Camden Property (CPT) Risk Analysis

We may not continue to qualify as a REIT in the future and the Internal Revenue Service may challenge our qualification as a REIT for prior years. If we fail to qualify as a REIT in any taxable year we may be subject to federal and state income taxes for such year and we may not be able to requalify as a REIT for the four subsequent taxable years and may be subject to federal and state income taxes in those years as well. This may also impair our ability to expand our business and raise capital which may adversely affect the value of our common shares. We may face other tax liabilities in the future which may impact our cash flow. These potential tax liabilities may be calculated on our income or property values at either the corporate or individual property levels. Any additional tax expense incurred would decrease the cash available for cash distributions to our common shareholders and non-controlling interest holders. Additionally, 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 adjusted taxable income.

As an owner, manager, and developer of multifamily properties, we may incur liability based on various conditions at our properties and the buildings thereon, and we also have become and in the future may become involved in legal proceedings, including consumer, employment, tort, antitrust, or commercial litigation, which if decided adversely to or settled by us, and not adequately covered by insurance, could result in liabilities which are material to our financial condition or results of operations.

Tax laws remain under constant review by persons involved in the legislative process, at the Internal Revenue Service, the U.S. Department of Treasury, and by various state and local tax authorities. Future changes in tax laws including administrative interpretations, enacted tax rates, or new pronouncements relating to accounting for income taxes could adversely affect us in a number of ways, including making it more difficult or more costly for us to qualify as a REIT.

A certain number of our properties are located in areas which have experienced and may in the future experience catastrophic weather and other natural events from time-to-time, including fires, snow or ice storms, windstorms, tornadoes, hurricanes, earthquakes, flooding, or other environmental events. These adverse weather or natural events could cause substantial damages or losses to our properties which could exceed our insurance coverage. In the event of a loss in excess of insured limits, we could lose our capital invested in the affected property, anticipated future revenue from the property, and could also continue to be obligated to repay any mortgage indebtedness or other obligations related to the property. Any such loss could materially and adversely affect our business, financial condition and results of operations.

The capital and credit markets are subject to volatility and disruption. If we need to incur debt from a source other than our revolving credit facility or our commercial paper program, we cannot be certain the additional financing will be available to the extent required and on acceptable terms. If debt financing on acceptable terms is not available, we may be unable to fully execute our growth strategy, otherwise take advantage of business opportunities, or respond to competitive pressures, any of which could have a material adverse effect on our results of operations, financial condition (including liquidity), and our ability to make distributions to shareholders. Other weakened economic conditions, including job losses, high unemployment levels, stock market volatility, and uncertainty about the future, could adversely affect rental rates and occupancy levels. Unfavorable changes in economic conditions may have a material adverse impact on our cash flows and operating results. Additional key economic risks which may adversely affect conditions in the markets in which we operate include the following: - local conditions, such as an oversupply of apartments or other housing available for rent, or a reduction in demand for apartments in the area;- declines in the financial condition of our residents, which may make it more difficult for us to collect rents from some residents;- declines in market rental rates;- low mortgage interest rates and home pricing, making alternative housing more affordable;- government or builder incentives which enable home buyers to put little or no money down, making alternative housing options more attractive;- regional economic downturns, including, but not limited to, business layoffs, downsizing, and increased unemployment, which may impact one or more of our geographical markets;- increased costs, including those driven by tariffs, regulatory changes, or other supplychain cost escalations such as higher prices for materials, equipment, contracted services, compliance requirements, or constraints in global or domestic supply chains; and - global or locally-targeted pandemics, epidemics, or other health crises, and any related measures enacted to prevent their spread or restricting our ability to enforce contractual rental obligations upon our residents.

We use technology in substantially all aspects of our business operations, including internet and cloud-based systems and applications. We also use mobile devices, social networking, outside vendors, and various platforms to connect with our employees, suppliers, and residents. As we have incorporated and may continue to incorporate the use of generative artificial intelligence and other advancing technologies, any breach, interruption, or security failure of those technologies, or any non-compliance with applicable laws, could have a negative impact on our business operations, results of operations, financial condition, or reputation. Information security risks have escalated as a result of these emerging technologies and the heightened sophistication and activity levels of cyber-attack perpetrators. Cyber-attacks can include third parties gaining unauthorized access to our data, including sensitive information about our residents, as well as our vendors' data or information technology systems. These attacks may occur through stolen credentials, computer malware, phishing attacks, ransomware, and other deliberate attempts to compromise information security. Our business involves the storage and transmission of numerous classes of sensitive and confidential information and intellectual property, including residents' and suppliers' personal information, private information about employees, and financial and strategic information about us. As we pursue our strategy to grow through acquisitions and developments and new initiatives to improve our operations, we are also expanding our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk. If we fail to assess and identify cybersecurity risks associated with our operations, we may become increasingly vulnerable to such risks and may be liable for consequential litigation and remediation costs. Additionally, the measures we have implemented to prevent security breaches and cyber incidents may not be effective and there can be no complete assurance of prevention or anticipation of such incidents. The theft, destruction, loss, misappropriation, or release of sensitive data, confidential information or intellectual property, or interference with our information technology systems or the technology systems of third parties on which we rely could result in business disruption, negative publicity, brand damage, violation of privacy laws, loss of residents, potential liability, and competitive disadvantage, any of which could result in a material adverse effect on our financial condition or results of operations. We rely on, or may rely in the future on, certain third-party service and software providers to host systems, provide key software, and to supply and store our sensitive data in a secure manner. These third parties face potential risks relating to cybersecurity similar to ours which could disrupt their businesses and adversely impact us. While we provide guidance and specific requirements, in some cases, we do not directly control their information technology security operations or the amount of investment they place in guarding against cybersecurity threats. Accordingly, we are subject to any flaws or breaches in their information technology systems, or those which they operate for us, which could have a material adverse effect on our financial condition or results of operations.

We expect other real estate investors will compete with us to acquire additional operating properties. This competition could increase prices for the type of properties we would likely pursue and adversely affect our ability to acquire these properties or achieve the expected profitability of such properties upon acquisition.