CubeSmart (NYSE:CUBE) Q2 2024 Earnings Conference Call August 2, 2024 11:00 AM ET Company Participants Josh Schutzer - Vice President of Finance Christopher Marr - President and Chief Executive Officer Timothy Martin - Chief Financial Officer Conference Call Participants Spenser Allaway - Green Street Advisors Sanket Agrawal - Evercore ISI Nick Joseph - Citigroup Michael Goldsmith - UBS Eric Luebchow - Wells Fargo Robin Haneland - BMO Capital Markets Todd Thomas - KeyBanc Capital Markets Brendan Lynch - Bar ...

CubeSmart (CUBE) came out with quarterly funds from operations (FFO) of $0.64 per share, in line with the Zacks Consensus Estimate. This compares to FFO of $0.66 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this self-storage company would post FFO of $0.64 per share when it actually produced FFO of $0.64, delivering no surprise. Over the last four quarters, the company has surpassed consensus FFO estimates two times. CubeSmart, which belongs t ...

MALVERN, Pa., Aug. 01, 2024 (GLOBE NEWSWIRE) -- CubeSmart (NYSE: CUBE) today announced its operating results for the three and six months ended June 30, 2024. "As expected, we experienced a marginally stronger seasonal uplift in demand during the second quarter and a customer base who continues to be resilient in an uncertain economy," commented President and Chief Executive Officer Christopher P. Marr. "Our data-driven approach to operations continues to allow us to optimize our performance in the face of ...

Diamond Sky Images/DigitalVision via Getty Images This led me to explore the self-storage universe. I found that there are three publicly traded competitors in the largely fragmented market, PSA, Extra Space Storage (EXR), and CUBE. The remainder are privately held by either families or investors like private equity sponsors. The industry boomed during 2020 when the pandemic began to inspire a generational shift in living habits. As families moved for a variety of reasons, self-storage operators benefitted ...

Company Overview - CubeSmart is a self-administered and self-managed real estate investment trust (REIT) that owns or manages 1,497 self-storage properties across the United States, ranking among the top three owners and operators in the U.S. self-storage market according to the 2024 Self Storage Almanac [1]. Financial Performance - The Board of Trustees of CubeSmart declared a quarterly dividend of $0.51 per common share for the period ending September 30, 2024, which is payable on October 15, 2024, to shareholders of record on October 1, 2024 [3]. Mission and Services - The mission of CubeSmart is to simplify the organizational and logistical challenges faced by customers due to various life events and business needs through innovative solutions, unparalleled service, and genuine care [4]. - The self-storage properties offered by CubeSmart are designed to provide affordable, easily accessible, and, in most locations, climate-controlled storage space for both residential and commercial customers [4].

Company Overview - CubeSmart is a self-administered and self-managed real estate investment trust (REIT) that owns or manages 1,493 self-storage properties across the United States [3] - According to the 2024 Self Storage Almanac, CubeSmart ranks among the top three owners and operators of self-storage properties in the U.S. [3] Financial Results Announcement - CubeSmart will release its financial results for the three-month period ended June 30, 2024, after the market close on Thursday, August 1, 2024 [1] - A conference call to discuss these results will be held at 11:00 a.m. ET on Friday, August 2, 2024 [1] Conference Call Details - A live webcast of the conference call will be available on the investor relations page of CubeSmart's corporate website [2] - Telephone participants can join the call by dialing 1 (800) 715-9871 with conference ID 4783436 [2] - A telephonic replay of the call will be available through August 16, 2024, by dialing 1 (800) 770-2030 using conference number 4783436 [2] Company Mission - CubeSmart's mission is to simplify organizational and logistical challenges for customers through innovative solutions, unparalleled service, and genuine care [4] - The self-storage properties are designed to offer affordable, easily accessible, and, in most locations, climate-controlled storage space for both residential and commercial customers [4]

[Filing Information](index=1&type=section&id=Filing%20Information) This section provides foundational details of the registrant, filing specifics, and the legal context of the Form 8-K submission [Registrant and Filing Overview](index=1&type=section&id=Registrant%20and%20Filing%20Overview) This section provides the foundational details of the registrant, CubeSmart, and the specifics of the Form 8-K filing, including its identification, address, and the securities registered - Registrant: CubeSmart and CubeSmart, L.P.[1](index=1&type=chunk)[9](index=9&type=chunk) - Filing Type: Current Report on Form 8-K, dated June 3, 2024.[1](index=1&type=chunk)[9](index=9&type=chunk) | Detail | Value | | :--- | :--- | | **Registrant Name** | CubeSmart / CubeSmart, L.P. | | **Principal Executive Offices** | 5 Old Lancaster Road, Malvern, Pennsylvania 19355 | | **Telephone Number** | (610) 535-5000 | | **Securities Registered** | Common Shares, $0.01 par value per share, of CubeSmart (CUBE) on New York Stock Exchange | [Legal and Regulatory Context](index=1&type=section&id=Legal%20and%20Regulatory%20Context) This section clarifies the regulatory framework under which the Form 8-K is filed, specifying that the furnished information is not considered 'filed' for certain legal purposes and is not subject to specific liabilities - The information in this Form 8-K (including exhibits) is furnished under Item 2.02, Item 7.01, and Item 9.01.[2](index=2&type=chunk)[11](index=11&type=chunk) - The furnished information is not deemed 'filed' for purposes of Section 18 of the Securities Exchange Act of 1934 and is not subject to its liabilities.[2](index=2&type=chunk) - It will not be incorporated by reference into other filings unless expressly set forth by specific reference.[2](index=2&type=chunk) [Current Report Items](index=2&type=section&id=Current%20Report%20Items) This section details the specific items of the Form 8-K, covering financial results, Regulation FD disclosure, and included exhibits [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) This item indicates the disclosure of results of operations and financial condition, with the specific details being incorporated by reference into Item 7.01 - Information disclosed in Item 2.02 is incorporated into Item 7.01.[11](index=11&type=chunk) [Item 7.01 Regulation FD Disclosure](index=2&type=section&id=Item%207.01%20Regulation%20FD%20Disclosure) Under Regulation FD, CubeSmart is furnishing a slide presentation to ensure broad and fair disclosure of information that may be used in investor presentations - A slide presentation (Exhibit 99.1) is being furnished with this report for use in presentations to investors.[18](index=18&type=chunk) - The information is furnished to satisfy Regulation FD requirements and is not an admission of materiality.[2](index=2&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the specific exhibits included with the Form 8-K, primarily the investor slide presentation and the interactive data file | Exhibit No. | Description | | :--- | :--- | | 99.1 | Slide Presentation Dated June 2024 | | 104 | Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | [Signatures](index=3&type=section&id=Signatures) This section formally concludes the Form 8-K filing with the required authorized signatures [Authorized Signatures](index=3&type=section&id=Authorized%20Signatures) This section formally concludes the Form 8-K filing with the required signatures from an authorized officer of CubeSmart, L.P. - The report is signed on behalf of CubeSmart, L.P. by Jeffrey P. Foster, Chief Legal Officer and Secretary.[14](index=14&type=chunk)[17](index=17&type=chunk) - The report was signed on June 3, 2024.[7](index=7&type=chunk)[14](index=14&type=chunk)

MALVERN, Pa., May 21, 2024 (GLOBE NEWSWIRE) -- CubeSmart (NYSE: CUBE) announced today that its Board of Trustees declared a quarterly dividend of $0.51 per common share for the period ending June 30, 2024. The dividend is payable on July 15, 2024 to common shareholders of record on July 1, 2024. The Company's mission is to simplify the organizational and logistical challenges created by the many life events and business needs of its customers through innovative solutions, unparalleled service, and genuine c ...

imaginima A common theme of research on REITer’s Digest is that REITs come in all shapes and sizes. There are REITs, both big and small, that invest in a whole ecosystem of asset classes. Many even specialize in specific subcategories of property types. Today, we are going to dive into one of only a handful of companies operating in the self-storage industry. We will discuss CubeSmart (NYSE:CUBE) and the self-storage market at large. CubeSmart recently reported earnings for the first quarter. After seve ...

[FORM 10-Q](index=1&type=section&id=FORM%2010-Q) Common Shares Outstanding (As of April 24, 2024) | Category | Shares Outstanding as of April 24, 2024 | | :----------- | :-------------------------------------- | | Common Stock | 224,972,363 | [EXPLANATORY NOTE](index=2&type=section&id=EXPLANATORY%20NOTE) - This report consolidates the quarterly reports of CubeSmart (the Parent Company, a REIT) and CubeSmart, L.P. (the Operating Partnership) to provide a comprehensive business view, reduce redundant disclosures, and enhance efficiency[23](index=23&type=chunk)[24](index=24&type=chunk)[43](index=43&type=chunk) - The Parent Company is the sole general partner of the Operating Partnership, holding a **99.4% interest** as of March 31, 2024[19](index=19&type=chunk) - The Operating Partnership holds most of the company's assets and conducts its business, while the Parent Company primarily acts as the general partner, issuing public equity and guaranteeing the Operating Partnership's debt[42](index=42&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) - This report contains forward-looking statements based on assumptions and expectations that may not be realized, subject to various risks, uncertainties, and other factors that could cause actual results to differ materially from expectations[30](index=30&type=chunk) - Key risks include adverse changes in economic conditions, increased competition, failure to execute business plans, pandemic impacts, reduced capital availability and increased costs, rising interest rates, financing risks, REIT qualification maintenance risks, acquisition and development failures, increased taxes, non-performance by joint venture partners, asset valuation declines, and cybersecurity breaches[49](index=49&type=chunk)[32](index=32&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 its subsidiaries, including balance sheets, statements of operations, comprehensive income, equity, and cash flows, along with corresponding statements for CubeSmart, L.P. and its subsidiaries, accompanied by detailed notes explaining organizational structure, accounting policies, and financial specifics [Consolidated Balance Sheets (CubeSmart and Subsidiaries)](index=9&type=section&id=CUBESMART%20AND%20SUBSIDIARIES%20CONSOLIDATED%20BALANCE%20SHEETS) Consolidated Balance Sheet Key Data (in thousands USD) | Metric | March 31, 2024 | December 31, 2023 | | :----------------------- | :------------- | :---------------- | | Total Assets | 6,208,888 | 6,225,020 | | Total Liabilities | 3,346,849 | 3,344,212 | | Total Equity | 2,803,786 | 2,820,532 | | Storage Properties, Net | 5,938,734 | 5,951,236 | | Cash and Cash Equivalents| 5,587 | 6,526 | [Consolidated Statements of Operations (CubeSmart and Subsidiaries)](index=10&type=section&id=CUBESMART%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Consolidated Statements of Operations Key Data (For the Three Months Ended March 31, in thousands USD) | Metric | 2024 | 2023 | | :--------------------------------------- | :------ | :------ | | Total Revenue | 261,406 | 256,528 | | Operating Expenses | 143,379 | 136,130 | | Net Income | 94,858 | 97,942 | | Net Income Attributable to Company Common Shareholders | 94,527 | 97,566 | | Basic Earnings Per Share | 0.42 | 0.43 | | Diluted Earnings Per Share | 0.42 | 0.43 | [Consolidated Statements of Comprehensive Income (Loss) (CubeSmart and Subsidiaries)](index=11&type=section&id=CUBESMART%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)) Consolidated Statements of Comprehensive Income (Loss) Key Data (For the Three Months Ended March 31, in thousands USD) | Metric | 2024 | 2023 | | :----------------------- | :----- | :----- | | Net Income | 94,858 | 97,942 | | Other Comprehensive Income | 20 | 20 | | Comprehensive Income | 94,878 | 97,962 | [Consolidated Statements of Equity (CubeSmart and Subsidiaries)](index=12&type=section&id=CUBESMART%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20EQUITY) Consolidated Statements of Equity Key Data (in thousands USD) | Metric | Balance as of December 31, 2023 | Balance as of March 31, 2024 | | :------------------------------- | :------------------------------ | :--------------------------- | | Total CubeSmart Shareholders' Equity | 2,798,828 | 2,782,108 | | Noncontrolling Interests (Subsidiaries) | 21,704 | 21,678 | | Total Equity | 2,820,532 | 2,803,786 | [Consolidated Statements of Cash Flows (CubeSmart and Subsidiaries)](index=13&type=section&id=CUBESMART%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Consolidated Statements of Cash Flows Key Data (For the Three Months Ended March 31, in thousands USD) | Activity | 2024 | 2023 | | :----------------------------------------------- | :-------- | :-------- | | Net Cash Provided by Operating Activities | 150,150 | 136,706 | | Net Cash Used in Investing Activities | (34,220) | (25,560) | | Net Cash Used in Financing Activities | (116,534) | (111,289) | | Cash and Cash Equivalents and Restricted Cash, End of Period | 7,613 | 8,782 | [Consolidated Balance Sheets (CubeSmart, L.P. and Subsidiaries)](index=14&type=section&id=CUBESMART%2C%20L.P.%20AND%20SUBSIDIARIES%20CONSOLIDATED%20BALANCE%20SHEETS) Consolidated Balance Sheet Key Data (in thousands USD) | Metric | March 31, 2024 | December 31, 2023 | | :----------------------- | :------------- | :---------------- | | Total Assets | 6,208,888 | 6,225,020 | | Total Liabilities | 3,346,849 | 3,344,212 | | Total Capital | 2,803,786 | 2,820,532 | | Storage Properties, Net | 5,938,734 | 5,951,236 | | Cash and Cash Equivalents| 5,587 | 6,526 | [Consolidated Statements of Operations (CubeSmart, L.P. and Subsidiaries)](index=15&type=section&id=CUBESMART%2C%20L.P.%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Consolidated Statements of Operations Key Data (For the Three Months Ended March 31, in thousands USD) | Metric | 2024 | 2023 | | :--------------------------------------- | :------ | :------ | | Total Revenue | 261,406 | 256,528 | | Operating Expenses | 143,379 | 136,130 | | Net Income | 94,858 | 97,942 | | Net Income Attributable to CubeSmart, L.P. | 95,068 | 98,180 | | Basic Earnings Per Unit | 0.42 | 0.43 | | Diluted Earnings Per Unit | 0.42 | 0.43 | [Consolidated Statements of Comprehensive Income (Loss) (CubeSmart, L.P. and Subsidiaries)](index=16&type=section&id=CUBESMART%2C%20L.P.%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)) Consolidated Statements of Comprehensive Income (Loss) Key Data (For the Three Months Ended March 31, in thousands USD) | Metric | 2024 | 2023 | | :----------------------- | :----- | :----- | | Net Income | 94,858 | 97,942 | | Other Comprehensive Income | 20 | 20 | | Comprehensive Income | 94,878 | 97,962 | [Consolidated Statements of Capital (CubeSmart, L.P. and Subsidiaries)](index=17&type=section&id=CUBESMART%2C%20L.P.%20AND%20SUBSIDIARIES%20CONSOLIDATED%20STATEMENTS%20OF%20CAPITAL) Consolidated Statements of Capital Key Data (in thousands USD) | Metric | Balance as of December 31, 2023 | Balance as of March 31, 2024 | | :------------------------------- | :------------------------------ | :--------------------------- | | Total CubeSmart, L.P. Capital | 2,798,828 | 2,782,108 | | Noncontrolling Interests (Subsidiaries) | 21,704 | 21,678 | | Total Capital | 2,820,532 | 2,803,786 | [Notes to Unaudited Consolidated Financial Statements](index=19&type=section&id=NOTES%20TO%20UNAUDITED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [1. Organization and Nature of Operations](index=19&type=section&id=1.%20ORGANIZATION%20AND%20NATURE%20OF%20OPERATIONS) - CubeSmart operates as a self-managed and self-administered real estate investment trust (REIT), conducting its business through CubeSmart, L.P. and its subsidiaries[8](index=8&type=chunk) - As of March 31, 2024, the company owned (or partially owned and consolidated) self-storage properties in the District of Columbia and **24 states**, operating as one reportable business segment[8](index=8&type=chunk) - The company typically experiences seasonal fluctuations in property occupancy, with slightly higher occupancy rates during summer months due to increased moving activity[98](index=98&type=chunk) [2. Summary of Significant Accounting Policies](index=19&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - The unaudited consolidated financial statements are prepared in accordance with SEC rules and regulations for interim financial reporting, including all necessary adjustments for a fair presentation of financial position, results of operations, and cash flows[99](index=99&type=chunk) - The company records self-storage properties at cost less accumulated depreciation, with depreciation for buildings, improvements, and equipment recognized on a straight-line basis over estimated useful lives of **5 to 39 years**[204](index=204&type=chunk) - Upon property acquisition, the purchase price is allocated to acquired tangible and intangible assets and assumed liabilities based on their estimated relative fair values[183](index=183&type=chunk) - Long-lived assets are reviewed for impairment when indicators such as declining occupancy and poor operating performance arise, and are evaluated based on their recoverability[184](index=184&type=chunk) - Investments in unconsolidated real estate ventures are accounted for using the equity method, with regular assessments for other-than-temporary impairment[208](index=208&type=chunk) - ASU No. 2023-07—Segment Reporting (Topic 280), issued in November 2023, is not expected to have a material impact on the company's consolidated financial statements[122](index=122&type=chunk) [3. Storage Properties](index=21&type=section&id=3.%20STORAGE%20PROPERTIES) Summary of Storage Property Carrying Values (in thousands USD) | Metric | March 31, 2024 | December 31, 2023 | | :----------------------------- | :------------- | :---------------- | | Land | 1,599,314 | 1,594,742 | | Buildings and Improvements | 5,542,740 | 5,517,544 | | Equipment | 141,954 | 144,372 | | Construction in Progress | 71,635 | 69,010 | | Right-of-Use Assets - Finance Leases | 41,945 | 41,945 | | Total Storage Properties | 7,397,588 | 7,367,613 | | Less: Accumulated Depreciation | (1,458,854) | (1,416,377) | | Storage Properties, Net | 5,938,734 | 5,951,236 | [4. Investment Activity](index=23&type=section&id=4.%20INVESTMENT%20ACTIVITY) - In the first quarter of 2024, the company acquired **two properties** in Connecticut for a total purchase price of **$20.2 million**, including **$0.9 million** in intangible assets (in-place leases)[5](index=5&type=chunk)[125](index=125&type=chunk) - In 2023, the company acquired **one property** in New Jersey for **$22 million**, recognizing approximately **$0.5 million** in amortization expense[126](index=126&type=chunk) - In 2023, the company sold the California Yacht Club for **$0.8 million**, recognizing a **$0.2 million loss**; additionally, an Illinois property was involuntarily condemned for **$8 million**, resulting in a **$4.8 million gain**[127](index=127&type=chunk)[302](index=302&type=chunk) - As of March 31, 2024, the company had invested in **four consolidated joint ventures** for self-storage properties, with accumulated development costs of **$57.3 million** and estimated total construction costs of **$109.7 million**[128](index=128&type=chunk) [5. Investment in Unconsolidated Real Estate Ventures](index=24&type=section&id=5.%20INVESTMENT%20IN%20UNCONSOLIDATED%20REAL%20ESTATE%20VENTURES) Summary of Investments in Unconsolidated Real Estate Ventures (As of March 31, 2024) | Joint Venture Name | CubeSmart Ownership Percentage | Number of Properties (March 31, 2024) | Investment Carrying Value (in thousands USD, March 31, 2024) | | :--------------------------------- | :----------------------------- | :------------------------------------ | :----------------------------------------------------------- | | Fontana Self Storage, LLC | 50% | 1 | 13,461 | | Rancho Cucamonga Self Storage, LLC | 50% | 1 | 20,524 | | 191 V CUBE LLC (HVP V) | 20% | 6 | 12,628 | | 191 IV CUBE LLC (HVP IV) | 20% | 28 | 16,385 | | CUBE HHF Northeast Venture LLC (HHFNE) | 10% | 13 | 909 | | CUBE HHF Limited Partnership (HHF) | 50% | 28 | 32,320 | | **Total** | | **77** | **96,227** | - The company's share of earnings from unconsolidated real estate ventures decreased from **$2.6 million** in Q1 2023 to **$0.8 million** in Q1 2024, a **$1.7 million (66.9%) reduction**, primarily due to an excess distribution from HVPSE in Q1 2023[108](index=108&type=chunk)[215](index=215&type=chunk) Summary of Unconsolidated Real Estate Ventures Operating Results (For the Three Months Ended March 31, in thousands USD) | Metric | 2024 | 2023 | | :----------------------- | :----- | :----- | | Total Revenue | 24,586 | 24,064 | | Net Income | 1,915 | 1,620 | | Company's Share of Net Income | 845 | 2,551 | [6. Other Assets](index=25&type=section&id=6.%20OTHER%20ASSETS) Composition of Other Assets (in thousands USD) | Metric | March 31, 2024 | December 31, 2023 | | :----------------------------------------- | :------------- | :---------------- | | Intangible Assets, Net | 2,036 | 1,806 | | Accounts Receivable, Net | 7,907 | 8,944 | | Prepaid Real Estate Taxes | 5,738 | 8,171 | | Prepaid Insurance | 2,174 | 4,879 | | Due from Related Parties | 20,018 | 18,045 | | Assets Related to Deferred Compensation Arrangements | 62,142 | 60,038 | | Right-of-Use Assets - Operating Leases | 50,179 | 50,476 | | Ground Lease Receivables | 6,206 | 6,193 | | Other | 6,233 | 4,732 | | **Total Other Assets, Net** | **162,633** | **163,284** | [7. Unsecured Senior Notes](index=27&type=section&id=7.%20UNSECURED%20SENIOR%20NOTES) Summary of Unsecured Senior Notes (in thousands USD) | Note Name | March 31, 2024 | December 31, 2023 | Effective Interest Rate | Maturity Date | | :----------------- | :------------- | :---------------- | :---------------------- | :------------ | | 4.000% Due 2025 | 300,000 | 300,000 | 3.99% | November 2025 | | 3.125% Due 2026 | 300,000 | 300,000 | 3.18% | September 2026| | 2.250% Due 2028 | 550,000 | 550,000 | 2.33% | December 2028 | | 4.375% Due 2029 | 350,000 | 350,000 | 4.46% | February 2029 | | 3.000% Due 2030 | 350,000 | 350,000 | 3.04% | February 2030 | | 2.000% Due 2031 | 450,000 | 450,000 | 2.10% | February 2031 | | 2.500% Due 2032 | 500,000 | 500,000 | 2.59% | February 2032 | | **Principal Balance** | **2,800,000** | **2,800,000** | | | | Less: Net Issuance Discount | (9,735) | (10,148) | | | | Less: Net Debt Issuance Costs | (12,740) | (13,362) | | | | **Unsecured Senior Notes, Net** | **2,777,525** | **2,776,490** | | | - As of March 31, 2024, the Operating Partnership complied with all senior note financial covenants, including a leverage ratio not exceeding **60%**, an interest coverage ratio exceeding **1.5:1.0**, and a secured debt leverage ratio not exceeding **40%**[134](index=134&type=chunk)[246](index=246&type=chunk) [8. Revolving Credit Facility](index=27&type=section&id=8.%20REVOLVING%20CREDIT%20FACILITY) - The company amended and restated its credit agreement on October 26, 2022, which includes an **$850 million** unsecured revolving credit facility maturing on February 15, 2027[154](index=154&type=chunk)[264](index=264&type=chunk) - As of March 31, 2024, the borrowing rate under the revolving credit facility was **6.37%**, with **$831 million** available for borrowing[135](index=135&type=chunk)[247](index=247&type=chunk) - For the three months ended March 31, 2024, the Operating Partnership complied with all financial covenants under the Second Amended and Restated Credit Agreement[136](index=136&type=chunk)[231](index=231&type=chunk)[304](index=304&type=chunk) [9. Mortgage Loans and Notes Payable](index=29&type=section&id=9.%20MORTGAGE%20LOANS%20AND%20NOTES%20PAYABLE) Summary of Mortgage Loans and Notes Payable (in thousands USD) | Mortgage Loans and Notes Payable | Carrying Value as of March 31, 2024 | Carrying Value as of December 31, 2023 | Effective Interest Rate | Maturity Date | | :------------------------------- | :---------------------------------- | :------------------------------------- | :---------------------- | :------------ | | Annapolis I, MD | 4,651 | 4,703 | 3.78% | May 2024 | | Brooklyn XV, NY | 14,657 | 14,746 | 2.15% | May 2024 | | Long Island City IV, NY | 11,862 | 11,946 | 2.15% | May 2024 | | Long Island City II, NY | 17,719 | 17,834 | 2.25% | July 2026 | | Long Island City III, NY | 17,723 | 17,839 | 2.25% | August 2026 | | Flushing II, NY | 54,300 | 54,300 | 2.15% | July 2029 | | **Principal Balance** | **120,912** | **121,368** | | | | Add: Unamortized Fair Value Adjustment | 7,103 | 7,689 | | | | Less: Net Debt Issuance Costs | (776) | (871) | | | | **Mortgage Loans and Notes Payable, Net** | **127,239** | **128,186** | | | - As of March 31, 2024, the company's mortgage loans were secured by self-storage properties with a net carrying value of approximately **$354.6 million**[115](index=115&type=chunk) [10. Accumulated Other Comprehensive Loss](index=29&type=section&id=10.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) - Accumulated other comprehensive loss primarily represents unrealized losses on interest rate swaps[157](index=157&type=chunk) Summary of Changes in Accumulated Other Comprehensive Loss (For the Three Months Ended March 31, 2024, in thousands USD) | Metric | Amount | | :----------------------------------------------- | :----- | | Balance as of December 31, 2023 | (413) | | Reclassification of Realized Loss on Interest Rate Swaps | 20 | | Balance as of March 31, 2024 | (393) | | Less: Portion Attributable to Noncontrolling Interests | 2 | | **Total Accumulated Other Comprehensive Loss Included in Equity** | **(391)**| [11. Risk Management and Use of Financial Instruments](index=30&type=section&id=11.%20RISK%20MANAGEMENT%20AND%20USE%20OF%20FINANCIAL%20INSTRUMENTS) - The company faces credit risk in cash accounts, but management considers the risk of loss low due to high credit ratings of major financial institutions[158](index=158&type=chunk) - The company uses derivative instruments, such as interest rate swap agreements, to manage interest rate risk, not for speculative purposes, aiming to minimize risk and/or borrowing costs[159](index=159&type=chunk) - As of March 31, 2024, and December 31, 2023, all of the company's derivative instruments were settled[160](index=160&type=chunk) - In Q1 2024, the company reclassified **$20 thousand** of unrealized losses from accumulated other comprehensive loss to interest expense, with an estimated **$0.1 million** expected to be reclassified over the next 12 months[305](index=305&type=chunk) [12. Fair Value Measurements](index=30&type=section&id=12.%20FAIR%20VALUE%20MEASUREMENTS) - The company uses a fair value hierarchy (Level 1, Level 2, Level 3) to measure the fair value of financial assets and liabilities, prioritizing observable inputs[141](index=141&type=chunk)[161](index=161&type=chunk)[13](index=13&type=chunk) - As of March 31, 2024, and December 31, 2023, the fair values of cash and cash equivalents, restricted cash, accounts receivable, other financial instruments, accounts payable, accrued expenses, and other liabilities approximated their carrying values[163](index=163&type=chunk) Carrying Value and Estimated Fair Value of Debt (in thousands USD) | Metric | March 31, 2024 | December 31, 2023 | | :------------ | :------------- | :---------------- | | Carrying Value| 2,923,164 | 2,922,776 | | Fair Value | 2,607,864 | 2,631,221 | [13. Noncontrolling Interests](index=32&type=section&id=13.%20NONCONTROLLING%20INTERESTS) - Noncontrolling interests represent third-party ownership in the company's consolidated joint ventures, primarily established for developing, owning, and operating new properties[144](index=144&type=chunk) Summary of Consolidated Joint Ventures (As of March 31, 2024, in thousands USD) | Consolidated Joint Venture | Number of Properties | Ownership Percentage | Total Assets | Total Liabilities | Related Party Loans | | :--------------------------------- | :------------------- | :------------------- | :----------- | :---------------- | :------------------ | | New Rochelle Investors, LLC | 1 | 70% | 24,855 | 1,253 | 599 | | 1074 Raritan Road, LLC | 1 | 90% | 14,141 | 7,931 | 6,642 | | 350 Main Street, LLC | 1 | 90% | 5,862 | 19 | — | | Astoria Investors, LLC | 1 | 70% | 43,338 | 28,937 | 27,397 | | CS Lock Up Anoka, LLC | 1 | 50% | 10,216 | 5,625 | 5,540 | | CS Valley Forge Village Storage, LLC | 1 | 70% | 19,149 | 14,873 | 14,792 | | CS Vienna, LLC | 1 | 80% | 30,200 | 35,325 | 34,875 | | SH3, LLC | 1 | 90% | 36,621 | 521 | — | | **Total** | **8** | | **184,382** | **94,484** | **89,845** | [14. Commitments and Contingencies](index=34&type=section&id=14.%20COMMITMENTS%20AND%20CONTINGENCIES) - As of March 31, 2024, third parties held **1,288,205 OP units** with a total redemption value of **$58.3 million**[146](index=146&type=chunk) - The company has entered into **four construction agreements** for new self-storage properties with developers, expecting to pay approximately **$38.5 million** in installments during 2024 and 2025[147](index=147&type=chunk) - The company is involved in claims arising in the ordinary course of business, for which management has adequately provided for potential liabilities, included in accounts payable, accrued expenses, and other liabilities[148](index=148&type=chunk) [15. Related Party Transactions](index=34&type=section&id=15.%20RELATED%20PARTY%20TRANSACTIONS) - The company provides management services to certain joint ventures and other related parties, with management fee income of **$1.2 million** for both Q1 2024 and Q1 2023[169](index=169&type=chunk) - As of March 31, 2024, amounts due from related parties totaled **$20 million**, and mortgage loans receivable from consolidated joint ventures amounted to **$89.8 million**[149](index=149&type=chunk) - The company recognized **$0.1 million** in revenue for both Q1 2024 and Q1 2023 as the lessor for ground leases related to the HVP IV properties in Texas[14](index=14&type=chunk)[171](index=171&type=chunk) [16. Earnings Per Share and Unit and Shareholders' Equity and Capital](index=36&type=section&id=16.%20EARNINGS%20PER%20SHARE%20AND%20UNIT%20AND%20SHAREHOLDERS'%20EQUITY%20AND%20CAPITAL) Earnings Per Share Calculation Components (CubeSmart Common Shareholders, in thousands USD, except per share amounts) | Metric | For the Three Months Ended March 31, 2024 | For the Three Months Ended March 31, 2023 | | :--------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net Income Attributable to Company Common Shareholders | 94,527 | 97,566 | | Weighted Average Basic Shares | 225,767 | 225,294 | | Weighted Average Diluted Shares | 226,575 | 226,183 | | Basic Earnings Per Share | 0.42 | 0.43 | | Diluted Earnings Per Share | 0.42 | 0.43 | Earnings Per Unit Calculation Components (CubeSmart, L.P., in thousands USD, except per unit amounts) | Metric | For the Three Months Ended March 31, 2024 | For the Three Months Ended March 31, 2023 | | :--------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net Income Attributable to CubeSmart, L.P. | 95,068 | 98,180 | | Weighted Average Basic Units | 227,057 | 226,717 | | Weighted Average Diluted Units | 227,865 | 227,606 | | Basic Earnings Per Unit | 0.42 | 0.43 | | Diluted Earnings Per Unit | 0.42 | 0.43 | Summary of OP Units Outstanding | OP Unit Holder | March 31, 2024 | March 31, 2023 | | :----------------------------- | :------------- | :------------- | | OP Units Held by Third Parties | 1,288,205 | 1,418,549 | | OP Units Held by General Partner | 224,965,172 | 224,671,525 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses the company's operating results, financial condition, and cash flows for Q1 2024, focusing on revenue, expenses, investment activities, liquidity, and non-GAAP financial measures, while highlighting strategies in self-storage property operations, acquisitions, and development [Overview](index=39&type=section&id=Overview) - The company is an integrated self-storage real estate company with in-house capabilities for operating, designing, developing, leasing, managing, and acquiring self-storage properties[176](index=176&type=chunk) - As of March 31, 2024, the company owned **613 self-storage properties**, totaling approximately **44.4 million square feet**, and managed **860 properties** for third parties, totaling **1,473 properties**[176](index=176&type=chunk) - Company revenue primarily derives from customer storage space rentals and property management fees, with operating performance dependent on the ability to maintain and increase occupancy and rental rates[198](index=198&type=chunk) - Properties in New York, Florida, California, and Texas contributed **17%, 14%, 11%, and 9%**, respectively, to total revenue in Q1 2024[180](index=180&type=chunk) [Summary of Critical Accounting Policies and Estimates](index=41&type=section&id=Summary%20of%20Critical%20Accounting%20Policies%20and%20Estimates) - This section outlines critical accounting policies and estimates deemed essential by management for preparing the unaudited consolidated financial statements, which require management judgment and assumptions, and involve a degree of uncertainty[181](index=181&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) - As of March 31, 2024, the company owned **598 same-store properties** and **15 non-same-store properties**. Same-store properties had an ending occupancy rate of **90.4%**, compared to **91.7%** in the prior year period[187](index=187&type=chunk)[190](index=190&type=chunk) Operating Results Comparison (For the Three Months Ended March 31, in thousands USD) | Metric | 2024 | 2023 | Change | Change Rate | | :--------------- | :------ | :------ | :------ | :---------- | | Total Revenue | 261,406 | 256,528 | 4,878 | 1.9% | | Operating Expenses | 143,379 | 136,130 | 7,249 | 5.3% | | Net Operating Income | 184,369 | 185,401 | (1,032) | (0.6%) | | Net Income | 94,858 | 97,942 | (3,084) | (3.1%) | - Total revenue increased by **1.9%**, primarily due to increased revenue from non-same-store properties acquired or opened in 2023 and 2024, higher other property-related income from increased customer storage protection plan participation, and increased property management fees[237](index=237&type=chunk) - Property operating expenses increased by **8.3%**, primarily due to higher real estate taxes and property insurance for same-store properties[238](index=238&type=chunk) - Interest expense on loans decreased by **3.3%**, primarily due to a lower average outstanding debt balance and a slight decrease in the average effective interest rate[239](index=239&type=chunk) - Earnings from real estate ventures decreased by **66.9%**, primarily due to an excess distribution from HVPSE in Q1 2023[215](index=215&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) - Cash flow from operating activities is the company's primary source of liquidity, used to fund debt payments, distributions, and capital expenditures[242](index=242&type=chunk) Cash Flow Activities Comparison (For the Three Months Ended March 31, in thousands USD) | Activity | 2024 | 2023 | Change | | :---------------------------------------- | :-------- | :-------- | :------ | | Net Cash Provided by Operating Activities | 150,150 | 136,706 | 13,444 | | Net Cash Used in Investing Activities | (34,220) | (25,560) | (8,660) | | Net Cash Used in Financing Activities | (116,534) | (111,289) | (5,245) | - Net cash provided by operating activities increased by **$13.4 million**, primarily attributable to the timing and amount of payments for certain accounts payable and accrued expenses[216](index=216&type=chunk) - Net cash used in investing activities increased by **$8.7 million**, primarily due to **$20.1 million** in storage property acquisitions in Q1 2024, compared to no acquisitions in the prior year period[241](index=241&type=chunk) - Net cash used in financing activities increased by **$5.2 million**, primarily due to higher cash distributions to common shareholders and noncontrolling interests in the Operating Partnership[217](index=217&type=chunk) - As of March 31, 2024, the company had approximately **$5.6 million** in available cash and cash equivalents, and **$831 million** available under its revolving credit facility[226](index=226&type=chunk) - The company anticipates recurring capital expenditures of **$15 million to $20 million**, planned capital improvements and property upgrades of **$13 million to $18 million**, and new property development costs of **$18 million to $28 million** for the remainder of 2024[244](index=244&type=chunk)[222](index=222&type=chunk) - Through its at-the-market equity program, the company may issue and sell up to **60 million shares** of common stock, though no common stock was sold in Q1 2024[249](index=249&type=chunk)[266](index=266&type=chunk) [Non-GAAP Financial Measures](index=53&type=section&id=Non-GAAP%20Financial%20Measures) - Net Operating Income (NOI) is a key metric used by management to assess property operating performance, helping to measure property economic productivity and eliminate the effects of capital structure and depreciation[251](index=251&type=chunk)[252](index=252&type=chunk)[267](index=267&type=chunk)[268](index=268&type=chunk) - Funds From Operations (FFO) is a widely used performance measure for real estate companies, providing a more comparable assessment of operating performance by excluding non-operating items such as gains/losses on real estate sales, impairment charges, and depreciation and amortization[254](index=254&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk) Reconciliation of FFO Attributable to Company Common Shareholders and Third-Party OP Unit Holders (in thousands USD) | Metric | For the Three Months Ended March 31, 2024 | For the Three Months Ended March 31, 2023 | | :----------------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net Income Attributable to Company Common Shareholders | 94,527 | 97,566 | | Add: Real Estate Depreciation and Amortization | 49,249 | 48,916 | | Add: Company's Share in Unconsolidated Real Estate Ventures | 2,092 | 2,134 | | Less: Net Gain on Sale of Real Estate | — | (1,713) | | Add: Noncontrolling Interests in Operating Partnership | 541 | 614 | | **FFO Attributable to Company Common Shareholders and Third-Party OP Unit Holders** | **146,409** | **147,517** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discloses the company's market risks, particularly the impact of interest rate fluctuations on revenue, cash flows, and the fair value of financial instruments, detailing sensitivity analyses for fixed and variable-rate debt [Market Risk](index=55&type=section&id=Market%20Risk) - The company's future revenues, cash flows, and the fair value of financial instruments are dependent on market interest rates[274](index=274&type=chunk) - As of March 31, 2024, the company's consolidated debt included **$2.92 billion** in fixed-rate mortgage loans and unsecured senior notes, and **$18.4 million** in variable-rate unsecured credit facility borrowings[276](index=276&type=chunk) [Effect of Changes in Interest Rates on our Outstanding Debt](index=55&type=section&id=Effect%20of%20Changes%20in%20Interest%20Rates%20on%20our%20Outstanding%20Debt) - If market interest rates increase by **100 basis points**, the fair value of fixed-rate debt would decrease by approximately **$115.5 million**; a **100 basis point decrease** would result in an increase of approximately **$119.7 million**[259](index=259&type=chunk) - If market interest rates for variable-rate debt increase/decrease by **100 basis points**, annual interest expense would decrease/increase by approximately **$0.2 million** accordingly[285](index=285&type=chunk) [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) This section discloses the management's assessment of disclosure controls and procedures for both the Parent Company and Operating Partnership, confirming their effectiveness at a reasonable assurance level, and reports no material changes in internal control over financial reporting [Controls and Procedures (Parent Company)](index=55&type=section&id=Controls%20and%20Procedures%20(Parent%20Company)) - As of the end of the reporting period, the Parent Company's Chief Executive Officer and Chief Financial Officer assessed and concluded that its disclosure controls and procedures are effective at a reasonable assurance level[278](index=278&type=chunk)[288](index=288&type=chunk) [Controls and Procedures (Operating Partnership)](index=57&type=section&id=Controls%20and%20Procedures%20(Operating%20Partnership)) - As of the end of the reporting period, the Operating Partnership's Chief Executive Officer and Chief Financial Officer assessed and concluded that its disclosure controls and procedures are effective at a reasonable assurance level[289](index=289&type=chunk) [Changes in Internal Control Over Financial Reporting](index=57&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - No changes in internal control over financial reporting for either the Parent Company or the Operating Partnership occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[262](index=262&type=chunk)[290](index=290&type=chunk) [Part II. OTHER INFORMATION](index=57&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) This section discloses that the company currently has no pending legal proceedings, other than routine litigation and administrative actions arising in the ordinary course of business, which are not expected to have a material adverse effect on the company's financial condition, results of operations, or cash flows - The company currently has no pending legal proceedings, other than routine litigation and administrative actions arising in the ordinary course of business, which are not expected to have a material adverse effect on the company's financial condition, results of operations, or cash flows[280](index=280&type=chunk)[291](index=291&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides information on Parent Company common stock repurchases, primarily involving shares withheld for employee tax obligations, and mentions a board-approved but unexecuted share repurchase program [Repurchases of Parent Company Common Shares](index=58&type=section&id=Repurchases%20of%20Parent%20Company%20Common%20Shares) Parent Company Common Share Repurchase Information (For the Three Months Ended March 31, 2024) | Period | Total Shares Repurchased | Average Price Paid Per Share | Total Number of Shares Repurchased Under Publicly Announced Plans or Programs | Maximum Number of Shares That May Yet Be Repurchased Under the Plans or Programs | | :----------------- | :----------------------- | :--------------------------- | :---------------------------------------------------------------------------- | :------------------------------------------------------------------------------- | | January 1 - January 31 | 17,736 | $46.17 | Not Applicable | 3,000,000 | | February 1 - February 29 | 278 | $43.69 | Not Applicable | 3,000,000 | | March 1 - March 31 | 167 | $43.60 | Not Applicable | 3,000,000 | | **Total** | **18,181** | **$46.11** | **Not Applicable** | **3,000,000** | - Repurchased shares represent common stock withheld by the company to cover employee tax obligations upon the vesting of restricted shares[293](index=293&type=chunk) - The Parent Company's Board of Trustees approved a repurchase program on September 27, 2007, authorizing the repurchase of up to **3 million shares** of common stock, though no repurchases have been made under this plan to date[281](index=281&type=chunk) [Item 5. Other Information](index=58&type=section&id=Item%205.%20Other%20Information) This section states that no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by the company's trustees or officers during Q1 2024 [Trading Arrangements](index=58&type=section&id=Trading%20Arrangements) - During the three months ended March 31, 2024, no Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements were adopted or terminated by any of the company's trustees or officers[294](index=294&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including CEO and CFO certifications (pursuant to Sarbanes-Oxley Act Sections 302 and 906) and financial information in Inline XBRL format - This section lists the exhibits filed with the report, including CEO and CFO certifications (pursuant to Sarbanes-Oxley Act Sections 302 and 906) and financial information in Inline XBRL format[296](index=296&type=chunk) [SIGNATURES OF REGISTRANT](index=60&type=section&id=SIGNATURES%20OF%20REGISTRANT) - This report was signed by Christopher P. Marr, Chief Executive Officer, Timothy M. Martin, Chief Financial Officer, and Matthew D. DeNarie, Chief Accounting Officer of CubeSmart on April 26, 2024[2](index=2&type=chunk)[299](index=299&type=chunk)[300](index=300&type=chunk)