CubeSmart(US:CUBE)2023-02-24 19:00Financial Data and Key Metrics Changes - Same-store revenue growth for the year came in at the high end of guidance, with a growth rate of 9.5% for Q4 and 16.7% for the year [44][57] - Expenses grew at an annual rate of 3%, with Q4 expenses increasing by 2.3% [44][57] - Same-store NOI growth was reported at 12.1% for Q4 [57] - FFO per share as adjusted was $0.67 for the quarter, representing a 16% growth over last year [59] Business Line Data and Key Metrics Changes - Same-store occupancy averaged 92.8% in Q4, ending the quarter at 92.1%, down 120 basis points compared to last year [57] - New York City market showed positive occupancy trends, with rents for new customers up by 3% compared to the previous year [4][5] Market Data and Key Metrics Changes - The New York MSA is experiencing a waning impact of new supply, with occupancy levels improving [48] - The percentage of the same-store portfolio impacted by new supply is expected to decrease from 35% to 30% [66][89] Company Strategy and Development Direction - The company focuses on maintaining a high-quality portfolio in top markets, emphasizing operational excellence and a conservative balance sheet [46][51] - The strategy includes a disciplined investment approach, looking for opportunities that fit the investment model at acceptable pricing [60][104] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the consumer and the portfolio's performance, despite economic uncertainties [45][71] - The outlook for 2023 includes expectations for steady growth, particularly in urban markets like New York City [49][100] Other Important Information - The company announced a 14% increase in its quarterly dividend, raising it to an annualized $1.96 per share [59] - The company entered 2023 with 98% of its debt being fixed rate, with a low debt-to-EBITDA ratio of 4.3x [51][63] Q&A Session Summary Question: What is the anticipated cadence and magnitude of ECRI throughout '23? - Management indicated that the process is dynamic, with expectations for ECRI to be above historical averages but lower than the previous year due to normalization [8][9] Question: Can you discuss the demand for the third-party management platform? - There is a strong pipeline of potential opportunities, with less churn expected in the portfolio due to fewer property sales [11][12] Question: How has the transaction market changed? - The transaction market is seeing fewer overall transactions, with a significant bid-ask spread making it challenging to close deals [14][15] Question: What are the expectations for expense growth in 2023? - Expense growth is expected to be around 3%, with a focus on operational efficiency and managing costs effectively [27][28] Question: Can you comment on the components of cost increases? - Anticipated pressures include property insurance, utilities, and personnel costs, but the company is focused on driving efficiencies [108][109]