CubeSmart(CUBE)2025-05-02 16:02Financial Data and Key Metrics Changes - The company reported FFO per share of $0.64, which was a penny above the high end of guidance [8][12] - Same store revenue growth decreased by 0.4% year over year, an improvement from a decline of 1.6% in the previous quarter [11] - Average occupancy for the same store portfolio was down 50 basis points to 89.5%, narrowing from a decline of 120 basis points in the fourth quarter [11] - Same store operating expenses grew only 0.6% year over year, better than expectations [12] Business Line Data and Key Metrics Changes - The company closed on the acquisition of the remaining 80% interest in a joint venture, acquiring a portfolio of 28 early-stage lease-up stores [13] - The third-party management platform added 33 stores, ending the quarter with 869 third-party stores under management [14] Market Data and Key Metrics Changes - Strong markets such as New York City boroughs, Chicago, and Washington D.C. continue to show strength, while supply-impacted markets like Northern New Jersey, Phoenix, and Atlanta are stabilizing [9] - In April, occupancy improved to 89.9% [22] Company Strategy and Development Direction - The company remains focused on optimizing its platform while maintaining high customer service standards [7] - The management expressed confidence in the long-term health of the self-storage industry due to the quality and geographic diversity of its portfolio [9] Management's Comments on Operating Environment and Future Outlook - Management noted uncertainty in the economy starting in April, which could impact consumer decisions related to storage demand [15] - The company anticipates gradual improvement in operational metrics in 2025, without expecting a sharp reacceleration [15] Other Important Information - The balance sheet remains strong with a net debt to EBITDA ratio of 4.8 times [14] - The company is addressing a bond maturity later in the year, either through existing capacity or opportunistically accessing debt markets [14] Q&A Session Summary Question: What are the drivers of demand in the current environment? - Management highlighted that demand is driven by everyday life events and business customers needing storage solutions, despite a slow housing market [19][20] Question: What was occupancy in April? - Occupancy ended at 89.9% in April [22] Question: Are there any pricing adjustments being made? - Management confirmed that move-in rates were down about 2% in April, an improvement from previous quarters [23] Question: How does the company view the leasing season? - Management expects a muted leasing season compared to pre-pandemic levels, with gradual improvements anticipated [30] Question: What is the outlook for Texas markets? - Management noted that while some Texas markets are under pressure, they see signs of stabilization and improvement [36] Question: Are there any surprises in development costs? - Management reported no significant surprises in development costs, as projects were not impacted by recent volatility [37] Question: What is the strategy regarding acquisitions? - Management indicated that while wholly owned acquisitions make sense, current market volatility has created uncertainty in valuations [54][55] Question: How does the company view demand in a potential recession? - Management expressed confidence in the self-storage business's resilience during economic downturns, noting that demand often increases during such times [91][92]