CubeSmart (CUBE) 27 Oct 182018 Q3 Earnings call transcript

Company Profile

Participants

Charles Place	Director of Investor Relations
Christopher Marr	President and Chief Executive Officer
Timothy Martin	Chief Financial Officer
Juan Sanabria	Bank of America Merrill Lynch
Todd Thomas	KeyBanc Capital Markets Inc.
Smedes Rose	Citigroup
Ki Bin Kim	SunTrust Robinson Humphrey Inc
Jeremy Metz	BMO Capital Markets
Eric Frankel	Green Street Advisors
Barry Oxford	D.A. Davidson & Co.
Jason Belcher	Wells Fargo Securities
Tayo Okusanya	Jefferies LLC
Ryan Lumb	Green Street Advisors

Call transcript

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Operator

Good morning, ladies and gentlemen, welcome to the CubeSmart Third Quarter 2018 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]. is event this note, being recorded. Please time, over to this I Investor would conference the turn to Charlie like Relations. At Place, of Director sir. Please ahead, go

Charles Place

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

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

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

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

Christopher Marr

CubeSmart our team third quarter solid against as continues plan. execute to A entire our business Charlie. very Thanks, report,

maximizing as we to platform best-in-class focused we our the markets serve. and portfolio in opportunities remain continue well, serve the as high-quality Our on

California. in Chicago markets began in was apart from up in Looking began those across Dallas appear and XXXX, XXXX top supply in ramping of XXXX, by our all in XX in to MSAs, our top

of this growth quarter the same-store a many the types. relatively other revenue X%. deceleration revenue X% of Following way consistent and growth peak quarter-to-quarter in XXXX, modest the through fairly seen quarter’s we property of by is CEOs same-store same-store of envy first growth growth That have our in

to our proprietary interesting expected observed specifically XX declines XXXX we our trends. saw XXXX see expected a period. new in supply project openings, the in Overall, currently analyze MSAs, XXXX openings, to our we’re XXXX, that from we and we rolling period data start to ending for three-year fewer to looking currently development compared XXXX in XXXX. report XXXX, cycle, XXXX-XXXX we period or rolling a that the ending top and of significant in saw When the we XX we openings. in the to Dallas, increase top increase As MSAs XXXX-XXXX, some store projecting three-year at XX% store trend compared for observed more XX% are an from earlier than MSA new than Chicago at even deliveries three-year

sequential comparing absolute supply to a modest comparing currently been in only mentioned to supply like MSA XXXX. the observed even the new decline D.C., recent previously three-year reacceleration three-year have leave an the revenue of to those strong XXXX with operating new new same-store the to Washington, In York the directly three-year absorb by XXXX. The openings an store periods I we an D.C. results in impact to XXXX to increase levels also both the four existing Chicago the are I power that will we in with we strong MSA demographically growing, of which forward, about MSAs. experienced of part CubeSmart submarket supply. XXXX supply the example even New store rolling dovetails have you Dallas, Bronx, the Digging to same-store is of in which further, XXXX in rolling shared. excellent sequential observations Washington, Looking acceleration, Chicago rolling impacting a anticipating not a been in expect data This in and experienced of XXXX driven where totals on just most acceleration we X% information XXXX increasing. and revenue based in growth markets our

draconian revenue of does that new not some supply growth have will impact the as the impact same-store it appear if First, have feared. on

starting peak we like into that this may, we of the enough and feel be deep supply is the look major it to point. the reach Second, markets the impact will getting cycle an development over next in year, inflection

with smoothly going that likely recover capita more markets square cycle now to our new supply to through and will impact levels higher are third navigate the I in our on of external out the experienced and results, footage for population be on will activities of strong more and per to into And new guidance growth development than relying Third, growth well-located ranges. demand, call balance Tim? turn assets supply fourth, will significant average the supply. color markets quarter demographic increased over Tim able slowly.

Timothy Martin

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

during growth $X.XX FFO, operating on quarter headline share Same-store XX.X%, was of We last good property and of results expenses quarter news Another same-store in expenses. year. result in reported the the evening, occupancy our quarter’s some in which revenue line The with X.X% from X% quarter. XX.X% to down solid same-store at same-store guidance XXXX a last items adjusted, report. growth of results as quarter growth a range. in beat $X.XX ended largely X.X% line several yielded with were our expectations to per including NOI third

in print grow opportunities offset pressure and year’s criteria. due during well in over external by Las on pace in X.X%, associated last fit driven we in million, quarter as Vegas Texas that taxes and was in inflated to $XX a costs, rentals one of maintenance last in ticked And as estate one timing. and hurricane and and the then found year advertising of costs, Washington, Angeles repair costs, higher largely Houston. the The stores up investment of under basis, on that utility recall You’ll to our a growth Expense savings purchase by growth bit, as Florida one with by one occupancy October, store D.C., closed for activity. was three only acquired continued a Charlotte. just wholly-owned real several our we we in On Los on

our single-asset grow target good finding we’re to transactions opportunities, So largely markets. expand and in

venture fourth on lease-up added and for $XX we to around quarter acquisitions to is venture for over two focused at asset end during stores two expect just more IV stores another million. Our store of Right that the our quarter that HVP during deliveries the million, six Exterior With the $XX package add the Page that currently of queue, our in remaining expected on on as projects have opened detailed in throughout XX. projects development Street in online, quarter, Bronx. we with XXXX, supplemental coming we one development our the

leverage platform, year. as attractive in provide CubeSmart the operating third total Our stores XXX third-party added year-to-date acquisition opportunities further road. This a adding this allows growth bringing in quarter, expand to we meaningful XX some and added brand the our to us down platform our management likely the stores way, continued stores will

during under front, at-the-market an price XXX,XXX sheet balance the $XX.X million program, ATM our of per quarter, raising average the we share. shares issued $XX.XX at On

as to XXXX is fourth as share very FFO Our to underlying FFO narrowed per $X.XXX with include $X.XX. expectations. same-store a Highlights revised full-year earnings Wrapping guidance the up, which revenue, guidance, from continues outlook of play midpoint We per a NOI. our and guidance release in range $X.XX out $X.XX an quarter as detailed $X.XX, of in and in share as well of are assumptions to last adjusted for the much improved raise line expenses evening. our at adjusted introduced

Our results operating the of our validate continue platform. to strength

We to growth strategy growth line a external BBB, on BaaX with in our continue balance execute investment-grade fund and sheet. disciplined that

we At for up Denise, for on call some open again, thanks, call morning. the questions? us So this point, why joining this don’t the

Operator

would I Mr. Martin. be too, happy,

now ahead. America. from Bank will session. will We question the of be first go Sanabria of And the question-and-answer [Operator begin Please Instructions] Juan

Juan Sanabria

Hi, good morning.

Christopher Marr

morning. Good

Juan Sanabria

bit a and bumps Just increases rates? pace on leases to offset help you your weakness about increasing to new hoping street to of could strategy rent existing? the what you any you’re the doing Are little in or the talk the in tenants magnitude

Timothy Martin

Juan, it’s Hey, Tim.

customer haven’t We increases. change had our any strategy to meaningful on rate

to then bit, every our still along pass XX timing anniversary six-month We to but the that they customers single-digit reach that high and be fluctuates we to increases – rate have from in to increase range of provided we months perspective, continue their range. thereafter, continue a tends a as

Juan Sanabria

a date us the give related you could supply? third basis a rates average to issue, in softness rates, that’s street the of on effective any the so or just just if in due year-over-year quarter then were increased to the seen And and on quarter hurricane Okay. been what trends deterioration? you’ve to And if net sense comp the fourth street

Christopher Marr

Hey, from Juan, it’s Chris. directions. I’ll that take both

the were from about at we September, increase X% during quarter-ended rate year. prior So cubes the over renting face the

basis asking where basis activity XX. are XX That Today, in October point shrunk if the Houston hurricane part in rents the contributed XX about Florida. in for impact, number. last are we impact, was activity hurricane from you And has and if and from the – think the today, at on a Florida, they’re you last flat. think year points about spot If hurricane physical XX to adjust the you rates in to about September occupancy large year about and lower that Houston

Juan Sanabria

you. Thank

Operator

ahead. The Thomas go next of Todd be will Please question KeyBanc. from

Todd Thomas

appreciate Hi, the thanks. Good morning. new I on comments supply. Chris,

the a that there. you four your didn’t new of major you of to of sense One feel mentioned markets, impact but the get takeaways expect in supply the was peak timeframe

you to supply XXXX, the do that the to that else? that realized? of of in Cubes from you’re that when rolling be be in was mean impact that – about impacted Then expect comment increase was or the expecting impact three-year X% something peak a mentioned. So Does portfolio there XX% sort portfolio pipeline you and –

Christopher Marr

Yes.

we it competition to to XXXX. not in the So expected of expect mean, impact XX% does portfolio be

We and on expected will share guidance update have earnings provide fourth our we we XXXX. historically our as quarter release when for analysis

in XXXX the So the ending the rolling we numbers raw X% in three-year markets. period to that top our in XX going open of XXXX versus think was in that, are stores just

we’re that the new next of or similar again, XXXX. peak, quote think, I exact the in terms over suspect, relatively on from in as In supply, so, results I we’ve felt my was XXXX see would going to year impact

Todd Thomas

guidance same-store in the expected in quarter because line that. Okay, on occupancy was the operating XQ the XQ. wanted that’s little revision to top and then a the better to just, little bit dig just a reflects I than And to helpful. bit But from fell strategy

You some your sounds that’s provide – in a versus how since But that’s occupancy slipped across hurricanes bit time And operating little you’re the maybe a public in portfolio happened it Houston. managing just but like, a heading here It’s little happened quarter-end. it went bit broadly, at what color and you then portfolio cited the bit into season? on in and more company since the the rate there? the little little bit can those a in more that, improved strategy explain Florida off-peak the to first

Christopher Marr

detail. will into the Yes, Tim get Sure.

hurricane think, felt was Florida third I of entirely the quarter, Houston in almost the in and the physical the in occupancy. impact

XX of majority in was in last September that moved an October at And largely down of overwhelming in artificial, all customers Florida, because occupancy year. so particular, those delta

So guidance. don’t provide well, of our – about guidance the beginning the think if you we at

we the in occupancy physical about year It you of the basis but minus of XXXX, or from XXXX If trend more beginning a is if expected, I’ll pull you XX give is where all commentary that. let as detail out the to Tim we impact basically saw continuing points on the you of at think what little have bit exactly plus the hurricane. would

Timothy Martin

the difficult largely, not, really add to is quarter, to entirely that. mean, if is a certainly the number to the of in reality don’t occupancy third the latter-half up lot against I attributable the hurricane comp activity. have a I whole

no So comp change deeper really of year ago. just focus, is all, our tough question what strategy activity a resulting a what’s your and the at hurricane given our operating

Todd Thomas

balance occupancy that occupancy improved has have guess, been a quarter the fourth bit. portfolio have year? I Do improve even expect continue comp I would here standpoint. that so, so an the the far the you would difficult thought more across But throughout a little to of occupancy little see from And bit delta to from

Timothy Martin

is see and of occupancy most diminish. you difficult the – quarter to then the hurricane the the think, fourth I beginning of at tough very starts impact Yes, what occupancy is comp the

a start within related to they of to who moved folks year move in certainly outs and – Move in Florida in those that in move As ago, out. moving out. started days to started those XX

by comp so the same end from And the it was difficult quarter. standpoint, the but throughout you be there quarter. of some the the the year, here the occupancy time a the tougher And get as comp impact at to will nearly not end third of wanes

Todd Thomas

Thank Okay. you.

Timothy Martin

Sure.

Operator

next Rose will question Smedes of go The ahead. be from Please Citi.

Smedes Rose

outlook next either maybe to so know how new that specifically Thanks. I And York? over year give think and in important of be Legislation just asking in you in you’re on a terms supply following in you said you could put I you’re New to light markets about Any just place of for or what of wanted the more talk update. about the rates think the York is I But are is updates kind New seeing the in supply? of and going to ask place? you particularly and you, what Zoning seeing you kind supply that formal maybe shortly year, in just

Christopher Marr

all of correct. first first got Smedes, congratulations, your I name

the is of things The that the time three I period, given the it’s you. over along changed plus New going back things think from supply, We see talked for So that York it amount study really for numbers much haven’t on and in Bronx. those interesting an first saw impact case to takes And sort time. have a what construction would get so. we how we or of going about move months huge

as Brooklyn the forward expectation that looking going that about that my Brooklyn, out the bit going will that think that, way we increasing supply a backwards. would to you is view the we If be how the in is has – play Bronx think

we the in As up points the we our first in XXXX basis third points in XXXX. in occupancy points. about up nine, XXXX, I on by at look basis we’ve to are its to rate points impact XXX say and feel first XXX our the same-stores that lagged we began and occupancy I in the Bronx second time had quarter we peaked and and XXX picking still points, XXX of the basis supply and decline. and XXXX, XXXX, quarter By of Bronx about we’re on of occupancies to of this physical began really And quarter the third The asking the basis basis declined the occupancy in back QX think at would than impact it year, a quarter saw XXXX XXXX, Rate higher were XXX then we ago. of back lag. come in positive. quarter close of year the been

of then peaked over asking in XXXX. recover to period and second year the XXXX of we quarter and fourth quarter So we the to positive negative today and asking began territory. That up the drop to rents same see are in rates negative last began the in drop

are our we’ve look a So supply we’ve period. got I think, even on increase that’s look as We like foot there, uses would But feel to to see that as they about supply. Texas the backfill do in is got out relying capacity to per we population going that, like the York, and we low arms talked supply population we’ve we every country. like that on you rest it. rolling market New to in of new new out Brooklyn, most population in The storage expect the square where like the growth, in material as are is three-year we forward, – around the fact just markets you not frankly

to in all. Queens currently we Bronx a Staten we see at will and anything don’t the in do we our in portfolio Island lesser the then to the see from extent Brooklyn and XXXX extent So a impacting supply in lesser suspect, headwind impact,

Smedes Rose

you And sort of a a contract? unaffiliated, interest third-party Okay. some just pool, in of go your versus on management third-party just minority do then of on facilities sort have number what just equity

Timothy Martin

don’t at Hey, here. interject Smedes, that that you answer fingertips, to my at you question that answer. here have let but us give an pull we’ll some that. right and I get I’ll point

Smedes Rose

All right. Thank you.

Christopher Marr

Sure.

Smedes Rose

That’s it.

Operator

The from Please next be SunTrust. go question will Ki Kim Bin ahead. of

Ki Bin Kim

Thanks.

might boroughs it in Following supply, water up of us kind just sense on wrap the last you for and up just so of what all you question that expect three-year we this when on in your deliveries XXXX, XXXX, abate? get XXXX could a like for

Christopher Marr

Yes.

So guess, XXXX, XXXX, basis, see rolling all XXXX total XX new to to would XX. a basis three-year And a boroughs. is rolling the then through XXXX in expect – number we openings that I openings, on we on new

Ki Bin Kim

XX.? You or said XX

Christopher Marr

XX.

Ki Bin Kim

Okay. And should do the be similar to in York? peak you your commentary, New kind of national think XXXX

Christopher Marr

Yes.

Ki Bin Kim

And your or the that’s that was growth starts All new quarter dilution if have is share, million. XXXX FFO openings. FFO for per you by about at deliveries, $XXX look X% from year-over-year about impacted something I the right. If development

when pieces $X.XX the So put net I this should of decrease increase those in impact to two or year? $X.XX dilutive differ together, a

Timothy Martin

Tim. it’s Kim,

looking? understand let of dilutive or impact the question, you’re again. development pipeline, XXXX the So comparing and The XXXX – to impact me XXXX prospectively the forward

Ki Bin Kim

forward? Looking

Timothy Martin

has in forward, is relatively relatively we when XXXX, we in think, likely come non-stabilized our likely be to pipeline from I of XXXX guidance Looking has the been amount will that because it’s be as it provide XXXX. development in flattish, out where come product similar

So from dilutive as to is think we stable the impact here relatively I XXXX. XXXX think transitioning about

Ki Bin Kim

you. Thank Okay.

Timothy Martin

back just Smedes, question, to next the to go before your hey, And Sure. question.

the ownership XXX of XXX as you. little XX% as Denise, So of is that CubeSmart ready count next manage in XX% the XXX venture stores, answer XXX have question. percentage think, have from the some Thank our one to that to XXX XX% those for I one. we’re ranging We

Operator

will Metz from Markets. of BMO Jeremy Capital next Very come good. The go ahead. questions Please

Jeremy Metz

I to will than lower it go release what have guys. correctly, sounded to been saying just than wanted prior, a maybe it were and XXXX like deliveries thinking, This and If maybe the forecast like supply your market be heard commentary. Hey, back XXXX. feels XXXX less I opening thinking. you less the

lending, So pipelines returns out or there tougher anything overall to, moving you that supply in impacting can lower point in? particular anything maybe

Christopher Marr

Yes, Jeremy.

be clear, I to or just data and yes, with, new That’s all XXXX, the right than something XX of on have So delivered. caveat on what is same, year the say news. count impact this XXXX based is XXth I opened XXXX. on existing it’s the now in in we MSAs. fact, January of The stores the of thought top XXXX did, this than is January our not again, delivery so would last going not XX. quarter, different of we’re Xth to will XX to all December in whether delivered XXXX, or December – it less has

will bit little et move around numbers as these hit continue year-to-your a people to delays, cetera. So

expectation I the where good I starting on And consistent, off. type see Dallas. to think, of you Chicago those touched of a fairly think, saw drop the themes, impact are see again, I is a while the early. general, in supply large markets, markets certain and you’re

I factors think combination primarily. a it’s of

You’ve new will pick seen pretty significant market Dallas. a a increase like supply in

one have didn’t just You year.

XX openings in this XXXX, expected year. So, XX XX in new had XXXX, you

than significant it’s effect, in rental in a down rates like ramp which Dallas. been had market a So has a compounding

in the when it’s storage. are market, look you’re rental where or you occupancy, I’m of think guarantee combine tariffs all up, getting find XXXX were significant submarket starting new less. looking that to Dallas, physical are pro going rates where was rates finding make five are forma that opened and costs meeting mature. just I’m in there And at those the forma from those finally in original I in be sites rental you’re sure that if four they pro to a I ago, in think they’re down those their any zoned And impacting hard anybody are built construction or but down. that, returns and exceeding market And are I XXXX, to available time sure, So think you mid-teens. cost like their of also factors for very stores supply land, occupancy, that that today, harder labor, years I’ll their or

in you’re trickles I of you that may or year eventually meet to be that back, four, disappointment through or penciled And five the time. may the in year six. likely many over out think that while starting So, stabilized that it’s going fact not just accept years be you market it sort three return to

Jeremy Metz

Yes. That color is helpful.

increase side So one sorry? like up in sound on it doesn’t seen Go deals just or lending more broken dry haven’t ahead. you any necessarily necessarily, –

Christopher Marr

I you’re don’t think to That’s self-storage. right. darn in resilient. the I mean, just is It’s going see again, too product distress

bit the you’ll think relative outcome in to when I who just disappointed pen were folks they some paper. little see just a put first their hopes to

Jeremy Metz

quarter. All a those of you after your driving on rents And you markets. little that? assets a Anything color in existing can give then then occupancy of had in the the and terms right. particular if pretty quarter relative bought to profile And in acquisition in what and activity in pickup you good the

looks opportunity for the those? what like wondering Just

Timothy Martin

a from nothing Jeremy, standpoint. strategic has changed HI,

in that where them stabilized just to to a quality lease-up. them at acquired more over three, be on think, a the opportunities find during that they still quarter basis, and all found two early last stores months transact. individual in work that we we one-off few stages transactions, to we They’re markets I The three the that assets third two the bought mix in three criteria, of the the found of and on are largely four and point. do here are this we we’ve target closed particular of quarter-end, which key that what actually here to a we fit markets in is subsequent our try that are tends here

stores Los at cap line were acquired in which in rates stages. were stabilized bought areas, to asset the cap the include that market And acquired we Angeles were largely the Washington, Houston the both in in in then that rate. on so with early store then that quarter-end, store Las are we three And And would a D.C. Charlotte our and stabilized subsequent in Vegas. that and those largely bought are stabilized

back-half So Jeremy, question, the your what I’m sorry? of was

Jeremy Metz

it No, was than like on anything then nuanced activity anything that of is pickup any really just market And mean, activity I increasing there? sounds part. sort in front? overall the this out It more on activity?

Timothy Martin

Yes.

I think that’s a fair characterization. Yes.

Jeremy Metz

And the go rate or terms deals. back sorry, on change say, a the any to that just what in there those relative of Is would cap for ago? stabilized year was been rates in three cap to, have

Timothy Martin

Not meaningful No. in any way.

Jeremy Metz

guys. All Thanks, right.

Operator

will question next Green Eric go ahead. Advisors. Please from Frankel of Street The be

Eric Frankel

JV you. management on you and lost it you XX some talk acquisitions look you partially – the little marketplace about business bit third-party for just like about Thank bit the the through also added and a maybe Can maybe little It XX. competition in comment stores, looks a looks further that? like

So can like? looks maybe that business you comment on what

Timothy Martin

Hey, Eric, Yes, at – be to continue trade active very the shows. we business thanks.

coming processes been validation We that owners folks more stores that here in And of be referrals has more our our quarter who our I – others platform think people our come run part from XX of the to manage a for platform. rate to phone are of are it’s and great XX to active to it we very us and continue calls a us better and a existing many our from receiving referring be that two and for for business. third-party years. continues real which

getting a and operating recently interest little little the of open more to adding that stabilized proportional of majority now. assets a little more the been a in We opposed platform. were overwhelming are making bit – stores from as a more to what bit had more It’s starting to having a opened balanced see more we’re newly more be getting shift coming to are up bit

continue the many on that stores of owners and and grow small we off of But and come our have meaningful to a in lot as that other for it that, is adding platform, new sell a the continuing CubeSmart various we As the focus part assets to we stores their far the platform numbers reasons. leave with more do stores brand. because what to

lot We It the makes marketing have efficient It that from it a and pins more of perspective. leverage allows map. size on more our platform. scale to a us

And to haven’t so grow continue business that our of past certainly delighted in the be changed competition, also there. we over this to It have of business years. that ability economics the Despite is at couple here are their at that competitive the the to that. and trying terms others platforms. grow We are really much all

of we value job get for help questions and and And our great all so the and are, the we out answering value we team create those all about a continue them. to what does the of are platform there those and showing can owners we who

Eric Frankel

that for you color. Thank

more question, one we’ll quick the Just into queue. go back

popularity, a given sources supply. a in there’s regarding seems second of the like appreciate the of certainly maybe supply, financing. and specifically, availability are it sector’s the can both growth the little how of equity debt Just I of But derivative bit deceleration increasing.

of a that supply result the popularity you possibility a the do like XXXX, still amount healthy see of where think terms the ago? that’s to couple supply have a to was their do years that or could So pro going not feel going couple of some to hitting surprise available, XXXX, of developers financing you that drive sector’s of forma last there’s levels you and the years really it as witnessed in

Christopher Marr

heart, can obtain the if Yes. develop. financing, right, at mean, Hey, developers going Chris. I they to this its is are

markets, on that see are of think which, we’re financing start right? it’s to and of as up. I And first pointed see to think, the think the supply now just new first it’s isn’t our impact available. I our I some because top is I to XX, dry I So the think out, commentary not

it look sites on the to just will markets. of been think, already when market built a it’s But have the at returns in lot I prime market. from and they move those

imagine But So to rates. you large Denver, pushing very available and work Nashville, in Rock in just levels to going Little of do their tools secondary down supply, the else. us. that today markets, develop their the drive and numbers just markets, impact financing or truck some But developer move They’re isn’t where on and some of doesn’t really of I of Raleigh have in those markets Little haven’t openings where other of is in influx rental to on could put and any deals parts you in make can’t new seeing back Rock. the seen a Denver, sense easily of that in make particularly Nashville going something may you’re in

don’t we analyzing more of you time constructive. There’s that. out help be on all going whole a scale more data trying with to what’s lot that So of in providers a national sort might spend

Eric Frankel

you. Thank Okay.

Operator

The next will be D.A. Oxford from Barry Please question ahead. Davidson. go of

Barry Oxford

when big very you it’s small over-equitized matter. guys any type at amount? forward? your quick, comes that But did Real minuscule, issuing picture Thanks. doesn’t And really a it to it ATM, very, just guys. your from very, you amount. arguably Great, looking a of equity, small I measure, going think an So question, issue do in guys debt by about why even could how that just position, a you be ratios know

Timothy Martin

lot Hey, Barry, of and miniscule. a Tim. That’s it’s verys

feelings. hurt my You

Barry Oxford

very realize just it’s I clear small a to wanted that, look, be amount. Well, I

the issue harping as bigger picture? not really much I’m I’m So as on that

Timothy Martin

appreciate that. I

Barry Oxford

Yes.

Timothy Martin

And something BBB+ our for look growth remains capacity time would that credit sheet end Completely are want be today, BBB. a a and BBB, consistent are our rating. there And we if that today we at a acknowledge the credit very metrics with the opportunistic appropriate and that the rating. be when the us conservative company a if metrics credit which external like out that think more lot to than be BaaX to manner balance that on see attractive of associated they fact at allows with the you to typically look we that’s is have at at plans. rationale We strategic the that we funding the and about opportunistic operating, in execute

where is day in interesting our that a execute ability equity plan. built something attractive, not the continue external a to come at growth us find there on we to time could perhaps to we’ve valuation the So

certainly when plan so valuation at committed an that attractive find to development that where appropriate time like today. to we adding amount growth our flow. And that lot some we do But equity the of cash and when can be to ATM we internally us, of free the we recognize cash continue program, commitments monitor flow with is we have that a to grow. is a leverage fact point the And a feel to funding funded

beyond that. do So think capital we support Ultimately, – then we growth. growing that about need capital equity to

And so when appropriate. we’re opportunistic

Barry Oxford

that thanks Great, for color.

feel stuff, just risk-adjusted guys the our sense, have in be a going Barry, alluded returns, actually you cost or supply peaking, would more. so it to than we projects very be still the pipeline, cost have we’re how and the of kind is development Would at that you development Looking queue development aren’t guys guys little to projects? about to more there, make if today? But bit you look, choosy in increase of looking the because

Christopher Marr

been I investment about Hey, is the Cube – markets a this the right-sized of is we have we’ve dollar from think, think have it. in think Chris. which been projects had number of risk-adjusted Yes, return. that And we how for have I small we about interested Barry, in amount and we

– we would are have and shaped again, So I would expect program. as sit up here the not we expanding basis, a things that on that today move-forward be way

make I my years a little down at bit. sense out of slow is if starts the think, had the going probably margin, it next couple guess over a you to to

Barry Oxford

color. jump the Okay, in queue. back that for I’ll great. Thanks

Christopher Marr

Barry. Thanks, Great.

Operator

go be will of Jason Belcher ahead. Fargo. from Wells Please question next The

Jason Belcher

Just your wondering about third-party management platform.

us versus, of As continue gain that give helpful. incremental to at on And much new third-party customers? you you’re margins you this customers XPM – And how margins you leverage with that that any getting sense would the adding in stream around income for give can a cost incremental couple is fee scale of say, be adding us there, management ago? a years can achieving associated you’re point sense

Timothy Martin

where add for bottom an store The costs. add would DM all the in the it’s to add to on a we then third-party adding if Jason, question. for for managed what line, not take we one because, when individual we’re asset market that a instance, it – really really individual any incremental a as store, a capacity the over fee can the store, store, Tim. Thanks an the store to have if is the more we Board one drop to on we XXX% on margin that because platform, the range – Hey, basis incremental of one,

that you like add have to Now accounting, to functional to as staff have manager district in the in staff you to add Ultimately, a continue oversight. areas. critical to you things additional mass other other you additional start is that get add reality storage,

roughly, capacity standpoint, I continue time. it overall, we’re continue say, there’s adding XX, you the XX% of ability couple there’s the stores the operating stores a quarter limit haven’t XX in, but so It’s our that over business That’s really on at business us we limit, the systems, platform. And a on when or much our a a at wouldn’t to margins for From in say no restrictor years. a would about changed if still I able are add factor to guess, that past margin XXX to XX of scalability pace. no sight. we

marketing increase do more add, of the they efficiencies that operating we from margin the the manage, the just But benefit perspective but stores, support our business. necessarily platform platform more existing our get, what also the from really that of team. that of our that our functions to largely different all a not ability don’t on and the achieve is, stores stores we And cost so profitability operating only we leverage the own incremental stores then all the

Jason Belcher

you. just if could then more I one please. Thank And helpful. That’s

give the there? through As into we quarter season, you we is on going rental update what should year-over-year softer expect and us the an discounting head where can

Christopher Marr

Chris. it’s Hey, Sure.

So increase quarter for we the point was in third basis quarter X.X%, of same this the in of year third over on experienced the same-store the pool, was pool discounts as what year. rents last a a XX which percentage of

we as have to as on. levers the them I multiple ways depending get. said were in again, different and what’s and tight and I low the at they we were upon to obviously market the going felt macro, would of But we beginning year, pull think, going pull and I discounts, think macro have So as about

materially And down. so don’t or I see changing them up

that points to just kind basis the so think, prior be be I’m in or where XX flat to versus to band, that we’re going up of I going year.

Jason Belcher

Thanks a lot.

Christopher Marr

Thanks.

Operator

question come next will The Please of Tayo Okusanya Jefferies. from ahead. go

Tayo Okusanya

tight. curious that The morning. be same-store OpEx good would quarter, that looks maintenance basis? forward how lower of this a again, it of pretty Yes, kind going I’m just be on for you Most expense. guys sustainable to kept

Timothy Martin

sustainable the quarter versus of of largely this that third last not third Largely, all. bit bit little last year capital a when year. timing quarter at spent, impact was comparability the Yes, lighter third a this and year is in little the year of heavier quarter of

hasn’t and So maintenance overall, expectation for costs changed. repair our full-year

Tayo Okusanya

though? for guidance OpEx has the year same-store your But

Timothy Martin

continued a that – that cost change to perspective. that, from is to that has It news – R&M less some utility good receiving related on we’re related costs, more

in That be. than lower going taxes, Our And real high, while the third them improved guidance. be. to we as expected still quite of quarter as utility high part estate to costs thought was were we the were aren’t then they

the guidance what really not thoughts the really combined provide two areas those so improved range, line are And R&M on our item. to

Tayo Okusanya

occupancy you’re And focus is period the then, down the causing of for growth decent. lower as again, do what’s of into kind well. The or year just end of little on I’m kind OpEx end slower quarter of have kind the bit advertising helpful. expense kind going you of the kind that than towards more But of seasonally still average the That’s growth to was the curious, the of as a at just quarter. Okay. of of kind pretty the just occupancy dip less quarter? occupancy occupancy

Timothy Martin

about a ago. of Yes. because tough the being We earlier the spoke year occupancy hurricanes comp from

And this of the than occupancy just up other year. it the anything what for time we a wasn’t be would expected comp. against difficult so really It’s

Tayo Okusanya

Gotcha.

Thank right. All fair. you. that’s Okay,

Timothy Martin

you. Thank

Operator

be Kim will question Bin of Please ahead. from Ki your next go And SunTrust. follow-up

Ki Bin Kim

Thanks.

So past maybe marginally the move-outs of would or seeing Are letters? customers second increased maybe been of if third their any gap about – rent like have versus changes in now. that between I couple type points I level what increase market the of mathematically in non-acceptance will think that for received for or letter, like your they’re probably with stress it’s be of paying think surveys increased customers you larger years, those up. level terms the

Timothy Martin

described ago, we year meaningful just the nothing changed case seen Everything behavior. perspective. any a years years that has consumer you from that five been Bin, would ago. ago, haven’t Ki change have in Really three

Ki Bin Kim

surveys And saw that Okay. on any color year-over-year? City New quarter York this you

Christopher Marr

Brooklyn. up Bronx, the Queens earlier, flattish in nicely in Yes, as and down about talked I in

Ki Bin Kim

that basically that to out, So when net you flat? turn does all

Christopher Marr

down. Flat, bit little

Ki Bin Kim

Okay. you. Thank

Christopher Marr

Thanks.

Operator

The follow-up ahead. go be Please America. next from Sanabria will of of question Bank Juan

Juan Sanabria

Hi, thank you.

mine number of on hurricane question prior ex a street fourth a the on quarter, impact. talked you follow-up to wanted Just about date, the the rates. To in

street have included you Houston, rates benefit and Florida the you wondering been that got what would Just had there?

Christopher Marr

about X%, Yes. X.X%. down They’re

Juan Sanabria

look bit, to about then a continuing Okay, of – at And kind the release. great. talked press kind in acquisitions of the you opportunities

joint if your you’re base quality any interest, portfolios maintaining demographics Just sheet how larger on-balance when seeing thinking for acquisitions? the of either the improving, wondering all, or of if important And venture. of the acquisition is or about through asset at

Timothy Martin

Sure. lot have our perspective. that been There haven’t of have been out from whole been a compelling that portfolios there particularly

sheet on on-balance quality owned We focused portfolio. our of very are the

for markets, market, future if of in we acquiring fit not market of disposing the in or well portfolio that, type creative more were or came us to we or a than portfolio think our the about could a those term about XX% those think longer investment the half they thinking tough criteria, If some on-balance and focus portfolio so to that maybe interested those think co-ownership having hypothetical about on somewhere taking we of some XX% assets about We sheet, assets half some a in assets they of assets they lot on if as one in in to met the hypothetical right of could you the – thinking were And way that and it’s a were things. vehicle. only came want, if meaning, had positioned.

at meet our not not to So need the portfolio longer-term certainly from quality don’t portfolio quality, because a to objective. of but look going it’s to be it going asset our complicated might think, we’re to perspective how I influence severely

Juan Sanabria

Thank you.

Christopher Marr

Thanks.

Operator

Street Please Green will a be next ahead. of Eric go follow-up Frankel Advisors. from And

Ryan Lumb

it XXXX? a what Great, for thanks. where This is specifically does capital cost outlook of acquisitions your your where Ryan for continued taking scenario, Under look growth, like forward today, roughly Lumb. external looking into follow-up. is Thanks remains another

Timothy Martin

on the based I our Yes, where super today, equity guess, isn’t capital is bright. outlook

of equity are some us Our relative forma disappointing platform. that quality to continued the given our question valuation our what of peers, continues comes certainly proceeds and to we to using demonstrate ability to down a do. the to, raise to bit to operating be answer – But our the pro ultimately,

where accretive That’s you, from far a equivalent is And a I to equity relative value if the mispriced trade an believe that and today arbitrage should allows just so seems our if greater we might of market NAV gave us be and level then course. and that to at were where be that we there there’s interesting to today, found where perspective, opportunity creates some to hypothetical the our – fetched be to or to mispriced that compelling that us. positive be build then have that grow

to continue growth our appetite on-balance on have trade – certainly at impact discount about if sheet. that have a we So think if ultimately, an continue we longer-term external to will to to NAV,

Ryan Lumb

your for York relative your of say, And same current more. and Maybe one to, be helpful. markets New pricing if your that decreasing would exposure it in assume stays the portfolio? the the just we outlook country, interest to across exposure your that’s or Sure, rest growing

Christopher Marr

Yes.

New in as have metrics So and at for look the back Bronx, fact place description again, at would the we York view of would New a on to York, we given look us. my an desirable demographics long-term business – we continue and to that the our incredibly

amount of bit opportunity own we the grow a acquisition there of think, We I hiatus. probably that. wouldn’t assets want to in to of dilute and market a is significant highest-quality the through share a

the But I those aren’t in look last that on in that opportunities been certainly them, interested at acquisition we as that think, developed the in to two or market. the CubeSmart, year heavily future. would have are of some point projects at shame we some continuing dominate

Ryan Lumb

Great. you. Thank

Operator

like would will and this gentlemen, question-and-answer his hand I Christopher Marr to conclude ladies remarks. closing And to session. the back our for conference over

Christopher Marr

all your next questions. year. and your we when you you Thank and in We for at again, look of San Francisco to interest with NAREIT Okay. forward seeing speaking you year-end report many

thank So you Have very much. a Halloween. happy

Operator

may Thank time, you, today’s sir. Ladies lines. At you and your attending presentation. Thank for gentlemen, the disconnect concluded. this you has conference

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