CubeSmart (CUBE) 27 Oct 172017 Q3 Earnings call transcript

Company Profile

Participants

Charlie Place	Director of Investor Relations
Chris Marr	President and Chief Executive Officer
Tim Martin	Chief Financial Officer
Ki Bin Kim	SunTrust
Smedes Rose	Citi
Juan Sanabria	Bank of America Merrill Lynch
Drew Smith	KeyBanc Capital Markets
David Corak	FBR
Nick Yulico	UBS
Gwen Clark	Evercore ISI
Todd Stender	Wells Fargo
Jeremy Metz	BMO Capital Markets

Call transcript

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Operator

Good day, and welcome to the CubeSmart Third Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] And please note this event is being recorded. I would now like to turn the conference over to Charlie Place, Director of Investor Relations. ahead. go Please

Charlie Place

Officer; Hello to Nicole. on morning Malvern, Chief from call Officer. Chief Thank third everyone. quarter Welcome Executive and President CubeSmart’s Chris Participants Tim XXXX Pennsylvania. Martin, include Financial you, Marr, Good and earnings today’s call.

will prepared remarks Q&A followed be Our a by session.

include which Company’s from our Company’s other forward-looking Investor evening furnishes risks documents Form of Relations Commission, risks, certain forward-looking of earnings provided filed issued and Annual the with morning, XX-K. supplemental remarks factors or could available operating statements. and addition, to to specifically our involve section The we to this that cause Securities those was is Company’s with Risk the materially the In and differ materially statements at factors together the under the the The www.cubesmart.com. forward-looking website will in on cause earnings release and earnings from that company actual regarding Report yesterday financial data Factors may the with differ files statements the and results our that the are section actual X-K Form Exchange strategy X-K and uncertainties filed Form to release results

Company’s now I GAAP Chris. financial the supplement www.cubesmart.com. on call include and addition, posted found at remarks measures. the the between non-GAAP will quarter third In Company’s over non-GAAP reference be A reconciliation to in measures can turn the to website

Chris Marr

by CubeSmart A Charlie. everyone of very on you, solid the execution Thank quarter team.

continue execute more providing service. customer our to and and people continue systems more Our best-in-class efficiently,

MSAs rent XX opportunity lows reduced this quarter, XX combination extremely the a increasing on rents, while discounting sequential effect which our our we generated focused MSA. reported acceleration activity The New the to keenly the in identified In revenue rental our occupancy. details. be of realized historic potent largest, growing to generation the including of was continue also York effect positive asking while has modestly new physical same-store gains third good and that in of of an we We

growth the year We have increased during quarters continued reflect points our XX first of performance basis the same-store the the with to of solid three impact annual our our expectation fourth the at midpoint, during along guidance execution quarter. of up revenue

for and The personified We our of demonstrated each and other customers our in Texas of incredible Hurricanes are made our during after in thankful which genuine of and the of manner Florida. and care proud. value took teammates They safety and fortitude everyone care. Irma in they in all Harvey our company

million noted, with have As the associated $X.X two we recognized hurricanes. costs approximately in

stores existing with impacted pleased open and and the and customers. development We non-stabilized assets. our are of performance new remain serving our of All our

first in service the of Dupont Adams we neighborhoods starts. placed solid are During an Street to D.C. new Both Manhattan and a excellent XXth our Morgan, Washington, in stores Circle, Circle off location the quarter, in in store store serving Logan

supply on with second our overall comments remains quarter outlook call. on Our consistent our

focus how will maximizing on the detail, the we supply XXXX far the systems the our in by result three-year to quality thus available it XXXX our lease-up new in to believe have people core development, XXXX the forward We opportunity to compared going for demographics attention typical XXXX a our we supply and the the markets four-year cycle. the with for Given Cube and impact navigated in navigating consistent to periods. new that to period three-year

third-party which a Lauderdale to in stores was continue we and program, area. Fort our Post acquisitions. approach have in and in asset one We the be will management our transaction Texas, in quarter-end, two we single to of disciplined acquired

We XX will about positioned call additional feel and quarter. management we to third growth, I the quarter. our the how adding turn entering over during outstanding execution newly stores are its very provide third-party Martin program existing positive detail. to now XX the fourth continued quarter during Our the developed and Tim

Tim Martin

joining interest to call and thanks for on and us continued your everyone support. the Chris, Thanks,

We’re to results, assumptions. a as our results as and report as Chris broad share quarter asking FFO include remained growth to for annual third indicated, pleased although those demand our our guidance adjusted our based, raise steady a projected to moderate. and and range as rent well product continues per beat underlying to Consumer

FFO had by when and unadjusted As related the the storm factoring September operationally hurricanes during net net cleanup, insurance the in negatively standpoint, income busy of state throughout our expected a we million Florida. impacted a in proceeds. $X.X damage with financial Chris Houston of quarter were and and mentioned, From the

we our as as costs an comparability, XX.X%, quarter-ending well FFO reported quarter excluded those points adjusted occupancy For results. same-store We up year-over-year. XX another from occupancy basis is with of our as from perspective which strong

was quarter impacted increases XX X.X% grew over X.X% only were Same-store Same-store last points by the XX.X%. slowing year, Our last from we growth real and estate reported taxes grew basis average costs. during and X.X% revenue the in quarter. occupancy expenses personnel

$X.XX range afternoon, $X.XX revised As the our FFO to X% full yesterday about earnings adjusted to as our we $X.XX to revising previous per of per detailed at our year $X.XX a increased range midpoint, guidance share in release share. of

revenue same-store at of new by the assumption guidance at expectations also raised of to to our raising XX basis guidance for from lowering range growth was X.X% a same-store expense X% X%. year, basis midpoint, updated the our to a same-store growth midpoint and on XX points the growth our range up NOI our We points X% provided

in sheet of assets down time, million but did remain expanding the million our We We during and growth any balance October. $XX three a focused $XX.X costs $XX.X million. keenly focused CubeSmart remain front acquire our on acquisitions range lowered on for and our have sheet of the the G&A footprint. balance external cost investment-grade not expected on on capital. revised quarter, closed we At to the to we Additionally, same

continues opened pipeline Washington, value Chris during as we Manhattan and create D.C. to mentioned. development the in shareholder as quarter, stores Our

more adding during XXX bringing XXX. on for quiet we XX pretty On quarter year-to-date extremely the the stores manage quarter, third-party A to stores management now sheet. balance third-party total We owners. side, active the remained our

XXXX. without equity. as pipeline have maturities in quarters, ability growth we’ve no mentioned to on our need debt we external And until fund basis of prior We any have issue a the leverage-neutral to common the

since not the sold for call the open call Nicole, at-the-market under point, equity Thanks, We up quarter At us morning. have the for third let’s on shares joining this program again, XXXX. of any our questions. this

Operator

Thank you.

the first Bin Ki Our SunTrust. Kim question comes ahead. question-and-answer We Please will [Operator Instructions] now from of begin go session.

Ki Bin Kim

and Thanks morning, guys. good

Chris Marr

morning. Good

Ki Bin Kim

So induce albeit usually increase growth. reduce when traffic wouldn’t I you that would discounts, – pricing, reduce occupancy or think more slightly, price you ever

So quarter the happened an what surprised upside? that during

Chris Marr

able good some the hurricanes would generate discount, the positive But the quarter, to to on Yes. we’re And of a was particular Florida move-ins We in bring saw but fairly effective in worked. the to certainly We not that, push suggested I to demand. would Houston. this it pricing an appeal too systems to down broad-based rent. to post combination and the again, The price demand. major markets. we were move-ins to best saw pre-hurricane positive pointed that We consumer Street our say across-the-board, system just in hard get components those experienced rate

So quality, systems into I our and come coming out people all have I than just attribute anticipated bit better to a location, can marketing, it quarter. asset the seemed asset mean, together to worked of it would little and we

Ki Bin Kim

customers actual for traffic comp you physical business target little it the a did different change spend of where just you a But advertising from? come all or bit? – way at with did maybe how doing Was

Chris Marr

XQ QX. the very consistent marketing channels from was it to the No, – were and

Ki Bin Kim

lastly, just, the that or suddenly revenue raised implies decelerate. the least guys same-store obviously, you And at quarter very fourth probably and accelerates guidance

And that strength the guessing assuming quarter? through. that So up carry holding I’m correct? I’m seeing that the Is is into occupancy that you’re

Chris Marr

expect hurricane-created quarter provided. But up. particularly there Again, bit Yes, fairly in fourth not is a to some or up. are plus hit ranges quarter may be the correct. the third back would components We we little within math occupancies the to Clearly, occupancy the different. occupancies, your the be of to Florida. – minus holding is I’m holding the consistent gave

be same contraction the discounts. necessarily it not on So might

little pretty positive You we’re bit quarter Street on see about a more push but may see in going how and the rate, into we trends quarter. net growth effective fourth the

Ki Bin Kim

overall, trending is of Okay. that tone, things just, larger seem a And narrative I sustainable think mean Do little but kind picture? been that’s in have change you the bit. a just or just changing does way like

Chris Marr

some is guidance year best. to seen obviously Yes. QX of think the season pretty in is, QX QX I QX, change I mean, the and into is the extent, I may going The as visibility the sort rental the we you we’ve into when And busy last provide well several years, driving of visibility how off good. you’re go. think is in the to think

to if the back opposite. proven of we I fact, discounting second year. the you think transcripts the have likely more in from increase gap out quarter, to would the go expected to half first in It’s, be

I So positive. tone is the think

obviously months is was expectation ago. Our positive six than it XXXX more for

I thoughts and February. going think XXXX? sustainable some on we’ll our into in How that time. XXXX be tuned to is providing of related Stay obviously just

Ki Bin Kim

All right, thank you.

Chris Marr

Thanks.

Operator

Rose ahead. of question go Our comes Smedes from next Citi. Please

Smedes Rose

the in if York maybe define just ask specifically New overall Hi, York versus thanks. you I it? New boroughs way to MSA, about performance wanted the talk that you the could

Chris Marr

in very boroughs in of MSA. overall the performance sequential we acceleration saw We the consistent in growth with acceleration the MSA. the saw to the boroughs for performance was same-store revenue same a The levels overall in Yes. sequential equal the the

performance about borough impact on. Bronx’s lot going And perspective, positive Bronx occupancy we a really brunt the talked mid-August a we all saw year, the signs by first. borough, certainly that’s strong from of mid-August occupancy be supply from of the on. result new about an of you go to the saw as from then Again, If

so occupancy in occupied in highly in some where significant is market so same And Island to stores from – then extremely to the that perhaps along. same power some Brooklyn So then overall continues just story improvement year. what the last gains of we’re Staten kind shoots had and chug one see all challenging there a with been starting in just one Bronx. year, very, to there the were very along green very continues for store Queens,

would performance in I you MSA. overall very of City to York performance the the in supplemental say similar what see So New

Smedes Rose

we’ve – folks specifically the just outlook city. of Thanks. just And heard supply different – on a the for then couple from different

the said others if wondering supply just front? you’re there’s maybe in New then on amount seeing that the what have that Some fair could have I have you and indicated a us was and that front to York deliveries peaked on come, – tell

Chris Marr

by Yes. Again, borough I it’s think borough.

we you’ve stores competition, So fairly that are of to deliveries huge overall to to just if Brooklyn. to Brooklyn, going Brooklyn. would things is peak for seen Bronx, in look expect certainly would a In you feel then will and slowing be XXXX, to overall number going peak significant impact that a In we’re XXXX about we like those well XXXX expect into on are XXXX XXXX facing that have of the openings. sort openings new Queens, for would just would CubeSmart the expect decline. to going And there see but new start the think out the at we XXXX. expect see even not when you down borough, XXXX Not to amount of we

turn I if and now starting Bronx. I right the seems three there But, think two to very corner this like for next again, you we’re It the looking it’s year. to think of supply. about similar think year sort at that’s

expect in overall, Cube stores impact see more so XXXX, Brooklyn the a in probably you’re we than So Brooklyn in would modest. going more few to and XXXX concentrated delivered on

Smedes Rose

Thank very much. you Great.

Operator

question next Bank of comes Juan ahead. Our Please of Merrill from Sanabria Lynch. go America

Juan Sanabria

performance. I sustainable? how And for that the that off, benefit the terms meant Or the is just at what came thanks of should was that? of Hi, we like time. in level of same-store looking hoping the about that of forward, level benefits discounting kind you think revenue quantify could

Chris Marr

Juan, Yes. Chris. it’s Thanks

to can’t a the same-store to were a X% we flip So we’ve not as continue XX back quarter. compares but back contributing imagine every XX a third low, of XXXX within the so be growth That to think and it’s the going that as was a percentage far rents not able that I’ve tighten. record The for obviously discounts direction, about in I That low basis quarter And of third it points record overall X.X% quarter quarter as quarter yet broken XXXX. to the of been the to saying in I to years. tracking or in the X% been record, were new X.X%. other

to more So discounting. on we’re would that increased that expect from a we focused again, rent likely model perspective. effective But net see you’re going pricing some

what upon depends consumer within that really it working is attract So to time period. the

Juan Sanabria

looking into blended give of, was can I a XXXX, discounting us guess, And XXXX? for you the what sense year-to-date

Chris Marr

the at from quarter, X.X% you were contractions X.X% third, where back the don’t first quarter, from, which, but quarter, all look if year quarter X.X% in blended, by know quarter a similar the it off was second I the my I the that top go the in of in was head, think, and earlier. quarter, of by

Juan Sanabria

couple your an question. Can Massachusetts. to to something if one what’s broader of well those Manhattan just degree think in in deliveries? as deliveries, supply back driving in industry were some of targeted being that’s I pushed and comment you the is a terms of one Waltham is that Bronx you the noticed on moving symptomatic and pushed where then back delays supply back maybe And from in as just in one earlier

Chris Marr

Yes, thing the no of science and is markets. specific I predicting of point any tricky in to think so those to

the fair permanent of probably and certificate back project not that storage. that’s longer inspections, at we ultimately it’s with taking sure occupancy receiving unique each is think certificate to temporary I I’m occupancy to of permitting do. say and your end,

markets. think you in development have just I

group overtaxed working just and to we are with longer checked do. get it to all each all who of those an through take folks this have of boxes You seems project

it from most would similar to that some So I something XX next. experiencing to related of the slipped developers and major days that, some in quarter that, by to quarter things one of the of it weather some it just just and it that imagine the are pushes MSAs.

Juan Sanabria

Thanks for your time.

Operator

Thomas go Todd from comes of KeyBanc Please question Capital Markets. next Our ahead.

Drew Smith

Drew Hi, good is This today. morning for Todd on guys.

of some the as a weighted asking was same-store kind of the that Ki on of I of obviously. from smaller of a anything in talk discounts and it reaccelerated in the slight be digging quarter from that broader could XX you York markets, Bin rents toward except market Just and bit. to revenue happening about bit reaccelerated if New the markets this increasing those seems differently a little Maybe some standpoint, more that things that look little what’s at doing market you’re lowering markets of about, by

Chris Marr

market answer those is a no strategy experiencing there’s Yes, to the that not. general specifically different are relative in that acceleration that’s

I think, to it rate. goes to – growth obviously

happened supply with would at a look and to San San positive able no pricing been some what period, impact are is weighing others. wouldn’t a impact a you little get the Phoenix, the Bernardino, that I supply in supply the Riverside, at But – largely growth you’ve from and Chicago, at comparable you’ve I markets In particular deceleration, in some you extent, power. seeing there’s Philadelphia in market of markets more that bit you that impact there or When those markets. the building say tough look before. Atlanta, the really those continues the year just got when a Dallas, So than incredible the on the a comp all Riverside, Bernardino, Philadelphia, in a to

factors. generalize. a So be would variety to it’s really of It hard

Drew Smith

talk you And what maybe can pace, then the have seeing and about that forward? thoughts be bid-ask spread, on pretty deal helpful. your you most, front a acquisition dispositions, flow appetite guys. little right the year. That’s great. and transactions Maybe the might you’re Thanks, what switching And quiet be where this the would bit, you guys now? any where been you to over of see also that if it’s kind is the And then moving market affecting think too, on just

Chris Marr

yes. Sure,

quarters for now. I talking things a few about consistent few you’re think seeing with been what we’ve a

for lot product juice high. of highly type rate a very, You have of at which some for quite not to left. that frankly, are very They’re occupied, expectations assets seller are and rents coming market there’s, just market

So needs think, adjustment don’t some of to point either seeing difference there, you’re spread at I be expectations. in bid-ask just trade just or they a and there

I those secondary the for cases from think deal in stepping coming in transacting. seeing you’re markets. instances, and in product I the the more you’re seeing some flow, additional And markets, tertiary think buyer market private

those – an go So the I smaller markets into for in think you just are They seeing public generally keyed those their buyer be who transactions in has the type portfolio. seem buyer either private or appetite of a to markets and happening.

obviously good we’ve many where meeting a of our quality combined with So expectation at we’re upside. point looking just a are volume and very that to market They’re opportunities. aren’t got underwriting

that of opportunity to upside. sense And not yield relative today from capital. perspective We’re a for to earn that paying the cost makes our

So to I obviously have our capacity to made we and also if financial expect for be spots. active, continue to found continue we will that we’ve to Obviously, so. we the transact. sense disciplined think, again, I us, very be pick very things think very, would been But

On continue the disposition side, we look. to

think to I guidance was our XX. X

year. yet haven’t anything done We this

transact. sense we or attractive We not continue opportunities And same also approach then again, But very to may reinvest, we dispositions if were as to to on had something to that found evaluate point correspondingly make again, what sense, made may find acquisitions. at disciplined we’ve we there. this would

Drew Smith

any toward one-offs kind portfolio way, deals you commentary do in of or And there? any guys have any view

Chris Marr

party deals. to have markets. concentrated out have in the smaller that the that there’s non-third- activity portfolios come smaller the the basis, one-off For there, a they again On be out, – tended deals

made out store third-party a our on portfolio. a was – in Lauderdale we transaction, that hole we one to So single-asset fill platform, Texas store one-off the a deal Fort sense our acquired of in

again, So speaks been think are opportunities volume there makes us. to out what find to sense we’ve that there, our able I for

Drew Smith

it. you thank Got it, guys. Appreciate

Operator

comes Our from FBR. David ahead. Please of Corak go next question

David Corak

morning good Hi, guys.

Just markets. top a question on supply XX your in

think And benign MSAs. would changed in pushed supply you’re the that of XXXX, you call, data it the the at and in supply hurricane I suggest some did the that given quarter, view that the the that your of more events on any kind markets? whatnot? of been Has seeing impact in the the becomes back all at of XX least XQ top has

Chris Marr

from deliveries in in was supply stores three-year XXXX. think look hate drum, in will Again, the than again, how to some be expect more few as XXXX You I clear our in increments our movement XX because XXXX these impact XXXX the markets, of less expect in to top a that I rolling I bottom more XXXX had we But would have but outside perspective, little – we than XXXX, I up of very so XXXX really said to challenging have And York top and primarily that’s both But to the things XXXX. the Phoenix, XXXX. it at a we pop bit we will generally, XX We’ve look we in will did stores. XXXX be visibility as we beat the MSAs, in New would still more than into XXXX that volume absolutely quarter, in it it David. from these get closer Atlanta. on out just a XXXX boroughs really of into today those second impact much to and it’s do tends really to the

David Corak

change markets? strategy that’s back specific discounting, market to And turning the or any the more just in then was prevalent Okay, the in helpful.

Chris Marr

a this maximizing pretty an want the was No, into in wouldn’t was mince, I with I don’t in go across-the-board. year would the a call it it revenue we portfolio. to entire and to across the really just quarter, say better there expectation it one was strategy. change suggested but I again, And broad approach but

David Corak

four of in kind XQ, weeks? the first Okay. In the continued that has

Chris Marr

the last five But more days the question, up first rate general in say pushing little bit that the little answer would Street a those trend. but time so, on think opening open to in in in so, or more – I discounting again, or I my my period. bit in said four also Yes. first weeks in a the I a – same

David Corak

kind revenue the trending the side, a few us you trended of one it’s the far. quarter and And that how with through of rate obviously share for days. how last just into snapshot me, October Street a thus Can just

Chris Marr

coming have some It really back little much also then would we Yes. busy bring hurricane, the out late September. somewhat were in of bit down as Street discounting and a bounce that didn’t season, around throughout impacted some Obviously, in quarter. got reductions that the seen we rate by the we of

if last today, where I on today, they think, snapshot a were are you from look rates year. at about Street this up X.X% day

Operator

Nick Our next UBS. ahead. comes from of question go Please Yulico

Nick Yulico

you If New next Page your Thanks. the How deals. be at Hi, development all completions have going everyone. same-store XX of York of properties entering your I many look are where year? C/O your supplemental those and to

Tim Martin

don’t We as purposes. it’s stabilized expect comparative Tim. to for any they won’t be of Nick, them Hey,

Nick Yulico

Okay. can just me the the And threshold for – from just into the putting remind properties what’s same-store? you

Tim Martin

Sure.

has comparing state-wide will them. been of policy useful think a performance. same-store comparison the analysis two when We to beat years Our is continue and

enter our be stabilized were it respective today. prior to needs – occupancy to in in a for the market property a year they within that the pool, year it needs have for So to the achieved to

XXXX, So eligible these so of wouldn’t entered next they stabilized same-store stores – into for pool none been have stores all be of our will to these be year.

Nick Yulico

Okay. thanks. Got it,

Tim Martin

you. Thank

Operator

comes question Evercore Gwen from Clark of go ISI. next Please Our ahead.

Gwen Clark

running of properties, unusual, is or us little through can a G&A how it bit the the walk third-party you operating expenses? account be through allocate the you but income this for management and whether Hi, cost

Tim Martin

Sure.

management let package in the here find for the page me supplemental third-party income fee So right you. – the

direct and our our on statement income line look management column there the store, that expenses on you associated all and it’s property included by costs with other/eliminations owner. if at third-party third-party personnel the in reimbursed fee Page pushed XX. package, property property the XX consolidating item a managing So are of any costs own is including are detailed And income supplemental its and specific Page through the the directly of on

– our office that which also would our costs run expense. our overhead, manager, other well to property in costs administrative be column effectively, as the under other/eliminations as district a stores expense Our property as property include back would third-party operating

Gwen Clark

so when Okay, we see…

Tim Martin

Effectively, the of that is column, in totality that business other/eliminations.

Gwen Clark

Okay.

when So indicative see company? not what’s million, costing that we $X.X negative really the that’s of

Tim Martin

there – of there to No, as other is because office district of costs the stores all are well. or There property-related stuff, in third-party are through stores, manager, whether the that own support all property our back overhead, of all that. runs the it

and third-party of business management profitable. the So itself is in

through that our costs Gwen, the our We our have worth to XX% is particular business margin costs $X.X the million talked also relate – a through of own balance well. being What this little stores. as this find that throughout same-store have we unusual in and the relate about you there overhead, of quarter, quarter might hurricane said a then number it’s that running flowing in the to roughly bit years that, column that there, look not that

Gwen Clark

super that’s helpful. Okay,

bit I it just little of confusion. caused think a

occupancy can you’re and a hurricane next on more impact the walk how the probably over months? through Florida about thinking just nine to major on you the markets six note, So of fun us there the

Chris Marr

Sure, Gwen, it’s Chris.

pretty the ramp-up a significant So before we we actually hurricane. Florida, in what was got saw

up up. year-over-year a XX% leading as week throughout Florida about in the basis, percentage think I rentals were

things XX% there XXth – another up ending mini was continue we slowed days Rentals then the storm, the the seven for have And Following of September. nicely spike. were down.

this tracking I seeming, vacated. would the week to moved the say at point, people So prior based about our of have on in half the hurricane who

six that would sense possessions those for damage in period for storage is are we sense so the the customers that that remaining of Florida obviously, But or other time. store their there my three would to over the a in need guess. keep going was in And longer on out I have the some stay whom, likely from that’s long there in our to and on is to customers impact sense revenue next have bleed most months time, to the at Florida. hurricane Obviously, occupancy some our be but a we’re that

Gwen Clark

just impacted one markets particularly that then Are impacted? not any And or within quick were there Florida follow-up.

Chris Marr

perspective both? damage or or customer a a From from

Gwen Clark

fundamentally From operating perspective like today. higher or have occupancy

Chris Marr

more Florida Tampa, Yes. customer say, Jacksonville major a the I markets. saw than on and basis the volume would other interest impact of on and percentage rental

Gwen Clark

Okay. helpful. That’s Thank really you.

Chris Marr

Thanks, Gwen.

Operator

comes question Wells Fargo. of ahead. Please next Todd Our Stender go from

Todd Stender

Hi, thanks.

The third-party have been to stores in number, can supply – pretty any because decipher seemed management common tougher new of I you the Is XX Any guess, from online of high. seeing? the anything acknowledgment you’re the you QX an themes there competition added capital compete on and quarter? really

Chris Marr

Yes.

to this for number I prior plus the don’t here growth it split, me minus terms we assuming newly that in manage. got next of And and that, program. I development year third-party overall constructed run existing year spectacular think split, that even good of but pace into perspective. actually from of two stores a right has front have even the the in a quarters, we’re Again, or they on for really just between in nice we’ve open, will that pipeline, stores going are stores opened year, opened, are then that and think have a I a

us a think Coming coming of I folks recession, having et they it’s were I may it’s to to cetera. say, combination quarter vary existing about the timing have expected another – cycle, think robust an because XXXX, into were you awful open open of quarter. I fourth tough time right? if very – that model, this would operating we some we really But stores slip store the will again, very we’ll owners. saw marketing a their have a think owners out And transitioning, another a will robust are struggling and and lot in of but very

there. pretty here the And gains is years stores The what some owners doing are seeing we I saw longer we who industry, are think a well. in spectacular we’re those lot As occupancy also the experienced no storage full. relatively stores now existing that are of of

So quarter about, small is and a do attributing in your and difficult a we to quarter, what the science we price things individual basically for that ability talk of had that technology great here owner, all to replicate. to third owner,

there. So left we’re only they is can from each us effectively help add their because new how come to to customer for us revenue folks starting to maximize and value they’re see looking lever

On manager can who the stores obviously as third-party and core our development be and CubeSmart. side, that of they a it’s a steady their flow in have they’re markets just choice choosing

Todd Stender

to the newly at last helpful. the C/O Illinois. North going is – deal developed Riverwoods, be of other would about Beach the question very Palm two And my newly the One the in project, is be That’s properties. two

in the So they of their pulling QX up XX opened just occupancies are Page supplemental, pretty and strong. and QX,

You’ve been a the that lease-up in just Beach just from and opened occupancies in steep. look QX. QX. North what’s that Palm because And pretty C/O already markets in the opened then XX% incentives, in has What the occupancy XX% are is deal discounting, landscape particular those the River is what got Woods like that

Chris Marr

is Yes. total look at it’s square North Palm you a as – rentable Beach’s store. The and feet, know, the it location, store, relatively small great you if

So XX,XXX we’ve got rentable.

a of the indicative a good just store constructed pace, nicely a and that store. is small so in And in location that’s a XX%, great relatively submarket somewhat very

discounts that at maximize up store. the or And how always to strategy we in We a reducing long-term right so believe to excessive of do idea asking offering revenue in particular order the there, not developed quickly approach. that, drastically change is rents newly no fill

surrounding. more we your certainly, I store, of more. So Riverwoods, to good is a is in XX,XXX-square that little going store location. In be very discount pointed out, it which store, part bit it’s of price as for of suburb the competitive think foot is quality. part size, that a there will that Chicago little high-quality is, But than very with pretty competition would you XX%, darn equal great say of I Certainly,

quickly. fairly up think no the a early renting discounting cubes we from quickly, again, strategy crazy pricing in I Riverwoods, also in probably out some would strategy which larger-sized So store the there. of or push our in months benefiting would are occupancy like

attractively full, work are As from located little larger-sized a on those gets out. the there harder cubes bit

Todd Stender

you. Thank it. Got

Operator

Capital Our comes go of Jeremy from BMO next question Markets. ahead. Please Metz

Jeremy Metz

on rates today? what did your Jump a to follow-up move-outs you of Just rates comment the in a if maybe more And guys. today late, broadly, I Hi, little but that, as your take to to move-in kind sorry on is so this, are relative market? just wondering missed relative XQ? where in-place

Chris Marr

missed of all and our sorry. that Yes, you XXXX guidance, Jeremy,

Jeremy Metz

I it. knew

Chris Marr

Yes.

in-place about higher. this little relative a gap in are the the little Street, So at customers quarter. bit vacate X.X%. look and churn rate the in quarter, the it you if half about look the rate lower end at at down it’s About of to there half customers you was at even point if And the and bit at a rental at the between the

Jeremy Metz

just can how And to does you X.X%, it? have in us, remind were that you that where XQ, you compare if

Chris Marr

move it in I around. know. you, so can sure, I’m year, I seasonal, QX. was It through does to very we X.X% remind tend go It’s though, don’t the about not as

Jeremy Metz

think that a Or reset? should out, I look X% much Okay. the really we seen tax And as pretty increases the better portfolio wondering I’m call how about expense of the question, elevated how obviously, – tax of you’ve expense, Tim, next at more year. this this it, or year? point just has much some then, of similar fair? we level guess, maybe healthy Is

Tim Martin

fully of we looking years, of see but better of XXXX. everything’s outlook our I which improved think good taxes the for little valued like not going Ironically, that approaching line looking couple and bit is Yes. pressure point is increases I where for think, you’re guess. thematically, still short in But to guiding, sector we’re best still guidance. at in two, type don’t sector bit estate news, the our got next issue, for a XXXX year anybody a a just still I little X% at actually best my to on don’t think item. probably issue you’re any embedded where we like feels We be is that mean, continued I a a the guess in next three X% feel real

Jeremy Metz

it. I you guidance yet. Appreciate See, Thanks. didn’t guys XXXX knew give

Tim Martin

Thanks, got You it. Jeremy.

Operator

is Our SunTrust. Kim Please from ahead. go Ki follow-up of Bin a next question

Ki Bin Kim

Thanks.

here. quick of couple a Just ones

moving higher? about that realized Is that X%. it’s else Your grew helped by something Or lower rent promotions?

Tim Martin

It certainly impact all – is contributor, combined a that is lower things promotion revenue. so it’s

impact. a it’s blended So

Ki Bin Kim

average your that you promotions when of your are competing less you quarter, your probably the But And did average lowered the properties? for on-portfolio now properties make ended promotional to like Okay. Or tougher this versus closer question. promotions type properties now on market?

Chris Marr

effective to rent. because we one look at an that was tend tough Yes, to answer a

So on competitors. of it depend degree the the will

we’re would if stores are effective market CubeSmart, par. I think big we just rent set competitive bit by set there look a there the than the competitive higher you the where a below it’s are being to that where are is there it the markets markets at we’re X% took pretty the I range. are of just say markets other what a country, we few if asked at little And charging. across where X% and around

Ki Bin Kim

adding lastly, in – just, or already have the starting for markets obviously there’s in So developers lot developers they Bronx, away? to seen still onboard. when like ramp-up? do they more a And are projects comfortable they like a a somewhat that at Okay. coming are example, at of that, how big developing comfortable supply Or Are market this are that staying properties they typically, pipeline point? completely look

Chris Marr

look they be probably their risk, developer approach, have very a driven forward. If they really equity structure not going closer. it’s would game on I’m a they sort that to fee substantial care it the and supply. depends sense that If under skin lot upon little yes, then, trying have I they would bit is or the it funny, largely absolutely, market is in financial a at the little of moving but about in which less new what’s

Ki Bin Kim

Yes. sense question. a gets worse The that’s reason market market better, a it in us on I like or give – average why gets supply if an that’ll probably asked for them there’s answer because like if maybe for a a like that that is maybe bigger I asked

Chris Marr

XXXX, X XXXX in in now drop as where MSA. last couple we we in right I number and good mean, we I we that over And Austin XX good we Austin so and and Austin track, that think looking of to a for probably new a what developers at I again. are in a look market Yes. of from see a had X sprawling, market we Austin is a use XXXX the years of X you’ve influx think X seen track certainly example supply size. of XXXX, new pretty in the again openings is in would XXXX,

minus generally opening not all So you few that clustered, instances all but they’re and these or there where base. customer some be necessarily all are stores same after time in are going have the same to plus frame going there’s a the are

assume to – got what from it risk. the have et of Texas get meetings, capital those own going folks influence a and will that cetera, that who certainly and in like market You’ve we on are what’s keenly at the SSA aware their who are

Ki Bin Kim

right. All Thanks again.

Chris Marr

Thank you.

Operator

Marr back the like would Chris turn over This I to concludes for closing conference remarks. question-and-answer to our session. any

Chris Marr

for maximizing of that with in advantage systems Obviously, markets. opportunities in quarter. results. presented the on the everybody, our Well, our be Continue produce looking us on listening. to refining focus performance to best order the in Continue first, dialing to thanks, for competitive to focused each our pleased in we’re and and

back obviously the again. updating XXXX So a on Have thank you. all fourth quarter on our when you and weekend. We look forward great thoughts together we to are

Operator

you The presentation. for conference Thank has concluded. attending today’s now

disconnect. now may You

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