Core Viewpoint - CubeSmart (CUBE) is rated as a buy for income-focused investors interested in equity real estate investment trusts (REITs) due to better-than-expected Q2 earnings results and raised guidance for the rest of the year [1] Financial Performance - The company reported Q2 earnings results that exceeded expectations [1] - Management has raised guidance for the remainder of the year, indicating positive future performance [1]

[Report Cover Page & General Information](index=1&type=section&id=Report%20Cover%20Page%20%26%20General%20Information) This document is the quarterly report (Form 10-Q) for the period ending June 30, 2025 - This is a quarterly report (Form 10-Q) for the period ending June 30, 2025[2](index=2&type=chunk) - The registrants include CubeSmart (the Parent Company, a Maryland real estate investment trust) and CubeSmart, L.P. (the Operating Partnership, a Delaware limited partnership)[2](index=2&type=chunk) - Both CubeSmart and CubeSmart, L.P. are classified as **large accelerated filers**[3](index=3&type=chunk) CubeSmart Common Shares Outstanding | Category | Shares Outstanding as of July 30, 2025 | | :--- | :--- | | Common Shares, $0.01 par value per share | 228,035,275 | [Explanatory Note](index=2&type=section&id=Explanatory%20Note) This report combines the Form 10-Q filings for CubeSmart and its operating partnership, CubeSmart, L.P - This report combines the Form 10-Q quarterly reports for CubeSmart (Parent Company, REIT) and CubeSmart, L.P. (Operating Partnership) for the period ended June 30, 2025, as they operate as a single enterprise[6](index=6&type=chunk) - As of June 30, 2025, the Parent Company owned approximately **99.5%** of the interest in the Operating Partnership and has full authority over its daily operations as its sole general partner[7](index=7&type=chunk) - The Parent Company's primary asset is its investment in the Operating Partnership, which holds substantially all of the company's assets and conducts its business operations[9](index=9&type=chunk) - The consolidated financial statements of the Parent Company and the Operating Partnership are nearly identical, with main differences in the equity (or capital) sections[10](index=10&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements based on assumptions and expectations that are inherently subject to risks and uncertainties - Forward-looking statements in this report are based on assumptions and expectations that may not be realized and are subject to risks, uncertainties, and other factors[22](index=22&type=chunk) - Key risks include adverse economic conditions in the real estate and self-storage markets, increased competition, inflation, rising interest rates, reduced capital availability, financing risks, failure to maintain REIT status, and risks related to acquisitions, cybersecurity, and regulatory changes[23](index=23&type=chunk)[25](index=25&type=chunk) - The company cautions readers against undue reliance on these statements and undertakes no obligation to update them beyond what is required by securities laws[24](index=24&type=chunk) [Part I. FINANCIAL INFORMATION](index=7&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for CubeSmart and CubeSmart, L.P., as of June 30, 2025 [CUBESMART AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS](index=9&type=section&id=CUBESMART%20AND%20SUBSIDIARIES%20CONSOLIDATED%20BALANCE%20SHEETS) Consolidated Balance Sheet Key Data (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total assets | $6,709,320 | $6,394,181 | +$315,139 | | Storage properties, net | $6,413,603 | $6,038,186 | +$375,417 | | Cash and cash equivalents | $8,741 | $71,560 | -$62,819 | | Total liabilities | $3,820,046 | $3,440,313 | +$379,733 | | Revolving credit facility | $366,300 | — | +$366,300 | | Total CubeSmart shareholders' equity | $2,813,678 | $2,871,856 | -$58,178 | [CUBESMART AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS](index=11&type=section&id=CUBESMART%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Consolidated Statements of Operations Key Data (in thousands of USD, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $282,303 | $266,209 | +$16,094 | +6.0% | | Total operating expenses | $170,413 | $148,754 | +$21,659 | +14.6% | | Net income attributable to the Company | $82,960 | $93,964 | -$11,004 | -11.7% | | Basic earnings per share | $0.36 | $0.42 | -$0.06 | -14.3% | | Diluted earnings per share | $0.36 | $0.41 | -$0.05 | -12.2% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $555,339 | $527,615 | +$27,724 | +5.3% | | Total operating expenses | $328,571 | $292,133 | +$36,438 | +12.5% | | Net income attributable to the Company | $172,157 | $188,491 | -$16,334 | -8.7% | | Basic earnings per share | $0.75 | $0.83 | -$0.08 | -9.6% | | Diluted earnings per share | $0.75 | $0.83 | -$0.08 | -9.6% | [CUBESMART AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)](index=12&type=section&id=CUBESMART%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)) Comprehensive Income Attributable to the Company (in thousands of USD) | Period | 2025 | 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Three months ended June 30 | $82,980 | $93,984 | -$11,004 | -11.7% | | Six months ended June 30 | $172,197 | $188,531 | -$16,334 | -8.7% | [CUBESMART AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY](index=13&type=section&id=CUBESMART%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20EQUITY) Total CubeSmart Shareholders' Equity (in thousands of USD) | Date | Amount | | :--- | :--- | | June 30, 2025 | $2,813,678 | | December 31, 2024 | $2,871,856 | - For the six months ended June 30, 2025, dividends on common shares were **$0.52 per share**[34](index=34&type=chunk) [CUBESMART AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS](index=15&type=section&id=CUBESMART%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Consolidated Statements of Cash Flows Key Data (Six months ended June 30, in thousands of USD) | Activity | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Net cash from operating activities | $303,800 | $321,012 | -$17,212 | | Net cash from investing activities | $(491,395) | $(54,563) | -$436,832 | | Net cash from financing activities | $124,264 | $(267,396) | +$391,660 | | Cash, cash equivalents, and restricted cash at end of period | $14,332 | $7,270 | +$7,062 | - The significant increase in cash used in investing activities was primarily due to the **$451.1 million** payment to acquire the remaining 80% interest in 191 IV CUBE LLC[36](index=36&type=chunk) - Cash from financing activities shifted from a net outflow to a net inflow, mainly driven by a **$373.8 million** increase in net proceeds from the revolving credit facility[36](index=36&type=chunk) [CUBESMART, L.P. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS](index=16&type=section&id=CUBESMART%2C%20L.P.%20AND%20SUBSIDIARIES%20CONSOLIDATED%20BALANCE%20SHEETS) Consolidated Balance Sheet Key Data (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total assets | $6,709,320 | $6,394,181 | +$315,139 | | Storage properties, net | $6,413,603 | $6,038,186 | +$375,417 | | Cash and cash equivalents | $8,741 | $71,560 | -$62,819 | | Total liabilities | $3,820,046 | $3,440,313 | +$379,733 | | Revolving credit facility | $366,300 | — | +$366,300 | | Total CubeSmart, L.P. capital | $2,813,678 | $2,871,856 | -$58,178 | [CUBESMART, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS](index=17&type=section&id=CUBESMART%2C%20L.P.%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Consolidated Statements of Operations Key Data (in thousands of USD, except per unit data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $282,303 | $266,209 | +$16,094 | +6.0% | | Total operating expenses | $170,413 | $148,754 | +$21,659 | +14.6% | | Net income attributable to CubeSmart, L.P. | $83,361 | $94,488 | -$11,127 | -11.8% | | Basic earnings per unit | $0.36 | $0.42 | -$0.06 | -14.3% | | Diluted earnings per unit | $0.36 | $0.41 | -$0.05 | -12.2% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $555,339 | $527,615 | +$27,724 | +5.3% | | Total operating expenses | $328,571 | $292,133 | +$36,438 | +12.5% | | Net income attributable to CubeSmart, L.P. | $173,011 | $189,556 | -$16,545 | -8.7% | | Basic earnings per unit | $0.75 | $0.83 | -$0.08 | -9.6% | | Diluted earnings per unit | $0.75 | $0.83 | -$0.08 | -9.6% | [CUBESMART, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)](index=18&type=section&id=CUBESMART%2C%20L.P.%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)) Comprehensive Income Attributable to CubeSmart, L.P. (in thousands of USD) | Period | 2025 | 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Three months ended June 30 | $83,381 | $94,508 | -$11,127 | -11.8% | | Six months ended June 30 | $173,051 | $189,596 | -$16,545 | -8.7% | [CUBESMART, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CAPITAL](index=19&type=section&id=CUBESMART%2C%20L.P.%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20CAPITAL) Total CubeSmart, L.P. Capital (in thousands of USD) | Date | Amount | | :--- | :--- | | June 30, 2025 | $2,813,678 | | December 31, 2024 | $2,871,856 | - For the six months ended June 30, 2025, distributions on OP Units were **$0.52 per unit**[45](index=45&type=chunk) [CUBESMART, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS](index=21&type=section&id=CUBESMART%2C%20L.P.%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Consolidated Statements of Cash Flows Key Data (Six months ended June 30, in thousands of USD) | Activity | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Net cash from operating activities | $303,800 | $321,012 | -$17,212 | | Net cash from investing activities | $(491,395) | $(54,563) | -$436,832 | | Net cash from financing activities | $124,264 | $(267,396) | +$391,660 | | Cash, cash equivalents, and restricted cash at end of period | $14,332 | $7,270 | +$7,062 | - The significant increase in cash used in investing activities was primarily due to the **$451.1 million** payment to acquire the remaining 80% interest in 191 IV CUBE LLC[47](index=47&type=chunk) - Cash from financing activities shifted from a net outflow to a net inflow, mainly driven by a **$373.8 million** increase in net proceeds from the revolving credit facility[47](index=47&type=chunk) [NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS](index=22&type=section&id=NOTES%20TO%20UNAUDITED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [1. ORGANIZATION AND NATURE OF OPERATIONS](index=22&type=section&id=1.%20ORGANIZATION%20AND%20NATURE%20OF%20OPERATIONS) - CubeSmart operates as a self-administered and self-managed real estate investment trust (REIT) through CubeSmart, L.P. and its subsidiaries[48](index=48&type=chunk) - As of June 30, 2025, the company owned (or partially owned and consolidated) self-storage properties in the District of Columbia and 25 states, which it operates as a single reportable segment[48](index=48&type=chunk) - The Parent Company owns approximately **99.5%** of the partnership interests in the Operating Partnership and serves as its sole general partner in an UPREIT structure[49](index=49&type=chunk) - The company typically experiences slightly higher store occupancy during the summer months due to increased moving activity[49](index=49&type=chunk) [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=22&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - The consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and SEC rules for interim financial reporting[50](index=50&type=chunk) - The Operating Partnership qualifies as a variable interest entity (VIE), and the Parent Company's assets and liabilities primarily represent those of the Operating Partnership[51](index=51&type=chunk)[52](index=52&type=chunk) - All of the Parent Company's debt represents obligations of the Operating Partnership, and the Parent Company guarantees the Operating Partnership's unsecured debt obligations[53](index=53&type=chunk) [3. STORAGE PROPERTIES](index=24&type=section&id=3.%20STORAGE%20PROPERTIES) Book Value of Company's Real Estate Assets (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Land | $1,703,015 | $1,645,549 | | Buildings and improvements | $6,148,331 | $5,759,848 | | Equipment | $155,294 | $147,709 | | Construction in progress | $49,805 | $33,723 | | Finance lease right-of-use assets | $41,945 | $41,945 | | Storage properties | $8,098,390 | $7,628,774 | | Less: accumulated depreciation | $(1,684,787) | $(1,590,588) | | Storage properties, net | $6,413,603 | $6,038,186 | Summary of Company's Acquisition and Disposition Activities (January 1, 2024 to June 30, 2025) | Year | Asset/Portfolio | Transaction Date | Number of Stores | Transaction Price (in thousands of USD) | | :--- | :--- | :--- | :--- | :--- | | 2025 Acquisitions | HVP IV Assets | February 2025 | 28 | $452,785 | | 2024 Acquisitions | Connecticut Asset | January 2024 | 2 | $20,200 | | | Oregon Asset | November 2024 | 1 | $10,450 | | | Pennsylvania Asset | November 2024 | 1 | $11,500 | | | Hines Portfolio | December 2024 | 14 | $157,250 | [4. INVESTMENT ACTIVITY](index=25&type=section&id=4.%20INVESTMENT%20ACTIVITY) - On February 20, 2025, the company acquired the remaining **80%** interest in HVP IV for **$452.8 million**, resulting in the consolidation of its 28 stores into the company's financial statements[57](index=57&type=chunk) - In December 2024, the company acquired an **85%** interest in seven consolidated joint ventures (the Hines Portfolio), which own 14 stores, for approximately **$157.3 million**[58](index=58&type=chunk) - As of June 30, 2025, the company had incurred **$39.0 million** in development costs for two self-storage projects in New York, with an expected total cost of **$45.7 million** and completion in Q3 2025[60](index=60&type=chunk) Stores Opened from January 1, 2024 to June 30, 2025 | Store Location | Number of Stores | Opening Date | Ownership % | Total Construction Cost (in thousands of USD) | | :--- | :--- | :--- | :--- | :--- | | Astoria, NY | 1 | Q2 2024 | 70% | $45,900 | | Clark, NJ | 1 | Q2 2024 | 90% | $15,900 | [5. INVESTMENTS IN UNCONSOLIDATED REAL ESTATE VENTURES](index=27&type=section&id=5.%20INVESTMENTS%20IN%20UNCONSOLIDATED%20REAL%20ESTATE%20VENTURES) Summary of Investments in Unconsolidated Real Estate Ventures (in thousands of USD) | Unconsolidated Real Estate Venture | Ownership % | Stores at June 30, 2025 | Stores at Dec 31, 2024 | Investment Book Value at June 30, 2025 | Investment Book Value at Dec 31, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Fontana Self Storage, LLC | 50% | 1 | 1 | $13,016 | $13,200 | | Rancho Cucamonga Self Storage, LLC | 50% | 1 | 1 | $19,824 | $20,107 | | 191 V CUBE LLC | 20% | 6 | 6 | $10,490 | $11,353 | | 191 IV CUBE LLC | 20% | - | 28 | — | $14,591 | | CUBE HHF Northeast Venture LLC | 10% | 13 | 13 | $1,287 | $1,469 | | CUBE HHF Limited Partnership | 50% | 28 | 28 | $30,023 | $31,253 | | Total | | 49 | 77 | $74,640 | $91,973 | - HVP IV was consolidated on February 20, 2025, after the company acquired the remaining 80% interest and is no longer listed as an unconsolidated joint venture[64](index=64&type=chunk)[65](index=65&type=chunk) Summary of Financial Position of Unconsolidated Ventures (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Storage properties, net | $374,458 | $684,067 | | Total assets | $388,442 | $701,193 | | Debt | $251,838 | $472,633 | | CubeSmart's equity | $44,091 | $60,993 | Summary of Operating Results of Unconsolidated Ventures (in thousands of USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $14,296 | $24,840 | $34,418 | $49,426 | | Net income | $843 | $205 | $714 | $2,120 | | Company's share of net income | $547 | $425 | $926 | $1,270 | [6. OTHER ASSETS](index=30&type=section&id=6.%20OTHER%20ASSETS) Composition of Other Assets (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Intangible assets, net | $25,962 | $10,332 | | Accounts receivable, net | $9,907 | $10,372 | | Prepaid property taxes | $7,429 | $9,272 | | Prepaid insurance | $9,962 | $5,768 | | Due from related parties | $24,648 | $18,866 | | Assets related to deferred compensation arrangements | $65,108 | $63,761 | | Operating lease right-of-use assets | $48,920 | $49,435 | | Ground lease receivable | — | $6,249 | | Notes receivable | $5,000 | $5,000 | | Other | $7,711 | $4,573 | | Total other assets, net | $204,647 | $183,628 | - On October 8, 2024, the company provided a **$5.0 million** loan to the owner of a third-party managed store at an annual interest rate of **10.00%**, maturing on May 7, 2026[71](index=71&type=chunk) [7. UNSECURED SENIOR NOTES](index=30&type=section&id=7.%20UNSECURED%20SENIOR%20NOTES) Summary of Unsecured Senior Notes (in thousands of USD) | Unsecured Senior Notes | June 30, 2025 | December 31, 2024 | Effective Interest Rate | Issue Date | Maturity Date | | :--- | :--- | :--- | :--- | :--- | :--- | | $300M 4.000% Guaranteed Notes due 2025 | $300,000 | $300,000 | 3.99% | Various | November 2025 | | $300M 3.125% Guaranteed Notes due 2026 | $300,000 | $300,000 | 3.18% | August 2016 | September 2026 | | $550M 2.250% Guaranteed Notes due 2028 | $550,000 | $550,000 | 2.33% | November 2021 | December 2028 | | $350M 4.375% Guaranteed Notes due 2029 | $350,000 | $350,000 | 4.46% | January 2019 | February 2029 | | $350M 3.000% Guaranteed Notes due 2030 | $350,000 | $350,000 | 3.04% | October 2019 | February 2030 | | $450M 2.000% Guaranteed Notes due 2031 | $450,000 | $450,000 | 2.10% | October 2020 | February 2031 | | $500M 2.500% Guaranteed Notes due 2032 | $500,000 | $500,000 | 2.59% | November 2021 | February 2032 | | Total principal outstanding | $2,800,000 | $2,800,000 | | | | | Less: Discount on issuance of unsecured senior notes, net | $(7,668) | $(8,495) | | | | | Less: Loan procurement costs, net | $(9,631) | $(10,874) | | | | | Total unsecured senior notes, net | $2,782,701 | $2,780,631 | | | | - For the three and six months ended June 30, 2025, the Operating Partnership was in compliance with all financial covenants under the unsecured senior notes[74](index=74&type=chunk) [8. REVOLVING CREDIT FACILITY](index=32&type=section&id=8.%20REVOLVING%20CREDIT%20FACILITY) - The company amended its unsecured credit agreement on October 26, 2022, which includes an **$850 million** unsecured revolving credit facility maturing on February 15, 2027[75](index=75&type=chunk) - As of June 30, 2025, the borrowing rate under the revolving credit facility was **5.48%**, with **$483.1 million** of available borrowing capacity[76](index=76&type=chunk) - For the three and six months ended June 30, 2025, the Operating Partnership was in compliance with all financial covenants under the credit agreement[77](index=77&type=chunk) [9. MORTGAGE LOANS AND NOTES PAYABLE](index=32&type=section&id=9.%20MORTGAGE%20LOANS%20AND%20NOTES%20PAYABLE) Summary of Mortgage Loans and Notes Payable (in thousands of USD) | Mortgage Loans and Notes Payable | Book Value at June 30, 2025 | Book Value at Dec 31, 2024 | Effective Interest Rate | Maturity Date | | :--- | :--- | :--- | :--- | :--- | | Long Island City II, NY | $17,126 | $17,368 | 2.25% | July 2026 | | Long Island City III, NY | $17,127 | $17,371 | 2.25% | August 2026 | | Allen, TX | $7,328 | $7,432 | 6.29% | August 2026 | | Dallas-Fort Worth, TX | $108,000 | $108,000 | 6.23% | May 2029 | | Flushing II, NY | $54,300 | $54,300 | 2.15% | July 2029 | | Total principal outstanding | $203,881 | $204,471 | | | | Add: Unamortized fair value adjustment | $5,331 | $6,137 | | | | Less: Loan procurement costs, net | $(4,120) | $(4,693) | | | | Total mortgage loans and notes payable, net | $205,092 | $205,915 | | | - As of June 30, 2025, the company's mortgage loans were secured by self-storage properties with a net book value of approximately **$399.7 million**[79](index=79&type=chunk) Future Principal Repayment Requirements for Mortgage Loans and Notes Payable as of June 30, 2025 (in thousands of USD) | Year | Amount | | :--- | :--- | | 2025 | $595 | | 2026 | $40,986 | | 2027 | — | | 2028 | — | | 2029 | $162,300 | | 2030 and thereafter | — | | Total principal repayments | $203,881 | [10. ACCUMULATED OTHER COMPREHENSIVE LOSS](index=34&type=section&id=10.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) - Accumulated other comprehensive loss represents the unrealized loss on interest rate swaps[80](index=80&type=chunk) Summary of Changes in Accumulated Other Comprehensive Loss (Six months ended June 30, 2025, in thousands of USD) | Metric | June 30, 2025 | | :--- | :--- | | Beginning balance at December 31, 2024 | $(332) | | Reclassification of realized loss on interest rate swaps | $40 | | Ending balance at June 30, 2025 | $(292) | | Less: Portion included in noncontrolling interests in the Operating Partnership | $2 | | Total accumulated other comprehensive loss included in equity | $(290) | [11. RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS](index=34&type=section&id=11.%20RISK%20MANAGEMENT%20AND%20USE%20OF%20FINANCIAL%20INSTRUMENTS) - The company uses derivative instruments, such as interest rate swap agreements, solely to manage interest rate risk exposure, not for speculative purposes[83](index=83&type=chunk) - As of June 30, 2025, and December 31, 2024, all derivative instruments entered into by the company had been settled[84](index=84&type=chunk) - In January 2019, the company settled an interest rate swap agreement for **$0.8 million**, with the termination premium being reclassified to interest expense over the life of the 2029 notes[86](index=86&type=chunk) - For the three and six months ended June 30, 2025, the reclassification of unrealized losses on interest rate swaps increased interest expense by **$20 thousand** and **$40 thousand**, respectively[86](index=86&type=chunk) [12. FAIR VALUE MEASUREMENTS](index=36&type=section&id=12.%20FAIR%20VALUE%20MEASUREMENTS) - The company uses a fair value hierarchy (Level 1, 2, and 3) to measure financial assets and liabilities, prioritizing observable inputs[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) Carrying Value and Estimated Fair Value of Company's Debt (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Carrying Value | $3,354,093 | $2,986,546 | | Fair Value | $3,170,176 | $2,728,503 | - The fair value of debt is estimated based on a discounted cash flow analysis using market rates for comparable debt and is classified as Level 2 in the fair value hierarchy[90](index=90&type=chunk)[92](index=92&type=chunk) [13. NONCONTROLLING INTERESTS](index=38&type=section&id=13.%20NONCONTROLLING%20INTERESTS) Summary of Company's Consolidated Joint Ventures (As of June 30, 2025, in thousands of USD) | Consolidated Joint Venture | Number of Stores | Ownership % | Total Assets | Total Liabilities | Related Party Loan | | :--- | :--- | :--- | :--- | :--- | :--- | | Hines Capital | 14 | 85% | $178,906 | $117,260 | — | | New Rochelle Investors, LLC | 1 | 70% | $38,191 | $15,322 | $13,096 | | 1074 Raritan Road, LLC | 1 | 90% | $15,526 | $10,832 | $10,601 | | 350 Main Street, LLC | 1 | 90% | $15,748 | $9,278 | $7,882 | | Astoria Investors, LLC | 1 | 70% | $44,832 | $30,740 | $29,955 | | CS Lock Up Anoka, LLC | 1 | 50% | $9,461 | $5,575 | $5,535 | | CS Valley Forge Village Storage, LLC | 1 | 70% | $18,175 | $14,882 | $14,792 | | CS Vienna, LLC | 1 | 80% | $28,899 | $34,873 | $34,193 | | SH3, LLC | 1 | 90% | $35,889 | $326 | — | | Total | 22 | | $385,627 | $239,088 | $116,054 | - As of June 30, 2025, and December 31, 2024, third parties held **1,103,240** and **1,194,705** Operating Partnership Units (OP Units), respectively[94](index=94&type=chunk) - The redemption value of the 1,103,240 OP Units held by third parties totaled **$46.9 million** as of June 30, 2025[94](index=94&type=chunk) [14. SEGMENT INFORMATION](index=38&type=section&id=14.%20SEGMENT%20INFORMATION) - The company operates in a single business segment: the ownership, operation, development, management, and acquisition of self-storage properties[95](index=95&type=chunk) - The company's Chief Operating Decision Maker (CODM) is the CEO, who manages the company on a consolidated basis and uses net income as the measure of segment profit or loss[97](index=97&type=chunk)[98](index=98&type=chunk)[100](index=100&type=chunk) Self-Storage Segment Revenues and Significant Segment-Level Expenses (Six months ended June 30, in thousands of USD) | Metric | 2025 | 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $555,339 | $527,615 | +$27,724 | +5.3% | | Property taxes | $60,266 | $54,048 | +$6,218 | +11.5% | | Personnel expenses | $43,784 | $44,668 | -$884 | -2.0% | | Advertising | $14,407 | $12,016 | +$2,391 | +19.9% | | Total property operating expenses | $171,962 | $160,134 | +$11,828 | +7.4% | | Depreciation and amortization | $125,644 | $101,752 | +$23,892 | +23.5% | | Interest expense on loans | $55,190 | $45,686 | +$9,504 | +20.8% | | Net income | $171,177 | $189,044 | -$17,867 | -9.5% | [15. COMMITMENTS AND CONTINGENCIES](index=42&type=section&id=15.%20COMMITMENTS%20AND%20CONTINGENCIES) - The company has agreements with developers to construct two new self-storage properties, with an expected payment of approximately **$10.0 million** in 2025[103](index=103&type=chunk) - The company is involved in claims arising from the ordinary course of business, for which management believes adequate provisions have been made[104](index=104&type=chunk) [16. RELATED PARTY TRANSACTIONS](index=42&type=section&id=16.%20RELATED%20PARTY%20TRANSACTIONS) Related Party Management Fee Revenue (in thousands of USD) | Period | 2025 | 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Three months ended June 30 | $600 | $1,200 | -$600 | -50.0% | | Six months ended June 30 | $1,500 | $2,400 | -$900 | -37.5% | Due from Related Parties (in thousands of USD) | Date | Amount | | :--- | :--- | | June 30, 2025 | $24,648 | | December 31, 2024 | $18,866 | - As of June 30, 2025, the company had outstanding mortgage receivables of **$116.1 million** from its consolidated joint ventures[106](index=106&type=chunk) - For the six months ended June 30, 2025, the company recognized **$0.1 million** in ground lease income[108](index=108&type=chunk) [17. EARNINGS PER SHARE AND UNIT AND SHAREHOLDERS' EQUITY AND CAPITAL](index=43&type=section&id=17.%20EARNINGS%20PER%20SHARE%20AND%20UNIT%20AND%20SHAREHOLDERS'%20EQUITY%20AND%20CAPITAL) Earnings Per Share Attributable to Company Common Shareholders (in thousands of USD, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Basic EPS | $0.36 | $0.42 | | Diluted EPS | $0.36 | $0.41 | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Basic EPS | $0.75 | $0.83 | | Diluted EPS | $0.75 | $0.83 | - For the three months ended June 30, 2025, dividends declared per common share were **$0.52**[109](index=109&type=chunk) Earnings Per Unit Attributable to CubeSmart, L.P. (in thousands of USD, except per unit amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Basic EPU | $0.36 | $0.42 | | Diluted EPU | $0.36 | $0.41 | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Basic EPU | $0.75 | $0.83 | | Diluted EPU | $0.75 | $0.83 | Summary of OP Units Outstanding | Category | As of June 30, 2025 | As of June 30, 2024 | | :--- | :--- | :--- | | OP Units outstanding held by third parties | 1,103,240 | 1,238,205 | | OP Units outstanding held by the General Partner | 228,033,843 | 225,196,862 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of the company's financial condition and results of operations [Overview](index=45&type=section&id=Overview) - The company is an integrated self-storage real estate company with capabilities in design, development, acquisition, operation, leasing, and management of self-storage properties[115](index=115&type=chunk) - As of June 30, 2025, the company owned (or partially owned and consolidated) **659** self-storage properties totaling approximately **48.1 million** rentable square feet and managed **873** stores for third parties, for a total of **1,532** stores[115](index=115&type=chunk) - The company's operating performance depends on retaining existing customers, leasing available space to new customers, and maintaining or increasing pricing levels[116](index=116&type=chunk) - The company continues to focus on maximizing internal growth opportunities and selectively pursuing targeted acquisitions and developments of self-storage properties[119](index=119&type=chunk) - For the six months ended June 30, 2025, stores in New York, Florida, Texas, and California contributed approximately **17%**, **14%**, **11%**, and **10%** of total revenues, respectively[121](index=121&type=chunk) [Summary of Critical Accounting Policies and Estimates](index=47&type=section&id=Summary%20of%20Critical%20Accounting%20Policies%20and%20Estimates) - The consolidated financial statements include all accounts of the company and its majority-owned and/or controlled subsidiaries, with the portion not owned by the company presented as noncontrolling interests[123](index=123&type=chunk) - The company records self-storage properties at cost less accumulated depreciation, with the purchase price allocated to tangible and intangible assets based on estimated relative fair values[125](index=125&type=chunk)[126](index=126&type=chunk) - The company reviews long-lived assets for impairment when events indicate that their carrying value may not be recoverable; **no impairment losses** were recognized for the periods ended June 30, 2025 and 2024[129](index=129&type=chunk) - The company accounts for its investments in unconsolidated real estate joint ventures using the equity method and assesses them for other-than-temporary impairment; **no impairment losses** were recognized for the periods ended June 30, 2025 and 2024[132](index=132&type=chunk) [Results of Operations](index=49&type=section&id=Results%20of%20Operations) [Acquisition and Development Activities](index=51&type=section&id=Acquisition%20and%20Development%20Activities) Change in Number of Owned (or partially owned and consolidated) Stores (January 1, 2024 to June 30, 2025) | Date | Number of Stores | | :--- | :--- | | Balance at January 1, 2024 | 631 | | Stores acquired in 2025 | 28 | | Stores developed in 2024 | 2 | | Stores acquired in 2024 | 16 | | Balance at June 30, 2025 | 659 | [Comparison of the three months ended June 30, 2025 to the three months ended June 30, 2024](index=52&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030%2C%202025%20to%20the%20three%20months%20ended%20June%2030%2C%202024) Comparison of Results of Operations (Three months ended June 30, in thousands of USD) | Metric | 2025 | 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $282,303 | $266,209 | +$16,094 | +6.0% | | Property operating expenses | $89,028 | $83,097 | +$5,931 | +7.1% | | Depreciation and amortization | $66,488 | $51,035 | +$15,453 | +30.3% | | Interest expense on loans | $29,090 | $22,767 | +$6,323 | +27.8% | | Net income | $82,432 | $94,186 | -$11,754 | -12.5% | | Net income attributable to Company common shareholders | $82,960 | $93,964 | -$11,004 | -11.7% | - The increase in total revenues was primarily attributable to additional revenue from the non-same-store portfolio of properties acquired or opened in 2024 and 2025[142](index=142&type=chunk) - The increase in interest expense on loans was due to a higher average outstanding debt balance (from **$2.96 billion** to **$3.43 billion**) and a higher weighted-average effective interest rate (from **3.01%** to **3.32%**) during the 2025 period[145](index=145&type=chunk) Same-Store Portfolio Performance (Three months ended June 30) | Metric | 2025 | 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Rental income | $222,645 | $224,165 | $(1,520) | (0.7)% | | Other property related revenues | $12,043 | $11,634 | $409 | 3.5% | | Total revenues | $234,688 | $235,799 | $(1,111) | (0.5)% | | Property operating expenses | $69,366 | $68,569 | $797 | 1.2% | | Net operating income (NOI) | $165,322 | $167,230 | $(1,908) | (1.1)% | | Occupancy at period-end | 91.1% | 91.8% | -0.7% | | | Annualized realized rent per sq. ft. | $22.45 | $22.41 | +$0.04 | | | Number of stores | 606 | 606 | | | [Comparison of the six months ended June 30, 2025 to the six months ended June 30, 2024](index=54&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030%2C%202025%20to%20the%20six%20months%20ended%20June%2030%2C%202024) Comparison of Results of Operations (Six months ended June 30, in thousands of USD) | Metric | 2025 | 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $555,339 | $527,615 | +$27,724 | +5.3% | | Property operating expenses | $171,962 | $160,134 | +$11,828 | +7.4% | | Depreciation and amortization | $125,644 | $101,752 | +$23,892 | +23.5% | | Interest expense on loans | $55,190 | $45,686 | +$9,504 | +20.8% | | Net income | $171,177 | $189,044 | -$17,867 | -9.5% | | Net income attributable to Company common shareholders | $172,157 | $188,491 | -$16,334 | -8.7% | - The increase in total revenues was primarily attributable to additional revenue from the non-same-store portfolio of properties acquired or opened in 2024 and 2025[150](index=150&type=chunk) - The increase in interest expense on loans was due to a higher average outstanding debt balance (from **$2.98 billion** to **$3.31 billion**) and a higher weighted-average effective interest rate (from **3.02%** to **3.25%**) during the 2025 period[154](index=154&type=chunk) Same-Store Portfolio Performance (Six months ended June 30) | Metric | 2025 | 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Rental income | $443,557 | $446,904 | $(3,347) | (0.7)% | | Other property related revenues | $22,541 | $21,141 | $1,400 | 6.6% | | Total revenues | $466,098 | $468,045 | $(1,947) | (0.4)% | | Property operating expenses | $135,404 | $134,189 | $1,215 | 0.9% | | Net operating income (NOI) | $330,694 | $333,856 | $(3,162) | (0.9)% | | Occupancy at period-end | 91.1% | 91.8% | -0.7% | | | Annualized realized rent per sq. ft. | $22.50 | $22.51 | $(0.01) | | | Number of stores | 606 | 606 | | | [Cash Flows](index=56&type=section&id=Cash%20Flows) Comparison of Cash Flows (Six months ended June 30, in thousands of USD) | Activity | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Net cash from operating activities | $303,800 | $321,012 | $(17,212) | | Net cash from investing activities | $(491,395) | $(54,563) | $(436,832) | | Net cash from financing activities | $124,264 | $(267,396) | $391,660 | - The decrease in cash flow from operating activities was primarily due to the timing and amount of payments for certain accounts payable and accrued expenses[155](index=155&type=chunk) - The increase in cash used in investing activities was mainly due to the **$451.1 million** payment to acquire the remaining 80% interest in 191 IV CUBE LLC[156](index=156&type=chunk) - The shift in cash flow from financing activities from a net outflow in 2024 to a net inflow in 2025 was primarily due to a **$373.8 million** increase in net proceeds from the revolving credit facility[157](index=157&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) [Liquidity Overview](index=56&type=section&id=Liquidity%20Overview) - The company's primary source of liquidity is cash flow from operating activities, which is used to fund debt service, distributions, and capital expenditures[158](index=158&type=chunk) - As a REIT, the company is required to distribute at least **90%** of its REIT taxable income annually, creating significant short-term and long-term liquidity needs[159](index=159&type=chunk) - For the remainder of fiscal 2025, expected recurring capital expenditures are **$5.5 million to $10.5 million**, planned capital improvements are **$5.0 million to $10.0 million**, and new store development costs are **$9.0 million to $14.0 million**[160](index=160&type=chunk)[161](index=161&type=chunk) - Scheduled principal repayments on outstanding debt for the remainder of 2025 are approximately **$300.6 million**[162](index=162&type=chunk) - As of June 30, 2025, the company had approximately **$8.7 million** in available cash and cash equivalents and **$483.1 million** available for borrowing under its revolving credit facility[166](index=166&type=chunk) [Unsecured Senior Notes](index=58&type=section&id=Unsecured%20Senior%20Notes) Summary of Unsecured Senior Notes (in thousands of USD) | Unsecured Senior Notes | June 30, 2025 | December 31, 2024 | Effective Interest Rate | Issue Date | Maturity Date | | :--- | :--- | :--- | :--- | :--- | :--- | | $300M 4.000% Guaranteed Notes due 2025 | $300,000 | $300,000 | 3.99% | Various | November 2025 | | $300M 3.125% Guaranteed Notes due 2026 | $300,000 | $300,000 | 3.18% | August 2016 | September 2026 | | $550M 2.250% Guaranteed Notes due 2028 | $550,000 | $550,000 | 2.33% | November 2021 | December 2028 | | $350M 4.375% Guaranteed Notes due 2029 | $350,000 | $350,000 | 4.46% | January 2019 | February 2029 | | $350M 3.000% Guaranteed Notes due 2030 | $350,000 | $350,000 | 3.04% | October 2019 | February 2030 | | $450M 2.000% Guaranteed Notes due 2031 | $450,000 | $450,000 | 2.10% | October 2020 | February 2031 | | $500M 2.500% Guaranteed Notes due 2032 | $500,000 | $500,000 | 2.59% | November 2021 | February 2032 | | Total principal outstanding | $2,800,000 | $2,800,000 | | | | | Less: Discount on issuance of unsecured senior notes, net | $(7,668) | $(8,495) | | | | | Less: Loan procurement costs, net | $(9,631) | $(10,874) | | | | | Total unsecured senior notes, net | $2,782,701 | $2,780,631 | | | | - For the three and six months ended June 30, 2025, the Operating Partnership was in compliance with all financial covenants under the unsecured senior notes[169](index=169&type=chunk) [Revolving Credit Facility](index=60&type=section&id=Revolving%20Credit%20Facility) - The company amended and restated its unsecured credit agreement, which includes an **$850 million** unsecured revolving credit facility maturing on February 15, 2027[170](index=170&type=chunk) - As of June 30, 2025, the borrowing rate under the revolving credit facility was **5.48%**, with **$483.1 million** of available borrowing capacity[171](index=171&type=chunk) - For the three and six months ended June 30, 2025, the Operating Partnership was in compliance with all financial covenants under the credit agreement[172](index=172&type=chunk) [Mortgage Loans and Notes Payable](index=60&type=section&id=Mortgage%20Loans%20and%20Notes%20Payable) Summary of Mortgage Loans and Notes Payable (in thousands of USD) | Mortgage Loans and Notes Payable | Book Value at June 30, 2025 | Book Value at Dec 31, 2024 | Effective Interest Rate | Maturity Date | | :--- | :--- | :--- | :--- | :--- | | Long Island City II, NY | $17,126 | $17,368 | 2.25% | July 2026 | | Long Island City III, NY | $17,127 | $17,371 | 2.25% | August 2026 | | Allen, TX | $7,328 | $7,432 | 6.29% | August 2026 | | Dallas-Fort Worth, TX | $108,000 | $108,000 | 6.23% | May 2029 | | Flushing II, NY | $54,300 | $54,300 | 2.15% | July 2029 | | Total principal outstanding | $203,881 | $204,471 | | | | Add: Unamortized fair value adjustment | $5,331 | $6,137 | | | | Less: Loan procurement costs, net | $(4,120) | $(4,693) | | | | Total mortgage loans and notes payable, net | $205,092 | $205,915 | | | [At-the-Market Equity Program](index=60&type=section&id=At-the-Market%20Equity%20Program) - The company launched a new at-the-market equity program on March 3, 2025, allowing for the sale of up to **13,510,817** CubeSmart common shares[174](index=174&type=chunk) - As of June 30, 2025, **no common shares** had been sold under the new program[175](index=175&type=chunk) - Net proceeds from the program will be used for working capital and general corporate purposes[175](index=175&type=chunk) [Non-GAAP Financial Measures](index=62&type=section&id=Non-GAAP%20Financial%20Measures) [NOI](index=62&type=section&id=NOI) - Net Operating Income (NOI) is defined as total continuing revenues less continuing property operating expenses and is a key metric for measuring store-level operating performance[176](index=176&type=chunk)[177](index=177&type=chunk) - NOI should not be considered a substitute for operating income or net income and has limitations, including difficulty in comparing results across companies[177](index=177&type=chunk)[178](index=178&type=chunk) [FFO](index=64&type=section&id=FFO) - Funds from Operations (FFO) is a widely used performance measure for real estate companies, defined as net income excluding gains or losses from property sales, plus real estate depreciation and amortization[180](index=180&type=chunk) - Management uses FFO as a key performance indicator to evaluate store-level operations, as it excludes certain expenses not relevant to operating performance[181](index=181&type=chunk) - FFO should not be considered an alternative to net income and does not represent cash generated from operating activities or the company's ability to make cash distributions[182](index=182&type=chunk) FFO Attributable to Company Common Shareholders and Third-Party OP Unitholders (in thousands of USD) | Period | 2025 | 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Three months ended June 30 | $148,912 | $145,970 | +$2,942 | +2.0% | | Six months ended June 30 | $297,061 | $292,379 | +$4,682 | +1.6% | [Off-Balance Sheet Arrangements](index=64&type=section&id=Off-Balance%20Sheet%20Arrangements) - The company has no off-balance sheet arrangements or relationships with unconsolidated entities other than its co-investment partnerships that have not been discussed in the report[185](index=185&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discloses the company's market risks, particularly interest rate risk, and its strategies for managing these risks [Market Risk](index=66&type=section&id=Market%20Risk) - The company's investment policy for cash and cash equivalents is to preserve principal and liquidity while maximizing returns on available funds[188](index=188&type=chunk) - The company's interest rate risk objective is to limit the impact of interest rate fluctuations on earnings and cash flows and to lower overall borrowing costs[189](index=189&type=chunk) [Effect of Changes in Interest Rates on our Outstanding Debt](index=66&type=section&id=Effect%20of%20Changes%20in%20Interest%20Rates%20on%20our%20Outstanding%20Debt) - As of June 30, 2025, the company's consolidated debt included **$3.0 billion** of fixed-rate debt and **$366.3 million** of variable-rate borrowings[190](index=190&type=chunk) - A **100 basis point increase** in market interest rates on variable-rate debt would increase annual interest expense by approximately **$3.7 million**[191](index=191&type=chunk) - A **100 basis point decrease** in market interest rates on variable-rate debt would decrease annual interest expense by approximately **$3.7 million**[191](index=191&type=chunk) - A **100 basis point increase** in market interest rates would decrease the fair value of fixed-rate debt by approximately **$96.7 million**[192](index=192&type=chunk) - A **100 basis point decrease** in market interest rates would increase the fair value of fixed-rate debt by approximately **$101.0 million**[192](index=192&type=chunk) [Item 4. Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures for both CubeSmart and CubeSmart, L.P [Controls and Procedures (Parent Company)](index=66&type=section&id=Controls%20and%20Procedures%20(Parent%20Company)) - As of the end of the reporting period, the Parent Company's management evaluated the effectiveness of its disclosure controls and procedures[193](index=193&type=chunk) - The evaluation concluded that the Parent Company's disclosure controls and procedures were **effective at a reasonable assurance level**[194](index=194&type=chunk) - There were **no material changes** to the Parent Company's internal control over financial reporting during the most recent fiscal quarter[196](index=196&type=chunk) [Controls and Procedures (Operating Partnership)](index=68&type=section&id=Controls%20and%20Procedures%20(Operating%20Partnership)) - As of the end of the reporting period, the Operating Partnership's management evaluated the effectiveness of its disclosure controls and procedures[197](index=197&type=chunk) - The evaluation concluded that the Operating Partnership's disclosure controls and procedures were **effective at a reasonable assurance level**[198](index=198&type=chunk) - There were **no material changes** to the Operating Partnership's internal control over financial reporting during the most recent fiscal quarter[199](index=199&type=chunk) [Part II. OTHER INFORMATION](index=68&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=68&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company has no ongoing legal proceedings expected to have a material adverse effect on its financial condition - The company has no ongoing legal proceedings that are expected to have a material adverse effect on its financial condition, results of operations, or cash flows[200](index=200&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section discloses the repurchase of common shares and the issuance of unregistered equity securities [Repurchases of Parent Company Common Shares](index=69&type=section&id=Repurchases%20of%20Parent%20Company%20Common%20Shares) Repurchases of Parent Company Common Shares (Three months ended June 30, 2025) | Period | Total Number of Shares Repurchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - April 30 | 4,351 | $42.03 | | May 1 - May 31 | — | — | | June 1 - June 30 | — | — | | Total | 4,351 | $42.03 | - The repurchased shares represent common shares withheld by the Parent Company to satisfy employee tax obligations upon the vesting of restricted shares[202](index=202&type=chunk) - The Board of Directors approved a repurchase program for up to **3.0 million** common shares in June 2007, but no repurchases have been made under this program to date[202](index=202&type=chunk) [Unregistered Sales of Equity Securities](index=69&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities) - During the three months ended June 30, 2025, the Parent Company issued **38,965** common shares to redeem an equivalent number of OP Units held by limited partners, exempt from registration under Section 4(a)(2) of the Securities Act of 1933[203](index=203&type=chunk) [Item 5. Other Information](index=69&type=section&id=Item%205.%20Other%20Information) This section covers trading arrangements for directors and executives, as well as recent changes to tax law [Trading Arrangements](index=69&type=section&id=Trading%20Arrangements) - During the three months ended June 30, 2025, no director or executive officer of the company adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement[204](index=204&type=chunk) [Tax Law Changes](index=69&type=section&id=Tax%20Law%20Changes) - On July 4, 2025, the "One Big Beautiful Bill Act" (OBBBA) was signed into law, making significant changes to U.S. federal income tax law[205](index=205&type=chunk) - OBBBA permanently extends the **20% deduction** for "qualified REIT dividends" for individuals and other non-corporate taxpayers[205](index=205&type=chunk) - For taxable years beginning after December 31, 2025, OBBBA increases the REIT asset test percentage limit for taxable REIT subsidiaries (TRSs) from **20% to 25%**[205](index=205&type=chunk) - For taxable years beginning after December 31, 2024, OBBBA restores the exclusion of depreciation, depletion, and amortization from adjusted taxable income when calculating the net interest expense deduction[205](index=205&type=chunk)[206](index=206&type=chunk) [Item 6. Exhibits](index=72&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including incentive plans, officer certifications, and financial information in Inline XBRL format - Exhibits include the amended and restated CubeSmart 2007 Equity Incentive Plan, various certifications by the CEO and CFO of CubeSmart and CubeSmart, L.P., and financial information in Inline XBRL format[209](index=209&type=chunk) [Signatures](index=74&type=section&id=Signatures) The report was duly signed by the company's executive officers on August 1, 2025 - The reports for both CubeSmart and CubeSmart, L.P. were signed on August 1, 2025, by Christopher P. Marr (CEO), Timothy M. Martin (CFO), and Matthew D. DeNarie (CAO)[214](index=214&type=chunk)[217](index=217&type=chunk)

Financial Data and Key Metrics Changes - The company reported a solid second quarter with key performance indicators exceeding expectations, with same store revenue growth down 0.5% year-over-year and average occupancy at 90.6%, down 80 basis points [13][14] - Funds from Operations (FFO) per share was reported at $0.65, at the high end of guidance [15] - Net debt to EBITDA ratio remained strong at 4.7 times [16] Business Line Data and Key Metrics Changes - Same store operating expenses grew by 1.2% year-over-year, indicating effective expense control [14] - The company added 30 stores to its third-party management platform, bringing the total to 873 stores [15] Market Data and Key Metrics Changes - Urban markets along the Acela Corridor and stores in Chicago were top performers, while Sunbelt markets, particularly Florida and Arizona, lagged due to reliance on housing mobility [10][11] - The New York MSA showed solid sequential acceleration in net rental income, with boroughs leading the way due to reduced new supply [11][24] Company Strategy and Development Direction - The company expects occupancy and move-in rates to approach parity by the end of the year, with a focus on stabilizing operational trends [11] - The management is cautious about the potential volatility in consumer behavior due to ongoing governmental and monetary policy decisions [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued improvement in operational trends through 2025, setting a positive outlook for 2026 [11][12] - The company acknowledged risks related to the housing market and the impact of new supply on performance [7][11] Other Important Information - The company is actively monitoring the market for long-term unsecured debt issuance as it prepares for the maturity of $300 million in senior unsecured notes [16] - The management highlighted the importance of expense efficiencies, particularly in insurance and property tax appeals, contributing to improved guidance [18][75] Q&A Session Summary Question: Revenue guidance adjustments - Management adjusted the top end of revenue guidance down due to lower expected demand levels, while raising the midpoint [20][21] Question: New York market performance - Positive trends in net rental income were noted, with some deceleration in growth, particularly in Northern New Jersey [22][24] Question: Customer turnover and recovery pace - The 5% monthly customer turnover impacts the pace of recovery, with improvements expected to take time to reflect in revenue [29][31] Question: Transaction market activity - The transaction market is seeing increased deal volume, but the company remains cautious about pricing and risk-adjusted returns [33][36] Question: Operating trends in Sunbelt markets - Sunbelt markets are expected to recover more slowly due to high supply levels, despite some positive trends emerging [40][42] Question: Impact of economic uncertainty on revenue management - The company will continue to monitor existing customer health and adjust strategies as needed, but remains optimistic about demand [43][44] Question: Expected deceleration in same store revenue - The deceleration is attributed to timing issues related to fee adjustments and the flow-through of rate increases [48][49] Question: Visibility on third-party management churn - Limited visibility on churn from third-party management, but the company is onboarding new stores to mitigate losses [50][52] Question: Construction starts and supply dynamics - No significant increase in construction starts is expected due to high costs and challenges in the market [58][60] Question: Update on Texas JV performance - The integration of the Texas JV portfolio is performing as expected, complementing existing assets [63][64] Question: Same store expense guidance - Expected acceleration in same store expenses is due to timing and inflationary pressures, with some favorable insurance renewals [72][75] Question: Customer acquisition and AI impact - Most traffic still comes from traditional searches, with AI tools not yet significantly impacting customer acquisition [77][78] Question: Credit rating comparison - The company acknowledges the disconnect in credit ratings compared to peers and is aware of the implications for investors [86][89]

Financial Data and Key Metrics Changes - The company reported a solid second quarter with key performance indicators exceeding expectations, with a trough to peak occupancy growth of 190 basis points compared to 180 basis points last year [11] - Net effective rates for new customers increased by 28.3% compared to 15% in 2024, indicating constructive rate trends [11] - Same store revenue growth was down 0.5% year over year, with average occupancy for the same store portfolio down 80 basis points to 90.6% during the quarter [14][15] - FFO per share as adjusted was reported at $0.65, at the high end of guidance [16] Business Line Data and Key Metrics Changes - The company added 30 stores to its third-party management platform, bringing the total to 873 stores at quarter end [16] - Same store operating expenses grew by 1.2% over last year, reflecting strong expense controls [15] Market Data and Key Metrics Changes - Urban markets along the Acela Corridor and stores in Chicago continued to perform well, while markets in the Sunbelt, particularly Florida and Arizona, lagged due to reliance on housing mobility [12] - The New York MSA showed solid sequential acceleration in net rental income, with boroughs leading the way due to reduced new supply and strong consumer demand [13] Company Strategy and Development Direction - The company expects occupancy and move-in rates to approach parity by the end of the year, with a focus on improving operational trends through 2025 [13] - The company is evaluating acquisition opportunities but has not found compelling risk-adjusted returns in the current market [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged risks of volatility due to ongoing governmental and monetary policy decisions but expressed confidence in continued improvement in operational trends [13] - The company anticipates that same store revenue growth will be slightly more negative in the third quarter but expects improvements in the fourth quarter [19] Other Important Information - Balance sheet metrics remain strong with net debt to EBITDA at 4.7 times [16] - The company is focused on issuing long-term unsecured debt as it approaches the maturity of its senior unsecured notes [16] Q&A Session Summary Question: What were the assumptions at the top end of revenue guidance? - Management indicated that the top end assumed stronger overall demand, which has not materialized, leading to a narrowing of expectations [22] Question: Can you provide color on the New York boroughs and Northern New Jersey? - Positive trends in net rental income were noted, with Northern New Jersey gradually improving as supply is absorbed [26] Question: How does the 5% customer churn affect recovery? - Management explained that even with good months, the 5% churn means it takes time for improvements to reflect in revenue [32] Question: What is the outlook for the transaction market? - The company noted an increase in deal volume but remains cautious about pricing and risk-adjusted returns [35][102] Question: What are the expectations for same store revenue in the third quarter? - Management indicated that timing and volatility from previous adjustments would impact revenue, but overall trends are positive [49] Question: How are operating expenses trending in Austin? - Operating expenses were impacted by taxes and supply pressures, with a difficult comp from the previous year [70] Question: What is the appetite for acquisitions? - The company is focused on high-quality assets in top markets but is currently not seeing attractive pricing for acquisitions [105]

```markdown [Executive Summary](index=1&type=section&id=1.%20Executive%20Summary) [Management Commentary](index=1&type=section&id=1.1.%20Management%20Commentary) Management noted improved seasonal performance and stabilizing fundamentals, with strong operating results leading to FFO per share at the high end of guidance and an upward revision of full-year guidance - The rental season saw modestly better seasonal performance compared to last year as key operating metrics maintained their positive momentum throughout the second quarter and into July. Fundamentals have continued to stabilize, supported by a lessening impact of new supply, better seasonal pricing to new customers, and the continued health of the existing customer[4](index=4&type=chunk) - Stabilizing operating fundamentals coupled with tighter expense control generated **FFO per share** at the high end of our guidance range. A more constructive environment positions us to raise the midpoints of our full-year **FFO per share** and same-store ranges[19](index=19&type=chunk) [Key Highlights for Q2 2025](index=1&type=section&id=1.2.%20Key%20Highlights%20for%20Q2%202025) CubeSmart reported its Q2 2025 financial and operational performance, including key metrics for earnings, same-store performance, and platform expansion Key Highlights for Q2 2025 | Metric | Q2 2025 | YoY Change | | :------------------------------------------------ | :------ | :--------- | | Diluted EPS attributable to common shareholders | $0.36 | -12.2% | | FFO, as adjusted, per diluted share | $0.65 | +1.6% | | Same-store NOI | -1.1% | (decrease) | | Same-store revenues | -0.5% | (decrease) | | Same-store operating expenses | +1.2% | (increase) | | Same-store occupancy (average) | 90.6% | | | Same-store occupancy (period end) | 91.1% | | | Stores added to third-party management platform | 30 | | | Total third-party managed store count | 873 | | [Financial Results](index=1&type=section&id=2.%20Financial%20Results) [Consolidated Financial Performance](index=1&type=section&id=2.1.%20Consolidated%20Financial%20Performance) Q2 2025 saw a decrease in net income and diluted EPS compared to Q2 2024, while FFO, as adjusted, and FFO per diluted share increased, with total revenues rising due to acquisitions and new developments, but property operating expenses and interest expense also increased, the latter driven by higher debt balances and interest rates Net Income and EPS (Consolidated) | Metric | Q2 2025 | Q2 2024 | Change | 6M 2025 | 6M 2024 | Change | | :------------------------------------------ | :------ | :------ | :----- | :------ | :------ | :----- | | Net income attributable to common shareholders (in millions) | $83.0 | $94.0 | -$11.0 | $172.157 | $188.491 | -$16.334 | | Diluted EPS attributable to common shareholders | $0.36 | $0.41 | -$0.05 | $0.75 | $0.83 | -$0.08 | FFO, as Adjusted (Consolidated) | Metric | Q2 2025 | Q2 2024 | Change | 6M 2025 | 6M 2024 | Change | | :---------------------------------------------------------------- | :------ | :------ | :----- | :------ | :------ | :----- | | FFO, as adjusted (in millions) | $148.9 | $146.0 | +$2.9 | $297.061 | $292.379 | +$4.682 | | FFO, as adjusted, per diluted share | $0.65 | $0.64 | +$0.01 | $1.29 | $1.28 | +$0.01 | Total Revenues and Operating Expenses (Consolidated) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (in thousands) | 6M 2025 (in thousands) | 6M 2024 (in thousands) | Change (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :-------------------- | :--------------------- | :--------------------- | :-------------------- | | Total revenues | $282,303 | $266,209 | +$16,094 | $555,339 | $527,615 | +$27,724 | | Property operating expenses | $89,028 | $83,097 | +$5,931 | $171,962 | $160,134 | +$11,828 | | Total operating expenses | $170,413 | $148,754 | +$21,659 | $328,571 | $292,133 | +$36,438 | Interest Expense | Metric | Q2 2025 | Q2 2024 | Change | | :------------------------------------ | :------ | :------ | :----- | | Interest expense on loans (in millions) | $29.1 | $22.8 | +$6.3 | | Average outstanding debt balance (in billions) | $3.43 | $2.96 | +$0.47 | | Weighted average effective interest rate | 3.32% | 3.01% | +0.31% | [Same-Store Performance](index=1&type=section&id=2.2.%20Same-Store%20Performance) The same-store portfolio (606 stores) experienced a **1.1%** decrease in **Net Operating Income (NOI)** for Q2 2025, resulting from a **0.5%** decline in total revenues and a **1.2%** rise in operating expenses, with period-end occupancy slightly decreasing to **91.1%** from **91.8%** year-over-year Same-Store Occupancy | Metric | Q2 2025 | Q2 2024 | Change | | :------------------------ | :------ | :------ | :----- | | Period end occupancy | 91.1% | 91.8% | -0.7% | | Period average occupancy | 90.6% | 91.4% | -0.8% | Same-Store Revenues and Expenses | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Percent Change | | :-------------------------- | :--------------------- | :--------------------- | :------------- | | Total revenues | $234,688 | $235,799 | (0.5)% | | Rental income | $222,645 | $224,165 | (0.7)% | | Other property related income | $12,043 | $11,634 | 3.5% | | Total operating expenses | $69,366 | $68,569 | 1.2% | | Property taxes | $27,014 | $26,311 | 2.7% | | Personnel expense | $13,893 | $14,106 | (1.5)% | | Advertising | $8,049 | $6,907 | 16.5% | | Repair and maintenance | $2,893 | $3,203 | (9.7)% | | Utilities | $5,015 | $5,254 | (4.5)% | | Property insurance | $3,023 | $3,287 | (8.0)% | Same-Store Net Operating Income (NOI) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Percent Change | 6M 2025 (in thousands) | 6M 2024 (in thousands) | Percent Change | | :-------------------- | :--------------------- | :--------------------- | :------------- | :--------------------- | :--------------------- | :------------- | | Net operating income | $165,322 | $167,230 | (1.1)% | $330,694 | $333,856 | (0.9)% | [Operational and Investment Activities](index=1&type=section&id=3.%20Operational%20and%20Investment%20Activities) [Investment Activity](index=1&type=section&id=3.1.%20Investment%20Activity) While no new stores were acquired in Q2 2025, year-to-date the company completed a significant acquisition of an **80%** interest in a **28-store** venture for **$452.8 million**, and two joint venture development properties are under construction in New York, with substantial investment already made and openings anticipated in Q3 2025 Acquisition Activity - The Company did not acquire any stores during the quarter ended June 30, **2025**[7](index=7&type=chunk) - In total for the year through June 30, **2025**, the Company acquired the remaining **80%** interest in HVP IV, a **28-store** unconsolidated real estate venture. The purchase price for the **80%** ownership interest was **$452.8 million**, which included **$44.4 million** to repay the Company's portion of the venture's existing indebtedness[7](index=7&type=chunk) Development Activity - As of June 30, **2025**, the Company had two joint venture development properties under construction. The Company anticipates investing a total of **$36.9 million** related to these projects and had invested **$27.0 million** of that total as of June 30, **2025**. Both stores are located in New York and are expected to open during the third quarter of **2025**[8](index=8&type=chunk) [Third-Party Management Platform](index=1&type=section&id=3.2.%20Third-Party%20Management%20Platform) CubeSmart's third-party management platform expanded to **873** stores, totaling **56.6 million** rentable square feet, with **30** new stores added in Q2 2025 and **63** year-to-date Third-Party Management Platform Growth | Metric | As of June 30, 2025 | Q2 2025 Additions | 6M 2025 Additions | | :-------------------------------- | :------------------ | :---------------- | :---------------- | | Total managed stores | 873 | 30 | 63 | | Total rentable square feet (millions) | 56.6 | | | [Consolidated Portfolio Overview](index=2&type=section&id=3.3.%20Consolidated%20Portfolio%20Overview) As of June 30, 2025, the consolidated portfolio comprised **659** stores with **48.1 million** rentable square feet and **90.8%** physical occupancy, while the same-store portfolio, representing a significant portion of total rentable square feet and property **NOI**, consisted of **606** stores Consolidated Portfolio Overview (as of June 30, 2025) | Metric | Value | | :------------------------------------ | :------ | | Total consolidated stores | 659 | | Total consolidated rentable square feet (millions) | 48.1 | | Consolidated physical occupancy | 90.8% | | Same-store portfolio stores | 606 | | Same-store rentable square feet (millions) | 43.8 | | Same-store % of consolidated rentable square feet | 91.0% | | Same-store % of property NOI (Q2 2025) | 93.8% | [Financial Outlook and Guidance](index=2&type=section&id=4.%20Financial%20Outlook%20and%20Guidance) [2025 Full Year Guidance](index=2&type=section&id=4.1.%202025%20Full%20Year%20Guidance) CubeSmart has revised its 2025 full-year guidance upwards, with estimated diluted **EPS** now between **$1.44** and **$1.50**, and **FFO per diluted share**, as adjusted, between **$2.54** and **$2.60**, with same-store revenue and **NOI** growth projections also improving compared to prior guidance 2025 Full Year Guidance Range Summary | Metric | Current Ranges | Prior Guidance (May 1, 2025) | | :------------------------------------------------ | :------------- | :--------------------------- | | Diluted earnings per share attributable to common shareholders | $1.44 to $1.50 | $1.41 to $1.49 | | FFO, as adjusted, per diluted share | $2.54 to $2.60 | $2.51 to $2.59 | | Same-store revenue growth | (1.25%) to (0.25%) | (2.00%) to 0.00% | | Same-store expense growth | 1.50% to 3.00% | 3.25% to 4.50% | | Same-store NOI growth | (2.75%) to (1.25%) | (4.00%) to (1.75%) | | 2025 Acquisition Activity to Date | $452.8M | $452.8M | | Property management fee income | $41.0M to $42.0M | $42.0M to $44.0M | | General and administrative expenses | $63.0M to $64.0M | $61.5M to $63.5M | | Interest and loan amortization expense | $118.0M to $122.0M | $118.0M to $124.0M | [Q3 2025 Guidance](index=3&type=section&id=4.2.%20Q3%202025%20Guidance) For the third quarter of 2025, the company anticipates diluted **EPS** attributable to common shareholders to range from **$0.36** to **$0.38**, and **FFO, as adjusted**, per diluted share to be between **$0.64** and **$0.66** Q3 2025 Guidance | Metric | Range | | :------------------------------------------------ | :------------ | | Diluted earnings per share attributable to common shareholders | $0.36 to $0.38 | | FFO, as adjusted, per diluted share | $0.64 to $0.66 | [Shareholder Information & Corporate Updates](index=2&type=section&id=5.%20Shareholder%20Information%20%26%20Corporate%20Updates) [Quarterly Dividend](index=2&type=section&id=5.1.%20Quarterly%20Dividend) CubeSmart declared a quarterly dividend of **$0.52** per common share on May 20, 2025, paid on July 15, 2025 - On May 20, **2025**, the Company declared a quarterly dividend of **$0.52** per common share. The dividend was paid on July 15, **2025** to common shareholders of record on July 1, **2025**[18](index=18&type=chunk) Quarterly Dividend | Metric | Q2 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | | Dividends per common share and unit | $0.52 | $0.51 | [Financing Activity](index=2&type=section&id=5.2.%20Financing%20Activity) No common shares were sold through the ATM equity program in Q2 2025, with **13.5 million** shares remaining available for issuance under existing agreements - During the three months ended June 30, **2025**, the Company did not sell any common shares of beneficial interest through its at-the-market ("ATM") equity program. As of June 30, **2025**, the Company had **13.5 million** shares available for issuance under the existing equity distribution agreements[17](index=17&type=chunk) [Conference Call Details](index=3&type=section&id=5.3.%20Conference%20Call%20Details) A conference call to discuss Q2 2025 results is scheduled for August 1, 2025, with live webcast and telephonic replay options available - Management will host a conference call at **11:00 a.m. ET** on Friday, August 1, **2025** to discuss financial results for the three months ended June 30, **2025**. A live webcast of the conference call will be available online from the investor relations page of the Company's corporate website at investors.cubesmart.com. Telephone participants may join on the day of the call by dialing **1 (800) 715-9871** using conference ID number **4783436**. After the live webcast, the webcast will be available on CubeSmart's website. In addition, a telephonic replay of the call will be available through August 8, **2025** by dialing **1 (800) 770-2030** using conference ID number **4783436**[24](index=24&type=chunk)[25](index=25&type=chunk) [Company Profile and Non-GAAP Financial Measures](index=4&type=section&id=6.%20Company%20Profile%20and%20Non-GAAP%20Financial%20Measures) [About CubeSmart](index=4&type=section&id=6.1.%20About%20CubeSmart) CubeSmart is a leading self-administered and self-managed REIT, ranking among the top three owners and operators of self-storage properties in the U.S., offering accessible and often climate-controlled storage solutions - CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the **2025** Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States[27](index=27&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=6.2.%20Non-GAAP%20Financial%20Measures) This section provides detailed definitions and management's rationale for using non-GAAP financial measures, specifically **Funds From Operations (FFO)** and **Net Operating Income (NOI)**, as key indicators for evaluating operating performance and economic productivity, while clarifying their limitations compared to GAAP measures Funds From Operations (FFO) - **Funds from operations** ("**FFO**") is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance. The April **2002** National Policy Bulletin of the National Association of Real Estate Investment Trusts (the "White Paper"), as amended, defines **FFO** as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of real estate and related impairment charges, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures[28](index=28&type=chunk) - Management uses **FFO** as a key performance indicator in evaluating the operations of the Company's stores. **FFO, as adjusted** represents **FFO** as defined above, excluding the effects of acquisition related costs, gains or losses from early extinguishment of debt, and other non-recurring items, which the Company believes are not indicative of the Company's operating results[29](index=29&type=chunk)[31](index=31&type=chunk) Net Operating Income (NOI) - The Company defines **net operating income**, which it refers to as "**NOI**," as total continuing revenues less continuing property operating expenses. Management uses **NOI** as a measure of operating performance at each of its stores, and for all of its stores in the aggregate[32](index=32&type=chunk)[33](index=33&type=chunk) - The Company believes **NOI** is useful to investors in evaluating operating performance because it is one of the primary measures used by management and store managers to evaluate the economic productivity of the Company's stores, including the ability to lease stores, increase pricing and occupancy, and control property operating expenses. Additionally, **NOI** helps the Company's investors meaningfully compare the results of its operating performance from period to period by removing the impact of its capital structure (primarily interest expense on outstanding indebtedness) and depreciation of the basis in its assets from operating results[34](index=34&type=chunk)[36](index=36&type=chunk) [Forward-Looking Statements and Risk Factors](index=6&type=section&id=7.%20Forward-Looking%20Statements%20and%20Risk%20Factors) [Forward-Looking Statements and Risk Factors](index=6&type=section&id=7.1.%20Forward-Looking%20Statements%20and%20Risk%20Factors) The report includes a comprehensive disclaimer on forward-looking statements, emphasizing their inherent risks and uncertainties, and outlines various factors that could cause actual results to differ materially, including economic conditions, competition, operational execution, inflation, interest rates, capital availability, financing risks, and specific industry and external challenges - Forward-looking statements include statements concerning the Company's plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information. Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated[37](index=37&type=chunk) - There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this presentation. Any forward-looking statements should be considered in light of the risks and uncertainties referred to in Item **1A**. "Risk Factors" in our Annual Report on Form **10-K** and in our other filings with the Securities and Exchange Commission ("SEC"). These risks include, but are not limited to, the following: adverse changes in economic conditions in the real estate industry and in the markets in which we own and operate self-storage properties; the effect of competition from existing and new self-storage properties and operators on our ability to maintain or raise occupancy and rental rates; the failure to execute our business plan; adverse consumer impacts and declines in general economic conditions from inflation, tariffs, rising interest rates and wage stagnation including the impact on the demand for self-storage, rental rates and fees and rent collection levels; reduced availability and increased costs of external sources of capital; financing risks, including rising interest rates, the risk of over-leverage and the corresponding risk of default on our mortgage and other debt and potential inability to refinance existing or future debt; risks related to our ability to maintain our qualification as a real estate investment trust ("REIT") for federal income tax purposes; the failure of acquisitions and developments to close on expected terms, or at all, or to perform as expected; increases in taxes, fees and assessments from state and local jurisdictions; the failure of our joint venture partners to fulfill their obligations to us or their pursuit of actions that are inconsistent with our objectives; reductions in asset valuations and related impairment charges; negative publicity relating to our business or industry, which could adversely affect our reputation; increases in operating costs, including, without limitation, insurance, utility and other general expenses, which could adversely affect our financial results; cybersecurity breaches, cyber or ransomware attacks or a failure of our networks, systems or technology, which could adversely impact our business, customer and employee relationships or result in fraudulent payments; risks associated with generative artificial intelligence tools and large language models and the conclusions that these tools and models may draw about our business and prospects in connection with the dissemination of negative opinions, characterizations or disinformation; changes in real estate, zoning, use and occupancy laws or regulations; risks related to or consequences of earthquakes, hurricanes, windstorms, floods, wildfires, other natural disasters or acts of violence, pandemics, active shooters, terrorism, insurrection or war that impact the markets in which we operate; potential environmental and other material liabilities; governmental, administrative and executive orders, regulations and laws, which could adversely impact our business operations and customer and employee relationships; uninsured or uninsurable losses and the ability to obtain insurance coverage, indemnity or recovery from insurance against risks and losses; changes in the availability of and the cost of labor; other factors affecting the real estate industry generally or the self-storage industry in particular; and other risks identified in Item **1A** of our Annual Report on Form **10-K** and, from time to time, in other reports that we file with the SEC or in other documents that we publicly disseminate[38](index=38&type=chunk)[40](index=40&type=chunk) [Consolidated Financial Statements (Tables)](index=9&type=section&id=8.%20Consolidated%20Financial%20Statements%20(Tables)) [Consolidated Balance Sheets](index=9&type=section&id=8.1.%20Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets show an increase in total assets and liabilities as of June 30, 2025, compared to December 31, 2024, primarily driven by changes in storage properties and debt, while total equity slightly decreased Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :---------------------------------------------------------------- | :------------------------ | :------------------ | | **ASSETS** | | | | Storage properties, net | $6,413,603 | $6,038,186 | | Cash and cash equivalents | $8,741 | $71,560 | | Total assets | $6,709,320 | $6,394,181 | | **LIABILITIES AND EQUITY** | | | | Unsecured senior notes, net | $2,782,701 | $2,780,631 | | Revolving credit facility | $366,300 | — | | Total liabilities | $3,820,046 | $3,440,313 | | Total CubeSmart shareholders' equity | $2,813,678 | $2,871,856 | | Total equity | $2,842,386 | $2,902,675 | | Total liabilities and equity | $6,709,320 | $6,394,181 | [Consolidated Statements of Operations](index=10&type=section&id=8.2.%20Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations for Q2 and 6M 2025 indicate increased total revenues and operating expenses, but a decrease in net income attributable to the company compared to the prior year periods Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $282,303 | $266,209 | $555,339 | $527,615 | | Total operating expenses | $170,413 | $148,754 | $328,571 | $292,133 | | Total other expense | $(29,458) | $(23,269) | $(55,591) | $(46,438) | | NET INCOME | $82,432 | $94,186 | $171,177 | $189,044 | | NET INCOME ATTRIBUTABLE TO THE COMPANY | $82,960 | $93,964 | $172,157 | $188,491 | | Diluted earnings per share attributable to common shareholders | $0.36 | $0.41 | $0.75 | $0.83 | [Same-Store Results](index=11&type=section&id=8.3.%20Same-Store%20Results) The detailed Same-Store Results table for Q2 and 6M 2025 highlights a year-over-year decrease in total revenues and **Net Operating Income (NOI)**, coupled with an increase in operating expenses for the same-store portfolio Same-Store Results (606 stores, in thousands) | Metric | Q2 2025 | Q2 2024 | Percent Change | 6M 2025 | 6M 2024 | Percent Change | | :-------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Total revenues | $234,688 | $235,799 | (0.5)% | $466,098 | $468,045 | (0.4)% | | Total operating expenses | $69,366 | $68,569 | 1.2% | $135,404 | $134,189 | 0.9% | | Net operating income | $165,322 | $167,230 | (1.1)% | $330,694 | $333,856 | (0.9)% | | Period end occupancy | 91.1% | 91.8% | | 91.1% | 91.8% | | | Period average occupancy | 90.6% | 91.4% | | 90.1% | 90.7% | | | Realized annual rent per occupied square foot | $22.45 | $22.41 | 0.2% | $22.50 | $22.51 | 0.0% | [Non-GAAP Measure – Computation of Funds From Operations](index=12&type=section&id=8.4.%20Non-GAAP%20Measure%20%E2%80%93%20Computation%20of%20Funds%20From%20Operations) This table presents the reconciliation of net income attributable to the Company's common shareholders to **FFO** attributable to the Company's common shareholders and third-party OP unitholders for the three and six months ended June 30, 2025, and 2024, detailing the adjustments made, primarily adding back real estate depreciation and amortization, to arrive at **FFO** Computation of Funds From Operations (in thousands) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :---------------------------------------------------------------- | :------ | :------ | :------ | :------ | | Net income attributable to the Company's common shareholders | $82,960 | $93,964 | $172,157 | $188,491 | | Add: Real estate depreciation and amortization (Real property) | $64,118 | $49,436 | $120,807 | $98,685 | | Add: Company's share of unconsolidated real estate ventures | $1,433 | $2,046 | $3,243 | $4,138 | | Add: Net income attributable to noncontrolling interests in the Operating Partnership | $401 | $524 | $854 | $1,065 | | FFO attributable to the Company's common shareholders and third-party OP unitholders | $148,912 | $145,970 | $297,061 | $292,379 | | FFO per diluted share and unit | $0.65 | $0.64 | $1.29 | $1.28 | | Payout ratio of FFO | 80.0% | 79.7% | 80.6% | 79.7% | ```

Core Insights - CubeSmart (CUBE) reported revenue of $282.3 million for the quarter ended June 2025, reflecting a 6.1% increase year-over-year and surpassing the Zacks Consensus Estimate of $274.33 million by 2.91% [1] - The company's EPS for the quarter was $0.65, up from $0.41 in the same quarter last year, exceeding the consensus estimate of $0.63 by 3.17% [1] Financial Performance Metrics - Property management fee income was reported at $10.15 million, slightly below the estimated $10.66 million, representing a year-over-year decline of 3% [4] - Rental income reached $239.56 million, exceeding the average estimate of $233.37 million, with a year-over-year increase of 5.6% [4] - Other property-related income was $32.6 million, surpassing the estimated $29.86 million, marking a year-over-year growth of 12.6% [4] - Net Earnings Per Share (Diluted) was reported at $0.36, slightly below the estimated $0.37 [4] Stock Performance - CubeSmart's shares have returned -4.4% over the past month, contrasting with the Zacks S&P 500 composite's increase of 2.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

分组1 - CubeSmart reported quarterly funds from operations (FFO) of $0.65 per share, exceeding the Zacks Consensus Estimate of $0.63 per share, and showing a slight increase from $0.64 per share a year ago, resulting in an FFO surprise of +3.17% [1] - The company achieved revenues of $282.3 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.91%, compared to $266.21 million in the same quarter last year [2] - Over the last four quarters, CubeSmart has surpassed consensus FFO estimates two times and topped consensus revenue estimates three times [2] 分组2 - The stock's immediate price movement will depend on management's commentary during the earnings call and the sustainability of FFO expectations [3][4] - CubeSmart shares have underperformed the market, losing about 4% since the beginning of the year, while the S&P 500 has gained 8.2% [3] - The current consensus FFO estimate for the coming quarter is $0.65 on revenues of $279.89 million, and for the current fiscal year, it is $2.58 on revenues of $1.1 billion [7] 分组3 - The Zacks Industry Rank indicates that the REIT and Equity Trust - Other industry is currently in the top 36% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in estimate revisions, which can be tracked by investors [5]

Core Viewpoint - CubeSmart reported stable operating fundamentals with modest improvements in seasonal performance compared to the previous year, driven by reduced new supply and better pricing strategies for new customers [2][3]. Financial Results - Net income attributable to common shareholders for Q2 2025 was $83.0 million, down from $94.0 million in Q2 2024, with diluted EPS decreasing to $0.36 from $0.41 [3][8]. - Adjusted FFO for Q2 2025 was $148.9 million, slightly up from $146.0 million in Q2 2024, with FFO per diluted share increasing by 1.6% to $0.65 [4][40]. Investment Activity - No acquisitions were made in Q2 2025, but the company acquired an 80% interest in HVP IV for $452.8 million, which included repayment of $44.4 million of existing debt [5][6]. - The company has two joint venture development properties under construction, with a total anticipated investment of $36.9 million, of which $27.0 million has been invested as of June 30, 2025 [6]. Same-Store Results - The same-store portfolio included 606 stores with a net operating income (NOI) decrease of 1.1% year-over-year, attributed to a 0.5% decline in revenues and a 1.2% rise in operating expenses [8][9]. - Same-store occupancy averaged 90.6% during the quarter, ending at 91.1%, compared to 91.8% in the previous year [9][41]. Operating Results - Total consolidated portfolio as of June 30, 2025, included 659 stores with 48.1 million rentable square feet and a physical occupancy of 90.8% [10][11]. - Total revenues increased by $16.1 million, while property operating expenses rose by $5.9 million compared to Q2 2024, primarily due to acquisitions and new developments [11][12]. Financing Activity - Interest expense increased to $29.1 million in Q2 2025 from $22.8 million in Q2 2024, driven by a higher average outstanding debt balance and increased interest rates [12][13]. Quarterly Dividend - A quarterly dividend of $0.52 per common share was declared on May 20, 2025, and paid on July 15, 2025 [14]. 2025 Financial Outlook - The company estimates fully diluted EPS for 2025 to be between $1.44 and $1.50, and adjusted FFO per share to be between $2.54 and $2.60 [15][16].

Company Overview - CubeSmart is a self-administered and self-managed real estate investment trust (REIT) that owns or manages 1,523 self-storage properties across the United States [1] - 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. [1] Dividend Announcement - The Board of Trustees of CubeSmart declared a quarterly dividend of $0.52 per common share for the period ending September 30, 2025 [1] - This dividend is payable on October 15, 2025, to common shareholders of record on October 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 - The article compares two stocks, DiamondRock Hospitality (DRH) and CubeSmart (CUBE), to determine which offers better value for investors [1] - DRH has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to CUBE, which has a Zacks Rank of 3 (Hold) [3][7] - Value investors typically consider various traditional metrics to identify undervalued stocks, beyond just earnings outlook [3] Group 2 - The Value category of the Style Scores system evaluates companies based on key metrics such as P/E ratio, P/S ratio, earnings yield, and cash flow per share [4] - DRH has a forward P/E ratio of 8.03, significantly lower than CUBE's forward P/E of 15.85, suggesting DRH may be undervalued [5] - DRH's PEG ratio is 4.61, while CUBE's PEG ratio is 7.51, indicating DRH's expected earnings growth is more favorable [5] - DRH's P/B ratio is 1.07, compared to CUBE's P/B of 3.26, further supporting DRH's valuation as more attractive [6] - Based on these valuation metrics, DRH holds a Value grade of B, while CUBE has a Value grade of D [6]