May 2024 Investor Presentation CUBESMART® self storage Safe Harbor Statement The forward-looking statements contained in this presentation are subject to various risks and known and unknown uncertainties. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurance that the Company's expectations will be achieved. Factors which could cause the Company's actual results, performance, or achievements to differ signifi ...

Company Overview - CubeSmart is a self-administered and self-managed real estate investment trust (REIT) that owns or manages 1,537 self-storage properties across the United States [1] - According to the 2025 Self Storage Almanac, CubeSmart ranks among the top three owners and operators of self-storage properties in the U.S. [1] Dividend Announcement - The Board of Trustees of CubeSmart declared a quarterly dividend of $0.52 per common share for the period ending June 30, 2025 [1] - This dividend is payable on July 15, 2025, to common shareholders of record on July 1, 2025 [1] Mission and Services - The company's mission is to simplify organizational and logistical challenges for customers through innovative solutions, unparalleled service, and genuine care [2] - CubeSmart's self-storage properties are designed to provide affordable, easily accessible, and, in many locations, climate-controlled storage space for both residential and commercial customers [2]

Group 1 - Albert Anthony is a Croatian-American media personality and analyst for financial media platforms Investing.com and Seeking Alpha, focusing on dividend stocks and general market commentary [1] - Since 2023, Albert Anthony has gained over 1,000 followers and has covered more than 200 companies across multiple sectors [1] - He has experience as an analyst in the IT sector and was part of the IT team at a top 10 financial firm in the US [1] Group 2 - Albert Anthony holds a B.A. from Drew University and has completed coursework through the Corporate Finance Institute and Coursera [1] - In 2025, he plans to launch a new book on Amazon discussing his methodology as an analyst and how he rates stocks [1] - The Albert Anthony brand is owned by Albert Anthony & Co., a sole proprietorship registered in Austin, Texas [1]

Group 1 - The investment approach has received over 500 five-star reviews, indicating high satisfaction among members who are experiencing benefits [1] - The company invests significant resources, over $100,000 annually, into researching profitable investment opportunities, particularly in real estate strategies [1] - Recent poor performance of REITs has led to a decline in investor interest, overshadowing their long-term rewarding potential [1] Group 2 - Jussi Askola leads the High Yield Landlord investing group, providing real-time updates on his REIT portfolio and transactions [2] - The group offers features such as three distinct portfolios (core, retirement, international), buy/sell alerts, and direct access to analysts for inquiries [2] - Jussi Askola is the President of Leonberg Capital, a value-oriented investment firm that consults various investment entities on REIT investing [2]

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]

Property Management and Operations - As of March 31, 2025, the company owned 659 self-storage properties with approximately 48.1 million rentable square feet, compared to 631 properties and 45.8 million square feet as of December 31, 2024[116]. - The company managed a total of 1,528 stores, including 869 stores for third parties, as of March 31, 2025[116]. - For the three months ended March 31, 2025, the company's stores in New York, Florida, Texas, and California contributed approximately 17%, 14%, 11%, and 10% of total revenues, respectively[122]. - The company experienced seasonal fluctuations in occupancy levels, typically higher during summer months due to increased moving activity[118]. - The company focuses on maximizing internal growth opportunities while selectively pursuing targeted acquisitions and developments of self-storage properties[120]. - The company acquired 28 stores from January 1, 2024, to March 31, 2025, increasing the total from 631 to 659 stores[138]. - The company has no significant customer concentration, with no single customer representing a significant portion of revenues[122]. Financial Performance - Total revenues increased from $261.4 million for the three months ended March 31, 2024, to $273.0 million for the three months ended March 31, 2025, an increase of $11.6 million, or 4.4%[143]. - Property operating expenses increased from $77.0 million for the three months ended March 31, 2024, to $82.9 million for the three months ended March 31, 2025, an increase of $5.9 million, or 7.7%[144]. - Depreciation and amortization increased from $50.7 million for the three months ended March 31, 2024, to $59.2 million for the three months ended March 31, 2025, an increase of $8.4 million, or 16.6%[145]. - Interest expense on loans increased from $22.9 million during the three months ended March 31, 2024, to $26.1 million during the three months ended March 31, 2025, an increase of $3.2 million, or 13.9%[146]. - Cash provided by operating activities decreased from $150.2 million for the three months ended March 31, 2024, to $146.3 million for the three months ended March 31, 2025, reflecting a decrease of $3.8 million[147]. - Cash used in investing activities increased from $34.2 million for the three months ended March 31, 2024, to $467.3 million for the three months ended March 31, 2025, reflecting an increase of $433.1 million[148]. - Cash provided by financing activities was $259.1 million for the three months ended March 31, 2025, compared to cash used of $116.5 million for the three months ended March 31, 2024, reflecting a change of $375.6 million[149]. - For the three months ended March 31, 2025, net income attributable to the company's common shareholders was $89.197 million, compared to $94.527 million for the same period in 2024[176]. - Funds from operations (FFO) attributable to the company's common shareholders and third-party OP unitholders for the three months ended March 31, 2025, was $148.149 million, slightly up from $146.409 million in 2024[176]. Debt and Liquidity - As of March 31, 2025, the company had approximately $10.8 million in available cash and cash equivalents, and approximately $467.0 million of availability for borrowings under its Revolver[158]. - The average outstanding debt balance increased from $2.99 billion during the three months ended March 31, 2024, to $3.20 billion during the three months ended March 31, 2025[146]. - As of March 31, 2025, the total outstanding unsecured senior notes amounted to $2,781.666 million, slightly up from $2,780.631 million as of December 31, 2024[159]. - The effective interest rates on the unsecured senior notes range from 2.10% to 4.46%, with a weighted average effective interest rate of 3.994% for the 2025 notes[160]. - The company has an $850 million unsecured revolving credit facility maturing on February 15, 2027, with borrowings under the facility having an interest rate of 5.44% as of March 31, 2025[162][163]. - As of March 31, 2025, $467 million was available for borrowing under the revolving credit facility, reduced by an outstanding letter of credit of $0.6 million[163]. - The total mortgage loans and notes payable, net, as of March 31, 2025, was $205.500 million, down from $205.915 million as of December 31, 2024[165]. Risk Management - The company’s operating results are sensitive to changes in economic conditions affecting consumer spending, which could impact growth and profitability[119]. - The company aims to manage interest rate risk through derivative financial instruments to mitigate the impact of interest rate fluctuations on earnings and cash flows[180]. - A 100 basis point increase in market interest rates on variable-rate debt would decrease future earnings and cash flows by approximately $3.8 million annually[182]. - A 100 basis point decrease in market interest rates on variable-rate debt would increase future earnings and cash flows by approximately $3.8 million annually[182]. - 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 $101.1 million[183]. - 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 $105.3 million[183]. Compliance and Governance - The company replaced its prior at-the-market equity distribution program with a new program allowing the sale of up to 13,510,817 common shares, with no shares sold under the new program as of March 31, 2025[166][167]. - The company was in compliance with all financial covenants under the unsecured senior notes and the revolving credit facility as of March 31, 2025[161][164].

Group 1 - CubeSmart held its first quarter 2025 earnings call with key participants including the CEO and CFO [1][2] - The call included prepared remarks followed by a question-and-answer session [2] - Supplemental operating and financial data is available on the company's investor relations website [2] Group 2 - The company provided forward-looking statements regarding earnings and strategy, highlighting potential risks and uncertainties [3]

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 [8][12] - Same store revenue growth decreased by 0.4% year over year, an improvement from a decline of 1.6% in the previous quarter [11] - 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 [11] - Same store operating expenses grew only 0.6% year over year, better than expectations [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 [13] - The third-party management platform added 33 stores, ending the quarter with 869 third-party stores under management [14] 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 [9] - In April, occupancy improved to 89.9% [22] Company Strategy and Development Direction - The company remains focused on optimizing its platform while maintaining high customer service standards [7] - The management expressed confidence in the long-term health of the self-storage industry due to the quality and geographic diversity of its portfolio [9] Management's Comments on Operating Environment and Future Outlook - Management noted uncertainty in the economy starting in April, which could impact consumer decisions related to storage demand [15] - The company anticipates gradual improvement in operational metrics in 2025, without expecting a sharp reacceleration [15] Other Important Information - The balance sheet remains strong with a net debt to EBITDA ratio of 4.8 times [14] - The company is addressing a bond maturity later in the year, either through existing capacity or opportunistically accessing debt markets [14] Q&A Session Summary Question: What are the drivers of demand in the current environment? - Management highlighted that demand is driven by everyday life events and business customers needing storage solutions, despite a slow housing market [19][20] Question: What was occupancy in April? - Occupancy ended at 89.9% in April [22] Question: Are there any pricing adjustments being made? - Management confirmed that move-in rates were down about 2% in April, an improvement from previous quarters [23] Question: How does the company view the leasing season? - Management expects a muted leasing season compared to pre-pandemic levels, with gradual improvements anticipated [30] Question: What is the outlook for Texas markets? - Management noted that while some Texas markets are under pressure, they see signs of stabilization and improvement [36] Question: Are there any surprises in development costs? - Management reported no significant surprises in development costs, as projects were not impacted by recent volatility [37] Question: What is the strategy regarding acquisitions? - Management indicated that while wholly owned acquisitions make sense, current market volatility has created uncertainty in valuations [54][55] Question: How does the company view demand in a potential recession? - Management expressed confidence in the self-storage business's resilience during economic downturns, noting that demand often increases during such times [91][92]

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]

Core Insights - CubeSmart (CUBE) reported revenue of $273.04 million for the quarter ended March 2025, marking a year-over-year increase of 4.5% and exceeding the Zacks Consensus Estimate of $267.13 million by 2.21% [1] - The company achieved an EPS of $0.64, up from $0.42 a year ago, and surpassed the consensus EPS estimate of $0.62 by 3.23% [1] Financial Performance Metrics - Property management fee income was reported at $10.51 million, slightly below the estimated $10.61 million, but showed a year-over-year increase of 6.1% [4] - Rental income reached $232.77 million, exceeding the estimated $225.78 million, with a year-over-year growth of 3.4% [4] - Other property-related income was $29.77 million, surpassing the estimated $29.33 million, reflecting a significant year-over-year increase of 13.1% [4] - Net Earnings Per Share (Diluted) was reported at $0.39, matching the average estimate based on four analysts [4] Stock Performance - CubeSmart's shares have returned -3.1% over the past month, compared to a -0.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]