CubeSmart (NYSE:CUBE) today announced its operating results for the
three and nine months ended September 30, 2018.
“Third-quarter performance continues to reflect healthy demand
trends and a competitive pricing environment,” commented President
and Chief Executive Officer Christopher P. Marr. “Our scalable,
sophisticated operating platform and customer service focus
generated solid results across our portfolio. We remain active and
disciplined in pursuing growth opportunities that deliver
attractive, risk-adjusted returns to our shareholders.”
Key Highlights for the Quarter
- Reported earnings per share (“EPS”) attributable to the
Company’s common shareholders of $0.23.
- Reported funds from operations (“FFO”) per share, as adjusted,
of $0.43, representing a year over year increase of 2.4%.
- Increased same-store (458 stores) net operating income (“NOI”)
3.9% year over year, driven by 3.0% revenue growth and a 0.6%
increase in property operating expenses.
- Same-store occupancy during the quarter averaged 93.3% and
ended the quarter at 92.7%.
- Closed on three property acquisitions totaling $59.6
million.
- Opened for operation one development property for a total cost
of $91.5 million.
- Sold 0.4 million common shares at an average sales price of
$31.38 per share, resulting in net proceeds of $12.9 million.
- Added 60 stores to our third-party management platform during
the quarter, bringing our total third-party managed store count to
582.
Financial Results
Net income attributable to the Company’s common shareholders was
$42.9 million for the third quarter of 2018, compared with $37.3
million for the third quarter of 2017. EPS attributable to the
Company’s common shareholders was $0.23 for the third quarter of
2018, compared to $0.21 for the same period last year.
FFO, as adjusted, was $80.7 million for the third quarter of
2018, compared with $77.2 million for the third quarter of 2017.
FFO per share, as adjusted, increased 2.4% to $0.43 for the third
quarter of 2018, compared with $0.42 for the same period last
year.
Investment Activity
Acquisition Activity
The Company acquired three stores in Washington, D.C., Nevada
and North Carolina for $59.6 million during the three months ended
September 30, 2018 and subsequent to quarter-end, acquired two
stores in California and Texas for $76.4 million. In total for the
year to date through this press release, the Company has acquired
seven properties for $167.2 million and currently has two
additional properties under contract for $41.3 million.
Unconsolidated Joint Venture Activity
During the third quarter of 2018, the Company’s joint venture,
HVP IV, acquired two properties located in Florida and Georgia for
$20.5 million. Year to date through the date of this release, HVP
IV has acquired ten properties for $114.4 million, of which the
Company has contributed $14.1 million. Additionally, HVP IV has two
properties under contract for $15.1 million that are expected to
close during the fourth quarter of 2018.
On August 15, 2018, HVP IV received a second advance of $24.4
million on its $107.0 million loan facility, which encumbers an
additional five stores that were acquired by the venture, bringing
the total outstanding debt balance to $68.1 million as of September
30, 2018. The loan bears interest at LIBOR plus 1.70% and matures
on May 16, 2021 with options to extend the maturity date through
May 16, 2023, subject to satisfaction of certain conditions and
payment of the extension fees as stipulated in the loan
agreement.
Development Activity
The Company has agreements with developers for the construction
of Class A self-storage properties. These agreements are structured
as either purchases at completion of construction and issuance of
certificate of occupancy (“C/O”) or as joint venture developments.
During the three and nine months ended September 30, 2018, the
Company opened for operation one joint venture development property
in New York for a total cost of $91.5 million.
As of September 30, 2018, the Company had one property under
contract to purchase at C/O for a total acquisition price of $19.2
million. The store is located in California and closing is
expected to occur during the fourth quarter of 2018. This
acquisition is subject to due diligence and other customary closing
conditions, and no assurance can be provided that the acquisition
will be completed on the terms described, or at all.
As of September 30, 2018, the Company had six joint venture
development properties under construction. The Company anticipates
investing a total of $160.0 million related to these projects and
had invested $70.1 million of that total as of September 30, 2018.
These stores are located in New York (3), Massachusetts (2), and
New Jersey. The six projects are expected to open at various times
between the first quarter of 2019 and the fourth quarter of
2019.
Third-Party Management
As of September 30, 2018, the Company’s third-party management
program included 582 stores totaling 38.8 million square feet.
During the three and nine months ended September 30, 2018, the
Company added 60 stores and 148 stores, respectively, to its
third-party management program.
Same-Store Results
The Company’s same-store portfolio at September 30, 2018
included 458 stores containing approximately 31.6 million rentable
square feet, or approximately 91.8% of the aggregate rentable
square feet of the Company’s 490 owned stores. These
same-store properties represented approximately 94.7% of property
net operating income for the quarter ended September 30, 2018.
Same-store physical occupancy at period end for the third
quarter of 2018 was 92.7%, compared with 93.5% for the same quarter
of last year. In the 2017 quarter, ending occupancy was positively
impacted by rentals from hurricanes Harvey and Irma. Same-store
revenues for the third quarter of 2018 increased 3.0% and
same-store
operating expenses increased 0.6% from the same quarter in 2017.
Same-store net operating income increased 3.9%, as compared with
the same period in 2017.
Operating Results
As of September 30, 2018, the Company’s total owned portfolio
included 490 stores containing 34.5 million rentable square feet
and had a physical occupancy of 90.4%.
Revenues increased $9.5 million and property operating expenses
increased $1.6 million in the third quarter of 2018, as compared
with the same period in 2017. Increases in revenues were
primarily attributable to increased net effective rents in the
same-store portfolio as well as revenues generated from property
acquisitions and recently opened development properties. Increases
in property operating expenses were primarily attributable to a
$0.2 million increase in same-store expenses driven by higher
property taxes and a $1.3 million increase in expenses associated
with newly acquired or developed stores.
Financing Activity
During the third quarter, the Company sold 0.4 million common
shares of beneficial interest through its “at-the-market” equity
program (“ATM”) at an average sales price of $31.38 per share,
resulting in net proceeds of $12.9 million, after deducting
offering costs. As of September 30, 2018, the Company had 11.2
million shares available for issuance under the existing equity
distribution agreements.
On July 23, 2018, 58,400 preferred OP units that were originally
issued on April 12, 2017 were exchanged for an aggregate of 46,322
common units of the Operating Partnership.
Quarterly Dividend
On August 7, 2018, the Company declared a dividend of $0.30 per
common share. The dividend was paid on October 15, 2018 to common
shareholders of record on October 1, 2018.
2018 Financial Outlook
“Based on our solid performance to date, we have increased the
midpoint of our FFO per share guidance and provided an improved
outlook on certain same store operating metrics,” commented Chief
Financial Officer Tim Martin. “We remain selective and disciplined
in pursuing external growth opportunities. During the third
quarter, we added 60 stores to the third party management platform,
opened for operation one new development property, and acquired
three properties on balance sheet as well as two properties in a
joint venture.”
Fully diluted EPS allocated to common shareholders for 2018 is
now expected to be between $0.83 and $0.84 (previously between
$0.80 and $0.84). Fully diluted FFO per share, as adjusted, for
2018 is now expected to be between $1.63 and $1.64 (previously of
between $1.61 and $1.65). We have also adjusted other guidance
assumptions to reflect third quarter results. Due to uncertainty
related to the timing and terms of transactions, the financial
impact of any potential future investment activity is excluded from
guidance. For 2018, the same store pool consists of 458
properties totaling 31.6 million square feet.
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Current Ranges
for |
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2018 Full Year Guidance Range
Summary |
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Annual
Assumptions |
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Prior
Guidance(1) |
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Same-store revenue growth |
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3.00 |
% |
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to |
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3.25 |
% |
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2.75 |
% |
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to |
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3.25 |
% |
|
Same-store expense growth |
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3.0 |
% |
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to |
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|
3.5 |
% |
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3.5 |
% |
|
to |
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|
4.5 |
% |
|
Same-store NOI growth |
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|
2.75 |
% |
|
to |
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|
3.25 |
% |
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2.0 |
% |
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to |
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3.0 |
% |
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Acquisition of wholly-owned operating properties |
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$ |
167.0M |
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to |
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$ |
172.0M |
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$ |
100.0M |
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to |
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$ |
150.0M |
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Acquisition of properties at C/O |
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$ |
19.2M |
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$ |
19.2M |
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$ |
40.0M |
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$ |
40.0M |
|
New development openings |
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$ |
91.5M |
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$ |
91.5M |
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$ |
90.0M |
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$ |
90.0M |
|
Dispositions |
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$ |
|
0 |
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to |
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$ |
25.0M |
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$ |
0 |
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to |
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$ |
50.0M |
|
Dilution from properties in lease-up |
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$ |
(0.06 |
) |
to |
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$ |
(0.07 |
) |
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$ |
(0.06 |
) |
to |
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$ |
(0.07 |
) |
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Property management fee income |
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$ |
19.5M |
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to |
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$ |
20.5M |
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$ |
19.0M |
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to |
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$ |
21.0M |
|
General and administrative expenses |
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$ |
35.5M |
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to |
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$ |
36.5M |
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$ |
35.5M |
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to |
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$ |
36.5M |
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Interest and loan amortization expense |
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$ |
65.5M |
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to |
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$ |
66.5M |
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$ |
65.5M |
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to |
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$ |
67.5M |
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Weighted average shares and units |
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187.5M |
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187.5M |
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187.3M |
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187.3M |
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|
Earnings per diluted share allocated to common shareholders |
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$ |
0.83 |
|
to |
|
$ |
0.84 |
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|
$ |
0.80 |
|
to |
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$ |
0.84 |
|
Plus: real estate depreciation and amortization |
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|
$ |
0.80 |
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$ |
0.80 |
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|
|
$ |
0.81 |
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$ |
0.81 |
|
FFO per diluted share, as adjusted |
|
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$ |
1.63 |
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to |
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$ |
1.64 |
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$ |
1.61 |
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to |
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$ |
1.65 |
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(1) Prior guidance as included in our second quarter earnings
release dated July 26, 2018.
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4th Quarter 2018
Guidance |
|
Range or
Value |
|
Earnings per diluted share allocated to common shareholders |
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$ |
0.20 |
|
to |
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$ |
0.21 |
|
Plus: real estate depreciation and amortization |
|
|
0.21 |
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|
0.21 |
|
FFO per diluted share, as adjusted |
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$ |
0.41 |
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to |
|
$ |
0.42 |
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Conference Call
Management will host a conference call at 11:00 a.m. ET on
Friday, October 26, 2018 to discuss financial results for the three
and nine months ended September 30, 2018.
A live webcast of the conference call will be available online
from the investor relations page of the Company's corporate website
at www.cubesmart.com. Telephone participants may avoid any
delays in joining the conference call by pre-registering for the
call using the following link to receive a special dial-in number
and PIN: http://dpregister.com/10124809.
Telephone participants who are unable to pre-register for the
conference call may join on the day of the call using
1-877-506-3281 for domestic callers, +1-412-902-6677 for
international callers, or 1-855-669-9657 for callers in
Canada. After the live webcast, the call will remain
available on CubeSmart's website for 30 days. In addition, a
telephonic replay of the call will be available through November
26, 2018. The replay numbers are 1-877-344-7529 for domestic
callers, +1-412-317-0088 for international callers, and
1-855-669-9658 for callers in Canada. For callers accessing a
telephonic replay, the conference number is 10124809.
Supplemental operating and financial data as of September 30,
2018 is available on the Company’s corporate website under Investor
Relations - Financial Information - Financial Reports.
About CubeSmart
CubeSmart is a self-administered and self-managed real estate
investment trust. The Company's self-storage properties are
designed to offer affordable, easily accessible and secure storage
space for residential and commercial customers. According to
the 2018 Self-Storage Almanac, CubeSmart is one of the top three
owners and operators of self-storage properties in the United
States.
Non-GAAP Financial Measures
Funds from operations (“FFO”) is a widely used performance
measure for real estate companies and is provided here as a
supplemental measure of operating performance. The April 2002
National Policy Bulletin of the National Association of Real Estate
Investment Trusts (the “White Paper”), as amended, defines FFO as
net income (computed in accordance with GAAP), excluding gains (or
losses) from sales of real estate and related impairment charges,
plus real estate depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint
ventures.
Management uses FFO as a key performance indicator in evaluating
the operations of the Company's stores. Given the nature of its
business as a real estate owner and operator, the Company considers
FFO a key measure of its operating performance that is not
specifically defined by accounting principles generally accepted in
the United States. The Company believes that FFO is useful to
management and investors as a starting point in measuring its
operational performance because FFO excludes various items included
in net income that do not relate to or are not indicative of its
operating performance such as gains (or losses) from sales of real
estate, gains from remeasurement of investments in real estate
ventures, impairments of depreciable assets, and depreciation,
which can make periodic and peer analyses of operating performance
more difficult. The Company’s computation of FFO may not be
comparable to FFO reported by other REITs or real estate companies.
FFO should not be considered as an alternative to net income
(determined in accordance with GAAP) as an indication of the
Company’s performance. FFO does not represent cash generated from
operating activities determined in accordance with GAAP and is not
a measure of liquidity or an indicator of the Company’s ability to
make cash distributions. The Company believes that to further
understand its performance, FFO should be compared with its
reported net income and considered in addition to cash flows
computed in accordance with GAAP, as presented in its Consolidated
Financial Statements.
FFO, as adjusted represents FFO as defined above, excluding the
effects of acquisition related costs, gains or losses from early
extinguishment of debt, and other non-recurring items, which the
Company believes are not indicative of the Company’s operating
results.
The Company defines net operating income, which it refers to as
“NOI,” as total continuing revenues less continuing property
operating expenses. NOI also can be calculated by adding back
to net income (loss): interest expense on loans, loan procurement
amortization expense, loan procurement amortization expense – early
repayment of debt, acquisition related costs, equity in losses of
real estate ventures, other expense, depreciation and amortization
expense, general and administrative expense, and deducting from net
income (loss): gains from sale of real estate, net, other income,
gains from remeasurement of investments in real estate ventures and
interest income. NOI is not a measure of performance
calculated in accordance with GAAP.
Management uses NOI as a measure of operating performance at
each of its stores, and for all of its stores in the aggregate. NOI
should not be considered as a substitute for operating income, net
income, cash flows provided by operating, investing and financing
activities, or other income statement or cash flow statement data
prepared in accordance with GAAP. The Company believes NOI is
useful to investors in evaluating operating performance because it
is one of the primary measures used by management and store
managers to evaluate the economic productivity of the Company’s
stores, including the ability to lease stores, increase pricing and
occupancy, and control property operating expenses. Additionally,
NOI helps the Company’s investors meaningfully compare the results
of its operating performance from period to period by removing the
impact of its capital structure (primarily interest expense on
outstanding indebtedness) and depreciation of the basis in its
assets from operating results.
Forward-Looking Statements
This presentation, together with other statements and
information publicly disseminated by CubeSmart (“we,” “us,” “our”
or the “Company”), contain certain forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, or the “Exchange Act.” Forward-looking
statements include statements concerning the Company’s plans,
objectives, goals, strategies, future events, future revenues or
performance, capital expenditures, financing needs, plans or
intentions relating to acquisitions and other information that is
not historical information. In some cases, forward-looking
statements can be identified by terminology such as “believes,”
“expects,” “estimates,” “may,” “will,” “should,” “anticipates,” or
“intends” or the negative of such terms or other comparable
terminology, or by discussions of strategy. Such statements are
based on assumptions and expectations that may not be realized and
are inherently subject to risks, uncertainties and other factors,
many of which cannot be predicted with accuracy and some of which
might not even be anticipated. Although we believe the expectations
reflected in these forward-looking statements are based on
reasonable assumptions, future events and actual results,
performance, transactions or achievements, financial and otherwise,
may differ materially from the results, performance, transactions
or achievements expressed or implied by the forward-looking
statements. As a result, you should not rely on or construe any
forward-looking statements in this presentation, or which
management may make orally or in writing from time to time, as
predictions of future events or as guarantees of future
performance. We caution you not to place undue reliance on
forward-looking statements, which speak only as of the date of this
presentation or as of the dates otherwise indicated in the
statements. All of our forward-looking statements, including those
in this presentation, are qualified in their entirety by this
statement.
There are a number of risks and uncertainties that could cause
our actual results to differ materially from the forward-looking
statements contained in or contemplated by this presentation. Any
forward-looking statements should be considered in light of the
risks and uncertainties referred to in Item 1A. “Risk Factors” in
our Annual Report on Form 10-K and in our other filings with the
Securities and Exchange Commission (“SEC”). These risks include,
but are not limited to, the following:
- national and local economic, business, real estate and
other market conditions;
- the competitive environment in which we operate,
including our ability to maintain or raise occupancy and rental
rates;
- the execution of our business plan;
- the availability of external sources of capital;
- financing risks, including the risk of over-leverage and
the corresponding risk of default on our mortgage and other debt
and potential inability to refinance existing indebtedness;
- increases in interest rates and operating costs;
- counterparty non-performance related to the use of
derivative financial instruments;
- our ability to maintain our status as a real estate
investment trust (“REIT”) for federal income tax purposes;
- acquisition and development risks;
- increases in taxes, fees, and assessments from state and
local jurisdictions;
- the failure of our joint venture partners to fulfill
their obligations to us or their pursuit of actions that are
inconsistent with our objectives;
- reductions in asset valuations and related impairment
charges;
- security breaches or a failure of our networks, systems
or technology, which could adversely impact our business, customer
and employee relationships;
- changes in real estate and zoning laws or
regulations;
- risks related to natural disasters;
- potential environmental and other liabilities;
- other factors affecting the real estate industry
generally or the self-storage industry in particular; and
- other risks identified in Item 1A of our Annual Report
on Form 10-K and, from time to time, in other reports that we
file with the SEC or in other documents that we publicly
disseminate.
Given these uncertainties, we caution readers not to place undue
reliance on forward-looking statements. We undertake no
obligation to publicly update or revise these forward-looking
statements, whether as a result of new information, future events
or otherwise except as may be required in securities laws.
Contact:
CubeSmart
Charles
PlaceDirector, Investor Relations(610) 535-5700
CUBESMART AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(in thousands, except share data)(unaudited)
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|
September 30, |
|
December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
(unaudited) |
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|
|
ASSETS |
|
|
|
|
|
|
|
Storage properties |
|
$ |
4,323,372 |
|
|
$ |
4,161,715 |
|
|
Less: Accumulated depreciation |
|
|
(838,325 |
) |
|
|
(752,925 |
) |
|
Storage properties, net (including VIE assets of $312,286 and
$291,496, respectively) |
|
|
3,485,047 |
|
|
|
3,408,790 |
|
|
Cash and cash equivalents |
|
|
3,387 |
|
|
|
5,268 |
|
|
Restricted cash |
|
|
3,092 |
|
|
|
3,890 |
|
|
Loan procurement costs, net of amortization |
|
|
1,134 |
|
|
|
1,592 |
|
|
Investment in real estate ventures, at equity |
|
|
98,156 |
|
|
|
91,206 |
|
|
Other assets, net |
|
|
49,234 |
|
|
|
34,590 |
|
|
Total assets |
|
$ |
3,640,050 |
|
|
$ |
3,545,336 |
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|
LIABILITIES AND EQUITY |
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|
|
Unsecured senior notes, net |
|
$ |
1,143,258 |
|
|
$ |
1,142,460 |
|
|
Revolving credit facility |
|
|
94,250 |
|
|
|
81,700 |
|
|
Unsecured term loans, net |
|
|
299,699 |
|
|
|
299,396 |
|
|
Mortgage loans and notes payable, net |
|
|
109,058 |
|
|
|
111,434 |
|
|
Accounts payable, accrued expenses and other liabilities |
|
|
153,185 |
|
|
|
143,344 |
|
|
Distributions payable |
|
|
56,584 |
|
|
|
55,297 |
|
|
Deferred revenue |
|
|
23,072 |
|
|
|
21,529 |
|
|
Security deposits |
|
|
476 |
|
|
|
486 |
|
|
Total liabilities |
|
|
1,879,582 |
|
|
|
1,855,646 |
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests in the Operating Partnership |
|
|
58,446 |
|
|
|
54,320 |
|
|
|
|
|
|
|
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|
|
Commitments and contingencies |
|
|
|
|
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|
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|
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|
Equity |
|
|
|
|
|
|
|
Common shares $.01 par value, 400,000,000 shares
authorized, 186,304,300 and 182,215,735 shares issued and
outstanding at September 30, 2018 and
December 31, 2017, respectively |
|
|
1,863 |
|
|
|
1,822 |
|
|
Additional paid-in capital |
|
|
2,472,839 |
|
|
|
2,356,620 |
|
|
Accumulated other comprehensive income |
|
|
— |
|
|
|
3 |
|
|
Accumulated deficit |
|
|
(779,533 |
) |
|
|
(729,311 |
) |
|
Total CubeSmart shareholders’ equity |
|
|
1,695,169 |
|
|
|
1,629,134 |
|
|
Noncontrolling interests in subsidiaries |
|
|
6,853 |
|
|
|
6,236 |
|
|
Total equity |
|
|
1,702,022 |
|
|
|
1,635,370 |
|
|
Total liabilities and equity |
|
$ |
3,640,050 |
|
|
$ |
3,545,336 |
|
|
CUBESMART AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS(in
thousands, except share data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income |
|
$ |
132,476 |
|
|
$ |
125,699 |
|
|
$ |
384,480 |
|
|
$ |
363,980 |
|
|
Other property related income |
|
|
15,494 |
|
|
|
14,241 |
|
|
|
44,788 |
|
|
|
41,104 |
|
|
Property management fee income |
|
|
5,400 |
|
|
|
3,925 |
|
|
|
14,794 |
|
|
|
10,377 |
|
|
Total revenues |
|
|
153,370 |
|
|
|
143,865 |
|
|
|
444,062 |
|
|
|
415,461 |
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses |
|
|
48,755 |
|
|
|
47,152 |
|
|
|
147,037 |
|
|
|
136,847 |
|
|
Depreciation and amortization |
|
|
35,239 |
|
|
|
35,971 |
|
|
|
105,251 |
|
|
|
110,826 |
|
|
General and administrative |
|
|
9,780 |
|
|
|
8,228 |
|
|
|
26,865 |
|
|
|
26,522 |
|
|
Acquisition related costs |
|
|
— |
|
|
|
235 |
|
|
|
— |
|
|
|
1,062 |
|
|
Total operating expenses |
|
|
93,774 |
|
|
|
91,586 |
|
|
|
279,153 |
|
|
|
275,257 |
|
|
OPERATING INCOME |
|
|
59,596 |
|
|
|
52,279 |
|
|
|
164,909 |
|
|
|
140,204 |
|
|
OTHER (EXPENSE) INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense on loans |
|
|
(15,191 |
) |
|
|
(14,454 |
) |
|
|
(45,797 |
) |
|
|
(42,028 |
) |
|
Loan procurement amortization expense |
|
|
(578 |
) |
|
|
(577 |
) |
|
|
(1,735 |
) |
|
|
(2,059 |
) |
|
Equity in losses of real estate ventures |
|
|
(292 |
) |
|
|
(280 |
) |
|
|
(785 |
) |
|
|
(1,305 |
) |
|
Other |
|
|
(233 |
) |
|
|
741 |
|
|
|
260 |
|
|
|
941 |
|
|
Total other expense |
|
|
(16,294 |
) |
|
|
(14,570 |
) |
|
|
(48,057 |
) |
|
|
(44,451 |
) |
|
NET INCOME |
|
|
43,302 |
|
|
|
37,709 |
|
|
|
116,852 |
|
|
|
95,753 |
|
|
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING
INTERESTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests in the Operating
Partnership |
|
|
(476 |
) |
|
|
(490 |
) |
|
|
(1,285 |
) |
|
|
(1,194 |
) |
|
Noncontrolling interest in subsidiaries |
|
|
74 |
|
|
|
78 |
|
|
|
166 |
|
|
|
182 |
|
|
NET INCOME ATTRIBUTABLE TO THE COMPANY’S COMMON
SHAREHOLDERS |
|
$ |
42,900 |
|
|
$ |
37,297 |
|
|
$ |
115,733 |
|
|
$ |
94,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share attributable to common shareholders |
|
$ |
0.23 |
|
|
$ |
0.21 |
|
|
$ |
0.63 |
|
|
$ |
0.53 |
|
|
Diluted earnings per share attributable to common shareholders |
|
$ |
0.23 |
|
|
$ |
0.21 |
|
|
$ |
0.63 |
|
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic shares outstanding |
|
|
186,074 |
|
|
|
180,304 |
|
|
|
184,036 |
|
|
|
180,218 |
|
|
Weighted-average diluted shares outstanding |
|
|
186,916 |
|
|
|
181,286 |
|
|
|
184,829 |
|
|
|
181,225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Store Facility Results (458
stores)(in thousands, except percentage and per square
foot data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
|
Nine Months
Ended |
|
|
|
|
|
September 30, |
|
Percent |
|
September 30, |
|
Percent |
|
|
2018 |
|
|
2017 |
|
|
Change |
|
2018 |
|
|
2017 |
|
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income |
|
$ |
124,017 |
|
|
$ |
120,500 |
|
|
2.9 |
|
% |
|
$ |
362,264 |
|
|
$ |
350,662 |
|
|
3.3 |
|
% |
Other property related income |
|
|
12,794 |
|
|
|
12,386 |
|
|
3.3 |
|
% |
|
|
37,672 |
|
|
|
36,379 |
|
|
3.6 |
|
% |
Total revenues |
|
|
136,811 |
|
|
|
132,886 |
|
|
3.0 |
|
% |
|
|
399,936 |
|
|
|
387,041 |
|
|
3.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property taxes |
|
|
13,742 |
|
|
|
13,039 |
|
|
5.4 |
|
% |
|
|
42,080 |
|
|
|
40,355 |
|
|
4.3 |
|
% |
Personnel expense |
|
|
10,848 |
|
|
|
10,721 |
|
|
1.2 |
|
% |
|
|
32,168 |
|
|
|
31,723 |
|
|
1.4 |
|
% |
Advertising |
|
|
2,246 |
|
|
|
1,990 |
|
|
12.9 |
|
% |
|
|
6,401 |
|
|
|
6,010 |
|
|
6.5 |
|
% |
Repair and maintenance |
|
|
1,277 |
|
|
|
1,528 |
|
|
(16.4 |
) |
% |
|
|
4,283 |
|
|
|
4,465 |
|
|
(4.1 |
) |
% |
Utilities |
|
|
4,090 |
|
|
|
4,395 |
|
|
(6.9 |
) |
% |
|
|
11,960 |
|
|
|
11,742 |
|
|
1.9 |
|
% |
Property insurance |
|
|
691 |
|
|
|
688 |
|
|
0.4 |
|
% |
|
|
2,046 |
|
|
|
2,111 |
|
|
(3.1 |
) |
% |
Other expenses |
|
|
5,047 |
|
|
|
5,372 |
|
|
(6.0 |
) |
% |
|
|
16,110 |
|
|
|
15,986 |
|
|
0.8 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
37,941 |
|
|
|
37,733 |
|
|
0.6 |
|
% |
|
|
115,048 |
|
|
|
112,392 |
|
|
2.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income (1) |
|
$ |
98,870 |
|
|
$ |
95,153 |
|
|
3.9 |
|
% |
|
$ |
284,888 |
|
|
$ |
274,649 |
|
|
3.7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
|
72.3 |
|
% |
|
71.6 |
|
% |
|
|
|
|
71.2 |
|
% |
|
71.0 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period end occupancy (2) |
|
|
92.7 |
|
% |
|
93.5 |
|
% |
|
|
|
|
92.7 |
|
% |
|
93.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period average occupancy (3) |
|
|
93.3 |
|
% |
|
93.8 |
|
% |
|
|
|
|
93.0 |
|
% |
|
93.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total rentable square feet |
|
|
31,616 |
|
|
|
|
|
|
|
|
|
31,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized annual rent per occupied square foot
(4) |
|
$ |
16.81 |
|
|
$ |
16.26 |
|
|
3.4 |
|
% |
|
$ |
16.44 |
|
|
$ |
15.88 |
|
|
3.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Same-Store Net Operating Income to
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store net operating income (1) |
|
$ |
98,870 |
|
|
$ |
95,153 |
|
|
|
|
|
$ |
284,888 |
|
|
$ |
274,649 |
|
|
|
|
Non same-store net operating income (1) |
|
|
5,549 |
|
|
|
3,227 |
|
|
|
|
|
|
14,350 |
|
|
|
7,714 |
|
|
|
|
Indirect property overhead (5) |
|
|
196 |
|
|
|
(1,667 |
) |
|
|
|
|
|
(2,213 |
) |
|
|
(3,749 |
) |
|
|
|
Depreciation and amortization |
|
|
(35,239 |
) |
|
|
(35,971 |
) |
|
|
|
|
|
(105,251 |
) |
|
|
(110,826 |
) |
|
|
|
General and administrative expense |
|
|
(9,780 |
) |
|
|
(8,228 |
) |
|
|
|
|
|
(26,865 |
) |
|
|
(26,522 |
) |
|
|
|
Acquisition related costs |
|
|
- |
|
|
|
(235 |
) |
|
|
|
|
|
- |
|
|
|
(1,062 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
59,596 |
|
|
$ |
52,279 |
|
|
|
|
|
$ |
164,909 |
|
|
$ |
140,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Net
operating income (NOI) is a non-GAAP (generally accepted accounting
principles) financial measure that excludes from operating income
the impact of depreciation and general & administrative
expense. |
(2) |
Represents
occupancy at September 30 of the respective year. |
(3) |
Represents
the weighted average occupancy for the period. |
(4) |
Realized
annual rent per occupied square foot is computed by dividing rental
income by the weighted average occupied square feet for the
period. |
(5) |
Includes
property management income earned in conjunction with managed
properties. |
Non-GAAP Measure – Computation of Funds
From Operations(in thousands, except per share
data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2018 |
|
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to the Company's
common shareholders |
|
$ |
42,900 |
|
$ |
37,297 |
|
$ |
115,733 |
|
$ |
94,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate depreciation and amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real property |
|
|
34,537 |
|
|
35,271 |
|
|
103,142 |
|
|
108,825 |
|
Company's share of unconsolidated real estate
ventures |
|
|
2,752 |
|
|
2,457 |
|
|
7,763 |
|
|
7,716 |
|
Noncontrolling interests in the Operating
Partnership |
|
|
476 |
|
|
490 |
|
|
1,285 |
|
|
1,194 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO attributable to common shareholders and
OP unitholders |
|
$ |
80,665 |
|
$ |
75,515 |
|
$ |
227,923 |
|
$ |
212,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan procurement amortization expense - early
repayment of debt |
|
|
— |
|
|
— |
|
|
— |
|
|
190 |
|
Acquisition related costs |
|
|
— |
|
|
235 |
|
|
— |
|
|
1,062 |
|
Property damage related to hurricanes, net of
expected insurance proceeds (1) |
|
|
— |
|
|
1,424 |
|
|
— |
|
|
1,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO, as adjusted, attributable to common
shareholders and OP unitholders |
|
$ |
80,665 |
|
$ |
77,174 |
|
$ |
227,923 |
|
$ |
215,152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to common shareholders - basic |
|
$ |
0.23 |
|
$ |
0.21 |
|
$ |
0.63 |
|
$ |
0.53 |
|
Earnings per share attributable to common shareholders -
diluted |
|
$ |
0.23 |
|
$ |
0.21 |
|
$ |
0.63 |
|
$ |
0.52 |
|
FFO per share and unit - fully diluted |
|
$ |
0.43 |
|
$ |
0.41 |
|
$ |
1.22 |
|
$ |
1.16 |
|
FFO, as adjusted per share and unit - fully diluted |
|
$ |
0.43 |
|
$ |
0.42 |
|
$ |
1.22 |
|
$ |
1.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic shares outstanding |
|
|
186,074 |
|
|
180,304 |
|
|
184,036 |
|
|
180,218 |
|
Weighted-average diluted shares outstanding |
|
|
186,916 |
|
|
181,286 |
|
|
184,829 |
|
|
181,225 |
|
Weighted-average diluted shares and units outstanding |
|
|
188,954 |
|
|
183,687 |
|
|
186,846 |
|
|
183,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend per common share and unit |
|
$ |
0.30 |
|
$ |
0.27 |
|
$ |
0.90 |
|
$ |
0.81 |
|
Payout ratio of FFO, as adjusted |
|
|
69.8 |
% |
|
64.3 |
% |
|
73.8 |
% |
|
69.2 |
% |
(1) |
Property
damage related to hurricanes, net of expected insurance proceeds
for the three and nine months ended September 30, 2017 includes
$0.1 million of storm damage related costs that are included in the
Company’s share of equity in losses of real estate ventures. |
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