• Same-Store Revenue Growth: Declined 0.8% year-over-year.
• Average Occupancy: Down 120 basis points to 90.8% for the same-store portfolio.
• Same-Store Operating Expenses: Increased by 5.3% over last year.
• Same-Store NOI Growth: Negative 3.1%.
• FFO Per Share (Adjusted): $0.67 for the quarter.
• Third-Party Management Stores: Added 24 stores, totaling 893 stores under management at quarter end.
• Equity Proceeds: Raised $32.8 million at an average sales price of $54.20 per share.

• Warning! GuruFocus has detected 6 Warning Sign with CUBE.

Release Date: November 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• CubeSmart (NYSE:CUBE) reported a solid third quarter, hitting the midpoint of their guidance range.
• The New York MSA significantly outperformed the rest of the portfolio, with rentals up year over year.
• CubeSmart (NYSE:CUBE) added 24 stores to their third-party management platform, bringing the total to 893 stores.
• The company maintained a strong balance sheet with low leverage and no floating rate exposure.
• CubeSmart (NYSE:CUBE) is seeing a more constructive acquisition environment, with opportunities aligning with their investment strategy.

Negative Points

• Same-store revenues declined by 0.8% compared to last year, with average occupancy down 120 basis points.
• Same-store operating expenses grew by 5.3%, driven by increased property insurance costs and marketing expenses.
• The company faced a competitive pricing environment, leading to slower rental volumes.
• Weaker performance was noted in Florida and Arizona markets due to new supply impacts.
• The churn gap for move-in and move-out rates was negative 27.4% during the quarter.

Q & A Highlights

Q: Chris, what are your thoughts on the current market conditions and expectations for the end of 2024 and into 2025? A: Christopher Marr, President and CEO, mentioned that the market is in a high beta environment with some weeks showing positive signs and others not. He emphasized the difficulty in predicting outcomes due to factors like interest rates and Federal Reserve actions, suggesting a week-by-week approach.

Q: Can you discuss the move-in, move-out reach spread for the quarter? A: Christopher Marr noted that the churn gap was negative 27.4% for the quarter.

Q: How are you balancing investments in price and marketing in the current competitive environment? A: Marr explained that marketing spend has grown about 10% year-over-year for the first nine months. The focus is on attracting high-quality customers willing to pay premium rates, with adjustments made weekly based on data analysis.

Q: Are you seeing any changes in customer behavior based on discounting strategies? A: Marr stated that customers attracted by significant discounts tend to have lower lengths of stay and higher credit issues. The strategy involves offering discounts based on local store inventory needs, recognizing that such customers may churn more quickly.

Q: What are your expectations for the New York market, given its recent performance? A: Marr highlighted that the New York MSA has tough comps but remains a strong market. He expects the supply impact in North Jersey to lessen next year, contributing to a stable performance without large swings.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.