CUBE - Earnings call transcript Q4 2024

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Operator

Thank you for standing by. My name is Karen, and I will be your conference operator today. At this time, I would like to welcome everyone to the CubeSmart Fourth Quarter 2024 Earnings Call. [Operator Instructions]

I will now turn the call over to Josh Schutzer, Vice President of Finance. ahead. go Please

Joshua Schutzer

Chief Good XXXX Karen. Chris Welcome CubeSmart's Tim to President Thank Call. morning, Participants Quarter Martin, and Officer; Earnings Chief include Officer. on Fourth and you, Executive everyone. Financial today's Marr, call

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

financial our section and of website www.cubesmart.com. is addition the supplemental to issued evening, the release, company's earnings In available was under which yesterday operating data Relations Investor at

and will remarks the materially that certain forward-looking factors filed Exchange earnings X-K with annual the regarding cause strategy are forward-looking uncertainties statements. Risk from the The differ Form section include statements Form involve morning, risks Securities that this and actual the risks, results specifically the actual Factors provided statements earnings and the materially The documents our to other files of forward-looking to and from Form may that company factors in Commission, company's release we results the cause with furnishes differ together XX-K. company's could these our to, and filed on X-K with, report or

in website addition, fourth posted remarks include reference found between GAAP financial to quarter In at company's and www.cubesmart.com. non-GAAP the on can be measures. the A supplement measures non-GAAP company's reconciliation the

to I over now will turn the Chris. call

Christopher Marr

in the same-store improve. the growth begun last in our Welcome and quarter slowly point COVID-induced of [indiscernible] quarter reaching the XXXX. peak Thank of you, that We have portfolio, the industry call. in an year, for experiencing trough second Good inflection Josh. fourth our been in of decelerating to believe to XXXX of morning. revenues since growth we Thanks for the same-store that participating. marked From trend may year-over-year revenue has the have November

year-over-year for customer fourth February. to to the improved gap being quarter of rentals averaging the points week their achieved year-over-year points XX.X% at basis negative XX X.X%. from occupancy from trends new the negative Rents of negative end the year-end same-store include of negative in 'XX negative narrowing gap XXX note basis of Specific as last have average

health along are customers, metrics, perform levels. positive our of historically to write-offs, the We key normal cetera, et about continue generally all economic existing

recognizing these closely remains stubbornly high. are We core watching inflation metrics

Our for all our continue growth XXXX assume in improvements base gradual case from major of our metrics. expectations quarter pattern that revenue across fourth the of we markets

Our lower continue beta outperform urban the markets Sunbelt. to

Our a we expectation sharply markets. of be is the near-term New spot, see growth top a highest-growing our remaining in do catalyst to our not obvious that continues today, XXXX. said, being City at York organic would performance bright That reaccelerate

our X these optimism for overly last optimistic. and industry the In trends demand housing that to The market would the we have stimulus to bull and busy of mix season included have case forecasts improvements a other around significant hope and provide hindsight, proven years, product. be

are our metrics and we in XXXX cautious being, by in are opinion, overall initial our prudently encouraged trends believe are While we that outlook. stabilizing, our through February

the optimistic very long-term health business. our about remain of We

in at 'XX, our culture we is were outhustling successfully an investments attractive late close raised to our in our program. methods operating partner's for pleased grow With out one stabilizing, of And capital ATM decades, For to of acquiring by are externally. team our joint we almost that valuations our planning opportunity under February, venture find hallmark the fundamentals interest X in to our transaction. the of opportunistically creative viewpoint accretive equity

include deliberately had X in and Xx, of the we took assets of of Tier XXXX constructed XXXX constructed The been leverage to that With advantage to a net capacity to portion purchase. that of fund is marks. the EBITDA debt balance portfolio recently between

team on that skillfully to from executives geopolitical to plan strategic was uncertain. Most would as our describe objective. these properties and current investments executed the environment inception balance macroeconomic on and bring Our our business sheet

this our ago of Over continuing has times demonstrated XX years that and over and to great leadership period, day, its navigated team Beginning self-storage of resilience. uncertainty. members through have cycles successfully

confident remain our focused and experience in on presented. and the to are future providing We outstanding the maximizing customers an opportunities valued

results over like Tim? 'XX Martin, I'd outlook investment turn more to detail. a our Now to who walk fourth for our the activity, you in call will Tim bit through our quarter and

Timothy Martin

of Thanks, for with your morning, few us. it Good day Chris. spend Thanks a taking to out everyone. minutes

mentioned, results, about our some expectations Chris guidance. on review some investment color and and I'll As talk quarter XXXX additional quickly activity fourth provide

X.X% for tax quarter. declined basis Same-store line asking negative NOI XXX occupancy which last over driven real rates dropping points levels year. on was item, growth driven year's by revenue XX.X% to the by fourth compared grew fourth during with continued pressure on in Same-store last estate average expenses X.X% X.X% Same-store quarter, largely the the quarter, quarter. the grew along

the we the throughout the as of and year, quarter quarter some refunds discussed fourth expected was received the significant reductions year. in tax increase in we've year-over-year last As

tax impacted tough So recurring this there's or new comp number, news. from a nothing last just year's that year's good

X.X%, For the actually bit projected a grew had estate than better real which the entering little was year. we year, taxes

dividend, the that quarterly announced yesterday's in per $X.XX We increase quarter. to FFO dividend per as our close, yield. annualized of reported X.X% a share We a adjusted up an on for represents share $X.XX X%

On the growth of in front, investment Pennsylvania fourth a million. for quarter, previously and on the Oregon closed announced the $XX combined acquisitions external in store we

owners. find our remaining of relationship was a a our getting investors, whom for solution investments very the to complementary existing on a their portfolio about as creation wanted excited to creative XX assets with Dallas over are XX% transaction this who example some opportunities and portfolio had some existing time. team position closed also of in for group value footprint. the looking presents We store were the maintain a interest Dallas liquidity good of and the capture our transaction the really of an incredibly accretive this in an to that portfolio We're We And acquisition third-party MSA.

our remaining we interest in We XX% as one Chris that ventures announced the on, also as to of unconsolidated IV. subsequent known touched joint HVP year-end, acquired that

venture Chris stores, able objective stores. participate in in lease-up to the a dilution in an us nonstabilized our the ultimately XXXX a being lease-up earn the promote income return XX structure minimizing formed XXXX, on while to of and broad through As venture investment opportunities by acquiring with acquired venture XXXX lease-up equity XX MSAs. From early-stage earnings portfolio of through minority being allowed mentioned, top was during outsized predominantly structure. investor the the to of The fee

to our which XXX% on balance our us assets acquisition sheet, partner's of always allows has goal do. own ultimate been to these recent Our interest

was additional consideration that $XXX.X of Some debt details at the closing transaction. million for and repaid. the There venture level was around numbers

However million XX% $XXX.X share venture. for the that in we of paid partner's $XX.X XX% debt interest was After debt our million. repayment,

So $XXX.X of which repayment plus closing total is million portfolio the totals the debt. remaining to $XXX.X any paid $XX.X bring of free consideration the million this at million, property debt for we on the and clear level sheet, XX% interest balance

an a an some to with little still as both in vintage we growth transaction, in This the value another bring perfect fully underwriting excited of to one parties. joint creating for We're venture attractive have was making, geographically portfolio meaningful stabilize. basis get a bit accretive years a and the close. of for diverse X outsized successful Ultimately strategic assets us, recent

In these equity anticipation and at-the-market net in growth opportunities, raised our quarter we of using during million program. $XXX.X external year-to-date the $XX.X proceeds million

for sales year for those the share. price Our average sales $XX.XX per was

the and last Transitioning earnings then assumptions. included evening. forward were our to and details looking guidance in our related of Those XXXX release

Our that is will of impact XXXX our same-store our compete in new portfolio. supply increased pool Embedded same-store stores. with by approximately property for of same-store expectations 'XX the X XX%

levels year For context, impacted in from is stores XX% XX% that by down our back last of supply of were XX% were impacted down at stores XXXX. and that peak from

enough for half The guidance rental the revenue end environment including is in the season to in the is in X positive to revenue strong cause of years, and of us assumes environment. the with the the Our occupancy operating rate similar assumes in inflect to housing back material our guide positive year. high that range XXXX no to last changes, same-store that fundamental

end the and year-over-year throughout negative current in maintained both the gaps our low occupancy rate that of guidance assumes XXXX. While

ends Our in rates and XXXX baseline expectation would look of on slightly book like falls year this digits something we to and down compare down occupancy as in being XXXX. levels X rates in average but those the still the mid-single compared middle average rates on to improving,

seen XXXX talk we're over expenses, property few we expecting don't continued have we this than same a Real comp to and estate of fourth taxes to We're deal like the But in same are quarter what years. in to of the more in not year particular. with wildcard, last but about. lot pressure the we've that, other on always the Shifting insurance. expecting a difficult did

FFO to Our XXXX is That's think $X.XX. it of $XXX.X of decline, about down $X.XX that is core FFO midpoint a with per range expectation our our $X.XX When by anchored share from million. $X.XX, of about share $X.XX performance really for per then of of portfolio. a you the same-store XXXX driver

That NOI to our same-store FFO per midpoint $X.XX same-store expectation NOI in at guidance, of decline equates X%. Looking down is X% share.

impact year-over-year same-store our midpoint. at else a So performance then the to outside of everything netting X is

properties from lease up, we We to guidance. have provided of little drag is $X.XX range and our the a bit $X.XX in

expense FFO XXXX growth bond need We our our drag year from notes to guidance, And per of guidance. a a from G&A as $X.XX midpoint expense impact our at our interest coupon. have negative in our have have about share maturity embedded this X% we of in the senior refinance upcoming

activities, as at transactions guidance property picture, again, midpoint range. few that down accretion as X% management leads generally at from modest fee midpoint of looking minutes recent including the ago, we're of outlined a our of at down some per external is income the share The that NOI FFO our items those well Offsetting midpoint the expectations to growth the X% our provided same-store that guidance at our range. growth I big earnings in

So Thanks don't us joining that remarks. call Karen, some why prepared we questions. on this up for the this again At time, concludes call the morning. for open our

Operator

comes Scotiabank. question from first from The Tricarico Instructions] Daniel [Operator

Daniel Tricarico

factors from the a ask other also partners see NOI to Curious are if I opportunities assets? your similar the to partners know the HVP portfolio. What for other about it's motivating wanted with and transaction. still sell opportunities relatively in young existing upside I these IV today? you JV

So to curious if there's there? squeeze more maybe juice

Christopher Marr

Thanks for the question.

-- in So liquidity over a they no joint have been for the so closed-end venture years. partner their this a vehicle, have them other is This been event had imminent our of past a talking ventures. opportunities we investment for in about couple

opportunity an for that been what made our we've navigating and sense that us, fairly a at so choppy looking for been made arrived we And and sense has for environment partner point.

that the now for based. was transact their motivation why from So was perspective, need

you from you've had and in assets in base have stable as stable That an as don't have of they mentioned, mature are through XXXX. the generally until think I are for acquired set, mentioned, fully years. assets back that them, a a said, tenant opportunity we them you XXXX number

little opportunity our So both in in that's not for all assets. a those assets for in capture juice bit more or we fully us 'XX of expecting only to stabilize the and underwriting, of those to fully for are embedded XXXX, some but

Daniel Tricarico

one? cap could acquisition or to yield Chris, share the you to to to year get the the get initial accretive be rate in quickly

Christopher Marr

Yes.

and think mid- our of expectations XXXX we transaction pick and about yield to IV X.XX it, XXXX, as Xs, for call at as high number. the a So a basis looking HVP we're our

Operator

Michael comes UBS. Goldsmith Question from from

Michael Goldsmith

an talked obvious remarks, bit the a initial is into you lack year, guidance. think catalyst the baked of about like little your which In for I the

Just about you're more So here? get what is accelerate can jump-start a it a bit What's to little talk looking the you're the like better could that? it just you trying that looking algorithm on for? housing? for just Is understanding help -- of what and than demand

Christopher Marr

Yes.

think you mixture I think a combination of of our it's clarity And kind X a rates. of the those think of about it's as consumer. mortgage I

but now, in people uncertainty lot today. with navigate high price case, a right think of information, [indiscernible] low, your sector, is conflicting trying ridiculous, dealing the The you're are price very very the of unless of the through public is at you're I which a lot pump generally to in unemployment right? is

So to get clarity people need just decisions. can some universally I we just make think so

acceptance the or the I this mortgage half fund is clarity currently with going therefore, on having the U.S. housing and on which rates long reality which has the rates, to think I need will is comes are do we who occupying to are we're folks world new government adjust need that to think to just or securities. see X% curve that going below, something homes we're to single-family either long-dated of how those what selling ultimately back the improve, that the view mortgage end and means treasury's again, the

So I clarity. we need think

today, sit give hope self-storage here there. anyone could have catalyst that visibility would when of that, you into that you just I they know And instead belief is don't the have that busy season that the confidence how

Now I way works, between July. nationally do to think, the given and lot has done the a world now be

for clarity, that which movement very and if to And initiatives become the spot confidence, very so U.S. that business. every day talked to the optimistic I U.S. place, It's sit XX newspapers February to certainly put the where on kind a difficult customer, think lot bright is of about would are helpful gives are outcome that real and clearly what and I be of certainly leads our create am a be consumer that in could could we more to see clear, just some and being an that businesses, the that today. in

Michael Goldsmith

an as I same-store how about you marked growth. Chris. talk a did inflection response, the fourth have may decelerating thoughtful appreciate the the quarter revenue point And in follow-up, been

more same-store I a I that [indiscernible] other like same-store first And you think how revenue easy in bit gets are So little growth. expecting that in reflected an comparison still -- have sound accelerate XXXX? revenue impact like difficult is it through you then the quarter, -- the think revenue in to also,

Christopher Marr

Yes.

the to think half improve year, have be that the slowly December out then X the year through things we all how on continuing trough. of that throughout to we particularly kind that based kind and other we're back that in is hit either where fourth the being think equal, we I going trends And down saw, would plays beginning of on of today, X.X%, possible quarter the direction.

appropriately today think being that And I of again, is cautious I there where in uncertainty. outlook. terms is think we're our

Operator

from The from Bank comes next question Spector America. Jeff of

Jeffrey Spector

that war about in your always, the conditions current about that could as appreciate current we in less you bring bottom you an see just around past talked but transparency inflection I the or rates cutting based thinking street because street 'XX. to I on say let's street the war? rate ask bottom, say, concerned line competitors war, are Chris, conditions guess thoughts. we're And the Are in in 'XX rate, about and street point decel. worried about to you new rate another customers

Christopher Marr

I don't question. for the Thanks concerned Again, is right know word. the Yes.

I We new range more of in The of it consistently. running think X-ish constructive need to X November. just weeks last think it that percent saw improvement that. last we're from week over see terms of as what couple we've which or about so, last mentioned in been down year, I is certainly kind we last in to cautious just rates we how months customers. have relates being the been to

And extrapolate don't try through today to so to season. again, April that busy July want

expectations. I where think in that's of the range

improvements On is is end we more we've the modest expectations approach at in our of where cautious and are continued hand, of in spread that there stall last the improvement between that one continue. for just other the negative year. we portfolio don't the the a And assume seen

chosen to how the book of think ends of I our moment X that's in we've kind at expectations. the

Jeffrey Spector

and decided mindset anything happened fair. out this whether and about follow-up has is, guidance in recent that's the question mean the thoughts, just polices your about see a uncertainty. weeks, put That's their Okay. you then administration changes, when again, talked it you couple you to happened than argue, some of -- ago. or my anything today to share have And softness housing thinking I and you'd there's uncertainty of [indiscernible] months the was right, more of

Or more really this Did come months? view last cautious of anything out you've been today? thinking couple or your recently form your to view the is how change

Christopher Marr

you're Yes, welcome.

it's think, middle. again, always, somewhere I in So as the

of and housing it like articulated call about in a came I very and it more on worse it a end early and I've of than think us assumed we did. in would And sort But okay, So the at the in I trends and encouraging and trends of out get think optimistic can't saw right? XXXX. I I we came then and out early in demand, this time, February. said, looked that encouraging again, talked housing that range year and where as recovery think And said, before, 'XX, in very, last XXXX January 'XX, December, we did industry, 'XX, at have periods

there's a element of, So strategy. this not think just is frankly, I hope

so of X update And here as realistic we you will back trends at we'll We'll again, that February. introduce on we've you, be be tried of it from the now. point. weeks And guidance to be at end front and in

Operator

question next from comes Green Spenser Street. from Glimcher The

Spenser Allaway

move-in missed XQ? if on as did rents are Sorry into [indiscernible], an this you how provide trending I far update

Christopher Marr

worries. no Yes,

move So from negative November in come we're since December quarter opening last X% We've again, And X.X%. down and my we've we've week We're in been said of in what between then trends quoted of gone in that remarks, XX.X%. running as fourth over -- I and or week, seen rents, that's X. was running is the negative improve at kind the average, of the I X.X%, that just X%. bottom gradually here which

Spenser Allaway

you you're know across broadly seeing what whether terms finish unstabilized. the or active just provide just mix, then more the portfolios And line. more gotten you're more versus have one-off you on even been transaction can curious recently, market stabilized guys what things in if I some but they're steel color Okay. haven't of Great. seeing in just

Timothy Martin

I an to lot part changed. to a bring is awful to you're of time think seller about that waiting lot what has There's rumors is discovery. really of There the a price Spenser. lot a Yes, environment rate -- awful And be Nothing lot to are continue something to are coming. folks an try if that of is to market. try and think

I mixed you get think messaging.

and that brokers, talk bring full very think they of of they're have you the lot to on. some stuff plates anxious out to they're working a If I

some some have much and talk be doing to imminent they to of to that's indications don't things to as but or they seem market. don't brokers stuff other seem a lot of value might like You they that, have

So of be an there would it's not opportunities. supply the time you to new where year of expect overwhelming

seasonally, would expect opportunity kind standpoint. I at it to So where of it's slightly you an be say or from below would

feel and things are of clearly, be to at interest lot going. and rate a sides the has where might both that don't table are rates rates perspective. interest about Just And the their like that of moment. trading expectations would from impact concern be on an a like many the of where where they folks cap on of

Operator

The KeyBank next Capital from Todd Thomas Markets. question comes from

Todd Thomas

thanks so the of well trends as -- that your Is that updated it date? far like you encouraged but Tim, of the it's as move-in and sounds occupancy year-to-date balance the through so not hard right update but of you're for slightly you provide what February. ahead an like to then, midpoint, recent sounds from ready maybe, tell Can the to year. extrapolate and guidance far Chris Is a Chris, peak that you're seeing it's you're season rents. sort It and read? performance the today? throughout And little running that comments, of

Christopher Marr

XX.X. on seen then with think, occupancy and and new comment, I occupancy in negative. of existing been encouraging we've the basis into pool our the the has which yes, we're last move-in question, closed customer, terms rate January continued yes, February, Todd, at the year what get December, the portfolio. stickiness of on again, your to new gap occupancy And both to points able the customers same-store it's your is volumes XX outright The to

core our customer those again, continues existing I rate as on We're good. to the our very increases large, given, base, by then there said, that of and be health quite and inflation the to And closely, about continues pace problematic. watching be And same. is

longer-term year given years, So again, sitting self-storage. choppy that been of our as do, It's in this realistic we couple elected of always to be confident I backdrop. here a and today, the as feel possible health expectations choppy as in

Todd Thomas

$X.XX wanted the seems first Okay. ask That's $X.XX in And the normal XQ in to XX% based quarter I'm despite just The so on else completed outsized and quarter guidance, change experience? the to at a XQ early wondering the sequential sequential then to quarter moving that digit, helpful. the single And this that's consider that almost high I from investments guidance. decline. midpoint, there's about XQ you a besides fourth this anything in XQ from year. a little to if typically seasonality

Christopher Marr

into Todd, for thanks question. let you. just sort Tim the to dive Yes. that for going I'm of

Timothy Martin

year. Yes. same -- really seen It's of the if I'm you have primarily there's anything different trying is as last to It Todd. there, decline seasonal in would think type

So in I'm seasonality. than there's move other sequential not that's that there thinking that in typical anything anything

Todd Thomas

If rate? X% do timing in last [indiscernible] And and Tim, have guidance Okay. you coupon, maturity, terms assumed one. could of in the in sneak I what's one assumed the guidance November what

Timothy Martin

there, I you but gist little bit the I'm up of the think got question. I broke a sorry,

So in coupon. a note note and maturities we November, obviously XXXX we senior has that have X% our

that think where perhaps second capital. of range as bit one about all maturity, expect, would we closer I the to wait expect that and before to range it to expectations day us some things ever early matures until a of interest to little opportunities if the the those expense timing of as raise way it's not you quarter being timing very would early in as a to contemplate, Our other be had could

But in range. is the in there. to range looking a we XX-year hopefully bit today rate, between expense contemplated a were replace quarter wide potential than it as in a the of little with towards of timing the range of wait as a early and our quarter sometime if might both second is potential because then interest and our why mid-Xs, range later somewhere price that. we'd tighter the refinancing assumptions is that's we it note, the from timing third So little within a bit bit of -- outcomes Today, little in the outcomes also range at the where be as

Operator

The next question comes Markets. from BMO Sanabria Juan from Capital

Juan Sanabria

Just in in hoping but you could as out further of of quarter, in should of expect I average to just the in-place revenue fourth the kind talk would close declines your about be I kind and decline occupancy any we that Or confidence go bit Because a bottoming look take fourth -- point that the that and rates little at moderating? same-store if the well item year-to-date, at particular if that we has look seem gap just 'XX? to again Is one-off through helpful. commentary quarter. we a as on kind improved

Christopher Marr

the a kind to of a of we from do saw and our on about I of demand things I just we which fourth in into longer in again, in went quarter think going thought kind then saw. perspective and than soften would the trends thought that done have November it expectation Juan, quarter, Yes. we rate we was October, think, firm based things month then starting

that trends in and around December continued our be to a were And achieved started competitive stores, and into perspective from anticipating then February. then January the pricing we have

it, started for happen, proactively then of in saw And XX accordingly, it reacted systems probably XX we off by were days. the it now our that and to happen. last, in just it when be terms don't when would began confidence we almost I know, continued about to the days So

case the XXXX. of for framing how think about kind that's So we downside

Juan Sanabria

like fee the management expected is be And then X% up it income property 'XX. in for about to my looks follow-up, third-party

you've the some the what Just a in assumptions of couple assuming on fourth income by I'm out curious to fee done year-to-date buying underlying the you're quarter JVs lose here. because that going and

Timothy Martin

Yes, great question.

them as anticipating board. So XX% XX property certainly, we're -- brought on we on management on stores management fees of fees property or losing

also there third-party assumption in stores certain a and quite management know -- stores. will other be batting know Our of that, obviously, throughout XX don't our mix anticipation assumes platform leave we that than stores we well those But that XXXX. which

fee So -- that. offset go and that our on on expectations is, range best the on an those again, we that could net coming of by of of on you those all guess platform manage that board, perhaps that stores into top stores being stores overlay our new do when then that leave expectations estimate the and formulating expectations variables we us of Obviously, are provided. revenue range the

Juan Sanabria

just can acquisition HVP plans funding can greedy. the just I you Tim, clarify be you've a the If little IV for year-to-date? that completed

Timothy Martin

Yes.

start So broadly, when was that aggressively use we started one the we XXXX. we transaction, were program to contemplating drivers the as why the first started of to thinking about the ATM it, of on in back half

raised that we on we you earmarked portion portion, all but what kind a for significant ATM share at it's prices the significant the of fungible, numbers $XX. gave raised So I we above of

So of it. year-end. all was That raised that's part at

today it, the -- revolver. I trying mean, proceeds So up model you're balance on or our on on if to our show the income sheet would

borrowings then some number do, we ended the a always we we're Xs. X.Xx. That some move at revolver the get have we that's will the why quarter when capacity as Xx bit up of the high up of little up under-levered. first had end or the into is haven't utilize which to do a So over quarter, have what which you but to will while, we'll time, we capacity. for we And We

the raise Over and it when it's and down all opportunistically typically we do capital we appropriate is to would capacity -- tend free to create time, cash -- then to what flow think use and again. that do bring about over ways

longer-term objective. the that's So

Operator

comes question Kim Securities. next The Truist Kevin from from

Ki Bin Kim

This is Bin. Ki

last way. guidance, happens maybe embedded can was So a year? I And in winter period if leasing And it typically to spring happened different the you could the What perspective to what's from -- in to I in the season, going like what's back ask guidance? put rates your wondering guess, what your increase? in I

Timothy Martin

perspective. we're going there's they a once of January, do So that that year-over-year obviously from pricing all That here happens, to up kind dating see a of to So been more are to trough rates get early start degree pricing. those which The the on a you spike that to seasonal seasonally. delta, increase it time. pricing numbers right? the years, movement late lot growth now be place a always guess I to happens referring has happen in to past the seasonality February, much massive all over modest back over you the the -- in X trend to

in embedded So on in are the our compress but continues expectations average, be seasonal rates to year's trend throughout by between the the of for year on trails digits. range average mid-single gap still rental last that year, -- middle would expectation an the the our

Ki Bin Kim

is was sometimes you why standpoint, is in if I your challenge increase? Which when look to comps. it asking in 'XX, asking we your it XX%? it's sequential Well, year-over-year think I about the a kind seasonality expected I was And due the to Is XX%? that's at why from Normally of rates midpoint?

Timothy Martin

what's average, helpful that's I'm same right? for complexity answer because again, to is On in complexity that's The going speaking happen. providing you the average, an that's on why same

that something last we You gap X% you of past a or mentioned did those the this on that weeks, that ebbs And have would month bit. we always in -- X.X% that is is average, the gap up weird could couple Chris just year. that contract. to comps you're and to go doing year over so. different today. to expect and today you on -- average, when range would -- But something little would the that over a expect down But And of continue then bit, we will flows little lower course might might year would it be than be average, on expect there go a

Christopher Marr

Bin, and differently. maybe -- a I'll Ki I little think try

year-over-year, as and down historical not just would and times. through you that rate there, of begin see your the the rate generated you get into new norms, season rate demand raise then and that would sequentially you back customers, to year the lowest to bring normally from the just is your historically busy half the you XX%. back slower then right, If think about And you'd lowest you about go that

like couple instead years, last more XX%, has of XX%. the been that Over

when would that the see that to at end, think, XX%. nothing range, XX% think to here, one going or today be XX%. least be range at But indicate outcomes there's just of that that us better about than it that might I modestly again, it's we contemplates in we the again,

Ki Bin Kim

today is bought X%. us, your repurchase I'm And comparing some Great. you that authorization Okay. recently. deals cap remind guess live? And a you the can around rate do have you of to I implied share

acquisition? So do how what's of mental terms in you something guess the -- HVP I like the versus buybacks calculus

Timothy Martin

just an authorized second if that overall significant that that could raising you a we share We deploy have. days valuations, a prices don't capital. could our perspective is XX repurchase that for very attractive from The We argue we where is the program. relative prolonged found less today there were And to And than that's do equity around disconnect capital of the in that have piece philosophy piece have we about ago thinking at that one is that. time. which period

those share from at capital disconnect market all standpoint had don't as perspective it the look of for not prolonged for on feel a repurchases an valuation clearly, We we a in if the it We is So an variables opportunity we period challenge, a us. to our of be be for at have like today. would attractive challenge use timer. that don't that us, a time, look of we

Operator

The Eric from Fargo. Wells question from Luebchow comes next

Eric Luebchow

touch has to MSA. above portfolio the Could continued pockets average, that's decelerated growth a although I you've New of within bit? know grow maybe on little you the guys had rate know regions bit. I supply a certain the market in York the some

are about year terms terms So throughout of moving occupancy, market this we about in how that how of think in you thinking rate, that should XXXX?

Christopher Marr

boroughs. the a the and optimism as really Yes, optimistic MSA about whole about continued

between parse to the boroughs you very continue X, if well. the So it perform

a presence. have We dominant

have dominant more last throughout to of have maintain premium pricing and that We we this translates been a brand that into challenging years. able couple

think about supply. the note other boroughs, I no the bright

low fourth competitors X minimal openings, about We expectation for to to Brooklyn opened anything the quarter. in XXXX. Bronx, being So XXXX all really nothing think Queens the of saw in when of in you not XQ, delivered and

trends through there, expect continue trends XXXX. and positive those to out continued we So

to have I more our North been we North also expectation in for -- growth, that headwind little Jersey. the particular, been that and performance again, quarter, in in to Again, Island, same-store negative peaked XXXX. A see have on stores think gap we than has which that started been revenue constructive slowly. that we is fourth again start kind Long Westchester, believe Jersey, today our continues a the the And we those brunt there. which close supply, of producing I of think

bullish at at to are. -- again, continue and sort extreme, it [indiscernible] positive bit bearish case, one starts more as then get least assume the our assets into the year turn we more of where we just just that they to those and become end Does midpoint

supply around we've So in continues a MSA about Probably boroughs last or talked the the the in the year we've to in long be perspective. so. that time overall constructive a been as from really most constructive helpful

So again, performer best in great to of expect continue it our markets. be our major 'XX market, and

Operator

question Mike next JPMorgan. comes from Mueller The from

Michael Mueller

Two ones. quick

'XX? second on? is, XX% about expenses that operating the and in that talking like levels markets question XX%. Austin, How were versus will in First, were similar 'XX to of Atlanta, you else something where much tax be up ECRI the looking Chicago, was they think And then comp to going do at you

Timothy Martin

mentioned On it in you I'll estate areas. in was question, concentrated expense real XX.X% we part. were take exactly your obviously, that taxes, The overall your a was the it where right. expense saw happens. ones handful The of that increase intuition

of had you So good as few the [indiscernible] a regions. comp to in got geographic see That's which that's we of tough XXXX, a we where XXXX. end the why kind the created of end an at news

Christopher Marr

I able and more bit same little of testing fairly it we one And at optimistic the for to assume that should stays the some generate the or that relates be improves are midpoint, a doing to the the rate and XXXX. they're just saw increases incremental. in again, customer and think, I the base consumer as we're existing health At think consistent get with we and what would always

that then are And either fair this more going direction a in again, little us the and back inflation bit, to things be base modestly at assumes the on bearish causes to that other within customer say. down but would core end bring increases those

Operator

Eric comes next Wolfe from Citi. question The from

Eric Wolfe

quarter significantly you the year versus will, third decisions and the a quarter. weakness and last good your what the some pretty in advertising the November? just if that I spend up bit and from in maybe caused in have whether of was might approach, you think about those fourth down talk Can drove October different

Christopher Marr

that Yes, the in impact quarter. necessarily from happened anything no in that of terms

look the is when and again, driven between think I always, side. the it's you by of balance on at timing system between that particularly -- seeing rate paid surge, that that, opportunity

efforts So consistent the SEO the more and are sort throughout of ongoing year.

then panel about paid we relative opportunity. side, the think on the the And to

think we I be opposite. and going heavier bit was quarter, always a then the lumpy third just a as in quarter-to-quarter continue were little little see Again, it's the signals so it year. accordingly. last the And We to move to

kind be look that's So the year. flows more up that little it expectations think at line into normal quarter-to-quarter clunky. -- our bit when year, into heading How a of the for in X.X%, I every with you can

Eric Wolfe

you within I think points Got other property-related your just to it what XXXX. That's tell factoring you're it. maybe basis same-store us like then XX in contributed income? And guidance, helpful. for revenue can

was XXXX? I and sustainable just repeatable curious sort that in So if was of

Timothy Martin

We various range we you're it, of the fee item in at. income, looking compared fees of some there the there. we how in spoke about ends lot initiatives from which May XXXX, frame. to structure, rates Yes, we and well, of we made in at earlier some adjustments a line late it fees components fees, the rental is call And time and and to up the rent sustainable about had that those repeatable. culmination that convenience adjustments made thinking to administrative priced fee looked

since growth lap year-over-year, of to of May And when period that we're this time here seen year. you've so that outsized we get to going

the see still to you expect it out. of should outsized should see growth first in and stabilize you So XXXX quarter then

But shift it not to revenues be and where very from. getting to It's temporary in a We sticky clear, more recurring. we're in it's be permanent believe nature.

from that's then area I standpoint, to modeling if going once year, you it this a -- You're -- be don't we think just in lap confusing will is helpful. May, an that

Operator

from next Jefferies. The question Jon from Petersen comes

Jonathan Petersen

little just operating your could a I pick bit if expenses. Maybe at

question be the you've level going a somewhat of few line it years, that So from think But been and lower pressure and there at the going more expense. offset -- more we're to like taxes out is I'm we of growth OpEx just is, had in can that business? past this least looks forward? personnel any looking of operational Or guess by the I'm have some back just inflation there. property broader squeezed back that should I getting inflation I tied think kind the insurance about on is at efficiencies normal at the to property

Christopher Marr

for expense back, at Thanks from storage perspective, typically, an When to look you operating the question. tends run Yes. inflationary levels. do overall

staffing to teammates we ever our do customer a tasks intend approach right a AI, be we continue at of machine to to store And self-storage. the and in we model, vending be in to teammates, we when a using at believe repetitive for there example, implement and don't service, center be just our As opportunities reduce look looking the will sales staffed stores, for savings. -- service-first clear, looking to

property will estate I real pressure tax fruit, say the an side continue end savings. insurance fair is points opposite expect low-hanging certainly up then Again, that continue one the so do we on where the the then easy on. think some picked. pick on to to and to we speak, But to I find been to side be has it's

of and our expenses I XXXX midpoint of minus plus And is those think all for again, overall, expectations so at of or range kind inflationary. the

Jonathan Petersen

haven't values increased the would probably Okay. years the taxes, asset And is there? would as before. then think of couple little every is different. on Because in I bit much know say they a the you jurisdiction I But past property the as delay did what

a point? So tail what's the pressure I being guess that on

Timothy Martin

really to Yes, difficult answer. question

tail exist. the doesn't Sometimes

at evidence favor are have forecasting not as are recently, on increased. more same-store or there mean ago. X catch growth I municipalities interest when certainly obviously, we're standpoint, in up. top point assessment pressure valuation in they what don't cap a that mean, rates were think line negative to from and certainly and can sometimes the our to rates years we And some an were that NOI, be I if looking really we about we X

the to your appreciate way is wish tail for which predict it of one had about is to I item. a The predict, So parts trying that you. to [indiscernible] quantify question. impossible I I line

Operator

comes Your from Kim from last question Ki Securities. Bin Truist

Ki Bin Kim

Thanks for allowing back. me

Just a follow-ups. quick of couple

NOI already guidance. can look XQ FFO you same-store in first what Given I that quarter? curious you the could provide was like provided if

Timothy Martin

guidance only ones quarter. for be who will far as -- we're know, That you -- ones as provide the provide we're the an only a FFO who the I

underlying But the give where to us assumptions. want of already X/X mean you I you goodness, given through, Now quarter. you we stand has Chris

quarter. we'll in where stop the for that's prognosticating So first

Ki Bin Kim

lower like back changes inflation DC and there's of to storage was like lead with a but turmoil early cost be the there's even DC? a job positive just bad economy, lot that DC? But some cost a cutting lot do factors you obviously to better factors. But those local economy, potential of in or treasuries. MSA curious, going to job in job the broader cuts [indiscernible], different I cuts I thoughts the have [indiscernible] different if net for economy, Trump potential potential could tied and with just on in the lower and mean then cuts And

Christopher Marr

Yes.

is I reality yes. answer is unfortunate that think the

So example. here's the

been which to apartment they're from them. now And You moved or and apartment are they've of Washington to away have many, possessions Washington bought an relocated a job many, many and recent graduates college that unemployed. out the has probationary taken got that they've furnish now got or employees and fit who in

the that do? job need our products. is return that which home oftentimes do to them replace that they they figure So otherwise for leads sadness to dislocation, how a many what either need to the or to And of out leads lost and

I the on. for outlook So general District more Columbia as positive going result a is the in little and bit sadly, probably of the what's DMV in storage of think, a

Operator

to I session. over the will Marr Q&A our call turn concludes remarks. for closing Chris That

Christopher Marr

Yes. Thanks, everybody.

said, of Speaking on years These with, out. the in famously the Warren of you economic tide last few end our optimistic health don't I'll Buffet country. are we as team, until but goes our naked future and our presented of business, behalf know challenges, customer our have the who's certain swimming

there to it's and do and uncertainty So culture tailwinds, of and are the become of when our our platform well helpful during clear easy strength our obvious periods volatility. people,

of a So thanks call, great and weekend. forward in for Have the week. part being look we person seeing next to you of many

Operator

joining, today's and disconnect. for call. Ladies and this may concludes Thank now all you you gentlemen,

CubeSmart (CUBE) 28 Feb 252024 Q4 Earnings call transcript