CubeSmart NYSE: CUBE executives said the company is entering 2026 with improving operating trends after what management described as a year of stabilization in 2025, pointing to positive year-over-year move-in rates in the back half of last year and early indications that those trends are continuing into the first quarter.
Management sees stabilizing demand and narrowing occupancy gap
President and CEO Chris Marr said operating metrics have improved over the past couple of quarters and are starting to flow through to financial results. Marr noted that the company’s “more stable urban markets in the Northeast and Midwest continue to outperform,” while supply-impacted markets across the Sun Belt and West Coast are showing “green shoots” in the form of second-derivative improvement.
He added that existing customer metrics remain strong, with “no change to attrition rates or credit.” Marr characterized 2025 as a period when demand patterns became more consistent throughout the year, and said the environment became “more constructive,” helping move-in rates turn positive in the second half.
Management provided a multi-quarter view of move-in rates, stating year-over-year quarterly growth improved from -10% in the fourth quarter of 2024 to -8.3% in the first quarter of 2025, -4% in the second quarter, then turned positive at +2.5% in the third quarter and +2.8% in the fourth quarter of 2025.
For early 2026, Marr said the occupancy gap continues to narrow. He reported occupancy at the end of January was 88.7%, which he said was 40 basis points below January 2025 and improved from a 70-basis-point year-end gap. With “a few days left” in February, Marr said trends remained encouraging, with quarter-to-date move-in rates generally in line with fourth-quarter results.
Fourth-quarter results: revenue nearly flat, expenses up
CFO Tim Martin said same-store revenue growth accelerated from the third quarter to “just shy of flat,” at -0.1% in the fourth quarter, which he said set an improved starting point for 2026. Same-store expenses increased 2.9% in the quarter, which Martin attributed in part to favorable real estate tax and property insurance outcomes, offset by higher marketing and repair-and-maintenance spending that he described as mostly timing-related versus the prior year.
As a result, same-store net operating income declined 1.1% in the fourth quarter, and the company reported adjusted FFO per share of $0.64 for the quarter. Martin also noted the company announced a 1.9% increase in its quarterly dividend to an annualized $2.12 per share, which he said equated to a 5.3% dividend yield based on the prior day’s close.
Capital allocation: JV mandate, acquisitions, and expanded buyback authorization
Martin said it has been difficult over the past couple of years to find accretive on-balance sheet acquisition opportunities given what he described as a disconnect between public and private market valuations. He cited two structured investments completed across late 2024 and early 2025 totaling $610 million (a recapitalization and a joint venture buyout), but said opportunities since then have been limited.
During the fourth quarter, the company closed two on-balance sheet acquisitions for $49 million. On a later question, management said those deals were not underwritten on a stabilized cap rate; Martin said they were “going in” at cap rates in the low 5% range and were expected to stabilize “into the about six range” in year two to two-and-a-half after benefiting from growth on CubeSmart’s platform.
Martin also highlighted a newly announced joint venture with CBRE Investment Management, with a $250 million mandate to invest in high-growth markets. In Q&A, management said the CBRE venture is focused on external opportunities—across “core plus” and “value-add”—and does not involve contributing CubeSmart assets.
Martin said the company used its existing share repurchase program in the fourth quarter, arguing that buybacks were compelling on a risk-adjusted basis given the company’s view of its portfolio quality relative to its stock price at the time and private-market pricing for lower-quality assets. He said the board expanded the repurchase authorization, leaving roughly $475 million of capacity at current valuation levels, and added the company generates about $100 million in annual free cash flow that could support repurchases on a leverage-neutral basis at those levels.
Management also raised the possibility of selling assets or contributing assets to a joint venture to fund additional repurchases if the public-private valuation gap persists into 2026, while emphasizing the company does not have a long list of properties it is eager to sell. CEO Marr said the timing of dispositions can be challenging because public valuations can change quickly.
2026 guidance and key assumptions
Martin said the company’s 2026 FFO per share guidance range is $2.52 to $2.60. He said the same-store pool for 2026 increases by 16 stores. At the midpoint, management’s same-store revenue assumptions include a generally similar macro environment to 2025, less impact from competing new supply, steadily improving competitive pricing, and a narrowing year-over-year occupancy gap as 2026 progresses.
On supply, Marr said only 19% of CubeSmart’s same-store portfolio is projected to be impacted by new supply in 2026, the lowest percentage since the company began discussing the metric in 2017. In response to analyst questions, management clarified the company measures supply impact on a three-year rolling basis; the 19% reflects stores that will compete with deliveries in 2024, 2025, or 2026. Martin added that the “nature” of the 19% should be less of a headwind because 2024 deliveries are further along in occupancy stabilization than brand-new openings.
On expenses, Martin said CubeSmart’s outlook is influenced by difficult comparisons created by its history of tight expense control. In Q&A, he reiterated key pressures expected in 2026 including real estate taxes (particularly later in the year), personnel costs after several years of very low growth, and higher weather-related costs following significant winter storms compared with early 2025.
Martin also said the balance sheet remains in “great shape,” with leverage ending the year at 4.8x net debt to EBITDA and credit metrics supportive of investment-grade ratings. He outlined potential debt-market activity in 2026, including possibly issuing bonds in the first half to repay revolver borrowings and potentially issuing again later to address bonds maturing in September, while noting guidance reflects a range of possible timing and market scenarios.
Market commentary: New York performance and regulatory backdrop
Marr said New York is expected to be among the company’s top-performing MSAs again in 2026. He attributed strength to recovering supply dynamics in areas such as North Jersey, Westchester, and Long Island, and to positive trends in the boroughs, including brand awareness and long lengths of stay. Later, he provided additional borough-level color, including that Brooklyn led through the year with same-store revenue growth “north of 5%” and that Queens remained consistent, while noting some supply pressure around Long Island City due to large competitor openings nearby.
Asked about a lawsuit announced by New York City’s Department of Consumer and Worker Protection regarding alleged predatory practices, Marr said the company is aware of the announcement and similar legislative attempts in other states related to pricing and transparency. He said CubeSmart continues to monitor developments, ensure compliance, and focus on customer experience.
Closing the call, Marr said the company had a “very solid start” to January and February despite challenging weather, and management said it is looking ahead to the industry’s seasonal busy period and plans to continue updating investors after first-quarter earnings.
About CubeSmart NYSE: CUBE
CubeSmart NYSE: CUBE is a publicly traded real estate investment trust (REIT) specializing in the ownership, operation and management of self-storage facilities across the United States. The company's portfolio comprises properties in primary and secondary markets, catering to both individual and business customers seeking flexible, short-term and long-term storage solutions. CubeSmart's facilities feature a range of unit sizes, climate-controlled options and advanced security features, supported by on-site managers and centralized customer service operations.
In addition to traditional self-storage units, CubeSmart offers specialty services such as vehicle and boat storage, retail sales of packing and moving supplies, and tenant insurance programs.
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