CubeSmart (NYSE:CUBE) Q1 2025 Earnings Conference Call May 2, 2025 11:00 AM ET Company Participants Josh Schutzer - VP, Finance Chris Marr - President and CEO Tim Martin - CFO Conference Call Participants Samir Khanal - Bank of America Merrill Lynch Nick Carn - Citi Spenser Glimcher - Green Street Todd Thomas - KeyBanc Capital Markets Michael Griffin - Evercore ISI Ravi Vaidya - Mizuho Daniel Tricarico - Scotiabank Ki Bin Kim - Truist Securities Michael Goldsmith - UBS Hong Zhang - JPMorgan Brendan Lynch - ...

Financial Data and Key Metrics Changes - The company reported FFO per share of $0.64, which was a penny above the high end of guidance [6][10] - Same store revenue growth decreased by 0.4% year over year, an improvement from a decline of 1.6% in the previous quarter [8][10] - Average occupancy for the same store portfolio was down 50 basis points to 89.5%, narrowing from a decline of 120 basis points in the fourth quarter [9][10] - Same store operating expenses grew by only 0.6% year over year, better than expectations [10][12] Business Line Data and Key Metrics Changes - The company closed on the acquisition of the remaining 80% interest in a joint venture, acquiring a portfolio of 28 early-stage lease-up stores [11] - The third-party management platform added 33 stores, ending the quarter with 869 third-party stores under management [12] Market Data and Key Metrics Changes - Strong markets such as New York City boroughs, Chicago, and Washington D.C. continue to show strength, while supply-impacted markets like Northern New Jersey, Phoenix, and Atlanta are stabilizing [7][12] - In Texas markets, Dallas is facing challenges due to supply and pricing decisions, while Austin shows signs of recovery [34][35] Company Strategy and Development Direction - The company remains focused on optimizing its platform while maintaining high customer service standards [6][10] - The management expressed confidence in the long-term health of the self-storage industry due to the quality and geographic diversity of its portfolio [7][12] - The company is cautious about the economic environment, maintaining a conservative outlook for gradual improvement in operational metrics in 2025 [13] Management's Comments on Operating Environment and Future Outlook - Management noted uncertainty in the economy affecting consumer decisions, which could impact storage demand [13] - The company does not foresee improvement in the housing market and expects a gradual recovery without sharp reacceleration [13] - Management highlighted the resilience of the self-storage business, noting that demand drivers include everyday life events and business needs [18][19] Other Important Information - The balance sheet remains strong with a net debt to EBITDA ratio of 4.8 times [12] - The company is monitoring the impact of macroeconomic factors on its operations and is prepared to adjust strategies accordingly [13][54] Q&A Session Summary Question: What are the drivers of demand in the current environment? - Management indicated that demand is driven by everyday life events and business needs, despite a slow housing market [18] Question: What was occupancy in April? - Occupancy ended at 89.9% in April, showing a slight improvement [21] Question: How does the company view the leasing season? - Management expects a muted leasing season compared to pre-pandemic levels, with no significant growth anticipated [30] Question: What is the outlook for Texas markets? - Management noted that while Austin is recovering, Dallas faces challenges due to supply and competitive pricing [34][35] Question: How is the company managing expenses? - The company has been proactive in managing staffing and operational expenses, leading to better-than-expected results [50] Question: What is the strategy for acquisitions? - The company is open to acquisitions but faces challenges due to market volatility and seller expectations [53][54] Question: How does the company view potential recession impacts? - Management believes the self-storage business is resilient during economic downturns, with demand potentially increasing due to life changes [88][90]

Financial Performance - Net income attributable to common shareholders for Q1 2025 was $89.2 million, down from $94.5 million in Q1 2024, with diluted EPS decreasing to $0.39 from $0.42[5] - Adjusted FFO for Q1 2025 was $148.1 million, slightly up from $146.4 million in Q1 2024, maintaining FFO per diluted share at $0.64 for both periods[6] - Total revenues for Q1 2025 were $273.036 million, an increase of 4.0% from $261.406 million in Q1 2024[43] - Net income attributable to the company for Q1 2025 was $89.197 million, compared to $94.527 million in Q1 2024, reflecting a decrease of 5.0%[43] - Same-store rental income decreased by 0.8% to $220.912 million in Q1 2025 from $222.739 million in Q1 2024[45] - Basic earnings per share attributable to common shareholders for Q1 2025 was $0.39, down from $0.42 in Q1 2024[43] - FFO attributable to the Company's common shareholders and third-party OP unitholders increased to $148.149 million from $146.409 million, showing a growth of about 1.2%[49] - Earnings per share attributable to common shareholders remained stable at $0.39 for both basic and diluted shares, compared to $0.42 in the previous year[49] Revenue and Expenses - Total revenues increased by $11.6 million, while property operating expenses rose by $5.9 million compared to Q1 2024, primarily due to acquisitions and new developments[14] - Interest expense increased to $26.1 million in Q1 2025 from $22.9 million in Q1 2024, attributed to a higher average outstanding debt balance and increased interest rates[15] - Interest expense on loans increased to $26.100 million in Q1 2025, compared to $22.919 million in Q1 2024[43] - Real estate depreciation and amortization for real property increased to $56.689 million from $49.249 million, a rise of approximately 15.1%[49] Occupancy and Property Performance - Same-store NOI decreased by 0.8% year-over-year, driven by a 0.4% decline in revenues and a 0.6% increase in operating expenses[12] - Same-store occupancy averaged 89.5% during the quarter, ending at 89.7%[9] - Period end occupancy for same-store properties was 89.7%, down from 90.3% in the prior year[45] - The company reported a gross margin of 71.5% for same-store results, slightly down from 71.7% in the previous year[45] - The company experienced a 10.4% increase in other property-related income, rising to $10.498 million from $9.507 million year-over-year[45] Assets and Liabilities - Total assets increased to $6.740 billion as of March 31, 2025, up from $6.394 billion as of December 31, 2024[41] - Total liabilities increased to $3.817 billion as of March 31, 2025, compared to $3.440 billion as of December 31, 2024[41] Dividends and Shareholder Returns - The company declared a quarterly dividend of $0.52 per common share, paid on April 15, 2025[17] - Dividends per common share and unit increased to $0.52 from $0.51, reflecting a growth of approximately 2.0%[49] - The payout ratio of FFO rose to 81.3% from 79.7%, indicating a higher proportion of FFO being distributed as dividends[49] Shareholder Metrics - Weighted average diluted shares outstanding increased to 229,169 from 226,575, representing an increase of about 0.7%[49] - Weighted average basic shares outstanding increased to 228,663 from 225,767, reflecting an increase of about 1.1%[49] Future Estimates - The company estimates 2025 diluted EPS to be between $1.41 and $1.49, and adjusted FFO per share to be between $2.51 and $2.59[20] Acquisitions and Investments - The company acquired the remaining 80% interest in the HVP IV portfolio for $452.8 million, which included $44.4 million to repay existing indebtedness[7] - The company has two joint venture development properties under construction, with a total anticipated investment of $36.9 million, of which $18.5 million has been invested as of March 31, 2025[8] Noncontrolling Interests - Net income attributable to noncontrolling interests in the Operating Partnership decreased to $453,000 from $541,000, a decline of approximately 16.2%[49] - The Company's share of unconsolidated real estate ventures decreased to $1.810 million from $2.092 million, a decline of about 13.5%[49]

CubeSmart (CUBE) reported $273.04 million in revenue for the quarter ended March 2025, representing a year-over-year increase of 4.5%. EPS of $0.64 for the same period compares to $0.42 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $267.13 million, representing a surprise of +2.21%. The company delivered an EPS surprise of +3.23%, with the consensus EPS estimate being $0.62.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and h ...

CubeSmart (CUBE) came out with quarterly funds from operations (FFO) of $0.64 per share, beating the Zacks Consensus Estimate of $0.62 per share. This compares to FFO of $0.64 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of 3.23%. A quarter ago, it was expected that this self-storage company would post FFO of $0.68 per share when it actually produced FFO of $0.68, delivering no surprise.Over the last four quarters, the company has ...

MALVERN, Pa., May 01, 2025 (GLOBE NEWSWIRE) -- CubeSmart (NYSE: CUBE) today announced its operating results for the three months ended March 31, 2025. “The first quarter represented a positive start to the year, with improving occupancy and rate trends driven by solid demand,” commented President and Chief Executive Officer Christopher P. Marr. “Our high-quality portfolio with its focus on top-tier markets uniquely positions us to perform during uncertain economic climates.” Key Highlights for the First Qua ...

Company Overview - CubeSmart is a self-administered and self-managed real estate investment trust (REIT) that owns or manages 1,528 self-storage properties across the United States [3] - According to the 2025 Self Storage Almanac, CubeSmart ranks as one of the top three owners and operators of self-storage properties in the U.S. [3] Financial Results Announcement - The company will release financial results for the three-month period ended March 31, 2025, after the market close on Thursday, May 1, 2025 [1] - A conference call to discuss these results will be held at 11:00 a.m. ET on Friday, May 2, 2025 [1] Conference Call Details - A live webcast of the conference call will be available on the investor relations page of the company's corporate website [2] - Telephone participants can join the call by dialing 1 (800) 715-9871 with conference ID number 4783436 [2] - A telephonic replay of the call will be available through May 16, 2025, by dialing 1 (800) 770-2030 with the same conference ID [2] Company Mission - The company's mission is to simplify organizational and logistical challenges for customers through innovative solutions, unparalleled service, and genuine care [4] - CubeSmart's self-storage properties are designed to provide affordable, easily accessible, and climate-controlled storage space for both residential and commercial customers [4]

iREIT+HOYA Capital is the premier income-focused investing service on Seeking Alpha. Our focus is on income-producing asset classes that offer the opportunity for sustainable portfolio income , diversification , and inflation hedging . Get started with a Free Two-Week Trial and take a look at our top ideas across our exclusive income-focused portfolios.It’s been a while since I last covered CubeSmart (NYSE: CUBE ) in February 2024, highlighting its challenges in the post-boom period after COVID, with potent ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K Date of report (Date of earliest event reported): January 7, 2025 CUBESMART CUBESMART, L.P. (Exact Name of Registrant as Specified in Its Charter) CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Maryland (CubeSmart) 001-32324 20-1024732 Delaware (CubeSmart, L.P.) 000-54462 34-1837021 (State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.) 5 Ol ...

Company Growth and Properties - As of December 31, 2024, the company owned 631 self-storage properties with approximately 45.8 million rentable square feet, compared to 611 properties and 44.1 million square feet in 2023, representing a growth of 3.3% in rentable square footage[213] - The company managed a total of 902 stores for third parties as of December 31, 2024, bringing the total number of stores owned and/or managed to 1,533[213] - As of December 31, 2024, the company owned 598 same-store properties, with the remaining 33 being non same-store properties, which include recent acquisitions and developments[232] - The company acquired 16 stores in the quarter ended December 31, 2024, including 14 stores owned by consolidated joint ventures[236] - The company acquired a controlling interest in seven consolidated joint ventures that own 14 stores, contributing to the increase in investing activities[259] - The company acquired the remaining 80% interest in 191 IV CUBE LLC for $452.8 million, which included $44.4 million to repay existing indebtedness[278] Revenue and Financial Performance - Revenues increased from $1.050 billion in 2023 to $1.066 billion in 2024, an increase of $15.9 million, or 1.5%[239] - Net income attributable to the company's common shareholders decreased from $410.8 million in 2023 to $391.2 million in 2024, a decrease of $19.6 million, or 4.8%[239] - FFO attributable to the Company's common shareholders and third-party OP unitholders was $600.8 million in 2024, down from $615.1 million in 2023, representing a decrease of 2.5%[256] - Cash provided by operating activities increased by $19.9 million, from $611.1 million in 2023 to $631.1 million in 2024, an increase of 3.3%[258] - Other income decreased from $6.3 million in 2023 to $1.2 million in 2024, a decrease of $5.1 million, or 81.6%[245] Expenses and Costs - Property operating expenses rose from $294.8 million in 2023 to $317.8 million in 2024, an increase of $23.0 million, or 7.8%[240] - General and administrative expenses increased from $57.0 million in 2023 to $59.7 million in 2024, an increase of $2.6 million, or 4.6%[241] - Interest expense on loans decreased from $93.1 million in 2023 to $90.8 million in 2024, a decrease of $2.2 million, or 2.4%[242] Cash Flow and Financing Activities - Cash used in investing activities rose significantly from $93.8 million in 2023 to $174.0 million in 2024, an increase of $80.1 million, primarily due to acquisitions[259] - Cash used in financing activities decreased by $130.4 million, from $518.0 million in 2023 to $387.7 million in 2024[260] - The revolving credit facility decreased by $18.1 million, reflecting the use of available cash to repay the outstanding balance[281] Debt and Interest Rates - The average outstanding debt balance decreased from $3.02 billion in 2023 to $2.96 billion in 2024[242] - The weighted average effective interest rate on outstanding debt decreased from 3.04% in 2023 to 3.00% in 2024[242] - As of December 31, 2024, the company's consolidated debt included $3.00 billion of outstanding fixed-rate mortgage loans and notes payable[289] - A 100 basis point increase in market interest rates would decrease the fair value of fixed-rate mortgage debt and unsecured senior notes by approximately $105.7 million[290] - A 100 basis point decrease in market interest rates would increase the fair value of fixed-rate mortgage debt and unsecured senior notes by approximately $109.4 million[290] Occupancy and Market Conditions - The company experienced seasonal fluctuations in occupancy levels, typically higher during summer months due to increased moving activity[215] - Period end occupancy decreased from 90.3% in 2023 to 89.3% in 2024[240] - The company's stores in New York, Florida, California, and Texas contributed approximately 18%, 14%, 11%, and 9% of total revenues for the year ended December 31, 2024, respectively[219] - The company’s operating results are sensitive to changes in economic conditions that impact consumer spending, which could affect growth and profitability[216] Asset Changes - Storage properties, net increased by $87.0 million from 2023 to 2024, reaching $6.038 billion, primarily due to acquisitions and improvements[279] - Other assets, net rose by $20.3 million to $183.6 million, driven by the value assigned to in-place leases and a $5.0 million note receivable[280] - Accounts payable and other liabilities increased by $28.2 million, attributed to the timing of payments for real estate taxes and other payables[283] Future Expectations - The Company expects recurring capital expenditures for 2025 to be approximately $14.0 million to $19.0 million, with planned capital improvements and store upgrades between $12.5 million to $17.5 million[265] - As of December 31, 2024, the Company had approximately $71.6 million in available cash and cash equivalents, along with $849.4 million available for borrowings under its Revolver[269] - The effective interest rate on the Revolver as of December 31, 2024, was 5.52%[274] - The Company was in compliance with all financial covenants under its unsecured senior notes and revolving credit facility as of December 31, 2024[272][275]