• Same Store NOI: Declined 3.7% in the fourth quarter.
• Same Store Revenue Growth: 1.6% for the quarter.
• Same Store Occupancy: Dropped 120 basis points on average compared to last year.
• Same Store Expenses: Grew 4.7% during the quarter, with real estate taxes increasing by 17.5%.
• FFO per Share Adjusted: Reported at $0.68 for the quarter.
• Dividend Increase: 2% increase to an annualized $2.08 per share, representing a 4.9% yield.
• Store Acquisitions: Closed acquisitions in Oregon and Pennsylvania for $22 million, and an 85% interest in a 14-store portfolio in Dallas MSA.
• Joint Venture Acquisition: Acquired remaining 80% interest in HPP4 joint venture, totaling $452.8 million in consideration.
• Equity Capital Raised: $85.6 million in net proceeds during the quarter, $118.3 million year-to-date, with an average sales price of $51.25 per share.
• 2025 FFO per Share Guidance: Range of $2.50 to $2.59, with a midpoint of $2.54.5, down from $2.63 in 2024.
• 2025 Same Store NOI Guidance: Midpoint expectation down 3%.

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Release Date: February 28, 2025

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

Positive Points

• CubeSmart (NYSE:CUBE) reported an improvement in year-over-year same-store revenue growth, indicating a potential inflection point in the trend of decelerating growth.
• The company successfully closed a joint venture investment by acquiring its partner's interest, enhancing its portfolio with recently constructed assets in tier-one markets.
• CubeSmart (NYSE:CUBE) raised equity capital at attractive valuations, which was used to fund strategic acquisitions, demonstrating effective capital management.
• The company's New York City market continues to outperform, remaining a top growth area with no new supply expected in key boroughs.
• CubeSmart (NYSE:CUBE) announced a 2% increase in its quarterly dividend, reflecting confidence in its financial stability and commitment to returning value to shareholders.

Negative Points

• Same-store NOI declined by 3.7% in the fourth quarter, driven by pressure on asking rates and a drop in occupancy levels.
• Real estate taxes increased significantly by 17.5% in the fourth quarter, impacting overall expenses.
• The company does not foresee an obvious catalyst for sharp re-acceleration of organic growth in 2025, indicating cautious revenue expectations.
• CubeSmart (NYSE:CUBE) anticipates continued pressure on property insurance costs, contributing to expense challenges.
• The company's guidance for 2025 reflects a potential decline in FFO per share, primarily due to expected performance of the core same-store portfolio.

Q & A Highlights

Q: Can you discuss the JV transaction and if there are similar opportunities with existing partners? What motivated your partners in HVP4 to sell, and are there NOI upside opportunities for these assets? A: Timothy Martin, CFO: There are no imminent opportunities for other joint ventures. Our partner in this venture had their investment in a closed-end vehicle, and we have been discussing a liquidity event for them over the past couple of years. The assets are generally stable, but we expect some of them to fully stabilize and capture more value in 2025 and beyond.

Q: What are you looking for as a catalyst for demand and revenue growth in 2025? A: Christopher Marr, CEO: We need clarity on mortgage rates and the overall economic environment. People are navigating conflicting information, and clarity would help them make decisions. We need either acceptance of the current mortgage rate environment or changes that adjust those rates. We are optimistic that initiatives being discussed nationally could provide clarity and confidence, which would be beneficial for our business.

Q: Are you concerned about a potential street rate war in 2025? A: Christopher Marr, CEO: We are cautious but not overly concerned. The last three months have been more constructive regarding rates for new customers. We are seeing improvements, but we need to see consistency. Our guidance reflects a range of expectations, from modest improvement to a more cautious approach if improvements stall.

Q: Can you provide an update on how moving rents are trending? A: Christopher Marr, CEO: Move-in rents have improved from a 10.3% decline in November to a 7.4% decline recently. This gradual improvement has been consistent since December 1st.

Q: How do you view the New York market for 2025? A: Christopher Marr, CEO: We are optimistic about the New York MSA, especially the boroughs, where we have a dominant presence and brand. There is minimal new supply expected in 2025, which should support continued positive trends. We expect New York to be our best-performing major market in 2025.

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