CubeSmart(US:CUBE)2026-02-27 17:02Financial Data and Key Metrics Changes - The same-store revenue growth for Q4 2025 was negative 0.1%, indicating stabilization compared to previous quarters [11] - Funds from Operations (FFO) per share for the quarter was reported at $0.64, with a 1.9% increase in the quarterly dividend to an annualized $2.12 per share, representing a 5.3% dividend yield [12] - The leverage ratio ended the year at 4.8x net debt to EBITDA, indicating a strong balance sheet [16] Business Line Data and Key Metrics Changes - The occupancy gap improved to 88.7% by the end of January 2026, narrowing from year-end 2025 [8] - Move-in rates showed significant improvement, turning positive at +2.8% in Q4 2025, compared to -10% in Q4 2024 [7] - Over 75% of the top 25 markets experienced revenue growth acceleration from Q3 to Q4 2025 [9] Market Data and Key Metrics Changes - Core urban markets in the Northeast and Midwest outperformed, while supply-impacted markets in the Sun Belt and West Coast began to show improvement [5][9] - Only 19% of same-store assets are projected to face new supply impacts in 2026, the lowest percentage since 2017 [10] Company Strategy and Development Direction - The company aims to return to growth in 2026, focusing on stabilizing fundamentals and improving operating metrics [5] - A new joint venture with CBRE IM was announced, with a $250 million mandate to invest in high-growth markets [13] - The company is considering share repurchases as a strategic option to enhance shareholder value amid disconnected public and private market valuations [15][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to historical revenue growth levels, expecting gradual improvement throughout 2026 [9][39] - The company is focused on expense controls, having led the sector in the lowest expense growth over the past several years [18] - Management acknowledged the potential impact of economic conditions, including layoffs, on demand for self-storage services, but emphasized the resilience of the business model [56][99] Other Important Information - The company executed share repurchases during Q4 2025, with an expanded authorization allowing for approximately $475 million in capacity [15] - The company is exploring opportunities to sell or contribute assets to joint ventures to fund additional share repurchases if valuation gaps persist [16][70] Q&A Session Summary Question: How does the company view supply impacts? - The company assesses supply impacts over a three-year rolling period, with 19% of stores impacted in 2026, reflecting deliveries from 2024 to 2026 [21][23] Question: How is the company responding to the lawsuit in New York? - The company is monitoring the situation and remains focused on compliance and providing optimal customer experiences [25] Question: What is driving the higher operating expenses outlook? - Key drivers include real estate taxes and weather-related costs, with personnel costs expected to rise slightly above inflation [30] Question: What is the outlook for move-in rates? - Management expects steady improvement in move-in rates, with a focus on maximizing revenue from existing customers [36][62] Question: How does the company view its portfolio and potential dispositions? - The company is open to trading assets to enhance portfolio quality and may consider joint ventures for non-core assets [69][70]