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Core Insights - Current market conditions suggest it is a favorable time to invest in Real Estate Investment Trusts (REITs) due to stable core and headline inflation rates at 3.0% [1] - A significant majority, 75% of investors, anticipate a decrease in the Fed Funds rate, which could further enhance the attractiveness of REIT investments [1] Investment Focus - The article emphasizes the importance of investing in income-producing asset classes, particularly REITs, which provide reliable income, diversification, and act as a hedge against inflation [1]

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. CubeSmart (NYSE:CUBE) is a real estate investment trust that owns and operates self-storage facilities across the United States. The 52-week range of CubeSmart's stock price was $34.24 to $50.70. CubeSmart's dividend yield is 5.58%. It paid $2.08 per share in dividends during the last 12 months. Don't Miss: The Latest On CubeSmart The company on Oct. 30 announced its Q3 2025 earnings, posting FFO of $0. ...

Company Overview - As of September 30, 2025, the company owned 660 self-storage properties with approximately 48.2 million rentable square feet, compared to 631 properties with 45.8 million rentable square feet as of December 31, 2024[124]. - The company managed a total of 1,523 stores, including 863 stores for third parties, as of September 30, 2025[124]. - The company acquired 28 stores in 2025, increasing the total from 631 at the beginning of the year to 660 by September 30, 2025[145]. - The company focuses on maximizing internal growth opportunities while selectively pursuing targeted acquisitions and developments of self-storage properties[128]. Revenue and Occupancy - For the nine months ended September 30, 2025, stores in New York, Florida, Texas, and California contributed approximately 17%, 14%, 11%, and 10% of total revenues, respectively[129]. - Total revenues increased from $270.9 million for the three months ended September 30, 2024, to $285.1 million for the three months ended September 30, 2025, an increase of $14.2 million, or 5.2%[150]. - Total revenues increased from $798.5 million for the nine months ended September 30, 2024 to $840.4 million for the nine months ended September 30, 2025, an increase of $41.9 million, or 5.2%[157]. - Period end occupancy decreased from 89.7% for the three months ended September 30, 2024, to 88.6% for the three months ended September 30, 2025[150]. - The company experienced seasonal fluctuations in occupancy levels, typically higher during summer months due to increased moving activity[126]. Financial Performance - Net income attributable to the company's common shareholders decreased from $100.8 million for the three months ended September 30, 2024, to $82.9 million for the three months ended September 30, 2025, a decrease of $17.9 million, or 17.7%[150]. - Funds from operations (FFO) attributable to common shareholders and third-party OP unitholders was $149.0 million for the three months ended September 30, 2025, compared to $153.0 million in 2024[191]. Expenses - Property operating expenses increased from $81.9 million for the three months ended September 30, 2024, to $90.8 million for the three months ended September 30, 2025, an increase of $9.0 million, or 11.0%[151]. - Depreciation and amortization increased from $51.2 million for the three months ended September 30, 2024, to $66.7 million for the three months ended September 30, 2025, an increase of $15.5 million, or 30.2%[152]. - General and administrative expenses increased from $14.3 million for the three months ended September 30, 2024, to $16.5 million for the three months ended September 30, 2025, an increase of $2.2 million, or 15.7%[153]. - Interest expense on loans increased from $22.8 million during the three months ended September 30, 2024, to $29.4 million during the three months ended September 30, 2025, an increase of $6.6 million, or 29.1%[154]. Debt and Financing - The average outstanding debt balance increased from $2.94 billion during the three months ended September 30, 2024, to $3.44 billion during the three months ended September 30, 2025[155]. - The weighted average effective interest rate on outstanding debt increased from 2.99% during the three months ended September 30, 2024, to 3.32% for the three months ended September 30, 2025[155]. - The average outstanding debt balance increased from $2.97 billion during the nine months ended September 30, 2024 to $3.35 billion during the nine months ended September 30, 2025[161]. - The weighted average effective interest rate on outstanding debt increased from 3.01% during the nine months ended September 30, 2024 to 3.28% for the nine months ended September 30, 2025[161]. - The company issued $450.0 million in unsecured senior notes due November 1, 2035, with an interest rate of 5.125%[173]. - As of September 30, 2025, the total outstanding unsecured senior notes amounted to $3,250.0 million, net of discounts and loan procurement costs[175]. - The company has an $850.0 million unsecured revolving credit facility maturing on February 15, 2027, with an effective interest rate of 5.27% as of September 30, 2025[177][178]. - The company reported net income attributable to common shareholders of $82.9 million for the three months ended September 30, 2025, compared to $100.8 million for the same period in 2024[191]. - The company had $849.3 million available for borrowing under the Revolver as of September 30, 2025, reduced by outstanding letters of credit totaling $0.7 million[178]. Cash Flow - Cash provided by operating activities increased from $466.4 million for the nine months ended September 30, 2024 to $472.0 million for the nine months ended September 30, 2025, reflecting an increase of $5.6 million[162]. - Cash used in investing activities increased from $72.9 million for the nine months ended September 30, 2024 to $513.0 million for the nine months ended September 30, 2025, reflecting an increase of $440.1 million[163]. - Cash provided by financing activities changed from a use of $356.4 million for the nine months ended September 30, 2024 to a provision of $78.0 million for the nine months ended September 30, 2025, reflecting a change of $434.4 million[164]. - As of September 30, 2025, the company had approximately $108.4 million in available cash and cash equivalents[172]. Market Sensitivity - The company's operating results are sensitive to changes in economic conditions that impact consumer spending, which could affect growth and profitability[127]. - A 100 basis point increase in market interest rates would decrease the fair value of outstanding fixed-rate mortgage debt and unsecured senior notes by approximately $125.3 million[198]. - Conversely, a 100 basis point decrease in market interest rates would increase the fair value of outstanding fixed-rate mortgage debt and unsecured senior notes by approximately $133.0 million[198]. - Changes in market interest rates affect the variable portion of the debt portfolio, impacting interest incurred and cash flows[197]. - The fixed portion of the debt portfolio is not affected by changes in market interest rates regarding interest incurred or cash flows[196].

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Financial Data and Key Metrics Changes - The company reported FFO per share as adjusted of $0.65 for the quarter [7] - Same-store revenues declined by 1% year-over-year, with average occupancy down 80 basis points to 89.9% [8] - Same-store operating expenses grew by 0.3% year-over-year, leading to a negative 1.5% same-store NOI growth for the quarter [8][10] - The company updated its full-year guidance, raising the midpoint of FFO per share and improving same-store revenue growth expectations [10] Business Line Data and Key Metrics Changes - The company is under contract to acquire three stores in the fourth quarter, indicating external growth momentum [9] - The joint venture development in Port Chester, New York, was completed and opened during the quarter [9] Market Data and Key Metrics Changes - Top-performing markets include urban areas in the Mid-Atlantic and Northeast, while some Sun Belt markets are still stabilizing [5][6] - The East Coast of Florida is experiencing stabilizing trends, with overall demand levels remaining stable but not significantly growing [5] Company Strategy and Development Direction - The company is focusing on maximizing revenue from each customer while balancing rate and occupancy [14] - The management anticipates continued gradual improvement in operational metrics without expecting a sharp reacceleration [4][11] - The company is exploring opportunities for development in New York City, although it faces challenges due to high costs and reduced tax incentives [56] Management's Comments on Operating Environment and Future Outlook - Management noted that the year has played out better than expected due to diminishing impacts from new supply and a healthier consumer environment [4] - The company expects to be on improved footing heading into 2026, with gradual stabilization trends anticipated [11][74] Other Important Information - The company successfully issued $450 million of 10-year senior unsecured notes, with a yield to maturity of 5.29% [9] - The net debt to EBITDA ratio was reported at 4.7 times at quarter end, indicating conservative leverage levels [10] Q&A Session Summary Question: How is the company balancing rate and occupancy in the current environment? - The company is focusing on maximizing revenue from each customer, with variations by market [14] Question: Can you provide insights on October trends? - The occupancy gap has contracted, and average rent-on-rentals is around 1.92% [17] Question: What percentage of leads are AI-influenced? - AI-influenced leads are currently less than 1% [18] Question: How is the company viewing the acquisition landscape? - The company has three stores under contract and sees a more constructive seller side in the market [28] Question: What is the outlook for same-store revenue growth? - Management conservatively expects positive same-store revenue growth to occur in the back half of 2026 [24][32] Question: Are there any changes in customer behavior regarding rate increases? - Customer health remains good, and there has been no significant change in behavior regarding ECRIs [42] Question: What is the outlook for development supply in the coming years? - Supply recovery is expected to be gradual, with elevated costs and cautious lending from primary lenders [66] Question: How did the move-in trend behave during the quarter? - The move-in trend was consistent with historical patterns, peaking in July [70]

Financial Performance - Net income attributable to common shareholders for Q3 2025 was $82.9 million, down from $100.8 million in Q3 2024, with diluted EPS decreasing to $0.36 from $0.44[6] - Adjusted FFO for Q3 2025 was $149.0 million, compared to $153.0 million in Q3 2024, with adjusted FFO per diluted share decreasing by 3.0% to $0.65[7] - Total revenues for Q3 2025 were $285.08 million, an increase of 5.4% compared to $270.89 million in Q3 2024[46] - Rental income reached $243.4 million in Q3 2025, up from $230.95 million in Q3 2024, reflecting a growth of 5.4%[46] - Net income attributable to the Company for Q3 2025 was $82.93 million, compared to $100.8 million in Q3 2024, representing a decrease of 17.7%[46] - Basic earnings per share attributable to common shareholders decreased to $0.36 in Q3 2025 from $0.45 in Q3 2024[46] - Net income for Q3 2025 was $82,416,000, down from $100,950,000 in Q3 2024, representing a decline of 18.3%[48] - Net operating income (NOI) for Q3 2025 was $166,454,000, a decrease of 1.5% from $168,966,000 in Q3 2024[48] - Funds From Operations (FFO) attributable to common shareholders for Q3 2025 was $148,971,000, a decrease from $153,012,000 in Q3 2024[51] - Earnings per share (EPS) attributable to common shareholders was $0.36 for Q3 2025, down from $0.45 in Q3 2024[51] Revenue and Expenses - Total revenues increased by $14.2 million, while property operating expenses rose by $9.0 million compared to Q3 2024, primarily due to acquisitions and new developments[17] - Property operating expenses for Q3 2025 were $90.85 million, up from $81.87 million in Q3 2024, indicating an increase of 11.9%[46] - Total operating expenses for Q3 2025 were $70,793,000, a slight increase of 0.3% from $70,578,000 in Q3 2024[48] - Interest expense increased from $22.8 million in Q3 2024 to $29.4 million in Q3 2025, attributed to a higher average outstanding debt balance and increased interest rates[18] Occupancy and Performance Metrics - Same-store NOI decreased by 1.5% year-over-year, driven by a 1.0% decrease in revenues and a 0.3% increase in operating expenses[10] - Same-store occupancy averaged 89.9% during the quarter, ending at 89.0%[10] - Period end occupancy rate was 89.0% in Q3 2025, down from 90.2% in Q3 2024[48] - Average occupancy for the period was 89.9% in Q3 2025, down from 90.7% in Q3 2024[48] - Realized annual rent per occupied square foot remained stable at $22.99 in Q3 2025 compared to $23.00 in Q3 2024[48] Acquisitions and Investments - The company acquired an 80% interest in HVP IV for $452.8 million, including $44.4 million to repay existing indebtedness[8] - The company entered contracts to acquire three properties in Arizona, Florida, and New Jersey for a total of $65.3 million, expected to close in Q4 2025[9] Assets and Liabilities - Total assets increased to $6.76 billion as of September 30, 2025, compared to $6.39 billion at the end of 2024, marking a growth of 5.7%[44] - Unsecured senior notes increased to $3.22 billion in Q3 2025 from $2.78 billion in Q4 2024, reflecting a rise of 15.9%[44] - Total liabilities rose to $3.90 billion as of September 30, 2025, compared to $3.44 billion at the end of 2024, an increase of 13.3%[44] Dividends and Future Estimates - The company declared a quarterly dividend of $0.52 per common share, paid on October 15, 2025[22] - The company estimates 2025 diluted EPS to be between $1.46 and $1.50, and adjusted FFO per share to be between $2.56 and $2.60[23] Risks and Challenges - The Company continues to face risks including adverse economic conditions and competition in the self-storage market, which could impact future performance[40] - The Company reported a total of 606 same-store results, which are critical for evaluating performance consistency[47]

Core Insights - CubeSmart reported quarterly funds from operations (FFO) of $0.65 per share, matching the Zacks Consensus Estimate, but down from $0.67 per share a year ago [1] - The company achieved revenues of $285.08 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 1.48% and up from $270.89 million year-over-year [2] - CubeSmart shares have declined approximately 6.5% year-to-date, contrasting with the S&P 500's gain of 17.2% [3] Financial Performance - The FFO for the previous quarter was expected to be $0.63 per share, but the actual result was $0.65, resulting in a positive surprise of +3.17% [1] - Over the last four quarters, CubeSmart has surpassed consensus FFO estimates two times and revenue estimates three times [2] Future Outlook - The sustainability of CubeSmart's stock price movement will largely depend on management's commentary during the earnings call and future FFO expectations [3][4] - The current consensus FFO estimate for the upcoming quarter is $0.65, with projected revenues of $277.38 million, and for the current fiscal year, the estimate is $2.58 on revenues of $1.11 billion [7] Industry Context - The REIT and Equity Trust - Other industry, to which CubeSmart belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8] - The performance of CubeSmart's stock may also be influenced by the overall industry outlook and trends in estimate revisions [5][8]

Core Viewpoint - CubeSmart reported third-quarter results that met expectations, with strong performance in coastal and urban markets, while sunbelt properties faced challenges in balancing rate and occupancy [2] Financial Results - Net income attributable to common shareholders for Q3 2025 was $82.9 million, down from $100.8 million in Q3 2024, with diluted EPS decreasing to $0.36 from $0.44 [4] - Adjusted FFO for Q3 2025 was $149.0 million, compared to $153.0 million in Q3 2024, with adjusted FFO per diluted share decreasing by 3.0% to $0.65 [5] - Same-store NOI decreased by 1.5% year-over-year, driven by a 1.0% decrease in revenues and a 0.3% increase in operating expenses [10][13] Investment Activity - No acquisitions were made in Q3 2025, but the company acquired an 80% interest in HVP IV for $452.8 million earlier in the year [6] - Contracts were signed to acquire three properties in Arizona, Florida, and New Jersey for a total of $65.3 million, expected to close in Q4 2025 [7] - One development property in New York was opened at a cost of $18.1 million, with another joint venture property under construction, anticipating a total investment of $19.0 million [8] Third-Party Management - The third-party management platform expanded to 863 stores, totaling 56.6 million rentable square feet, with 46 stores added in Q3 2025 [11] Operating Results - The total consolidated portfolio included 660 stores with 48.2 million rentable square feet and a physical occupancy rate of 88.6% as of September 30, 2025 [14] - Total revenues increased by $14.2 million, while property operating expenses rose by $9.0 million compared to Q3 2024, primarily due to acquisitions and new developments [15] Financing Activity - The company issued $450 million in unsecured senior notes due 2035, with proceeds used to repay debt and for general corporate purposes [17] Quarterly Dividend - A quarterly dividend of $0.52 per common share was declared on July 29, 2025, and paid on October 15, 2025 [19] 2025 Financial Outlook - The company estimates fully diluted EPS for 2025 to be between $1.46 and $1.50, and adjusted FFO per share to be between $2.56 and $2.60 [21]

Company Overview - CubeSmart (NYSE: CUBE) is one of the largest self-storage REITs with a portfolio of over 1,500 properties [1] - The company focuses on submarkets with attractive demographics for long-term growth [1] Investment Insights - The stock is currently being evaluated for potential investment opportunities [2] - The analyst has extensive experience researching over 1,000 companies across various sectors, including REITs [1] Market Position - CubeSmart operates in a competitive market with a high-quality property portfolio [1] - The company is positioned to benefit from favorable demographic trends in its target markets [1]