CubeSmart Q4 FY2025 earnings call

• 2025 was a year of stabilization for demand trends, with move-in rates turning positive in the second half of 2025 and continuing positive momentum in the fourth quarter of 2025. At the start of 2026, similar positive trends were seen with the occupancy gap continuing to narrow.
• Stable urban markets in the Northeast and Midwest outperformed, and over 75% of the top 25 markets saw revenue growth accelerate from the third quarter to the fourth quarter of 2025.
• For 2026, same-store revenue guidance considers a generally similar macro environment, lessening impact from competing new supply, continuation of steadily improving competitive pricing, and narrowing of the year-over-year occupancy gap. The company has led the sector with the lowest expense growth over the past several years, but 2026 has drivers like real estate taxes, personnel costs, and weather-related costs pushing up expense growth.
• Announced a new joint venture with CBREIM with a $250 million mandate to invest in high-growth markets across the spectrum of core, core plus, and value-add opportunities.

Self-storage business: Stable urban markets in the Northeast and Midwest outperformed markets in the Sun Belt and West Coast affected by supply. In 2025, demand trends stabilized with positive move-in rates in the second half of the year. At the start of 2026, move-in rates continued to grow positively and the occupancy gap narrowed. In 2026, only 19% of same stores were projected to face the impact of new supply, the lowest since 2017.

• FFO per share expectation for 2026 is a range of $2.52 to $2.60 per share.
• Same-store guidance includes an increase of 16 stores in 2026. The midpoint of the same-store revenue guidance assumes a generally similar macro environment to last year, lessening impact from competing new supply in markets, continuation of steadily improving competitive pricing, and narrowing of the year-over-year occupancy gap as the year progresses. 19% of the same-store portfolio was projected to be impacted by new supply in 2026, down from 24% last year and the peak of 50% in 2019.

• Public and private market valuation disconnect may affect capital deployment.
• Regulatory risks such as lawsuits in markets like New York regarding predatory practices.
• External factors like weather events can impact expenses.

Q: Michael Goldsmith from UBS asked about supply and the New York lawsuit.

A: The 19% of stores impacted by supply is on a three-year rolling basis. For the New York lawsuit, the company is aware and monitors compliance, focusing on providing optimal customer experience.

Q: Victor Fadiv from Scotiabank asked about operating expenses outlook and JV opportunity.

A: Operating expenses are driven by real estate taxes, weather-related costs, and personnel costs. The JV with CBREIM is focused on investing across core, core plus, value-add opportunities in high-growth markets.

Q: Brad Heffern from RBC asked about move-in rate assumption.

A: The company guides to overall revenue growth range, with a constructive environment for pricing to new customers and expectation to steadily close the occupancy gap throughout the year.

Q: Todd Thomas from Key Bank asked about New York momentum and outperformance.

A: New York is expected to continue as a top-performing MSA, with north jersey, westchester county, long island recovering from supply headwinds and positive trends in the city itself.

Q: Ravi Vaidya from Mizzou asked about fee income line.

A: The other property income line includes merchandise sales, fees, truck rental income, etc., and the 2026 expectation is to continue building on 2025 results.

Q: Michael Griffin from Evercore ISI asked about rate vs occupancy.

A: Focus is on maximizing customer value, with decisions made daily on interplay between volume and rate.

Q: Juan Sambria from BMO Capital Markets asked about dispositions.

A: It's a fluid discussion, with the company liking its portfolio and considering joint ventures and share repurchases if valuation disconnect persists.

Q: Spencer Glincher from Green Street asked about share buyback and acquisition.

A: The two assets bought had growth embedded, and the company is looking at various opportunities considering valuation disconnect.

Q: Brendan Lynch from Barclays asked about new supply in 2027.

A: The 19% of assets impacted by new supply in 2026 will shift to a three-year rolling period including 2025, 2026, 2027, and expected to trend downward. The CBRE JV is for external opportunities, not asset contribution.

Q: Eric Lupechao from Wells Fargo asked about New York MSA strength breakdown.

A: Strength was across the board in boroughs like Queens, Brooklyn, Bronx, etc., with good lengths of stay and move-in rate growth.

Q: Eric Wolf from Citigroup asked about job losses and DC market.

A: Storage is a neighborhood business, and DC's performance has some tough comps but is expected to be a leader in 2026.

Q: Samir Canal from Bank of America asked about transaction market pricing.

A: The referenced portfolio in New York was a manager of some assets, and New York is a great market but the transaction didn't make sense for CubeSmart.

Q: Mike Mueller from JP Morgan asked about asset selling.

A: The list of assets to cycle out is very short, and the objective is to further strategic objectives by improving portfolio quality and repurchasing shares if valuation disconnect persists