By Mike Fickes

As chairman and CEO of Houston-based apartment REIT Camden Property Trust (NYSE: CPT), Richard Campo once donned a Star Trek uniform and showed clips of "Star Trek II: The Wrath of Khan" to make a point about overcoming business challenges. A golfer, skier, fisherman and general sports fan, Campo also contributes his real estate expertise to the Harris County-Houston Sports Authority.

Recently, Campo spoke with Real Estate Portfolio about the current state of the multifamily sector, leadership lessons learned from Captain Kirk and his role in the return of professional football to Houston.

Portfolio: What are the biggest challenges facing the apartment industry today?
Campo: The immediate challenge is the decrease in demand for apartments as a result of the recession.

Portfolio: Doesn't the multifamily industry usually experience increasing demand during recessions?
Campo: Multifamily businesses tend to be resilient during recessions, even though demand for apartments slows. Fewer people buy homes in a recession, and so fewer people move out of apartments.

This recession is different. Home buying has held up, and the apartment industry has seen a normal slowing of demand, coupled with more residents moving out. This has decreased occupancy rates. Our occupancy rate decreased from 94.7 percent in the first quarter of 2001 to 91.7 percent in the first quarter of this year. Most of the drop has come after September 11—we have properties in Dallas near the airport and American Airlines' headquarters. Those properties took big hits because of airline layoffs.

Portfolio: How is Camden Property Trust dealing with this challenge?
Campo: The first thing some companies do in a recession is cut costs at the property level, by reducing maintenance and laying people off. We try not to do that. We focus on customer service and differentiating ourselves with our brand promise of "living excellence."

We work to renew all our tenants that we possibly can, without playing the discount game. We try to renew tenants with incentives that improve the property. For example, we might install ceiling fans or repaint the apartment. These steps cost money, but they also enhance the value of the real estate. We only offer price concessions as a last resort.

Portfolio: I hear you make a correlation between Star Trek and the multifamily business?
Campo: (Chuckling) Two months ago, I gave a CEO address at a company property management conference, and I used "The Wrath of Khan" to make my point. I like Star Trek movies because they are about leadership. At the conference, I showed clips of the crisis events in the movie, which always follow a pattern: The ship is crippled. An enemy is attacking. There are only a few seconds to find a solution. Someone in the crew figures out a strategy. And they win.

My point was that to survive difficult times you need a team that thinks and acts innovatively and aggressively. The movie illustrated that point. Funny thing—I was surprised by the number of people that came up to me afterwards to say they had seen the movie and loved it.

Portfolio: Turning to contemporary technology, did Camden invest in dot.com companies?
Campo: Yes, and we wrote off all our technology investments last year, taking a charge of $9.8 million. I also want to say that we haven't written off the companies. While Broadband Residential has gone out of business, we still have about $7 million invested in companies that are doing well. These include rent.com, Credit Retriever, Q-Corp, opsXchange, Yield Star and Leasing Desk. Even though these stocks have no value today, that doesn't mean that they won't have value in the future.

Portfolio: In addition to investing, does Camden do business with these companies?
Campo: Yes. We wrote off the investments so our investors wouldn't worry. But these companies provide new multifamily technologies that we use. For example, we are fully rolled out in credit screening with Credit Retriever. We can approve or deny applicants in 30 seconds and analyze closing ratios and other business issues. We work with Q-Corp, which we branded as Camden Connect on our web site. This service enables new tenants to set up their cable television and utilities, order newspaper delivery and arrange for other services. We've also rolled Yield Star yield management technology into our property management system.

Portfolio: What do you do to get away from work and relax?
Campo: I've been married for 22 years, and I have three kids. On vacation, we'll go skiing together. Not long ago we went skiing in Park City, UT. I like to go fishing with my son, and I'm a golfer. I have a 17 handicap. I used to be a 15, but I've regressed. I watch all professional sports. My favorite is professional football, which Houston hasn't had for a couple of years. However, our NFL team (Houston Texans) is coming back this August.

Portfolio: Where will the new team play?
Campo: Reliant Stadium. One of my community projects is volunteering with the Harris County–Houston Sports Authority. I am the secretary-treasurer and chairman of the finance committee. In that role, I helped put together the financing for Reliant Stadium. I also helped finance the baseball stadium (formerly Enron Field, now known as Minute Maid Field) and negotiated on behalf of the city with the Houston Rockets for a new basketball arena downtown. It's a lot of work, but it's fun.