CubeSmart(CUBE)2025-05-02 15:00Financial Data and Key Metrics Changes - The company reported FFO per share of $0.64, which was a penny above the high end of guidance [6][10] - Same store revenue growth decreased by 0.4% year over year, an improvement from a decline of 1.6% in the previous quarter [8][10] - Average occupancy for the same store portfolio was down 50 basis points to 89.5%, narrowing from a decline of 120 basis points in the fourth quarter [9][10] - Same store operating expenses grew by only 0.6% year over year, better than expectations [10][12] Business Line Data and Key Metrics Changes - The company closed on the acquisition of the remaining 80% interest in a joint venture, acquiring a portfolio of 28 early-stage lease-up stores [11] - The third-party management platform added 33 stores, ending the quarter with 869 third-party stores under management [12] Market Data and Key Metrics Changes - Strong markets such as New York City boroughs, Chicago, and Washington D.C. continue to show strength, while supply-impacted markets like Northern New Jersey, Phoenix, and Atlanta are stabilizing [7][12] - In Texas markets, Dallas is facing challenges due to supply and pricing decisions, while Austin shows signs of recovery [34][35] Company Strategy and Development Direction - The company remains focused on optimizing its platform while maintaining high customer service standards [6][10] - The management expressed confidence in the long-term health of the self-storage industry due to the quality and geographic diversity of its portfolio [7][12] - The company is cautious about the economic environment, maintaining a conservative outlook for gradual improvement in operational metrics in 2025 [13] Management's Comments on Operating Environment and Future Outlook - Management noted uncertainty in the economy affecting consumer decisions, which could impact storage demand [13] - The company does not foresee improvement in the housing market and expects a gradual recovery without sharp reacceleration [13] - Management highlighted the resilience of the self-storage business, noting that demand drivers include everyday life events and business needs [18][19] Other Important Information - The balance sheet remains strong with a net debt to EBITDA ratio of 4.8 times [12] - The company is monitoring the impact of macroeconomic factors on its operations and is prepared to adjust strategies accordingly [13][54] Q&A Session Summary Question: What are the drivers of demand in the current environment? - Management indicated that demand is driven by everyday life events and business needs, despite a slow housing market [18] Question: What was occupancy in April? - Occupancy ended at 89.9% in April, showing a slight improvement [21] Question: How does the company view the leasing season? - Management expects a muted leasing season compared to pre-pandemic levels, with no significant growth anticipated [30] Question: What is the outlook for Texas markets? - Management noted that while Austin is recovering, Dallas faces challenges due to supply and competitive pricing [34][35] Question: How is the company managing expenses? - The company has been proactive in managing staffing and operational expenses, leading to better-than-expected results [50] Question: What is the strategy for acquisitions? - The company is open to acquisitions but faces challenges due to market volatility and seller expectations [53][54] Question: How does the company view potential recession impacts? - Management believes the self-storage business is resilient during economic downturns, with demand potentially increasing due to life changes [88][90]