Earnings call transcript: CubeSmart misses EPS forecast in Q3 2025

CubeSmart reported its third-quarter earnings for 2025, revealing a slight miss on earnings per share (EPS) forecasts and a modest beat on revenue expectations. The company posted an EPS of $0.36, falling short of the $0.38 forecast, while revenue reached $285.08 million, surpassing the expected $281.89 million. Following the earnings release, CubeSmart's stock fell by 3.33% in regular trading hours, closing at $38.8, down from the previous close of $39.06. According to InvestingPro data, despite the quarterly miss, CubeSmart remains profitable over the last twelve months with a basic EPS of $1.65, and analysts predict continued profitability for the full year 2025.

Key Takeaways

• CubeSmart's Q3 EPS of $0.36 missed the forecast by 5.26%.
• Revenue exceeded expectations, reaching $285.08 million.
• Stock declined by 3.33% following the earnings announcement.
• Full-year FFO per share guidance was raised slightly.
• Same-store revenue and expense growth guidance improved.

Company Performance

CubeSmart's performance in the third quarter of 2025 was marked by mixed results. While the company managed to exceed revenue expectations, its EPS fell short of forecasts. The company experienced a 1% decline in same-store revenues year-over-year, with average occupancy dropping to 89.9%. Despite these challenges, CubeSmart reported a successful $450 million issuance of senior unsecured notes and expanded its third-party management platform significantly.

Financial Highlights

• Revenue: $285.08 million, up from the $281.89 million forecast.
• Earnings per share: $0.36, below the $0.38 forecast.
• Same-store revenue declined by 1% year-over-year.
• Same-store NOI growth was negative at 1.5%.

Earnings vs. Forecast

CubeSmart's actual EPS of $0.36 represented a 5.26% miss compared to the forecasted $0.38. However, the company achieved a 1.13% revenue surprise, with actual revenue at $285.08 million against the forecast of $281.89 million. This mixed performance reflects ongoing challenges in the self-storage market, including declining occupancy and increased operating expenses.

Market Reaction

CubeSmart's stock reacted negatively to the earnings report, declining by 3.33% in regular trading hours. The current stock price of $38.8 is significantly below its 52-week high of $50.7, indicating investor concerns over the missed EPS forecast and ongoing operational challenges.

Outlook & Guidance

CubeSmart raised its full-year FFO per share guidance by a penny, signaling cautious optimism. The company expects same-store revenue growth to potentially turn positive in the latter half of 2026, with gradual improvements in operational metrics anticipated. However, the outlook remains conservative due to a high customer churn rate.

Executive Commentary

CEO Chris Marr emphasized the slow and steady stabilization of the market, stating, "It's a slow, steady stabilization without a catalyst for rapid acceleration." CFO Tim Martin echoed this sentiment, noting, "We would conservatively expect same-store revenue growth in the back half of 2026." These comments highlight the company's cautious approach to future growth.

Risks and Challenges

• Declining occupancy rates, which could impact revenue.
• Increased operating expenses, affecting profitability.
• High customer churn rates, posing a challenge to revenue stability.
• Economic uncertainties that could affect consumer spending.
• Competitive pressures in key urban markets.

Q&A

During the earnings call, analysts inquired about CubeSmart's acquisition strategy, which includes three stores under contract, and the impact of AI on lead generation, which remains minimal. The company also addressed concerns about move-in rates, which saw a slight decline in October compared to the previous quarter.

Full transcript - CubeSmart (CUBE) Q3 2025:

Colby, Conference Operator: Ladies and gentlemen, thank you for standing by. My name is Colby, and I'll be your conference operator today. At this time, I'd like to welcome you to the CubeSmart third quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise, and after the speakers are marked, there will be a question-and-answer session. If you would like to ask a question at that time, please press star then the number one on your telephone keypad. If you would like to withdraw your question at any time, please press star one again. I'll now turn the call over to Josh Schutzer, Vice President of Finance.

Josh Schutzer, Vice President of Finance, CubeSmart: Thank you, Colby. Good morning, everyone. Welcome to CubeSmart's third quarter 2025 earnings call. Participants on today's call include Chris Marr, President and Chief Executive Officer, and Tim Martin, Chief Financial Officer. Our prepared remarks will be followed by a Q&A session. In addition to our earnings release, which was issued yesterday evening, supplemental and financial data is available under the Investor Relations section of the company's website at www.cubesmart.com. The company's remarks will include certain forward-looking statements regarding earnings and strategy that involve risks, uncertainties, and other factors that may cause the actual results to differ materially from these forward-looking statements.

The risks and factors that could cause our actual results to differ materially from forward-looking statements are provided in documents the company furnishes to or files with the Securities and Exchange Commission, specifically the Form 8-K we filed this morning, together with our earnings release filed with the Form 8-K, and the risk factors section in the company's annual report on Form 10-K. In addition, the company's remarks include reference to non-GAAP measures. The reconciliation between GAAP and non-GAAP measures can be found in the third quarter financial supplement posted on the company's website at www.cubesmart.com. I'll now turn the call over to Chris.

Colby, Conference Operator: Thank you, Josh. Happy Halloween, and welcome, everyone, to our third quarter call. It was a very solid third quarter for CubeSmart, which resulted in guidance increases across our key, same-store, and earnings metrics. Across all markets, our existing customer KPIs remain strong, with key credit and attrition metrics remaining consistent within historical normal ranges. We are continuing to feel diminishing headwinds from new supply as the stores placed in service over the last three years lease up, and the forward pipeline continues shrinking. As evident by two consecutive quarters of improved guidance expectations, the year has played out a bit better than we expected, which we attribute to the lessening impact of new supply, a more constructive pricing environment during our busy rental season, and the continued health of the consumer. We foresee continued gradual improvement in operational metrics. We are not anticipating a catalyst for a sharp reacceleration.

We are prepared and operating under the expectation that the stabilizing trends, as well as deliveries of new stores, will vary by market. Market-level performance was similar to what we have been discussing for the last couple of quarters. Top performers continue to be the more urban, Mid-Atlantic, and Northeast markets. The East Coast of Florida is experiencing stabilizing trends, and some of the Sun Belt markets are still finding their footing. In summary, it's a slow, steady stabilization without a catalyst for rapid acceleration, just like we laid out when we entered the year. We've seen some better pricing power that started earlier in the year for the reasons I've previously shared, while overall demand levels are mostly stable but not growing significantly.

It takes time for improving fundamentals to flow through to revenue, with only 4% to 5% monthly customer churn, and this was the first quarter since Q1 2022 where move-in rates in the same-store portfolio were positive year over year. Assuming these stabilizing trends continue through the end of the year, we should be on improved footing heading into 2026. Now, I'd like to turn the call over to our Chief Financial Officer, Tim Martin, for his commentary.

Tim Martin, Chief Financial Officer, CubeSmart: Thanks, Chris. Good morning, and thank you to everyone for taking the time to join us today. For the quarter, we performed in line with our expectations, reporting FFO per share as adjusted of $0.65. Same-store revenues declined 1% compared to last year, with average occupancy for our same-store portfolio down 80 basis points to 89.9%. Same-store operating expenses grew just 0.3% over last year, again reflecting our keen focus on expense control. We saw favorable year-over-year variances in utilities expenses and in property insurance following our successful renewal back in May, which we discussed last quarter. Negative 1% revenue growth combined with 0.3% expense growth yielded negative 1.5% same-store NOI growth for the quarter. From an external growth perspective, we're starting to see a little momentum here late in the year as we're under contract to acquire three stores in the fourth quarter.

We also completed and opened our joint venture development in Port Chester, New York, during the quarter and are scheduled to open our project in New Rochelle, New York, during the fourth quarter. On the third-party management front, we had another productive quarter, adding 46 stores to our platform, bringing us to 863 stores under management at quarter end. On the balance sheet, we successfully completed our issuance of $450 million of 10-year senior unsecured notes on August 20. The offering has a yield to maturity of 5.29% and was our first time back to the market in four years. We were delighted with the execution and delighted with the support we received from our fixed-income investor base.

Our 2025 notes mature later this month, and we intend to satisfy those initially through borrowings under our unsecured credit facility and then ultimately term that out by accessing the bond market again in the coming months. Our leverage levels remain quite conservative, with net debt to EBITDA at 4.7 times at quarter end. From a guidance perspective, we updated our full-year expectations and underlying assumptions in our press release last evening. Highlights of the guidance changes include a penny raise at the midpoint of our FFO per share as adjusted. On same-store revenue growth, we improved the midpoint of our guidance range. Our expense growth guidance range improved as well, with a revised midpoint of 1.5% for the year. All of that translates into improved same-store NOI expectations for the year, with a revised midpoint of negative 1.25%.

Picking up on Chris's comments, we expect trends to continue to stabilize through the remainder of the year, putting us on better footing heading into 2026 than where we entered this year. Our guidance implies negative revenue growth in Q4, although acceleration from Q3 at the midpoint. While we're still not anticipating things snapping all the way back to normalized levels of growth quickly, we're seeing encouraging signs that are starting to flow through the portfolio. Thanks again for joining us on the call this morning. Happy Halloween. At this time, Colby, let's open up the call for some questions.

Colby, Conference Operator: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star then the number one on your telephone keypad to raise your hand and enter the queue. If you would like to withdraw your question at any time, simply press star one again. Thank you. Your first question comes from the line of Samir Khanal with Bank of America. The line is open.

Good morning, everybody. Hey, Chris. How are you thinking about the balance between rate and occupancy right now in an environment where demand seems to be stable as you try to get that new customer in the door? Thanks.

Tim Martin, Chief Financial Officer, CubeSmart: Ultimately, the systems are focusing in on maximizing the revenue from each customer and trying to find that balance. It varies by market. When you think about those two levers, rate and occupancy, you have the elasticity of demand that one has to deal with. When we look at those markets that we would describe as having been solid for a while, kind of the rock stars in this part of the cycle where you're getting both rate and occupancy, I'd call out New York City, Washington, D.C. MSA, Chicago. You have those markets that are stabilizing, so their rate and occupancy are moving in a good direction, albeit still perhaps down year over year. Those examples would be Miami and Los Angeles.

Those markets that are still trying to find their footing, where again, the systems every day are trying to navigate through that dynamic of new move-in customer rate versus occupancy and testing is the demand there at any price. Those would be the same markets we've talked about all year: Atlanta, Phoenix, Cape Coral, Charlotte, the Sun Belt market. It really varies quite a lot by market as the systems try to find that balance.

Maybe as a follow-up here, I know you talked about move-in rates that were positive in the quarter, kind of 2.5%, better on rate versus occupancy. Can you provide some color around October as well, what you're seeing, kind of trends in October? Thanks.

Yeah. The occupancy gap to last year has contracted from the end of the third quarter. As of yesterday, we're down 100 basis points from where we were at this point last year. The average rent-on-rentals, that 2.5% that you quoted for the quarter in October, is kind of in that 1.92% kind of range.

Okay, thanks a lot.

Colby, Conference Operator: Your next question comes from the line of Nick Carn from Scotiabank. The line is open.

Hello. This is Victor Fede on with Nihilicom. On your last call, you said that most demand still comes from traditional search, and you're working with your partners for Gemini integration. What percentage of leads and bookings are now AI-influenced today, and how does overall the cost per AI leads compare to traditional search engine leads so far?

Tim Martin, Chief Financial Officer, CubeSmart: Yeah, the leads coming through the LLMs, which is primarily ChatGPT at this point for us, are about less than 1%.

Got it. You also mentioned last call that the merchant builder exit wave is kind of coming to the market. I am just trying to understand whether it has intensified recently and what does it mean for you and for your potential acquisition pool.

I'm sorry. I think we got a little bit more clarity on the question, if we could. Merchant builder sellers?

Yeah, sellers. Whether you can see now more of them or not really versus, for example, Q2.

Yeah. No, I haven't really seen a change. Again, there's no, and there typically isn't significant duress in our sector. I think what you have is folks who may have opened a store in 2022 where they were underwriting cash flows based on the spectacular storage performance during COVID are clearly not meeting their pro formas. I think what we're finding is everyone's just looking for ways to extend out and anticipate stabilizing trends and better times ahead. Financial institutions, for the most part, are cooperating.

Got it. Thank you.

Thanks.

Colby, Conference Operator: Your next question comes from Todd Thomas with KeyBanc Capital Markets. Your line is open.

Hi. Thanks. Good morning. Chris, Tim, your comments about the improving trends and third quarter being the first period of higher move-in rents, and it seems like that continued in October. Your guidance assumes an improving revenue growth trend in fourth quarter, albeit still negative. You mentioned that. Your comments overall suggesting that trend of improving revenue growth, early sort of read into 2026, is it fair to assume that you would expect all else equal that trend to continue from here, just given the 4% to 5% churn and the time it takes for that to translate to revenue growth? Is that how you're thinking about it at this point in the cycle?

Tim Martin, Chief Financial Officer, CubeSmart: Yeah. As you think, I mean, as you think about '26. Macro, again, assuming that consumer health remains where it is, the economy continues to do okay. We would anticipate that the trend from Q3 to Q4, and again, we talked about in Q2 that Q3 had a little bit of an anomaly and that was going to create that decel from the prior quarter. Yeah, that trend should continue. Again, do we inflect positive in same-store revenue growth? As we sit here today? Yes. When might that occur? Again, as we sit here today, I would conservatively expect that's probably the back half of 2026.

Okay. Some of your peers, I think, ran promotions or implemented newer discounting strategies during the quarter. I was just wondering if you can speak to whether CubeSmart participated or what discounting strategies might have been implemented during the peak season and how you're thinking about pricing, promotions, and discounting in the off-peak season as occupancy typically pulls back a bit here.

Yeah. I guess there was some new vernacular introduced recently with this gross net kind of concept. The 2.5% gross move-in rate year-over-year growth that we saw is, for us, it is also the net. We have not had any change in our discounting.

Okay. Are you changing your promotional offerings, though, or changing your discount strategies at all?

No.

Okay. All right. Thank you.

Thanks, Todd.

Colby, Conference Operator: Your next question comes from the line of Juan Sanabria with BMO Capital Markets. Your line is open.

Hi. Good morning. Thanks for the time. Just on the acquisition side, a couple of your peers have become more aggressive, talking about more opportunities or deal flow. Just curious what you're seeing and/or willingness or appetite to increase the external investments.

Tim Martin, Chief Financial Officer, CubeSmart: Thanks, Juan. Appreciate the question. I guess we have three stores under contract, so that's movement in the right direction. I think what we have seen and we've talked about here for the past several quarters is a pretty consistent view from the buying side of the table as to what return thresholds look like. I don't think that's changed much at all. It hasn't for us. I don't think it's changed much for others either. I think the change is that the seller side of the equation has gotten a little bit more constructive from the buyer's perspective, and you're starting to see things move a little bit. I think you saw that from some of our peers. I think you see that from us with the three stores that we have under contract.

I wouldn't say there's any earth-shattering move other than the market becomes a little bit more constructive as the gap between buyer and seller has shrunk to the point where you're starting to see some things get done.

Just as a follow-up, your rent per occupied square foot was strong in the quarter, up 2.4% quarter over quarter, flat year over year, better than peers. What do you think allowed you to push that in place rate, relative to the industry a bit stronger?

I think, again, everybody's system, I assume, is trying to do the same thing, which is find that balance between the levels of demand that are out there for storage and then pricing to capture that customer as well as the marketing tools to capture that customer. I think some of it is portfolio construct, again, where we are at this part of the cycle. Our strategy and our quality focus, I think, is very helpful to our results. Part of it actually is just sort of the normal seasonality that one would expect to see from Q2 into Q3.

Colby, Conference Operator: Your next question comes from the line of Eric Wolf with Citi. The line is open.

Hey, thanks for taking my questions. I think you said a moment ago that, conservatively, same-store revenue might not turn positive until the back half of 2026. If you're already at 2% to 3% move-in rate growth, is there some reason to believe that stays there, that you wouldn't just go to 2% to 3% same-store revenue growth? Is there some kind of offset on the ETRI? I'm just trying to understand why, if you're already at, call it, positive move-in rents today, it's going to take until the back half of 2026 to be positive on same-store revenue.

Tim Martin, Chief Financial Officer, CubeSmart: Yeah, I mean, not sarcastically, it's math. We are in a business where 4% to 5% of our existing customers churn on a monthly basis. Barring, again, some sort of change to the good on the demand side, which we don't foresee a catalyst for, it just takes time. You will just gradually see that slightly negative same-store revenue growth begin to move in a positive direction. Exactly when that crossover occurs, we're not providing guidance at this point, and we don't do quarterly guidance from a same-store perspective. I think, to be fair, at this point on October 31, what I shared is kind of the conservative outlook at the moment.

Got it. I guess to the move-in rents that you provide in the South, does that include promotions? I'm probably asking because I'm just thinking through if we continue to see just positive move-in rent growth, like, I don't know, say 2% to 3% or 2% to 4%, does that eventually translate into kind of 2% to 4% same-store revenue growth? I know occupancy obviously plays a factor, to your point, but I guess I'm just wondering about if you can really just kind of take these move-in rent growths and then assume you're going to get a similar ECRI component to it and take that as a leading indicator of where same-store revenue growth is going, or we're mistakenly not including promotions or not including something else into that calculation.

I'll jump in. If you think about your premise there of 2% to 3%, 2% to 4% type year-over-year improvement in pricing, and you held everything else constant, then ultimately, after, call it 12 months when you've churned 5% of your portfolio each month at that type of churn, then eventually that's where you would get to. It would probably be helped a little bit then by some of those other factors. You probably get a little bit more out of your ECRIs. You probably get a little bit of occupancy if you're in that environment. If you have that type of pricing power, normal pricing power over a prolonged period of time. Back to Chris's point earlier here, it just takes time to flow through because it's 4% to 5% a month, and it builds and builds and builds.

If you had that for a prolonged period of time, I think that's ultimately where you get to from a revenue growth perspective, plus or minus.

Thanks. Does the move-in rents include promotions, or is that a separate calculation we should make? I think it was up like mid-2s this quarter. Is that flat with promotions?

Yeah. That 2.5% is gross, and for us is the same as the net because our promotions have not changed, the amount or the magnitude.

Got it. Thank you.

Thanks.

Colby, Conference Operator: Your next question comes from the line of Michael Griffin with Evercore ISI. The line is open.

Great. Thanks. Chris, maybe you can expand a bit on whether or not you've seen any changes in new customer behavior. I mean, it seems like if you're able to raise these new customer rents, maybe there's less price sensitivity or customers shopping around. I know it's always a topical point with storage, but any incremental home buyer customers coming back, or is it still they haven't really materialized yet?

Tim Martin, Chief Financial Officer, CubeSmart: Yeah. I think what you're finding is you're just able to get rate in these markets that are not typically the home buyer and seller movement markets. You're leading year-over-year improvement in rate to new customers: Manhattan, Queens, Brooklyn, Chicago, Washington, DC. The laggards where you're just still trying to find your footing in terms of where is that balance and at what rate can you get that customer to convert continue to be Atlanta, Phoenix, Charlotte, some in Texas. Some of the major Texas markets are moving in that direction as well. It really is just market from our perspective, which then sort of ties into your question, which is its customer use case.

Thanks. Appreciate the context there.

I'm sorry. One last piece of this. Ultimately, it's still when we talk about supply and those headwinds are diminishing across the portfolio, but that also varies pretty significantly by market. Not surprising, those Sun Belt markets that, A, tended to rely historically on a little bit more of that home buyer and seller are also the markets that continue to get deliveries. While deliveries overall are down, they are still occurring all too frequently in Atlanta, in Phoenix, in the West Coast of Florida.

It is kind of a double whammy for those Sun Belt markets, so to say.

Yes.

Great. Maybe next, just on sort of the ECRIs and outlook there. I realize that the rent roll-downs, the move-in, the move-out is still pretty wide. Has your strategy changed there at all? Have customers become more sensitive to rate increases, or are they typically still willing to accept them, and you're able to push strategically where you can?

Yeah. The customer health, which we continue to really focus in on, and again, varies by economic strata and parts of the country, generally across the portfolio, continues to be very good. We have not seen any change in customer behavior as it relates to ECRIs, and our overall approach has been consistent throughout 2025.

Great. That's it for me. Thanks for the time.

You too.

Colby, Conference Operator: Your next question comes from the line of Ravi Vaidya with Mizuho. The line's open.

Hi there. Good morning. Hope you guys are doing well. I wanted to ask for the third-party management platform. I saw a couple of stores came off on a net basis. Is there something that, looking ahead, should be expected to increase again, or maybe who are some of the new private operators that you're partnering with, and how can that be used as a hedge for higher supply? Thanks.

Tim Martin, Chief Financial Officer, CubeSmart: Yeah. I appreciate the question. On our third-party management platform, we talk about the stores that we add to the platform because that's ultimately what we control. Our new business development team is looking for opportunities to add owners, to add stores to the platform. This year, we have exceeded adding 130 stores for at least the eighth consecutive year. That part of the business remains healthy. The part that is very difficult to predict is when stores are going to leave the platform. Part of this year's churn was self-inflicted earlier in the year when we bought 28 stores that were in that third-party managed bucket. You just have a lot of stores that are leaving the platform. Most often, that is because they have transacted. They have sold to somebody that either self-manages or has a different relationship.

Trying to predict the net growth in the store count on the third-party management platform is an impossible task. We control what we can control. When stores leave the platform, we've talked about in the past, we feel like it's a job well done. We've helped that owner create the value. We've stabilized and improved performance. In most cases, we set them up to achieve their desired results as they transact and sell the asset to someone else.

Got it. That's helpful. Thank you.

Thank you.

Colby, Conference Operator: Your next question comes from the line of Spenser Glimcher from Green Street. The line is open.

Thank you. Maybe just going back to the acquisition front, are there certain markets or geographies that you guys are more comfortable underwriting just due to greater stabilization of fundamentals? On the flip side, are there any markets that are sort of redlined right now just because there's still too much operational uncertainty, maybe outside of the obvious supply-heavy markets?

Yeah. I mean, just the nuanced responses, we're comfortable underwriting it everywhere. I think embedded in our underwriting are obviously going to be different risk hurdles based on some of those characteristics that you would refer to. Perhaps the best deal that we can find right now would be in a market that's more challenged because others don't see maybe what we see. We don't have a bias necessarily to blacklist a particular market because of supply as an example or some other criteria. What we would do in that standpoint is to make sure that from a risk-adjusted standpoint, we're getting paid to take on that uncertainty. Those markets create more challenge from an underwriting standpoint to try to look at where rates are today, perhaps, and where rates might be in a year or two.

It is a challenging but not impossible underwrite when you have a store in particular because it's such a micro-market business. When you have a store that is competing against new supply, to be able to have confidence in your ability to project where rates in that small market are going to stabilize once that new supply leases up is a challenge. It's the fun part of the investments team and what they do because those deals that have a little bit of hair on them are the most challenging but also very interesting and perhaps the place that you can make a really nice risk-adjusted return. We're not avoiding markets, but certainly considering all of those risk factors.

Okay. That's very helpful. Can you just share what stabilized cap rates you guys are underwriting on the three assets you're acquiring in 4Q?

Tim Martin, Chief Financial Officer, CubeSmart: Yeah. Those three assets are a little bit of a mixed bag between stable and not stable. Going in, when you look across the three, we're going in in the low fives and stabilizing across the board fairly early on in year two or three, right around a six across the board for those three opportunities.

Okay, thank you so much.

Thank you.

Colby, Conference Operator: Your next question comes from Brendan Lynch from Barclays. The line is open.

Great. Thank you for taking my question. New York City continues to perform quite well, and it continues to outperform other large markets in the Northeast. Maybe you can just kind of compare and contrast what is leading to that outperformance. Obviously, there's a lot of supply issues in the Sun Belt. Maybe it's the same in the Northeast. Just kind of any color that you can provide on New York relative to some of these other markets in the region.

Tim Martin, Chief Financial Officer, CubeSmart: Yep. It's going to be partly what you just said. The boroughs really have nonexistent new supply impact, so you're really stable from that perspective. You have a more need-based customer, and then obviously, we have a very significant position there and one in which the asset quality is extremely high. We just have everything in our favor in a market that in this part of the cycle is just doing very well. Other Northeast, Philadelphia, Boston, a little bit of a mixture there. You've got supply as opposed to the boroughs, and you have a little bit more of a mix in the customer base. It's not quite Sun Belt-like, but you do have a little bit more of that mover, so to speak, than you might have in, say, the Bronx. I think it's kind of a combination of those two things.

You see that similarly in urban Chicago. You see it in a few of the other urban markets.

Great. Thanks, Chris. Maybe just sticking with New York City, you've got the new development coming there. It's a relatively small investment. I think it's $19 million. Maybe just talk about what would allow you to get more assertive or aggressive on development in the New York City area.

It's really looking for opportunities that are located in a spot that would be complementary to our existing portfolio and, frankly, would have a need from a demand standpoint for there to be new product. Obviously, it's not as easy to pencil out deals in the boroughs as it used to be because the tax incentives aren't there any longer. There are opportunities somewhere, but the fruit is pretty high up in the tree. For us to find an opportunity, it's going to be something that we're pretty excited about.

Great. Next step.

Thank you.

Colby, Conference Operator: Your next question comes from the line of Eric Luchow from Wells Fargo. Your line is open.

Thanks for the question. Can you comment a little bit on any trends you're seeing on your average length of stay? It seems like vacates have been kind of muted across the industry this year. Obviously, it helps from a roll-down perspective, but perhaps takes a little bit longer for some of these better moving rates to flow through the portfolio. Any commentary on that would be helpful.

Tim Martin, Chief Financial Officer, CubeSmart: Sure. When you think about those trends, I would macro say they're consistent, still elevated. Our customers who have been with us greater than a year, that's up 50 bps year over year. If you kind of compare it to pre-COVID, third quarter of 2019, it's plus 260 bps. Customers who have been with us greater than two years, which is about 40% of our customers, that's actually down year over year, about 140 bps, but up 50 bps from what we saw in 3Q19. Continue to be pretty consistent. Have come down a bit off of peak, but still elevated relative to historical metrics.

I appreciate that. I know you provided a little bit of directional commentary on 2026, but just trying to take maybe more of the bull case. Obviously, if we get a housing catalyst, if we see a pickup in customer mobility, moving rates continue to find stability, start growing. Do you think it's reasonable we could get back to more historical levels of growth by maybe the second half of next year, certainly into 2027, and then potentially even higher beyond that, especially given some of the supply delivery commentary? Just wanted to get your temperature on what you see over the next few years and not just into 2026.

Yeah. I do see that bull case as playing out the way you described. It's sort of finding that catalyst for demand. If that occurs, housing being the easiest thing to point at, we continue to have a healthy consumer. I think you then start to see consistent performance from those solid markets that we've experienced here over the last couple of quarters. Those steady eddies continue, and you're overall helped by the fact that the Charlottes and the Nashville, etc., of the world should rebound quite nicely. I think we're well positioned from obviously to get the rate. We've shown that we can do that through this cycle, increasingly more so over the last couple of months. On the occupancy side, then you get the pickup there as well.

To your point, you could see, and I would expect if those conditions were to occur, you would see more elevated performance.

Okay. I appreciate it. Thanks, guys.

Thank you.

Colby, Conference Operator: Your next question comes from the line of Michael Mueller with JPMorgan. Your line is open.

Yeah. Hi. I just go back to development supply. I mean, what's your gut feeling tell you about how quickly supply may come back in some of the markets as they improve over the next couple of years? I mean, do you see a lot of competitive projects near you where people are just kind of waiting for the right time to kick off, or do you think you're going to have a little bit longer of a runway without meaningful supply?

Tim Martin, Chief Financial Officer, CubeSmart: I think that crystal ball is complicated and maybe a little fuzzy. I think it will be slower. I think that you have a couple of factors. Again, we still have elevated cost. I think it will, to our point, be a more gradual recovery in move-in rates. You'll still have to see some progress there. I think the developers, again, who have opened in 2022 and are sort of trying to figure out how to hang on at this point, may not be likely to want to get back into it again until they deal with exiting the store that they have.

Ultimately, the primary lenders to the space for the developers, those local and regional banks, have to be, if they continue to be constructive in terms of how they think about underwriting and how they think about providing that leverage, I think that should constrain things as well. At least you look out through next year, probably at least the first half of 2027, I think we'll continue to see some restraint. There are the markets I've called out that appear to have no guardrails, but I think we'll continue to see some constraint. If you just think practically, if it picks back up again, it takes six months to sort of get everything going and then another 12 months to build. You're 18 months out from whenever that happens.

Got it. Okay. Thank you.

Colby, Conference Operator: Your next question comes from the line of Michael Goldsmith with UBS. Your line is open.

Good morning. Thanks a lot for taking my questions. Move-in rate was up 2.5% during the quarter, apparently both on a gross and a net basis, but came down in October. How did the move-in trend during the quarter? Did it peak in October, or did it peak kind of earlier during the period? Is that how it normally plays out? Thanks.

Tim Martin, Chief Financial Officer, CubeSmart: Yeah. The move-in trend was historically normal. You see kind of that peak in July, and then trends tend to sequentially start to slow down. Again, I think the message here is that the road is a bit windy. We've got markets that are continuing to move in a fairly straight line in an upward trajectory. There are markets, again, pick on the Sun Belt, where the road's a little bit more windy. Overall, I would say kind of consistent with the last couple of years is what we've seen.

Got it. You've said on the call maybe a couple of times, just really stabilizing trends and encouraging signs. By stabilizing trends, are you referring to same-store revenue growth, and by encouraging signs, you're suggesting the move-in rate? Is that kind of what you're pointing to?

Yeah. The top-line metric, same-store revenue growth, we'll just kind of beat the drum again. It takes time for that to move given the relatively low churn in the customer base. When we talk about stabilizing trends, we're talking about move-in rates and demand levels, which have been weaker than historical but fairly consistent, and occupancy. It's more of the KPIs that are happening every day, which will then gradually bleed into the same-store revenue result, which will then gradually move that in a positive direction.

Thank you very much. Port Chester looks great. Good luck in the fourth quarter.

Thank you. Super excited about that.

Appreciate it. We have units available if you'd like to be a guest.

I'm good, thanks.

Colby, Conference Operator: Thank you. With no further questions in queue, I'd like to turn the conference back over to Chris Marr for closing remarks.

Tim Martin, Chief Financial Officer, CubeSmart: Okay. Thank you, everybody, for participating. Stabilizing trends, encouraged by the direction overall that the portfolio is moving. Assuming these continue, we expect to be on improved footing heading into 2026. We look forward to seeing some of you at upcoming conferences. Next time we're on a quarterly call, we'll share our specific expectations for 2026. Thank you all. Happy Halloween.

Colby, Conference Operator: This concludes today's conference call. You may now disconnect.

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