CubeSmart Reports First Quarter 2025 Results

Core Insights - CubeSmart reported a positive start to 2025 with improving occupancy and rate trends driven by solid demand [1] - The company emphasizes its high-quality portfolio in top-tier markets as a strategic advantage during uncertain economic conditions [1] Financial Results - Net income attributable to common shareholders for Q1 2025 was $89.2 million, down from $94.5 million in Q1 2024 [3] - Diluted EPS for Q1 2025 decreased to $0.39 from $0.42 in the same period last year [3] - Adjusted FFO was $148.1 million for Q1 2025, compared to $146.4 million for Q1 2024, with FFO per diluted share remaining at $0.64 for both periods [4] Investment Activity - The company acquired the remaining 80% interest in HVP IV for $452.8 million, which included $44.4 million to repay existing indebtedness [5] - HVP IV owns 28 stores across various states including Arizona, Florida, and Texas [5] Development Activity - CubeSmart has agreements for constructing self-storage properties in high-barrier locations, with two joint venture development properties under construction [6] - The total anticipated investment for these projects is $36.9 million, with $18.5 million already invested as of March 31, 2025 [6] Third-Party Management - As of March 31, 2025, the third-party management platform included 869 stores totaling 56.4 million rentable square feet, with 33 stores added during the quarter [7] Same-Store Results - The same-store portfolio included 606 stores with 43.8 million rentable square feet, representing approximately 95.5% of the company's property NOI for Q1 2025 [8] - Same-store NOI decreased by 0.8% year-over-year, attributed to a 0.4% decrease in revenues and a 0.6% increase in operating expenses [9][10] Operating Results - The total consolidated portfolio included 659 stores with a physical occupancy of 89.2% as of March 31, 2025 [11] - Total revenues increased by $11.6 million, while property operating expenses rose by $5.9 million compared to Q1 2024 [12] Interest Expense - Interest expense increased from $22.9 million in Q1 2024 to $26.1 million in Q1 2025, due to a higher average outstanding debt balance and increased interest rates [13] Quarterly Dividend - A quarterly dividend of $0.52 per common share was declared on February 25, 2025, and paid on April 15, 2025 [15] 2025 Financial Outlook - The company estimates fully diluted EPS for 2025 to be between $1.41 and $1.49, and fully diluted FFO per share, as adjusted, to be between $2.51 and $2.59 [16] - Guidance for same-store revenue growth is projected between -2.00% and 0.00% for the full year [17]