Skip to content
    CUBE
    Earnings call· Dec 2025(Q4 FY25)

    CubeSmart Q4 FY25 earnings call CUBE

    Feb 27, 2026 Source

    Executive summary

    CubeSmart Q4 FY25 — Fundamentals Stabilize, Positioned for Growth

    CubeSmart reported Q4 FY25 results showing stabilization in operating fundamentals, with positive move-in rates and accelerating same-store revenue growth. The company is positioned for a gradual return to historical growth levels, supported by declining new supply impact and strategic capital allocation initiatives, including a new joint venture and share repurchase authorization. Management is actively navigating market disconnects and expense pressures while maintaining a strong balance sheet.

    Highlights

    5

    • Move-in rates turned positive in Q3 FY25 (+2.5%) and accelerated to +2.8% in Q4 FY25, indicating stabilizing demand.

    • Same-store revenue growth accelerated from Q3 FY25 to -0.1% in Q4 FY25, nearing flat performance.

    • New supply impact on same-store portfolio projected to be 19% in 2026, the lowest since 2017 and down from 24% in 2025.

    • Announced a 1.9% increase in quarterly dividend, raising the annualized payout to $2.12 per share.

    • Leverage ended the year at a favorable 4.8x Net Debt to EBITDA.

    Concerns

    4

    • Same-store NOI declined 1.1% in Q4 FY25, reflecting continued pressure despite revenue stabilization.

    • 2026 expense growth is expected to be higher due to tough comps from prior expense controls, real estate taxes, and significant winter-related costs.

    • Limited accretive on-balance sheet acquisition opportunities due to disconnect in public and private market valuations.

    • New York City Department of Consumer and Worker Protection filed a lawsuit over predatory practices in the New York market, where CubeSmart has a large presence.

    Guidance & targets

    4
    CategoryTargetConfidence
    FFO per share as adjusted
    $2.52 to $2.60 per share
    high materiality
    High
    Same-store revenue growth
    generally similar macro environment to last year, lasting impact from competing new supply, steadily improving competitive pricing, narrowing of year-over-year occupancy gap
    high materiality
    Medium
    Return to historical revenue and NOI growth
    second half of 2027 on a quarterly basis, then annually
    high materiality
    Medium
    Same-store portfolio impact from new supply
    19%
    high materiality
    High

    Segment performance

    6
    SegmentRevenueYoYQoQMargin
    New York City MSA (Overall)
    Expected to be among the top-performing MSAs in 2026, benefiting from recovery in North Jersey, Westchester, and Long Island from supply headwinds, and consistent positive trends in the city itself with good lengths of stay and brand awareness.
    		——accelerated from Q3 FY25 to Q4 FY25—
    New York City MSA (Boroughs - Queens)
    Consistent revenue growth and occupancy stability, with good growth in asking rent. Limited impact from new supply.
    		——consistent Q2, Q3, Q4 FY25—
    New York City MSA (Boroughs - Brooklyn)
    Leader throughout the year with strong same-store revenue growth and steady occupancies, driven by good length of stay and move-in rate growth across neighborhoods.
    		—north of 5%——
    New York City MSA (Boroughs - Bronx)
    Occupancies have been pretty steady, growing a little in H2 FY25, with strength in Riverdale and Bronx River areas.
    		——nice acceleration throughout the year—
    Top 25 Markets (Overall)
    Broad-based improvement in fundamentals across many markets.
    		——revenue growth accelerated from Q3 to Q4 FY25 in over 75% of markets—
    Washington D.C. MSA
    Deceleration due to tough comps after many quarters of strong performance. Expected to remain a leading market in 2026.
    		——decelerated a bit in Q4 FY25—

    Operational metrics

    10
    FFO per share as adjusted
    $0.64
    Q4 FY25

    Reported FFO per share as adjusted for the quarter.

    Quarterly dividend increase
    1.9%
    Q4 FY25

    Increase in quarterly dividend announced during the quarter.

    Dividend yield
    5.3%
    Q4 FY25

    Dividend yield based on yesterday's close.

    Share repurchase authorization capacity
    $475M
    Q4 FY25

    Capacity remaining under the expanded share repurchase authorization.

    Net Debt to EBITDA
    4.8x
    FY25

    Leverage ratio at year-end, favorable to investment grade credit ratings.

    Same-store pool increase
    16
    FY26

    Number of stores added to the same-store pool for 2026.

    Occupancy gap (January)
    88.7%down 40 bps vs January 2025
    January 2026

    Occupancy gap at the end of January 2026, showing improvement from year-end 2025.

    Cubes turnover rate
    5%
    monthly

    Approximate percentage of cubes that turn over in any given month.

    Acquisition cap rate (going in)
    low 5s
    Q4 FY25

    Going-in cap rate for the two on-balance sheet acquisitions closed in Q4 FY25.

    Acquisition cap rate (stabilized)
    6%
    Year 2-2.5

    Stabilized cap rate for the two on-balance sheet acquisitions closed in Q4 FY25.

    Industry KPIs

    2
    MetricValueDetails
    Move in rate growth churn+2.8%%
    Self storage same store revenue noi growthRevenue: -0.1%; Expenses: +2.9%; NOI: -1.1%%

    Deals & partnerships

    2
    CBRE IMNew joint venture with a mandate to invest in high-growth markets across core, core plus, and value-add opportunities.$250M mandate

    This venture is focused on external opportunities, not contributions from CubeSmart's existing portfolio. It leverages an existing working relationship through CubeSmart's third-party management platform.

    UndisclosedAcquisition of two on-balance sheet properties.$49M

    These acquisitions were under contract at values that made sense to the company, despite the challenging environment for accretive on-balance sheet opportunities.

    Risks & headwinds

    4
    New supply impactFY26

    19% of same-store assets in 2026 (down from 24% in 2025 and 50% in 2019)

    Mitigation: The impact is lessening as more deliveries are from prior years (2024), which are reaching occupancy stabilization and pricing more competitively. This is the lowest percentage since 2017.

    Higher operating expensesFY26

    Same-store expenses grew 2.9% in Q4 FY25; higher growth expected in FY26

    Mitigation: Management has historically led the sector in expense controls. Key drivers for 2026 include real estate taxes (tough comps from Q4 FY25 good news), personnel costs (inflationary growth after multi-year low growth), and significant winter-related costs in Q1 FY26. No specific mitigation strategy was detailed beyond continued focus on controls.

    Disconnect in public and private market valuationsOngoing

    Limited accretive on-balance sheet opportunities for acquisitions

    Mitigation: Exploring alternative capital allocation strategies, including expanding joint venture relationships (e.g., CBRE IM JV with $250M mandate) and utilizing share repurchases (expanded authorization to $475M) funded potentially by asset dispositions or JV contributions.

    Regulatory/legal scrutiny in New York CityOngoing

    Lawsuit filed by New York City Department of Consumer and Worker Protection over predatory practices

    Mitigation: Monitoring the situation and similar legislative attempts to ensure compliance. Focused on providing optimal customer experience and remaining flexible.

    What to watch in Q1 FY26

    5

    Same-store revenue growth

    next quarter
    Current-0.1% in Q4 FY25
    TargetContinued acceleration towards positive growth

    Why it matters

    This metric is a key indicator of the company's operational recovery and progress towards historical growth levels, directly impacting FFO.

    Same-store revenue growth accelerated from the third quarter to just shy of flat at negative 0.1% for the quarter, reflecting the continued stabilization of trends that Chris touched on and moving us to an improved starting point for 2026.

    Q&A highlights

    7

    Clarification on the 19% new supply impact figure for 2026 – whether it's new deliveries or cumulative, and its multi-year nature.

    The 19% figure represents stores impacted by new supply over a 3-year rolling period (deliveries in 2024, 2025, or 2026). Deliveries from earlier years (e.g., 2024) are less impactful as those stores approach occupancy stabilization and price more competitively, making the current 19% less of a headwind than past peaks.

    “So for the 19% of our stores that are impacted by supply in 2026, those are stores that within their trade ring are going to compete against something that is delivered in 2024, 2025 or 2026.”

    asked by Michael Goldsmith · answered by Timothy Martin

    2 min read6 chapters

    Detailed Narrative

    01

    Operating Fundamentals and Demand Trends

    CubeSmart observed a stabilization in demand trends throughout 2025, with move-in rates turning positive in Q3 FY25 at +2.5% and accelerating to +2.8% in Q4 FY25. This positive momentum has continued into early 2026, with the occupancy gap narrowing. The company noted that existing customer metrics remain strong, with no changes to attrition rates or credit quality, indicating a constructive operating environment.

    02

    New Supply Impact and Market Dynamics

    The impact of new supply is projected to affect only 19% of CubeSmart's same-store portfolio in 2026, a significant reduction from 24% in 2025 and a peak of 50% in 2019. This lower exposure to new supply, combined with stabilizing occupancy levels at newer facilities, is expected to reduce competitive headwinds. Urban markets in the Northeast and Midwest continue to outperform, while Sunbelt and West Coast markets are showing signs of improvement.

    03

    Capital Allocation Strategy and Share Repurchases

    Given the persistent disconnect between public and private market valuations, CubeSmart's Board expanded its share repurchase authorization to approximately $475 million. The company views share repurchases as a compelling investment option, particularly when compared to private market values for lower-quality assets. Management is also exploring asset dispositions or contributions to joint ventures to fund additional buybacks, aiming to improve portfolio quality and execute strategic objectives.

    04

    Joint Venture Expansion and External Growth

    CubeSmart announced a new joint venture with CBRE IM with a $250 million mandate to invest in high-growth markets. This partnership aims to expand the company's JV relationships and provides an avenue for continued portfolio growth with enhanced returns, focusing on core, core plus, and value-add opportunities. This external growth strategy complements the limited on-balance sheet acquisition opportunities available in the current market.

    05

    Expense Outlook and Drivers

    The company anticipates higher year-over-year expense growth in 2026, primarily driven by challenging comparisons due to prior years' strong expense controls. Key factors include increases in real estate taxes, particularly in late 2026, and higher personnel costs. Additionally, significant winter-related costs from recent storms are expected to impact Q1 FY26 expenses, especially given CubeSmart's substantial presence in the Northeast.

    06

    Debt Management and Refinancing Plans

    CubeSmart's balance sheet remains strong, with leverage at 4.8x Net Debt to EBITDA. The company plans to opportunistically access the bond market in the first half of 2026 to repay amounts drawn on its revolver. In the latter half of the year, it may seek to issue new bonds to repay existing maturities in September, maintaining flexibility by ensuring revolver capacity is available if market conditions are not favorable for bond issuance.

    AI-generated summary of the company’s earnings call. Not investment advice.