- Earnings call transcript Q3 2022

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Operator

Good morning. Thank you for attending today’s CubeSmart Third Quarter 2022 Earnings Call. My name is Florham, and I will be your moderator for today’s call. All lines will remain muted during the presentation portion of the call with an opportunity for questions-and-answers at the end. [Operator Instructions] It is now my pleasure to pass the conference over to our host, Josh Schutzer, Vice President of Finance. Mr. proceed. please Schutzer,

Josh Schutzer

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

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

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

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

Chris Marr

our example all teammates, working of during in their teams appreciative are world-class safe physical are service and to customer by Thankfully, truly and of all like start work. we thanking stakeholders CubeSmart to experienced. for and our led and Josh. the recognizing hard and genuine are deeply of hurricane. Thanks, care we I the -- I’d Welcome, CubeSmart CubeSmart our all proud teammates off Thanks our serving demonstrated third call. our participating customers all quarter everyone. know of of repair we damage that diligently are by who

business, a our Turning say, quarter quarter was would segments of across to and it company. the positive I very all

the gradual seasonality. I albeit the we pace would normal are than have will year. return expected to as expected we markets slower a entered Our experiencing at say more

positive. So that’s a

While so operating conditions baseline have and the up pre-pandemic a higher levels. flows is and substantial normalized, are metrics much over cash leg

If have is percentage comparing been of our XXX same-store with our customers look in two third few you our stores of pre-pandemic the points about quarter by The XX%. rates more is who by points, XX%. up XXX the occupancy a for declined us facts XXXX supply of years of basis than are quarter new our and impacted has third up percentage about the basis up at to XXXX, asking

continues quite behavior customer Our positive. to be

third in Our XXXX continued QX quarter normalize, our have below remain receivables write-offs but levels. and to or still the at

Turning The in to look to very continue at specific strong. markets. be MSAs Florida major

quarter balance demand in it our D.C. were from the overall battle continue timing, as very embedded trends the third from during a solid. for we highlight significant as MSA and comp of through we to of we activity Acquisition results challenging, supply same-store continues that comps third price ventures. become Washington, quarter-over-quarter was relatively not QX delivered during of investment very new of customers throughout shareholder the balance the to across period year, Overall, a impact and with revenues The results. to sellers of of in more Given the quarter result remain quarter and the New remain normalize and a we of our for one as of see the in to The trends the discovery. XXXX however, benefited any in so activity all as and the muted decelerate assets on expect and quarter expect certainly the solid. markets the hurricane, did are year XXXX. sale MSA our consumer demand joint comparing York buyers it The the our guidance the a weighing easier during quarter the of value is the was

capacity are has during entering outperformer we Officer, about positioned the XXXX. create has us conditions shape, experienced is will I Historically, are external to Our been who management call balance and Tim unsettled. our that, to in growth. accretive and tested. nicely Certainly, and for Financial is and the self-storage the go with take sheet and balance detail sheet opportunities weak believe a we we economy are great leverage advantage well excellent an table agile presented of plenty to the and With Tim? sets relative cycle Chief this if more economic CubeSmart team confident lean turn to been low over into when some a Martin, are quarter.

Tim Martin

Thanks, your Chris, and everyone on and you the thank for support. interest call to continued

quarter fundamentals, in on, reflect of a context the constructive of the backdrop a return slow all very continue seasonality. touched more for that third Chris in As to results to normal strong operating

end leading the XX.X%, an growth performance included results Our for the the were results and better through was of for NOI Headline quarter expectations, X.X% improved than a bit grew for of the quarter. year. growth revenue XX.X% to expenses same-store our outlook

advertising continues in per $X.XX the XX% estate continuing driven line last representing taxes, by to on be ending and lower occupancy insurance, We pressure revenue quarter quarter expense XX.X%. and costs and This remain adjusted double-digit at spend. real quarter for reported with for offset as X.X% NOI same-store the healthy Same-store the over the more Same-store by expectations in was throughout same-store quarter FFO our share and utilities of personnel of while growth third Xth property year. quarter, normal efficiencies at levels very growth averaging seasonal growth. patterns return the marks to and and quarter to consecutive XX.X% the year

investments months no ventures. our and growth activity slowdown front, unique not a to said, rate volatility external Chris store our transactional of good opportunities. couple the markets in sale one XX and it March the we the did see given quality. team quarter determined investment $XX.X related that upside a was onto transaction from a bit at in mentioned, fit the in as interest market But the a store the one we platform. and our and for surprise perspective, uncertainty. asset very was busy certainly Back the most strategy Atlanta quarter great sector, last XXXX, during number us of good we remains a the but have bringing activity could seen On We That of underwriting over we wasn’t macroeconomic million, during on of of joint for acquired by on-balance notable were the that for a looking of that to our stores sheet our portfolio those assets given of capture

many for to as in us as times, a the promoted summer, it calendar up partner then back a good net we $XX.X cash pushed had market we $XX.X ended million that structure all our along looked August So sale Ultimately, rents opportunity. March and we the the third-party we on creative a portfolio invested gave two return past back acquiring that the repositioned Roll we interest time an From a our to was of this of equity assets, to XXXX, Ultimately, bring to forward being XX% buyer received in over improved half August. with the agreed a us stores invested done and transaction, solution we position of occupancy partner the million. to year closed standpoint, a the Cube levels. the the period. $X.X have of minority in in assets we a of sale during for XX for including XXXX, million in a a distributions and -- unaffiliated of with

us opportunistic those for gains a be course, look show don’t transaction created for capacity up to obviously, we They it’s don’t in provides Of value up a reported numbers. tangible that our meaningful additional same-store as our and results. shareholders But our FFO in forward. show

the the under third-party XX we management and the stores stores front, with third-party management. third ended quarter quarter On added in XXX

we XX, our in last to the our when XXXX leaving $XXX sheet of to levels. pushes evening. XXXX, maturity the related The standpoint, maturity XX.X went the and pricing of we of our per in genuinely revolver BBB/BaaX very revolver extended and we $XX with for conservative banks relationships XXXX end position remains revolver to year growth credit earnings closed our bank based senior the ratings. by a and new manner XX at consistent FFO and our was from increased guidance current that size solid on assumptions then fundamentals, XXXX XXXX the position leverage have already sheet range to and for $X.XX as the release to this from the ratings a improved a recast quarter our the we another end, strong funding points current of what received maturity basis group. improves revised guidance Details really Based further support our this smoothly, continued only The with we are included continue on credit XXXX Subsequent million, don’t in revolving Wednesday, we each just new days and our notes of until appreciate the have to actually, balance The our balance Our mature. maturities as of about February have focus were scheduled credit on that’s ago, our midpoint. million in operating and expanded revolver full strong two facility. grew on share was we

same-store XXXX a our high positioned same-store midpoint believe for We well up really into point might sheet. of heading and new bring high strong quality NOI provided our range we and high well an uncertainties outlook wrap portfolio new growth really of also platform, and a our levels XXXX our the with set XXXX improved a that We quality XX.X% bidding growth. the are over XX% growth with with for an up to revenue balance year quality conservative are improved

up for for this questions. don’t we thanks on call us at the joining some So again the this Florham, time, open call morning why

Operator

Michael, Instructions] now Our is line comes from Michael UBS. of question [Operator Goldsmith open. Certainly. line the with your first

Michael Goldsmith

so the had to the in revenue implies for about the lot saw question. quarter growth. X%, from of taking The first the you growth for guidance more from a second decelerated strong, deceleration quarter, Thanks that’s implies and anywhere same-store morning. that than a XXX second the quarter basis the X% between quarter. in deceleration larger fourth Same-store was points my revenue quarter Good what but it

metrics operating going am of just the kind I to in understand of trying So forward? magnitude better and cadence deceleration the the some of

Chris Marr

the we good take Michael, that. in are you are see Obviously, math guidance at a while going is expectation. details into the not all are occupancies expectations. your that question. the markets and point Yeah. for so fact I embedded delve will XXXX, the part beginning driven to correct and But of to from our to It’s of of fourth down that quarter. decel quarter third by across our our here

of XX as XX between somewhere XX we year time. think, yesterday, I were basis below and basis -- to basis at last this points points points

that occupancy stayed in consistent range. has So pretty

We by the is last XXX year and but basis the expectation the guide between somewhere have don’t below of talked XXX year. before, points our points basis we occupancy, end

deceleration. rental the for digits. third customers, during down seeing of are all a were occupancy rates the perspective, down, from effective quarter then you which that So we markets new And some rate year-over-year single across come net high causes

we I where about news that’s as the good were this think of week. is

as in will last you that further. expect deteriorated given the So difficult, terms that hasn’t of seasonality, it was continue. but become But abnormality the limited really more would comps year deceleration

think the be will consistent. pace I not

are see rates. will you at you growth think again, I looking some quarters,

high So a to will same-store than implied, are growth. others. But little we in bit optimistic be some start revenue quarters single-digit we going that because XXXX, are higher you as

revenue still our year the what’s first into economy, on and to expectations I some quarter and cetera. and will guess, continue average, possibly XX-year all through they are the same-store there’s of been average if the that macro, and next will case than be in think to where year. when higher details But XX-year a made et decelerating from that the working we certainly happen results think into a I we year momentum that degree second can XXXX going quarter, with have this very but are growth, you of be about the last So

Tim Martin

our in growth, point might made point chance talk because get to I on, made sixth same-store a remarks a pile say revenue about just to a consecutive seven. quarter -- my Chris. a double-digit not I to prepared I of

clearly growth six So quarters consecutive for double-digit those levels are sustainable. of not

the would is else’s think XXXX is I of delve on that. has and in everybody the I question that’s say question trying to I pace on it’s and and on mind I been touched his And the that surprise year out to looking into figure one opening try of balance back, of us, great to back, think, a the and the probably think, Chris looking this deceleration guidance pleasant exactly for the throughout pace call the a industry. remarks,

Michael Goldsmith

ECRI. we revenue color, That’s we follow-up, just growth moderate And helpful guys. rates recently driven rates of seen have moderate, a has been really sort by street a the and as seen lot have street

been at push question a similar rate moderating environment? more intensity have here and can maybe like you we Thanks. to ECRI continue guess a pressured that I street So in is, the

Chris Marr

Yeah. to as minds as question and our XXXX then I here inputs thinking budgeting we we our comes bottoms-up do these the get things in are great a mentioned, our of again, all key health of metrics into another mean, around try all good evaluate spot. The good remain today remains I use very we very about. the to and that the consumer that consumer,

employment, think I CEOs you that’s savings. can household and next that, look who at at we the look is there the part performed question savings during through we to storage how strong going be is out, quarter the the that to has going we to continue backwards be see Obviously, of least If brief recessions. listen and banks of of case third major the believe to as year.

plenty expectations that Operator, up for relative and be for think, I basis think we a November the for December but are good continue and are come to we that’s put we results to point, to next question. yet of will industry is year. data pretty our this at where ready well positioned next kind as on of here very refine the I

Operator

Perfect. Yeah.

Juan Juan, question next of line your Sanabria Our comes open. with now is the from BMO. line

Juan Sanabria

Hi.

last the Just hopping ECRIs, like the growth street you about room waning. rates, couple have customers to of big seems increase years between of some than in Michael’s street the catch just larger two? how interplay question, average back ECRIs, given the that you existing but ECRIs rate given to over been do the be think seems last in on had those on up It

you curious will gap here XX just will second out be months, the any be that would and growth provide trying to part kind So slowed, come helpful? therefore, you could of a rate -- just and naturally color XX ECRIs go at closed there that the normalization because of or looking question, street down months have has ECRI

Chris Marr

the not is input. the only we input Historically, Great over an It rate question, Juan. rate existing environment decoupling input. the certainly weighted is think and environment. an increase not would about from street It customer

You Cube occupancy at to us, Cube how pattern market specific they is that think long with about relates store, as the what that specific behavior it their the in and payment. the customer have been the of in size, that

to length pricing appropriate one You apples-to-apples timing strategies, in go new element. customer. may Certainly, do think we the a inclined kind algorithms of absolute as an customers asked to discounts a and the so to or the customer of are from is we talked varying challenging particularly have that there they that about and dollar customers related obviously, of in monthly factors ad and increase adjoining that be other paying a of provide, determine basis a incentives they for into be to are comparison, the for potential stay, about types or customer Cube are it’s most size not and to of But various coming facility paying storage may pure to specific amount when related the may on are with amount what the nauseam another. move

is some levels the are unemployment as think tighten, potentially increased we I start the as come conditions too sit ECRI that thesis the expect down. we current to I be for -- don’t soon think to magnitude here in that depleted, that to material sequential I potential magnitude say as month. household and not today, we it it’s perhaps So any would But have naturally think overly economic may as savings given

Juan Sanabria

in are Excellent. talk Florida. Southeast, And the assume state I’d benefit follow-up, of a Ian you then from performance. getting geographic particular Hurricane just as middle the just could you in about the some of

seeing one the the of you boys off then, in poster So hot impact all, markets are in that cooling be a housing at like of second the slowdown the question. child any some think use part And there? secondly, would in market I

Chris Marr

we pre-hurricane and have think vacancy you MSAs. such and to about in, are are when and timing the residence the that a good the their the beginning in overall But not. or of Florida possessions of didn’t and the still wind to hurricane is structure who shape. damage, had So timing customers dry are is our physical who coming occupancies certainly We begin see in with home lot the

the like in and much in of steady slow are coming part Phoenix you Tucson New and then a curve are and like or that to October markets York. definitely the seasonal So latter country average From part in our markets of same-store be the expectations. revenues of and in into here will a and benefit significantly deceleration or rest effective the those that above in that’s occupancy net down a November that a growth the rates Chicago in a housing the are saw than market, faster

trends moment. are So at that’s the kind we of seeing that the

Juan Sanabria

Chris. you, Thank

Operator

your for you Thank question.

now Citi. the Rose open. is of Smedes Our with line next Smedes, your comes line from question

Smedes Rose

on maybe wanted ramping kind and pre-COVID you the next start get marketing advertising ask and to would Cubes just the more levels? of back again business you have Thanks. to I decelerated into up more as expect that trends to to side normalcy, of of back like kind year Hi.

Chris Marr

week-to-week here dollar dollar search. one are to a question based on That decisions incremental paid a because basis challenging particularly it when relates a each is on invested we Yeah. on and making on return each

I that of levers it, the intertwined. think at we are sort look

one think so a is then the, discount -- through the as that at the to going opportunity channel new market. how that what then about if or we search net customer, and lifetime have paid rate value in the effective made, look You we offer is that customer street coming on what’s rate and particularly, in and

think a with as some results I you created an you advertising others in seeing seen as opportunities are Google market bid in market. little some I and with more have our more see by costs softening, sure and That’s and globally, Facebook, to efficient do headline the which and by am from offset perspective larger be both lower the spend. their choose what to market smaller peers, to

XXXX Again, we expect expenses, other that’s more fourth thesis predictable than look So year in some be and marketing will number in that would a necessarily next are our out again, certainly into quarter think quarter-to-quarter. planning whole easily our little outsized, process. which moment, I of growth at the a volatile consistent not year. but see some We next process of is the to bit as the spend, and more

Smedes Rose

that additions just coming the supply the you was kind little wondering talk next -- at you, you wanted looks to surprising, maybe could which it at get. least your competitive ticking we looking of of I that are seeing pipeline, sort ask supply that you was like of data And if thought it’s kind on a I in over year? looks actually up were like market, the I bit, on then just Okay. It about

Chris Marr

Yeah.

not We our that are top seeing in XX MSAs.

seeing are delays. we think I

the out. without you are that get timing year, deliveries have seeing So continues a doubt, the pushed expected at of we would the to beginning

instead bit think for that’s opportunity leased creating it after for an do up of one allowing next before is the comes on another. a stores a rate get because come I deliveries on happening which a that better positive think pace, one the to I is

positive So a think that’s year. I been this

think of year. expectation slightly But XXXX in I going next terms down our top will XXXX that now trend we continue our to markets. right out, as in it’s look from

deliveries, quarters pushed these what get a of will year. out sense of terms we into In delays how have fourth next better and many

we about XXXX to would late Although, say pushed would I get the into expect from XXXX. same,

So I think supply the major markets. in it’s still constructive a

high-quality I track think folks the that supply nationally. data the that producing of some are

may more that markets the we seen I that picture on from owners the that third-party paint get new more are ground not may those have more what the markets different our attention. think to are that cycle, a is starting secondary given supply in last seeing and

Smedes Rose

Okay. Thank you. Appreciate it.

Chris Marr

Thanks.

Operator

you Thank for you. Thank your question.

Samir line with the question Evercore line next Our your open. of ISI. now is comes from Khanal Samir,

Samir Khanal

Thanks so much. Chris. Good morning. Hey,

I side. more trying better can that call have how XX this that the side, of I of I is there expense mean, the mean, right? on you done guess let’s into good do job a of next I get months that sort know, just hold months? six over sort done it, numbers sort you certainly how expenses On trends next year. to the year, I am to have expense low much of, looking of don’t you end, a efficiencies sort growth personnel on expense at controlling sustainable are

Tim Martin

Good Tim. It’s Samir. Hey, question.

of trends of most guidance expenses sort in expectation is from level next high -- here. those in I providing a to are trends year think the our that continue likely

just expectation to for our only line. Chris continue marketing that on see going but to for -- is think I pressure property continue explained, will the you us, is not others, there’s that to be challenge continues opportunistic on personnel markets. as a look that. to balancing are a the be staff in we still at It certain pressure wage. we standpoint, fact From tax

overall, and well with utility be the with lower-hanging will continue was a But be efficient offset how but we to we get and or staff the to costs. to Expect that. of picked. year. continue think planning for ago, the year on pressure to be find as tree that technology, that is on stores we XX ways those that But, able do pretty continued healthcare nearly on not some see months somewhat costs challenge to Although think to pressures, lot these our we efficient it starting a pressures fruit about next of to I to

say So months standpoint, level next a would the over high would the months. from what more of I would we same to XX six be expect

Samir Khanal

more demand from And great a color, what shift and seeing on sort that so at plays in of all extend much. months? seeing the NOI can guess, sort much. you elaborate That’s you you and thought, over York, this Tim. are I even I to New when supply about of -- landscape you so next market than Thanks the trends over a maybe it’s to growth, are that guess, bit we how then, talk certainly look just of beginning better think, side revenue going you sort growth Thanks XX year. little think and Chris, bit into trending a I of sort out of

Chris Marr

Yeah.

Cube physical on major the the been third-party occupancy plan demand and up at last than as New an nicely It Jersey have running during see can Long XX occupancy through leased have managed third MSA. opened of boroughs, basis a was I a perspective. point, are both year. from think Island, down the -- you basis the in we that and points only stores higher where ahead in least Westchester, and The bit our market So, really it with side, the has occupancy quarter, XX points, point we

level areas, see XXXX be the didn’t MSA the in a We demand, have would XXXX, and rent a and to as in, Tucson continues MSA in or seen growth consumer in the more a So in specifically whole Phoenix. same good. the you urban say, the as of

and we you in the cautious this and markets. that be to impact But just a the Brooklyn will South continue particularly be of on everyone, there are same navigate deceleration fine. be getting you we we is supply caution am there as Southwest say more that through and an an Queens I and and are seeing to metric will confident not more that From rate in I some able the same perspective, will will impact. So at just

look across of we I to open the think market-by-market, two have our to other new street stores, who’s from our you impact directly Long directly next store-by-store, of City specifics, one in a one at market, going when us the Island -- stores. crowded competitor

that one underway So and looks It may be finally store for built been it’s problematic. like get open. It’s to years. going and years

that pressure pocket. on particular little So some put will that

way to to a have late likely will us. Brooklyn, bit an of a store open XXXX that frankly, that market, to our stores have Gowanus, is situated, segment a We from get travel where and to supposed customers managed to that a of York in in that have on impact owned exactly draw it’s it’s that, market New for

I at bit think be that stores, us a impact the impact that adjacent. there’s another store one geography our helpful there, but then will be may to definitely So in And will of pretty that’s Brooklyn us.

us for and those in more in or have challenge a about in portfolio seven the of managed. have should entirety you late against exposure of stores you when that owned little impact. that and think about XXXX that’s when comp think So that a you three But a will about borough XX-ish boroughs will our six, are a stores talking bit of an present

as So again through I we okay be it’s but we this. be navigate to think going going there, are to

Samir Khanal

so much. Thanks

Operator

question. your for you Thank

line Markets. with from question line Todd is the next Our Todd, of Thomas KeyBanc your Capital comes now open.

Todd Thomas

a Hi. Thanks. I investments wanted little ask to bit. about

pipeline IRR underwriting little in and disciplined, your conservative like And growth of about underwriting or looking there’s forecast more a I Can terms hurdles you how general? are bit today, little thinking the whether deals changing guess, are bit looks you just a your otherwise? you talk investment been today, have deal flow changes deals whether or on in what of rent are you You in that about or at front. of the investments, not sort market

Tim Martin

question. the for Thanks Tim. It’s Todd. Hey,

expect, has for you as into on would where walking -- -- a we or remarks started then we rumblings I aggressively. summer middle or discovery fall the bit deal to some of hear still would handful early bit, slowed. it the as I price unique sector. quite seemingly deposits, pool and but still are there’s later activity and part through, to to previous a And and that you some and the re-trading here, It mentioned shrink had walking but went every folks summer As our away certainly went say, you the about a of again, starting the started away pretty fall, the little buyer into deals of pursuing are to not folks that got apart from the and in

makes a volatility have of lot broadly the markets. seen we that the when in capital that sense think I there’s

six our you slowing a come so I market is the absolutely I where is of accustomed market sellers opportunities had to what have across desk to a to think in buyers then grown and months six they and ago be underwrite. little in a now bit where think to you down to from looked have going seen where think months are the of that are of like period price trying discovery adjust

are physical and this a us. attractive market been throughout have the we that deals to the you big year, handful a and us the we quality what have which think that have a There saw lower of that been XXXX. are at quality That’s of overall, seen just XXXX, of opportunity continuation been I that from year. has consistent the our in opportunities that has appetite super driver the throughout is not in that are volume But, we quality. on seen looked same based

I wanted to question, was anything there else most think about? but you on touched of that that your talk

Todd Thomas

Yeah. are Have mean you I I you little guess, are cap what can requirements? changed you your seeing -- relevant, talk about are trends, cap but bit hurdles rates, not return in obviously, going always price IRR and maybe you seeing… a rates

Tim Martin

Yeah.

Todd Thomas

you market adjusted the and underwriting? … in have how your

Tim Martin

seen the demand, it end of growth the the go volatility to It of underwrite Throw we the back The will two are on rate through a calibrate be has to actually, development to actually of storage in top to moderate. have we variables or year or and think about lot cycle the several how your to years Sure. complexity into some growth simple you will and be facility asking that start to that go underwriting Yeah. get underwriting coming in itself then more that where that, underwriting has that fun. the largely to past into tail a heat COVID the rate on continue fairly when created used over gotten opportunity. trying now

are and the that we of don’t lot existing availability the luxury we standpoint, our be way We portfolio. volatility of -- think every the So two the quality, of of lease-up on of day low and great requiring disciplined, But we early-stage opportunities that complementary will debt. cost patient, price are and for high perfect quarters. the our at that we or both return a opportunity input having and changed. that three have high-quality for returns to for of in there the leverage or us capital be a one of and spectrum underwriting infill, are necessarily through all are likely across look based interesting have we coming the stable makes Certainly, months to through. and go are more equity very capital, which of hasn’t asset the process levels look to a some we the variability we and The from has, flexibility the portfolio very adjusted a certainly to opportunities have it stock we

Todd Thomas

asking And is can talk kind might rent Okay. basis? about growth and year-over-year any of market what October then Can how you rents through sense? you quarter a share think reasonable on in during the expect trended you to XXXX,

Chris Marr

Hey, Todd. It’s Chris.

as was in and high-single new quarter digits customers are So, the of we for mentioned that’s markets across I as week. down earlier, this NER the where

we are through fortunately, tougher, high-single digits. have from just So, year, tougher X%, that seasonality, we the no last and that’s gone the year into and But in get had as have X% positively I X%, kind which now further averaging we gotten X%, think, of and down gone and hasn’t as from to comps October. declined here

underwrite, try said, for out As market specific. it’s the as Tim and future, we look to really

over seeing level to we and normalized you quarter the we behavior is and last to upon to near-term, market it into we try a asset that’s fair trend depends But unique doing opportunity. and be into So first particular of the What will this challenging at lease-up are an you year or seasonality again, think of stage of the customer say here, think we it about as that where it’s I in since out. see project that more as about are get the look everything submarket. back to comps trying asset what and really, year, at comps

Todd Thomas

All Okay. you. right. Thank

Tim Martin

welcome. are You

Operator

for you your Thank question.

from comes question is Doykan Bank next open. line line of of Lizzy, your the America. Lizzy with Our now

Lizzy Doykan

Thanks in terms with ask credit obtaining Hi. the conditions of them? for facility. going the new your believe noticing I market said the about on the taking you am went are are? you given and banks. Good extension going see I your morning. -- I you what my -- there Do out foresee discussions kind you do with in just revolving wondering guess, wanted well relationships the to question. how just what or are out with tough the with now banks I of financing how discussions

Tim Martin

so. several it’s on of the for having facility we de-risking -- business given and started when for we volatile we just part in feel process maturity to for Hey, normal our when market like We until less the move the more the quarters or Lizzy. probably been. the frankly, of much where a us, has in lenders little a But as direction would little it waited normal, Thanks course looking less of a would a -- bit a revolver, stricter or market just, It are and the view have not borrower’s at times, different as that it’s side of the probably ahead appropriate had recast XXXX. have we always question. to was continues flexibility to bit case do say, a a middle I normally XXXX Yeah. for in would

so, result relationships time hard I at to of work group is here in have bank I strong, institutions. great the with we we had longstanding months And that very getting financing very those quarters. process obtaining coming and high-quality that, a and really fairly it’s have do more where a a And coming think smooth partnerships a as believe going get and challenging with to

and a be closed happy we and have again, de-risk this and feel until have earlier XXXX position facing good to uncertain that’s for like pretty here to here really worry just very us to it in are in. we down maturity not week, our So about schedule late times, some

Lizzy Doykan

to And How the with That’s about of great with fund focus from then the I makes on the guess, depend kind JV. to venture capital regards you just sense, Thank I joint opportunities. does allocation, you. your the by use wanted sales color. about partnerships? what of particularly thinking ask your it are most

gauge of in you a were been you said partnerships? how I just with Specifically, your better I on balance opportunities where know sheet. of But assets what’s to understanding with they not kind get line with this want deal, the your

Tim Martin

believe, articulated starts well to we balance -- it Yeah. very and had on we with have consistent have as what us -- sheet. we I’d say want very, to our a for strategy

markets. is have the desire the Our in to quality highest highest quality portfolio

had our that touched of unique -- our the a lines was set when that a original case stabilize, exited, our ideally, because third-party an up we fabulously forward it have we up way. and of opportunities stabilized that a to their we different at would way more easy understand. to then a for every one to our do have vehicles, in have Once they found achieve didn’t value reasons that are frankly, category. simple partners lot capital ventures different a many on, those out in co-investment five balance investors have platform in are ranging pretty we lease-up, when in bring we But worked structures our dilution, stores shareholders that to found due some then, to opportunity position to we venture our co-investment on and past on then that, that that that, on can the thought stores overall the and partially bring on and use to it on when reasons opportunity the in had buy objective. period to great And you to to stabilize, from one will you sheet find we assets, in buy get lease-up those similar managed it XXX% opportunities and our many structure, with reasons. having early-stage really we onto manage to so of in on have in own would preference bring add variety expect well we lot just hold ideally is as owned sheet could In for for of them recently structure, platform, venture especially But a look that fit stores and for for early-stage But going opportunities we it from timing. bring focused balance

Lizzy Doykan

you. Thank Great.

Chris Marr

Sure.

Operator

your you Thank question. for

Street. open. Balaguer Green now question line of David, next from Our line David comes is with the your

David Balaguer

to wanted I the market York again. morning. New Good touch on

growth something look wanted As touch difference compared markets to a what stickier does about relative of markets? bit the on that you and that in occupancy phenomenon, to just compared other mentioned difference other lagging being bit markets, And a a a least at some rent like? York that other relative on basis is but New length to to little stay

Chris Marr

Yeah.

who in broadly I a, is and will a it, in uses a basis. the more of it’s stores neighborhood of on in boroughs call many the product think, just I all the our consumer regular

visit very folks residences store just frequently who So mover. us at just living customer to is be the and an to it particular small a that opposed to as in does attractive tend base use CubeSmart will typical just overwhelming

all that XXXX as would or population. stickier seen big is saw you urban that customer. in in our rent So New I result, growth phenomenon And in saw get the just you of the a stores, markets most the you as I see the have the again, in just Southwest we York, think suburban of a think, again out, more quite not some as but pointed in just shifts I just across markets didn’t

David Balaguer

Great. that of than a a we some extent York might the you slow see you forward to New lot a would hot be occupancy being expect markets And trends think with growth bit in stickier other that down, of markets? those the sticky, bit the would rent positive moving

Chris Marr

Yeah.

deceleration the some the urban as basis think see, see I on wouldn’t at in markets, rate. markets same it to the the in decline relative in again, expect you a

David Balaguer

rates, shifting rates what like it. you. months moving Got typical decline winter back move-in to looks trough summer a And to in peak in that remind of and sort say, year months? you can slower just us from, the peak Thank normal

Chris Marr

A It’s when you a that markets, time about range and XX% Yeah. but in call pretty XX% just think it, range. wide B to

David Balaguer

very Great. Thank much. you

Chris Marr

Yeah.

Operator

for your question. you Thank

Kim question Truist. with next the of line Bin Our Ki comes from

is line now Your open.

Ki Bin Kim

Thanks and good morning.

bridge doesn’t what stuff that York providing other built, growth, seeing just to to some would plenty it get know some spread what And wide that. pretty job the you that supply probably you it’s that New the then are the try at be the some but figure are providers seems more you of one commentary, are know Just topic. and not data showing? on XX% data obviously, that that are gap you us help that they I question versus never of and your marry your to of providers look of When what on about look supply Can saying, risk, supply a I providers City between showing out bad. there, data are includes

Chris Marr

think, it when this the data, -- again, believe that boroughs particularly. is, you not the at MSA, again, are not One, I Bin. is looking Ki Thanks, I Yeah. and

Manhattan, Island. Long So and you Queens are all picking well Brooklyn, as of Staten Westchester, up Jersey, as Island,

look stores supply you where many that markets, don’t have just when are submarkets at open particularly impact, presence. again, of those and its we So, to on are in that Cube, a competitive going

XX or or is where to some I in it’s I either the of specifically Cube. we competition looking us looking create months to construction done movement know am am at sign under going So actually get what when some entitled so markets it, tells at we in and will next that

think will there think, that own XXXX at a one part I in edge shape said, way, REITs public Again, and -- one each the be here of have given kind to, I completed also the Bronx, of get of store the store as Cube. dynamics to -- area. of one Atlantic New New York is, the latter will Gowanus, competitors in and form same So other we when in answered I competitors one they of City, be or to in will I general management who also about the they that store one Island York very Brooklyn, on have the Queens assuming Long in relative that East City, question and Avenue will

into larger Long not stores it’s tend Jersey, be are clustered they to get as area obviously, much the lot, you boroughs. Island, in a As and it’s New Westchester, a

Ki Bin Kim

what markets the that we second should going Florida the go for next we seen biggest And to back taxes year. next about think and Texas and property Thanks. are your Great. some But up your more homes self-storage are you maybe than a you expecting in -- markets in lot, maybe for that? are thinking product. taxes curious, year I if property was like for of topic question, and expenses have about for how

Tim Martin

expecting them go are sure. We up for to

we those. think is to are impact for and as see waiting finally are those the some bills XXXX what of in areas getting of finalize for we I some still

to hard are provide to try be are have certainly likely XXXX going be. to quarter and those are those at are and to we some exactly that But pressure look when under that been where that will we markets to on provide color next guidance. continue So

Chris Marr

think… I Bin, Ki And

Ki Bin Kim

you. Thank

Chris Marr

I been you you range growth hasn’t the look if all years you that or change tax has if look and years, estate growth as of … forward month. our least expense that’s now -- at to think at going last at right expense. look consistent four the don’t five real tax over Yes, fairly real estate expectation is

Ki Bin Kim

a one third squeeze your opportunities I And Thanks. promote in JVs? other if what there are could here,

Tim Martin

if oftentimes our of our or promoting type in of Many not either on most, our Yeah. our actually our some interest. promote JVs, partner’s favor, ventures, partner a favor has have development

in the to by common that that touched and a But that opportunity that this we get on our one up it’s we either fairly position bringing it’s can So, on of it were were the of a add it on the either quarter a component leased This a be doing in we to -- and side many on on monetized be obviously, and was fairly were go work opportunity. to and can value prettied it ventures we direction was of, that here side so it. all of the can and that common one, -- equation. on professionalized the great stores side be big we depending the up hard we

Ki Bin Kim

Okay. Thank you.

Chris Marr

Sure. Thanks.

Operator

Thank you for your question.

of Our with final JPMorgan open. comes Michael is question Mueller from your now the Chase. line line W. Michael,

Michael W. Mueller

Yeah. change and any I have the year just anything of that has over two to been customers years, percentage over material? been place question, have one there a in

Chris Marr

the answer than great change is greater for year, And been question. the has minimal. one factual So,

year, greater been So months it’s one pretty consistent. those than and customers, greater than both six

those than are that For gone years, X%. it greater has about two up

Michael W. Mueller

period? that’s what And time over

Chris Marr

comparing… is That

Tim Martin

to… Year-over-year

Chris Marr

Year-over-year. Yeah.

Michael W. Mueller

Got it.

Thank it. you. Okay. That was Appreciate it.

Chris Marr

appreciate and you. Thank it. Thanks Okay.

Tim Martin

Thanks.

Operator

This will queue. the pass for the for your question. in session. questions you registered are the closing I remarks. all Thank back Chris concludes now have we to Marr Those question-and-answer

Chris Marr

for good our everybody with very enjoyed you. a the I questions, call. appreciate All sharing right. thoughts and interest really the Thanks

in the shape. is said, As we team I good --

external growth. We have the appetite to find

execute disciplined. appetite. balance remain to capacity that will have We the on sheet But we

finding customer to patient. our and be We portfolio, focused base, to are our opportunities on will accretive to remain our will earnings so we that

that to perform to the capital the potentially try and into XXXX, advantage Cube well. could some that’s we create if ready for opportunities in of change an storage us, are perspective, take to will we markets continue from and some certainly, internal case, Meanwhile, look think, changes in I are and growth the debt out As them. attractive confident conditions economic we

portfolio that well confident our a focused. the team is that to relative certainly performance positioned and is basis are achieve on We

the report to all end Coast again you Take out speaking produce and XXXX. your to in thank So looking participating at for again. to for we and person when and in call. you in the Look attention here NAREIT to of speaking expectations you our forward care. forward of Thanks year West many

Operator

quarter CubeSmart for This third participation. today’s your call. you XXXX earnings concludes Thank

now may disconnect your You lines.

CubeSmart 28 Oct 222022 Q3 Earnings call transcript