CubeSmart

CubeSmart reported Q2 FFO per share as adjusted of $0.63. Same-store revenue grew 0.8% year over year, up from 0.6% in Q1, while same-store operating expenses increased 4.4%, leading to -0.7% same-store NOI growth. Move-in rates were 1.7% higher year over year, and the occupancy gap improved to flat by quarter-end; by July 30, same-store physical occupancy was 91.1%, up 30 basis points from July 30, 2025. Management raised full-year same-store revenue guidance to 0.5% to 1.25% and same-store expense guidance to 3.25% to 4.5%, and said the midpoint of guidance implies returning to positive same-store NOI and positive earnings growth in the second half of 2026.

Chris Marr said 2026 is an inflection year, with same-store revenues turning positive early in the year and momentum improving into the summer leasing season. He highlighted broad-based demand, lower vacate activity, longer lengths of stay, and easing supply pressure in many markets, while noting Sunbelt markets remain more challenged. His tone was notably optimistic, repeatedly pointing to a stronger setup for late 2026 and 2027 and emphasizing the resilience of self-storage demand.

Tim Martin emphasized that second-quarter results reflected improving demand and easing supply headwinds, with revenue growth accelerating and expense growth still elevated due to tough comps, winter costs, front-loaded marketing, insurance timing, and personnel comparisons. He said the company bought back $42.5 million of stock in Q2, bringing year-to-date repurchases to $75.8 million, and described the Titan JV as a leverage-neutral way to unlock value from 15 noncore assets at a mid-5s cap rate. He also said the revolver was expanded from $850 million to $1 billion, maturity was pushed from February 2027 to June 2030, and the company has no debt maturities in 2027, giving it flexibility while it monitors a bond maturity next quarter and current debt market volatility.

Analysts pressed management on why confidence has improved, what specifically is driving the better outlook, and whether the JV proceeds should be used mainly for buybacks or could also fund future acquisitions. Management said the improvement is being driven by strong top-of-funnel demand, continued customer health, and, importantly, a reduction in the impact of new supply; it also said share repurchases are an offensive use of capital in the current valuation environment, while the JV creates another path for future growth. Questions also focused on New York pricing regulation, July leasing trends, and debt costs; management said it is not doing anything materially different in New York yet, July rentals were 3% higher year over year with vacates down 3%, and a 10-year debt issue today would likely price in the mid-5s, maybe a bit higher.