CubeSmart(US:CUBE)2021-05-01 00:42Financial Data and Key Metrics Changes - The company reported a same-store revenue growth of 6.7% for Q1 2021, with a 2% increase in expenses, resulting in an NOI growth of 8.9% [11][12] - Average occupancy for Q1 was 93.8%, up 280 basis points year-over-year, with quarter-ending occupancy at 94.4% [11][12] - FFO per share as adjusted was $0.47, representing a 14.6% growth compared to the previous year [12] Business Line Data and Key Metrics Changes - The average offered net effective rates for new customers in the same-store pool increased by over 20% year-over-year, ending the quarter up over 40% compared to the end of Q1 2020 [8][11] - The company added 31 new stores to its third-party management platform during the quarter, with a focus on both newly-developed and existing stores [9][14] Market Data and Key Metrics Changes - The company noted a shift in third-party management opportunities from the top 25 MSAs to MSAs ranked 26 through 100 [10][58] - Supply deliveries in core markets are expected to continue declining from their 2019 peak [10][59] Company Strategy and Development Direction - The company is pursuing a disciplined growth strategy focused on high-quality assets and has increased its full-year FFO per share guidance by nearly 2% based on strong operating fundamentals [15][16] - The management team remains active in acquisitions, with a robust pipeline of opportunities, while maintaining a disciplined underwriting approach [10][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand and net rental trends continuing through the busy spring and early summer season [7][17] - The company is well-positioned heading into the busy rental season, with strong performance in April trends [10][17] Other Important Information - The company raised net proceeds of $99.7 million through its at-the-market equity program during the quarter [15] - The management team highlighted the importance of maintaining conservative leverage levels to pursue external growth opportunities [15] Q&A Session Summary Question: Impact of movement back to New York on assets - Management indicated no significant volatility in urban markets as activity resumes, with similar patterns observed in urban and suburban markets [19] Question: Advertising expense trends - Management expects marketing advertising expenses to be higher than inflationary levels throughout 2021, with efficiencies gained in Q1 [20] Question: Revised guidance and occupancy rate growth - Management noted improved outlook based on strong Q1 performance and high occupancy levels, with expectations for continued gains during the rental season [22][24] Question: Third-party management store losses - Management explained that the majority of lost stores were acquired by other entities, but they remain confident in their ability to replace these stores [30][31] Question: Rate increases for existing customers - Management reported that receptivity to rate increases has remained consistent, with efforts to balance profitability without significantly impacting vacate rates [66][67] Question: Acquisition competition - Management noted competition from a range of entities, including REITs and private operators, with varying underwriting assumptions impacting bidding outcomes [61][62] Question: Supply and demand outlook - Management discussed the balance between strong operational fundamentals and rising development costs, indicating that while supply may increase, it will be offset by challenges in labor and materials [73][74]