CubeSmart(US:CUBE)2025-10-31 20:35Company Overview - As of September 30, 2025, the company owned 660 self-storage properties with approximately 48.2 million rentable square feet, compared to 631 properties with 45.8 million rentable square feet as of December 31, 2024[124]. - The company managed a total of 1,523 stores, including 863 stores for third parties, as of September 30, 2025[124]. - The company acquired 28 stores in 2025, increasing the total from 631 at the beginning of the year to 660 by September 30, 2025[145]. - The company focuses on maximizing internal growth opportunities while selectively pursuing targeted acquisitions and developments of self-storage properties[128]. Revenue and Occupancy - For the nine months ended September 30, 2025, stores in New York, Florida, Texas, and California contributed approximately 17%, 14%, 11%, and 10% of total revenues, respectively[129]. - Total revenues increased from $270.9 million for the three months ended September 30, 2024, to $285.1 million for the three months ended September 30, 2025, an increase of $14.2 million, or 5.2%[150]. - Total revenues increased from $798.5 million for the nine months ended September 30, 2024 to $840.4 million for the nine months ended September 30, 2025, an increase of $41.9 million, or 5.2%[157]. - Period end occupancy decreased from 89.7% for the three months ended September 30, 2024, to 88.6% for the three months ended September 30, 2025[150]. - The company experienced seasonal fluctuations in occupancy levels, typically higher during summer months due to increased moving activity[126]. Financial Performance - Net income attributable to the company's common shareholders decreased from $100.8 million for the three months ended September 30, 2024, to $82.9 million for the three months ended September 30, 2025, a decrease of $17.9 million, or 17.7%[150]. - Funds from operations (FFO) attributable to common shareholders and third-party OP unitholders was $149.0 million for the three months ended September 30, 2025, compared to $153.0 million in 2024[191]. Expenses - Property operating expenses increased from $81.9 million for the three months ended September 30, 2024, to $90.8 million for the three months ended September 30, 2025, an increase of $9.0 million, or 11.0%[151]. - Depreciation and amortization increased from $51.2 million for the three months ended September 30, 2024, to $66.7 million for the three months ended September 30, 2025, an increase of $15.5 million, or 30.2%[152]. - General and administrative expenses increased from $14.3 million for the three months ended September 30, 2024, to $16.5 million for the three months ended September 30, 2025, an increase of $2.2 million, or 15.7%[153]. - Interest expense on loans increased from $22.8 million during the three months ended September 30, 2024, to $29.4 million during the three months ended September 30, 2025, an increase of $6.6 million, or 29.1%[154]. Debt and Financing - The average outstanding debt balance increased from $2.94 billion during the three months ended September 30, 2024, to $3.44 billion during the three months ended September 30, 2025[155]. - The weighted average effective interest rate on outstanding debt increased from 2.99% during the three months ended September 30, 2024, to 3.32% for the three months ended September 30, 2025[155]. - The average outstanding debt balance increased from $2.97 billion during the nine months ended September 30, 2024 to $3.35 billion during the nine months ended September 30, 2025[161]. - The weighted average effective interest rate on outstanding debt increased from 3.01% during the nine months ended September 30, 2024 to 3.28% for the nine months ended September 30, 2025[161]. - The company issued $450.0 million in unsecured senior notes due November 1, 2035, with an interest rate of 5.125%[173]. - As of September 30, 2025, the total outstanding unsecured senior notes amounted to $3,250.0 million, net of discounts and loan procurement costs[175]. - The company has an $850.0 million unsecured revolving credit facility maturing on February 15, 2027, with an effective interest rate of 5.27% as of September 30, 2025[177][178]. - The company reported net income attributable to common shareholders of $82.9 million for the three months ended September 30, 2025, compared to $100.8 million for the same period in 2024[191]. - The company had $849.3 million available for borrowing under the Revolver as of September 30, 2025, reduced by outstanding letters of credit totaling $0.7 million[178]. Cash Flow - Cash provided by operating activities increased from $466.4 million for the nine months ended September 30, 2024 to $472.0 million for the nine months ended September 30, 2025, reflecting an increase of $5.6 million[162]. - Cash used in investing activities increased from $72.9 million for the nine months ended September 30, 2024 to $513.0 million for the nine months ended September 30, 2025, reflecting an increase of $440.1 million[163]. - Cash provided by financing activities changed from a use of $356.4 million for the nine months ended September 30, 2024 to a provision of $78.0 million for the nine months ended September 30, 2025, reflecting a change of $434.4 million[164]. - As of September 30, 2025, the company had approximately $108.4 million in available cash and cash equivalents[172]. Market Sensitivity - The company's operating results are sensitive to changes in economic conditions that impact consumer spending, which could affect growth and profitability[127]. - A 100 basis point increase in market interest rates would decrease the fair value of outstanding fixed-rate mortgage debt and unsecured senior notes by approximately $125.3 million[198]. - Conversely, a 100 basis point decrease in market interest rates would increase the fair value of outstanding fixed-rate mortgage debt and unsecured senior notes by approximately $133.0 million[198]. - Changes in market interest rates affect the variable portion of the debt portfolio, impacting interest incurred and cash flows[197]. - The fixed portion of the debt portfolio is not affected by changes in market interest rates regarding interest incurred or cash flows[196].