CubeSmart(CUBE) - 2025 Q4 - Annual Results

Financial Performance - As of September 30, 2025, CubeSmart has a total of 1,523 properties and an enterprise value of $12.7 billion, with a 5-year total shareholder return of 65%[3] - The company achieved a 56% growth in Funds From Operations (FFO) per share, as adjusted, over the past five years, and a 59% increase in dividends during the same period[3] - CubeSmart's same-store Net Operating Income (NOI) has a compound annual growth rate (CAGR) of 6.8% over the last five years[3] - The company generated $41 million in management fee revenue from 863 properties, enhancing profitability through additional revenue streams[21] - FFO per share growth has consistently outperformed the peer average over the past three years, with a sector-leading expense control that is 300 basis points lower than peers[26] - The annual dividend per share has increased by 273% since 2014, with 15 consecutive years of dividend increases[27] - The company has generated a 10-year total shareholder return of +182%, outperforming the peer average of +168%[28] Market Position and Strategy - The company has a diversified portfolio with 91% of its owned NOI coming from the top 40 metropolitan statistical areas (MSAs) across 41 states and Washington D.C.[11] - CubeSmart's focus on quality markets with strong demographics supports stable long-term demand trends and cash flow stability[12] - The New York City market shows a competitive advantage with the lowest supplied market at 2.6 square feet per capita, significantly below the national average of 7.8 square feet per capita[13] - CubeSmart's strategic joint ventures have resulted in $900 million in acquisitions, with 47 properties currently in existing ventures[19] - The company focuses on acquiring high-quality assets in markets with strong demographics and demand trends, aiming for long-term value creation[16] Growth and Development - CubeSmart's acquisition volume over the past five years totals $2.8 billion, indicating a strong growth strategy through acquisitions[3] - CubeSmart's consolidated acquisitions since 2010 total $6.1 billion, with $2.1 billion from third-party management, and 76% of acquisitions located in top-25 MSAs[18] - The company has achieved a 231% increase in stores on the platform since 2010, with a customer base growth of 608,000, reaching a total of 799,000 customers[17] - CubeSmart's new development delivered amounts to $764 million, with $19 million in projects currently in the pipeline, all located in top-10 MSAs[20] - A total of 109 stores were added to the third-party management platform, with 863 stores under management as of September 30[24] Financial Health - The company has a Baa2/BBB credit rating, reflecting a solid financial position and investment-grade status[3] - CubeSmart's debt maturity schedule shows a net debt to EBITDA ratio of 4.7x and a fixed charge coverage ratio of 5.6x, indicating a disciplined balance sheet strategy[23] - The company has a weighted average interest rate of 3.36% and 100% of its debt is fixed rate, ensuring stability while funding growth[23] Operational Efficiency - The operational platform is designed to maximize property cash flows and includes dynamic pricing strategies to optimize revenue[14] - The company has implemented a sophisticated technological platform to enhance customer service and operational efficiencies[14] - CubeSmart's mobile app enhances customer interaction, contributing to revenue maximization through individually optimized customer rate increases[1] Future Projections - Same-store revenue growth for 2025 is projected to be between 1.00% and 2.00%[24] - Same-store expense growth is expected to range from (1.75%) to (0.75%) for the same period[24] - The same-store occupancy rate was reported at 88.6%, reflecting a decrease of 70 basis points year-over-year[25] Recent Transactions - The company acquired the remaining 80% interest in the HVP IV joint venture for $452.8 million, including $44.4 million to repay the venture's debt[24] - The average portfolio occupancy at the time of acquisition for newly developed stores was 91.1%[22]