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CubeSmart Reports Third Quarter 2024 Results

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CubeSmart (NYSE: CUBE) reported its Q3 2024 results with diluted EPS of $0.44, down from $0.45 in Q3 2023. The company's FFO per diluted share decreased 1.5% to $0.67. Same-store NOI decreased 3.1% year-over-year, with revenues declining 0.8% and operating expenses increasing 5.3%. Same-store occupancy averaged 90.8% during the quarter, ending at 90.2%. The company added 24 stores to its third-party management platform, reaching 893 stores total. CubeSmart is under contract to acquire two stores for $22.0 million and maintains its 2024 FFO guidance between $2.62 and $2.66 per share.

CubeSmart (NYSE: CUBE) ha riportato i risultati del terzo trimestre 2024, con un utilo per azione diluito di $0.44, in calo rispetto a $0.45 nel terzo trimestre 2023. L'FFO per azione diluita della società è diminuito dell'1,5% a $0.67. L'NOI dei negozi comparabili è sceso del 3,1% rispetto all'anno precedente, con i ricavi che sono diminuiti dello 0,8% e le spese operative che sono aumentate del 5,3%. L'occupazione media dei negozi comparabili è stata del 90,8% durante il trimestre, chiudendo al 90,2%. L'azienda ha aggiunto 24 negozi alla sua piattaforma di gestione di terzi, raggiungendo un totale di 893 negozi. CubeSmart è sotto contratto per acquisire due negozi per $22,0 milioni e mantiene la sua guida FFO per il 2024 tra $2,62 e $2,66 per azione.

CubeSmart (NYSE: CUBE) reportó sus resultados del tercer trimestre de 2024, con un EPS diluido de $0.44, en comparación con $0.45 en el tercer trimestre de 2023. El FFO por acción diluida de la compañía disminuyó un 1.5% a $0.67. El NOI de las mismas tiendas disminuyó un 3.1% interanual, con ingresos cayendo un 0.8% y gastos operativos aumentando un 5.3%. La ocupación promedio de las mismas tiendas fue del 90.8% durante el trimestre, terminando en 90.2%. La empresa agregó 24 tiendas a su plataforma de gestión de terceros, alcanzando un total de 893 tiendas. CubeSmart tiene un contrato para adquirir dos tiendas por $22.0 millones y mantiene su orientación FFO para 2024 entre $2.62 y $2.66 por acción.

CubeSmart (NYSE: CUBE)는 2024년 3분기 실적을 발표했으며, 희석주당순이익(EPS)은 $0.44로, 2023년 3분기 $0.45에서 감소했습니다. 회사의 희석주당 FFO는 1.5% 감소하여 $0.67에 달했습니다. 동일 매장 NOI는 전년 대비 3.1% 감소했으며, 수익은 0.8% 감소하고 운영 비용은 5.3% 증가했습니다. 동일 매장 평균 점유율은 분기 동안 90.8%였으며, 종료 시 90.2%였습니다. 회사는 제3자 관리 플랫폼에 24개 매장을 추가하여 총 893개 매장에 도달했습니다. CubeSmart는 두 개 매장을 $2200만에 인수하기 위해 계약을 체결했으며, 2024년 FFO 가이던스는 주당 $2.62에서 $2.66 사이로 유지하고 있습니다.

CubeSmart (NYSE: CUBE) a annoncé ses résultats du troisième trimestre 2024, avec un BPA dilué de 0,44 $, en baisse par rapport à 0,45 $ au troisième trimestre 2023. Le FFO par action diluée de l'entreprise a diminué de 1,5 % pour atteindre 0,67 $. Le NOI des magasins comparables a baissé de 3,1 % d'une année sur l'autre, avec des revenus en déclin de 0,8 % et des dépenses d'exploitation en hausse de 5,3 %. Le taux d'occupation moyen des magasins comparables était de 90,8 % durant le trimestre, se terminant à 90,2 %. L'entreprise a ajouté 24 magasins à sa plateforme de gestion tierce, atteignant un total de 893 magasins. CubeSmart est sous contrat pour acquérir deux magasins pour 22,0 millions de dollars et maintient ses prévisions de FFO pour 2024 entre 2,62 $ et 2,66 $ par action.

CubeSmart (NYSE: CUBE) hat die Ergebnisse für das 3. Quartal 2024 bekannt gegeben, wobei der verwässerte EPS bei $0.44 lag, ein Rückgang von $0.45 im 3. Quartal 2023. Der FFO pro verwässerter Aktie des Unternehmens sank um 1,5% auf $0.67. Der NOI der gleichen Geschäfte fiel im Jahresvergleich um 3,1%, während die Einnahmen um 0,8% zurückgingen und die Betriebskosten um 5,3% stiegen. Die durchschnittliche Belegung der gleichen Geschäfte lag im Quartal bei 90,8% und endete bei 90,2%. Das Unternehmen fügte seiner Plattform für das Management Dritter 24 Geschäfte hinzu und erreichte insgesamt 893 Geschäfte. CubeSmart hat einen Vertrag zum Erwerb von zwei Geschäften für $22,0 Millionen abgeschlossen und hält seine FFO-Prognose für 2024 zwischen $2,62 und $2,66 pro Aktie aufrecht.

Positive
  • Added 24 stores to third-party management platform, expanding to 893 stores
  • Under contract to acquire two new stores for $22.0 million
  • Strong balance sheet with reduced interest expense, down $0.4 million YoY
  • Successful ATM equity program raising $32.8 million
Negative
  • Diluted EPS decreased to $0.44 from $0.45 YoY
  • Same-store NOI decreased 3.1% year-over-year
  • Same-store revenues declined 0.8%
  • Operating expenses increased 5.3%
  • Occupancy declined to 90.2% from 91.3% YoY

Insights

CubeSmart's Q3 2024 results reveal concerning trends in the self-storage sector. The 3.1% decline in same-store NOI, driven by a 0.8% revenue decrease and 5.3% expense increase, signals operational challenges. The drop in occupancy to 90.2% from 91.3% year-over-year reflects softening demand.

The company's FFO per share declined to $0.67 from $0.68, while maintaining a quarterly dividend of $0.51. The guidance range of $2.62 to $2.66 for 2024 FFO suggests growth potential. However, the company's strong balance sheet and strategic expansion through third-party management platform (adding 24 stores) provides some stability.

The self-storage market's competitive pressure is evident in CubeSmart's performance. The planned acquisition of two properties for $22.0 million and development projects worth $36.9 million demonstrate a measured approach to growth in a challenging environment. The reduction in interest expense to $22.8 million, coupled with a lower weighted average interest rate of 2.99%, shows effective debt management.

The expansion of third-party managed properties to 893 locations, representing 58.3 million square feet, indicates a strategic shift toward fee-based income streams, which could provide more stable revenues in a softening market.

MALVERN, Pa., Oct. 31, 2024 (GLOBE NEWSWIRE) -- CubeSmart (NYSE: CUBE) today announced its operating results for the three and nine months ended September 30, 2024.

“The third quarter saw a continuation of trends as we remain in a competitive environment for new customer rental rates while the existing customer remains very resilient,” commented President and Chief Executive Officer Christopher P. Marr. “This month, we celebrated our 20th anniversary as a public company. While it’s exciting to celebrate our accomplishments over the past two decades, we remain keenly focused on our culture of innovation and enhancing our position as an industry leader.”

Key Highlights for the Third Quarter

  • Reported diluted earnings per share (“EPS”) attributable to the Company’s common shareholders of $0.44.
  • Reported funds from operations (“FFO”), as adjusted, per diluted share of $0.67.
  • Same-store (598 stores) net operating income (“NOI”) decreased 3.1% year over year, resulting from a 0.8% decrease in revenues and a 5.3% increase in operating expenses.
  • Same-store occupancy averaged 90.8% during the quarter, ending at 90.2%.
  • Added 24 stores to our third-party management platform, bringing our total third-party managed store count to 893.

Financial Results

Net income attributable to the Company’s common shareholders was $100.8 million for the third quarter of 2024, compared with $102.6 million for the third quarter of 2023. Diluted EPS attributable to the Company’s common shareholders decreased to $0.44 for the third quarter of 2024, compared with $0.45 for the same period last year.

FFO, as adjusted, was $153.0 million for the third quarter of 2024, compared with $154.0 million for the third quarter of 2023. FFO, as adjusted, per diluted share decreased 1.5% to $0.67 for the third quarter of 2024, compared with $0.68 for the same period last year.  

Investment Activity

Acquisition Activity

The Company is under contract to acquire two stores in Oregon (1) and Pennsylvania (1) for an aggregate purchase price of approximately $22.0 million. These acquisitions are expected to close during the fourth quarter of 2024.

Development Activity

The Company has agreements with developers for the construction of self-storage properties in high-barrier-to-entry locations. As of September 30, 2024, the Company had two joint venture development properties under construction. The Company anticipates investing a total of $36.9 million related to these projects and had invested $9.1 million of that total as of September 30, 2024. Both stores are located in New York and are expected to open during the third quarter of 2025.

Third-Party Management

As of September 30, 2024, the Company’s third-party management platform included 893 stores totaling 58.3 million rentable square feet. During the three and nine months ended September 30, 2024, the Company added 24 stores and 131 stores, respectively, to its third-party management platform.

Same-Store Results

The Company’s same-store portfolio as of September 30, 2024 included 598 stores containing 43.0 million rentable square feet, or approximately 96.7% of the aggregate rentable square feet of the Company’s 615 consolidated stores. These same-store properties represented approximately 97.5% of the Company’s property NOI for the three months ended September 30, 2024.

Same-store physical occupancy as of September 30, 2024 and 2023 was 90.2% and 91.3%, respectively. Same-store total revenues for the third quarter of 2024 decreased 0.8% and same-store operating expenses increased 5.3% compared to the same quarter in 2023. Same-store NOI decreased 3.1% from the third quarter of 2023 to the third quarter of 2024.

Operating Results

As of September 30, 2024, the Company’s total consolidated portfolio included 615 stores containing 44.4 million rentable square feet and had physical occupancy of 89.7%.

Total revenues increased $3.0 million and property operating expenses increased $4.3 million in the third quarter of 2024, as compared to the same period in 2023. Increases in revenues were primarily attributable to increases in property management fees and other fee revenue, increases in customer storage protection plan participation at our owned and managed stores, and revenues generated from property acquisitions and recently opened development properties. Increases in property operating expenses were primarily attributable to an increase in advertising costs within the same-store portfolio and increased expenses generated from property acquisitions and recently opened development properties.

Interest expense decreased from $23.2 million during the three months ended September 30, 2023 to $22.8 million during the three months ended September 30, 2024, a decrease of $0.4 million. The decrease was attributable to a decrease in the average outstanding debt balance and lower interest rates during the 2024 period compared to the 2023 period. The average outstanding debt balance decreased from $3.00 billion during the three months ended September 30, 2023 to $2.94 billion during the three months ended September 30, 2024. The weighted average effective interest rate on our outstanding debt decreased from 3.04% during the three months ended September 30, 2023 to 2.99% for the three months ended September 30, 2024.

Financing Activity

During the three months ended September 30, 2024, the Company sold 0.6 million common shares of beneficial interest through its at-the-market (“ATM”) equity program at an average sales price of $54.20 per share, resulting in net proceeds of $32.8 million, after deducting offering costs. As of September 30, 2024, the Company had 5.2 million shares available for issuance under the existing equity distribution agreements.

Quarterly Dividend

On July 23, 2024, the Company declared a quarterly dividend of $0.51 per common share. The dividend was paid on October 15, 2024 to common shareholders of record on October 1, 2024.

2024 Financial Outlook

“During the quarter, we found a select number of attractive investment opportunities as the transaction market became more constructive,” commented Chief Financial Officer Tim Martin. “We raised a modest amount of equity capital and are excited to put our well-capitalized balance sheet to work.”

The Company estimates that its fully diluted earnings per share for 2024 will be between $1.72 and $1.76, and that its fully diluted FFO per share, as adjusted, for 2024 will be between $2.62 and $2.66. Due to uncertainty related to the timing and terms of transactions, the impact of any potential future speculative investment activity is excluded from guidance. For 2024, the same-store pool consists of 598 properties totaling 43.0 million rentable square feet.



               
 Current Ranges for Current Ranges for
2024 Full Year Guidance Range SummaryCurrent Ranges for Annual Assumptions Prior Guidance (1)
Same-store revenue growth (0.75%) to 0.25% (0.75%) to 0.25%
Same-store expense growth 4.50% to 6.00%  4.50% to 6.00%
Same-store NOI growth (3.00%) to (1.00%)  (3.00%) to (1.00%)
                
Acquisition of consolidated operating properties$100.0M to$200.0M $100.0M to$200.0M
Dilution from properties in lease-up$(0.02) to$(0.03) $(0.02) to$(0.03)
                
Property management fee income$40.5M to$42.5M $40.5M to$42.5M
General and administrative expenses$59.5M to$61.5M $59.5M to$61.5M
Interest and loan amortization expense$97.0M to$99.0M $97.0M to$99.0M
Full year weighted average shares and units 228.2M   228.2M  227.7M   227.7M
                
              
Diluted earnings per share attributable to common shareholders$1.72  to$1.76  $1.71  to$1.77 
Plus: real estate depreciation and amortization 0.90     0.90   0.90     0.90 
FFO, as adjusted, per diluted share$2.62  to$2.66  $2.61  to$2.67 
(1)   Prior guidance as included in our second quarter earnings release dated August 1, 2024.
                
4th Quarter 2024 Guidance  Range
Diluted earnings per share attributable to common shareholders $0.45  to$0.48 
Plus: real estate depreciation and amortization         0.22     0.22 
FFO, as adjusted, per diluted share       $0.67  to$0.70 


Conference Call

Management will host a conference call at 11:00 a.m. ET on Friday, November 1, 2024 to discuss financial results for the three months ended September 30, 2024.

A live webcast of the conference call will be available online from the investor relations page of the Company’s corporate website at investors.cubesmart.com. Telephone participants may join on the day of the call by dialing 1 (800) 715-9871 using conference ID number 4783436.

After the live webcast, the webcast will be available on CubeSmart’s website. In addition, a telephonic replay of the call will be available through November 15, 2024 by dialing 1 (800) 770-2030 using conference ID number 4783436.

Supplemental operating and financial data as of September 30, 2024 is available in the investor relations section of the Company’s corporate website.

About CubeSmart

CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the 2024 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.

Non-GAAP Financial Measures

Funds from operations (“FFO”) is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance. The April 2002 National Policy Bulletin of the National Association of Real Estate Investment Trusts (the “White Paper”), as amended, defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of real estate and related impairment charges, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.

Management uses FFO as a key performance indicator in evaluating the operations of the Company's stores. Given the nature of its business as a real estate owner and operator, the Company considers FFO a key measure of its operating performance that is not specifically defined by accounting principles generally accepted in the United States. The Company believes that FFO is useful to management and investors as a starting point in measuring its operational performance because FFO excludes various items included in net income that do not relate to or are not indicative of its operating performance such as gains (or losses) from sales of real estate, gains from remeasurement of investments in real estate ventures, impairments of depreciable assets, and depreciation, which can make periodic and peer analyses of operating performance more difficult. The Company’s computation of FFO may not be comparable to FFO reported by other REITs or real estate companies.

FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of the Company’s performance. FFO does not represent cash generated from operating activities determined in accordance with GAAP and is not a measure of liquidity or an indicator of the Company’s ability to make cash distributions. The Company believes that to further understand its performance, FFO should be compared with its reported net income and considered in addition to cash flows computed in accordance with GAAP, as presented in its consolidated financial statements.

FFO, as adjusted represents FFO as defined above, excluding the effects of acquisition related costs, gains or losses from early extinguishment of debt, and other non-recurring items, which the Company believes are not indicative of the Company’s operating results.

The Company defines net operating income, which it refers to as “NOI,” as total continuing revenues less continuing property operating expenses. NOI also can be calculated by adding back to net income (loss): interest expense on loans, loan procurement amortization expense, loss on early extinguishment of debt, acquisition related costs, equity in losses of real estate ventures, other expense, depreciation and amortization expense, general and administrative expense, and deducting from net income (loss): equity in earnings of real estate ventures, gains from sales of real estate, net, other income, gains from remeasurement of investments in real estate ventures and interest income. NOI is a measure of performance that is not calculated in accordance with GAAP.

Management uses NOI as a measure of operating performance at each of its stores, and for all of its stores in the aggregate. NOI should not be considered as a substitute for net income, cash flows provided by operating, investing and financing activities, or other income statement or cash flow statement data prepared in accordance with GAAP. The Company believes NOI is useful to investors in evaluating operating performance because it is one of the primary measures used by management and store managers to evaluate the economic productivity of the Company’s stores, including the ability to lease stores, increase pricing and occupancy, and control property operating expenses. Additionally, NOI helps the Company’s investors meaningfully compare the results of its operating performance from period to period by removing the impact of its capital structure (primarily interest expense on outstanding indebtedness) and depreciation of the basis in its assets from operating results.

Forward-Looking Statements

This presentation, together with other statements and information publicly disseminated by CubeSmart (“we,” “us,” “our” or the “Company”), contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the “Exchange Act.” Forward-looking statements include statements concerning the Company’s plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information. In some cases, forward-looking statements can be identified by terminology such as “believes,” “expects,” “estimates,” “may,” “will,” “should,” “anticipates,” or “intends” or the negative of such terms or other comparable terminology, or by discussions of strategy. Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, future events and actual results, performance, transactions or achievements, financial and otherwise, may differ materially from the results, performance, transactions or achievements expressed or implied by the forward-looking statements. As a result, you should not rely on or construe any forward-looking statements in this presentation, or which management or persons acting on their behalf may make orally or in writing from time to time, as predictions of future events or as guarantees of future performance. We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this presentation or as of the dates otherwise indicated in such forward-looking statements. All of our forward-looking statements, including those in this presentation, are qualified in their entirety by this statement.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this presentation. Any forward-looking statements should be considered in light of the risks and uncertainties referred to in Item 1A. “Risk Factors” in our Annual Report on Form 10-K and in our other filings with the Securities and Exchange Commission (“SEC”).

These risks include, but are not limited to, the following:

  • adverse changes in economic conditions in the real estate industry and in the markets in which we own and operate self-storage properties;
  • the effect of competition from existing and new self-storage properties and operators on our ability to maintain or raise occupancy and rental rates;
  • the failure to execute our business plan;
  • adverse impacts from pandemics, quarantines and stay at home orders, including the impact on our ability to operate our self-storage properties, the demand for self-storage, rental rates and fees and rent collection levels;
  • reduced availability and increased costs of external sources of capital;
  • increases in interest rates and operating costs;
  • financing risks, including the risk of over-leverage and the corresponding risk of default on our mortgage and other debt and potential inability to refinance existing or future debt;
  • counterparty non-performance related to the use of derivative financial instruments;
  • risks related to our ability to maintain our qualification as a real estate investment trust (“REIT”) for federal income tax purposes;
  • the failure of acquisitions and developments to close on expected terms, or at all, or to perform as expected;
  • increases in taxes, fees and assessments from state and local jurisdictions;
  • the failure of our joint venture partners to fulfill their obligations to us or their pursuit of actions that are inconsistent with our objectives;
  • reductions in asset valuations and related impairment charges;
  • cybersecurity breaches, cyber or ransomware attacks or a failure of our networks, systems or technology, which could adversely impact our business, customer and employee relationships or result in fraudulent payments;
  • changes in real estate, zoning, use and occupancy laws or regulations;
  • risks related to or consequences of earthquakes, hurricanes, windstorms, floods, other natural disasters or acts of violence, pandemics, active shooters, terrorism, insurrection or war that impact the markets in which we operate;
  • potential environmental and other material liabilities;
  • governmental, administrative and executive orders, regulations and laws, which could adversely impact our business operations and customer and employee relationships;
  • uninsured or uninsurable losses and the ability to obtain insurance coverage, indemnity or recovery from insurance against risks and losses;
  • our ability to attract and retain talent in the current labor market;
  • other factors affecting the real estate industry generally or the self-storage industry in particular; and
  • other risks identified in Item 1A of our Annual Report on Form 10-K and, from time to time, in other reports that we file with the SEC or in other documents that we publicly disseminate.

Given these uncertainties, we caution readers not to place undue reliance on forward-looking statements. We undertake no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise except as may be required in securities laws.

Contact:

CubeSmart
Josh Schutzer
Vice President, Finance
(610) 535-5700



CUBESMART AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
  September 30, December 31,
     2024    2023
  (unaudited)   
       
ASSETS      
Storage properties $7,422,281  $7,367,613 
Less: Accumulated depreciation  (1,544,603)  (1,416,377)
Storage properties, net (includes VIE amounts of $189,516 and $180,615, respectively)  5,877,678   5,951,236 
Cash and cash equivalents (includes VIE amounts of $1,856 and $3,002, respectively)  43,507   6,526 
Restricted cash  1,848   1,691 
Loan procurement costs, net of amortization  3,048   3,995 
Investment in real estate ventures, at equity  92,161   98,288 
Other assets, net  174,173   163,284 
Total assets $6,192,415  $6,225,020 
       
LIABILITIES AND EQUITY      
Unsecured senior notes, net $2,779,596  $2,776,490 
Revolving credit facility     18,100 
Mortgage loans and notes payable, net  94,788   128,186 
Lease liabilities - finance leases  65,677   65,714 
Accounts payable, accrued expenses and other liabilities  223,516   201,419 
Distributions payable  116,420   115,820 
Deferred revenue  39,786   38,483 
Total liabilities  3,319,783   3,344,212 
       
Noncontrolling interests in the Operating Partnership  66,330   60,276 
       
Commitments and contingencies      
       
Equity      
Common shares $.01 par value, 400,000,000 shares authorized, 226,002,624 and 224,921,053 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively  2,260   2,249 
Additional paid-in capital  4,195,449   4,142,229 
Accumulated other comprehensive loss  (351)  (411)
Accumulated deficit  (1,411,850)  (1,345,239)
Total CubeSmart shareholders’ equity  2,785,508   2,798,828 
Noncontrolling interests in subsidiaries  20,794   21,704 
Total equity  2,806,302   2,820,532 
Total liabilities and equity $6,192,415  $6,225,020 



CUBESMART AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
  Three Months Ended September 30, Nine Months Ended September 30,
     2024    2023    2024    2023
             
REVENUES            
Rental income $230,954  $232,468  $682,935  $681,962 
Other property related income  29,268   25,857   84,542   76,001 
Property management fee income  10,668   9,551   31,028   27,246 
Total revenues  270,890   267,876   798,505   785,209 
OPERATING EXPENSES            
Property operating expenses  81,868   77,546   242,002   223,494 
Depreciation and amortization  51,210   49,985   152,962   150,672 
General and administrative  14,265   14,060   44,512   43,059 
Total operating expenses  147,343   141,591   439,476   417,225 
OTHER (EXPENSE) INCOME            
Interest:            
Interest expense on loans  (22,750)  (23,204)  (68,436)  (70,439)
Loan procurement amortization expense  (986)  (1,030)  (3,031)  (3,111)
Equity in earnings of real estate ventures  418   1,141   1,688   4,482 
Other  721   (119)  744   382 
Total other expense  (22,597)  (23,212)  (69,035)  (68,686)
NET INCOME  100,950   103,073   289,994   299,298 
Net income attributable to noncontrolling interests in the Operating Partnership  (551)  (640)  (1,616)  (1,870)
Net loss attributable to noncontrolling interests in subsidiaries  398   212   910   662 
NET INCOME ATTRIBUTABLE TO THE COMPANY $100,797  $102,645  $289,288  $298,090 
             
Basic earnings per share attributable to common shareholders $0.45  $0.46  $1.28  $1.32 
Diluted earnings per share attributable to common shareholders $0.44  $0.45  $1.28  $1.32 
             
Weighted average basic shares outstanding  226,166   225,467   225,941   225,380 
Weighted average diluted shares outstanding  227,149   226,210   226,805   226,206 



Same-Store Results (598 stores)
(in thousands, except percentages and per square foot data)
(unaudited)
  Three Months Ended   Nine Months Ended   
  September 30, Percent  September 30, Percent 
     2024    2023    Change2024    2023    Change
                  
REVENUES                 
Rental income $224,958  $227,926  (1.3)%  $665,743  $669,257  (0.5)%
Other property related income  11,067   9,927  11.5 %   31,927   29,497  8.2 %
Total revenues  236,025   237,853  (0.8)%   697,670   698,754  (0.2)%
                  
OPERATING EXPENSES                 
Property taxes (1)  25,168   24,859  1.2 %   76,871   75,072  2.4 %
Personnel expense  13,890   13,443  3.3 %   41,566   40,144  3.5 %
Advertising  8,095   6,036  34.1 %   17,737   16,103  10.1 %
Repair and maintenance  2,755   2,770  (0.5)%   8,405   7,743  8.5 %
Utilities  6,481   6,382  1.6 %   17,613   17,436  1.0 %
Property insurance  3,334   3,117  7.0 %   9,690   7,927  22.2 %
Other expenses  9,297   8,949  3.9 %   28,386   26,587  6.8 %
                  
Total operating expenses  69,020   65,556  5.3 %   200,268   191,012  4.8 %
                  
Net operating income (2) $167,005  $172,297  (3.1)%  $497,402  $507,742  (2.0)%
                  
Gross margin  70.8 %   72.4 %     71.3 %   72.7 %    
                  
Period end occupancy  90.2 %   91.3 %     90.2 %   91.3 %    
                  
Period average occupancy  90.8 %   92.0 %     90.9 %   92.0 %    
                  
Total rentable square feet  42,990        42,990       
                  
Realized annual rent per occupied square foot (3) $23.05  $23.06  0.0 %  $22.73  $22.57  0.7 %
                  
Reconciliation of Same-Store Net Operating Income to Operating Income                 
                  
Same-store net operating income (2) $167,005  $172,297    $497,402  $507,742    
Non same-store net operating income (2)  4,268   2,902     11,867   8,123    
Indirect property overhead (4)  17,749   15,131     47,234   45,850    
Depreciation and amortization  (51,210)  (49,985)    (152,962)  (150,672)   
General and administrative expense  (14,265)  (14,060)    (44,512)  (43,059)   
Interest expense on loans  (22,750)  (23,204)    (68,436)  (70,439)   
Loan procurement amortization expense  (986)  (1,030)    (3,031)  (3,111)   
Equity in earnings of real estate ventures  418   1,141     1,688   4,482    
Other  721   (119)    744   382    
                  
Net income $100,950  $103,073    $289,994  $299,298    
                  

(1)   For comparability purposes, certain amounts related to the expiration of certain real estate tax abatements have been excluded from the same-store portfolio results ($178k and $571k for the three and nine months ended September 30, 2024, respectively).

(2)   Net operating income (“NOI”) is a non-GAAP (“generally accepted accounting principles”) financial measure. The above table reconciles same-store NOI to GAAP Net income.

(3)   Realized annual rent per occupied square foot is calculated by dividing annualized rental income by the weighted average occupied square feet for the period.

(4)   Includes property management income earned in conjunction with managed properties.



Non-GAAP Measure – Computation of Funds From Operations
(in thousands, except percentages and per share and unit data)
(unaudited)
  Three Months Ended  Nine Months Ended 
  September 30, September 30, 
  2024 2023 2024 2023 
              
Net income attributable to the Company's common shareholders $100,797 $102,645 $289,288 $298,090  
              
Add (deduct):             
Real estate depreciation and amortization:             
Real property  49,639  48,404  148,324  146,218  
Company's share of unconsolidated real estate ventures  2,025  2,104  6,163  6,353  
Loss (gain) from sales of real estate, net (1)    236    (1,477) 
Net income attributable to noncontrolling interests in the Operating Partnership  551  640  1,616  1,870  
              
FFO attributable to the Company's common shareholders and third-party OP unitholders $153,012 $154,029 $445,391 $451,054  
              
Basic earnings per share attributable to common shareholders $0.45 $0.46 $1.28 $1.32  
Diluted earnings per share attributable to common shareholders $0.44 $0.45 $1.28 $1.32  
FFO per diluted share and unit $0.67 $0.68 $1.95 $1.98  
              
Weighted average basic shares outstanding  226,166  225,467  225,941  225,380  
Weighted average diluted shares outstanding  227,149  226,210  226,805  226,206  
Weighted average diluted shares and units outstanding  228,386  227,614  228,067  227,621  
              
Dividend per common share and unit $0.51 $0.49 $1.53 $1.47  
Payout ratio of FFO  76.1% 72.1% 78.5% 74.2 %

(1)  For the three months ended September 30, 2023, represents a loss related to the sale of the California Yacht Club, which was acquired in 2021 as part of the Company's acquisition of LAACO, Ltd. This amount is included in the component of other (expense) income designated as Other within our consolidated statements of operations. For the nine months ended September 30, 2023, includes distributions received in excess of our investment in HVPSE. This amount is included in Equity in earnings of real estate ventures within our consolidated statements of operations.


FAQ

What was CubeSmart's (CUBE) earnings per share in Q3 2024?

CubeSmart reported diluted earnings per share (EPS) of $0.44 for Q3 2024, compared to $0.45 in Q3 2023.

How many stores did CubeSmart (CUBE) add to its third-party management platform in Q3 2024?

CubeSmart added 24 stores to its third-party management platform in Q3 2024, bringing the total to 893 stores.

What is CubeSmart's (CUBE) FFO guidance for full-year 2024?

CubeSmart expects its fully diluted FFO per share, as adjusted, for 2024 to be between $2.62 and $2.66.

What was CubeSmart's (CUBE) same-store NOI performance in Q3 2024?

CubeSmart's same-store NOI decreased 3.1% in Q3 2024 compared to Q3 2023.

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