Camden Valley Creek			380				1984				855				93.7
Camden Valley Park			516				1986				743				94.1
Camden Valley Ridge			408				1987				773				92.5
Camden Westview			335				1983				697				95.1

OPERATING PROPERTIES (CONTINUED)

		Number of				Year Placed				Average Apartment				2007 Average
Property and Location		Apartments				In Service				Size (Sq. Ft.)				Occupancy (1)
Houston
Camden Baytown			272				1999				844				94.9	%
Camden City Centre (4)			379				2007				932			Lease-up
Camden Creek			456				1984				639				91.8
Camden Greenway			756				1999				861				96.3
Camden Holly Springs (2)			548				1999				934				94.9
Camden Midtown			337				1999				843				97.9
Camden Oak Crest			364				2003				870				96.4
Camden Park (2)			288				1995				866				96.3
Camden Plaza (4) (10)			271				2007				915			Lease-up
Camden Royal Oaks (4)			236				2006				923			Lease-up
Camden Steeplechase			290				1982				748				93.1
Camden Stonebridge			204				1993				845				97.5
Camden Sugar Grove (2)			380				1997				917				95.0
Camden Vanderbilt (12)			894				1996/1997				863				87.0
Camden West Oaks			671				1982				726				93.2

(1)		Represents average physical occupancy for the year except as noted below.
(2)		Properties owned through a joint venture in which we own a 20% interest. The remaining interest is owned by an unaffiliated private investor.
(3)		Property owned through a joint venture in which we own a 50% interest. The remaining interest is owned by an unaffiliated private investor.
(4)		Properties under lease-up at December 31, 2007.
(5)		Properties owned through a joint venture in which we own a 15% interest. The remaining interest is owned by an unaffiliated private investor.
(6)		Properties owned through a joint venture in which we own a 20% interest. The remaining interest is owned by an unaffiliated private pension fund.
(7)		Development property completed during 2007 — average occupancy calculated from date at which occupancy exceeded 90% through year-end.
(8)		Properties acquired during 2007 – average occupancy calculated from date of acquisition date through year-end.
(9)		Miramar is a student housing project for Texas A&M at Corpus Christi. Average occupancy includes summer which is normally subject to high vacancies.
(10)		Property owned through a joint venture in which we own 30%. The remaining interest is owned by an unaffiliated private investor.
(11)		Properties held for sale at December 31, 2007.
(12)		Properties under redevelopment at December 31, 2007.

Item 3. Legal Proceedings

For discussion regarding legal proceedings, see Note 17, “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
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
2006 Quarters:
First		$	72.70			$	58.40			$	0.66
Second			73.55				65.50				0.66
Third			77.99				72.80				0.66
Fourth			80.97				71.40				0.66

As of February 15, 2008, there were 727 shareholders of record and approximately 28,500 beneficial owners of our common shares.

The following table summarizes repurchases of our equity securities in the quarter ended December 31, 2007:

														Approximate
										Total Number of				Dollar Value of
										Shares Purchased as				Shares That May Yet
		Total Number of				Average Price Paid				Part of Publicly				Be Purchased Under
		Shares Purchased				per Share				Announced Programs				the Program (1)
Month ended October 31, 2007			21,100			$	59.88				21,100			$	163,550,000
Month ended November 30, 2007			1,575,000				52.03				1,575,000				81,603,000
Month ended December 31, 2007			680,400				46.68				680,400				49,842,000
Total (2)			2,276,500			$	50.50				2,276,500

(1)		In April 2007, our Board of Trust Managers approved a program to repurchase up to $250.0 million of our common equity securities through open market purchases and privately negotiated transactions. In January 2008, our Board of Trust Managers approved the repurchase up to an additional $250.0 million of our common equity securities.
(2)		During the year ended December 31, 2007, we repurchased approximately 3.6 million common shares for cash totaling approximately $200.2 million, or $55.54 average price per share.

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, 2003 through 2007. 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 restated for amounts classified as discontinued operations.

COMPARATIVE SUMMARY OF SELECTED FINANCIAL AND PROPERTY DATA

		Year Ended December 31,
(in thousands, except per share amounts and property data)		2007				2006				2005(d)				2004				2003
Operating Data
Total property revenues		$	609,080			$	580,576			$	504,061			$	365,261			$	348,209
Total property expenses			227,306				220,163				193,792				147,621				138,333
Total non-property income			25,002				35,530				50,912				27,884				12,066
Total other expenses			344,996				350,850				343,155				211,236				194,859
Income from continuing operations			47,078				125,016				151,526				22,767				18,329
Net income			148,457				232,846				199,086				41,341				29,430
Income from continuing operations per share
Basic		$	0.81			$	2.21			$	2.91			$	0.55			$	0.47
Diluted			0.80				2.14				2.72				0.54				0.44
Net income per share
Basic		$	2.55			$	4.11			$	3.83			$	1.00			$	0.75
Diluted			2.51				3.96				3.58				0.98				0.71
Distributions declared per common share		$	2.76			$	2.64			$	2.54			$	2.54			$	2.54
Balance Sheet Data (at end of year)
Real estate assets		$	5,527,403			$	5,141,467			$	5,039,007			$	3,159,077			$	3,099,856
Total assets			4,890,760				4,586,050				4,487,799				2,629,364				2,625,561
Notes payable			2,828,095				2,330,976				2,633,091				1,576,405				1,509,677
Minority interests			219,952				223,511				221,023				159,567				196,385
Shareholders’ equity			1,531,313				1,734,356				1,370,903				738,515				784,885
Other Data
Cash flows provided by (used in):
Operating activities		$	223,106			$	231,569			$	200,845			$	156,997			$	144,703
Investing activities			(346,798	)			(52,067	)			(207,561	)			(65,321	)			(94,386	)
Financing activities			123,555				(180,044	)			6,039				(92,780	)			(47,365	)
Funds from operations – diluted (a)			227,153				237,790				195,290				143,669				135,699
Property Data
Number of operating properties (at the end of year) (b)			182				186				191				144				144
Number of operating apartment homes (at end of year) (b)			63,085				63,843				65,580				51,456				51,344
Number of operating apartment homes (weighted average) (b)(c)			53,132				55,850				55,056				47,118				46,382
Weighted average monthly total property revenue per apartment home		$	1,005			$	951			$	871			$	777			$	754
Properties under development (at end of period)			11				11				9				3				2

(a)		Management considers FFO to be an appropriate measure of the financial performance of an equity REIT. The National Association of Real Estate Investment Trusts (“NAREIT”) currently defines FFO as net income (computed in accordance with accounting principles generally accepted in the United States of America (“GAAP”)), excluding gains (or losses) associated with the sale of previously depreciated operating properties, real estate depreciation and amortization, and adjustments for unconsolidated joint ventures. Our calculation of diluted FFO also assumes conversion of all potentially dilutive securities, including minority interests, which are convertible into common shares. We consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions of operating properties and excluding depreciation, FFO can help one compare the operating performance of a company’s real estate between periods or as compared to different companies.
(b)		Includes discontinued operations.
(c)		Excludes apartment homes owned in joint ventures.
(d)		The 2005 results include the operations of Summit Properties Inc. subsequent to February 28, 2005.

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. 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 that 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:

	•		Insufficient cash flows could affect our ability to make required payments for debt obligations or pay distributions to shareholders and create refinancing risk;
	•		Unfavorable changes in economic conditions could adversely impact occupancy or rental rates;
	•		We have significant debt; which could have important adverse consequences;
	•		Volatility in debt markets could adversely impact future acquisitions and values of real estate assets;
	•		Various changes could adversely impact the market price of our common shares;
	•		Development and construction risks could impact our profitability;
	•		Our property acquisition strategy may not produce the cash flows expected;
	•		Difficulties of selling real estate could limit our flexibility;
	•		Variable rate debt is subject to interest rate risk;
	•		Issuances of additional debt or equity may adversely impact our financial condition;
	•		Losses from catastrophes may exceed our insurance coverage;
	•		Potential liability for environmental contamination could result in substantial costs;
	•		Tax matters, including failure to qualify as a real estate investment trust (“REIT”) could have adverse consequences;
	•		Investments through joint ventures and partnerships involve risks not present in investments in which we are the sole investor;
	•		We face risks associated with investment in and management of a discretionary fund;
	•		Our dependence on our key personnel;
	•		We may incur losses on interest rate hedging arrangements;
	•		Competition could limit our ability to lease apartments or increase or maintain rental income; and
	•		Changes in laws and litigation risks could affect our business.

These forward-looking statements represent our estimates and assumptions as of the date of this report.

Executive Summary

Based on our results for the year ended December 31, 2007 and the projected economic conditions, we expect moderating growth during 2008. Economic factors affecting our revenue include declining job growth and continued population growth and household formations in the markets in which we operate, as well as declining fundamentals in the for-sale single-family housing market. Negative sentiment currently surrounding single-family housing could have a positive impact on multifamily demand, as more potential home buyers choose to rent and existing renters extend their stays in apartment homes. However, high inventories of unsold single-family homes in select markets could cause further declines in home prices, making home buying a more attractive option for some renters or resulting in additional single-family homes becoming rental units.

We intend to look for opportunities to acquire existing communities through our investment in and management of a discretionary investment fund. During its term, which will end eight years from the final closing, subject to two one-year extensions, the Fund will be our exclusive investment vehicle for acquiring fully developed multifamily properties, subject to certain exceptions. We expect market concentration risk to be mitigated as our property operations are not centralized in any one market and our portfolio of apartment communities are geographically diverse. We also intend to continue focusing on our development pipeline with approximately $2.0 billion to $2.5 billion in our current and future development pipelines. Total projected capital costs and the commencement of future developments may be impacted by increasing construction costs and other factors.

Property Portfolio

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

		December 31, 2007								December 31, 2006
		Apartment								Apartment
		Homes				Properties				Homes				Properties
Operating Properties
Las Vegas, Nevada			8,064				30				8,064				30
Dallas, Texas (1)			7,225				18				7,773				21
Houston, Texas			6,346				15				5,696				13
Tampa, Florida			5,503				12				5,635				12
Washington, D.C. Metro			4,525				13				3,834				11
Charlotte, North Carolina			3,574				15				4,146				17
Orlando, Florida			3,296				8				3,296				8
Atlanta, Georgia			3,202				10				3,202				10
Austin, Texas			2,778				9				2,525				8
Raleigh, North Carolina			2,704				7				2,704				7
Denver, Colorado			2,529				8				2,529				8
Southeast Florida			2,520				7				2,520				7
Phoenix, Arizona			2,433				8				2,433				8
Los Angeles/Orange County, California			2,191				5				2,191				5
San Diego/Inland Empire, California			1,196				4				846				3
Other			4,999				13				6,449				18
Total Operating Properties			63,085				182				63,843				186
Properties Under Development
Washington, D.C. Metro			1,543				4				2,237				6
Houston, Texas			733				3				650				2
Austin, Texas			556				2				—				—
Los Angeles/Orange County, California			290				1				290				1
Orlando, Florida			261				1				261				1
San Diego/Inland Empire, California			—				—				350				1
Total Properties Under Development			3,383				11				3,788				11
Total Properties			66,468				193				67,631				197
Less: Joint Venture Properties (2)
Las Vegas, Nevada			4,047				17				4,047				17
Houston, Texas			1,946				6				1,487				4
Phoenix, Arizona			992				4				992				4
Los Angeles/Orange County, California			711				2				711				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			12,217				41				11,758				39
Total Properties Owned 100%			54,251				152				55,873				158