Q3 2025 CubeSmart Earnings Call

2025 earnings call.

All lines have been placed on mute to prevent any background noise and after the Speakers' remarks, there will be a question and answer session.

If you'd like to ask a question at that time. Please press Star then the number one on your telephone keypad.

Tim Martin: Yeah. I think what you're finding is you're just able to get rate in these markets that are not typically the home buyer and seller movement markets. You're leading year-over-year improvement in rate to new customers. Manhattan, Queens, Brooklyn, Chicago, Washington, DC, and then the laggards where you're just still trying to find your footing in terms of where is that balance and at what rate can you get that customer to convert, continue to be Atlanta, Phoenix, Charlotte, some in Texas. Some of the major Texas markets are moving in that direction as well. It really is just market from our perspective, which then sort of ties into your question, which is its customer use case.

If you'd like to withdraw your question at any time, Please press star one again.

I'll now turn the call over to Josh should Sir Vice President of Finance.

Thank you Colby good morning, everyone welcome to <unk> third quarter 2025 earnings call participants on today's call include Chris Marr, President and Chief Executive Officer, and Tim Martin Chief Financial Officer, our prepared remarks will be followed by Q&A session. In addition to our earnings release, which was issued.

Speaker #1: Ladies and gentlemen, thank you for standing by. My name is Colby, and I'll be your conference operator today. At this time, I'd like to welcome you to the CubeSmart Q3 2025 earnings call.

Speaker #1: All lines have been placed on mute to prevent any background noise. And after the speakers are marked, there will be a question-and-answer session. If you would like to ask a question at that time, please press star then the number one on your telephone keypad.

Yesterday evening.

Subsequent mental and financial data is available under the Investor Relations section of the company's website at Www Dot <unk> Smart dotcom.

Speaker #1: If you would like to withdraw your question at any time, please press star one again. I'll now turn the call over to Josh Schutzer.

Company's remarks will include certain forward looking statements regarding earnings and strategy that involve risks uncertainties and other factors that may cause the actual results to differ materially from these forward looking statements.

Speaker #1: Vice President of Finance.

The risks and factors that could cause our actual results to differ materially from forward looking statements are provided in documents the company furnishes to or files with the Securities and Exchange Commission specifically the form 8-K, we filed this morning together with our earnings release filed with the form 8-K, and the risk factors section in the company's annual report on Form 10-K. In addition, the company's remark.

Speaker #2: Thank you, Colby. Good morning, everyone. Welcome to CubeSmart's Q3 2025 earnings call. Participants on today's call include Chris Marr, President and Chief Executive Officer, and Tim Martin, Chief Financial Officer.

Speaker #2: Our prepared remarks will be followed by a Q&A session. In addition to our earnings release, which was issued yesterday evening, supplemental financial data is available under the Investor Relations section of the company's website at www.cubesmart.com.

Todd Thomas: Thanks. Appreciate the context there.

This include reference to non-GAAP measures a reconciliation between GAAP and non-GAAP measures can be found in the third quarter financial supplement posted on the company's website at Www Dot cube Smart Dot Com I will now turn the call over to Chris.

Tim Martin: I'm sorry. One last piece is, ultimately, when we talk about supply and those headwinds are diminishing across the portfolio, but that also varies pretty significantly by market. Not surprising, those Sun Belt markets that, A, tended to rely historically on a little bit more of that home buyer and seller, are also the markets that continue to get deliveries. While deliveries overall are down, they are still occurring all too frequently in Atlanta, in Phoenix, in the West Coast of Florida.

Speaker #2: The company's remarks will include certain forward-looking statements regarding earnings and strategy that involve risks, uncertainties, and other factors that may cause the actual results to differ materially from these forward-looking statements.

Thank you Josh.

Happy Halloween and welcome everyone to our third quarter call.

Speaker #2: The risks and factors that could cause our actual results to differ materially from forward-looking statements are provided in documents the company furnishes to or files with the Securities and Exchange Commission, specifically the Form 8-K we filed this morning, together with our earnings release filed with the Form 8-K, and the risk factors section in the company's annual report on Form 10-K.

It was a very solid third quarter for cube, which resulted in guidance increases across our key same store and earnings metrics.

Across all markets, our existing customer Kpis remained strong.

With key credit and attrition metrics remaining consistent within historical normal ranges.

Speaker #2: In addition, the company's remarks include reference to non-GAAP measures. The reconciliation between GAAP and non-GAAP measures can be found in the Q3 Financial Supplement posted on the company's website at www.cubesmart.com.

Todd Thomas: It's kind of a double whammy for those Sun Belt markets, so to say.

We are continuing to field diminishing headwinds from new supply as the stores placed in service over the last three years lease up and the forward pipeline continue shrinking.

Tim Martin: Yes.

Todd Thomas: Great. Maybe next, just on sort of the ECRIs and outlook there. I realize that the rent roll-downs, the move-in, the move-out is still pretty wide. Has your strategy changed there at all? Have customers become more sensitive to rate increases, or are they typically still willing to accept them, and you're able to push strategically where you can?

Speaker #2: I'll now turn the call over to Chris.

Speaker #1: Thank you, Josh. Happy Halloween. And welcome, everyone, to our Q3 calls. It was a very solid Q3 for Cube, which resulted in guidance increases across our key same-store and earnings metrics.

As evidenced by two consecutive quarters of improved the guidance expectations. The year has played out a bit better than we expected, which we attribute to the lessening impact of new supply.

A more constructive pricing environment during our busy rental season.

Speaker #1: Across all markets, our existing customer KPIs remain strong, with key credit and attrition metrics remaining consistent within historical normal ranges. We are continuing to feel diminishing headwinds from new supply as the stores placed in service over the last three years lease up, and the forward pipeline continues shrinking.

Tim Martin: Yeah. The customer health, which we continue to really focus in on, and again, varies by economic strata and parts of the country, generally across the portfolio, continues to be very good. We have not seen any change in customer behavior as it relates to ECRIs, and our overall approach has been consistent throughout 2025.

And the continued health of the consumer.

We foresee continued gradual improvement in operational metrics we.

We are not anticipating a catalyst for a sharp reacceleration.

We are prepared and operating under the expectation that the stabilizing trends as well as deliveries of new stores will vary by market.

Speaker #1: As evident by two consecutive quarters of improved guidance expectations, the year has played out a bit better than we expected. Which we attribute to the lessening impact of new supply, a more constructive pricing environment during our busy rental season, and the continued health of the consumer.

Market level performance was similar to what we have been discussing for the last couple of quarters top performers continue to be the more urban mid Atlantic and northeast markets.

Todd Thomas: Great. That's it for me. Thanks for the time.

The East Coast of Florida is experiencing stabilizing trends.

Tim Martin: You too.

Operator: Your next question comes from the line of Ravi Vaidya with Mizuho. The line's open.

And some of the Sun belt markets are still finding their footing.

Speaker #1: We foresee continued gradual improvement in operational metrics. We are not anticipating a catalyst for a sharp re-acceleration. We are prepared and operating under the expectation that the stabilizing trends as well as deliveries of new stores will vary by market.

In summary, it's a slow steady stabilization without a catalyst for rapid acceleration.

Ravi Vaidya: Hi there. Good morning. Hope you guys are doing well. I wanted to ask for the third-party management business. I saw a couple of stores came off on a net basis. Is there something that, looking ahead, should be expected to increase again? Or maybe who are some of the new private operators that you're partnering with, and how can that be used as a hedge for higher supply? Thanks.

Like we laid out when we entered the year with.

We've seen some better pricing power that started earlier in the year for the reasons I have previously shared while overall demand levels are mostly stable, but not growing significantly.

Speaker #1: Market-level performance was similar to what we have been discussing for the last couple of quarters. Top performers continue to be the more urban Mid-Atlantic and Northeast markets, the East Coast of Florida is experiencing stabilizing trends, and some of the Sun Belt markets are still finding their footing.

It takes time for improving fundamentals to flow through to revenue with only 4% to 5% monthly customer churn.

And this was the first quarter since Q1, 2022, where move in rates in the same store portfolio were positive year over year.

Tim Martin: Yeah. I appreciate the question. On our third-party management program, we talk about the stores that we add to the platform because that's ultimately what we control. That's our new business development team looking for opportunities to add owners, to add stores to the platform. This year, we have exceeded adding 130 stores for at least the eighth consecutive year. That part of the business remains healthy. The part that is very difficult to predict is when stores are going to leave the platform. Part of this year's churn was self-inflicted earlier in the year when we bought 28 stores that were in that third-party managed bucket. You just have a lot of stores that are leaving the platform. Most often, that is because they have transacted. They have sold to somebody that either self-manages or has a different relationship.

Assuming these stabilizing trends continue through the end of the year, we should be on improved footing heading into 2026.

Speaker #1: In summary, it's a slow steady stabilization without a catalyst for rapid acceleration, just like we laid out when we entered the year. We've seen some better pricing power that started earlier in the year.

Now I'd like to turn the call over to our Chief Financial Officer, Tim Martin for his commentary.

Speaker #1: For the reasons I've previously shared, while overall demand levels are mostly stable, they are not growing significantly. It takes time for improving fundamentals to flow through to revenue, with only 4 to 5 percent monthly customer churn.

Thanks, Chris Good morning, and thank you to everyone for taking the time to join US today for the quarter. We performed in line with our expectations reporting <unk> per share as adjusted of 65.

Same store revenues declined 1% compared to last year with average occupancy for our same store portfolio down 80 basis points to 89, 9%.

Speaker #1: And this was the first quarter since Q1 2022 where move-in rates in the same-store portfolio were positive year over year. Assuming these stabilizing trends continue through the end of the year, we should be on improved footing heading into 2026.

Same store operating expenses grew just 3% over last year again, reflecting our keen focus on expense control, we saw favorable year over year variances and utilities expenses and in property insurance. Following our successful renewal back in May, which we discussed last quarter.

Speaker #1: Now, I'd like to turn the call over to our Chief Financial Officer, Timothy Martin, for his commentary.

So negative 1% revenue growth combined with 3% expense growth yielded negative one 5% same store NOI growth for the quarter.

Tim Martin: Trying to predict the net growth in the store count on the third-party management platform is an impossible task. We control what we can control. When stores leave the platform, we've talked about in the past, we feel like it's a job well done. We've helped that owner create the value. We've stabilized and improved performance. In most cases, we set them up to achieve their desired results as they transact and sell the asset to someone else.

Speaker #3: Thanks, Chris. Good morning, and thank you to everyone for taking the time to join us today. For the quarter we performed in line with our expectations, reporting FFO per share as adjusted of 65 cents.

From an external growth perspective, we're starting to see a little momentum here late in the year as we are under contract to acquire three stores in the fourth quarter. We also completed and opened our joint venture development in Port Chester, New York during the quarter and are scheduled to open our project in New Rochelle, New York during the fourth quarter.

Speaker #3: Same-store revenues declined 1 percent compared to last year, with average occupancy for our same-store portfolio down 80 basis points to 89.9 percent. Same-store operating expenses grew just 0.3 percent over last year, again reflecting our keen focus on expense control.

On the third party management front, we had another productive quarter, adding 46 stores to our platform, bringing us to 863 stores under management at quarter end.

Speaker #3: We saw favorable year-over-year variances in utilities expenses and in property insurance following our successful renewal back in May, which we discussed last quarter. So, negative 1% revenue growth combined with 0.3% expense growth yielded negative 1.5% same-store NOI growth for the quarter.

On the balance sheet, we successfully completed our issuance of $450 million of 10 year senior unsecured notes on August 20th.

Ravi Vaidya: Got it. That's helpful. Thank you.

Tim Martin: Thank you.

Operator: Your next question comes from the line of Spenser Glimcher from Green Street. Your line is open.

The offering has a yield to maturity of five 9% and was our first time back to the market and for years, we were delighted with the execution and delighted with the support we received from our fixed income investor base.

Speaker #3: From an external growth perspective, we're starting to see a little momentum here late in the year, as we're under contract to acquire three stores in the fourth quarter.

Spenser Glimcher: Thank you. Maybe just going back to the acquisition front, are there certain markets or geographies that you guys are more comfortable underwriting just due to greater stabilization of fundamentals? On the flip side, are there any markets that are sort of redlined right now just because there's still too much operational uncertainty, maybe outside of the obvious supply-heavy markets?

Speaker #3: We also completed and opened our joint venture development in Port Chester, New York, during the quarter, and are scheduled to open our project in New Rochelle, New York, during the fourth quarter.

Our 2025 notes mature later this month and we intend to satisfy those initially through borrowings under our unsecured credit facility and then ultimately term that out by accessing the bond market again in the coming months.

Speaker #3: On the third-party management front, we had another productive quarter, adding 46 stores to our platform, bringing us to 863 stores under management at quarter-end.

Our leverage levels remain quite conservative with net debt to EBITDA at four seven times at quarter end.

Ravi Vaidya: Yeah. I mean, just the nuanced responses, we're comfortable underwriting it everywhere. I think embedded in our underwriting are obviously going to be different risk hurdles based on some of those characteristics that you would refer to. Perhaps the best deal that we can find right now would be in a market that's more challenged because others don't see maybe what we see. We don't have a bias necessarily to blacklist a particular market because of supply as an example or some other criteria. What we would do in that standpoint is to make sure that from a risk-adjusted standpoint, we're getting paid to take on that uncertainty. Those markets create more challenge from an underwriting standpoint to try to look at where rates are today, perhaps, and where rates might be in a year or two.

Speaker #3: On the balance sheet, we successfully completed our issuance of $450 million of 10-year senior unsecured notes on August 20th. The offering has a yield to maturity of 5.29 percent and was our first time back to the market in four years.

From a guidance perspective, we updated our full year expectations and underlying assumptions in our press release last evening highlights other guidance changes include a penny raise at the midpoint of our <unk> per share as adjusted.

Speaker #3: We were delighted with the execution and delighted with the support we received from our fixed income investor base. Our 2025 notes matured later this month, and we intend to satisfy those initially through borrowings under our unsecured credit facility and then ultimately turn that out by accessing the bond market again in the coming months.

On same store revenue growth, we improved the midpoint of our guidance range, our expense growth guidance range improved as well with a revised midpoint of one 5% for the year.

All of that translates into improved same store NOI expectations for the year with a revised midpoint of negative 125%.

Picking up on Chris's comments, we expect trends to continue to stabilize through the remainder of the year, putting us on better footing heading into 2026 than where we entered this year.

Speaker #3: Our leverage levels remain quite conservative, with net debt to EBITDA at 4.7 times at quarter-end. From a guidance perspective, we updated our full-year expectations and underlying assumptions in our press release last evening.

Our guidance implies negative revenue growth in Q4, although acceleration from Q3 at the midpoint.

Speaker #3: Highlights of the guidance changes include a penny raise at the midpoint of our FFO per share as adjusted. On same-store revenue growth, we improved the midpoint of our guidance range. Our expense growth guidance range improved as well, with a revised midpoint of 1.5 percent for the year.

While we are still not anticipating things snapping all the way back to normalized levels of growth quickly, we're seeing encouraging signs that are starting to flow through the portfolio.

Ravi Vaidya: It is a challenging but not impossible underwrite when you have a store in particular because it's such a micro-market business. When you have a store that is competing against new supply, to be able to have confidence in your ability to project where rates in that small market are going to stabilize once that new supply leases up is a challenge. It's the fun part of the investments team and what they do because those deals that have a little bit of hair on them are the most challenging but also very interesting and perhaps the place that you can make a really nice risk-adjusted return. We're not avoiding markets, but certainly considering all of those risk factors.

Thanks again for joining us on the call. This morning happy Halloween and at this time Colby, let's open up the call for some questions.

Speaker #3: All of that translates into improved same-store NOI expectations for the year, with a revised midpoint of negative 1.25 percent. Picking up on Chris's comments, we expect trends to continue to stabilize through the remainder of the year, putting us on better footing heading into 2026 than where we entered this year.

Thank you we will now begin the question and answer session.

You'd like to ask a question. Please press Star then the number one on your telephone keypad to raise your hand and into the queue.

I would like to withdraw your question at any time simply press Star one again.

Speaker #3: Our guidance implies negative revenue growth in Q4, although acceleration from Q3 at the midpoint. While we're still not anticipating things snapping all the way back to normalized levels of growth quickly, we're seeing encouraging signs that are starting to flow through the portfolio.

Thank you.

The first line. Your first question comes from the line of Samir Khanal with Bank of America. Your line is open.

Hey, good morning, everybody, Hey, Chris I guess, just how are you thinking about the balance between rate and occupancy right now.

Spenser Glimcher: Okay. Yeah, that's very helpful. Can you just share what stabilized cap rates you guys are underwriting on the three assets you're acquiring in Q4?

Speaker #3: Thanks again for joining us on the call this morning. Happy Halloween, and this time, Colby, let's open up the call for some questions.

In an environment, where demand seems to be stable as you try to get that new customer in the door. Thanks.

Tim Martin: Yeah. Those three assets are a little bit of a mixed bag between stable and not stable. Going in, when you look across the three, we're going in in the low fives and stabilizing across the board fairly early on in year two or three, right around a six across the board for those three opportunities.

So ultimately the systems are focusing in on maximizing the revenue from each customer and so trying to find that balance and it varies by.

By market. So when you think about.

Spenser Glimcher: Okay, thank you so much.

When you think about those two those two levers right in occupancy you have the.

Tim Martin: Thank you.

Operator: Your next question comes from Brendan Lynch from Barclays. Your line is open.

You have the elasticity of demand that one has to.

Brendan Lynch: Great. Thank you for taking my question. New York City continues to perform quite well. It continues to outperform other large markets in the Northeast. Maybe you can just kind of compare and contrast what is leading to that outperformance. Obviously, there's a lot of supply issues in the Sun Belt. Maybe it's the same in the Northeast. Any color that you can provide on New York relative to some of these other markets in the region.

Deal with and so when we look at those markets that we would describe as having been solid for a while kind of the rock stars in this part of the cycle, where youre getting both rate and occupancy I'd call out New York City, Washington D C MSA Chicago.

And then you have those markets that are stabilizing so their rate and occupancy are moving in a good direction, albeit.

Still perhaps.

Down year over year, and those examples would be Miami.

Tim Martin: Yeah, it's going to be partly what you just said. Again, the boroughs, really nonexistent new supply impact, so you're really stable from that perspective. You have a more need-based customer, and then obviously, we have a very significant position there and one in which the asset quality is extremely high. We just have everything in our favor in a market that in this part of the cycle is just doing very well. Other Northeast, Philadelphia, Boston, a little bit of a mixture there. You've got supply as opposed to the boroughs, and you have a little bit more of a mix in the customer base. It's not quite Sun Belt-like, but you do have a little bit more of that mover, so to speak, than you might have in, say, the Bronx. I think it's kind of a combination of those two things.

In Los Angeles.

And then those markets that are still trying to find their footing, where again the systems every day or trying to.

To navigate through that dynamic of of new move in customer rate versus occupancy and testing is the demand there.

At any price.

And those would be the same.

Same markets, we've talked about all year Atlanta theme.

Phoenix, Cape Coral Charlotte, the Sun belt markets.

Really varies quite quite a lot by market.

And.

As the systems try to find that balance.

And maybe as a follow up here.

I know you talked about move in rates that were positive in the quarter kind of a two 5% better on rate versus occupancy.

Can you provide some color around what October as well, but what are you seeing kind of trends in October. Thanks.

Yeah. So the occupancy gap to last year has contracted from the end of the third quarter as of yesterday.

We're down 100 basis points from.

From where we were at this point last year.

Tim Martin: You see that similarly in urban Chicago. You see it in a few of the other urban markets.

And the average.

Rent on rentals that that two and a half that you quoted for the quarter and October is kind of in that 192% kind of range.

Brendan Lynch: Great. Thanks, Chris. Maybe just sticking with New York City, you've got the new development coming there. It's a relatively small investment. I think it's $19 million. Maybe just talk about what would allow you to get more assertive or aggressive on development in the New York City area.

Okay.

Okay excellent.

Okay.

Your next question comes from the line of Nicholas you Leeco from Scotiabank. Your line is open.

Hello, This is ctrip and Elong and Qunar com.

Tim Martin: It's really looking for opportunities that are located in a spot that would be complementary to our existing portfolio and, frankly, would have a need from a demand standpoint for there to be new product. Obviously, it's not as easy to pencil out deals in the boroughs as it used to be because the tax incentives aren't there any longer. Surely there are opportunities somewhere, but the fruit is pretty high up in the tree. For us to find an opportunity, it's going to be something that we're pretty excited about.

Last call you said that most demand still comes from traditional search and Youre working with our partners Gemini integration, but what percentage of fleet and bookings are now AI influenced today and how does overall the cost of our AI leads compared to traditional search engine so far.

Rent on rentals are that that two and a half that you quoted for the quarter and October is kind of in that 192% kind of range.

Yes, the the leads coming through the <unk>, which is primarily chat the GPT at this point for us are about less than 1%.

Okay.

Okay. Thanks, a lot.

Thanks.

Your next question comes from the line of Nicholas you Leeco from Scotiabank. Your line is open.

Got it.

And then.

He also mentioned last call that.

Hello. This is sneaker baidu honorees kulik on on your last call you said that most demand still comes from traditional search and Youre walking with our partners, our Gemini integration, but what percentage of fleet and bookings are now AI influenced today and how does overall the cost better AI leads compared to traditional search engine.

Brendan Lynch: Great. Next step.

That mentioned builder exit ways is kind of coming to the market and just trying to understand whether it has intensified rapidly and what does it mean for you and kind of for your potential acquisition pool.

Tim Martin: Thank you.

Operator: Your next question comes from the line of Eric Luchow from Wells Fargo. Your line is open.

Brendan Lynch: Thanks for the question. Can you comment a little bit on any trends you're seeing on your average length of stay? It seems like vacates have been kind of muted across the industry this year. Obviously, helps from a roll-down perspective, but perhaps takes a little bit longer for some of these better moving rates to flow through the portfolio. Any commentary on that would be helpful.

I'm, sorry, I think we got a little bit more clarity on the question, if we could merchant builder.

So far.

Yeah.

The leads coming through the <unk>, which is primarily chat the GPT at this point for us are about less than 1%.

The sellers.

Yes, yes, yes, whether that you can see now more of them or not.

Not really.

Q2.

Yeah, No I haven't really seen a change again there is no. There is no and there typically is in significant duress in our sector.

Tim Martin: Sure. When you think about those trends, I would macro say they're consistent, still elevated. Our customers who have been with us greater than a year, that's up 50 basis points year over year. If you kind of compare it to pre-COVID, third quarter of 2019, it's plus 260 basis points. Those customers who have been with us greater than two years, which is about 40% of our customers, that's actually down year over year, about 140 basis points, but up 50 basis points from what we saw in Q3 2019. They continue to be pretty consistent, have come down a bit off of peak, but still elevated relative to historical metrics.

Got it.

And then.

He also mentioned last call that.

That merchant builder exit wave is kind of coming to the market and just trying to understand whether it has intensified recently and what does it mean for you and it's kind of all your potential acquisition pool.

So I think what you have is.

Folks who may have opened a store in 2020 to where they were underwriting cash flows based on the spectacular storage performance. During COVID-19 are clearly not meeting their pro forma is.

I'm, sorry, I think we got a little bit more clarity on the question, if we could merchant builder sellers.

But I think what we're finding is everyone's just looking for ways to extend.

Yeah, Yeah, yeah, whether there you can see now more of them or are not really versus for example, Q2.

Extend out and anticipate stabilizing trends in better times ahead and financial institutions for the most part are cooperating.

Yeah, No I haven't really seen a change you know again there is no. There is no and there typically is in light of significant duress in our sector.

Got it thank you.

Thanks.

Your next question comes from Todd Thomas with Keybanc. Your line is open.

So I think what you have is.

Brendan Lynch: I appreciate that. I know you provided a little bit of directional commentary on 2026, but just trying to take maybe more of the bull case. Obviously, if we get a housing catalyst, if we see a pickup in customer mobility, moving rates continue to find stability, start growing. Do you think it's reasonable we could get back to more historical levels of growth by maybe the second half of next year, certainly into 2027, and then potentially even higher beyond that, especially given some of the supply delivery commentary? Just wanted to get your temperature on what you see over the next few years and not just into 2026.

Well folks who may have opened a store in 2020 to where they were underwriting cash flows based on the spectacular storage performance. During COVID-19 are clearly not meeting their pro forma is.

Hi, Thanks, good morning.

Tim your comments about the improving trends.

And third quarter being the first period of higher move in rents and it seems like that continued in October.

But I think what we're finding is everyone's just looking for ways to.

<unk> assumes an improving revenue growth trend in <unk>, albeit still negative you mentioned that.

Extend out and.

But just your comments overall, suggesting that that trend of.

Anticipate stabilizing trends in better times ahead and financial institutions for the most part are cooperating.

Improving revenue growth too.

Early sort of read into 26 is it fair to assume that you would expect all else equal that that trend to continue from here just given the 4% to 5% churn in the time it takes for that to translate to revenue growth is that how youre thinking about it at this point in the cycle.

Got it thank you.

Thanks.

Your next question comes from Todd Thomas with Keybanc. Your line is open.

Tim Martin: Yeah. I do see that bull case as playing out the way you described. It's sort of finding that catalyst for demand, and if that occurs, housing being the easiest thing to point at, we continue to have a healthy consumer. I think you then start to see consistent performance from those solid markets that we've experienced here over the last couple of quarters. Those steady eddies continue, and you're overall helped by the fact that the Charlottes and the Nashville, etc., of the world should rebound quite nicely. I think we're well positioned, obviously, to get the rate. We've shown that we can do that through this cycle, increasingly more so over the last couple of months. On the occupancy side, then you get the pickup there as well.

Hi, Thanks, good morning.

Tim your comments about the improving trends.

As you think I mean, as you think about 'twenty six macro again, assuming the consumer health remains where it is the economy continues to.

And third quarter being the first period of higher move in rents and it seems like that continued in October.

<unk> assumes an improving revenue growth trend in <unk>, albeit still negative you mentioned that.

To do okay.

We would anticipate that the trend from Q3 to Q4 and again, we talked about in Q2 that Q3 at a little bit of anomaly.

But just your comments overall, suggesting that that trend of.

Improving revenue growth do you you know early sort of read into 26 is it fair to assume that you would expect all else equal that that trend to continue from here just given the 4% to 5% churn in the time it takes for that to translate to revenue growth is that how youre thinking about it at this point in the cycle.

That was going to create that DSL from from the prior quarter, but yes that trend should continue again.

Do we inflect.

Positive in same store revenue growth.

As we sit here today, yes, when might that occur again as we sit here today I would I would conservatively expect that's probably the back half of 2026.

Yeah. Thanks.

Think about 'twenty sex macro again, assuming the consumer health remains where it is the economy continues to.

Okay and then.

To do okay.

Some of your peers I think ran promotions are implemented.

We would anticipate that the trend from Q3 to Q4 and again, we talked about in Q2 that Q3 at a little bit of anomaly.

Discounting strategies during the quarter I was just wondering if you can speak to whether whether Q participate in or what discounting strategies might've been implemented during the peak season, and how youre thinking about.

Tim Martin: To your point, you could see, and I would expect if those conditions were to occur, you would see more elevated performance.

That was going to create that DSL from from the prior quarter, but yeah that trend should continue again do we inflect positive in the same store revenue growth.

Yeah.

Brendan Lynch: Okay. I appreciate it. Thanks, guys.

Pricing.

Promotions and discounting in the off peak season.

Tim Martin: Thank you.

As we sit here today, yes, when might that occur again as we sit here today I would I would conservatively.

Operator: Your next question comes from the line of Michael Mueller with JPMorgan. Your line is open.

As you know.

Occupancy typically pulls back a bit here.

Yeah. So I guess there was some.

[Analyst]: Yeah. Hi. I just go back to development supply. I mean, what's your gut feeling tell you about how quickly supply may come back in some of the markets as they improve over the next couple of years? I mean, do you see a lot of competitive projects near you where people are just kind of waiting for the right time to kick off, or do you think you're going to have a little bit longer of a runway without meaningful supply?

That's probably the back half of 2026.

New new vernacular introduced recently with this gross net kind of concept the two 5% gross.

Okay, and then you know.

Some of your peers I think Brian you know promotions are implemented.

Move in rate year over year growth that we saw for US. It is also the net we have not had any change in our discount.

Newer discounting strategies during the quarter I was just wondering if you can speak to whether you know whether to participate in or what discounting strategies might've been implemented during the peak season, and how youre thinking about.

Okay are you changing your promotional offerings, though or changing your discount strategies at all.

Tim Martin: I think that crystal ball is complicated and maybe a little fuzzy. I think it will be slower. You have a couple of factors. Again, we still have elevated cost. I think it will, to our point, be a more gradual recovery in move-in rates. You'll still have to see some progress there. I think the developers who have opened in 2022 and are sort of trying to figure out how to hang on at this point may not be likely to want to get back into it again until they deal with exiting the store that they have. Ultimately, the primary lenders to the space for the developers, those local and regional banks, have to be—if they continue to be constructive in terms of how they think about underwriting and how they think about providing that leverage, I think that should constrain things as well.

Pricing.

Yeah.

Promotions and discounting in the off peak season has occupancy.

Okay alright, thank you.

Typically pulls back a bit here.

Thanks Todd.

Yeah. So I guess there was some.

Your next question comes from the line Juan Sanabria with BMO capital markets. Your line is open.

New new new vernacular introduced recently with this gross net kind of concept the 2.5% gross.

Hi, good morning, Thanks for the time just on the acquisition side a couple of your peers have become more aggressive possible about more opportunities or deal flow, just curious, what you're seeing and or willingness or appetite to.

Move in rate year over year growth that we saw is for US. It is also the net we have not had any change in in our discounting.

The increase the external investments.

Okay are you changing your promotional offerings, though or changing your discount strategies at all.

Thanks, Paul I appreciate the question.

I guess, we have three stores under contract. So that is a movement in the right direction I think what we've seen and we've talked about here for the past several quarters is pretty consistent view from the buying side of the table as to what as to what return thresholds look like I don't think that's changed much at all Hasnt for us I don't think it changed much.

Yeah.

Okay alright, thank you.

Thanks Todd.

Your next question comes from the line of Juan Sanabria with BMO capital markets. Your line is open.

Hi, good morning, Thanks for the time just on the acquisition side a couple of your peers have become more aggressive talking more about more opportunities or deal flow.

For others, either I think the I think the changes that the seller side of the equation has gotten a little bit more constructive from the buyer's perspective, when youre starting to see things move a little bit I think you saw that from some of our peers I think youll see that from us with the three stores that we have under contract so nothing.

Tim Martin: At least you look out through next year, probably at least the first half of 2027. I think we'll continue to see some restraint. There are the markets I've called out that appear to have no guardrails, but I think we'll continue to see some constraint. If you just think practically, if it picks back up again, it takes six months to sort of get everything going and then another 12 months to build. You're 18 months out from whenever that happens.

Curious, what you're seeing and or willingness or appetite to.

To increase the external investments.

Thanks, Paul I appreciate the question.

I guess, we have three stores under contract so thats movement in the right direction I think what we've seen and we've talked about here for the past several quarters is pretty consistent view from the buying side of the table as to what as to what return thresholds look like I don't think that's changed much at all Hasnt for us I don't think it changed much.

I wouldn't say, there's any any earth shattering move other than the market becomes a little bit more constructive as the as the gap between buyer and seller has.

Has shrunk to the point, where you're starting to see some things get done.

Thanks, and then just.

[Analyst]: Got it. Okay. Thank you.

I'll follow up.

Your rent per occupied square foot was strong in the quarter up two 4% quarter over quarter flat year over year better than peers.

Operator: Your next question comes from the line of Michael Goldsmith with UBS. Your line is open.

Others, either I think the I think the changes that the seller side of the equation has gotten a little bit more constructive from the buyer's perspective, and youre starting to see things move a little bit I think you saw that from some of our peers I think you see that from us with the three stores that we have under contract so nothing.

What do you think allowed you to push that in place right.

Michael Goldsmith: Good morning. Thanks all for taking my questions. Move-in rate was up 2.5% during the quarter, apparently both on a gross and a net basis, but came down in October. How did the move-in trend during the quarter? Did it peak in October, or did it peak kind of earlier during the period? Is that how it normally plays out? Thanks.

Relative to the industry with a stronger.

Yes.

Yes, I think again, you're just.

Everybody's system I assume is trying to do the same thing which is fine that balance between.

I wouldn't say, there's any any earth shattering move other than the market becomes a little bit more constructive as the as the gap between buyer and seller has.

The levels of demand that are out there for.

Storage and then <unk>.

Has shrunk to the point, where you're starting to see some things get done.

Tim Martin: Yeah. The move-in trend was historically normal. You see kind of that peak in July, and then trends tend to sequentially start to slow down. Again, I think the message here is that the road is a bit windy. We've got markets that are continuing to move in a fairly straight line in an upward trajectory. There are markets, again, pick on the Sun Belt, where the road's a little bit more windy. Overall, I would say kind of consistent with the last couple of years is what we've seen.

Reising to capture that customer as well as the marketing tools to capture that customer.

Thanks, and then just as a follow up.

Your rent per occupied square foot was strong in the quarter up two 4% quarter over quarter flat year over year better than peers.

I think some of it is portfolio construct again, where we are at this part of the cycle.

Our.

What do you think a lot either.

Our strategy and our quality focus I think.

Was that in place right.

Relative to the industry as a stronger.

It is very helpful to our results.

Okay.

Yeah, I think again, you're just.

And then part of it actually is just sort of the normal seasonality that one would expect to see from Q2 into Q3.

Everybody's system I assume is trying to do the same thing which is find that balance between.

The levels of demand that are out there for.

Storage and then <unk>.

Your next question comes from the line of Eric Wolfe with Citi. Your line is open.

Reising to capture that customer as well.

[Analyst]: Got it. You've said on the call maybe a couple of times, just really stabilizing trends and encouraging signs. By stabilizing trends, are you referring to the same-store revenue growth, and by encouraging signs, you're suggesting the move-in rate? Is that what you're pointing to?

As the marketing tools to capture that customer.

Hey, Thanks for taking my questions.

I think some of it is portfolio construct again, where we are at this part of the cycle.

Thank you said a moment ago that.

Conservatively that same store revenue might not turn positive until the back half of 2026th but I.

Our.

Our strategy and our quality focus I think.

If you are already at 2% to 3%.

That is very helpful to our results.

Tim Martin: Yeah. The top-line metric, same-store revenue growth, we'll just kind of beat the drum again. It takes time for that to move given the relatively low churn in the customer base. When we talk about stabilizing trends, we're talking about move-in rates and demand levels, which again have been weaker than historical, but fairly consistent, and occupancy. It's more of the KPIs that are happening every day, which will then gradually bleed into the same-store revenue result, which will then gradually move that in a positive direction.

Move in rate growth is there some reason to believe that that stays there that you wouldn't just go to like 2% to 3% same store revenue growth is there some kind of offset on the cri I'm just trying to understand why.

And then part of it actually is just sort of the normal seasonality that one would expect to see from Q2 into Q3.

Okay.

If youre already I would call it positive move in ruling today that it's going to take until the back half of 2026 to be positive on same store revenue.

Your next question comes from the line of Eric Wolfe with Citi. Your line is open.

Yeah, I mean, it's not sarcastically, it's Matt. So we are in a business, where 4% to 5% of our existing customers churn on a monthly basis, and so barring again some sort of.

Hey, Thanks for taking my questions.

Thank you said a moment ago that a.

Conservatively that same store revenue might not turn positive until the back half of 2026, but I mean, if you are already at 2% to 3%.

Change.

Move in rate growth is there some reason to believe that that stays there that you wouldn't just go to like 2% to 3% same store revenue growth is there some kind of offset on the cri I'm just trying to understand why.

To the good on the demand side.

[Analyst]: Thank you very much. Port Chester looks great. Good luck in the fourth quarter.

Which we don't we don't foresee a catalyst for that it just takes time. So you will just gradually see.

Tim Martin: Thank you. Super excited about it.

Brendan Lynch: We have units available if you'd like to be a guest.

Youre already I would call it positive move in rents today that it's going to take until the back half of 2026 to be positive on same store revenue.

[Analyst]: I'm good, thanks.

Hi.

At that slightly negative same store revenue growth begin to move in a positive direction and exactly when that crossover occurs.

Operator: Thank you. With no further questions in queue, I'd like to turn the conference back over to Chris Marr for closing remarks.

Yeah.

Is it not sarcastically, it's math, so we are in a business, where 4% to 5% of our existing customers churn on a monthly basis, and so barring again some sort of.

We're not providing.

Tim Martin: Thank you, everybody, for participating. Stabilizing trends, encouraged by the direction overall that the portfolio is moving. Assuming these continue, we expect to be on improved footing heading into 2026. We look forward to seeing some of you at upcoming conferences. Next time we're on a quarterly call, we'll share our specific expectations for 2026. Thank you all. Happy Halloween.

Guidance at this point and we don't do quarterly guidance from a same store perspective, but.

I think to be fair at this point in.

October 31.

What I, what I shared is kind of the conservative outlook at the moment.

Change.

To the good on the demand side again, which we don't we don't foresee a catalyst for that it just takes time. So you will just gradually see.

Got it and then I guess to the move in rents.

That you provide in the south I mean does that include promotions.

I'm, probably asking because I'm just thinking through like if we continue to see positive move in rent growth like I don't I'd say, 2% to 3% or 2% to 4%.

That that's slightly negative same store revenue growth begin to move in a positive direction and exactly when that crossover occurs.

That eventually translate into call it two to.

Operator: This concludes today's conference call. You may now disconnect.

4% same store revenue growth I know occupancy obviously plays a factor.

We're not providing.

Guidance at this point and we don't do quarterly guidance from a same store perspective, but again I think to be fair at this point in.

To your point, but I guess I'm just wondering about that.

If you can really just kind of take these move in rent growth and then assume youre going to get a similar PCI component to it and take that as a leading indicator of where same store revenue growth is going or where mistakenly not including promotions youre not including something else into that.

October 31.

What I, what I shared is kind of the conservative outlook at the mall.

Got it and then I guess to the move in rents.

Calculation.

That you provide in the south I mean does that include promotions.

I will jump in if you think about the if you think about your premise there of <unk>.

I'm, probably asking because I'm just thinking through like if we continue to see just positive move in rent growth I got at let's say, 2% to 3% or 2% to 4% is that eventually translate into call. It two to four.

Two to three 2% to 4% type type year over year improvement in pricing then.

4% same store revenue growth I know occupancy obviously plays a factor.

<unk> held everything else constant then ultimately after call. It 12 months when you've turned 5% of your portfolio each month at that type of churn and eventually that's where you would get to.

To your point, but I guess I'm just wondering about the notes. If you can really just kind of take these move in rent growth and then assume youre going to get a similar PCI component to it and take that as a leading indicator of where same store revenue growth is going or where mistakenly not including promotions youre not including something else into that.

And then and then it would.

It would probably be helped a little bit then by some of those other factors you probably got a little bit more out of your U C. Our eyes, you probably get a little bit of occupancy. If you are in that environment. When you have if you have that type of pricing power normal pricing power of a prolonged period of time so.

Calculation.

I will jump in if you think about the if you think about your premise there.

Back to Chris's point earlier here is it just takes time to flow through because it's 4% to 5% a month and that builds and builds and builds. So if you had that for a prolonged period of time I think that's that's ultimately where you get to from a revenue growth perspective, plus or minus.

Of two to three 2% to 4% type type year over year improvement in pricing there.

Then.

Held everything else constant then ultimately after call. It 12 months when you've turned 5% of your portfolio each month at that type of churn and then eventually that's where you would get to.

And then there's the move in rents include.

Promotions.

And then and then it would.

Or is that like a separate calculation, we you should make meaning that I think it was up like mid twos.

It would probably be helped a little bit then by by some of those other factors you probably got a little bit more out of your ECR is you probably get a little bit of occupancy. If you are in that environment. When you have that type of pricing power normal pricing power of a prolonged period of time. So yes back to Chris's point earlier here is it just takes time to flow through because it's.

This quarter is that something that's flat with promotion.

Yeah, so that two 5% is gross.

And is it for US is the same as the net because our promotions have not change the amount or the magnitude.

<unk>, 4% to 5% of months and then it builds and builds and builds so.

Got it thank you.

You had that for a prolonged period of time I think that's that's ultimately where you get to from a revenue growth perspective, plus or minus.

Thanks.

Your next question comes from the line of Michael Griffin with Evercore ISI. Your line is open.

Thanks, and then there's the moving rents include.

Great. Thanks, Chris maybe you can expand a bit on whether or not you've seen any changes in in new customer behavior. I mean, it seems like if you were able to raise these new customer rents, maybe there's less price sensitivity or customer shopping around and I know, it's always a topical point.

Promotions.

Or is that like a separate calculation, we should make meaning that I think it was up like mid twos. This.

This quarter is that flat with promotion.

Yeah, so that two 5% is gross.

And is it for us.

George but any incremental homebuyer customers coming back or is it still they haven't really materialized yet.

Is the same as the net because of our promotions have not changed the amount or the magnitude.

Got it thank you.

Yes, I think I think what what you're finding is.

Thanks.

Your next question comes from the line of Michael Griffin with Evercore ISI. Your line is open.

Youre, just able to get rate.

In these markets that are that are not typically the the home buyer and seller movement markets. So.

Great. Thanks, Chris maybe you can expand a bit on whether or not you've seen any changes in in new customer behavior. I mean, it seems like if you were able to raise these new customer rents, maybe there's less price sensitivity or customers shopping around and I know, it's always a topical point.

Youre, leading year over year improvement in our rate of new customers Manhattan.

Queens Brooklyn.

Storage, but any incremental homebuyer customers coming back or is it still they haven't really materialized yet.

Chicago, Washington D C and then the laggards, where you're just still trying to find your your footing.

Yeah, I think I think what what you're finding is.

In terms of where is that balance.

And at what rate can you get that customer to converge continue to be you know Atlanta Phoenix.

Youre, just able to get rate.

In these markets that are that are not typically.

Charlotte.

Some some in Texas some of the major Texas markets are moving in that direction as well. So it really is just.

The home buyer and seller move met markets. So.

Youre, leading year over year improvement in the rate of new customers Manhattan.

Market from our perspective, which then sort of ties into your question, which is as you know customer use case.

Queens Brooklyn.

Thanks appreciate the context.

Chicago, Washington D C and then the laggards, where you're just still trying to find your footing.

Yes, Im sorry, one last piece of this and then ultimately it's still when we talk about supply and those headwinds are diminishing.

In terms of where is that balance and at what rate can you get that customer to converge continue to be Atlanta Phoenix.

Across the portfolio, but that also varies pretty.

Pretty significantly by market, so not surprising those sunbelt markets that.

Charlotte.

A tended to rely historically on a little bit more of that home buyer and seller are also the markets that continue to get deliveries while deliveries overall are down.

<unk>.

Some some in Texas some of the major Texas markets are moving in that direction as well. So it really is just a.

They are still occurring.

Market from our perspective, which then sort of ties into your question, which is customer use case.

All too frequently in Atlanta and Phoenix.

The West Coast of Florida.

Yeah.

So it's kind of a double whammy for those sunbelt markets so to say.

I appreciate the context.

Yes, Im sorry, one last piece of this and then ultimately it's still when we talk about supply and those headwinds are diminishing.

Yes.

Great and then maybe next just on sort of the ECR is an outlook there I mean, I realize that the rent roll downs to move in to move out is still pretty wide, but has your strategy changed there at all have customers become more sensitive to rate increases or are they tip.

Across the portfolio, but that also varies.

Pretty significantly by market, so not surprising those sunbelt markets that.

A tended to rely historically on a little bit more of that home buyer and seller are also the markets that continue to get deliveries while deliveries overall are down.

<unk> still willing to accept them and you are able to push strategically where you can.

You are still occurring.

Yes, the customer the customer health, which you know we continue to really focus in on and again varies by.

All too frequently in Atlanta and Phoenix.

The West Coast of Florida.

So it's kind of a double whammy for those sunbelt market so to say.

Varies by.

The economic strata and parts of the country.

Yes.

Great and then maybe next just on sort of the ECR is an outlook there I mean, I realize that the rent roll downs to move into move out is still pretty wide, but has your strategy changed there at all have customers become more sensitive to rate increases or are they.

Generally across the portfolio continues to be very good and.

And we have not seen any change in.

In customer behavior as it relates to <unk> and our overall approach.

It has been consistent throughout 2025.

<unk> still willing to accept them and you're able to push strategically where you can.

Great. That's it for me thanks for the time.

Yes, the customer the customer health, which we continue to really focus in on and again varies by.

Yes.

Your next question comes from the line of Paul.

<unk> <unk> with Mizuho Your line is open.

Varies by.

Hi, there good morning Hope you guys are doing well.

Economic strata in parts of the country.

I wanted to ask for the third party management business.

Generally across the portfolio continues to be very good and we have not seen any change in.

A couple of stores came off on a net basis.

There is something that.

Looking ahead should we expect it to increase again or maybe where some of the new private operators that you are partnering with and how can that be used as a.

In customer behavior as it relates to ECR is in our overall approach.

<unk> has been consistent throughout 2025.

The hedge for a higher supply.

Great. That's it for me thanks for the time.

I appreciate the question so on the on our third Party management program, we talk about the stores that we add to the platform because that's that's ultimately what we what we control that's our new business development team is.

Yes.

Your next question comes from the line of Aviv Aida with Mizuho. Your line is open.

Hi, there. Good morning Hope you guys are doing well I wanted to ask for the third party management business.

<unk> is looking for opportunities to add owners to add stores to the platform. This year, we have it.

So a couple of stores came off on a net basis is there something that.

<unk>, adding 130 stores for the eighth consecutive at least 130 stores a year for the eighth consecutive year. So that part of the business remains healthy department is very difficult to predict is when stores are going to leave leave the platform and.

Looking ahead should we expect it to increase again or maybe it was where the some of the new private operators that you are partnering with and how can that be used as a hedge for for higher supply. Thanks.

Part of this year when you have that churn part of the part of this year's churn was self inflicted earlier in the year. When we we bought 28 stores.

I appreciate the question so on our third party management program, we talk about the stores that we add to the platform because that's ultimately what we what we control that's our new business development team is.

That were that were in that third party managed bucket.

You just have a lot of stores that are that are.

Leaving the platform. Most most often that is because they have they are transacted. They are sold to somebody that either stopped manages or has a different relationship and so.

<unk> is looking for opportunities to add owners to add stores to the platform. This year, we have exceeded adding 130 stores for the eighth consecutive at least 130 stores a year for the eighth consecutive year. So that part of the business remains healthy the part that is very difficult to predict is when.

Trying to predict the net growth and in the store count on the <unk> platform is an impossible task.

So we control we can control and we.

Stores are going to leave leave the platform and <unk>.

We look wind stores leave the platform, we've talked about in the past, we feel like its job well done.

Part of this year when you have that churn part of that part of this year's churn was self inflicted earlier in the year when we.

We've helped that owner create the value, we stabilized and improved performance in most cases, we set them up too.

We bought 28 stores.

That were that were in that third party managed bucket.

You just have a lot of stores that are that are.

To achieve their desired results as they transact in.

Leaving the platform most most often that is because they have they have transacted. They have sold to somebody that either self manages our has a different relationship and so.

Until the asset to someone else.

Right.

Got it that's helpful. Thank you.

Thank you.

Trying to predict the net growth.

Your next question comes from the line of Spenser <unk> from Green Street. Your line is open.

And the store count on the <unk> platform is an impossible task.

Yeah. Thank you, maybe just going back to the acquisition front are there certain markets or geographies that you guys are more comfortable underwriting just due to the greater stabilization of fundamentals and and then on the flip side are there any markets that are sort of outlined right now just because there's still too much operational uncertainty maybe outside of the <unk>.

So we control we can control and we.

We look when stores leave the platform we've talked about in the past, we feel like its job well done.

We've helped that owner create the value, we stabilized and improved performance in most cases, we set them up too.

To achieve their desired results as they transact in.

Supply heavy markets.

And so the asset to someone else.

Yes, I mean, just the new entre responses, we're comfortable underwriting everywhere I think embedded in our underwriting or.

Alright.

Got it that's helpful. Thank you.

Thank you.

Obviously, you're going to going to be different.

Your next question comes from the line of Spenser <unk> from Green Street. Your line is open.

Risk return risk hurdles based on some of those characteristics that you would refer to.

Perhaps the best deal that we can find right now would be in a market that's more challenge because.

Yes. Thank you maybe just going back to the acquisition front are there certain markets or geographies that you guys are more comfortable underwriting just due to greater stabilization of fundamentals and and then on the flip side are there any markets that are sort of Red line right now just because there's still too much operational uncertainty maybe outside of the <unk>.

Others, others don't see maybe what we see and so we don't have a bias necessarily to.

To blacklist, a particular market because of.

Supply as an example, or.

Or some other criteria, but what we would do in that standpoint is to make sure that from a risk adjusted standpoint, we're getting paid to take on that uncertainty. So those markets create more challenge from an underwriting standpoint to try to.

As supply heavy markets.

Yeah, I mean, just the new entre responses, we're comfortable underwriting everywhere I think embedded in our underwriting are obviously going to going to be different.

Look at where rates are today, perhaps where rates might be in a year or two it is a it is a challenging but not impossible underwrite. When you have when you have a store in particular, because it's such a micro market business. When you have a store that is competing against new supply.

Risk return risk hurdles based on some of those characteristics that you referred to.

Perhaps the best deal that we can find right now would be in a market that's more challenge because.

Others, others don't see maybe what we see and so we don't have a bias necessarily to.

To be able to have confidence in your and your ability to project where rates in that small market are going to stabilize once that new supply leases up as a challenge that's the fun part of the investments team and what they do because those those deals that have a little bit of hair on them. The most.

To blacklist, a particular market because of <unk>.

Supply as an example, or.

Or some other criteria.

What we would do in that standpoint is to make sure that from a risk adjusted standpoint, we're getting paid to take on that uncertainty. So those markets create more challenged from an underwriting standpoint to try to.

Challenging, but also very interesting and perhaps the place that you can.

That you can make a really nice risk adjusted returns. So we haven't we're not avoiding markets, but but certainly considering all of those risk factors.

Look at where rates are today, perhaps where rates might be in a year or two.

It is a challenging but not impossible underwrite when you have when you have a store in particular, because it's such a micro market business. When you have a store that is competing against new supply.

Okay very helpful. And then can you just share what stabilized cap rates you guys are underwriting unnecessary assets.

To be able to have confidence in your and your ability to project where rates in that small market are going to stabilize once that new supply leases up as a challenge that's the fun part of the investments team and what they do because those those deals that have a little bit of hair on them.

And your firing and <unk>.

Those three assets are a little bit of a mixed bag between stable and not stable going in when you look across the three we're going in in the low fives and stabilizing across the board fairly early on in year, two or three.

Challenging, but also very interesting and perhaps the place that you can.

At right around effects across the board for those three opportunities.

That you can make a really nice risk adjusted returns. So we haven't we're not avoiding markets, but but certainly considering all of those risk factors.

Okay. Thank you so much.

Thank you.

Your next question comes from Brendan Lynch from Barclays. Your line is open.

Okay, Yes.

And then can you just share what stabilized cap rates you guys are underwriting on the three assets.

Great. Thank you for taking my question.

New York City continues to perform quite well.

And your firing and <unk>.

It continues to outperform other.

Yeah. Those three assets are a little bit of a mixed bag between stable and not stable going in when you look across the three we're going in in the low fives.

Large markets in the northeast.

Maybe you can do.

Kind of compare and contrast, what is leading to that outperformance.

And stabilizing across the board fairly early on in year, two or three.

Obviously, theres a lot of the supply issues in the sunbelt, maybe its a thing in the northeast, but just kind of any color that you can provide on new York relative to some of these other markets.

At right around FX.

Across the board for those three opportunities.

In the region.

Okay. Thank you so much.

Yeah, So it's going to be partly what you just said so again.

Thank you.

Yeah.

Your next question comes from Brendan Lynch from Barclays. Your line is open.

The boroughs.

Really.

Non existent new supply impact so you're really.

Great. Thank you for taking my question.

New York City continues to perform quite well.

Stable from that perspective, you have a.

And it continues to outperform other.

More need based customer and then obviously we have.

Large markets in the northeast.

A very significant position, there and one in which the asset quality is.

Maybe you can do.

Kind of compare and contrast, what is leading to that outperformance.

There's a lot of the supply issues in the Sunbelt, maybe it's the same in the northeast, but just kind of any color that you can provide on new York relative to some of these other markets.

Extremely high so.

We just have no everything in our favor.

Market that in this part of the cycle.

In the region.

Is just doing very well.

Yeah, So it's going to be a partly what you just said so again.

Other northeast Philadelphia, Boston, a little bit of a mixture there you've got supply.

The boroughs.

Really nonexistent new supply impacts.

As opposed to the boroughs.

Really.

Stable from that perspective, you have a.

And you have a little bit more of a mix in the customer base.

More need based customer and then obviously we have.

Not quite sunbelt like but you do have.

A very significant position, there and one in which the asset quality is extremely high so.

A little bit more of that.

Mover.

So to speak than you might have in say the Bronx.

So I think it's kind of a combination of those two things.

We just have no everything in our favor in a market that in this part of the cycle.

And you see that similarly in urban Chicago, you see it in.

Is just doing very well.

Ah.

A few of the other.

Other northeast Philadelphia, Boston, a little bit of a mixture there you've got supply.

Urban markets.

Great. Thanks, Chris and then maybe just sticking with New York City, you've got the new development.

As opposed to the boroughs.

And you have a little bit of a more of a mix in the customer base.

Coming there, it's a relatively small investment.

I think it's 19 million, maybe just talk about what would allow you to get more.

Got quite sunbelt like but you do have.

A little bit more of that mover.

Over aggressive on development and the New York City area.

So to speak than you might have in say the Bronx.

It's really looking for opportunities that have a.

So I think it's kind of a combination of those two things and you see that similarly in urban Chicago, you'll see it in.

That are located in a spot that would be.

Complementary to our existing portfolio and frankly would have a need from a from a demand standpoint for there to be new product.

A few of the other.

Herb and markets.

Obviously, it's not as easy to pencil out deals in the boroughs as it used to be because the tax incentives aren't there any longer.

Great. Thanks, Chris and then maybe just sticking with New York City, you've got the new development.

Coming there, it's a relatively small investment.

So surely surely there are opportunity somewhere but.

But the fruit is pretty high up in the tree.

I think it's 19 million, maybe just talk about what would allow you to get more.

And.

For us to find an opportunity that's going to be it's going to be something that we're pretty excited about.

Assertive or aggressive on development and the New York City area.

Alright, Thanks, Tim.

It's really looking for opportunities that have.

Thank you.

Your next question comes from the line of Eric <unk> from Wells Fargo. Your line is open.

That are located in a spot that would be.

Complementary to our existing portfolio and frankly would have a need from a from a demand standpoint for there to be new product.

Thanks for the question.

Could you comment a little bit on any trends youre seeing on your average length of stay it seems like vacates have been kind of muted across the industry.

Obviously, it's not as easy to pencil out deals in the boroughs as it used to be because the tax incentives aren't there any longer.

This year, obviously helps from a roll down perspective, but perhaps a little bit longer for some of these better moving rates flow through to the portfolio. So any commentary on that would be helpful.

So surely surely there are opportunity somewhere but.

But.

<unk> is pretty high up in the tree.

And.

For us to find an opportunity that's going to be it's going to be something that we're pretty excited about.

Sure when you think about.

<unk>.

<unk> trends I would macro say, they're consistent still elevated so our customers who have.

Great. Thanks, Tim.

Thank you.

Your next question comes from the line of Eric <unk> from Wells Fargo. Your line is open.

Been with us greater than a year.

50 basis points year over year, and again, if you kind of compare it to pre COVID-19. So third quarter of 2019, it's plus 260 basis points.

Alright, thanks for the question.

Can you comment a little bit on any trends youre seeing on your average length of stay it seems like vacates have been kind of muted across the industry. This.

And then those customers who have been with us greater than two years.

This year, obviously helps from a roll down perspective, but.

It's about 40% of our customers, that's actually down year over year about 140 basis points, but again up 50 basis points, what we saw.

Perhaps takes a little bit longer for some of these better moving rates flow through to the portfolio. So any commentary on that would be helpful.

<unk> 19, so continue to be pretty consistent have come down a bit off of peak, but but still elevated relative to historical metrics.

Sure when you think about.

Those trends I would macro say, they're consistent still elevated so our customers who have.

Been with us greater than a year, that's up 50 basis points year over year and again, if you kind of compare it to pre COVID-19. So third quarter of 2019, it's plus 260 basis points.

I appreciate that and I know you provided a little bit of directional commentary on 'twenty six but just trying to think maybe it's more of the bull case, and obviously, if we get to.

How does the catalyst if we see a pickup in customer mobility moving rates.

And then those customers who have been with us greater than two years, which is about 40% of our customers that's actually down year over year about 140 basis points, but again up 50 basis points, what we saw.

Continue to find stability start growing.

Do you think it's reasonable we could get back to more historical levels of growth by maybe the second half of next year certainly into 2027, and then potentially even higher.

<unk> 19, so continue to be pretty consistent have come down a bit off of peak, but but still elevated relative to historical metrics.

Beyond that especially given some of the supply delivery commentary I just wanted to get your temperature on what you see over the next few years and not just into 'twenty six.

I appreciate that and I know you provided a little bit of directional commentary on 2006, but just trying to take maybe its more of a bull case. So obviously, if we get to.

Yeah, I do see that Bull case as playing out.

<unk> you described again, it's a it's sort of finding that catalyst or.

Housing catalysts, if we see a pickup in customer mobility move in rates.

For demand.

Continue to find stability start growing.

And if that occurs you know housing being the easiest thing to point at.

Do you think it's reasonable we could get back to more historical levels of growth by maybe the second half of next year certainly into 2027, and then potentially even higher.

We continue to have a healthy consumer.

I think you then start to see.

Beyond that especially given some of the supply delivery commentary just wanted to get your temperature on what you see over the next few years and not just into 2006.

Consistent performance from those.

Solid markets that we've.

That we've experienced here over the last couple of quarters of steady eddies continue and then your overall helped by the fact that the Charlotte <unk>.

Yes.

Yeah, I do see that bulk case as playing out.

<unk> you described again it's.

<unk> fills etcetera of the world.

It's sort of finding that catalyst for.

Should rebound quite nicely and I think.

Good for demand.

We're well positioned from obviously to get the right. We've shown that that we can do that through this cycle.

And if that occurs housing being the easiest thing to point at.

<unk> more so over the last couple of months and then on the.

We continue to have a healthy consumer.

On the occupancy side, then you get the pick up there as well and you know to your point you could see.

Yeah.

I think you then start to see.

Consistent performance from those.

And I would expect that those conditions were to occur you would see.

Solid markets that we have.

That we've experienced here over the last couple of quarters, though steady eddies continue and then your overall helped by the fact that the Charlotte and Nashville et cetera of the world.

More elevated performance.

Okay I appreciate it thanks guys.

Okay.

Your next question comes from the line of Michael Mueller with Jpmorgan. Your line is open.

Should rebound quite nicely and I think.

We're well positioned from obviously to get the right. We've shown that that we can do that through this cycle.

Yeah, Hi, just to go back to development supply.

What's your gut feeling tells you about how quickly supply may come back in some of the markets.

Increasingly more so over the last couple of months and then on the.

As they improve over the next couple of years I mean, do you see a lot of competitive projects and near you where people are just kind of waiting for the right time to kick off or do you think youre going to have a little bit longer for runway without meaningful supply.

On the occupancy side, then you get the pick up there as well and to your point you could see.

And I would expect if those conditions were to occur you would see.

More elevated performance.

Yeah, I think I think that that crystal balls.

Okay I appreciate it thanks guys.

It's complicated and maybe a little fuzzy so I think.

Okay.

Your next question comes from the line of Michael Mueller with Jpmorgan. Your line is open.

I think it will be slower I think that you have a couple of factors again, we still have elevated cost.

Yeah, Hi, just going back to development supply.

I think it will to our point being a more gradual recovery in move in rates. So you'll still have to see some progress there.

Is your gut feeling tell you about how quickly supply may come back in some of the markets.

As they improve over the next couple of years I mean, do you see a lot of competitive projects and near you where people are just kind of waiting for the right time to kick off or do you think youre going to have a little bit longer for runway without meaningful supply.

And I think the developers again, who have you know.

Opened in 'twenty, two what are sort of trying to figure out how to hang on at this point it.

Yeah, I think I think that that crystal balls.

It may not be likely to want to get back into it again until they deal with.

Complicated and maybe a little fuzzy so I think I.

Exiting the store that they have and then ultimately the.

I think it will be slower I think that you have a couple of factors again, we still have elevated cost.

Primary lenders to the space for the developers those local and regional banks have to be they continue to be constructive in terms of how they think about underwriting and how they think about providing that leverage.

I think it will to our point being a more gradual recovery in move in rates. So you'll still have to see some progress there.

I think that should constrain things as well so.

Again at least you look out through next year.

And I think the developers again, who have open.

Probably at least the first half of 'twenty seven I think we will continue to see some restraint again, there are the markets I've called out that that appear to have no.

Opened in 'twenty, two what are sort of trying to figure out how to hang on at this point you know it.

It may not be likely to want to get back into it again until they deal with.

<unk>, but I think we'll continue to see some constraint and then if you just think practically if it picks back up again.

Exiting the store that they have and then ultimately you know the.

It takes six months to sort of get everything going and then another 12 months to build failure 18 months out from from whenever that happens.

Primary lenders to the space for the developers those local and regional banks have to be they continue to be constructive in terms of how they think about underwriting and how they think about providing that leverage.

Got it okay. Thank you.

Yeah.

I think that should constrain things as well so.

Your next question comes from the line of Michael Goldsmith with UBS. Your line is open.

Again at least you look out through next year.

Good morning, Thanks for taking my questions move in rate was up two 5% during the quarter apparently both on a gross and net basis, but came down in October so how did the move in trend during the quarter did it peak in October or did it peak kind of earlier than during the peer.

Probably at least the first half of 2007, I think we will continue to see some restraint again there are the markets I've called out that that appear to have no guardrails, but I think we'll continue to see some constraint and then if you just think practically if it picks back up again.

It takes six months to sort of get everything go in and then another 12 months to build failure 18 months out from from whenever that happens.

And is that how it normally plays out thanks.

Yes move in trend.

Was historically normally you see kind of that peak.

Got it okay. Thank you.

Yeah.

In July and then trends tend to sequentially start to.

Your next question comes from the line of Michael Goldsmith with UBS. Your line is open.

Slowdown.

But again I think the message here is that.

Good morning, Thanks for taking my questions move in rate was up two 5% during the quarter, our apparently both on a gross and net basis, but came down in October so.

The road has it been winding we've got markets that are continuing to move in a fairly straight line in an upward trajectory and then there are markets again pick on the sunbelt, where the roads are a little bit more aligned so.

How did the move in trend during the quarter did it peak in October or did it peak kind of earlier than during the period and is that how it normally plays out thanks.

Overall, I would say kind of.

Consistent with the last couple of years is what we've seen.

Yeah move in trend.

Was historically normally you see kind of that peak and in.

Got it and you said on the call maybe a couple of times.

In July and then trends tend to sequentially start to slow down.

Stabilizing trends in an encouraging start and.

Stabilizing trends or are you, referring to the same store revenue growth and by encouraging signs.

But again I think.

The message here is that.

You're suggesting the move in rate is that is that kind of what youre pointing to.

The road has it been winding we've got markets that are continuing to move in.

Yeah, So again.

Fairly straight line in an upward trajectory and then there are markets again pick on the Sunbelt, where now the roads are a little bit more wine. So.

Topline metric same store revenue growth or just kind of beat the drum again, it takes time for that to move given the.

The relatively low churn in the customer base. So when we talk about stabilizing.

Overall, I would say kind of.

Consistent with the last couple of years is what we've seen.

Stabilizing trends, we're talking about move in rates and demand levels, which again have been weaker.

Got it.

You said on the call maybe a couple of times. So just really stabilizing trends in encouraging signs by stabilizing trends or are you referring to same store revenue growth and by encouraging signs.

Weaker than historical but fairly consistent and.

And occupancy so it's more of the Kpis that are happening every day, which will then gradually bleed into the same store revenue result, which will then.

You are suggesting the move in rate is that is that kind of what youre pointing to.

Yeah, So again.

Gradually move that in a positive direction.

The topline metric same store revenue growth or just kind of beat the drum again, it takes time for that to move given the.

Thank you very much port Chester looks great.

In the fourth quarter.

Thank you Super excited I appreciate we have units available if you'd like to be.

Relatively low churn in the customer base. So when we talk about stay.

Yeah.

Stabilizing trends, we're talking about move in rates and demand levels, which again have been weaker.

Thanks.

Thank you and with no further questions in queue I'd like to turn the conference back over to Chris Marr for closing remarks.

Weaker than historical but fairly consistent and.

And occupancy so it's more of the.

Okay. Thank you everybody for participating again.

The Kpis that are happening every day, which will then gradually bleed into the same store revenue result, which will then.

A stabilizing trends.

<unk> by the direction overall the portfolio is moving.

Gradually move that in a positive direction.

Assuming these continue we expect to be on improved footing heading into 2026.

Thank you very much port Chester looks great.

Good luck in the fourth quarter.

We look forward to seeing some of you at upcoming conferences and our next time we're on.

Thank you Super excited.

And its available if you'd like to be.

[laughter].

Quarterly call, we'll share our specific expectations for 2026, so thank you all happy Halloween.

Im good thanks.

Thank you and with no further questions in queue I'd like.

To turn the conference back over to Chris Marr for closing remarks.

This concludes today's conference call you may now disconnect.

Okay. Thank you everybody for participating again.

Stabilizing trends encouraged by the direction overall that the portfolio is moving.

Assuming these continue we expect to be an improved footing heading into 2026.

We look forward to seeing some of you at upcoming conferences and next time, we're on a quarter.

Quarterly call, we'll share our specific expectations for 2026, so thank you all happy Halloween.

This concludes today's conference call you may now disconnect.

Yeah.

Yeah.

Yeah.