CAMDEN PROPERTY TRUST - Annual Report: 2008 (Form 10-K)

Filed by Bowne Pure Compliance

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, 2008


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

For the transition period from _______ to _______

Commission file number: 1-12110

CAMDEN PROPERTY TRUST

(Exact name of registrant as specified in its charter)


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

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

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

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


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

Securities registered pursuant to Section 12(g) of the Act: None

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

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

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

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

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


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

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

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

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

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement in connection with its Annual Meeting of Shareholders to be held May 6, 2009 are incorporated by reference in Part III.

TABLE OF CONTENTS


	Page

PART I

Item 1. Business		1

Item 1A. Risk Factors		3

Item 1B. Unresolved Staff Comments		10

Item 2. Properties		10

Item 3. Legal Proceedings		16

Item 4. Submission of Matters to a Vote of Security Holders		16

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		17

Item 6. Selected Financial Data		18

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk		39

Item 8. Financial Statements and Supplementary Data		39

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		40

Item 9A. Controls and Procedures		40

Item 9B. Other Information		43

PART III

Item 10. Directors, Executive Officers and Corporate Governance		43

Item 11. Executive Compensation		43

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		43

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

Item 14. Principal Accounting Fees and Services		43

PART IV

Item 15. Exhibits and Financial Statement Schedules		44

SIGNATURES		51

Exhibit 12.1
Exhibit 21.1
Exhibit 23.1
Exhibit 24.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

PART I

Item 1. Business

General Development of Business

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

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

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

Financial Information about Segments

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

Narrative Description of Business

As of December 31, 2008, we owned interests in, operated, or were developing 186 multifamily properties comprising 64,329 apartment homes across the United States. We had 1,426 apartment homes under development at five of our multifamily properties, including 1,060 apartment homes at four multifamily properties owned through joint ventures, in which we own an interest, in addition to other sites we may develop into multifamily apartment communities. Additionally, one property comprised of 671 apartment homes was designated as held for sale.

Operating Strategy

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

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

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

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

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

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

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

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

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

Investments in Joint Ventures. We have entered into, and may continue in the future to enter into, joint ventures or partnerships (including limited liability companies) through which we own an indirect economic interest of less than 100% of the community or communities owned directly by the joint venture or partnership. See Note 7, “Investments in Joint Ventures,” and Note 14, “Commitments and Contingencies,” of the Notes to Consolidated Financial Statements for further discussion of our investments in joint ventures.

Competition

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

Employees

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

Qualification as a Real Estate Investment Trust

As of December 31, 2008, we met the qualification of a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, we, with the exception of our taxable REIT subsidiaries, will not be subject to federal income tax to the extent we meet certain requirements of the Code.

Item 1A. Risk Factors

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

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

Volatility in capital and credit markets could adversely impact us.

The capital and credit markets have been experiencing extreme volatility and disruption, which has caused the spreads on prospective debt financings to widen considerably and made it more difficult to borrow money. If current levels of market disruption and volatility continue or worsen, we may not be able to obtain new debt financing or refinance our existing debt on favorable terms or at all, which would adversely affect our liquidity and our ability to make distributions to shareholders. This market turmoil and tightening of credit have led to an increased lack of consumer confidence and widespread reduction of business activity generally, which have adversely impacted and may continue to adversely impact us, including our ability to acquire and dispose of assets and continue our development pipeline.

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

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

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

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

	•		changes in the national, regional, and local economic climates;

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

	•		a continued economic downturn which simultaneously effects one or more of our geographical markets; and

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

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

We face risks associated with land holdings.

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

Difficulties of selling real estate could limit our flexibility.

We intend to evaluate the potential disposition of assets that may no longer help us meet our objectives. When we decide to sell an asset, we may encounter difficulty in finding buyers in a timely manner as real estate investments generally cannot be disposed of quickly, especially when market conditions are poor. These difficulties have been exacerbated in the current credit environment because buyers have experienced difficulty in obtaining the necessary financing. These factors may limit our ability to vary our portfolio promptly in response to changes in economic or other conditions and may also limit our ability to utilize sales proceeds as a source of liquidity, which would adversely affect our ability to make distributions to shareholders or repay debt. In addition, in order to maintain our status as a REIT, the Code imposes restrictions on our ability to sell properties held fewer than two years, which may cause us to incur losses thereby reducing our cash flows and adversely impacting our ability to make distributions to shareholders or repay debt.

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

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

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

Risks Associated with Our Operations

Development and construction risks could impact our profitability.

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

	•		inability to obtain, or delays in obtaining, necessary zoning, land-use, building, occupancy, and other required permits and authorizations, or problems with subcontractors could result in increased costs;

	•		incurring construction costs exceeding our original estimates due to increased materials, labor, or other costs, or due to errors and omissions which occur in the design or construction process;

	•		experiencing fluctuations in occupancy rates and rents at a newly completed property which may not be adequate to make the property profitable;

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

	•		inability to complete construction and lease-up of a community on schedule, resulting in increased costs;

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

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

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

Our acquisition strategy may not produce the cash flows expected.

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

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

	•		our estimates of the costs of repositioning or redeveloping the acquired property may prove inaccurate;

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

	•		we may not be able to obtain adequate financing.

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

Competition could adversely affect our ability to acquire properties.

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

Losses from catastrophes may exceed our insurance coverage.

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

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

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

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

We have formed the Funds which, through wholly-owned subsidiaries, we manage as the general partner and advisor and to which we have committed 20% of the total equity interest, up to $75 million in the aggregate. As of December 31, 2008, the Funds had total capital commitments of $375 million. There are risks associated with the investment in and management of the Funds, including the following:

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

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

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

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

	•		we are permitted to acquire land and develop communities but are generally prohibited from acquiring fully developed multifamily properties outside of the Funds until the earlier of (i) December 31, 2011 or (ii) such time as 90% of the Funds’ committed capital is invested, subject to certain exceptions;

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

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

We depend on our key personnel.

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

Changes in laws and litigation risks could affect our business.

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

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

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

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

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

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

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

We may face other tax liabilities in the future which may impact our cash flow. These potential tax liabilities may be calculated on our income or property at either the corporate or individual property levels. Any additional tax expense incurred would decrease the cash available for distribution to our shareholders.

Risks Associated with Our Indebtedness and Financing

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

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

	•		delay in resident lease commencements;

	•		decline in occupancy;

	•		failure of residents to make rental payments when due;

	•		the attractiveness of our properties to residents and potential residents;

	•		our ability to adequately manage and maintain our properties;

	•		competition from other available apartments and housing alternatives; and

	•		changes in market rents.

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

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

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

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

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

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

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

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

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

Variable rate debt is subject to interest rate risk.

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

We may incur losses on interest rate hedging arrangements.

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

Issuances of additional debt or equity may adversely impact our financial condition.

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

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

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

Risks Associated with Our Shares

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

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

Our share price will fluctuate.

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

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

	•		investor interest in our property portfolio;

	•		the reputation and performance of REITs;

	•		the attractiveness of REITs as compared to other investment vehicles;

	•		the results of our financial condition and operations;

	•		the perception of our growth and earnings potential;

	•		dividend payment rates;

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

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

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

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

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The Properties

Our properties typically consist of mid-rise buildings or two and three story buildings in a landscaped setting and provide residents with a variety of amenities. Most of the properties have one or more swimming pools and a clubhouse and many have whirlpool spas, tennis courts, and controlled-access gates. Many of the apartment homes offer additional features such as fireplaces, vaulted ceilings, microwave ovens, covered parking, icemakers, washers and dryers, and ceiling fans.

Operating Properties

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


Year Placed in Service	Number of Operating Properties

2001-2008		46

1996-2000		57

1991-1995		19

1986-1990		39

1980-1985		15

Prior to 1980		5

Property Table

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

OPERATING PROPERTIES


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

OPERATING PROPERTIES (CONTINUED)


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

OPERATING PROPERTIES (CONTINUED)


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

OPERATING PROPERTIES (CONTINUED)


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

OPERATING PROPERTIES (CONTINUED)


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


(1)		Represents average physical occupancy for the year except as noted below.

(2)		Properties under lease-up at December 31, 2008.

(3)		Development property completed during 2008 — average occupancy calculated from date at which occupancy exceeded 90% through year-end.

(4)		Redevelopment completed during 2008 — average occupancy calculated from date at which occupancy exceeded 90% through year-end.

(5)		Properties under redevelopment at December 31, 2008.

(6)		Property held for sale at December 31, 2008.

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

(8)		Properties owned through a joint venture in which we own a 20% interest. The remaining interest is owned by an unaffiliated private investor.

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

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

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

(12)		Properties owned through a joint venture in which we own a 30% interest. The remaining interest is owned by an unaffiliated private investor.

(13)		Property owned through a joint venture in which we own a 20% interest. The remaining interest is owned by an unaffiliated private pension fund.

Item 3. Legal Proceedings

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

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

None.

PART II

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

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


	High		Low		Distributions
2008 Quarters:
First	$	54.65	$	42.18	$	0.70
Second		55.35		44.08		0.70
Third		54.87		41.79		0.70
Fourth		44.95		18.96		0.70

2007 Quarters:
First	$	79.26	$	68.09	$	0.69
Second		75.32		66.97		0.69
Third		68.74		54.96		0.69
Fourth		66.82		45.78		0.69

5-Year Performance
Key Market Indices

This graph assumes the investment of $100 on December 31, 2003
and quarterly reinvestments of dividends. [Source: NAREIT]

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

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

Total Number of Approximate

Shares Purchased Dollar Value of

Total Number of as Part of Publicly Shares That May Yet

Shares Average Price Announced Be Purchased Under

Purchased Paid per Share Programs the Program (1)

Month ended October 31, 2008
— $ — — $ 269,869,000

Month ended November 30, 2008
4,400 22.97 4,400 269,768,097

Month ended December 31, 2008
— — — 269,768,097

Total (2)
4,400 $ 22.97 4,400

(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 of up to an additional $250.0 million of our common equity securities.

(2)
From April 2007 through December 31, 2008, we repurchased approximately 4.3 million common shares for cash totaling approximately $230.2 million, or $53.56 average price per share.

17

Table of Contents

Item 6. Selected Financial Data

The following table provides selected financial data relating to our historical financial condition and results of operations as of and for each of the years ending December 31, 2004 through 2008. This data should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes. Prior year amounts have been reclassified for discontinued operations.

COMPARATIVE SUMMARY OF SELECTED FINANCIAL AND PROPERTY DATA

Year Ended December 31,

(in thousands, except per share amounts and property data) 2008 2007 2006 2005(e) 2004

Operating Data (a)

Total property revenues
$ 624,016 $ 588,319 $ 561,029 $ 485,696 $ 347,174

Total property expenses
238,915 217,350 210,621 184,566 138,700

Total non-property income (loss)
(19,540 ) 25,002 35,530 50,912 27,884

Total other expenses
331,278 339,548 345,908 338,520 206,022

Income (loss) from continuing operations
(13,705 ) 41,721 119,953 147,022 18,815

Net income
70,973 148,457 232,846 199,086 41,341

Income (loss) from continuing operations per share

Basic
$ (0.25 ) $ 0.72 $ 2.12 $ 2.83 $ 0.45

Diluted
(0.25 ) 0.71 2.06 2.64 0.44

Net income per share

Basic
$ 1.28 $ 2.55 $ 4.11 $ 3.83 $ 1.00

Diluted
1.28 2.51 3.96 3.58 0.98

Distributions declared per common share
$ 2.80 $ 2.76 $ 2.64 $ 2.54 $ 2.54

Balance Sheet Data (at end of year)

Total real estate assets, at cost
$ 5,491,593 $ 5,527,403 $ 5,141,467 $ 5,039,007 $ 3,159,077

Total assets
4,730,342 4,890,760 4,586,050 4,487,799 2,629,364

Notes payable
2,832,396 2,828,095 2,330,976 2,633,091 1,576,405

Minority interests
187,787 219,952 223,511 221,023 159,567

Shareholders’ equity
1,411,494 1,531,313 1,734,356 1,370,903 738,515

Other Data

Cash flows provided by (used in):

Operating activities
$ 216,958 $ 223,106 $ 231,569 $ 200,845 $ 156,997

Investing activities
(37,374 ) (346,798 ) (52,067 ) (207,561 ) (65,321 )

Financing activities
(173,074 ) 123,555 (180,044 ) 6,039 (92,780 )

Funds from operations — diluted (b)
169,585 227,153 237,790 195,290 143,669

Property Data

Number of operating properties (at the end of year) (c)
181 182 186 191 144

Number of operating apartment homes (at end of year) (c)
62,903 63,085 63,843 65,580 51,456

Number of operating apartment homes (weighted average) (c)(d)
51,277 53,132 55,850 55,056 47,118

Weighted average monthly total property revenue per apartment home
$ 1,055 $ 1,025 $ 970 $ 888 $ 792

Properties under development (at end of period)
5 11 11 9 3

(a)
Excludes discontinued operations.

(b)
Management considers Funds from Operations (“FFO”) to be an appropriate measure of the financial performance of an equity REIT. The National Association of Real Estate Investment Trusts (“NAREIT”) currently defines FFO as net income (computed in accordance with accounting principles generally accepted in the United States of America (“GAAP”)), excluding gains (or losses) associated with the sale of previously depreciated operating properties, real estate depreciation and amortization, and adjustments for unconsolidated joint ventures. Our calculation of diluted FFO also assumes conversion of all potentially dilutive securities, including 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 assist in the comparison of the operating performance of a company’s real estate between periods or as compared to different companies.

(c)
Includes discontinued operations.

(d)
Excludes apartment homes owned in joint ventures.

(e)
The 2005 results include the operations of Summit Properties Inc. subsequent to February 28, 2005.

18

Table of Contents

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

The following discussion should be read in conjunction with the consolidated financial statements and notes appearing elsewhere in this report. Historical results and trends which might appear in the consolidated financial statements should not be interpreted as being indicative of future operations.

We consider portions of this report to be “forward-looking” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to our expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions, or other items relating to the future; forward-looking statements are not guarantees of future performances, results, or events. Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, we can give no assurance our expectations will be achieved. Any statements contained herein which are not statements of historical fact should be deemed forward-looking statements. Reliance should not be placed on these forward-looking statements as they are subject to known and unknown risks, uncertainties, and other factors beyond our control and could differ materially from our actual results and performance.

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

•
Volatility in capital and credit markets could adversely impact us;

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

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

•
We face risks associated with land holdings;

•
Difficulties of selling real estate could limit our flexibility;

•
Compliance or failure to comply with laws requiring access to our properties by disabled persons could result in substantial cost;

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

•
Development and construction risks could impact our profitability;

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

•
Competition could adversely affect our ability to acquire properties;

•
Losses from catastrophes may exceed our insurance coverage;

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

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

•
We depend on our key personnel;

•
Changes in laws and litigation risks could affect our business;

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

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

•
We have significant debt, which could have important adverse consequences;

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

•
Variable rate debt is subject to interest rate risk;

•
We may incur losses on interest rate hedging arrangements;

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

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

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

•
Our share price will fluctuate; and

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

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

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

Executive Summary

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

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

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

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

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

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

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Property Portfolio

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

December 31, 2008 December 31, 2007

Apartment Apartment

Homes Properties Homes Properties

Operating Properties

Las Vegas, Nevada
8,016 29 8,064 30

Houston, Texas
6,620 16 6,346 15

Dallas, Texas
6,119 15 7,225 18

Washington, D.C. Metro
5,702 16 4,525 13

Tampa, Florida
5,503 12 5,503 12

Charlotte, North Carolina
3,574 15 3,574 15

Orlando, Florida
3,557 9 3,296 8

Atlanta, Georgia
3,202 10 3,202 10

Raleigh, North Carolina
2,704 7 2,704 7

Southeast Florida
2,520 7 2,520 7

Los Angeles/Orange County, California
2,481 6 2,191 5

Phoenix, Arizona
2,433 8 2,433 8

Denver, Colorado
2,171 7 2,529 8

Austin, Texas
2,106 7 2,778 9

San Diego/Inland Empire, California
1,196 4 1,196 4

Other
4,999 13 4,999 13

Total Operating Properties
62,903 181 63,085 182

Properties Under Development

Houston, Texas
712 3 733 3

Washington, D.C. Metro
366 1 1,543 4

Austin, Texas
348 1 556 2

Los Angeles/Orange County, California
— — 290 1

Orlando, Florida
— — 261 1

Total Properties Under Development
1,426 5 3,383 11

Total Properties
64,329 186 66,468 193

Less: Joint Venture Properties (1)

Las Vegas, Nevada
4,047 17 4,047 17

Houston, Texas (2)
2,199 7 1,946 6

Phoenix, Arizona
992 4 992 4

Los Angeles/Orange County, California
711 2 711 2

Austin, Texas
601 2 — —

Washington, D.C. Metro
508 1 508 1

Dallas, Texas
456 1 456 1

Denver, Colorado
320 1 320 1

Other
3,237 9 3,237 9

Total Joint Venture Properties
13,071 44 12,217 41

Total Properties Owned 100%
51,258 142 54,251 152

(1)
Refer to Note 7, “Investments in Joint Ventures,” in the Notes to Consolidated Financial Statements for further discussion of our joint venture investments.

(2)
Figures for 2008 include Camden Travis Street, a fully-consolidated joint venture, of which we retain a 25% ownership.

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Stabilized Communities

We generally consider a property stabilized once it reaches 90% occupancy. During the year ended December 31, 2008, stabilization was achieved at five recently completed properties as follows:

Number of

Apartment Date of Date of

Property and Location Homes Completion Stabilization

Camden Old Creek
San Marcos, CA
350 1Q07 1Q08

Camden Monument Place
Fairfax, VA
368 4Q07 2Q08

Camden Plaza — joint venture
Houston, TX
271 3Q07 2Q08

City Centre
Houston, TX
379 4Q07 3Q08

Camden Royal Oaks
Houston, TX
236 3Q06 4Q08

Partial Sales and Dispositions to Joint Ventures Included in Continuing Operations

In March 2008, we sold Camden Amber Oaks, a development community in Austin, Texas, to the Fund for approximately $8.9 million. No gain or loss was recognized on the sale. Concurrent with the transaction, we invested approximately $1.9 million in the Fund. In August 2008, we sold Camden South Congress to the Fund for approximately $44.2 million and recognized a gain of approximately $1.8 million on the sale. In conjunction with the transaction, we invested approximately $2.8 million in the Fund.

There were no partial sales or dispositions to joint ventures for the year ended December 31, 2007.

During the year ended December 31, 2006, we recognized gains of approximately $91.5 million from the partial sale of nine properties to an affiliated unconsolidated joint venture. This partial sale generated net proceeds of approximately $170.9 million. The gains recognized on the partial sales of these assets were included in continuing operations as we retained a partial interest in the ventures which own these assets. We also recognized gains of approximately $0.5 million and $4.7 million on the partial sales of land to two joint ventures located in Houston, Texas and College Park, Maryland, respectively. The gains recognized on the sales of these assets were included in continuing operations as we retained a partial interest in the ventures which own these assets. We recognized an additional gain of approximately $0.8 million on the sale of land located adjacent to one of our pre-development assets in College Park, Maryland. The gain on this sale was not included in discontinued operations as the operations and cash flows of these assets were not clearly distinguished, operationally or for reporting purposes, from the adjacent assets.

Discontinued Operations and Assets Held for Sale

We intend to maintain a long-term strategy of managing our invested capital through the selective sale of properties and to utilize the proceeds to reduce our outstanding debt and leverage ratios and fund investments with higher anticipated growth prospects in our markets. Income from discontinued operations includes the operations of properties, including land, sold during the period or classified as held for sale as of December 31, 2008. The components of earnings classified as discontinued operations include separately identifiable property-specific revenues, expenses, depreciation, and interest expense, if any. The gain on the disposal of the held for sale properties is also classified as discontinued operations.

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A summary of our 2008 dispositions and properties held for sale as of December 31, 2008 is as follows:

Number of

Apartment Date of

Property and Location Homes Disposition Year Built

Dispositions

Camden Ridgeview
Austin, TX
167 1Q08 1984

Camden Towne Village
Mesquite, TX
188 2Q08 1983

Oasis Sands
Las Vegas, NV
48 2Q08 1994

Camden Lakeview
Irving, TX
476 3Q08 1985

Camden Arbors
Westminster, CO
358 3Q08 1986

Camden Woodview
Austin, TX
283 3Q08 1984

Camden Briar Oaks
Austin, TX
430 3Q08 1980

Camden Place
Mesquite, TX
442 3Q08 1984

Held for Sale

Camden West Oaks
Houston, TX
671 n/a 1982

Total apartment homes sold and held for sale
3,063

During the year ended December 31, 2008, we received net proceeds of approximately $121.7 million and recognized gains of approximately $80.2 million from the sale of the eight operating properties listed above to unaffiliated third parties. During the year ended December 31, 2007, we received net proceeds of approximately $166.4 million and recognized gains of approximately $106.3 million from the sale of ten operating properties, containing 3,054 apartment homes, to unaffiliated third parties. During the year ended December 31, 2006, we received net proceeds of approximately $137.3 million and recognized a gain of approximately $78.8 million on the sale of eight operating properties, containing 3,041 apartment homes, to unaffiliated third parties.

During the year ended December 31, 2008, we recognized gains of approximately $1.1 million from the sale of land adjacent to our regional office in Las Vegas, Nevada. The gain on this sale was not included in discontinued operations as the operations and cash flows of this asset were not clearly distinguished, operationally or for reporting purposes, from the adjacent assets.

Upon our decision to abandon efforts to develop certain land parcels and to market these parcels for sale, we reclassify the operating expenses associated with these assets to discontinued operations. At December 31, 2008, we had undeveloped land parcels classified as held for sale as follows:

($ in millions) Net Book

Location Acres Value

Southeast Florida
2.2 $ 7.4

Dallas
2.4 1.8

Total land held for sale
$ 9.2

There were no sales of undeveloped land during the year ended December 31, 2008. During the year ended December 31, 2007, we sold undeveloped land totaling approximately 0.9 acres to unrelated third parties. In connection with these sales, we received net proceeds of approximately $6.0 million and recognized gains totaling approximately $0.7 million. During the year ended December 31, 2006, we sold undeveloped land totaling approximately 8.7 acres to unrelated third parties. In connection with these sales, we received net proceeds of approximately $41.0 million and recognized gains totaling approximately $20.5 million.

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Development and Lease-Up Properties

At December 31, 2008, we had five completed consolidated properties in lease-up as follows:

Number of % Leased Estimated

($ in millions) Apartment Cost at Date of Date of

Property and Location Homes Incurred 2/15/09 Completion Stabilization

Camden Potomac Yard
Arlington, VA
378 $ 104.5 73 % 2Q08 4Q09

Camden Orange Court
Orlando, FL
261 45.5 65 % 2Q08 3Q09

Camden Summerfield
Landover, MD
291 62.6 78 % 2Q08 4Q09

Camden Cedar Hills
Austin, TX
208 23.6 88 % 4Q08 2Q09

Camden Whispering Oaks
Houston, TX
274 27.3 80 % 4Q08 3Q09

Total
1,412 $ 263.5 76 %

At December 31, 2008, we had two consolidated properties under construction as follows:

Included in

Number of Properties Estimated Estimated

($ in millions) Apartment Estimated Cost Under Date of Date of

Property and Location Homes Cost Incurred Development Completion Stabilization

Camden Dulles Station
Oak Hill, VA
366 $ 77.0 $ 71.4 $ 14.4 1Q09 3Q10

Camden Travis Street (a)
Houston, TX
253 39.0 9.3 9.3 1Q10 3Q10

Total
619 $ 116.0 $ 80.7 $ 23.7

(a)
Camden Travis Street is owned in a fully-consolidated joint venture, of which we retain a 25% ownership.

Our consolidated balance sheet at December 31, 2008 included approximately $264.2 million related to properties under development and land. Of this amount, approximately $23.7 million related to projects currently under construction. Additionally, at December 31, 2008, we had approximately $184.3 million invested in land for projects we may begin constructing in the future and approximately $56.2 million invested primarily in land tracts in which future development activities have been put on hold.

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At December 31, 2008, we had investments in non-consolidated joint ventures which were developing the following multifamily communities:

Number of Total

($ in millions) Apartment Estimated Cost

Property and Location Ownership % Homes Cost Incurred

Completed Communities (1)

Camden Main & Jamboree
Irvine, CA
30 % 290 N/A $ 110.1

Camden College Park
College Park, MD
30 % 508 N/A 125.3

Completed Communities Total
798 $ 235.4

Under Construction

Braeswood Place (1) (2)
Houston, TX
30 % 340 $ 48.6 $ 41.1

Belle Meade (2)
Houston, TX
30 % 119 33.2 20.0

Camden Amber Oaks (1)
Austin, TX
20 % 348 40.0 32.6

Under Construction Total
807 $ 121.8 $ 93.7

Pre-Development (3)
Total Acres

Lakes at 610
Houston, TX
30 % 6.1 N/A $ 6.4

Town Lake
Austin, TX
72 % 25.9 N/A 37.9

Pre-Development Total
32.0 $ 44.3

(1)
Properties in lease-up as of December 31, 2008.

(2)
Properties being developed by joint venture partner.

(3)
Properties in pre-development by joint venture partner.

Refer to Note 7, “Investments in Joint Ventures” in the Notes to Consolidated Financial Statements for further discussion of our joint venture investments.

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Geographic Diversification

At December 31, 2008 and 2007, our investments in various geographic areas, excluding depreciation, investments in joint ventures, and properties held for sale, were as follows:

(in thousands) 2008 2007

Washington, D.C. Metro
$ 1,219,866 22.4 % $ 1,196,451 21.8 %

Southeast Florida
446,629 8.2 444,645 8.1

Houston, Texas
377,041 6.9 374,177 6.8

Dallas, Texas
337,890 6.2 372,075 6.8

Tampa, Florida
386,816 7.1 370,379 6.7

Los Angeles/Orange County, California
330,849 6.1 346,452 6.3

Orlando, Florida
364,379 6.7 336,768 6.1

Atlanta, Georgia
319,047 5.8 316,733 5.8

Las Vegas, Nevada
321,782 5.9 314,609 5.7

Charlotte, North Carolina
316,387 5.8 312,760 5.7

Raleigh, North Carolina
237,023 4.3 235,263 4.3

San Diego/Inland Empire, California
226,556 4.1 225,769 4.1

Austin, Texas
159,897 2.9 221,807 4.1

Denver, Colorado
186,292 3.4 202,962 3.7

Phoenix, Arizona
118,003 2.2 117,092 2.1

Other
107,377 2.0 105,742 1.9

Total
$ 5,455,834 100.0 % $ 5,493,684 100.0 %

Results of Operations

Changes in revenues and expenses related to our operating properties from period to period are due primarily to the performance of stabilized properties in the portfolio, the lease-up of newly constructed properties, acquisitions, and dispositions. Where appropriate, comparisons of income and expense on communities included in continuing operations are made on a dollars-per-weighted average apartment home basis in order to adjust for such changes in the number of apartment homes owned during each period. Selected weighted averages for the years ended December 31 are as follows:

2008 2007 2006

Average monthly property revenue per apartment home
$ 1,055 $ 1,025 $ 970

Annualized total property expenses per apartment home
$ 4,845 $ 4,544 $ 4,370

Weighted average number of operating apartment homes owned 100%
49,312 47,832 48,200

Weighted average occupancy of operating apartment homes owned 100%
93.8 % 93.7 % 95.1 %

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Property-level operating results

The following tables present the property-level revenues and property-level expenses, excluding discontinued operations, for the year ended December 31, 2008 as compared to 2007 and for the year ended December 31, 2007 as compared to 2006:

Apartment Year Ended

Homes December 31, Change

($ in thousands) at 12/31/08 2008 2007 $ %

Property revenues

Same store communities
40,340 $ 498,875 $ 491,736 $ 7,139 1.5 %

Non-same store communities
8,469 108,184 88,925 19,259 21.7

Development and lease-up communities
2,031 9,444 81 9,363 *

Dispositions/other
— 7,513 7,577 (64 ) (0.8 )

Total property revenues
50,840 $ 624,016 $ 588,319 $ 35,697 6.1 %

Property expenses

Same store communities
40,340 $ 188,644 $ 180,277 $ 8,367 4.6 %

Non-same store communities
8,469 40,395 33,444 6,951 20.8

Development and lease-up communities
2,031 5,694 140 5,554 *

Dispositions/other
— 4,182 3,489 693 19.9

Total property expenses
50,840 $ 238,915 $ 217,350 $ 21,565 9.9 %

*
Not a meaningful percentage

Same store communities are communities we owned and were stabilized as of January 1, 2007. Non-same store communities are stabilized communities we have acquired, developed, or re-developed after January 1, 2007. Development and lease-up communities are non-stabilized communities we have acquired or developed after January 1, 2007.

Apartment Year Ended

Homes December 31, Change

at 12/31/07 2007 2006 $ %

Property revenues

Same store communities
39,417 $ 479,015 $ 460,758 $ 18,257 4.0 %

Non-same store communities
8,312 96,372 75,448 20,924 27.7

Development and lease-up communities
3,459 8,473 508 7,965 *

Dispositions/other
— 4,459 24,315 (19,856 ) (81.7 )

Total property revenues
51,188 $ 588,319 $ 561,029 $ 27,290 4.9 %

Property expenses

Same store communities
39,417 $ 175,189 $ 171,320 $ 3,869 2.3 %

Non-same store communities
8,312 35,488 27,392 8,096 29.6

Development and lease-up communities
3,459 4,726 532 4,194 *

Dispositions/other
— 1,947 11,377 (9,430 ) (82.9 )

Total property expenses
51,188 $ 217,350 $ 210,621 $ 6,729 3.2 %

*
Not a meaningful percentage

Same store communities are communities we owned and were stabilized as of January 1, 2006. Non-same store communities are stabilized communities we have acquired, developed, or re-developed after January 1, 2006. Development and lease-up communities are non-stabilized communities we have developed or acquired after January 1, 2006.

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Table of Contents

Same store analysis

Our same store property revenues for the year ended December 31, 2008 increased approximately $7.1 million, or 1.5%, from 2007 resulting primarily from increases in other property income, partially offset by a decline in rental revenues due to slight declines in average occupancy and average rental rates for our same store portfolio. Same store property revenues for the year ended December 31, 2007 increased approximately $18.3 million, or 4.0%, from 2006 primarily from increases in other property income and higher average rental income per apartment home, partially offset by declines in occupancy.

Same store property revenues for 2008 as compared to 2007 were positively impacted by increases in other property income due to the continued implementation of the Perfect Connection (also known as CamdenTV) in 2008, which provides cable services to our residents, and other utility rebilling programs. The increase in other property income was partially offset by a decrease in average rental rates, as we experienced rental rate decreases primarily as a result of the challenges we and the multifamily industry faced throughout the year, which are discussed in detail in the “Executive Summary.” Average total occupancy at our same store properties declined in 2008 as we experienced decreases in occupancy in a majority of our markets. We believe our operating performance during the current market environment benefited from the continued operational and technological enhancements we are making at many of our communities, which have created opportunities to take advantage of additional revenue sources.

Same store property revenues for 2007 as compared to 2006 were positively impacted by increases in revenues in substantially all markets. These revenue increases were driven by other property income which increased due to the implementation of Perfect Connection, and other utility rebilling programs. Our same store communities recognized an overall increase in average rental rates, and we experienced rental rate increases in all markets. The increase in average rental rates in 2007 was a result of moderate improvements in fundamentals such as job growth, population growth, and household formations. Average occupancy at our same store properties declined less than 1% in 2007, as we had slight decreases in occupancy in a majority of our markets.

Total property expenses from our same store communities increased approximately $8.4 million, or 4.6%, and approximately $3.9 million, or 2.3%, for the year ended December 31, 2008 as compared to 2007 and for the year ended December 31, 2007 as compared to 2006, respectively. The increases in same store property expenses per apartment home of $207 for the year ended December 31, 2008 as compared to 2007 were primarily due to increases in utility expenses in connection with our utility rebilling programs and real estate taxes. Real estate taxes increased primarily due to increases in appraisals and taxation rates. The increase for the year ended December 31, 2007 as compared to 2006 was primarily due to increases in repair and maintenance costs as well as utility expenses in connection with our utility rebilling programs.

Non-same store analysis and other analysis

Property revenues from non-same store and development and lease-up communities increased approximately $28.6 million for the year ended December 31, 2008 as compared to 2007 and increased approximately $28.9 million for the year ended December 31, 2007 as compared to 2006. The increases in both periods were primarily due to the completion and lease-up of certain properties in our development pipeline as well as property acquisitions in 2007 and 2006. See “Development and Lease-Up Properties” for additional detail of occupancy at properties in our development pipeline.

Property expenses from non-same store and development and lease-up communities increased approximately $12.5 million for the year ended December 31, 2008 as compared to 2007 and approximately $12.3 million for 2007 as compared to 2006. The increases in both periods were due to the completion and lease-up of properties in our development pipeline as well as acquisitions completed in 2007 and 2006.

Property revenues from dispositions/other decreased approximately $0.1 million and approximately $19.9 million for the year ended December 31, 2008 as compared to 2007 and for the year ended December 31, 2007 as compared to 2006, respectively. The decrease for the year ended December 31, 2007 primarily related to properties partially sold to joint ventures.

Property expenses from dispositions/other increased approximately $0.7 million and decreased approximately $9.4 million for the year ended December 31, 2008 as compared to 2007 and for the year ended December 31, 2007 as compared to 2006, respectively. The increase for the year ended December 31, 2008 as compared to December 31, 2007 primarily related to insurance costs related to Hurricane Ike. Refer to Note 14, “Commitments and Contingencies”, in the Notes to Consolidated Financial Statements for further discussion. The decrease for the year ended December 31, 2007 as compared to December 31, 2006 primarily related to properties partially sold to joint ventures.

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Non-property income

Year Ended Year Ended

December 31, Change December 31, Change

($ in thousands) 2008 2007 $ % 2007 2006 $ %

Fee and asset management
$ 9,167 $ 8,293 $ 874 10.5 % $ 8,293 $ 14,041 $ (5,748 ) (40.9 )%

Sale of technology investments
— 623 (623 ) (100.0 ) 623 1,602 (979 ) (61.1 )

Interest and other income
4,736 8,804 (4,068 ) (46.2 ) 8,804 9,771 (967 ) (9.9 )

Income (loss) on deferred compensation plans
(33,443 ) 7,282 (40,725 ) * 7,282 10,116 (2,834 ) (28.0 )

Total non-property income (loss)
$ (19,540 ) $ 25,002 $ (44,542 ) (178.2 )% $ 25,002 $ 35,530 $ (10,528 ) (29.6 )%

*
Not a meaningful percentage

Fee and asset management income, which represents income related to third-party construction and development projects and property management, for the year ended December 31, 2008 increased approximately $0.9 million as compared to 2007 and decreased approximately $5.7 million for the year ended December 31, 2007 as compared to 2006. Growth was relatively flat for 2008 as compared to 2007 due to decreased third-party construction activities in 2008, partially offset by increases in management fees earned from the Fund. The decrease in 2007 as compared to 2006 was primarily due to increased fees earned from joint ventures and third-party construction and development projects in 2006 as compared to 2007 as these 2006 projects were winding down in 2007 and were not replaced with additional projects.

Interest and other income decreased approximately $4.1 million for 2008 as compared to 2007 and decreased approximately $1.0 million for 2007 as compared to 2006. Interest income, which primarily relates to interest earned on notes receivable outstanding under our mezzanine financing program, decreased approximately $0.8 million for 2008 as compared to 2007 and increased approximately $0.6 million for 2007 as compared to 2006. The decrease for 2008 as compared to 2007 was primarily due to contractual reductions in interest rates related to mezzanine loans for development communities which have reached stabilization, reductions in interest earned on variable rate notes due to reductions in the London Interbank Offered Rate (“LIBOR”), and principal payments received in 2008. The increase for 2007 as compared to 2006 was primarily due to new notes issued during the latter part of 2006 of approximately $9.1 million. Other income decreased approximately $3.3 million for 2008 as compared to 2007 and decreased approximately $1.6 million for 2007 as compared to 2006. Other income primarily represents income recognized upon the settlement of legal, insurance and warranty claims, and contract disputes. In 2007, other income included approximately $3.3 million related to settlement of a contract dispute.

Income on deferred compensation plans decreased approximately $40.7 million during the year ended December 31, 2008 as compared to 2007 and decreased approximately $2.8 million during the year ended December 31, 2007 as compared to 2006. The changes in income primarily related to the performance of the assets held in the deferred compensation plans for plan participants, which is subject to fluctuations in the financial markets.

Other expenses

Year Ended Year Ended

December 31, Change December 31, Change

($ in thousands) 2008 2007 $ % 2007 2006 $ %

Property management
$ 19,910 $ 18,413 $ 1,497 8.1 % $ 18,413 $ 18,490 $ (77 ) (0.4 )%

Fee and asset management
6,054 4,552 1,502 33.0 4,552 9,382 (4,830 ) (51.5 )

General and administrative
31,586 32,590 (1,004 ) (3.1 ) 32,590 37,584 (4,994 ) (13.3 )

Interest
132,399 115,753 16,646 14.4 115,753 117,348 (1,595 ) (1.4 )

Depreciation and amortization
171,814 157,297 14,517 9.2 157,297 149,206 8,091 5.4

Amortization of deferred financing costs
2,958 3,661 (703 ) (19.2 ) 3,661 3,782 (121 ) (3.2 )

Expense (benefit) on deferred compensation plans
(33,443 ) 7,282 (40,725 ) * 7,282 10,116 (2,834 ) (28.0 )

Total non-property expenses
$ 331,278 $ 339,548 $ (8,270 ) (2.4 )% $ 339,548 $ 345,908 $ (6,360 ) (1.8 )%

*
Not a meaningful percentage

Property management expense, which represents regional supervision and accounting costs related to property operations, increased approximately $1.5 million for the year ended December 31, 2008 as compared to 2007 and decreased approximately $0.1 million for 2007 as compared to 2006. Property management expenses were 3.2%, 3.1%, and 3.3% of total property revenues for the years ended December 31, 2008, 2007, and 2006, respectively.

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Fee and asset management expense, which represents expenses related to third-party construction and development projects and property management, increased approximately $1.5 million for 2008 as compared to 2007 and decreased approximately $4.8 million for 2007 as compared to 2006. The increase for 2008 as compared to 2007 was primarily attributable to increased costs associated with the Fund partially offset by decreases in our third-party construction activities. The decrease for 2007 as compared to 2006 is primarily attributable to decreased third-party activities, offset by costs associated with the Fund which was formed in the latter part of 2007.

General and administrative expenses decreased approximately $1.0 million during the year ended December 31, 2008 as compared to 2007 and decreased approximately $5.0 million during the year ended December 31, 2007 as compared to 2006, and were 5.0%, 5.4%, and 6.4% of total revenues, excluding income or loss on deferred compensation plans, for the years ended December 31, 2008, 2007, and 2006, respectively. The decreases in general and administrative expenses for the year ended December 31, 2008 as compared to 2007 and for December 31, 2007 as compared to 2006 were primarily due to decreases in salaries, incentive compensation, and legal expenses. Additionally, during 2006, an aggregate of 76,542 share awards that otherwise would have vested from time to time over the next five years became immediately exercisable. By accelerating the vesting of these share awards, we recognized a one-time expense of approximately $4.2 million for the year ended December 31, 2006.

Interest expense for the year ended 2008 increased approximately $16.6 million as compared to 2007 primarily due to the repurchase of common shares using debt proceeds, the timing of refinancing portions of our long-term indebtedness at higher rates, and decreased capitalized interest, partially offset by decreased amounts outstanding on our line of credit, our repurchases and early retirement of outstanding debt, and a decline in interest rates on our floating rate debt, Refer to Note 9, “Notes Payable,” in the Notes to Consolidated Financial Statements for further discussion of our debt repurchases and retirements. Interest expense for the year ended 2007 decreased approximately $1.6 million as compared to 2006. Factors contributing to the decrease in interest expense in 2007 as compared to 2006 include repayment of debt from proceeds received from our July 2006 equity offering, property dispositions during both periods, and interest adjustments related to tax liabilities. Partially offsetting this decrease was interest incurred on debt used to repurchase our common shares during 2007. While our average debt level outstanding during 2007 increased slightly as compared to 2006, we continued to fund construction costs associated with our development pipeline, increasing interest capitalized by approximately $2.0 million in 2007 as compared to 2006.

Depreciation and amortization expense increased approximately $14.5 million during the year ended December 31, 2008 as compared to 2007 and increased approximately $8.1 million during the year ended December 31, 2007 as compared to 2006. The increases were primarily due to an increased level of new development and capital improvements placed in service each year as compared to the previous year, partially offset by dispositions.

Amortization of deferred financing costs decreased $0.7 million and $0.1 million during the years ended December 31, 2008, and 2007, respectively. The decrease for fiscal year 2008 was due to certain deferred financing costs becoming fully amortized.

Expense on deferred compensation plans decreased approximately $40.7 million during the year ended December 31, 2008 as compared to 2007 and decreased approximately $2.8 million during the year ended December 31, 2007 as compared to 2006. The changes in expense primarily related to the performance of the assets held in the deferred compensation plans for plan participants, which is subject to fluctuations in the financial markets.

Other

Year Ended Year Ended

December 31, Change December 31, Change

($ in thousands) 2008 2007 $ % 2007 2006 $ %

Gain on sale of properties, including land
$ 2,929 $ — $ 2,929 100.0 % $ — $ 97,452 $ (97,452 ) (100.0 )%

Gain on early retirement of debt
13,566 — 13,566 100.0 — — — —

Impairment loss on land
(51,323 ) (1,447 ) (49,876 ) * (1,447 ) — (1,447 ) (100.0 )

Equity in income (loss) of joint ventures
(1,265 ) 1,526 (2,791 ) (182.9 ) 1,526 5,156 (3,630 ) (70.4 )

Distributions on perpetual preferred units
(7,000 ) (7,000 ) — — (7,000 ) (7,000 ) — —

Income allocated to common units and other minority interests
(4,052 ) (4,729 ) 677 14.3 (4,729 ) (15,685 ) 10,956 69.9

Income tax expense — current
(843 ) (3,052 ) 2,209 72.4 (3,052 ) — (3,052 ) (100.0 )

*
Not a meaningful percentage

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Gain on sale of properties, including land, totaled approximately $2.9 million for the year ended December 31, 2008 due to gains on the partial sale of properties to the Fund and a gain on the sale of a land parcel in Las Vegas, Nevada to an unaffiliated third-party. There was no gain on sale of properties, including land, for the year ended December 31, 2007. Gain on sale of properties, including land, for the year ended December 31, 2006 included gains of approximately $91.5 million from the partial sale of nine operating properties to an affiliated joint venture and approximately $5.2 million from the partial sales of land to affiliated joint ventures; also included in gain on sale of properties for the year ended December 31, 2006 was approximately $0.8 million from the sale of undeveloped land to an unaffiliated third party. See further discussion of gains associated with property dispositions in “Property Portfolio.”

Gain on early retirement of debt was approximately $13.6 million for the year ended December 31, 2008. These gains were the result of various repurchases and retirements of debt, and included a tender offer for certain series of outstanding debt, which resulted in the repurchase and retirement of approximately $108.3 million of debt from unrelated third parties for approximately $100.6 million. In addition to the tender offer, we repurchased and retired approximately $82.7 million of various series of other outstanding debt from unrelated third parties for approximately $75.7 million during the year ended December 31, 2008. These gains were partially offset by the proportionate share of unamortized loan costs and other costs associated with the retirement of the debt.

The impairment loss on land for the year ended December 31, 2008 of approximately $51.3 million reflects impairments in the value of land holdings for several potential development projects we no longer plan to pursue, including approximately $48.6 million related to land holdings for five projects we no longer plan to develop, approximately $1.6 million in the value of a land parcel held for future development, and approximately $1.1 million for costs capitalized for a potential joint venture development we no longer plan to pursue. The impairment loss on land for the year ended December 31, 2007 of approximately $1.4 million reflects impairment in the value of one potential development project we no longer plan to pursue. These impairment charges are the difference between each parcel’s estimated fair value and the carrying value, which includes pursuit and other costs.

Equity in income (loss) of joint ventures decreased approximately $2.8 million for the year ended December 31, 2008 as compared to 2007, and decreased approximately $3.6 million for the year ended December 31, 2007 as compared to 2006. Changes from period to period were due to changes in the number of properties held through joint ventures, and the development dilution we are experiencing on the completion of units in our joint venture development pipeline, which resulted in depreciation and interest expense recorded exceeding income recognized as these properties have not reached stabilization. We recognized approximately $2.8 million of gains for our proportionate share of the sale of three properties held through a joint venture during the year ended December 31, 2006.

Income allocated to common units and other minority interests decreased approximately $0.7 million during the year ended December 31, 2008 as compared to 2007 and decreased approximately $11.0 million during the year ended December 31, 2007 as compared to 2006. Income allocated to common units in 2006 included the impact of gains recognized on the partial sale of eight properties to an affiliated joint venture during the year ended December 31, 2006. A portion of the gains recognized were allocated to minority interest holders in Camden Operating, L.P.

For the tax year ended December 31, 2008, we had current income tax expense of approximately $0.8 million. Income tax expense decreased $2.2 million for the year ended December 31, 2008 as compared to the same period in 2007, primarily attributable to less gains on property dispositions in states with high income tax rates and changes in state tax laws affecting one of our operating partnerships.

Funds from Operations (“FFO”)

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.

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We believe in order to facilitate a clear understanding of our consolidated historical operating results, FFO should be examined in conjunction with net income as presented in the Consolidated Statements of Income and Comprehensive Income and data included elsewhere in this report. FFO is not defined by GAAP and should not be considered as an alternative to net income as an indication of our operating performance. Additionally, FFO as disclosed by other REITs may not be comparable to our calculation.

Reconciliations of net income to diluted FFO for the years ended December 31, 2008, 2007, and 2006 are as follows:

(in thousands) 2008 2007 2006

Funds from operations

Net income
$ 70,973 $ 148,457 $ 232,846

Real estate depreciation and amortization, including discontinued operations
171,009 161,064 157,233

Adjustments for unconsolidated joint ventures (1)
7,103 4,934 478

Gain on sale of properties, including land and discontinued operations, net of
(83,117 ) (105,098 ) (170,304 )

Taxes

Income allocated to common units, including discontinued operations
3,617 17,796 17,537

Funds from operations — diluted
$ 169,585 $ 227,153 $ 237,790

Weighted average shares — basic
55,272 58,135 56,660

Incremental shares issuable from assumed conversion of:

Common share options and awards granted
114 482 725

Common units
3,142 3,503 3,868

Weighted average shares — diluted
58,528 62,120 61,253

(1)
Adjustment for 2006 includes approximately $2.8 million in gains recognized on sales of properties held in joint ventures. 2006 adjustment is net of approximately $0.5 million in prepayment penalties incurred with the repayment of mortgage notes directly associated with the sold properties.

Liquidity and Capital Resources

Financial Condition and Sources of Liquidity

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

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

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

•
maintaining conservative coverage ratios; and

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

Our interest expense coverage ratio, net of capitalized interest, was 2.6, 3.0, and 2.9 times for the years ended December 31, 2008, 2007, and 2006, respectively. Our interest expense coverage ratio is calculated by dividing interest expense for the period into the sum of property revenues and expenses, non-property income, other expenses, income from discontinued operations, depreciation, amortization, and interest expense. At December 31, 2008, 2007, and 2006, 78.3%, 81.6%, and 80.5%, respectively, of our properties (based on invested capital) were unencumbered. Our weighted average maturity of debt, excluding our line of credit, was 5.0 years at December 31, 2008.

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

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Our primary source of liquidity is cash flow generated from operations. Other sources include the availability under our unsecured credit facility and other short-term borrowings, proceeds from dispositions of properties and other investments, and access to the capital markets. We believe our liquidity and financial condition are sufficient to meet all of our reasonably anticipated cash flow needs during 2009 including:

•
normal recurring operating expenses;

•
current debt service requirements;

•
recurring capital expenditures;

•
initial funding of property developments, acquisitions, and notes receivable; and

•
the minimum dividend payments required to maintain our REIT qualification under the Internal Revenue Code of 1986.

Factors which could increase or decrease our future liquidity include but are not limited to current volatility in capital and credit markets, sources of financing, completion of planned asset sales, the effect our debt level and decreases in credit ratings could have on our costs of funds and our ability to access capital markets, and changes in operating costs resulting from a weakened economy, which could also impact occupancy and rental rates and ultimately impact our planned growth of capital.

Cash Flows

Certain sources and uses of cash, such as the level of discretionary capital expenditures, repurchases of debt and common shares, and distributions paid on our equity securities are within our control and are adjusted as necessary based upon market conditions. The following is a discussion of our cash flows for the years ended December 31, 2008 and 2007.

Net cash provided by operating activities was approximately $217.0 million during the year ended December 31, 2008 as compared to approximately $223.1 million for the same period in 2007. The decrease was primarily due to increased interest payments on our levels of outstanding debt, timing of payments of trade payables and receivables, offset by growth in revenues from our same store, non-same store, and development communities.

Cash flows used in investing activities during the year ended December 31, 2008 totaled approximately $37.4 million, as compared to approximately $346.8 million during the year ended December 31, 2007. Cash outflows for property development, acquisition, and capital improvements were approximately $199.3 million during 2008 as compared to approximately $500.8 million during 2007. Proceeds received from sales of properties, sales of assets to joint ventures, joint venture distributions representing returns of investments, and sale of technology investments totaled approximately $177.1 million for the year ended December 31, 2008 as compared to approximately $178.9 million for the year ended December 31, 2007.

Net cash used in financing activities totaled approximately $173.1 million for the year ended December 31, 2008, primarily as a result of approximately $379.2 million in repayment of outstanding notes payable. The repayment consisted of approximately $100.6 million of outstanding notes payable related to our December 2008 tender offer, repurchase and retirement of approximately $75.7 million of various series of other outstanding debt, and repayment of approximately $201.9 million of maturing secured notes payable. See Note 9 of the Notes to Consolidated Financial Statements, “Notes Payable,” for further discussion. Net cash used in financing activities was also attributable to distributions paid to shareholders and minority interest holders of approximately $172.3 million and approximately $33.1 million of common share repurchases, offset by proceeds from notes payable and increases in our unsecured line of credit of approximately $385.9 million and $30.0 million, respectively. Net cash provided by financing activities totaled approximately $123.6 million for the year ended December 31, 2007, primarily as a result of approximately $808.0 million in proceeds from notes payable, offset by repayment of balances outstanding on our line of credit of approximately $91.0 million, payments of approximately $213.4 million related to the payoff of two senior unsecured notes and one mortgage note, approximately $200.5 million of common share repurchases, and distributions paid to shareholders and minority interest holders of approximately $178.1 million.

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Financial Flexibility

We have a $600 million unsecured credit facility which matures in January 2010 and can be extended at our option through January 2011. The scheduled interest rate is based on spreads over the London Interbank Offered Rate (“LIBOR”) or the Prime Rate. The scheduled interest rate spreads are subject to change as our credit ratings change. Advances under the line of credit may be priced at the scheduled rates, or we may enter into bid rate loans with participating banks at rates below the scheduled rates. These bid rate loans have terms of six months or less and may not exceed the lesser of $300 million or the remaining amount available under the line of credit. The line of credit is subject to customary financial covenants and limitations, all of which we believe we are in compliance.

Our line of credit provides us with the ability to issue up to $100 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding under our line, it does reduce the amount available. At December 31, 2008, we had outstanding letters of credit totaling approximately $10.5 million, and had approximately $444.5 million available under our unsecured line of credit.

As an alternative to our unsecured line of credit, from time to time we borrow using competitively bid unsecured short-term notes with lenders who may or may not be a part of the unsecured line of credit bank group. Such borrowings vary in term and pricing and are typically priced at interest rates below those available under the unsecured line of credit.

We have an automatic shelf registration statement on file with the Securities and Exchange Commission which allows us to offer, from time to time, common shares, preferred shares, debt securities, or warrants. Our declaration of trust provides we may issue up to 110,000,000 shares of beneficial interest, consisting of 100,000,000 common shares and 10,000,000 preferred shares. As of December 31, 2008, we had 66,027,911 common shares and no preferred shares outstanding.

We believe our ability to access capital markets is enhanced by our senior unsecured debt ratings by Moody’s and Standard and Poor’s, which are currently Baa1 and BBB+, respectively, as well as the ability to borrow on a secured basis from Fannie Mae or Freddie Mac. However, we may not be able to maintain our current credit ratings and may not be able to borrow on a secured or unsecured basis in the future. The capital and credit markets have been experiencing extreme volatility and disruption, which has caused the spreads on prospective debt financings to widen considerably and have made it more difficult to borrow money. If current levels of market disruption and volatility continue or worsen, we may not be able to obtain new debt financing or refinance our existing debt on favorable terms or at all.

Future Cash Requirements and Contractual Obligations

One of our principal long-term liquidity requirements includes the repayment of maturing debt, including borrowings under our unsecured line of credit used to fund development and acquisition activities. During 2009 approximately $3.9 million of secured mortgage notes and approximately $130.5 million of unsecured debt, including scheduled principal amortizations, are scheduled to mature. See Note 9 of the Notes to Consolidated Financial Statements, “Notes Payable,” for further discussion of scheduled maturities. Additionally, as of December 31, 2008, we had several current development projects in various stages of construction, for which a total estimated cost of approximately $63.4 million remained to be funded; we anticipate funding approximately $6 million of these costs through our unsecured line of credit and the remaining approximate $57 million from existing joint venture construction loans. We intend to meet our long-term liquidity requirements through the use of cash flows from operations, draws on our unsecured credit facility, property dispositions, secured mortgage notes, and debt and equity offerings under our automatic shelf registration statement.

In order for us to continue to qualify as a REIT we are required to distribute annual dividends equal to a minimum of 90% of our REIT taxable income, computed without regards to the dividends paid deduction and our net capital gains. In November 2008, we announced our Board of Trust Managers had declared a dividend distribution of $0.70 per share to our common shareholders of record as of December 4, 2008. The dividend was subsequently paid on January 2, 2009. We paid equivalent amounts per unit to holders of the common operating partnership units. This distribution to common shareholders and holders of common operating partnership units equates to an annualized dividend rate of $2.80 per share or unit.

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The following table summarizes our known contractual cash obligations as of December 31, 2008:

(in millions) Total 2009 2010 2011 2012 2013 Thereafter

Debt maturities (1)
$ 2,832.4 $ 134.4 $ 355.5 $ 421.7 $ 772.2 $ 227.2 $ 921.4

Interest payments (2)
658.6 136.6 121.9 101.5 89.2 54.6 154.8

Capital contributions to Fund (3)
32.8 32.8 — — — — —

Non-cancelable lease payments
14.9 2.5 2.5 2.4 2.0 1.9 3.6

Postretirement benefit obligations
3.0 0.2 0.2 0.2 0.2 0.2 2.0

Construction contracts
63.4 61.5 1.9 — — — —

$ 3,605.1 $ 368.0 $ 482.0 $ 525.8 $ 863.6 $ 283.9 $ 1,081.8

(1)
Includes our line of credit and scheduled principal amortizations.

(2)
Includes contractual interest payments for our line of credit, senior unsecured notes, medium-term notes, and secured notes. Interest payments on hedged loans were calculated based on the interest rates effectively fixed by the interest rate swap agreements. The interest payments on certain secured notes with floating interest rates and our line of credit were calculated based on the interest rates in effect as of December 31, 2008 or the most recent practicable date.

(3)
Contingent on timing of capital calls by the Fund; subject to change.

Off-Balance Sheet Arrangements

The joint ventures in which we have an interest have been funded in part with secured, third-party debt. We are committed to additional funding under mezzanine loans provided to joint ventures. See further discussion of our investments in various joint ventures in Note 7, “Investments in Joint Ventures” and a discussion of our mezzanine construction financing in Note 8, “Notes Receivable” in the Notes to Consolidated Financial Statements.

Inflation

Substantially all of our apartment leases are for a term generally ranging from six to fifteen months. In an inflationary environment, we may realize increased rents at the commencement of new leases or upon the renewal of existing leases. The short-term nature of our leases generally minimizes our risk from the adverse effects of inflation.

Critical Accounting Policies

Critical accounting policies are those most important to the presentation of a company’s financial condition and results, and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We follow financial accounting and reporting policies in accordance with generally accepted accounting principles in the United States of America.

General. A comprehensive enumeration of our significant accounting policies is presented in Note 2 to the accompanying consolidated financial statements as of December 31, 2008 and 2007, and for the years ended December 31, 2008, 2007, and 2006. Each of our policies has been chosen based upon current authoritative literature that collectively comprises accounting principles generally accepted in the United States of America.

Principles of Consolidation. Our consolidated financial statements include our accounts, the accounts of variable interest entities (“VIEs”) in which we are the primary beneficiary, and the accounts of other subsidiaries and joint ventures over which we have control. All intercompany transactions, balances, and profits have been eliminated in consolidation. Investments acquired or created are evaluated based on Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) 46R, “Consolidation of Variable Interest Entities” (as revised), which requires the consolidation of VIEs in which we are considered to be the primary beneficiary. If the investment is determined not to be within the scope of FIN 46R, then the investments are evaluated for consolidation using American Institute of Certified Public Accountants’ Statement of Position 78-9, “Accounting for Investments in Real Estate Ventures,” and Accounting Research Bulletin 51, “Consolidated Financial Statements.” If we are the general partner in a limited partnership, we also consider the guidance of Emerging Issues Task Force Issue 04-5, “Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights,” to assess whether any rights held by the limited partners overcome the presumption of control by us.

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Use of Estimates. In the application of GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, results of operations during the reporting periods, and related disclosures. Our more significant estimates relate to estimates supporting our impairment analysis related to the carrying values of our real estate assets, estimates of the useful lives of our assets, reserves related to our general liability and employee benefit programs, estimates related to our investments in joint ventures and mezzanine construction financing, and estimates of expected losses of variable interest entities. These estimates are based on historical experience and various other assumptions believed to be reasonable under the circumstances. Future events rarely develop exactly as forecasted, and the best estimates routinely require adjustment.

Income Recognition. Our rental and other property revenue is recorded when due from residents and is recognized monthly as it is earned. Other property revenue consists primarily of utility rebillings and administrative, application, and other transactional fees charged to our residents. Our apartment homes are rented to residents on lease terms generally ranging from six to fifteen months, with monthly payments due in advance. Interest, fee and asset management, and all other sources of income are recognized as earned. Two of our properties are subject to rent control or rent stabilization. Operations of apartment properties acquired are recorded from the date of acquisition in accordance with the purchase method of accounting. In management’s opinion, due to the number of residents, the types and diversity of submarkets in which the properties operate, and the collection terms, there is no significant concentration of credit risk.

Cost Capitalization. Real estate assets are carried at cost plus capitalized carrying charges. Carrying charges are primarily interest and real estate taxes which are capitalized as part of properties under development. Expenditures directly related to the development, acquisition, and improvement of real estate assets, excluding internal costs relating to acquisitions of operating properties, are capitalized at cost as land and buildings and improvements. Indirect development costs, including salaries and benefits and other related costs directly attributable to the development of properties are also capitalized. All construction and carrying costs are capitalized and reported in the balance sheet as properties under development until the apartment homes are substantially completed. Upon substantial completion of the apartment homes, the total cost for the apartment homes and the associated land is transferred to buildings and improvements and land, respectively.

Where possible, we stage our construction to allow leasing and occupancy during the construction period, which we believe minimizes the duration of the lease-up period following completion of construction. Our accounting policy related to properties in the development and leasing phase is all operating expenses associated with completed apartment homes are expensed. We capitalize renovation and improvement costs we believe extend the economic lives of depreciable property. Capital expenditures subsequent to initial construction are capitalized and depreciated over their estimated useful lives, which range from three to twenty years.

Depreciation and amortization is computed over the expected useful lives of depreciable property on a straight-line basis with lives generally as follows:

Estimated

Useful Life

Buildings and improvements
5-35 years

Furniture, fixtures, equipment and other
3-20 years

Intangible assets (in-place leases and above and below market leases)
underlying lease term

Derivative Instruments. We utilize derivative financial instruments to manage interest rate risk, and we designate the derivative instruments as cash flow hedges. Derivative instruments are recorded in the balance sheet as either an asset or a liability measured at fair value. For cash flow hedge relationships, changes in the fair value of the derivative instrument deemed effective at offsetting the risk being hedged are reported in other comprehensive income or loss and are reclassified into earnings when the hedged item affects earnings. The ineffective portion is recognized in current period earnings. Derivatives not designated or not qualifying for hedge treatment must be recorded at fair value with gains or losses recognized in earnings in the period of change. We do not use derivative instruments for trading or speculative purposes. We use derivative instruments to reduce the potential impact of changes in interest rates on variable-rate debt.

We formally document all relationships between hedging instruments and hedged items, as well as our risk management objective and strategy for undertaking the hedge. This process includes specific identification of the hedging instrument and the hedged transaction, the nature of the risk being hedged, and how the hedging instrument’s effectiveness in hedging the exposure to the hedged transaction’s variability in cash flows attributable to the hedged risk will be assessed and measured. Both at the inception of the hedge and on an ongoing basis, we assess whether the derivatives used in hedging transactions are highly effective in offsetting changes in cash flows or fair values of hedged items. We discontinue hedge accounting if a derivative is not determined to be highly effective as a hedge or has ceased to be a highly effective hedge.

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Accumulated other comprehensive income or loss on the Consolidated Balance Sheets reflects the effective portions of cumulative changes in the fair value of derivatives in qualifying cash flow hedge relationships.

Asset Impairment. Long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment exists if estimated future undiscounted cash flows associated with long-lived assets are not sufficient to recover the carrying value of such assets. When impairment exists the long-lived asset is adjusted to its respective fair value. We consider projected future undiscounted cash flows, trends, strategic decisions regarding future development plans, and other factors in our assessment of whether impairment conditions exist. While we believe our estimates of future cash flows are reasonable, different assumptions regarding such factors as market rents, economies, and occupancies could significantly affect these estimates. In estimating fair value, management uses appraisals, management estimates, or discounted cash flow calculations. In addition, we continually evaluate our investments in joint ventures and mezzanine construction financing and if we believe there is an other than temporary decline in market value, or if it is probable we will not collect all interest and principal in accordance with the terms of the mezzanine loan, we will record an impairment charge based on these evaluations. In general, we provide mezzanine loans to affiliated joint ventures constructing or operating multifamily assets. While we believe it is currently probable we will collect all scheduled principal and interest with respect to these development loans, current market conditions with respect to credit availability and with respect to real estate market fundamentals inject a significant amount of uncertainty into the environment. Given this, any future adverse development in market conditions would cause us to re-evaluate our conclusions, and could result in material impairment charges with respect to our mezzanine loans.

The value of our properties held for development depends on market conditions, including estimates of the project start date as well as estimates of future demand of multifamily communities. We have analyzed trends and other information related to each potential development and have incorporated this information as well as our current outlook into the assumptions we use in our impairment analyses. Due to the judgment and assumptions applied in the estimation process with respect to impairments, including the fact that limited market information regarding the value of comparable land exists at this time, it is possible actual results could differ substantially from those estimated.

We believe the carrying value of our operating real estate assets, properties under development, and land is currently recoverable. However, if market conditions worsen beyond our current expectations, or if changes in our development strategy significantly affect any key assumptions used in our fair value calculations, we may need to take additional charges in future periods for impairments related to existing assets. Any such non-cash charges would have an adverse effect on our consolidated financial position and results of operations.

We do not purchase land for resale. However, when we own land or communities which no longer fit into our plans and we determine the best use of the asset is the sale of the asset, the asset is accounted for as properties held for sale, including land, assuming the held for sale criteria defined in Statement of Financial Accounting Standards (“SFAS”) 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” are met. We record land held for sale at the lesser of its carrying value or fair value less estimated costs to sell.

Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS 157, “Fair Value Measurements.” SFAS 157 defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. The statement does not require new fair value measurements, but is applied to the extent other accounting pronouncements require or permit fair value measurements. The statement emphasizes fair value as a market-based measurement which should be determined based on assumptions market participants would use in pricing an asset or a liability. In February 2008, the FASB issued FSP 157-2, “Effective Date of FASB Statement 157,” which deferred the effective date of SFAS 157 for us to January 1, 2009 for all nonfinancial assets and nonfinancial liabilities, except for those which are recognized or disclosed at fair value in the financial statements on a recurring basis. We have adopted FAS 157 for nonfinancial assets and nonfinancial liabilities effective January 1, 2009, and this adoption has not and is not expected to materially affect how we determine fair value.

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In December 2007, the FASB issued SFAS 141R, “Business Combinations,” which replaced SFAS 141, “Business Combinations.” SFAS 141R applies to all transactions or events in which an entity obtains control of one or more businesses. SFAS 141R requires the acquiring entity in a business combination to recognize the full fair value of assets acquired and liabilities assumed in the transaction (whether a full or partial acquisition); establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed; requires expensing of most transaction and restructuring costs; and requires the acquirer to disclose to investors and other users all of the information needed to evaluate and understand the nature and financial impact of the business combination. SFAS 141R is effective for us for business combinations made on or after January 1, 2009. We expect the adoption of SFAS 141R to have a material effect on our accounting for future acquisitions of properties, which may fall under the definition of a business, as most transaction costs associated with such acquisitions will be expensed as opposed to the prior treatment of such charges as capitalized costs.

In December 2007, the FASB issued SFAS 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB 51.” SFAS 160 clarifies a noncontrolling interest in a subsidiary is an ownership interest in a consolidated entity which should be reported as equity in the parent’s consolidated financial statements. SFAS 160 requires a reconciliation of the beginning and ending balances of equity attributable to non-controlling interests and disclosure, on the face of the consolidated income statements, of those amounts of consolidated net income attributable to the non-controlling interests, eliminating the past practice of reporting these amounts as an adjustment in arriving at consolidated net income. SFAS 160 also requires a parent to recognize a gain or loss in net income when a subsidiary is deconsolidated and requires the parent to attribute to a noncontrolling interest its share of losses, even if such treatment results in a deficit non-controlling interests balance within the parent’s equity accounts. SFAS 160 is effective for us on January 1, 2009 and most provisions will be applied retrospectively. We are currently evaluating the effects, if any, the adoption of SFAS 160 may have on our financial statements.

In June 2008, the FASB issued FASB Staff Position (“FSP”) 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities.” FSP 03-6-1 affects entities which accrue non-returnable cash dividends on share-based payment awards during the awards’ service period. The FASB concluded unvested share-based payment awards which are entitled to non-forfeitable cash dividends, whether paid or unpaid, are participating securities and are participants of undistributed earnings. Because the awards are considered participating securities, the issuer is required to apply the two-class method of computing basic and diluted earnings per share which involves separate computations for common shares and participating securities. As we do accrue and pay non-forfeitable cash dividends on unvested share-based payment awards, these types of awards are considered participating securities and will be included in our earnings per share calculation in future periods. FSP 03-6-1 is effective for us on January 1, 2009 and will require retrospective application. The retrospective application on our adoption of this FSP would not have had any impact on basic or diluted earnings per share for the year ended December 31, 2008. The impact of our adoption of this FSP on basic and diluted earnings per share for the year ended December 31, 2007 would result in a decrease of approximately $0.01 and $0.02, respectively.

In October 2008, the FASB issued FSP 157-3, “Determining the Fair Value of a Financial Asset When the Market for that Asset is Not Active.” FSP 157-3 clarifies the application of SFAS 157, “Fair Value Measurements” in a non-active market. FSP 157-3 became effective upon issuance, including prior periods for which financial statements have not been issued. We adopted FSP 157-3 upon issuance, and it did not have a material impact on our consolidated financial position, results of operations, or cash flows.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The table below provides information about our assets and our liabilities sensitive to changes in interest rates as of December 31, 2008 and 2007.

December 31, 2008 December 31, 2007

Weighted Weighted Weighted Weighted

Average Average Average Average

Amount Maturity Interest % Of Amount Maturity Interest % Of

(in millions) (in years) (1) Rate Total (in millions) (in years) (1) Rate Total

Fixed rate debt (2)
$ 2,467.3 4.4 5.5 % 87.1 % $ 2,655.5 4.6 5.4 % 93.9 %

Variable rate debt
365.1 11.5 2.7 12.9 172.6 19.8 5.0 6.1

(1)
Excludes balances outstanding under our unsecured line of credit, which are included in variable rate debt.

(2)
Includes a $500 million term loan entered into in 2007 and $3.4 million of a construction loan entered into in 2008 which has become effectively fixed by the use of an interest rate swap (see discussion below).

We use variable rate indebtedness available under our revolving credit facility to initially fund acquisitions and our development pipeline. To the extent we incur additional variable rate indebtedness, our exposure to increases in interest rates would increase.

For fixed rate debt, interest rate changes affect the fair market value but do not impact net income to common shareholders or cash flows. Conversely, for floating rate debt, interest rate changes generally do not affect the fair market value but do impact net income to common shareholders and cash flows, assuming other factors are held constant.

Holding other variables constant, a one percentage point variance in interest rates would change the unrealized fair market value of the fixed rate debt by approximately $76.0 million. The net income available to common shareholders and cash flows impact on the next year resulting from a one percentage point variance in interest rates on floating rate debt, excluding debt effectively fixed by interest rate swap agreements described below, would be approximately $3.7 million, holding all other variables constant.

We currently use interest rate caps and swaps to reduce the impact of interest rate fluctuations on certain variable indebtedness, not for trading or speculative purposes. Under the cap and swap agreements:

•
we agree to pay a counterparty the interest that would have been incurred on a fixed principal amount at a fixed interest rate; and

•
the counterparty agrees to pay us the interest rate that would have been incurred on the same principal amount at an assumed floating interest rate tied to a particular market index.

As of December 31, 2008, the effect of our swap agreements was to fix the interest rate on approximately $503.4 million of our variable rate debt. Had the swap agreements not been in place during 2008, our annual interest costs would have been approximately $9.3 million lower, based on balances and reported interest rates through the year as the variable interest rates were less than the effective interest rates on the associated swap agreements. Additionally, if the variable interest rates on this debt had been 100 basis points higher through 2008 and the swap agreements not been in place, our annual interest cost would have been approximately $4.2 million lower.

Derivative financial investments expose us to credit risk in the event of non-performance by the counterparties under the terms of the interest rate hedge agreements. We believe we minimize our credit risk on these transactions by dealing with major, creditworthy financial institutions. As part of our on-going control procedures, we monitor the credit ratings of counterparties and our exposure to any single entity, thus minimizing credit risk concentration. We believe the likelihood of realized losses from counterparty non-performance is remote.

Item 8. Financial Statements and Supplementary Data

Our response to this item is included in a separate section at the end of this report beginning on page F-1.

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

None.

Item 9A. Controls and Procedures

Evaluation of disclosure controls and procedures. We carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Securities Exchange Act (“Exchange Act”) Rules 13a-15(e) and 15d-15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded the disclosure controls and procedures as of the end of the period covered by this report are effective to ensure information required to be disclosed by us in our Exchange Act filings is recorded, processed, summarized, and reported within the periods specified in the Securities and Exchange Commission’s rules and forms.

Changes in internal controls. There were no changes in our internal control over financial reporting (identified in connection with the evaluation required by paragraph (d) in Rules 13a-15 and 15d-15 under the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934 as follows:

A process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of trust managers, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

•
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

•
Provide reasonable assurance transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

•
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2008. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.

Based on our assessment, management concluded our internal control over financial reporting is effective as of December 31, 2008.

Deloitte & Touche LLP, an independent registered public accounting firm, has issued an attestation report regarding the effectiveness of our internal controls over financial reporting, which is included herein.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trust Managers and Shareholders of
Camden Property Trust
Houston, Texas

We have audited the internal control over financial reporting of Camden Property Trust and subsidiaries (the “Company”) as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of trust managers, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and the board of trust managers of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2008 of the Company and our report dated February 18, 2009 expressed an unqualified opinion on those financial statements and financial statement schedules.

/s/ DELOITTE & TOUCHE LLP

Houston, Texas
February 18, 2009

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Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers, and Corporate Governance

Information with respect to this Item 10 is incorporated by reference from our Proxy Statement, which we expect to file on or before March 23, 2009 in connection with the Annual Meeting of Shareholders to be held May 6, 2009.

Item 11. Executive Compensation

Information with respect to this Item 11 is incorporated by reference from our Proxy Statement, which we expect to file on or before March 23, 2009 in connection with the Annual Meeting of Shareholders to be held May 6, 2009.

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

Information with respect to this Item 12 is incorporated by reference from our Proxy Statement, which we expect to file on or before March 23, 2009 in connection with the Annual Meeting of Shareholders to be held May 6, 2009.

Equity Compensation Plan Information

Number of securities

remaining available for

Number of securities to be Weighted-average future issuance under

issued upon exercise of exercise price of equity compensation plans

outstanding options, outstanding options, (excluding securities

warrants and rights warrants and rights reflected in column (a))

Plan Category (a) (b) (c)

Equity compensation plans approved by security holders
4,125,312 $ 41.37 2,370,310

Equity compensation plans not approved by security holders
— — —

Total
4,125,312 $ 41.37 2,370,310

Item 13. Certain Relationships and Related Transactions and Director Independence

Information with respect to this Item 13 is incorporated herein by reference from our Proxy Statement, which we expect to file on or before March 23, 2009 in connection with the Annual Meeting of Shareholders to be held May 6, 2009.

Item 14. Principal Accounting Fees and Services

Information with respect to this Item 14 is incorporated herein by reference from our Proxy Statement, which we expect to file on or before March 23, 2009 in connection with the Annual Meeting of Shareholders to be held May 6, 2009.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

The following documents are filed as part of this report:

(1) Financial Statements:

Report of Independent Registered Public Accounting Firm
F-1

Consolidated Balance Sheets as of December 31, 2008 and 2007
F-2

Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2008, 2007, and 2006
F-3

Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2008, 2007, and 2006
F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2008, 2007, and 2006
F-6

Notes to Consolidated Financial Statements
F-8

(2) Financial Statement Schedules:

Schedule III — Real Estate and Accumulated Depreciation
S-1

Schedule IV — Mortgage Loans on Real Estate
S-7

All other schedules have been omitted since the required information is presented in the financial statements and the related notes or is not applicable.

(3) Index to Exhibits:

The following exhibits are filed as part of or incorporated by reference into this report:

Exhibit Filed Herewith or Incorporated Herein

No. Description by Reference (1)

2.1
Agreement and Plan of Merger, dated October 4, 2004, among Camden Property Trust, Camden Summit, Inc. and Summit Properties Inc.

Current Report on Form 8-K filed on October 5, 2004

2.2
Amendment No. 1 to Agreement and Plan of Merger, dated October 6, 2004, among Camden Property Trust, Camden Summit, Inc. and Summit Properties Inc.

Exhibit 2.1 to Form 8-K filed on October 6, 2004

2.3
Amendment No. 2 to Agreement and Plan of Merger, dated January 24, 2005, among Camden Property Trust, Camden Summit, Inc. and Summit Properties Inc.

Exhibit 2.1 to Form 8-K filed on January 25, 2005

3.1
Amended and Restated Declaration of Trust of Camden Property Trust

Exhibit 3.1 to Form 10-K for the year ended December 31, 1993

3.2
Amendment to the Amended and Restated Declaration of Trust of Camden Property Trust

Exhibit 3.1 to Form 10-Q for the quarter ended June 30, 1997

3.3
Second Amended and Restated Bylaws of Camden Property Trust

Exhibit 3.3 to Form 10-K for the year ended December 31, 1997

3.4
Amendment to Second Amended and Restated Bylaws of Camden Property Trust

Exhibit 99.2 to Form 8-K filed on May 4, 2006

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Exhibit Filed Herewith or Incorporated Herein

No. Description by Reference (1)

4.1
Specimen certificate for Common Shares of Beneficial Interest

Form S-11 filed on September 15, 1993 (Registration No. 33-68736)

4.2
Indenture dated as of February 15, 1996 between Camden Property Trust and the U.S. Trust Company of Texas, N.A., as Trustee

Exhibit 4.1 to Form 8-K filed on February 15, 1996

4.3
First Supplemental Indenture dated as of February 15, 1996 between Camden Property Trust and U.S. Trust Company of Texas, N.A., as Trustee

Exhibit 4.2 to Form 8-K filed on February 15, 1996

4.4
Form of Indenture for Senior Debt Securities dated as of February 11, 2003 between Camden Property Trust and SunTrust Bank, as Trustee

Exhibit 4.1 to Form S-3 filed on February 12, 2003 (Registration No. 333-103119)

4.5
First Supplemental Indenture dates as of May 4, 2007 between the Company and U.S. Bank National Association, as successor to SunTrust Bank, as trustee

Exhibit 4.2 to Form 8-K filed on May 7, 2007

4.6
Indenture dated as of February 11, 2003 between the Company and U.S. Bank National Association, as successor to SunTrust Bank, as trustee.

Exhibit 4.1 to Form 8-K filed on May 7, 2007

4.7
Registration Rights Agreement, dated as of February 23, 1999, between Camden Property Trust and the unitholders named therein

Exhibit 99.3 to Form 8-K filed on March 10, 1999

4.8
Form of Amendment to Registration Rights Agreement, dated as of December 1, 2003, between Camden Property Trust and the unitholders named therein

Exhibit 4.8 to Form 10-K for the year ended December 31, 2003

4.9
Form of Registration Rights Agreement between Camden Property Trust and the holders named therein

Form S-4 filed on November 24, 2004 (Registration No. 333-120733)

4.10
Form of Statement of Designation of Series B Cumulative Redeemable Preferred Shares of Beneficial Interest

Exhibit 4.1 to Form 8-K filed on March 10, 1999

4.11
Form of Amendment to Statement of Designation of Series B Cumulative Redeemable Preferred Shares of Beneficial Interest, effective as of December 31, 2003

Exhibit 4.10 to Form 10-K for the year ended December 31, 2003

4.12
Form of Camden Property Trust 7.625% Note due 2011

Exhibit 4.4 to Form 8-K filed on February 20, 2001

4.13
Form of Camden Property Trust 6.75% Note due 2010

Exhibit 4.3 to Form 8-K filed on September 17, 2001

4.14
Form of Camden Property Trust 5.875% Note due 2012

Exhibit 4.3 to Form 8-K filed on November 25, 2002

4.15
Form of Camden Property Trust 5.375% Note due 2013

Exhibit 4.2 to Form 8-K filed on December 9, 2003

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Exhibit Filed Herewith or Incorporated Herein

No. Description by Reference (1)

4.16
Form of Camden Property Trust 4.70% Note due 2009

Exhibit 4.2 to Form 8-K filed on July 12, 2004

4.17
Form of Camden Property Trust 4.375% Note due 2010

Exhibit 4.2 to Form 8-K filed on December 20, 2004

4.18
Form of Camden Property Trust 5.00% Note due 2015

Exhibit 4.2 to Form 8-K filed on June 7, 2005

4.19
Form of Camden Property Trust 5.700% Notes due 2017

Exhibit 4.3 to Form 8-K filed on May 7, 2007

4.20
Indenture dated as of August 7, 1997 between Camden Summit Partnership, L.P. (f/k/a Summit Properties Partnership, L.P.) and First Union National Bank

Exhibit 4.1 to Camden Summit Partnership, L.P.’s Form 8-K filed on August 11, 1997 (File No. 000-22411)

4.21
Supplemental Indenture No. 1, dated as of August 12, 1997, between Camden Summit Partnership, L.P. (f/k/a Summit Properties Partnership, L.P.) and First Union National Bank

Exhibit 4.1 to Camden Summit Partnership, L.P.’s Form 8-K/A-1 filed on August 18, 1997 (File No. 000-22411)

4.22
Supplemental Indenture No. 2, dated as of December 17, 1997, between Camden Summit Partnership, L.P. (f/k/a Summit Properties Partnership, L.P.) and First Union National Bank

Exhibit 4.1 to Camden Summit Partnership, L.P.’s Form 8-K/A-1 filed on December 17, 1997 (File No. 000-22411)

4.23
Supplemental Indenture No. 3, dated as of May 29, 1998, between Camden Summit Partnership, L.P. (f/k/a Summit Properties Partnership, L.P.) and First Union National Bank

Exhibit 4.2 to Camden Summit Partnership, L.P.’s Form 8-K filed on June 2, 1998 (File No. 000-22411)

4.24
Supplemental Indenture No. 4, dated as of April 20, 2000, between Camden Summit Partnership, L.P. (f/k/a Summit Properties Partnership, L.P.) and First Union National Bank

Exhibit 4.2 to Camden Summit Partnership, L.P.’s Form 8-K filed on April 28, 2000 (File No. 000-22411)

4.25
Supplemental Indenture No. 5, dated as of June 21, 2005, among Camden Summit Partnership, L.P., Camden Property Trust and Wachovia Bank, N.A.

Exhibit 99.1 to Form 8-K filed on June 23, 2005

4.26
Form of Camden Summit Partnership, L.P. (f/k/a Summit Properties Partnership, L.P.) 7.59% Medium-Term Note due 2009

Exhibit 4.1 to Camden Summit Partnership, L.P.’s Form 10-Q for the quarter ended March 31, 1999 (File No. 000-22411)

4.27
Form of Camden Summit Partnership, L.P. (f/k/a Summit Properties Partnership, L.P.) 8.50% Medium-Term Note due 2010

Exhibit 10.2 to Summit Property Inc.’s Form 10-Q for the quarter ended September 30, 2000 (File No. 001-12792)

4.28
Form of Camden Summit Partnership, L.P. (f/k/a Summit Properties Partnership, L.P.) 7.703% Medium-Term Note due 2011

Exhibit 10.3 to Summit Property Inc.’s Form 10-Q for the quarter ended June 30, 2001 (File No. 001-12792)

10.1
Form of Indemnification Agreement between Camden Property Trust and certain of its trust managers and executive officers

Form S-11 filed on July 9, 1993 (Registration No. 33-63588)

10.2
Second Amended and Restated Employment Agreement dated July 11, 2003 between Camden Property Trust and Richard J. Campo

Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2003

10.3
Second Amended and Restated Employment Agreement dated July 11, 2003 between Camden Property Trust and D. Keith Oden

Exhibit 10.2 to Form 10-Q for the quarter ended June 30, 2003

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Exhibit Filed Herewith or Incorporated Herein

No. Description by Reference (1)

10.4
Form of First Amendment to Second Amended and Restated Employment Agreements, effective as of January 1, 2008, between Camden Property Trust and each of Richard J. Campo and D. Keith Oden.

Exhibit 99.1 to Form 8-K filed on November 30, 2007

10.5
Second Amendment to Second Amended and Restated Employment Agreement, dated as of March 14, 2008 between Camden Property Trust and D. Keith Oden.

Exhibit 99.1 to Form 8-K filed on March 18, 2008

10.6
Form of Employment Agreement by and between Camden Property Trust and certain senior executive officers

Exhibit 10.13 to Form 10-K for the year ended December 31, 1996

10.7
Form of First Amendment to Employment Agreement, effective as of January 1, 2008, between the Company and each of H. Malcolm Stewart, Dennis M. Steen, and Steven K. Eddington.

Exhibit 99.1 to Form 8-K filed on November 30, 2007

10.8
Second Amended and Restated Employment Agreement, dated November 3, 2008, between Camden Property Trust and H. Malcolm Stewart

Exhibit 99.1 to Form 8-K filed on November 4, 2008

10.9
Second Amended and Restated Camden Property Trust Key Employee Share Option Plan (KEYSOP^TM), effective as of January 1, 2008

Exhibit 99.5 to Form 8-K filed on November 30, 2007

10.10
Amendment No. 1 to Second Amended and Restated Camden Property Trust Key Employee Share Option Plan, effective as of January 1, 2008

Exhibit 99.1 to Form 8-K filed on December 8, 2008

10.11
Distribution Agreement dated March 20, 1997 among Camden Property Trust and the Agents listed therein relating to the issuance of Medium Term Notes

Exhibit 1.1 to Form 8-K filed on March 21, 1997

10.12
Form of Amended and Restated Master Exchange Agreement between Camden Property Trust and certain key employees

Exhibit 10.7 to Form 10-K for the year ended December 31, 2003

10.13
Form of Amended and Restated Master Exchange Agreement between Camden Property Trust and certain trust managers

Exhibit 10.8 to Form 10-K for the year ended December 31, 2003

10.14
Form of Amended and Restated Master Exchange Agreement between Camden Property Trust and certain key employees

Exhibit 10.9 to Form 10-K for the year ended December 31, 2003

10.15
Form of Master Exchange Agreement between Camden Property Trust and certain trust managers

Exhibit 10.10 to Form 10-K for the year ended December 31, 2003

10.16
Form of Amendment No. 1 to Amended and Restated Master Exchange Agreement (Trust Managers) effective November 27, 2007

Exhibit 99.3 to Form 8-K filed on November 30, 2007

10.17
Form of Amendment No. 1 to Amended and Restated Master Exchange Agreement (Key Employees) effective November 27, 2007

Exhibit 99.4 to Form 8-K filed on November 30, 2007

10.18
Form of Third Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P.

Exhibit 10.1 to Form S-4 filed on February 26, 1997 (Registration No. 333-22411)

10.19
First Amendment to Third Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P., dated as of February 23, 1999

Exhibit 99.2 to Form 8-K filed on March 10, 1999

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Exhibit Filed Herewith or Incorporated Herein

No. Description by Reference (1)

10.20
Form of Second Amendment to Third Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P., dated as of August 13, 1999

Exhibit 10.15 to Form 10-K for the year ended December 31, 1999

10.21
Form of Third Amendment to Third Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P., dated as of September 7, 1999

Exhibit 10.16 to Form 10-K for the year ended December 31, 1999

10.22
Form of Fourth Amendment to Third Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P., dated as of January 7, 2000

Exhibit 10.17 to Form 10-K for the year ended December 31, 1999

10.23
Form of Amendment to Third Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P., dated as of December 1, 2003

Exhibit 10.19 to Form 10-K for the year ended December 31, 2003

10.24
Amended and Restated Limited Liability Company Agreement of Sierra-Nevada Multifamily Investments, LLC, adopted as of June 29, 1998 by Camden Subsidiary, Inc. and TMT-Nevada, L.L.C.

Exhibit 99.1 to Form 8-K filed on July 15, 1998

10.25
Amended and Restated Limited Liability Company Agreement of Oasis Martinique, LLC, adopted as of October 23, 1998 among Oasis Residential, Inc. and the persons named therein

Exhibit 10.59 to Oasis Residential, Inc.’s Form 10-K for the year ended December 31, 1997 (File No. 001-12428)

10.26
Exchange Agreement, dated as of October 23, 1998, by and among Oasis Residential, Inc., Oasis Martinique, LLC and the holders listed therein

Exhibit 10.60 to Oasis Residential, Inc.’s Form 10-K for the year ended December 31, 1997 (File No. 001-12428)

10.27
Contribution Agreement, dated as of February 23, 1999, by and among Belcrest Realty Corporation, Belair Real Estate Corporation, Camden Operating, L.P. and Camden Property Trust

Exhibit 99.1 to Form 8-K filed on March 10, 1999

10.28
Amended and Restated 1993 Share Incentive Plan of Camden Property Trust

Exhibit 10.18 to Form 10-K for the year ended December 31, 1999

10.29
Camden Property Trust 1999 Employee Share Purchase Plan

Exhibit 10.19 to Form 10-K for the year ended December 31, 1999

10.30
Amended and Restated 2002 Share Incentive Plan of Camden Property Trust

Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2002

10.31
Amendment to Amended and Restated 2002 Share Incentive Plan of Camden Property Trust

Exhibit 99.1 to Form 8-K filed on May 4, 2006

10.32
Amendment to Amended and Restated 2002 Share Incentive Plan of Camden Property Trust, effective as of January 1, 2008

Exhibit 99.1 to Form 8-K filed on July 29, 2008

10.33
Camden Property Trust Short Term Incentive Plan

Exhibit 10.2 to Form 10-Q for the quarter ended March 31, 2002

10.34
Amended and Restated Camden Property Trust Non-Qualified Deferred Compensation Plan, effective as of January 1, 2008

Exhibit 99.6 to Form 8-K filed on November 30, 2007

10.35
Amendment No. 1 to Amended and Restated Camden Property Trust Non-Qualified Deferred Compensation Plan, effective as of January 1, 2008

Exhibit 99.2 to Form 8-K filed on July 29, 2008

10.36
Amendment No. 2 to Amended and Restated Camden Property Trust Non-Qualified Deferred Compensation Plan, effective as of January 1, 2008

Exhibit 99.2 to Form 8-K filed on December 8, 2008

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Exhibit Filed Herewith or Incorporated Herein

No. Description by Reference (1)

10.37
Form of Second Amended and Restated Agreement of Limited Partnership of Camden Summit Partnership, L.P. among Camden Summit, Inc., as general partner, and the persons whose names are set forth on Exhibit A thereto

Exhibit 10.4 to Form S-4 filed on November 24, 2004 (Registration No. 333-120733)

10.38
Form of Tax, Asset and Income Support Agreement among Camden Property Trust, Camden Summit, Inc., Camden Summit Partnership, L.P. and each of the limited partners who has executed a signature page thereto

Exhibit 10.5 to Form S-4 filed on November 24, 2004 (Registration No. 333-120733)

10.39
Form of Amended and Restated Credit Agreement dated January 14, 2005 among Camden Property Trust, Bank of America, N.A., as administrative agent, J.P. Morgan Chase Bank, N.A., as syndication agent, Wachovia Bank, N.A. and Wells Fargo Bank, N.A., as the documentation agents, and the Lenders named therein

Exhibit 99.1 to Form 8-K filed on January 18, 2005

10.40
Form of First Amendment to Credit Agreement, dated as of January 18, 2006, among Camden Property Trust and Bank of America, N.A. on behalf of itself and the Lenders

Exhibit 99.1 to Form 8-K filed on January 20, 2006

10.41
Form of Credit Agreement dated as of August 17, 2007 among Camden Property Trust, Bank of America, N.A., as administrative agent and JPMorgan Chase Bank, N.A., as syndication agent.

Exhibit 99.1 to Form 8-K filed on August 21, 2007

10.42
Form of Credit Agreement dated as of October 4, 2007 among Camden Property Trust, Bank of America, N.A., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, and the financial institutions and other entities designated as “Lenders” on Schedule I thereto.

Exhibit 99.1 to Form 8-K filed on October 10, 2007

10.43
Employment Agreement dated February 15, 1999, by and among William B. McGuire, Jr., Summit Properties Inc. and Summit Management Company, as restated on August 24, 2001

Exhibit 10.1 to Summit Properties Inc.’s Form 10-Q for the quarter ended September 30, 2001 (File No. 000-12792)

10.44
Noncompetition Agreement between Summit Properties Inc. and William F. Paulsen

Exhibit 10.5 to Summit Properties Inc.’s Form 10-Q for the quarter ended March 31, 2000 (File No. 001-12792)

10.45
Noncompetition Agreement between Summit Properties Inc. and William B. McGuire, Jr.

Exhibit 10.7 to Summit Properties Inc.’s Form 10-Q for the quarter ended March 31, 2000 (File No. 001-12792)

10.46
Amendment Agreement, dated as of June 19, 2004, among William B. McGuire, Jr., Summit Properties Inc. and Summit Management Company

Exhibit 10.8.2 to Summit Properties Inc.’s Form 10-Q for the quarter ended June 30, 2004 (File No. 001-12792)

10.47
Amendment Agreement, dated as of June 19, 2004, among William F. Paulsen, Summit Properties Inc. and Summit Management Company

Exhibit 10.8.2 to Summit Properties Inc.’s Form 10-Q for the quarter ended June 30, 2004 (File No. 001-12792)

10.48
Separation Agreement, dated as of February 28, 2005, between Camden Property Trust and William B. McGuire, Jr.

Exhibit 99.1 to Form 8-K filed on April 28, 2005

10.49
Separation Agreement, dated as of February 28, 2005, between Camden Property Trust and William F. Paulsen

Exhibit 99.2 to Form 8-K filed on April 28, 2005

10.50
Separation Agreements and General Release, dated as of March 16, 2007, between Camden Property Trust and James M. Hinton

Exhibit 99.1 to Form 8-K filed on March 22, 2007

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Exhibit Filed Herewith or Incorporated Herein

No. Description by Reference (1)

10.51
Credit Agreement dated July 28, 2003 by and among Camden Summit Partnership, L.P. (f/k/a Summit Properties Partnership, L.P.), Summit Sweetwater, LLC, Summit Shiloh, LLC, Summit Grandview, LLC, Summit Portofino Place, LTD., and L.J. Melody & Company

Exhibit 10.1 to Camden Summit Partnership, L.P.’s Form 10-Q for the quarter ended June 30, 2003

10.52
Distribution Agreement, dated as of April 20, 2000, by and among Camden Summit Partnership, L.P. (f/k/a Summit Properties Partnership, L.P.), Summit Properties Inc. and the Agents listed therein

Camden Summit Partnership, L.P.’s Form 8-K filed on April 28, 2000

10.53
First Amendment to Distribution Agreement, dated as of May 8, 2001, among Camden Summit Partnership, L.P. (f/k/a Summit Properties Partnership, L.P.), Summit Properties Inc. and the Agents named therein

Exhibit 10.2 to Summit Properties Inc.’s Form 10-Q for the quarter ended March 31, 2001

10.54
Master Credit Agreement, dated as of September 24, 2008, among CSP Community Owner, LLC, CPT Community Owner, LLC, and Red Mortgage Capital, Inc. (2)

Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2008

12.1
Statement Re Computation of Ratios

Filed Herewith

21.1
List of Subsidiaries

Filed Herewith

23.1
Consent of Deloitte & Touche LLP

Filed Herewith

24.1
Powers of Attorney for Richard J. Campo, D. Keith Oden, William R. Cooper, Scott S. Ingraham, Lewis A. Levey, William B. McGuire, Jr., F. Gardner Parker, William F. Paulsen, Steven A. Webster, and Kelvin R. Westbrook

Filed Herewith

31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act

Filed Herewith

31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act

Filed Herewith

32.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Filed Herewith

(1)
Unless otherwise indicated, all references to reports or registration statements are to reports or registration statements filed by Camden Property Trust (File No. 1-12110).

(2)
Portions of the exhibit have been omitted pursuant to a request for confidential treatment.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Camden Property Trust has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

February 19, 2009 CAMDEN PROPERTY TRUST

By: /s/ Michael P. Gallagher
Michael P. Gallagher
Vice President — Chief Accounting Officer

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Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of Camden Property Trust and in the capacities and on the dates indicated.

Name Title Date

/s/ Richard J. Campo

Richard J. Campo
Chairman of the Board of Trust Managers and Chief Executive Officer (Principal Executive Officer) February 19, 2009

/s/ D. Keith Oden

D. Keith Oden
President and Trust Manager February 19, 2009

/s/ Dennis M. Steen

Dennis M. Steen
Chief Financial Officer, Senior Vice President-Finance and Secretary (Principal Financial Officer) February 19, 2009

/s/ Michael P. Gallagher

Michael P. Gallagher
Vice President — Chief Accounting Officer (Principal Accounting Officer) February 19, 2009

*

William R. Cooper
Trust Manager February 19, 2009

*
Trust Manager February 19, 2009

Scott S. Ingraham

*

Lewis A. Levey
Trust Manager February 19, 2009

*

William B. McGuire, Jr.
Trust Manager February 19, 2009

*

F. Gardner Parker
Trust Manager February 19, 2009

*

William F. Paulsen
Trust Manager February 19, 2009

*

Steven A. Webster
Trust Manager February 19, 2009

*

Kelvin R. Westbrook
Trust Manager February 19, 2009

*By:
/s/ Dennis M. Steen

Dennis M. Steen

Attorney-in-fact

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trust Managers and Shareholders of
Camden Property Trust
Houston, Texas

We have audited the accompanying consolidated balance sheets of Camden Property Trust and subsidiaries (the “Company”) as of December 31, 2008 and 2007, and the related consolidated statements of income and comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2008. Our audits also included the financial statement schedules listed in the Index at Item 15. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Camden Property Trust and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 18, 2009 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Houston, Texas
February 18, 2009

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CAMDEN PROPERTY TRUST

CONSOLIDATED BALANCE SHEETS

December 31,

(in thousands, except per share amounts) 2008 2007

Assets

Real estate assets, at cost

Land
$ 744,059 $ 730,548

Buildings and improvements
4,447,587 4,316,472

5,191,646 5,047,020

Accumulated depreciation
(981,049 ) (868,074 )

Net operating real estate assets
4,210,597 4,178,946

Properties under development and land
264,188 446,664

Investments in joint ventures
15,106 8,466

Properties held for sale, including land
20,653 25,253

Total real estate assets
4,510,544 4,659,329

Accounts receivable — affiliates
37,000 35,940

Notes receivable

Affiliates
58,109 50,358

Other
8,710 11,565

Other assets, net
103,013 126,996

Cash and cash equivalents
7,407 897

Restricted cash
5,559 5,675

Total assets
$ 4,730,342 $ 4,890,760

Liabilities and shareholders’ equity

Liabilities

Notes payable

Unsecured
$ 2,103,187 $ 2,265,319

Secured
729,209 562,776

Accounts payable and accrued expenses
82,575 107,403

Accrued real estate taxes
23,600 24,943

Distributions payable
42,936 42,689

Other liabilities
149,554 136,365

Total liabilities
3,131,061 3,139,495

Commitments and contingencies

Minority interests

Perpetual preferred units
97,925 97,925

Common units
88,075 111,624

Other minority interests
1,787 10,403

Total minority interests
187,787 219,952

Shareholders’ equity

Common shares of beneficial interest; $0.01 par value per share; 100,000 shares authorized; 68,770 and 68,030 issued; 66,028 and 65,434 outstanding at December 31, 2008 and 2007, respectively
660 654

Additional paid-in capital
2,237,703 2,209,631

Distributions in excess of net income
(312,309 ) (227,025 )

Employee notes receivable
(295 ) (1,950 )

Treasury shares, at cost
(463,209 ) (433,874 )

Accumulated other comprehensive loss
(51,056 ) (16,123 )

Total shareholders’ equity
1,411,494 1,531,313

Total liabilities and shareholders’ equity
$ 4,730,342 $ 4,890,760

See Notes to Consolidated Financial Statements.

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CAMDEN PROPERTY TRUST

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

Year Ended December 31,

(in thousands, except per share amounts) 2008 2007 2006

Property revenues

Rental revenues
$ 547,718 $ 525,497 $ 510,129

Other property revenues
76,298 62,822 50,900

Total property revenues
624,016 588,319 561,029

Property expenses

Property operating and maintenance
168,883 155,181 151,595

Real estate taxes
70,032 62,169 59,026

Total property expenses
238,915 217,350 210,621

Non-property income

Fee and asset management
9,167 8,293 14,041

Sale of technology investments
— 623 1,602

Interest and other income
4,736 8,804 9,771

Income (loss) on deferred compensation plans
(33,443 ) 7,282 10,116

Total non-property income (loss)
(19,540 ) 25,002 35,530

Other expenses

Property management
19,910 18,413 18,490

Fee and asset management
6,054 4,552 9,382

General and administrative
31,586 32,590 37,584

Interest
132,399 115,753 117,348

Depreciation and amortization
171,814 157,297 149,206

Amortization of deferred financing costs
2,958 3,661 3,782

Expense (benefit) on deferred compensation plans
(33,443 ) 7,282 10,116

Total other expenses
331,278 339,548 345,908

Income from continuing operations before gain on sale of properties, gain on early retirement of debt, impairment loss on land, equity in income (loss) of joint ventures, minority interests, and income taxes
34,283 56,423 40,030

Gain on sale of properties, including land
2,929 — 97,452

Gain on early retirement of debt
13,566 — —

Impairment loss on land
(51,323 ) (1,447 ) —

Equity in income (loss) of joint ventures
(1,265 ) 1,526 5,156

Income allocated to minority interests

Distributions on perpetual preferred units
(7,000 ) (7,000 ) (7,000 )

Income allocated to common units and other minority interests
(4,052 ) (4,729 ) (15,685 )

Income (loss) from continuing operations before income taxes
(12,862 ) 44,773 119,953

Income tax expense — current
(843 ) (3,052 ) —

Income (loss) from continuing operations
(13,705 ) 41,721 119,953

Income from discontinued operations
4,480 13,214 15,927

Gain on sale of discontinued operations, including land, net of tax
80,198 107,039 99,273

Income from discontinued operations allocated to common units
— (13,517 ) (2,307 )

Net income
$ 70,973 $ 148,457 $ 232,846

See Notes to Consolidated Financial Statements.

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CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

Year Ended December 31,

(In thousands, except per share amounts) 2008 2007 2006

Earnings per share — basic

Income (loss) from continuing operations
$ (0.25 ) $ 0.72 $ 2.12

Income from discontinued operations, including gain on sale and income allocated to common units
1.53 1.83 1.99

Net income
$ 1.28 $ 2.55 $ 4.11

Earnings per share — diluted

Income (loss) from continuing operations
$ (0.25 ) $ 0.71 $ 2.06

Income from discontinued operations, including gain on sale and income allocated to common units
1.53 1.80 1.90

Net income
$ 1.28 $ 2.51 $ 3.96

Distributions declared per common share
$ 2.80 $ 2.76 $ 2.64

Weighted average number of common shares outstanding
55,272 58,135 56,660

Weighted average number of common and common dilutive equivalent shares outstanding
55,272 59,125 59,524

Consolidated Statements of Comprehensive Income

Net income
$ 70,973 $ 148,457 $ 232,846

Other comprehensive income (loss)

Unrealized loss on cash flow hedging activities
(35,069 ) (16,123 ) —

Gain on postretirement obligations
136 — —

Comprehensive income
$ 36,040 $ 132,334 $ 232,846

See Notes to Consolidated Financial Statements.

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CAMDEN PROPERTY TRUST

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Common Accumulated

shares of Additional Distributions Employee Treasury other Total

beneficial paid-in in excess of notes shares, at comprehensive shareholders’

(in thousands, except per share amounts) interest capital net income receivable cost loss equity

Shareholders’ Equity, January 1, 2006
608 1,902,595 (295,074 ) (2,078 ) (235,148 ) — 1,370,903

Net income
232,846 232,846

Other comprehensive income
— —

Common shares issued (3,600 shares)
36 254,895 254,931

Common shares issued under dividend reinvestment plan
30 30

Share awards issued under benefit plan (317 shares)
3 (1 ) (2 ) —

Share awards canceled under benefit plan (31 shares)
— —

Amortization of previously granted share awards
12,964 12,964

Employee share purchase plan
1,359 935 2,294

Repayment of employee notes receivable, net
42 42

Share awards placed into deferred plans (97 shares)
(1 ) 1 —

Common share options exercised (119 shares)
1 5,293 5,294

Conversions and redemptions of operating partnership units (334 shares)
3 6,486 6,489

Cash distributions ($2.64 per share)
(151,437 ) (151,437 )

Shareholders’ equity, December 31, 2006
$ 650 $ 2,183,622 $ (213,665 ) $ (2,036 ) $ (234,215 ) $ — $ 1,734,356

Net income
148,457 148,457

Other comprehensive income
(16,123 ) (16,123 )

Common shares issued under dividend reinvestment plan
38 38

Share awards issued under benefit plan (282 shares)
3 18 (64 ) (43 )

Share awards canceled under benefit plan (65 shares)
(1 ) 1 —

Amortization of previously granted share awards
9,327 9,327

Employee share purchase plan
817 562 1,379

Repayment of employee notes receivable, net
86 86

Share awards placed into deferred plans (151 shares)
(2 ) 2 —

Common share options exercised (96 shares)
1 4,333 4,334

Conversions and redemptions of operating partnership units (266 shares)
3 11,473 11,476

Common shares repurchased (3,604 shares)
(200,157 ) (200,157 )

Cumulative effect of a change in accounting principle
(2,496 ) (2,496 )

Cash distributions ($2.76 per share)
(159,321 ) (159,321 )

Shareholders’ equity, December 31, 2007
$ 654 $ 2,209,631 $ (227,025 ) $ (1,950 ) $ (433,874 ) $ (16,123 ) $ 1,531,313

Net income
70,973 70,973

Other comprehensive income (loss)
(34,933 ) (34,933 )

Common shares issued under dividend reinvestment plan
7 7

Share awards issued under benefit plan (268 shares)
3 (3 ) —

Share awards canceled under benefit plan (36 shares)
— — —

Amortization of previously granted share awards
10,221 10,221

Employee share purchase plan
142 740 882

Repayment of employee notes receivable, net
1,655 1,655

Share awards placed into deferred plans (147 shares)
(2 ) 2 —

Common share options exercised (45 shares)
— 2,155 2,155

Conversions and redemptions of operating partnership units (464 shares)
5 15,548 15,553

Common shares repurchased (695 shares)
(30,075 ) (30,075 )

Cash distributions ($2.80 per share)
(156,257 ) (156,257 )

Shareholders’ equity, December 31, 2008
$ 660 $ 2,237,703 $ (312,309 ) $ (295 ) $ (463,209 ) $ (51,056 ) $ 1,411,494

See Notes to Consolidated Financial Statements.

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CAMDEN PROPERTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,

(in thousands) 2008 2007 2006

Cash flows from operating activities

Net income
$ 70,973 $ 148,457 $ 232,846

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization, including discontinued operations
169,151 157,137 159,860

Gain on sale of discontinued operations
(80,198 ) (107,039 ) (99,273 )

Impairment loss on land
51,323 1,447 —

Gain on early retirement of debt
(13,566 ) — —

Income allocated to minority interests
11,052 25,246 24,992

Share-based compensation
7,663 7,547 11,619

Distributions of income from joint ventures
5,392 5,406 —

Amortization of deferred financing costs
2,975 3,689 3,813

Equity in loss (income) of joint ventures
1,265 (1,526 ) (5,156 )

Accretion of discount on unsecured notes payable
571 590 694

Gain on sale of technology investments
— (623 ) (1,602 )

Gain on sale of properties, including land
(2,929 ) — (97,452 )

Interest on notes receivable — affiliates
(3,688 ) (4,112 ) (108 )

Net change in operating accounts
(3,026 ) (13,113 ) 1,336

Net cash from operating activities
$ 216,958 $ 223,106 $ 231,569

Cash flows from investing activities

Development and capital improvements
(199,269 ) (417,789 ) (334,339 )

Proceeds from sales of properties, including land and discontinued operations
123,513 171,757 181,963

Proceeds from partial sales of assets to joint ventures
52,509 — 213,720

Investments in joint ventures
(10,444 ) (6,015 ) (3,147 )

Distributions of investments from joint ventures
1,058 6,525 47,922

Acquisition of operating properties
— (83,031 ) (109,961 )

Payment of merger related liabilities
— — (8,233 )

Earnest money deposits on potential transactions
— (340 ) (4,803 )

Increase in notes receivable — affiliates
(3,487 ) (3,154 ) (41,615 )

Payments received on notes receivable — other
2,855 1,000 9,406

Change in restricted cash
116 (954 ) 368

Proceeds from the sale of technology investments
— 623 1,602

Issuance of notes receivable — other
— (8,710 ) —

Other
(4,225 ) (6,710 ) (4,950 )

Net cash from investing activities
$ (37,374 ) $ (346,798 ) $ (52,067 )

See Notes to Consolidated Financial Statements.

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CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,

(in thousands) 2008 2007 2006

Cash flows from financing activities

Proceeds from notes payable
$ 385,927 $ 807,990 $ —

Repayment of notes payable
(379,213 ) (213,376 ) (227,284 )

Net increase (decrease) in unsecured line of credit and short-term borrowings
30,000 (91,000 ) (45,000 )

Payment of deferred financing costs
(4,321 ) (5,113 ) (2,945 )

Distributions to shareholders and minority interests
(172,332 ) (178,142 ) (166,234 )

Repurchase of common shares and units
(33,133 ) (200,467 ) (170 )

Common share options exercised
1,729 3,795 4,155

Repayment of employee notes receivable
1,679 190 150

Proceeds from issuance of common shares
— — 254,931

Net increase (decrease) in accounts receivable — affiliates
(929 ) (1,452 ) 382

Other
(2,481 ) 1,130 1,971

Net cash from financing activities
$ (173,074 ) $ 123,555 $ (180,044 )

Net increase (decrease) in cash and cash equivalents
6,510 (137 ) (542 )

Cash and cash equivalents, beginning of year
897 1,034 1,576

Cash and cash equivalents, end of year
$ 7,407 $ 897 $ 1,034

Supplemental information

Cash paid for interest, net of interest capitalized
$ 136,172 $ 114,531 $ 121,396

Cash paid for income taxes
1,651 2,555 —

Supplemental schedule of non-cash investing and financing activities

Distributions declared but not paid
$ 42,937 $ 42,693 $ 43,068

Decrease (increase) in liabilities associated with construction and capital expenditures
24,167 40 (5,261 )

Conversion of operating partnership units to common shares
15,793 11,638 6,569

Debt disposed of through dispositions
14,010 — —

Value of shares issued under benefit plans, net of cancellations
10,766 15,381 16,144

Contribution of real estate assets to joint ventures
10,523 — 33,493

Assumption of debt by joint venture
— — 30,525

Cancellation of notes receivable — affiliate in connection with property acquisition
— — 12,053

Common units issued in connection with investment in joint venture
— — 1,900

Acquisition of Summit, net of cash acquired, at fair value

Assets acquired
— — 1,881

Liabilities assumed
— — 1,881

Minority interests issued in connection with real estate contribution
— 532 —

See Notes to Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description 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. As of December 31, 2008, we owned interests in, operated, or were developing 186 multifamily properties comprising 64,329 apartment homes across the United States. We had 1,426 apartment homes under development at five of our multifamily properties, including 1,060 apartment homes at four multifamily properties owned through joint ventures, in which we own an interest, in addition to other sites we may develop into multifamily apartment communities. Additionally, one property comprised of 671 apartment homes was designated as held for sale.

2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements

Principles of Consolidation. Our consolidated financial statements include our accounts, the accounts of variable interest entities (“VIEs”) in which we are the primary beneficiary, and the accounts of other subsidiaries and joint ventures over which we have control. All intercompany transactions, balances, and profits have been eliminated in consolidation. Investments acquired or created are evaluated based on Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) 46R, “Consolidation of Variable Interest Entities” (as revised), which requires the consolidation of VIEs in which we are considered to be the primary beneficiary. If the investment is determined not to be within the scope of FIN 46R, then the investments are evaluated for consolidation using American Institute of Certified Public Accountants’ Statement of Position 78-9, “Accounting for Investments in Real Estate Ventures,” and Accounting Research Bulletin 51, “Consolidated Financial Statements.” If we are the general partner in a limited partnership, we also consider the guidance of Emerging Issues Task Force Issue 04-5, “Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights,” to assess whether any rights held by the limited partners overcome the presumption of control by us.

Allocations of Purchase Price. Upon the acquisition of real estate, we allocate the purchase price between tangible and intangible assets, which includes land, buildings, furniture and fixtures, the value of in-place leases, including above and below market leases, and acquired liabilities. When allocating the purchase price to acquired properties, we allocate costs to the estimated intangible value of in-place leases and above or below market leases and to the estimated fair value of furniture and fixtures, land and buildings on a value determined by assuming the property was vacant by applying methods similar to those used by independent appraisers of income-producing property. Depreciation and amortization is computed on a straight-line basis over the remaining useful lives of the related assets. The value of in-place leases and above or below market leases is amortized over the estimated average remaining life of leases in place at the time of acquisition. Estimates of fair value of acquired debt are based upon interest rates available for the issuance of debt with similar terms and remaining maturities.

Asset Impairment. Long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment exists if estimated future undiscounted cash flows associated with long-lived assets are not sufficient to recover the carrying value of such assets. When impairment exists the long-lived asset is adjusted to its respective fair value. We consider projected future undiscounted cash flows, trends, strategic decisions regarding future development plans, and other factors in our assessment of whether impairment conditions exist. While we believe our estimates of future cash flows are reasonable, different assumptions regarding such factors as market rents, economies, and occupancies could significantly affect these estimates. In estimating fair value, management uses appraisals, management estimates, or discounted cash flow calculations. In addition, we continually evaluate our investments in joint ventures and mezzanine construction financing and if we believe there is an other than temporary decline in market value, or if it is probable we will not collect all interest and principal in accordance with the terms of the mezzanine loan, we will record an impairment charge based on these evaluations. In general, we provide mezzanine loans to affiliated joint ventures constructing or operating multifamily assets. While we believe it is currently probable we will collect all scheduled principal and interest with respect to these development loans, current market conditions with respect to credit availability and with respect to real estate market fundamentals inject a significant amount of uncertainty into the environment. Given this, any future adverse development in market conditions would cause us to re-evaluate our conclusions, and could result in material impairment charges with respect to our mezzanine loans.

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The value of our properties held for development depends on market conditions, including estimates of the project start date as well as estimates of demand of multifamily communities. We have analyzed trends and other information related to each potential development and have incorporated this information as well as our current outlook into the assumptions we use in our impairment analyses. Due to the judgment and assumptions applied in the estimation process with respect to impairments, including the fact that limited market information regarding the value of comparable land exists at this time, it is possible actual results could differ substantially from those estimated.

We believe the carrying value of our operating real estate assets, properties under development, and land is currently recoverable. However, if market conditions worsen beyond our current expectations, or if changes in our development strategy significantly affect any key assumptions used in our fair value calculations, we may need to take additional charges in future periods for impairments related to existing assets. Any such non-cash charges would have an adverse effect on our consolidated financial position and results of operations.

Cash and Cash Equivalents. All cash and investments in money market accounts and other highly liquid securities with a maturity of three months or less at the date of purchase are considered to be cash and cash equivalents.

Cost Capitalization. Real estate assets are carried at cost plus capitalized carrying charges. Carrying charges are primarily interest and real estate taxes which are capitalized as part of properties under development. Expenditures directly related to the development, acquisition, and improvement of real estate assets, excluding internal costs relating to acquisitions of operating properties, are capitalized at cost as land and buildings and improvements. Indirect development costs, including salaries and benefits and other related costs directly attributable to the development of properties are also capitalized. All construction and carrying costs are capitalized and reported in the balance sheet as properties under development until the apartment homes are substantially completed. Upon substantial completion of the apartment homes, the total cost for the apartment homes and the associated land is transferred to buildings and improvements and land, respectively.

As discussed above, carrying charges are principally interest and real estate taxes capitalized as part of properties under development and buildings and improvements. Capitalized interest was approximately $17.7 million, $22.6 million, and $20.6 million in 2008, 2007, and 2006, respectively. Capitalized real estate taxes were approximately $3.4 million, $3.5 million, and $2.6 million in 2008, 2007, and 2006, respectively.

Where possible, we stage our construction to allow leasing and occupancy during the construction period, which we believe minimizes the duration of the lease-up period following completion of construction. Our accounting policy related to properties in the development and leasing phase is all operating expenses associated with completed apartment homes are expensed. We capitalize renovation and improvement costs we believe extend the economic lives of depreciable property. Capital expenditures subsequent to initial construction are capitalized and depreciated over their estimated useful lives, which range from three to twenty years.

Depreciation and amortization is computed over the expected useful lives of depreciable property on a straight-line basis with lives generally as follows:

Estimated

Useful Life

Buildings and improvements
5-35 years

Furniture, fixtures, equipment and other
3-20 years

Intangible assets (in-place leases and above and below market leases)
underlying lease term

Derivative Instruments. We utilize derivative financial instruments to manage interest rate risk, and we designate the derivative instruments as cash flow hedges. Derivative instruments are recorded in the balance sheet as either an asset or a liability measured at fair value. For cash flow hedge relationships, changes in the fair value of the derivative instrument deemed effective at offsetting the risk being hedged are reported in other comprehensive income or loss and are reclassified into earnings when the hedged item affects earnings. The ineffective portion is recognized in current period earnings. Derivatives not designated or not qualifying for hedge treatment must be recorded at fair value with gains or losses recognized in earnings in the period of change. We do not use derivative instruments for trading or speculative purposes. We use derivative instruments to reduce the potential impact of changes in interest rates on variable-rate debt.

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We formally document all relationships between hedging instruments and hedged items, as well as our risk management objective and strategy for undertaking the hedge. This process includes specific identification of the hedging instrument and the hedged transaction, the nature of the risk being hedged, and how the hedging instrument’s effectiveness in hedging the exposure to the hedged transaction’s variability in cash flows attributable to the hedged risk will be assessed and measured. Both at the inception of the hedge and on an ongoing basis, we assess whether the derivatives used in hedging transactions are highly effective in offsetting changes in cash flows or fair values of hedged items. We discontinue hedge accounting if a derivative is not determined to be highly effective as a hedge or has ceased to be a highly effective hedge.

See Note 10, “Derivative Instruments and Hedging Activities,” for further discussion of derivative financial instruments.

Accumulated other comprehensive income or loss in the Consolidated Balance Sheets includes the effective portions of cumulative changes in the fair value of derivatives in qualifying cash flow hedge relationships.

Discontinued Operations. The results of operations for properties sold during the period or classified as held for sale at the end of the current period are required to be classified as discontinued operations in the current and prior periods. The property-specific components of earnings that are classified as discontinued operations include separately identifiable property-specific revenues, expenses, depreciation and interest expense, if any. The gain or loss resulting from the eventual disposal of the held for sale properties is also classified as discontinued operations. Real estate assets held for sale are measured at the lower of carrying amount or fair value less costs to sell, and are presented separately in the accompanying consolidated balance sheets. Subsequent to classification of a property as held for sale, no further depreciation is recorded. Properties sold by our unconsolidated entities are not included in discontinued operations and related gains or losses are reported as a component of equity in income of joint ventures.

Gains on sale of real estate are recognized using the full accrual or partial sale methods, as applicable, in accordance with SFAS No. 66 “Accounting for Real Estate Sales,” provided various criteria relating to the terms of sale and any subsequent involvement with the real estate sold are met.

Income Recognition. Our rental and other property revenue is recorded when due from residents and is recognized monthly as it is earned. Other property revenue consists primarily of utility rebillings and administrative, application, and other transactional fees charged to our residents. Our apartment homes are rented to residents on lease terms generally ranging from six to fifteen months, with monthly payments due in advance. Interest, fee and asset management, and all other sources of income are recognized as earned. Two of our properties are subject to rent control or rent stabilization. Operations of apartment properties acquired are recorded from the date of acquisition in accordance with the purchase method of accounting. In management’s opinion, due to the number of residents, the types and diversity of submarkets in which the properties operate, and the collection terms, there is no significant concentration of credit risk.

Insurance. Our primary lines of insurance coverage are property, general liability, and health and workers’ compensation. We believe our insurance coverage adequately insures our properties against the risk of loss attributable to fire, earthquake, hurricane, tornado, flood and other perils and adequately insures us against other risks. Losses are accrued based upon our estimates of the aggregate liability for claims incurred using certain actuarial assumptions followed in the insurance industry and based on our experience.

Other Assets, Net. Other assets in our consolidated financial statements include investments under deferred compensation plans, deferred financing costs, non-real estate leasehold improvements and equipment, prepaid expenses, the value of in-place leases net of related accumulated amortization, and other miscellaneous receivables. Investments under deferred compensation plans are classified as trading securities and are adjusted to fair market value at period end. See further discussion of our investments under deferred compensation plans in Note 11, “Share Based Compensation and Benefit Plans.” Deferred financing costs are amortized over the terms of the related debt on the straight-line method, which approximates the effective interest method. Corporate leasehold improvements and equipment are depreciated using the straight-line method over the shorter of the expected useful lives or the lease terms which range from three to ten years.

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Reclassifications. Certain reclassifications have been made to amounts in prior period financial statements to conform to the current period presentations. We reclassified one property previously included in discontinued operations to continuing operations during the three months ended June 30, 2008 as management made the decision not to sell this asset. As a result, we adjusted the current and prior period consolidated financial statements to reflect this reclassification. Additionally, we recorded a depreciation charge of approximately $0.6 million during the year ended December 31, 2008 on this asset in accordance with the provisions of SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

Reportable Segments. Our multifamily communities are geographically diversified throughout the United States, and management evaluates operating performance on an individual property level. As each of our apartment communities has similar economic characteristics, residents, and products and services, our apartment communities have been aggregated into one reportable segment. Our multifamily communities generate rental revenue and other income through the leasing of apartment homes, which comprised 98%, 97%, and 96% of our total consolidated revenues, excluding income or loss on deferred compensation plans, for the years ended December 31, 2008, 2007, and 2006, respectively.

Restricted Cash. Restricted cash consists of escrow deposits held by lenders for property taxes, insurance and replacement reserves, cash required to be segregated for the repayment of residents’ security deposits, and escrowed amounts related to our development activities. Substantially all restricted cash is invested in demand and short-term instruments.

Share Based Compensation. Compensation expense associated with share-based awards under SFAS 123R is recognized in our consolidated statements of income and comprehensive income using the grant-date fair values. Compensation cost for all share-based awards, including options, requires measurement at estimated fair value on the grant date and recognition of compensation expense over the requisite service period for awards expected to vest. Share awards can have vesting periods of up to ten years. The fair value of stock option grants was estimated using the Black-Scholes valuation model. The compensation cost for share awards is based on the market value of the shares on the date of grant.

Use of Estimates. In the application of accounting principles generally accepted in the United States of America (“GAAP,”) management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, results of operations during the reporting periods, and related disclosures. Our more significant estimates relate to estimates supporting our impairment analysis related to the carrying values of our real estate assets, estimates of the useful lives of our assets, reserves related to our general liability and employee benefit programs, estimates related to our investments in joint ventures and mezzanine construction financing, and estimates of expected losses of variable interest entities. These estimates are based on historical experience and various other assumptions believed to be reasonable under the circumstances. Future events rarely develop exactly as forecasted, and the best estimates routinely require adjustment.

Recent Accounting Pronouncements. In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) 157, “Fair Value Measurements.” SFAS 157 defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. The statement does not require new fair value measurements, but is applied to the extent other accounting pronouncements require or permit fair value measurements. The statement emphasizes fair value as a market-based measurement which should be determined based on assumptions market participants would use in pricing an asset or a liability. In February 2008, the FASB issued FSP 157-2, “Effective Date of FASB Statement 157,” which deferred the effective date of SFAS 157 for us to January 1, 2009 for all nonfinancial assets and nonfinancial liabilities, except for those which are recognized or disclosed at fair value in the financial statements on a recurring basis. We have adopted FAS 157 for nonfinancial assets and nonfinancial liabilities effective January 1, 2009, and this adoption has not and is not expected to materially affect how we estimate fair value, although future disclosures regarding how we develop fair value estimates for nonfinancial assets and liabilities is expected to be enhanced. In October 2008, the FASB issued FSP 157-3, “Determining the Fair Value of a Financial Asset When the Market for that Asset is Not Active.” FSP 157-3 clarifies the application of SFAS 157 in a non-active market. FSP 157-3 became effective upon issuance, including prior periods for which financial statements have not been issued. We adopted FSP 157-3 upon issuance, and it did not have a material impact on our estimated fair value measurements.

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In December 2007, the FASB issued SFAS 141R, “Business Combinations,” which replaced SFAS 141, “Business Combinations.” SFAS 141R applies to all transactions or events in which an entity obtains control of one or more businesses. SFAS 141R requires the acquiring entity in a business combination to recognize the full fair value of assets acquired and liabilities assumed in the transaction (whether a full or partial acquisition); establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed; requires expensing of most transaction and restructuring costs; and requires the acquirer to disclose to investors and other users all of the information needed to evaluate and understand the nature and financial impact of the business combination. SFAS 141R is effective for us for business combinations made on or after January 1, 2009. We expect the adoption of SFAS 141R to have a material effect on our accounting for acquisitions of properties, which may fall under the definition of a business, as most transaction costs associated with such acquisitions will be expensed as opposed to the prior capitalization of such costs.

In December 2007, the FASB issued SFAS 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB 51.” SFAS 160 clarifies a non-controlling interest in a subsidiary is an ownership interest in a consolidated entity which should be reported as equity in the parent’s consolidated financial statements. SFAS 160 requires a reconciliation of the beginning and ending balances of equity attributable to non-controlling interests and disclosure, on the face of the consolidated income statements, of those amounts of consolidated net income attributable to the non-controlling interests, eliminating the past practice of reporting these amounts as an adjustment in arriving at consolidated net income. SFAS 160 also requires a parent to recognize a gain or loss in net income when a subsidiary is deconsolidated and requires the parent to attribute to a non-controlling interest its share of losses, even if such treatment results in a deficit non-controlling interests balance within the parent’s equity accounts. SFAS 160 is effective for us on January 1, 2009 and most provisions will be applied retrospectively. We are currently evaluating the effects, if any, the adoption of SFAS 160 may have on our financial statements.

In June 2008, the FASB issued FASB Staff Position (“FSP”) 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities.” FSP 03-6-1 affects entities which accrue non-returnable cash dividends on share-based payment awards during the awards’ service period. The FASB concluded unvested share-based payment awards which are entitled to non-forfeitable cash dividends, whether paid or unpaid, are participating securities and are participants of undistributed earnings. Because the awards are considered participating securities, the issuer is required to apply the two-class method of computing basic and diluted earnings per share which involves separate computations for common shares and participating securities. As we do accrue and pay non-forfeitable cash dividends on unvested share-based payment awards, these types of awards are considered participating securities and will be included in our earnings per share calculation in future periods. FSP 03-6-1 is effective for us on January 1, 2009 and will require retrospective application. The retrospective application on our adoption of this FSP would not have had any impact on basic or diluted earnings per share for the year ended December 31, 2008. The impact of our adoption of this FSP on basic and diluted earnings per share for the year ended December 31, 2007 would result in a decrease of approximately $0.01 and $0.02, respectively.

3. Share Data

Basic earnings per share are computed using income (loss) from continuing operations and the weighted average number of common shares outstanding. Diluted earnings per share reflect common shares issuable from the assumed conversion of common share options and awards granted and units convertible into common shares. Only those items that have a dilutive impact on our basic earnings per share are included in diluted earnings per share. For the years ended December 31, 2008, 2007, and 2006, 5.2 million, 4.3 million, and 2.8 million common share options and awards granted and units convertible into common shares, respectively, were excluded from the diluted earnings per share calculation as they were not determined to be dilutive.

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The following table presents information necessary to calculate basic and diluted earnings per share for the periods indicated:

Year Ended December 31,

(in thousands, except per share amounts) 2008 2007 2006

Basic earnings per share calculation

Income (loss) from continuing operations
$ (13,705 ) $ 41,721 $ 119,953

Income from discontinued operations, including gain on sale
84,678 106,736 112,893

Net income
$ 70,973 $ 148,457 $ 232,846

Income (loss) from continuing operations — per share
$ (0.25 ) $ 0.72 $ 2.12

Income from discontinued operations — per share
1.53 1.83 1.99

Net income — per share
$ 1.28 $ 2.55 $ 4.11

Weighted average number of common shares outstanding
55,272 58,135 56,660

Diluted earnings per share calculation

Income (loss) from continuing operations
$ (13,705 ) $ 41,721 $ 119,953

Income allocated to common units
— 27 2,432

Income (loss)from continuing operations, as adjusted
(13,705 ) 41,748 122,385

Income from discontinued operations, including gain on sale
84,678 106,736 112,893

Income from discontinued operations allocated to common units
— — 652

Net income, as adjusted
$ 70,973 $ 148,484 $ 235,930

Income (loss) from continuing operations, as adjusted — per share
$ (0.25 ) $ 0.71 $ 2.06

Income from discontinued operations — per share
1.53 1.80 1.90

Net income, as adjusted — per share
$ 1.28 $ 2.51 $ 3.96

Weighted average common shares outstanding
55,272 58,135 56,660

Incremental shares issuable from assumed conversion of:

Common share options and awards granted
— 482 725

Common units
— 508 2,139

Weighted average common shares outstanding, as adjusted
55,272 59,125 59,524

In April 2007, our Board of Directors approved a program to repurchase up to $250 million of our common equity securities through open market purchases, block purchases, and privately negotiated transactions. In January 2008, our Board of Trust Managers voted to increase the April 2007 repurchase plan to allow for the repurchase of up to $500 million of our common equity securities through open market purchases, block purchases, and privately negotiated transactions. We intend to use proceeds from asset sales and borrowings under our line of credit to fund share repurchases. Under this program, we repurchased 4.3 million shares for a total of approximately $230.2 million from April 2007 through December 31, 2008. The remaining dollar value of our common equity securities authorized to be repurchased under the program was approximately $269.8 million as of December 31, 2008.

At December 31, 2008 and 2007, 12.9 million and 12.2 million shares, respectively, were held in treasury.

In June 2006, we issued 3.6 million common shares at $71.25 per share in a public equity offering. We used the net proceeds of approximately $254.9 million to reduce indebtedness on our unsecured line of credit and for general corporate purposes.

We filed an automatic shelf registration statement with the Securities and Exchange Commission during 2006 which became effective upon filing. We may use the shelf registration statement to offer, from time to time, common shares, preferred shares, debt securities, or warrants. Our declaration of trust provides that we may issue up to 110,000,000 shares of beneficial interest, consisting of 100,000,000 common shares and 10,000,000 preferred shares. As of December 31, 2008, we had 66,027,911 common shares and no preferred shares outstanding under our declaration of trust.

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4. Operating Partnerships

At December 31, 2008, approximately 11% of our multifamily apartment homes were held in Camden Operating, L.P (“Camden Operating” or the “operating partnership”). Camden Operating has issued both common and preferred limited partnership units. As of December 31, 2008, we held 89.1% of the common limited partnership units and the sole 1% general partnership interest of the operating partnership. The remaining common limited partnership units, comprising 1,177,115 units, are primarily held by former officers, directors, and investors of Paragon Group, Inc., which we acquired in 1997. Each common limited partnership unit is redeemable for one common share of Camden or cash at our election. Holders of common limited partnership units are not entitled to rights as shareholders prior to redemption of their common limited partnership units. No member of our management owns Camden Operating common limited partnership units, and two of our ten trust managers own Camden Operating common limited partnership units.

Camden Operating has $100 million of 7.0% Series B Cumulative Redeemable Perpetual Preferred Units outstanding. Distributions on the preferred units are payable quarterly in arrears. The Series B preferred units are redeemable beginning in December 2008 by the operating partnership for cash at par plus the amount of any accumulated and unpaid distributions. There were no redemptions as of December 31, 2008. The preferred units are convertible beginning in 2013 by the holder into a fixed number of corresponding Series B Cumulative Redeemable Perpetual Preferred Shares. The Series B preferred units are subordinate to present and future debt. Distributions on the Series B preferred units totaled approximately $7.0 million for each of the years ended December 31, 2008, 2007, and 2006.

We are the controlling managing member interest in Oasis Martinique, LLC, which owns one property in Orange County, California and is included in our consolidated financial statements. The remaining interests, comprising 669,348 units, are exchangeable into 508,035 common shares.

At December 31, 2008, approximately 24% of our multifamily apartment homes were held in Camden Summit Partnership, L.P. (“the Camden Summit Partnership”). This operating partnership has issued common limited partnership units. As of December 31, 2008, we held 93.5% of the common limited partnership units and the sole 1% general partnership interest of the Camden Summit Partnership. The remaining common limited partnership units, comprising 1,260,085 units, are primarily held by former officers, directors and investors of Summit Properties, Inc. (“Summit”), a company we acquired in 2005. Each common limited partnership unit is redeemable for one common share of Camden or cash at our election. Holders of common limited partnership units are not entitled to rights as shareholders prior to redemption of their common limited partnership units. No member of our management owns Camden Summit Partnership common limited partnership units, and two of our ten trust managers own Camden Summit Partnership common limited partnership units.

In conjunction with our merger with Summit, we acquired employee notes receivable from former employees of Summit. At December 31, 2008 and 2007, the notes receivable had an outstanding balance of approximately $0.3 million and $2.0 million, respectively. During 2008, one employee repaid all his notes outstanding totaling approximately $1.6 million. As of December 31, 2008, the one remaining employee note receivable was 100% secured by Camden common shares.

5. Income Taxes

We have maintained and intend to maintain our election as a REIT under the Internal Revenue Code of 1986, as amended. In order for us to continue to qualify as a REIT we must meet a number of organizational and operational requirements, including a requirement to distribute annual dividends to our shareholders equal to a minimum of 90% of our REIT taxable income, computed without regards to the dividends paid deduction and our net capital gains. As a REIT, we generally will not be subject to federal income tax on our taxable income at the corporate level to the extent such income is distributed to our shareholders annually. If our taxable income exceeds our dividends in a tax year, REIT tax rules allow us to designate dividends from the subsequent tax year in order to avoid current taxation on undistributed income. For the year ended December 31, 2006, we designated dividends from 2007 to meet our dividend distribution requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to federal and state income taxes at regular corporate rates, including any applicable alternative minimum tax. In addition, we may not be able to requalify as a REIT for the four subsequent taxable years. Historically, we have incurred only state and local income, franchise, excise and margin taxes. Taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to applicable federal, state, and local income taxes.

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The following table reconciles net income to REIT taxable income for the years ended December 31, 2008, 2007, and 2006:

Year Ended December 31,

(in thousands) 2008 2007 2006

Net income
$ 70,973 $ 148,457 $ 232,846

Net (income) loss of taxable REIT subsidiaries included above
9,239 (3,449 ) (6,540 )

Net income from REIT operations
80,212 145,008 226,306

Book depreciation and amortization, including discontinued operations
175,162 164,978 163,673

Tax depreciation and amortization
(164,327 ) (155,173 ) (177,153 )

Book/tax difference on gains/losses from capital transactions
826 (25,985 ) (90,694 )

Book/tax difference on impairment of loss on land
51,323 1,447 —

Book/tax difference on merger costs
(68 ) (234 ) (331 )

Other book/tax differences, net
(15,342 ) 7,843 (767 )

REIT taxable income
127,786 137,884 121,034

Dividends paid deduction
(151,346 ) (144,604 ) (121,034 )

Dividends paid in excess of taxable income
$ (23,560 ) $ (6,720 ) $ —

A schedule of per share distributions we paid and reported to our shareholders is set forth in the following table:

Year Ended December 31,

Common Share Distributions 2008 2007 2006

Ordinary income
$ 1.34 $ 1.20 $ 0.26

Long-term capital gain
0.91 1.18 1.85

Unrecaptured Sec. 1250 gain
0.55 0.38 0.53

Total
$ 2.80 $ 2.76 $ 2.64

Percentage of distributions representing tax preference items
5.59 % 7.15 % 5.99 %

We have taxable REIT subsidiaries which are subject to federal and state income taxes. At December 31, 2008, our taxable REIT subsidiaries had net operating loss carryforwards (“NOL’s”) of approximately $15.8 million which expire in years 2020 to 2028. Because NOL’s are subject to certain change of ownership, continuity of business, and separate return year limitations, and because it is unlikely the available NOL’s will be utilized, no benefits of these NOL’s have been recognized in our consolidated financial statements.

SFAS No. 109, “Accounting for Income Taxes,” requires a public enterprise to disclose the aggregate difference in the basis of its net assets for financial and tax reporting purposes. The carrying value reported in our consolidated financial statements exceeded the tax basis by approximately $1,073.3 million.

Income Tax Expense — Current. For the tax year ended December 31, 2008, we had current income tax expense of approximately $0.8 million, comprised mainly of state income taxes. Income tax expense decreased $2.2 million for the year ended December 31, 2008 as compared to the same period in 2007, primarily attributable to a $1.6 million decrease in state taxes for our operating partnerships. This decrease was primarily attributable to less gains on property dispositions in states with high income tax rates and changes in state tax laws affecting one of our operating partnerships.

Income Tax Expense — Deferred. For the years ended December 31, 2008, 2007, and 2006, our deferred tax accounts were not material.

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6. Property Acquisitions, Dispositions, Assets Held for Sale, and Impairments

Acquisitions. In April 2007, we acquired Camden South Congress, a 253-apartment home community located in Austin, Texas for approximately $42.8 million and in June 2007, we acquired Camden Royal Palms, a 352-apartment home community located in Tampa, Florida for $41.1 million. Both properties were purchased using proceeds from our unsecured line of credit. The purchase prices of these properties were allocated to the tangible and intangible assets and liabilities acquired based on their estimated fair values at the date of acquisition. We did not acquire any operating properties in 2008.

Discontinued Operations and Assets Held for Sale. For the years ended December 31, 2008, 2007, and 2006, income from discontinued operations included the results of operations of one operating property, containing 671 apartment homes, classified as held for sale at December 31, 2008 and the results of operations of eight operating properties sold in 2008 through their sale dates. For the years ended December 31, 2007 and 2006, income from discontinued operations also included the results of operations of ten operating properties sold during 2007 and eight operating properties sold during 2006 through their sale dates. As of December 31, 2008, the one operating property held for sale had a net book value of approximately $11.1 million.

The following is a summary of income from discontinued operations for the years presented below:

Year Ended December 31,

(in thousands) 2008 2007 2006

Property revenues
$ 15,857 $ 41,693 $ 56,233

Property expenses
8,149 20,526 28,625

7,708 21,167 27,608

Interest
466 998 996

Depreciation and amortization
2,762 6,955 10,685

Income from discontinued operations
$ 4,480 $ 13,214 $ 15,927

Gain on sale of discontinued operations
$ 80,198 $ 107,039 $ 99,273

Dispositions. During the year ended December 31, 2008, we received net proceeds of approximately $121.7 million and recognized gains of approximately $80.2 million from the sale of eight operating properties, containing 2,392 apartment homes, to unaffiliated third parties. During the year ended December 31, 2007, we received net proceeds of approximately $166.4 million and recognized gains of approximately $106.3 million from the sale of ten operating properties, containing 3,054 apartment homes, to unaffiliated third parties. In addition, we sold 0.9 acres of undeveloped land to an unrelated third party, receiving net proceeds of approximately $6.0 million and recognizing gains totaling approximately $0.7 million. During the year ended December 31, 2006, we received net proceeds of approximately $137.3 million and recognized a gain of approximately $78.8 million on the sale of eight operating properties, containing 3,041 apartment homes, to unaffiliated third parties. In addition, we sold 8.7 acres of undeveloped land to an unrelated third party, receiving net proceeds of approximately $41.0 million and recognizing gains totaling approximately $20.5 million.

During the year ended December 31, 2008, we recognized gains of approximately $1.1 million from the sale of land adjacent to our regional office in Las Vegas, Nevada. The gain on this sale was not included in discontinued operations as the operations and cash flows of this asset were not clearly distinguished, operationally or for reporting purposes, from the adjacent assets.

Partial Sales and Dispositions to Joint Ventures included in Continuing Operations. In March 2008, we sold Camden Amber Oaks, a development community in Austin, Texas, to the Camden Multifamily Value Add Fund, L.P., (the “Fund”) for approximately $8.9 million. No gain or loss was recognized on the sale. Concurrent with the transaction, we invested approximately $1.9 million in the Fund. In August 2008, we sold Camden South Congress to the Fund for approximately $44.2 million and recognized a gain of approximately $1.8 million on the sale. In conjunction with the transaction, we invested approximately $2.8 million in the Fund.

There were no partial sales or dispositions to joint ventures for the year ended December 31, 2007.

During the year ended December 31, 2006, we recognized gains of approximately $91.5 million from the partial sale of nine properties to an affiliated unconsolidated joint venture. This partial sale generated net proceeds of approximately $170.9 million. We also recognized gains of approximately $0.5 million and $4.7 million on the partial sales of land to two joint ventures located in Houston, Texas and College Park, Maryland, respectively.

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The gains recognized from the partial sales of these assets are included in continuing operations as we retained a partial interest in the ventures which own these assets.

Upon our decision to abandon efforts to develop certain land parcels and to market these parcels for sale, we reclassify the operating expenses associated with these assets to discontinued operations. At December 31, 2008, we had 4.6 acres of undeveloped land parcels classified as held for sale with a net book value of approximately $9.2 million.

Impairment. The impairment loss on land for the year ended December 31, 2008 of approximately $51.3 million reflects impairments in the value of land holdings for several potential development projects we no longer plan to pursue, including approximately $48.6 million related to land holdings for five projects we no longer plan to develop, approximately $1.6 million in the value of a land parcel held for future development, and approximately $1.1 million for costs capitalized for a potential joint venture development we no longer plan to pursue. The impairment loss on land for the year ended December 31, 2007 of approximately $1.4 million reflects impairment in the value of one potential development project we no longer plan to pursue. These impairment charges are the difference between each parcel’s estimated fair value and the carrying value, which includes pursuit and other costs.

7. Investments in Joint Ventures

The joint ventures described below are accounted for using the equity method. The joint ventures in which we have an interest have been funded in part with secured, third-party debt. We have guaranteed no more than our proportionate interest on six loans totaling approximately $75.3 million utilized for construction and development activities for our joint ventures. Additionally, we eliminate fee income from property management services provided to these joint ventures to the extent of our ownership.

Our contributions of real estate assets to joint ventures at formation in which we receive cash are treated as partial sales provided certain criteria are met. As a result, the amounts recorded as gain on sale of assets to joint ventures represent the change in ownership of the underlying assets. Our initial recorded investment is comprised of our historical carrying value of the assets on the date of the respective transaction multiplied by our ownership percentage in the joint venture. We have provided mezzanine loans to certain joint ventures, which are recorded as “Notes receivable — affiliates” as discussed in Note 8, “Notes Receivable.”

We earn fees for property management, construction, development, and other services related to joint ventures in which we own an interest. Fees earned for these services amounted to approximately $9.2 million, $8.3 million, and $14.0 million for the years ended December 31, 2008, 2007, and 2006, respectively.

As of December 31, 2008, our equity investments in unconsolidated joint ventures accounted for utilizing the equity method of accounting consisted of 24 joint ventures, with our ownership percentages ranging from 15% to 72%. As discussed above, we provide property management services to the operating joint ventures and may provide construction and development services to the joint ventures currently under development. The following table summarizes balance sheet and income statement data for the unconsolidated joint ventures as of December 31 (in millions):

2008 2007

Total Assets
$ 1,234.4 $ 1,099.2

Total Third-Party Debt
984.2 883.9

Total Equity
168.7 149.7

2008 2007 2006

Total Revenues
$ 127.1 $ 113.7 $ 88.8

Net Income (Loss)
(18.7 ) (3.7 ) 13.4

Equity in Income (Loss) (1)
(1.3 ) 1.5 5.2

(1)
Equity in Income excludes our ownership interest in transactions with our joint ventures.

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Variable Interest Entities. As discussed in Note 2, “Summary of Significant Accounting Policies and Recent Accounting Pronouncements, Principles of Consolidation,” investments acquired or created are evaluated based on FIN 46R to determine whether or not the investment qualifies as a VIE. If the investment is determined to fall under the scope of FIN 46R, we then determine whether we are the primary beneficiary by performing a combination of qualitative and quantitative measures, including analyzing expected investment portfolios for the entities using various investment assumptions including product mix, return rates, and revenue and expense growth. The projected cash flow allocations are reviewed to determine whether or not we are in a primary beneficiary position based on expected returns or losses each variable interest holder would absorb. In addition, we consider factors such as voting rights and decision-making abilities of each variable interest holder.

The Fund is a VIE, but we do not consolidate the Fund as we are not considered to be the primary beneficiary. The Fund is in the form of a joint venture and was created to make investments in multifamily and mixed-use projects and own, develop, redevelop, manage, supervise, and dispose of such investments. The Fund currently contains one development project and one 253-unit operating property, and continues to evaluate potential acquisitions. The Fund is financed with third-party secured debt.

The following table compares the carrying amount of our investment in the Fund to the maximum loss exposure as of December 31, 2008 (in thousands):

VIE Investment (1) Maximum Loss Exposure (2)

Fund
$ 3,504 $ 37,500

(1)
Included in investments in joint ventures in the consolidated balance sheets.

(2)
Based on maximum capital commitment to the Fund; however, given we are the general partner, maximum loss exposure could be unlimited.

8. Notes Receivable

Affiliates. We provided mezzanine construction financing with rates ranging from LIBOR plus 3% to 14% per year, in connection with certain of our joint venture transactions. As of December 31, 2008 and 2007, the balance of “Notes receivable — affiliates” totaled $58.1 million and $50.4 million, respectively, on notes maturing through 2010. We eliminate the interest and other income to the extent of our percentage ownership in the joint ventures. We have reviewed the terms and conditions underlying these notes receivable and believe these notes are collectible, and no impairment existed at December 31, 2008.

At December 31, 2008, we were committed to funding additional amounts under the mezzanine loans in the amount of approximately $31.7 million.

Other. We have a mezzanine financing program under which we provide secured financing to owners of real estate properties. As of December 31, 2008 and 2007, the balance of secured note receivables due from unrelated third parties was approximately $8.7 million and $11.6 million, respectively. During the first quarter of 2008, one of our notes receivable, totaling approximately $2.9 million with an interest rate of Prime Rate plus 1%, was paid in full. The remaining note, which matures in January 2010, accrues interest at LIBOR plus 2%, which is recognized as earned. We have reviewed the terms and conditions underlying the outstanding notes receivable and believe this note is collectible, and no impairment existed at December 31, 2008.

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9. Notes Payable

The following is a summary of our indebtedness:

December 31,

(in millions) 2008 2007

Commercial Banks

Unsecured line of credit and short-term borrowings
$ 145.0 $ 115.0

$500 million term loan, due 2012
500.0 500.0

645.0 615.0

Senior unsecured notes

$100.0 million 4.74% Notes, due 2009
81.9 99.9

$250.0 million 4.39% Notes, due 2010
150.4 249.9

$100.0 million 6.77% Notes, due 2010
79.9 100.0

$150.0 million 7.69% Notes, due 2011
149.8 149.7

$200.0 million 5.93% Notes, due 2012
199.6 199.5

$200.0 million 5.45% Notes, due 2013
199.3 199.2

$250.0 million 5.08% Notes, due 2015
248.9 248.8

$300.0 million 5.75% Notes, due 2017
246.0 299.0

1,355.8 1,546.0

Medium-term notes

$15.0 million 7.63% Notes, due 2009
15.0 15.0

$25.0 million 4.64% Notes, due 2009
25.2 25.9

$10.0 million 4.90% Notes, due 2010
10.5 10.9

$14.5 million 6.79% Notes, due 2010
14.5 14.5

$35.0 million 4.99% Notes, due 2011
37.2 38.0

102.4 104.3

Total unsecured notes payable
2,103.2 2,265.3

Secured notes

3.18% – 8.50% Conventional Mortgage Notes, due 2009 – 2018
686.6 498.8

2.12% Tax-exempt Mortgage Note, due 2028 (1)
42.6 57.6

7.29% Tax-exempt Mortgage Note due 2025
— 6.4

729.2 562.8

Total notes payable
$ 2,832.4 $ 2,828.1

Floating rate debt included in commercial bank indebtedness (1.53%)
$ 145.0 $ 115.0

Floating rate tax-exempt debt included in secured notes (2.12%)
42.6 57.6

Floating rate debt included in secured notes (3.18% – 4.20%)
180.9 —

Value of real estate assets subject to secured notes
1,193.5 1,018.1

(1)
Approximately $14.0 million of which was paid off in connection with the sale of the related property in the third quarter of 2008.

We have a $600 million unsecured credit facility which matures in January 2010 and can be extended at our option to January 2011. The scheduled interest rate is based on spreads over LIBOR or the Prime Rate. The scheduled interest rate spreads are subject to change as our credit ratings change. Advances under the line of credit may be priced at the scheduled rates, or we may enter into bid rate loans with participating banks at rates below the scheduled rates. These bid rate loans have terms of six months or less and may not exceed the lesser of $300 million or the remaining amount available under the line of credit. The line of credit is subject to customary financial covenants and limitations, all of which we believe are in compliance.

Our line of credit provides us with the ability to issue up to $100 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding under our line of credit, it does reduce the amount available. At December 31, 2008, we had outstanding letters of credit totaling approximately $10.5 million, and had approximately $444.5 million available under our unsecured line of credit.

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As an alternative to our unsecured line of credit, from time to time we borrow using competitively bid unsecured short-term notes with lenders who may or may not be a part of the unsecured line of credit bank group. Such borrowings vary in term and pricing and are typically priced at interest rates below those available under the unsecured line of credit.

On August 18, 2008, we entered into a construction loan agreement for approximately $33.1 million to finance the development of a multifamily apartment community in Houston, Texas. The loan has an annual interest rate of LIBOR plus 1.45% and matures in August 2011. We entered into an interest rate swap, with a notional amount fluctuating up to a maximum of 50% of the projected outstanding balance on the construction loan. The swap will fix the interest rate at approximately 3.82% per annum for three years. The swap became effective November 2008. This swap has been formally designated as a hedge and is expected to be a highly effective cash flow hedge of the interest rate risk.

On September 24, 2008, we and one of our subsidiaries, the Camden Summit Partnership, as guarantors, and CPT Community Owner, LLC and CSP Community Owner, LLC, each a Delaware limited liability company and our subsidiary, as borrowers (collectively, the “Borrowers”), entered into a secured master credit facility agreement for a $380 million credit facility. The facility is comprised of a $175 million variable rate loan funded with a Fannie Mae Discount Mortgage Backed Security (“DMBS”) and a $205 million fixed rate loan. The variable rate loan is currently priced at approximately 4.2% per annum and is for a ten-year term. The DMBS rate has typically approximated three-month LIBOR. The fixed rate loan has a fixed annual interest rate of 5.625% for a ten-year term and provides for an additional one-year term with a variable rate. We have entered into standard nonrecourse carveout guarantees. The obligations of the Borrowers under the credit agreement are secured by cross-collateralized first priority mortgages on 17 of our multifamily properties. We used the proceeds from this credit facility for the repayment of maturing debt, including approximately $173 million of secured notes payable, as well as pay down of amounts outstanding under our revolving line of credit, with the remainder being used for general corporate purposes. Concurrent with this transaction, we entered into an interest rate cap, with a notional amount of $175 million, to cap the variable interest at approximately 7.17% for three-month LIBOR, before the applicable spread, per annum for three years. Although the hedge is expected to offset our exposure to interest rate movements it did not meet the strict hedge accounting requirements of SFAS 133 for cash flow hedges. As such, gains and losses will be recognized in earnings for the period of change.

On December 12, 2008, we commenced a cash tender offer for certain series of notes maturing in 2009 and 2010. We repurchased and retired approximately $108.3 million of our outstanding debt for approximately $100.6 million. We recorded a gain of approximately $7.2 million in relation to the tender offer, which is included in gain on early retirement of debt in our Consolidated Statements of Income and Comprehensive Income. These gains were partially offset by the proportionate share of unamortized loan costs and other costs associated with the retirement of the debt.

We also repurchased and retired approximately $82.7 million of various other outstanding debt from unrelated third parties for approximately $75.7 million during fiscal year 2008. We recorded a gain of approximately $6.4 million related to these transactions, which is included in gain on early retirement of debt in our Consolidated Statements of Income and Comprehensive Income. These gains were partially offset by the proportionate share of unamortized loan costs and other costs associated with the retirement of the debt.

As part of the 2005 Summit merger, we assumed certain debt and recorded approximately $33.9 million as a fair value adjustment which is being amortized over the respective debt terms. As of December 31, 2008, approximately $6.0 million of the fair value adjustment remained unamortized. We recorded amortization of the fair value adjustment, which resulted in a decrease of interest expense, of approximately $5.4 million, $7.1 million, and $7.6 million during the years ended December 31, 2008, 2007 and 2006, respectively.

During 2008 we repaid approximately $191 million of unsecured notes either as they matured or as an early repurchase and retirement, excluding repayments on our line of credit, with an effective interest rate of 5.1%.

At December 31, 2008 and 2007, the weighted average interest rate on our floating rate debt, which includes our unsecured line of credit, was 2.7% and 5.0%, respectively.

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Our indebtedness, excluding our unsecured line of credit, had a weighted average maturity of 5.0 years. Scheduled repayments on outstanding debt, including our line of credit and scheduled principal amortizations, and the weighted average interest rate on maturing debt at December 31, 2008 are as follows:

(in millions) Weighted Average

Year Amount Interest Rate

2009
$ 134.4 5.2 %

2010
355.5 5.1

2011
421.7 4.5

2012
772.2 5.4

2013
227.2 5.4

2014 and thereafter
921.4 5.1

Total
$ 2,832.4 5.1 %

10. Derivative Instruments & Hedging Activities

We have entered into interest rate hedge agreements to reduce the impact of interest rate fluctuations on our variable rate debt. We have not entered into any interest rate hedge agreements for our fixed-rate debt and do not enter into derivative transactions for trading or other speculative purposes. The following tables summarize our interest rate hedge agreements at December 31, 2008 (dollars in millions):

Notional balance
$ 500

Hedging instrument
Interest rate swap

Effective interest rate
5.24 %(1)

Maturity date
10/4/2012

Estimated liability fair value
$ 50.3

(1)
Includes our interest rate spread of 0.5%

Notional balance
$ 175

Hedging instrument
Interest rate cap

Interest rate cap LIBOR strike
7.17 %

Maturity date
10/1/2011

Estimated asset fair value
$ 0.1

Notional balance
$ 3.4

Hedging instrument
Interest rate swap

Effective interest rate
3.82 %

Maturity date
8/18/2011

Estimated liability fair value
$ 0.8

We have determined our interest rate hedge agreements qualify as effective cash flow hedges under SFAS 133, “Accounting for Derivative Instruments and Hedging Activities,” resulting in our recording the effective portion of cumulative changes in the fair value of the interest rate hedge agreements in other comprehensive income (loss). Amounts recorded in other comprehensive income (loss) will be reclassified into earnings as adjustments to interest expense in the periods in which earnings are affected by the hedged cash flows. To adjust the interest rate hedge agreements to their fair value, we recorded unrealized losses in other comprehensive loss of approximately $35.1 million and $16.1 million during the years ended December 31, 2008 and 2007, respectively. These amounts will be reclassified into interest expense in conjunction with the periodic payment of the cash flows being hedged. The change in net unrealized losses for the years ended December 31, 2008 and 2007 reflect a reclassification of unrealized losses from accumulated other comprehensive loss to interest expense of approximately $9.3 million and $0.3 million, respectively. We anticipate approximately $18.4 million of accumulated other comprehensive loss at December 31, 2008 will be reclassified as a charge to interest expense over the next twelve months to offset the variability of cash flows of the hedge transaction during this period.

We assess, both at inception and on an on-going basis, the effectiveness of the cash flow hedging relationships and any hedge ineffectiveness is recognized directly in earnings. During the years ended December 31, 2008 and 2007, no hedge ineffectiveness was recognized in earnings and we expect the hedging relationships to continue to be highly effective. The fair value of the interest rate hedge agreements is included in other liabilities.

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Derivative financial instruments expose us to credit risk in the event of non-performance by the counterparties under the terms of the interest rate hedge agreements. We believe we minimize our credit risk on these transactions by dealing with major, creditworthy financial institutions. As part of our on-going control procedures, we monitor the credit ratings of counterparties and our exposure to any single entity, thus minimizing credit risk concentration. We believe the likelihood of realized losses from counterparty non-performance is remote.

11. Share Based Compensation and Benefit Plans

Incentive Plan. During 2002, our Board of Trust Managers adopted, and our shareholders approved, the 2002 Share Incentive Plan of Camden Property Trust (the “2002 Share Plan”). Under the 2002 Share Plan, we may issue up to 10% of the total of (i) the number of our common shares outstanding as of the plan date, February 5, 2002, plus (ii) the number of our common shares reserved for issuance upon conversion of securities convertible into or exchangeable for our common shares, plus (iii) the number of our common shares held as treasury shares. Compensation awards that can be granted under the 2002 Share Plan include various forms of incentive awards, including incentive share options, non-qualified share options and share awards. The class of eligible persons that can receive grants of incentive awards under the 2002 Share Plan consists of key employees, consultants and non-employee trust managers as determined by the Compensation Committee of our Board of Trust Managers. The 2002 Share Plan does not have a termination date; however, no incentive share options will be granted under this plan after February 5, 2012.

Valuation Assumptions. The weighted average fair value of options granted was $5.06, $11.04, and $7.88 in 2008, 2007, and 2006, respectively. We estimated the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The following assumptions were used for options granted during each respective period:

Year Ended

December 31,

2008 2007 2006

Expected volatility
20.5 % 17.1 % 16.6 %

Risk-free interest rate
3.6 % 4.6 % 4.4 %

Expected dividend yield
5.8 % 3.7 % 4.1 %

Expected life (in years)
7 6 5

Our computation of expected volatility for 2008 was based on the historical volatility of our common shares over a time period equal to the expected term of the option and ending on the grant date. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield on our common shares is calculated using the annual dividends paid in the prior year. Our computation of expected life for 2008 was determined based on historical experience of similar awards, giving consideration to the contractual terms of the share-based awards.

Options. Options are exercisable, subject to the terms and conditions of the plan, in increments ranging from 20% to 33.33% per year on each of the anniversaries of the date of grant. The plan provides that the exercise price of an option will be determined by the Compensation Committee of the Board of Trust Managers on the day of grant, and to date all options have been granted at an exercise price that equals the fair market value on the date of grant. Options exercised during 2008 were exercised at prices ranging from $24.88 to $43.90 per share. At December 31, 2008, options outstanding were exercisable at prices ranging from $24.88 to $73.32 per share and had a weighted average remaining contractual life of 5.8 years.

The total intrinsic value of options exercised was approximately $0.5 million during the year ended December 31, 2008. As of December 31, 2008, there was approximately $1.8 million of total unrecognized compensation cost related to unvested options, which is expected to be amortized over the next five years.

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The following table summarizes share options outstanding and exercisable at December 31, 2008:

Outstanding Options Exercisable Options

Range of Weighted Weighted Remaining

Exercise Average Average Contractual

Prices Number Price Number Price Life

$24.88-$41.91
285,371 $ 35.37 285,371 $ 35.37 3.4

$42.90-$43.90
353,486 42.98 353,486 42.98 4.9

$44.00-$73.32
897,670 48.78 466,360 49.49 6.9

Total options
1,536,527 $ 44.96 1,105,217 $ 43.76 5.8

The following table summarizes activity under our Share Incentive Plans for the three years ended December 31:

Options and Share awards

Weighted Weighted Weighted

Average Average Average

1993 Share Plan 2008 2008 Price 2007 2007 Price 2006 2006 Price

Balance at January 1
1,885,989 $ 30.34 1,953,800 $ 31.99 2,045,730 $ 32.12

Options

Exercised
(39,013 ) 38.26 (60,695 ) 33.37 (89,879 ) 32.24

Forfeited
— — (6,986 ) 33.98 (1,086 ) 29.44

Net options
(39,013 ) (67,681 ) (90,965 )

Share awards

Forfeited
— (130 ) 34.72 (965 ) 34.71

Net share awards
— (130 ) (965 )

Balance at December 31
1,846,976 $ 29.68 1,885,989 $ 30.34 1,953,800 $ 31.99

Exercisable options at December 31
165,811 $ 32.78 174,576 $ 32.68 262,779 $ 32.78

Vested share awards at December 31
1,337,273 $ 28.95 1,337,273 $ 28.95 1,317,733 $ 28.85

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Shares

Available Options and Share awards

for Weighted Weighted Weighted

Issuance Average Average Average

2002 Share Plan 2008 2008 2008 Price 2007 2007 Price 2006 2006 Price

Balance at January 1
3,032,625 1,621,958 $ 51.21 1,498,911 $ 46.40 1,334,332 $ 42.72

Options

Granted
(444,264 ) 444,264 48.02 — — — —

Exercised
— (5,937 ) 37.89 (63,013 ) 41.71 (75,366 ) 35.50

Forfeited
12,954 (12,954 ) 48.02 (2,836 ) 39.99 (1,534 ) 36.87

Net options
(431,310 ) 425,373 (65,849 ) (76,900 )

Share awards

Granted
(267,450 ) 267,450 48.23 253,836 77.22 270,658 65.24

Forfeited
36,445 (36,445 ) 58.10 (64,940 ) 64.55 (29,179 ) 52.63

Net share awards
(231,005 ) 231,005 188,896 241,479

Balance at December 31
2,370,310 2,278,336 $ 50.85 1,621,958 $ 51.21 1,498,911 $ 46.40

Exercisable options at December 31
939,406 $ 45.70 908,925 $ 45.48 754,586 $ 44.84

Vested share awards at December 31
654,664 $ 50.90 498,772 $ 48.57 354,850 $ 46.44

Employee Share Purchase Plan (“ESPP”). We have established an ESPP for all active employees and officers who have completed one year of continuous service. Participants may elect to purchase Camden common shares through payroll deductions and/or through semi-annual contributions. At the end of each six-month offering period, each participant’s account balance is applied to acquire common shares at 85% of the market value, as defined, on the first or last day of the offering period, whichever price is lower. We currently use treasury shares to satisfy ESPP share requirements. Each participant must hold the shares purchased for nine months in order to receive the discount, and a participant may not purchase more than $25,000 in value of shares during any plan year, as defined. The following table presents certain information related to our ESPP.

2008 2007 2006

Shares purchased
25,939 20,534 30,352

Weighted average fair value of shares purchased
$ 37.81 $ 59.98 $ 73.61

Expense recorded (in millions)
$ 0.1 $ 0.2 $ 0.5

In January 2009, 12,940 shares were purchased under the ESPP related to the 2008 plan year.

Share Awards and Vesting. Share awards generally have a vesting period of five years. The compensation cost for share awards is based on the market value of the shares on the date of grant and is amortized over the vesting period. To determine our estimated forfeitures, we use actual forfeiture history. At December 31, 2008, the unamortized value of previously issued unvested share awards was approximately $22.8 million. This amount will be amortized into earnings over the next five years. The total fair value of shares vested during the years ended December 31, 2008, 2007, and 2006, was $8.8 million, $8.1 million, and $10.9 million, respectively. On October 30, 2006, the Compensation Committee of the Board of Trust Managers of Camden Property Trust authorized the acceleration of vesting of all unvested share awards held by two members of senior management issued under the 2002 share incentive plan. As a result of vesting acceleration, an aggregate of 76,542 share awards that otherwise would have vested from time to time over the subsequent five years became immediately exercisable. All other terms and conditions applicable to such share awards remain in effect. By accelerating the vesting of these share awards, we recognized a one-time expense in 2006 of approximately $4.2 million. This action will reduce compensation expense by an equivalent amount over the five-year period these share awards would have originally vested.

Total compensation cost for options and share awards charged against income was $6.5 million, $5.8 million, and $9.4 million for 2008, 2007, and 2006, respectively.

Rabbi Trust. We have established a rabbi trust for a select group of participants in which share awards granted under the share incentive plan and salary and other cash amounts earned may be deposited. The rabbi trust is an irrevocable trust and no portion of the trust fund may be used for any purpose other than the delivery of those assets to the participants. The assets held in the rabbi trust are subject to the claims of the Company’s general creditors in the event of bankruptcy or insolvency. As of December 31, 2008, the rabbi trust is in use only for deferrals made prior to 2005, including bonuses related to service in 2004 but paid in 2005.

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We follow the provisions of EITF 97-14 “Accounting for Deferred Compensation Arrangements Where the Amounts Are Held in a Rabbi Trust and Invested” regarding the accounting for the rabbi trust. As a result, the assets of the rabbi trust are consolidated into our financial statements. Granted share awards held by the rabbi trust are classified in equity in a manner similar to the manner in which treasury stock is accounted. Subsequent changes in the fair value of the shares are not recognized. The deferred compensation obligation is classified as an equity instrument and changes in the fair value of the amount owed to the participant are not recognized. At December 31, 2008, 2007, and 2006, approximately 2.1 million, 2.1 million, and 2.2 million share awards, respectively, were held in the rabbi trust. Additionally, as of December 31, 2008, 2007, and 2006, the rabbi trust was holding trading securities totaling approximately $50.2 million, $76.4 million, and $65.8 million, respectively, which represents cash deferrals made by plan participants. Market value fluctuations on these trading securities are recognized in income in accordance with SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” and the fair value of the liability due to participants is adjusted accordingly.

At December 31, 2008, 2007, and 2006, approximately $35.0 million, $34.9 million, and $33.7 million, respectively, was required to be paid to us by plan participants upon the withdrawal of any assets from the trust, and is included in “Accounts receivable-affiliates” in our consolidated financial statements.

Non-Qualified Deferred Compensation Plan. The Non-Qualified Deferred Compensation Plan (the “Plan”), effective December 1, 2004, is an unfunded arrangement established and maintained primarily for the benefit of a select group of participants. Eligible participants shall commence participation in the Plan on the date the deferral election first becomes effective. We will credit to the participant’s account an amount equal to the amount designated as the participant’s deferral for the plan year as indicated in the participant’s deferral election(s). Any modification to or termination of the Plan will not reduce a participant’s right to any vested amounts already credited to his or her account. At December 31, 2008, 2007, and 2006, approximately 0.7 million, 0.5 million, and 0.4 million share awards, respectively, were held in the Plan. Additionally, as of December 31, 2008, 2007, and 2006, the Plan was holding trading securities totaling approximately $18.1 million, $20.7 million, and $15.6 million, respectively, which represents cash deferrals made by plan participants. Market value fluctuations on these trading securities are recognized in income in accordance with SFAS No. 115 and the fair value of the liability due to participants is adjusted accordingly.

401(k) Savings Plan. We have a 401(k) savings plan, which is a voluntary defined contribution plan. Under the savings plan, every employee is eligible to participate beginning on the date the employee has completed six months of continuous service with us. Each participant may make contributions to the savings plan by means of a pre-tax salary deferral, which may not be less than 1% or more than 60% of the participant’s compensation. The federal tax code limits the annual amount of salary deferrals that may be made by any participant. We may make matching contributions on the participant’s behalf up to a predetermined limit. The matching contributions made for the years ended December 31, 2008, 2007, and 2006 were approximately $1.4 million, $1.2 million, and $1.0 million, respectively. A participant’s salary deferral contribution is 100% vested and nonforfeitable. A participant will become vested in our matching contributions 33.33% after one year of service, 66.67% after two years of service and 100% after three years of service. Administrative expenses under the savings plan were paid by us and were not significant.

12. Fair Value of Financial Instruments

As of January 1, 2008 we adopted SFAS 157, “Fair Value Measurements,” (“SFAS 157”). The standard defines fair value, establishes a framework for measuring fair value, and also expands disclosures about fair value measurements. The following table presents information about our assets and liabilities measured at fair value on a recurring basis as of December 31, 2008, and indicates the fair value hierarchy of the valuation techniques utilized by us to determine such fair value.

In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets we have the ability to access for identical assets or liabilities. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices observable for the asset or liability, such as interest rates and yield curves observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In instances in which the inputs used to measure fair value may fall into different levels of the fair value hierarchy, the level in the fair value hierarchy within which the fair value measurement in its entirety has been determined is based on the lowest level input significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Disclosures concerning assets and liabilities measured at fair value on a recurring basis are as follows:

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Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2008

(in millions)

Quoted Prices in Significant

Active Markets Other Significant Balance at

for Identical Observable Unobservable December 31,

Assets (Level 1) Inputs (Level 2) Inputs (Level 3) 2008

Assets

Deferred compensation plan investments
$ 43.9 $ — $ — $ 43.9

Derivative financial instruments
$ — $ 0.1 $ — $ 0.1

Liabilities

Derivative financial instruments
$ — $ 51.1 $ — $ 51.1

To estimate fair values, observable market prices are used if available. In some instances, observable market prices are not readily available for certain financial instruments and fair value is estimated using present value or other techniques appropriate for a particular financial instrument. These techniques involve some degree of judgment and as a result are not necessarily indicative of the amounts we would realize in a current market exchange. The use of different assumptions or estimation techniques may have a material effect on the estimated fair value amounts.

Deferred compensation plan investments. The estimated fair values of investment securities classified as deferred compensation plan investments are based on quoted market prices utilizing public information for the same transactions or information provided through third-party advisors. Our deferred compensation plan investments are recorded in other assets.

Derivative financial instruments. We enter into derivative financial instruments, specifically interest rate swaps and caps, for non-trading purposes. We use interest rate swaps and caps to manage interest rate risk arising from interest payments associated with floating rate debt. Through December 31, 2008, derivative financial instruments were designated and qualified as cash flow hedges. Derivative contracts with positive net fair values are recorded in accrued expenses and other assets. Derivative contracts with negative net fair values are recorded in accrued expenses and other liabilities. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps and caps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, to comply with the provisions of SFAS 157, credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair values to account for potential nonperformance risk. The fair value of interest rate caps are determined using the market standard methodology of discounting the future expected cash receipts which would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observed market interest rate curves and volatilities.

To comply with the provisions of SFAS 157, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, and guarantees.

Although we have determined the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, as of December 31, 2008, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

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Other Fair Value Disclosures. As of December 31, 2008 and 2007, management estimated the carrying value of cash and cash equivalents, restricted cash, accounts receivable, notes receivable, investments and liabilities under deferred compensation plans, accounts payable, accrued expenses and other liabilities, and distributions payable were at amounts that reasonably approximated their fair value.

In calculating the fair value of our notes payable, interest rates and spreads reflect our current creditworthiness and market conditions available for the issuance of notes payable with similar terms and remaining maturities. In instances where market conditions are not available, we follow the guidance of FSP 157-3 to estimate fair value in a non-active market.

December 31, 2008 December 31, 2007

Carrying Estimated Carrying Estimated

(in thousands) Value Fair Value Value Fair Value

Fixed rate notes payable (1)
$ 2,467.3 $ 2,163.8 $ 2,655.5 $ 2,609.6

Floating rate notes payable (2)
365.1 359.0 172.6 172.6 (3)

(1)
Includes a $500 million term loan entered into in 2007 and $3.4 million of a construction loan entered into in 2008 which has become effectively fixed by the use of an interest rate swap.

(2)
Includes balances outstanding under our unsecured line of credit.

(3)
Carrying value approximated fair value.

13. Net Change in Operating Accounts

The effect of changes in the operating accounts on cash flows from operating activities is as follows:

Year Ended December 31,

(in thousands) 2008 2007 2006

Decrease (increase) in assets:

Other assets, net
$ (4,350 ) $ 9,956 $ (2,667 )

Increase (decrease) in liabilities:

Accounts payable and accrued liabilities
(568 ) (19,657 ) 17,339

Accrued real estate taxes
486 1,855 (110 )

Other liabilities
1,406 (5,267 ) (13,226 )

Change in operating accounts
$ (3,026 ) $ (13,113 ) $ 1,336

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14. Commitments and Contingencies

Construction Contracts. As of December 31, 2008, we were obligated for approximately $63.4 million of additional expenditures on our recently completed projects and those currently under development. We expect to fund approximately $57 million of this amount from existing joint venture construction loans.

Litigation. In September 2007, The Equal Rights Center filed a lawsuit against us and one of our wholly-owned subsidiaries in the United States District Court for the District of Maryland. This suit alleges various violations of the Fair Housing Act and the Americans with Disabilities Act by us in the design, construction, control, management, and/or ownership of various multifamily properties. The plaintiff seeks compensatory and punitive damages in unspecified amounts, an award of attorneys’ fees and costs of suit, as well as preliminary and permanent injunctive relief that includes modification of existing assets and prohibiting construction or sale of noncompliant units or complexes. At this stage in the proceeding, it is not possible to predict or determine the outcome of the lawsuit, nor is it possible to estimate the amount of loss, if any, that would be associated with an adverse decision.

We are subject to various other legal proceedings and claims which arise in the ordinary course of business. Matters which arise out of allegations of bodily injury, property damage, and employment practices are generally covered by insurance. While the resolution of these other legal proceedings and claims cannot be predicted with certainty, management believes the final outcome of such matters will not have a material adverse effect on our consolidated financial statements.

Other Contingencies. In the ordinary course of our business, we issue letters of intent indicating a willingness to negotiate for acquisitions, dispositions, or joint ventures and also enter into arrangements contemplating various transactions. Such letters of intent and other arrangements are non-binding as to either party unless and until a definitive contract is entered into by the parties. Even if definitive contracts relating to the purchase or sale of real property are entered into, these contracts generally provide the purchaser with time to evaluate the property and conduct due diligence, during which periods the purchaser will have the ability to terminate the contracts without penalty or forfeiture of any deposit or earnest money. There can be no assurance definitive contracts will be entered into with respect to any matter covered by letters of intent or we will consummate any transaction contemplated by any definitive contract. Furthermore, due diligence periods for real property are frequently extended as needed. An acquisition or sale of real property becomes probable at the time the due diligence period expires and the definitive contract has not been terminated. We are then at risk under a real property acquisition contract, but generally only to the extent of any earnest money deposits associated with the contract, and are obligated to sell under a real property sales contract.

Lease Commitments. At December 31, 2008, we had long-term leases covering certain land, office facilities, and equipment. Rental expense totaled approximately $3.0 million for both of the years ended December 31, 2008 and 2007 and $2.9 million for the year ended December 31, 2006. Minimum annual rental commitments for the years ending December 31, 2009 through 2013 are approximately $2.5 million, $2.5 million, $2.4 million, $2.0 million, and $1.9 million, respectively, and $3.6 million in the aggregate thereafter.

Investments in Joint Ventures. We have entered into, and may continue in the future to enter into, joint ventures or partnerships (including limited liability companies) through which we own an indirect economic interest 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.

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In December 2007, we formed 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 will be acquired by or contributed to the Fund for development. In April 2008, we formed a co-investment limited partnership (the “Co-Investment Vehicle”) to invest for its own account or alongside the Fund in one or more investments of the Fund. The Fund and the Co-Investment Vehicle (collectively, the “Funds”) will serve, until the earlier of (i) December 31, 2011 or (ii) such time as 90% of the Funds’ committed capital is invested, as the exclusive vehicles 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 Funds, transactions with our existing ventures, contributions or sales of properties to or entities in which we remain an investor, and transactions approved by the Funds’ advisory board. The Funds will not restrict our development activities and will terminate on December 31, 2015, subject to two one-year extensions. We are currently targeting acquisitions for the Funds where value creation opportunities are present through one or more of the following: redevelopment activities, market cycle opportunities, or improved property operations. One of our wholly-owned subsidiaries is the general partner of each of the Funds, and we have committed 20% of the total equity of each of the Funds, up to $75 million in the aggregate. We have received commitments to each of the Funds from an unaffiliated investor of $150 million and on September 30, 2008 the Funds were closed to additional investors.

Employment Agreements. At December 31, 2008, we had employment agreements with eight of our senior officers, the terms of which expire at various times through August 20, 2009. Such agreements provide for minimum salary levels, as well as various incentive compensation arrangements, which are payable based on the attainment of specific goals. The agreements also provide for severance payments plus a gross-up payment if certain situations occur, such as termination without cause or a change of control. In the case of five of the agreements, the severance payment equals one times the respective current annual base salary in the case of termination without cause and 2.99 times the respective average annual base salary over the previous three fiscal years in the case of a change of control and a termination of employment or a material adverse change in the scope of their duties. In the case of one agreement, the severance payment equals one times the respective current annual base salary for termination without cause and 2.99 times the greater of current gross income or average gross income over the previous three fiscal years in the case of a change of control. In the case of the other two agreements, the severance payment generally equals 2.99 times the respective average annual compensation over the previous three fiscal years in connection with, among other things, a termination without cause or a change of control, and the officer would be entitled to receive continuation and vesting of certain benefits in the case of such termination.

Hurricane Ike. On September 13, 2008, Hurricane Ike came ashore on the Texas Gulf Coast and impacted our multifamily communities in the Houston, Texas area. As of February 2009, our current assessment of the total damage incurred is approximately $11.3 million; approximately $1.4 million was not covered by insurance. Accordingly, our operating results for the year ended December 31, 2008 include a corresponding charge in property and operating expenses to reflect the estimated amounts not reimbursable by insurance.

15. Postretirement Benefits

We maintain a postretirement benefit for two former officers of Summit, who also serve on our Board of Trust Managers. Benefits received by these former employees include office space and medical benefits. Participants in the postretirement plan contribute to the cost of the medical benefits. Our contribution for medical benefits is limited to amounts between $562 and $868 per month per participant and dependents. For measurement purposes, a 12.1% and 11.0% rate of increase in the per capita cost of covered health care claims was assumed for the years ending December 31, 2008 and 2007, respectively; the rate was assumed to decrease until 2015 at which point the annual rate would be 5.0% and remain at that level thereafter. Our contribution for office space was approximately $187,000 for the year ended December 31, 2008.

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As of December 31, the status of our defined postretirement benefit plan was as follows:

(in thousands) 2008 2007

Postretirement benefit obligation, beginning of year
$ 3,162 $ 3,202

Interest cost
182 176

Actuarial gain (1)
(160 ) —

Benefits paid
(206 ) (216 )

Net periodic postretirement benefit obligation, end of year
$ 2,978 $ 3,162

(1)
Included in other comprehensive income in our Consolidated Statements of Income and Comprehensive Income.

The weighted average discount rate used to determine the value of accumulated postretirement benefit cost for the years ended December 31, 2008 and 2007 was 6.29% and 5.62%, respectively. As of December 31, 2008, we had accrued for the approximate $3.0 million associated with these postretirement liabilities in other liabilities in our consolidated balance sheet. We paid approximately $0.2 million to the plan during the year ended December 31, 2008. During 2009, we expect to pay approximately $0.2 million to the plan.

The benefits expected to be paid in each of the next five fiscal years, and in the aggregate for the five fiscal years thereafter are as follows:

(in thousands) Estimated Benefit

Year Beginning January 1 Payment

2009
$ 210

2010
216

2011
215

2012
220

2013
224

2014-2018
1,165

Total
$ 2,250

A 1% increase or decrease in assumed health care cost trend rates has no significant effect on the interest cost component of net periodic postretirement health care costs. A 1% increase or decrease in assumed health care cost trend rates would increase or decrease the accumulated postretirement benefit obligation by approximately $0.3 million.

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16. Quarterly Financial Data (unaudited)

Summarized quarterly financial data, which has been adjusted for discontinued operations as discussed in Note 6, “Property Acquisitions, Dispositions, Assets Held for Sale, and Impairments,” for the years ended December 31, 2008 and 2007, is as follows:

(in thousands, except per share amounts) First Second Third Fourth Total(e)

2008:

Revenues
$ 151,464 $ 155,527 $ 159,383 $ 157,642 $ 624,016

Net income
14,915 17,294 73,673 (34,909 ) 70,973

Net income per share — basic
0.27 0.31 1.33 (a) (0.63 )(b) 1.28

Net income per share — diluted
0.27 0.31 1.32 (a) (0.63 )(b) 1.28

2007:

Revenues
$ 142,728 $ 146,383 $ 149,743 $ 149,465 $ 588,319

Net income
13,037 42,592 11,852 80,976 148,457

Net income per share — basic
0.22 0.72 (c) 0.20 1.43 (d) 2.55

Net income per share — diluted
0.22 0.71 (c) 0.20 1.41 (d) 2.51

(a)
Includes a $65,599, or $1.18 basic and $1.17 diluted per share, impact related to the gain on sale of discontinued operations.

(b)
Includes a $51,323, or $0.93 for both basic and diluted per share, impact related to the impairment loss on land.

(c)
Includes a $30,976, or $0.53 basic and $0.52 diluted per share, impact related to the gain on sale of discontinued operations.

(d)
Includes a $75,306, or $1.33 basic and $1.31 diluted per share, impact related to the gain on sale of discontinued operations, as well as a $1,447 or $0.03 for both basic and diluted per share, impact related to the impairment loss on land.

(e)
Net income per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly net income per share may not equal the total computed for the year.

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Schedule III

CAMDEN PROPERTY TRUST

REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2008
(in thousands)

Initial Cost Total Cost

Building/ Cost Building/ Total Cost,

Construction Subsequent to Construction Net of Year of

in Progress & Acquisition/ in Progress & Accumulated Accumulated Completion/

Current Communities Land Improvements Construction Land Improvements Total Depreciation Depreciation Encumbrances Acquisition

Camden Ashburn Farm
4,835 22,604 441 4,835 23,045 27,880 2,847 25,033 15,364 2005

Camden Aventura
12,185 47,616 1,431 12,185 49,047 61,232 5,862 55,370 36,660 2005

Camden Ballantyne
4,503 30,250 709 4,503 30,959 35,462 3,797 31,665 26,025 2005

Camden Bay
7,450 63,283 3,010 7,450 66,293 73,743 15,326 58,417 1998/2002

Camden Bay Pointe
1,296 10,394 4,455 1,296 14,849 16,145 7,970 8,175 1997

Camden Bayside
3,726 28,689 8,387 3,726 37,076 40,802 17,650 23,152 1997

Camden Baytown
520 13,071 1,091 520 14,162 14,682 4,794 9,888 1999

Camden Bel Air
3,594 31,221 3,277 3,594 34,498 38,092 13,853 24,239 1998

Camden Breakers
1,055 13,024 2,866 1,055 15,890 16,945 6,278 10,667 1996

Camden Breeze
2,894 15,828 2,531 2,894 18,359 21,253 7,173 14,080 1998

Camden Brickell
14,621 57,031 1,504 14,621 58,535 73,156 7,463 65,693 2005

Camden Brookwood
7,174 31,984 657 7,174 32,641 39,815 4,346 35,469 22,624 2005

Camden Buckingham
2,704 21,251 1,621 2,704 22,872 25,576 7,884 17,692 1997

Camden Caley
2,047 17,445 948 2,047 18,393 20,440 5,550 14,890 2000

Camden Canyon
1,802 11,666 4,383 1,802 16,049 17,851 5,377 12,474 1998

Camden Centennial
3,123 13,051 2,237 3,123 15,288 18,411 5,804 12,607 1995

Camden Centre
172 1,166 185 172 1,351 1,523 547 976 1998

Camden Centreport
1,613 12,644 1,306 1,613 13,950 15,563 4,863 10,700 1997

Camden Cimarron
2,231 14,092 1,821 2,231 15,913 18,144 6,639 11,505 1997

Camden Citrus Park
1,144 6,045 2,688 1,144 8,733 9,877 4,755 5,122 1997

Camden City Centre
4,976 46,787 — 4,976 46,787 51,763 2,770 48,993 2007

Camden Clearbrook
2,384 43,942 2 2,384 43,944 46,328 3,573 42,755 2007

Camden Club
4,453 29,811 4,766 4,453 34,577 39,030 15,831 23,199 1998

Camden Commons
2,476 20,073 3,564 2,476 23,637 26,113 10,898 15,215 1998

Camden Copper Ridge
1,204 9,180 3,734 1,204 12,914 14,118 7,366 6,752 3,922 1993

Camden Copper Square
4,825 23,672 1,189 4,825 24,861 29,686 7,589 22,097 2000

Camden Cotton Mills
4,246 19,147 1,081 4,246 20,228 24,474 2,587 21,887 2005

Camden Cove
1,382 6,266 1,080 1,382 7,346 8,728 3,234 5,494 1998

Camden Creek
1,494 12,483 4,677 1,494 17,160 18,654 10,673 7,981 1993

Camden Crest
4,412 33,366 823 4,412 34,189 38,601 4,231 34,370 25,760 2005

Camden Crown Valley
9,381 54,210 1,030 9,381 55,240 64,621 13,531 51,090 2001

Camden Deerfield
4,895 21,922 682 4,895 22,604 27,499 2,980 24,519 19,220 2005

Camden Del Mar
4,404 35,264 12,761 4,404 48,025 52,429 16,105 36,324 1998

Camden Dilworth
516 16,633 — 516 16,633 17,149 1,735 15,414 13,073 2006

Camden Doral
10,260 40,416 675 10,260 41,091 51,351 4,990 46,361 28,838 2005

Camden Doral Villas
6,476 25,543 729 6,476 26,272 32,748 3,338 29,410 21,651 2005

Camden Dunwoody
5,290 23,642 888 5,290 24,530 29,820 3,087 26,733 21,168 2005

Camden Fair Lakes
15,626 104,223 1,491 15,626 105,714 121,340 12,109 109,231 50,637 2005

Camden Fairfax Corner
8,484 72,874 17 8,484 72,891 81,375 7,270 74,105 2006

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Schedule III

CAMDEN PROPERTY TRUST

REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2008
(in thousands)

Initial Cost Total Cost

Building/ Cost Building/ Total Cost,

Construction Subsequent to Construction Net of Year of

in Progress & Acquisition/ in Progress & Accumulated Accumulated Completion/

Current Communities Land Improvements Construction Land Improvements Total Depreciation Depreciation Encumbrances Acquisition

Camden Fairview
1,283 7,223 850 1,283 8,073 9,356 1,181 8,175 2005

Camden Fairways
3,969 15,543 8,262 3,969 23,805 27,774 8,700 19,074 1998

Camden Fallsgrove
9,408 43,647 344 9,408 43,991 53,399 5,406 47,993 2005

Camden Farmers Market
17,341 74,193 1,711 17,341 75,904 93,245 17,448 75,797 2001/2005

Camden Forest
970 7,209 1,862 970 9,071 10,041 4,428 5,613 1997

Camden Foxcroft
1,408 7,919 1,800 1,408 9,719 11,127 1,275 9,852 9,040 2005

Camden Gaines Ranch
5,094 37,100 1,173 5,094 38,273 43,367 4,034 39,333 2005

Camden Gardens
1,500 6,137 2,309 1,500 8,446 9,946 4,882 5,064 1994

Camden Glen Lakes
2,157 16,339 12,561 2,157 28,900 31,057 17,408 13,649 1993

Camden Governor’s Village
3,669 20,508 786 3,669 21,294 24,963 2,781 22,182 13,004 2005

Camden Grand Parc
7,688 35,900 489 7,688 36,389 44,077 4,363 39,714 2005

Camden Grandview
7,570 33,859 1,135 7,570 34,994 42,564 4,608 37,956 2005

Camden Greenway
16,916 43,933 2,876 16,916 46,809 63,725 15,265 48,460 52,359 1999

Camden Habersham
1,004 10,283 2,313 1,004 12,596 13,600 6,439 7,161 1997

Camden Harbor View
16,079 127,459 830 16,079 128,289 144,368 21,819 122,549 2003

Camden Highlands Ridge
2,612 34,726 2,476 2,612 37,202 39,814 11,752 28,062 1996

Camden Hills
853 7,834 1,117 853 8,951 9,804 3,750 6,054 1998

Camden Hunter’s Creek
4,156 20,925 729 4,156 21,654 25,810 2,748 23,062 2005

Camden Huntingdon
2,289 17,393 2,407 2,289 19,800 22,089 8,596 13,493 1995

Camden Interlocken
5,293 31,612 2,439 5,293 34,051 39,344 10,696 28,648 1999

Camden Lago Vista
3,497 29,623 31 3,497 29,654 33,151 4,489 28,662 2005

Camden Lake Pine
5,746 31,714 1,032 5,746 32,746 38,492 4,336 34,156 26,212 2005

Camden Lakes
3,106 22,746 7,302 3,106 30,048 33,154 16,593 16,561 1997

Camden Lakeside
1,171 7,395 2,710 1,171 10,105 11,276 5,287 5,989 1997

Camden Lakeway
3,915 34,129 2,766 3,915 36,895 40,810 12,879 27,931 1997

Camden Landings
1,045 6,434 2,881 1,045 9,315 10,360 5,019 5,341 1997

Camden Landsdowne
15,502 102,267 1,020 15,502 103,287 118,789 12,802 105,987 2005

Camden Largo Town Center
8,411 44,163 706 8,411 44,869 53,280 5,077 48,203 2005

Camden Las Olas
12,395 79,518 694 12,395 80,212 92,607 10,138 82,469 2005

Camden Laurel Ridge
915 4,338 1,834 915 6,172 7,087 3,527 3,560 1994

Camden Lee Vista
4,350 34,645 2,117 4,350 36,762 41,112 9,965 31,147 2000

Camden Legacy
4,068 26,612 2,836 4,068 29,448 33,516 11,468 22,048 1998

Camden Legacy Creek
2,052 12,896 1,428 2,052 14,324 16,376 5,395 10,981 1997

Camden Legacy Park
2,560 15,449 1,721 2,560 17,170 19,730 6,239 13,491 1997

Camden Legends
1,370 6,382 701 1,370 7,083 8,453 2,697 5,756 1998

Camden Live Oaks
6,428 39,127 9,562 6,428 48,689 55,117 19,705 35,412 1998

Camden Manor Park
2,535 47,134 1 2,535 47,135 49,670 5,236 44,434 29,675 2006

Camden Martinique
28,401 51,861 8,590 28,401 60,451 88,852 20,331 68,521 42,588 1998

Camden Midtown
4,583 18,026 1,535 4,583 19,561 24,144 6,494 17,650 1999

Camden Midtown Atlanta
6,196 33,828 1,337 6,196 35,165 41,361 4,601 36,760 20,565 2005

Camden Miramar
— 25,526 3,763 — 29,289 29,289 10,127 19,162 1994-2004

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Schedule III

CAMDEN PROPERTY TRUST

REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2008
(in thousands)

Initial Cost Total Cost

Building/ Cost Building/ Total Cost,

Construction Subsequent to Construction Net of Year of

in Progress & Acquisition/ in Progress & Accumulated Accumulated Completion/

Current Communities Land Improvements Construction Land Improvements Total Depreciation Depreciation Encumbrances Acquisition

Camden Monument Place
9,030 54,053 3 9,030 54,056 63,086 3,112 59,974 2007

Camden Oak Crest
2,078 20,941 381 2,078 21,322 23,400 5,097 18,303 17,309 2003

Camden Oasis
2,409 13,745 3,863 2,409 17,608 20,017 9,852 10,165 1993

Camden Old Creek
20,360 71,777 7 20,360 71,784 92,144 5,410 86,734 2007

Camden Overlook
4,591 25,563 1,934 4,591 27,497 32,088 3,604 28,484 20,770 2005

Camden Palisades
8,406 31,497 4,928 8,406 36,425 44,831 13,662 31,169 1998

Camden Park Commons
1,146 11,311 1,522 1,146 12,833 13,979 4,964 9,015 1997

Camden Peachtree City
6,536 29,063 950 6,536 30,013 36,549 4,016 32,533 2005

Camden Pinehurst
3,380 14,807 4,994 3,380 19,801 23,181 18,666 4,515 1997

Camden Pinnacle
1,640 12,287 1,973 1,640 14,260 15,900 5,463 10,437 1994

Camden Plantation
6,299 77,964 1,708 6,299 79,672 85,971 9,390 76,581 2005

Camden Pointe
2,058 14,879 1,652 2,058 16,531 18,589 6,025 12,564 1998

Camden Portofino
9,867 38,702 995 9,867 39,697 49,564 4,746 44,818 2005

Camden Preserve
1,206 16,258 1,746 1,206 18,004 19,210 6,872 12,338 1997

Camden Providence Lakes
2,020 14,855 3,931 2,020 18,786 20,806 4,002 16,804 2002

Camden Renaissance
4,144 37,424 2,648 4,144 40,072 44,216 12,325 31,891 1997

Camden Reserve
3,910 20,027 5,467 3,910 25,494 29,404 11,565 17,839 1997

Camden Reunion Park
3,302 18,457 750 3,302 19,207 22,509 2,541 19,968 19,961 2005

Camden Ridgecrest
1,008 12,720 1,926 1,008 14,646 15,654 6,303 9,351 1995

Camden River
5,386 24,025 1,615 5,386 25,640 31,026 3,343 27,683 14,332 2005

Camden Roosevelt
11,470 45,785 202 11,470 45,987 57,457 6,002 51,455 2005

Camden Royal Oaks
1,055 19,919 78 1,055 19,997 21,052 2,343 18,709 2006

Camden Royal Palms
2,147 38,339 426 2,147 38,765 40,912 2,066 38,846 2007

Camden Russett
13,460 61,837 906 13,460 62,743 76,203 7,570 68,633 46,545 2005

Camden San Paloma
6,480 23,045 1,974 6,480 25,019 31,499 5,413 26,086 2002

Camden Sea Palms
4,336 9,930 1,788 4,336 11,718 16,054 4,298 11,756 1998

Camden Sedgebrook
5,266 29,211 684 5,266 29,895 35,161 3,887 31,274 21,614 2005

Camden Shiloh
4,181 18,798 664 4,181 19,462 23,643 2,722 20,921 2005

Camden Sierra at Otay
10,585 49,781 490 10,585 50,271 60,856 9,117 51,739 2003

Camden Silo Creek
9,707 45,144 250 9,707 45,394 55,101 5,540 49,561 2005

Camden Simsbury
1,152 6,499 261 1,152 6,760 7,912 865 7,047 2005

Camden South End Square
6,625 29,175 549 6,625 29,724 36,349 3,869 32,480 23,693 2005

Camden Springs
1,520 8,300 3,046 1,520 11,346 12,866 7,511 5,355 1994

Camden St. Clair
7,526 27,486 953 7,526 28,439 35,965 3,530 32,435 21,306 2005

Camden Steeplechase
1,089 5,190 3,713 1,089 8,903 9,992 5,869 4,123 1994

Camden Stockbridge
5,071 22,693 699 5,071 23,392 28,463 3,234 25,229 21,646 2005

Camden Stonebridge
1,016 7,137 1,983 1,016 9,120 10,136 4,450 5,686 1993

Camden Stonecrest
3,954 22,021 463 3,954 22,484 26,438 2,932 23,506 17,814 2005

Camden Stoneleigh
3,498 31,285 776 3,498 32,061 35,559 2,763 32,796 2006

Camden Sweetwater
4,395 19,664 847 4,395 20,511 24,906 2,789 22,117 2005

Camden Touchstone
1,203 6,772 1,619 1,203 8,391 9,594 1,200 8,394 2005

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Table of Contents

Schedule III

CAMDEN PROPERTY TRUST

REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2008
(in thousands)

Initial Cost Total Cost

Building/ Cost Building/ Total Cost,

Construction Subsequent to Construction Net of Year of

in Progress & Acquisition/ in Progress & Accumulated Accumulated Completion/

Current Communities Land Improvements Construction Land Improvements Total Depreciation Depreciation Encumbrances Acquisition

Camden Tuscany
3,330 36,466 325 3,330 36,791 40,121 6,501 33,620 2003

Camden Valley Creek
1,529 9,543 4,717 1,529 14,260 15,789 8,048 7,741 1994

Camden Valley Park
3,096 14,667 7,907 3,096 22,574 25,670 13,862 11,808 1994

Camden Valley Ridge
1,609 9,814 4,044 1,609 13,858 15,467 7,380 8,087 1994

Camden Valleybrook
7,340 39,139 546 7,340 39,685 47,025 5,116 41,909 2005

Camden Vanderbilt
16,076 44,918 11,588 16,076 56,506 72,582 20,636 51,946 1994/1997

Camden Vineyards
4,367 28,494 574 4,367 29,068 33,435 6,225 27,210 2002

Camden Vintage
3,641 19,255 3,450 3,641 22,705 26,346 9,534 16,812 1998

Camden Vista Valley
2,318 17,014 3,970 2,318 20,984 23,302 10,153 13,149 1998

Camden Westshore
1,734 10,819 4,774 1,734 15,593 17,327 6,904 10,423 1997

Camden Westview
1,066 7,932 2,935 1,066 10,867 11,933 6,515 5,418 1993

Camden Westwind
26,824 68,257 21 26,824 68,278 95,102 7,464 87,638 2006

Camden Westwood
4,567 25,354 779 4,567 26,133 30,700 3,460 27,240 19,907 2005

Camden Woods
2,693 19,930 6,131 2,693 26,061 28,754 12,159 16,595 1999

Camden World Gateway
5,785 51,821 1,014 5,785 52,835 58,620 5,646 52,974 2005

695,865 3,867,153 305,912 695,865 4,173,065 4,868,930 971,190 3,897,740 723,282

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Table of Contents

Schedule III

Camden Property Trust
Real Estate and Accumulated Depreciation
As of December 31, 2008
(in thousands)

Initial Cost Total Cost

Building/ Cost Building/ Total Cost,

Construction Subsequent to Construction Net of Year of

in Progress & Acquisition/ In Progress & Accumulated Accumulated Completion/

Land Improvements Construction Land Improvements Total Depreciation Depreciation Encumbrances Acquisition

Lease-Up &
Development Communities

Camden Cedar Hills
2,684 20,880 — 2,684 20,880 23,564 609 22,955 2008

Camden Dulles Station
10,807 60,611 — 10,807 60,611 71,418 1,131 70,287 N/A

Camden Orange Court
5,319 40,148 — 5,319 40,148 45,467 1,374 44,093 2008

Camden Potomac Yards
16,498 88,013 — 16,498 88,013 104,511 3,642 100,869 2008

Camden Summerfield
14,659 47,926 — 14,659 47,926 62,585 2,028 60,557 2008

Camden Travis Street
1,780 7,515 — 1,780 7,515 9,295 — 9,295 5,927 N/A

Camden Whispering Oaks
1,188 26,064 — 1,188 26,064 27,252 630 26,622 2008

52,935 291,157 — 52,935 291,157 344,092 9,414 334,678 5,927

Development Communities

5400 Lamar Acreage
8,465 — 8,465 8,465 403 8,062 N/A

Camden Amber Oaks Phase II
4,112 — 4,112 4,112 — 4,112 N/A

Camden Celebration
15,239 — 15,239 15,239 — 15,239 N/A

Camden City Centre II
7,903 — 7,903 7,903 2 7,901 N/A

Camden Countryway
16,116 — 16,116 16,116 — 16,116 N/A

Camden Deer Springs
19,996 — 19,996 19,996 — 19,996 N/A

Camden Farmer’s Market Phase III/IV
6,511 — 6,511 6,511 1 6,510 N/A

Camden Highlands
6,926 — 6,926 6,926 36 6,890 N/A

Camden Lake Nona
21,970 — 21,970 21,970 — 21,970 N/A

Camden Lincoln Station
4,647 — 4,647 4,647 — 4,647 N/A

Camden McGowen Station
10,850 — 10,850 10,850 — 10,850 N/A

Camden Montague
3,577 — 3,577 3,577 1 3,576 N/A

Camden NOMA
24,976 — 24,976 24,976 1 24,975 N/A

Camden NOMA II
17,331 — 17,331 17,331 — 17,331 N/A

Camden Royal Oaks II
3,756 — 3,756 3,756 — 3,756 N/A

Camden Selma & Vine
` 16,954 — 16,954 16,954 — 16,954 N/A

Camden South Capital
26,960 — 26,960 26,960 1 26,959 N/A

Camden Summerfield
18,668 — 18,668 18,668 — 18,668 N/A

Camden Whispering Oaks II
5,228 — 5,228 5,228 — 5,228 N/A

— 240,185 — — 240,185 240,185 445 239,740 N/A

Corporate
2,627 — — 2,627 2,627 2,627

$ 748,800 $ 4,401,122 $ 305,912 $ 748,800 $ 4,707,034 $ 5,455,834 $ 981,049 $ 4,474,785 $ 729,209

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Table of Contents

Schedule III

CAMDEN PROPERTY TRUST

REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2008
(in thousands)

The changes in total real estate assets, excluding depreciation, investments in joint ventures, and properties held for sale for the years ended December 31:

2008 (a) 2007 2006

Balance, beginning of the period
$ 5,493,684 $ 5,099,459 $ 4,860,799

Additions during the period:

Acquisition — Other
83,290 149,386

Acquisition — Summit
1,994

Development
122,088 333,412 254,128

Improvements
46,465 89,698 57,544

Classification from held for sale
15,783 122,750

Deductions during period:

Cost of real estate sold — Other
(52,183 ) (5,313 ) (248,587 )

Impairment loss on land (b)
(50,190 ) (1,447 )

Classification to held for sale
(119,813 ) (105,415 ) (98,555 )

Balance, end of period
$ 5,455,834 $ 5,493,684 $ 5,099,459

The changes in accumulated depreciation for the years ended December 31:

2008 (a) 2007 2006

Balance, beginning of the period
$ 868,074 $ 762,011 $ 716,650

Depreciation
168,006 154,051 153,570

Real estate sold
(1,845 ) (75,755 )

Real estate disposed
(3,053 ) (1,502 )

Transferred to held for sale
(54,684 ) (46,486 ) (46,302 )

Transferred from held for sale
4,551 13,848

Balance, end of period
$ 981,049 $ 868,074 $ 762,011

(a)
Excludes two parcels classified as held for sale with gross book values of $1.8 million and $7.4 million, one townhome classified as held for sale with a gross book value of $0.3 million, and one operating property with a gross book value of $24.8 million, and accumulated depreciation of $13.7 million.

(b)
Excludes a $1.1 million impairment loss related to a potential joint venture development we no longer plan to pursue as there were no real estate assets associated with the potential joint venture.

The aggregate cost for federal income tax purposes at December 31, 2008 was $4.6 billion.

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Table of Contents

Schedule IV

CAMDEN PROPERTY TRUST
MORTGAGE LOANS ON REAL ESTATE
December 31, 2008

($ in thousands) Face amount of Carry amount of

Description Interest rate Final maturity date Periodic payment terms mortgages mortgages (a)

Apartments

Second Mortgages

Los Angeles/Orange County, California
12.00 % March 2009 Interest Only $ 22,616 $ 22,616

Houston, Texas
12.00 % January 2009 Interest Only 9,226 9,226

Washington DC Metro
14.00 % August 2010 Interest Only 9,412 9,412

First Mortgages

Houston, Texas
Libor + 2.00% December 2009 Interest Only 8,710 8,710

Undeveloped Land

First Mortgage

Houston, Texas
Libor + 3.00% December 2009 Interest Only 5,637 5,637

Houston, Texas
Libor + 3.00% December 2009 Interest Only 8,405 8,405

Houston, Texas
Libor + 3.00% July 2011 Interest Only 2,813 2,813

Total
$ 66,819 $ 66,819

(a)
The aggregate cost at December 31, 2008 for federal income tax purposes is approximately $66,819.

Changes in mortgage loans for the years ended December 31, 2008, 2007 and 2006 are summarized below.

2008 2007 2006

Balance at beginning of year
$ 61,923 $ 45,333 $ 25,177

Additions:

Advances under real estate loans
8,693 17,590 41,615

Deductions:

Collections of principal
3,797 1,000 21,459

Balance at end of year
$ 66,819 $ 61,923 $ 45,333

S-7

Table of Contents

EXHIBIT INDEX

Exhibit Filed Herewith or Incorporated Herein

No. Description by Reference (1)

12.1
Statement Re Computation of Ratios
Filed Herewith

21.1
List of Subsidiaries
Filed Herewith

23.1
Consent of Deloitte & Touche LLP
Filed Herewith

24.1
Powers of Attorney for Richard J. Campo, D. Keith Oden, William R. Cooper, Scott S. Ingraham, Lewis A. Levey, William B. McGuire, Jr., F. Gardner Parker, William F. Paulsen, Steven A. Webster, and Kelvin R. Westbrook
Filed Herewith

31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act
Filed Herewith

31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act
Filed Herewith

32.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Filed Herewith


(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 of up to an additional $250.0 million of our common equity securities.

(2)		From April 2007 through December 31, 2008, we repurchased approximately 4.3 million common shares for cash totaling approximately $230.2 million, or $53.56 average price per share.


	Year Ended December 31,
(in thousands, except per share amounts and property data)	2008			2007			2006			2005(e)			2004
Operating Data (a)
Total property revenues	$	624,016		$	588,319		$	561,029		$	485,696		$	347,174
Total property expenses		238,915			217,350			210,621			184,566			138,700
Total non-property income (loss)		(19,540	)		25,002			35,530			50,912			27,884
Total other expenses		331,278			339,548			345,908			338,520			206,022
Income (loss) from continuing operations		(13,705	)		41,721			119,953			147,022			18,815
Net income		70,973			148,457			232,846			199,086			41,341

Income (loss) from continuing operations per share
Basic	$	(0.25	)	$	0.72		$	2.12		$	2.83		$	0.45
Diluted		(0.25	)		0.71			2.06			2.64			0.44
Net income per share
Basic	$	1.28		$	2.55		$	4.11		$	3.83		$	1.00
Diluted		1.28			2.51			3.96			3.58			0.98

Distributions declared per common share	$	2.80		$	2.76		$	2.64		$	2.54		$	2.54

Balance Sheet Data (at end of year)
Total real estate assets, at cost	$	5,491,593		$	5,527,403		$	5,141,467		$	5,039,007		$	3,159,077
Total assets		4,730,342			4,890,760			4,586,050			4,487,799			2,629,364
Notes payable		2,832,396			2,828,095			2,330,976			2,633,091			1,576,405
Minority interests		187,787			219,952			223,511			221,023			159,567
Shareholders’ equity		1,411,494			1,531,313			1,734,356			1,370,903			738,515

Other Data
Cash flows provided by (used in):
Operating activities	$	216,958		$	223,106		$	231,569		$	200,845		$	156,997
Investing activities		(37,374	)		(346,798	)		(52,067	)		(207,561	)		(65,321	)
Financing activities		(173,074	)		123,555			(180,044	)		6,039			(92,780	)
Funds from operations — diluted (b)		169,585			227,153			237,790			195,290			143,669

Property Data
Number of operating properties (at the end of year) (c)		181			182			186			191			144
Number of operating apartment homes (at end of year) (c)		62,903			63,085			63,843			65,580			51,456
Number of operating apartment homes (weighted average) (c)(d)		51,277			53,132			55,850			55,056			47,118
Weighted average monthly total property revenue per apartment home	$	1,055		$	1,025		$	970		$	888		$	792
Properties under development (at end of period)		5			11			11			9			3


(a)		Excludes discontinued operations.

(b)		Management considers Funds from Operations (“FFO”) to be an appropriate measure of the financial performance of an equity REIT. The National Association of Real Estate Investment Trusts (“NAREIT”) currently defines FFO as net income (computed in accordance with accounting principles generally accepted in the United States of America (“GAAP”)), excluding gains (or losses) associated with the sale of previously depreciated operating properties, real estate depreciation and amortization, and adjustments for unconsolidated joint ventures. Our calculation of diluted FFO also assumes conversion of all potentially dilutive securities, including 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 assist in the comparison of the operating performance of a company’s real estate between periods or as compared to different companies.

(c)		Includes discontinued operations.

(d)		Excludes apartment homes owned in joint ventures.

(e)		The 2005 results include the operations of Summit Properties Inc. subsequent to February 28, 2005.

	•		Volatility in capital and credit markets could adversely impact us;

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

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

	•		We face risks associated with land holdings;

	•		Difficulties of selling real estate could limit our flexibility;

	•		Compliance or failure to comply with laws requiring access to our properties by disabled persons could result in substantial cost;

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

	•		Development and construction risks could impact our profitability;

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

	•		Competition could adversely affect our ability to acquire properties;

	•		Losses from catastrophes may exceed our insurance coverage;

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

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

	•		We depend on our key personnel;

	•		Changes in laws and litigation risks could affect our business;

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

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

	•		We have significant debt, which could have important adverse consequences;

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

	•		Variable rate debt is subject to interest rate risk;

	•		We may incur losses on interest rate hedging arrangements;

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

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

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

	•		Our share price will fluctuate; and

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


	December 31, 2008				December 31, 2007
	Apartment				Apartment
	Homes		Properties		Homes		Properties
Operating Properties
Las Vegas, Nevada		8,016		29		8,064		30
Houston, Texas		6,620		16		6,346		15
Dallas, Texas		6,119		15		7,225		18
Washington, D.C. Metro		5,702		16		4,525		13
Tampa, Florida		5,503		12		5,503		12
Charlotte, North Carolina		3,574		15		3,574		15
Orlando, Florida		3,557		9		3,296		8
Atlanta, Georgia		3,202		10		3,202		10
Raleigh, North Carolina		2,704		7		2,704		7
Southeast Florida		2,520		7		2,520		7
Los Angeles/Orange County, California		2,481		6		2,191		5
Phoenix, Arizona		2,433		8		2,433		8
Denver, Colorado		2,171		7		2,529		8
Austin, Texas		2,106		7		2,778		9
San Diego/Inland Empire, California		1,196		4		1,196		4
Other		4,999		13		4,999		13

Total Operating Properties		62,903		181		63,085		182

Properties Under Development
Houston, Texas		712		3		733		3
Washington, D.C. Metro		366		1		1,543		4
Austin, Texas		348		1		556		2
Los Angeles/Orange County, California		—		—		290		1
Orlando, Florida		—		—		261		1

Total Properties Under Development		1,426		5		3,383		11

Total Properties		64,329		186		66,468		193

Less: Joint Venture Properties (1)
Las Vegas, Nevada		4,047		17		4,047		17
Houston, Texas (2)		2,199		7		1,946		6
Phoenix, Arizona		992		4		992		4
Los Angeles/Orange County, California		711		2		711		2
Austin, Texas		601		2		—		—
Washington, D.C. Metro		508		1		508		1
Dallas, Texas		456		1		456		1
Denver, Colorado		320		1		320		1
Other		3,237		9		3,237		9

Total Joint Venture Properties		13,071		44		12,217		41

Total Properties Owned 100%		51,258		142		54,251		152


(1)		Refer to Note 7, “Investments in Joint Ventures,” in the Notes to Consolidated Financial Statements for further discussion of our joint venture investments.

(2)		Figures for 2008 include Camden Travis Street, a fully-consolidated joint venture, of which we retain a 25% ownership.


	Number of
	Apartment		Date of
Property and Location	Homes		Disposition		Year Built

Dispositions
Camden Ridgeview Austin, TX		167		1Q08		1984
Camden Towne Village Mesquite, TX		188		2Q08		1983
Oasis Sands Las Vegas, NV		48		2Q08		1994
Camden Lakeview Irving, TX		476		3Q08		1985
Camden Arbors Westminster, CO		358		3Q08		1986
Camden Woodview Austin, TX		283		3Q08		1984
Camden Briar Oaks Austin, TX		430		3Q08		1980
Camden Place Mesquite, TX		442		3Q08		1984
Held for Sale
Camden West Oaks Houston, TX		671		n/a		1982


Total apartment homes sold and held for sale		3,063


($ in millions)			Net Book
Location	Acres		Value

Southeast Florida		2.2	$	7.4
Dallas		2.4		1.8

Total land held for sale			$	9.2


	Number of				% Leased					Estimated
($ in millions)	Apartment		Cost		at			Date of		Date of
Property and Location	Homes		Incurred		2/15/09			Completion		Stabilization

Camden Potomac Yard Arlington, VA		378	$	104.5		73	%		2Q08		4Q09
Camden Orange Court Orlando, FL		261		45.5		65	%		2Q08		3Q09
Camden Summerfield Landover, MD		291		62.6		78	%		2Q08		4Q09
Camden Cedar Hills Austin, TX		208		23.6		88	%		4Q08		2Q09
Camden Whispering Oaks Houston, TX		274		27.3		80	%		4Q08		3Q09


Total		1,412	$	263.5		76	%


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

Camden Dulles Station Oak Hill, VA		366	$	77.0	$	71.4	$	14.4		1Q09		3Q10
Camden Travis Street (a) Houston, TX		253		39.0		9.3		9.3		1Q10		3Q10


Total		619	$	116.0	$	80.7	$	23.7


(a)		Camden Travis Street is owned in a fully-consolidated joint venture, of which we retain a 25% ownership.


				Number of				Total
($ in millions)				Apartment		Estimated		Cost
Property and Location	Ownership %			Homes		Cost		Incurred

Completed Communities (1)
Camden Main & Jamboree Irvine, CA		30	%		290		N/A	$	110.1
Camden College Park College Park, MD		30	%		508		N/A		125.3

Completed Communities Total					798			$	235.4


Under Construction
Braeswood Place (1) (2) Houston, TX		30	%		340	$	48.6	$	41.1
Belle Meade (2) Houston, TX		30	%		119		33.2		20.0
Camden Amber Oaks (1) Austin, TX		20	%		348		40.0		32.6

Under Construction Total					807	$	121.8	$	93.7


Pre-Development (3)				Total Acres

Lakes at 610 Houston, TX		30	%		6.1		N/A	$	6.4
Town Lake Austin, TX		72	%		25.9		N/A		37.9

Pre-Development Total					32.0			$	44.3


(1)		Properties in lease-up as of December 31, 2008.

(2)		Properties being developed by joint venture partner.

(3)		Properties in pre-development by joint venture partner.


(in thousands)	2008				2007

Washington, D.C. Metro	$	1,219,866	22.4	%	$	1,196,451	21.8	%
Southeast Florida		446,629	8.2			444,645	8.1
Houston, Texas		377,041	6.9			374,177	6.8
Dallas, Texas		337,890	6.2			372,075	6.8
Tampa, Florida		386,816	7.1			370,379	6.7
Los Angeles/Orange County, California		330,849	6.1			346,452	6.3
Orlando, Florida		364,379	6.7			336,768	6.1
Atlanta, Georgia		319,047	5.8			316,733	5.8
Las Vegas, Nevada		321,782	5.9			314,609	5.7
Charlotte, North Carolina		316,387	5.8			312,760	5.7
Raleigh, North Carolina		237,023	4.3			235,263	4.3
San Diego/Inland Empire, California		226,556	4.1			225,769	4.1
Austin, Texas		159,897	2.9			221,807	4.1
Denver, Colorado		186,292	3.4			202,962	3.7
Phoenix, Arizona		118,003	2.2			117,092	2.1
Other		107,377	2.0			105,742	1.9

Total	$	5,455,834	100.0	%	$	5,493,684	100.0	%


	Apartment		Year Ended
	Homes		December 31,				Change
($ in thousands)	at 12/31/08		2008		2007		$			%

Property revenues
Same store communities		40,340	$	498,875	$	491,736	$	7,139			1.5	%
Non-same store communities		8,469		108,184		88,925		19,259			21.7
Development and lease-up communities		2,031		9,444		81		9,363			*
Dispositions/other		—		7,513		7,577		(64	)		(0.8	)

Total property revenues		50,840	$	624,016	$	588,319	$	35,697			6.1	%


Property expenses
Same store communities		40,340	$	188,644	$	180,277	$	8,367			4.6	%
Non-same store communities		8,469		40,395		33,444		6,951			20.8
Development and lease-up communities		2,031		5,694		140		5,554			*
Dispositions/other		—		4,182		3,489		693			19.9

Total property expenses		50,840	$	238,915	$	217,350	$	21,565			9.9	%


(1)		Adjustment for 2006 includes approximately $2.8 million in gains recognized on sales of properties held in joint ventures. 2006 adjustment is net of approximately $0.5 million in prepayment penalties incurred with the repayment of mortgage notes directly associated with the sold properties.


(in millions)	Total		2009		2010		2011		2012		2013		Thereafter
Debt maturities (1)	$	2,832.4	$	134.4	$	355.5	$	421.7	$	772.2	$	227.2	$	921.4
Interest payments (2)		658.6		136.6		121.9		101.5		89.2		54.6		154.8
Capital contributions to Fund (3)		32.8		32.8		—		—		—		—		—
Non-cancelable lease payments		14.9		2.5		2.5		2.4		2.0		1.9		3.6
Postretirement benefit obligations		3.0		0.2		0.2		0.2		0.2		0.2		2.0
Construction contracts		63.4		61.5		1.9		—		—		—		—

	$	3,605.1	$	368.0	$	482.0	$	525.8	$	863.6	$	283.9	$	1,081.8


(1)		Includes our line of credit and scheduled principal amortizations.

(2)		Includes contractual interest payments for our line of credit, senior unsecured notes, medium-term notes, and secured notes. Interest payments on hedged loans were calculated based on the interest rates effectively fixed by the interest rate swap agreements. The interest payments on certain secured notes with floating interest rates and our line of credit were calculated based on the interest rates in effect as of December 31, 2008 or the most recent practicable date.

(3)		Contingent on timing of capital calls by the Fund; subject to change.


		Estimated
		Useful Life
Buildings and improvements		5-35 years
Furniture, fixtures, equipment and other		3-20 years
Intangible assets (in-place leases and above and below market leases)		underlying lease term


	December 31, 2008										December 31, 2007
			Weighted		Weighted								Weighted		Weighted
			Average		Average								Average		Average
	Amount		Maturity		Interest			% Of			Amount		Maturity		Interest			% Of
	(in millions)		(in years) (1)		Rate			Total			(in millions)		(in years) (1)		Rate			Total

Fixed rate debt (2)	$	2,467.3		4.4		5.5	%		87.1	%	$	2,655.5		4.6		5.4	%		93.9	%
Variable rate debt		365.1		11.5		2.7			12.9			172.6		19.8		5.0			6.1

(1)		Excludes balances outstanding under our unsecured line of credit, which are included in variable rate debt.

(2)		Includes a $500 million term loan entered into in 2007 and $3.4 million of a construction loan entered into in 2008 which has become effectively fixed by the use of an interest rate swap (see discussion below).

	•		Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

	•		Provide reasonable assurance transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

	•		Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.



(1) Financial Statements:

Report of Independent Registered Public Accounting Firm			F-1

Consolidated Balance Sheets as of December 31, 2008 and 2007			F-2

Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2008, 2007, and 2006			F-3

Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2008, 2007, and 2006			F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2008, 2007, and 2006			F-6

Notes to Consolidated Financial Statements			F-8

(2) Financial Statement Schedules:

Schedule III — Real Estate and Accumulated Depreciation			S-1

Schedule IV — Mortgage Loans on Real Estate			S-7


Exhibit			Filed Herewith or Incorporated Herein
No.		Description	by Reference (1)
	2.1	Agreement and Plan of Merger, dated October 4, 2004, among Camden Property Trust, Camden Summit, Inc. and Summit Properties Inc.	Current Report on Form 8-K filed on October 5, 2004

	2.2	Amendment No. 1 to Agreement and Plan of Merger, dated October 6, 2004, among Camden Property Trust, Camden Summit, Inc. and Summit Properties Inc.	Exhibit 2.1 to Form 8-K filed on October 6, 2004

	2.3	Amendment No. 2 to Agreement and Plan of Merger, dated January 24, 2005, among Camden Property Trust, Camden Summit, Inc. and Summit Properties Inc.	Exhibit 2.1 to Form 8-K filed on January 25, 2005

	3.1	Amended and Restated Declaration of Trust of Camden Property Trust	Exhibit 3.1 to Form 10-K for the year ended December 31, 1993

	3.2	Amendment to the Amended and Restated Declaration of Trust of Camden Property Trust	Exhibit 3.1 to Form 10-Q for the quarter ended June 30, 1997

	3.3	Second Amended and Restated Bylaws of Camden Property Trust	Exhibit 3.3 to Form 10-K for the year ended December 31, 1997

	3.4	Amendment to Second Amended and Restated Bylaws of Camden Property Trust	Exhibit 99.2 to Form 8-K filed on May 4, 2006


(1)		Unless otherwise indicated, all references to reports or registration statements are to reports or registration statements filed by Camden Property Trust (File No. 1-12110).

(2)		Portions of the exhibit have been omitted pursuant to a request for confidential treatment.


February 19, 2009	CAMDEN PROPERTY TRUST
	By:	/s/ Michael P. Gallagher
		Michael P. Gallagher
		Vice President — Chief Accounting Officer


Name	Title	Date

/s/ Richard J. Campo Richard J. Campo	Chairman of the Board of Trust Managers and Chief Executive Officer (Principal Executive Officer)	February 19, 2009

/s/ D. Keith Oden D. Keith Oden	President and Trust Manager	February 19, 2009

/s/ Dennis M. Steen Dennis M. Steen	Chief Financial Officer, Senior Vice President-Finance and Secretary (Principal Financial Officer)	February 19, 2009

/s/ Michael P. Gallagher Michael P. Gallagher	Vice President — Chief Accounting Officer (Principal Accounting Officer)	February 19, 2009

* William R. Cooper	Trust Manager	February 19, 2009

*	Trust Manager	February 19, 2009
Scott S. Ingraham

* Lewis A. Levey	Trust Manager	February 19, 2009

* William B. McGuire, Jr.	Trust Manager	February 19, 2009

* F. Gardner Parker	Trust Manager	February 19, 2009

* William F. Paulsen	Trust Manager	February 19, 2009

* Steven A. Webster	Trust Manager	February 19, 2009

* Kelvin R. Westbrook	Trust Manager	February 19, 2009


	Common															Accumulated
	shares of			Additional			Distributions			Employee			Treasury			other			Total
	beneficial			paid-in			in excess of			notes			shares, at			comprehensive			shareholders’
(in thousands, except per share amounts)	interest			capital			net income			receivable			cost			loss			equity

Shareholders’ Equity, January 1, 2006		608			1,902,595			(295,074	)		(2,078	)		(235,148	)		—			1,370,903

Net income								232,846												232,846
Other comprehensive income																	—			—
Common shares issued (3,600 shares)		36			254,895															254,931
Common shares issued under dividend reinvestment plan					30															30
Share awards issued under benefit plan (317 shares)		3			(1	)								(2	)					—
Share awards canceled under benefit plan (31 shares)					—															—
Amortization of previously granted share awards					12,964															12,964
Employee share purchase plan					1,359									935						2,294
Repayment of employee notes receivable, net											42									42
Share awards placed into deferred plans (97 shares)		(1	)		1															—
Common share options exercised (119 shares)		1			5,293															5,294
Conversions and redemptions of operating partnership units (334 shares)		3			6,486															6,489
Cash distributions ($2.64 per share)								(151,437	)											(151,437	)

Shareholders’ equity, December 31, 2006	$	650		$	2,183,622		$	(213,665	)	$	(2,036	)	$	(234,215	)	$	—		$	1,734,356


Net income								148,457												148,457
Other comprehensive income																	(16,123	)		(16,123	)
Common shares issued under dividend reinvestment plan					38															38
Share awards issued under benefit plan (282 shares)		3			18									(64	)					(43	)
Share awards canceled under benefit plan (65 shares)		(1	)		1															—
Amortization of previously granted share awards					9,327															9,327
Employee share purchase plan					817									562						1,379
Repayment of employee notes receivable, net											86									86
Share awards placed into deferred plans (151 shares)		(2	)		2															—
Common share options exercised (96 shares)		1			4,333															4,334
Conversions and redemptions of operating partnership units (266 shares)		3			11,473															11,476
Common shares repurchased (3,604 shares)														(200,157	)					(200,157	)
Cumulative effect of a change in accounting principle								(2,496	)											(2,496	)
Cash distributions ($2.76 per share)								(159,321	)											(159,321	)

Shareholders’ equity, December 31, 2007	$	654		$	2,209,631		$	(227,025	)	$	(1,950	)	$	(433,874	)	$	(16,123	)	$	1,531,313


Net income								70,973												70,973
Other comprehensive income (loss)																	(34,933	)		(34,933	)
Common shares issued under dividend reinvestment plan					7															7
Share awards issued under benefit plan (268 shares)		3			(3	)														—
Share awards canceled under benefit plan (36 shares)		—			—															—
Amortization of previously granted share awards					10,221															10,221
Employee share purchase plan					142									740						882
Repayment of employee notes receivable, net											1,655									1,655
Share awards placed into deferred plans (147 shares)		(2	)		2															—
Common share options exercised (45 shares)		—			2,155															2,155
Conversions and redemptions of operating partnership units (464 shares)		5			15,548															15,553
Common shares repurchased (695 shares)														(30,075	)					(30,075	)
Cash distributions ($2.80 per share)								(156,257	)											(156,257	)

Shareholders’ equity, December 31, 2008	$	660		$	2,237,703		$	(312,309	)	$	(295	)	$	(463,209	)	$	(51,056	)	$	1,411,494


	Year Ended December 31,
(in thousands)	2008			2007			2006
Cash flows from operating activities
Net income	$	70,973		$	148,457		$	232,846
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization, including discontinued operations		169,151			157,137			159,860
Gain on sale of discontinued operations		(80,198	)		(107,039	)		(99,273	)
Impairment loss on land		51,323			1,447			—
Gain on early retirement of debt		(13,566	)		—			—
Income allocated to minority interests		11,052			25,246			24,992
Share-based compensation		7,663			7,547			11,619
Distributions of income from joint ventures		5,392			5,406			—
Amortization of deferred financing costs		2,975			3,689			3,813
Equity in loss (income) of joint ventures		1,265			(1,526	)		(5,156	)
Accretion of discount on unsecured notes payable		571			590			694
Gain on sale of technology investments		—			(623	)		(1,602	)
Gain on sale of properties, including land		(2,929	)		—			(97,452	)
Interest on notes receivable — affiliates		(3,688	)		(4,112	)		(108	)
Net change in operating accounts		(3,026	)		(13,113	)		1,336

Net cash from operating activities	$	216,958		$	223,106		$	231,569


Cash flows from investing activities
Development and capital improvements		(199,269	)		(417,789	)		(334,339	)
Proceeds from sales of properties, including land and discontinued operations		123,513			171,757			181,963
Proceeds from partial sales of assets to joint ventures		52,509			—			213,720
Investments in joint ventures		(10,444	)		(6,015	)		(3,147	)
Distributions of investments from joint ventures		1,058			6,525			47,922
Acquisition of operating properties		—			(83,031	)		(109,961	)
Payment of merger related liabilities		—			—			(8,233	)
Earnest money deposits on potential transactions		—			(340	)		(4,803	)
Increase in notes receivable — affiliates		(3,487	)		(3,154	)		(41,615	)
Payments received on notes receivable — other		2,855			1,000			9,406
Change in restricted cash		116			(954	)		368
Proceeds from the sale of technology investments		—			623			1,602
Issuance of notes receivable — other		—			(8,710	)		—
Other		(4,225	)		(6,710	)		(4,950	)

Net cash from investing activities	$	(37,374	)	$	(346,798	)	$	(52,067	)


	Year Ended December 31,
Common Share Distributions	2008			2007			2006
Ordinary income	$	1.34		$	1.20		$	0.26
Long-term capital gain		0.91			1.18			1.85
Unrecaptured Sec. 1250 gain		0.55			0.38			0.53

Total	$	2.80		$	2.76		$	2.64


Percentage of distributions representing tax preference items		5.59	%		7.15	%		5.99	%