CubeSmart (CUBE) Q3 2024 earnings summary

Executive summary

• Third quarter performance was solid, with results at the midpoint of guidance despite a competitive market and slower rental volumes.

• Owns and manages 615 self-storage properties with 44.4 million rentable sq. ft. as of September 30, 2024, and manages 893 third-party stores, totaling 1,508 stores under management.

• Urban markets, especially New York MSA, outperformed, while Sun Belt and pandemic-boosted markets like Florida and Arizona lagged due to new supply.

• Focus remains on disciplined capital allocation, maximizing internal growth, selective acquisitions, and remains a third-party manager of choice, adding 130+ stores annually for eight consecutive years.

• Celebrated 20th anniversary as a NYSE-traded company, maintaining industry leadership and innovation.

Financial highlights

• Total revenues for Q3 2024 were $270.9M, up 1.1% from Q3 2023; net income was $100.8M, down 1.8% year-over-year.

• FFO as adjusted was $153.0M ($0.67 per share), at the midpoint of guidance and down 1.5% year-over-year.

• Same-store revenues declined 0.8% year-over-year; average same-store occupancy fell 120 basis points to 90.8%.

• Same-store NOI decreased 3.1% year-over-year, with a 5.3% increase in operating expenses.

• Diluted EPS for Q3 2024 was $0.44, compared to $0.45 in Q3 2023.

Outlook and guidance

• Full-year FFO per share guidance range narrowed and maintained at the midpoint; 2024 FFO per diluted share, as adjusted: $2.62–$2.66.

• Q4 2024 FFO per diluted share, as adjusted: $0.67–$0.70; diluted EPS guidance: $0.45–$0.48.

• Same-store revenue growth expected between -0.75% and 0.25%; expense growth 4.5%–6.0%; NOI growth -3.0% to -1.0%.

• Guidance reflects comfort with current ranges, with no significant changes expected for the remainder of the year.

• Expects recurring capital expenditures of $3M–$8M, planned improvements of $1.5M–$6.5M, and development costs of $2M–$7M for the remainder of 2024.