Q2 2026 CubeSmart Earnings Call

July 31, 2026

Operator: Hello, everyone. Thank you for joining us, welcome to the CubeSmart Second Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. I will now hand the call over to Josh Schutzer, Senior Vice President of Finance. Josh, please go ahead.

Speaker #1: If you would like to ask a question, please press *1 on your telephone keypad. To withdraw your question, press *1 again. I will now hand the call over to Josh Schutzer, Senior Vice President of Finance.

Speaker #1: Josh, please go ahead.

Speaker #2: Thanks, Sarah. Good morning, everyone. Welcome to CubeSmart's second quarter 2026 earnings call. Participants on today's call include Chris Marr, President and Chief Executive Officer, and Tim Martin, Chief Financial Officer.

Josh Schutzer: Thanks, Sarah. Good morning, everyone. Welcome to CubeSmart's Second Quarter 2026 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 a Q&A session. In addition to our earnings release, which was issued yesterday evening, supplemental operating and financial data is available under the investor relations section of the company's website at www.cubesmart.com. 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.

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 operating and financial data is available under the Investor Relations section of the company's website at www.cubesmart.com.

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 actual results to differ materially from these forward-looking statements.

Speaker #2: The risks and factors that could cause our actual results to differ materially from forward-looking statements are provided in documents that 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 factor section of the company's annual report on Form 10-K.

Josh Schutzer: 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 of the company's annual report on Form 10-K. In addition, the company's remarks include reference to non-GAAP measures.

Speaker #2: In addition, the company's remarks include references to non-GAAP measures. A reconciliation between GAAP and non-GAAP measures can be found in the second quarter financial supplement posted on the company's website at www.cubesmart.com.

Tim M. Martin: A reconciliation between GAAP and non-GAAP measures can be found in the Q2 financial supplement posted on the company's website at www.cubesmart.com. I will now turn the call over to Chris.

Josh Schutzer: A reconciliation between GAAP and non-GAAP measures can be found in the Q2 financial supplement posted on the company's website at www.cubesmart.com. I will now turn the call over to Chris.

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

Speaker #3: Thank you, Josh. And thank you, everyone, for joining us this morning. 2026 marks a year of inflection as we return to positive growth throughout the year.

Chris P. Marr: Thank you, Josh, and thank you, everyone, for joining us this morning. 2026 marks a year of inflection as we return to positive growth throughout the year. Following a stabilization in operating fundamentals in 2025, we saw same-store revenues inflect positively in early 2026. Our base case expectation is for continued acceleration in revenues that will lead to a return to positive earnings growth in H2 2026, providing a strong setup entering 2027. Our key performance indicators are flashing green, showcasing the resilience of the self-storage business and the value of having such a wide range of need-based demand for our product, benefiting us from not being overly reliant on any one source. Same-store revenues continue their positive momentum, reflecting the strength of our customer base, the declining impact of new supply in many of our core markets, and the quality of our portfolio and operating platform.

Chris Marr: Thank you, Josh, and thank you, everyone, for joining us this morning. 2026 marks a year of inflection as we return to positive growth throughout the year. Following a stabilization in operating fundamentals in 2025, we saw same-store revenues inflect positively in early 2026. Our base case expectation is for continued acceleration in revenues that will lead to a return to positive earnings growth in H2 2026, providing a strong setup entering 2027. Our key performance indicators are flashing green, showcasing the resilience of the self-storage business and the value of having such a wide range of need-based demand for our product, benefiting us from not being overly reliant on any one source. Same-store revenues continue their positive momentum, reflecting the strength of our customer base, the declining impact of new supply in many of our core markets, and the quality of our portfolio and operating platform.

Speaker #3: Following a stabilization in operating fundamentals in 2025, we saw same-store revenues inflect positively in early 2026. Our base case expectation is for continued acceleration in revenues that will lead to a return to positive earnings growth in the second half of 2026, providing a strong setup entering 2027.

Speaker #3: Our key performance indicators are flashing green showcasing the resilience of the self-storage business and the value of having such a wide range of need-based demand for our product, benefiting us from not being overly reliant on any one source.

Speaker #3: Same-store revenues continue their positive momentum, reflecting the strength of our customer base; the declining impact of new supply in many of our core markets; and the quality of our portfolio and operating platform.

Speaker #3: Macro volatility is impacting the U.S. consumer, however, our customers' health remains strong with lower vacate activity elongating lengths of stay and continued solid credit metrics.

Chris P. Marr: Macro volatility is impacting the US consumer. However, our customers' health remains strong, with lower vacate activity, elongating lengths of stay, and continued solid credit metrics. This environment continues to showcase the strength of our quality-focused strategy, with primary markets outperforming and showcasing their lower beta characteristics. We had a positive and productive spring and summer busy rental season, closing the occupancy gap to 2025 by the end of June, and that momentum has continued into July. Q2 move-in rates for new customers at a year-over-year +1.7% improves sequentially by 80 basis points, all other factors held constant provides an attractive setup for the back half of the year and heading into 2027. There continues to be a wide dispersion in move-in rates for new customers across our major markets.

Chris Marr: Macro volatility is impacting the US consumer. However, our customers' health remains strong, with lower vacate activity, elongating lengths of stay, and continued solid credit metrics. This environment continues to showcase the strength of our quality-focused strategy, with primary markets outperforming and showcasing their lower beta characteristics. We had a positive and productive spring and summer busy rental season, closing the occupancy gap to 2025 by the end of June, and that momentum has continued into July. Q2 move-in rates for new customers at a year-over-year +1.7% improves sequentially by 80 basis points, all other factors held constant provides an attractive setup for the back half of the year and heading into 2027. There continues to be a wide dispersion in move-in rates for new customers across our major markets.

Speaker #3: This environment continues to showcase the strength of our quality-focused strategy with primary markets outperforming and showcasing their lower beta characteristics. We had a positive and productive spring and summer busy rental season, closing the occupancy gap to 2025 by the end of June, and that momentum has continued into July.

Speaker #3: Second quarter move-in rates for new customers at a year-over-year positive 1.7%, improved sequentially by 80 basis points, and all other factors held constant provides an attractive setup for the back half of the year and heading into 2027.

Speaker #3: There continues to be a wide dispersion in move-in rates for new customers across our major markets. Strength continues in the Acela corridor—Boston, Stamford, New York, and Philadelphia. In the Midwest, Chicago, Columbus, and Cleveland are performing well. We are also seeing very positive, improving trends in our West Coast markets, with our Inland Empire and Los Angeles properties exhibiting very strong sequential improvement and swinging second-quarter same-store revenue growth on a year-over-year basis back into positive territory.

Chris P. Marr: Strength continues in the Acela corridor, Boston, Stamford, New York, and Philadelphia, in the Midwest, Chicago, Columbus, and Cleveland, very positive improving trends in our West Coast markets with our Inland Empire and Los Angeles properties exhibiting very strong sequential improvement and swinging Q2 same-store revenue growth on a year-over-year basis back into positive territory. With another solid quarter of sequentially improving trends, we are optimistic for continued gradual recovery in our major Sun Belt markets. These markets are experiencing the most pressure from supply as well as macroeconomic factors impacting the consumer, resulting in a challenging new customer pricing environment. We have maintained our disciplined capital allocation strategy.

Chris Marr: Strength continues in the Acela corridor, Boston, Stamford, New York, and Philadelphia, in the Midwest, Chicago, Columbus, and Cleveland, very positive improving trends in our West Coast markets with our Inland Empire and Los Angeles properties exhibiting very strong sequential improvement and swinging Q2 same-store revenue growth on a year-over-year basis back into positive territory. With another solid quarter of sequentially improving trends, we are optimistic for continued gradual recovery in our major Sun Belt markets. These markets are experiencing the most pressure from supply as well as macroeconomic factors impacting the consumer, resulting in a challenging new customer pricing environment. We have maintained our disciplined capital allocation strategy.

Speaker #3: With another solid quarter of sequentially improving trends, we are optimistic for continued gradual recovery in our major Sunbelt markets; these markets are experiencing the most pressure from supply as well as macroeconomic factors impacting the consumer resulting in a challenging new customer pricing environment.

Speaker #3: We have maintained our disciplined capital allocation strategy during the quarter. We executed against several objectives. We articulated earlier in the year including a new joint venture, the continued execution of our share repurchase program, and the recast and increased note Tim is very excited to share the details with you during his prepared remarks.

Chris P. Marr: During the quarter, we executed against several objectives we articulated earlier in the year, including a new joint venture, the continued execution of our share repurchase program, and the recast and increased capacity in our credit facility, and I know Tim is very excited to share the details with you during his prepared remarks. As we come to the end of July, our rental volumes are elevated over last year. As of 30 July, our same-store physical occupancy is 91.1%, a 30 basis point increase over 30 July 2025. Our pricing algorithms have informed us that it is optimal to maintain seasonal pricing trends and build physical occupancy as we move into the fall. Self-storage remains a tremendously resilient business as we continue to benefit from the diverse set of needs-based use cases for the product, even against a backdrop of volatile consumer confidence.

Chris Marr: During the quarter, we executed against several objectives we articulated earlier in the year, including a new joint venture, the continued execution of our share repurchase program, and the recast and increased capacity in our credit facility, and I know Tim is very excited to share the details with you during his prepared remarks. As we come to the end of July, our rental volumes are elevated over last year. As of 30 July, our same-store physical occupancy is 91.1%, a 30 basis point increase over 30 July 2025. Our pricing algorithms have informed us that it is optimal to maintain seasonal pricing trends and build physical occupancy as we move into the fall. Self-storage remains a tremendously resilient business as we continue to benefit from the diverse set of needs-based use cases for the product, even against a backdrop of volatile consumer confidence.

Speaker #3: As we come to the end of July, our rental volumes are elevated over last year. As of July 30, our same-store physical occupancy is 91.1%, a 30 basis point increase over July 30, 2025.

Speaker #3: Our pricing algorithms have informed us that it is optimal to maintain seasonal pricing trends and build physical occupancy as we move into the fall.

Speaker #3: Self-storage remains a strong business as we continue to benefit from needs-based use cases for the product, even against a backdrop of volatile consumer confidence. We are optimistic about the outlook for our business as we continue to see steady acceleration in fundamentals.

Chris P. Marr: We are optimistic about the outlook for our business as we continue to see steady acceleration in fundamentals. Our high-quality portfolio, our sophisticated operating systems, and our customer service focused team are well positioned to continue to drive us forward as we inflect back to positive earnings growth in H2 2026. I'll now turn it over to Tim for more details on the quarter and our positively updated guidance ranges. Tim?

Chris Marr: We are optimistic about the outlook for our business as we continue to see steady acceleration in fundamentals. Our high-quality portfolio, our sophisticated operating systems, and our customer service focused team are well positioned to continue to drive us forward as we inflect back to positive earnings growth in H2 2026. I'll now turn it over to Tim for more details on the quarter and our positively updated guidance ranges. Tim?

Speaker #3: Our high-quality portfolio, our sophisticated operating systems, and our customer service-focused team are well positioned to continue to drive us forward as we inflect back to positive earnings growth in the second half of 2026.

Speaker #3: I'll now turn it over to Tim for more details on the quarter and our positively updated guidance ranges. Tim?

Speaker #4: Thanks, Chris. Good morning, everyone. Thanks, as always. We appreciate you taking the time to join us on the call today. Second quarter results were reflective of the positive environment that Chris touched on.

Tim M. Martin: Thanks, Chris. Good morning, everyone. Thanks as always. We appreciate you taking the time to join us on the call today. Q2 results were reflective of the positive environment that Chris touched on with broad-based improvement across most markets as demand trends remain steady while headwinds from new supply continue to dissipate. Same-store year-over-year revenue growth accelerated from 0.6% in Q1 to 0.8% in Q2. Move-in rates grew 1.7% year over year, while the occupancy gap improved to flat by the end of the quarter. Those stabilizing trends and H1 results led us to improving our full year same-store revenue guidance range to a new range of 0.5% to 1.25%, which implies at the midpoint our expectation that same-store revenue growth will continue to accelerate in H2.

Tim Martin: Thanks, Chris. Good morning, everyone. Thanks as always. We appreciate you taking the time to join us on the call today. Q2 results were reflective of the positive environment that Chris touched on with broad-based improvement across most markets as demand trends remain steady while headwinds from new supply continue to dissipate. Same-store year-over-year revenue growth accelerated from 0.6% in Q1 to 0.8% in Q2. Move-in rates grew 1.7% year over year, while the occupancy gap improved to flat by the end of the quarter. Those stabilizing trends and H1 results led us to improving our full year same-store revenue guidance range to a new range of 0.5% to 1.25%, which implies at the midpoint our expectation that same-store revenue growth will continue to accelerate in H2.

Speaker #4: We saw broad-based improvement across most markets, as demand trends remained steady while headwinds from new supply continued to dissipate. Same-store year-over-year revenue growth accelerated from 0.6% in the first quarter to 0.8% in the second quarter. Move-in rates grew 1.7% year-over-year, while the occupancy gap improved to flat by the end of the quarter.

Speaker #4: Those stabilizing trends and first-half results led us to improving our full-year same-store revenue guidance range to a new range of 0.5% to 1.25%, which implies that the midpoint our expectation that same-store revenue growth will continue to accelerate in the back half of the year.

Speaker #4: Same-store operating expenses grew 4.4% over last year, in line with our expectations. As we previously discussed, we had some tough expense comps after four straight years of industry-leading expense control, especially in the first half of the year.

Tim M. Martin: Same-store operating expenses grew 4.4% over last year, in line with our expectations. As we previously discussed, we had some tough expense comps after four straight years of industry-leading expense control, especially in H1. We modestly improved our full-year guidance range for same-store expenses to a new range of 3.25% to 4.5%, reflecting our expectation of moderating expense growth in H2. Revenue growth of 0.8% combined with 4.4% expense growth yielded -0.7% same-store NOI growth for the quarter. We reported FFO per share as adjusted of $0.63 for the quarter, which was at the midpoint of our guidance entering the quarter. As discussed last quarter, we continue to execute on our disciplined capital allocation strategy, looking for creative ways to create shareholder value in an environment that continues to have a disconnect between public and private market valuations.

Tim Martin: Same-store operating expenses grew 4.4% over last year, in line with our expectations. As we previously discussed, we had some tough expense comps after four straight years of industry-leading expense control, especially in H1. We modestly improved our full-year guidance range for same-store expenses to a new range of 3.25% to 4.5%, reflecting our expectation of moderating expense growth in H2. Revenue growth of 0.8% combined with 4.4% expense growth yielded -0.7% same-store NOI growth for the quarter. We reported FFO per share as adjusted of $0.63 for the quarter, which was at the midpoint of our guidance entering the quarter. As discussed last quarter, we continue to execute on our disciplined capital allocation strategy, looking for creative ways to create shareholder value in an environment that continues to have a disconnect between public and private market valuations.

Speaker #4: We modestly improved our full-year guidance range for same-store expenses to a new range of 3.25% to 4.5%, reflecting our expectation of moderating expense growth in the back half of the year.

Speaker #4: Revenue growth of 0.8% combined with 4.4% expense growth yielded -0.7% same-store NOI growth for the quarter, we reported FFO per share as adjusted of 63 cents for the quarter, which was at the midpoint of our guidance entering the quarter.

Speaker #4: As discussed last quarter, we continue to execute on our disciplined capital allocation strategy, looking for creative ways to create shareholder value in an environment that continues to have a disconnect between public and private market valuations.

Speaker #4: We announced last evening a new joint venture with Heitman where we will be contributing 15 non-core assets to a newly formed joint venture in which we'll have a 20% ownership stake.

Tim M. Martin: We announced last evening a new joint venture with Heitman, where we will be contributing 15 non-core assets to a newly formed joint venture in which we'll have a 20% ownership stake. The contributed assets were identified as non-core, meaning either they were in isolated markets or they were in outer ring locations in core markets. This transaction allows us to unlock value at a market rate for these assets, continue to participate in upside potential through both future growth as well as fees with a partner we have a very long and successful history with. It also improves the overall quality of our on-balance sheet portfolio. This initial transaction in the venture provides the seed portfolio with the opportunity to grow in the future, giving us yet another avenue for future external growth, in addition to our on-balance sheet activity, as well as our previously announced JV with CBRE.

Tim Martin: We announced last evening a new joint venture with Heitman, where we will be contributing 15 non-core assets to a newly formed joint venture in which we'll have a 20% ownership stake. The contributed assets were identified as non-core, meaning either they were in isolated markets or they were in outer ring locations in core markets. This transaction allows us to unlock value at a market rate for these assets, continue to participate in upside potential through both future growth as well as fees with a partner we have a very long and successful history with. It also improves the overall quality of our on-balance sheet portfolio. This initial transaction in the venture provides the seed portfolio with the opportunity to grow in the future, giving us yet another avenue for future external growth, in addition to our on-balance sheet activity, as well as our previously announced JV with CBRE.

Speaker #4: The contributed assets were identified as non-core, meaning either they were in isolated markets or they were in outer-ring locations in core markets. This transaction allows us to unlock value at a market rate for these assets continue to participate in upside potential through both future growth as well as fees with a partner we have a very long and successful history with.

Speaker #4: It also improves the overall quality of our on-balance-sheet portfolio. This initial transaction in the venture provides the seed portfolio with the opportunity to grow in the future, giving us yet another avenue for future external growth in addition to our on-balance-sheet activity, as well as our previously announced JV with CBRE.

Speaker #4: Proceeds from the transaction will be used to fund share repurchases, giving us a leverage-neutral opportunity to accretively invest in our shares as they trade at implied valuations that are disconnected from where high-quality storage assets are trading in the private market.

Tim M. Martin: Proceeds from the transaction will be used to fund share repurchases, giving us a leverage-neutral opportunity to accretively invest in our shares as they trade at implied valuations that are disconnected from where high-quality storage assets are trading in the private market. We had additional share repurchases during the Q2, totaling $42.5 million, bringing us to $75.8 million year to date, with much of that activity done with the Heitman JV in mind. The relative value of our portfolio has continued to make it our most attractive investment option. On the third-party management front, we added 25 stores to the platform in the Q2 and ended the quarter with 872 third-party stores under management. Also, during the quarter, we closed on our extended and expanded revolving credit facility, extending the maturity from February 2027 to June 2030.

Tim Martin: Proceeds from the transaction will be used to fund share repurchases, giving us a leverage-neutral opportunity to accretively invest in our shares as they trade at implied valuations that are disconnected from where high-quality storage assets are trading in the private market. We had additional share repurchases during the Q2, totaling $42.5 million, bringing us to $75.8 million year to date, with much of that activity done with the Heitman JV in mind. The relative value of our portfolio has continued to make it our most attractive investment option. On the third-party management front, we added 25 stores to the platform in the Q2 and ended the quarter with 872 third-party stores under management. Also, during the quarter, we closed on our extended and expanded revolving credit facility, extending the maturity from February 2027 to June 2030.

Speaker #4: We had additional share repurchases during the second quarter totaling 42.5 million, bringing us to 75.8 million year-to-date. With much of that activity done with the Heitman JV in mind.

Speaker #4: The relative value of our portfolio has continued to make it our most attractive investment option. On the third-party management front, we added 25 stores to the platform in the second quarter and ended the quarter with 872 third-party stores under management.

Speaker #4: Also during the quarter, we closed on our extended and expanded revolving credit facility, extending the maturity from February of '27 to June of 2030.

Speaker #4: We increased the capacity of the facility from $850 million to $1 billion and improved the pricing. Quick thank you to our entire high-quality bank group.

Tim M. Martin: We increased the capacity of the facility from $850 million to $1 billion and improved the pricing. Thank you to our entire high-quality bank group. We always appreciate your continued support. Our balance sheet's in great shape. We have a bond that matures next quarter. We've been actively monitoring the debt markets and will continue to do so in the coming months. The expanded capacity on the revolver, combined with no debt maturities in 2027, gives us a lot of flexibility as we navigate through the next several quarters. Details of our 2026 earnings guidance and related assumptions were included in our press release last evening. Big picture, operating fundamentals continue to improve across most markets. Demand trends are steady. Headwinds from new supply continue to dissipate.

Tim Martin: We increased the capacity of the facility from $850 million to $1 billion and improved the pricing. Thank you to our entire high-quality bank group. We always appreciate your continued support. Our balance sheet's in great shape. We have a bond that matures next quarter. We've been actively monitoring the debt markets and will continue to do so in the coming months. The expanded capacity on the revolver, combined with no debt maturities in 2027, gives us a lot of flexibility as we navigate through the next several quarters. Details of our 2026 earnings guidance and related assumptions were included in our press release last evening. Big picture, operating fundamentals continue to improve across most markets. Demand trends are steady. Headwinds from new supply continue to dissipate.

Speaker #4: We always appreciate your continued support. Our balance sheets in great shape. We have a bond that matures next quarter and we've been actively monitoring the debt markets and will continue to do so in the coming months.

Speaker #4: The expanded capacity on the revolver, combined with no debt maturities in 2027, gives us a lot of flexibility as we navigate through the next several quarters.

Speaker #4: Details of our 2026 earnings guidance and related assumptions were included in our press release last evening. Big picture, operating fundamentals continue to improve across most markets.

Speaker #4: Demand trends are steady. Headwinds from new supply continue to dissipate. We saw improvements in move-in rates as well as occupancy levels and our customers remain strong with lower vacate activity elongating lengths of stay and no change to credit metrics.

Tim M. Martin: We saw improvements in move-in rates as well as occupancy levels. Our customers remain strong with lower vacate activity, elongating lengths of stay, and no change to credit metrics. Our baseline expectation is for continued gradual improvement in top-line growth for the balance of 2026. Our same-store expense guidance implies lower expense growth for the rest of the year. The midpoint of our same-store NOI range implies returning to positive growth in the H2 of the year. The midpoint of our FFO per share's adjusted guidance range also implies returning to positive earnings growth in the back half. When you add it all up, we feel great about where we're positioned and see positive trends that are leading to a really nice setup for us in 2027. Thanks again for joining us on the call this morning.

Tim Martin: We saw improvements in move-in rates as well as occupancy levels. Our customers remain strong with lower vacate activity, elongating lengths of stay, and no change to credit metrics. Our baseline expectation is for continued gradual improvement in top-line growth for the balance of 2026. Our same-store expense guidance implies lower expense growth for the rest of the year. The midpoint of our same-store NOI range implies returning to positive growth in the H2 of the year. The midpoint of our FFO per share's adjusted guidance range also implies returning to positive earnings growth in the back half. When you add it all up, we feel great about where we're positioned and see positive trends that are leading to a really nice setup for us in 2027. Thanks again for joining us on the call this morning.

Speaker #4: Our baseline expectation is for continued, gradual improvement in top-line growth for the balance of 2026. Our same-store expense guidance implies lower expense growth for the rest of the year.

Speaker #4: The midpoint of our same-store NOI range implies returning to positive growth in the second half of the year. And the midpoint of our FFO per shares adjusted guidance range also implies returning to positive earnings growth in the back half.

Speaker #4: So when you add it all up, we feel great about where we're positioned and see positive trends that are leading to a really nice setup for us in 2027.

Speaker #4: Thanks again for joining us on the call this morning. At this time, Sarah, why don't we open up the call for some questions?

Tim M. Martin: At this time, Sarah, why don't we open up the call for some questions?

Tim Martin: At this time, Sarah, why don't we open up the call for some questions?

Speaker #1: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one on your telephone keypad.

Operator: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question. If you're muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Michael Griffin with Evercore ISI. Your line is open. Please go ahead.

Speaker #1: To withdraw your question, press star one again. Please pick up your handset when asking a question. If you're muted locally, please remember to unmute your device.

Speaker #1: Please stand by while we compile the Q&A roster. Your first question comes from the line of Michael Griffin with Evercore ISI. Your line is open.

Speaker #1: Please go ahead.

Speaker #2: Great. Thanks so much. Chris, in your prepared remarks, you talked about some key performance indicators flashing green. I was wondering if you can expand on that.

Michael Griffin: Great. Thanks so much. Chris, in your prepared remarks, you talked about some key performance indicators flashing green. I was wondering if you can expand on that. Is this just really move-in rents getting better year over year as a result of maybe better comps, more moderating supply, or is there anything on the organic demand side that you're seeing differently within the business right now?

Speaker #2: I mean, is this just really move-in rents getting better year over year as a result of maybe better comps, more moderating supply? Or is there anything on the organic demand side that you're seeing differently within the business right now?

Speaker #3: Yeah, thanks, Michael. I think it's that full menu. We're seeing very good top-of-funnel demand, with a diverse set of use cases for the product.

Chris P. Marr: Yeah. Thanks, Michael. I think it's that full menu. We're seeing very good top-of-funnel demand with a diverse set of use cases for the product. We're continuing to see the existing customer health, as we mentioned, credit metrics, et cetera, be very positive.

Chris Marr: Yeah. Thanks, Michael. I think it's that full menu. We're seeing very good top-of-funnel demand with a diverse set of use cases for the product. We're continuing to see the existing customer health, as we mentioned, credit metrics, et cetera, be very positive.

Speaker #3: We're continuing to see existing customer health, as we mentioned with credit metrics and so on, remain very positive. We're continuing to see those existing customers stay with us on their storage journey.

Chris P. Marr: We're continuing to see those existing customers stay with us on their storage journey a bit longer each, as time goes by. We're seeing some good trends across the board, strength in the East Coast, and the middle part of the country. Some improving green shoots in the Sun Belt on customers' move-in rates. I think on the OpEx side, as Tim said, we're seeing the trends as we would've expected get better as we go in the back half of the year. I think just broadly, feel very good about where we are at this point in the year.

Chris Marr: We're continuing to see those existing customers stay with us on their storage journey a bit longer each, as time goes by. We're seeing some good trends across the board, strength in the East Coast, and the middle part of the country. Some improving green shoots in the Sun Belt on customers' move-in rates. I think on the OpEx side, as Tim said, we're seeing the trends as we would've expected get better as we go in the back half of the year. I think just broadly, feel very good about where we are at this point in the year.

Speaker #3: A bit longer each as time goes by. We're seeing some good trends across the board—strength in the East Coast, and, across the country, some improving green shoots in the Sun Belt on customers' move-in rates.

Speaker #3: I think, on the OPEX side, as Tim said, we're seeing the trends, as we would have expected, get better as we go in the back half of the year.

Speaker #3: So I think, just broadly, I feel very good about where we are at this point in the year.

Speaker #2: Thanks, Chris. That's some helpful context. And then maybe, Tim, I appreciated your prepared remarks around the new joint venture. Is there anything you can share in terms of pricing or cap rate that that deal transacted at and I mean, it seems like the near-term priority is a share repurchases.

Michael Griffin: Thanks, Chris. That's some helpful context. Maybe Tim, I appreciated your prepared remarks around the new joint venture. Is there anything you can share in terms of pricing or cap rates that that deal transacted at? It seems like the near-term priority is the share repurchases. Are you seeing anything? I know you had the recently formed joint venture earlier this year, maybe to go on offense in terms of JVs. It doesn't seem like wholly owned on-balance-sheet acquisition pencil, but just curious how you weigh those proceeds being used for either share repurchases or potential acquisition opportunities in the future. Thank you.

Speaker #2: I mean, are you seeing anything? I know you had the recently formed joint venture earlier this year. Maybe to go on offense in terms of JVs, it doesn't seem like wholly owned on balance sheet acquisitions pencil, but just curious how you weigh kind of those proceeds being used for either share repurchases or potential acquisition opportunities in the future.

Speaker #2: Thank you.

Speaker #4: Thanks, Michael. Yeah. I mean, I consider the share repurchases and the transaction that we just announced with Hyman to absolutely be playing offense. It's playing offense in the context of the environment that we're in.

Tim M. Martin: Thanks, Michael. Yeah. I consider the share repurchases and the transaction that we just announced with Heitman to absolutely be playing offense. It's playing offense in the context of the environment that we're in. It gives us a great opportunity to be consistent with our operating strategy of improving the quality of our portfolio. It allows us to take advantage of being able to contribute these assets at a market valuation, which I would characterize to your first question, in the mid-fives from a cap rate perspective. Being able to use those proceeds to take advantage of the disconnect of what we're seeing out there. That's a bit redundant to my prepared remarks, but that's the gist of the approach.

Tim Martin: Thanks, Michael. Yeah. I consider the share repurchases and the transaction that we just announced with Heitman to absolutely be playing offense. It's playing offense in the context of the environment that we're in. It gives us a great opportunity to be consistent with our operating strategy of improving the quality of our portfolio. It allows us to take advantage of being able to contribute these assets at a market valuation, which I would characterize to your first question, in the mid-fives from a cap rate perspective. Being able to use those proceeds to take advantage of the disconnect of what we're seeing out there. That's a bit redundant to my prepared remarks, but that's the gist of the approach.

Speaker #4: It gives us a great opportunity to be consistent with our operating strategy of improving the quality of our portfolio. It allows us to take advantage of being able to contribute these assets at a market valuation, which I would characterize, to your first question, in the mid-fives from a cap rate perspective.

Speaker #4: And being able to use those proceeds to take advantage of the disconnect of what we're seeing out there. So that's a bit redundant to my prepared remarks, but that's the gist of the approach.

Speaker #4: And then again, it gives us yet another vehicle to look at future growth opportunities, along with Hyman, now that we have this seed portfolio in this venture.

Tim M. Martin: Again, it gives us yet another vehicle to look at future growth opportunities along with Heitman now that we have this seed portfolio in this venture, gives us yet another path. I think the market is starting to open up, and we're ready to get to that part of the offensive playbook as well when the time's right for us.

Tim Martin: Again, it gives us yet another vehicle to look at future growth opportunities along with Heitman now that we have this seed portfolio in this venture, gives us yet another path. I think the market is starting to open up, and we're ready to get to that part of the offensive playbook as well when the time's right for us.

Speaker #4: It gives us yet another path. I think the market is starting to open up, and we're ready to get to that part of the offensive playbook as well when the time's right for us.

Speaker #2: Great. Thanks so much.

Michael Griffin: Great. Thanks so much.

Speaker #4: Thank you.

Tim M. Martin: Thank you.

Tim Martin: Thank you.

Speaker #1: Your next question comes from the line of Michael Goldsmith with UBS. Your line is open. Please go ahead.

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

Speaker #5: Good morning. Thanks a lot for taking my questions. Chris, your prepared remarks, you sounded more optimistic than you've been in some time. So can you and then you also talked about accelerating into strength into 2027.

Michael Goldsmith: Good morning. Thanks a lot for taking my questions. Chris, in your prepared remarks, you sounded more optimistic than you've been in some time. You also talked about accelerating into strength into 2027. Can you talk a little bit about what it is specifically that's driving that? Also, if you could talk a little bit about the cadence as it creates that setup for next year.

Speaker #5: So, can you talk a little bit about what it is specifically that's driving that? And then also, if you could talk a little bit about the cadence as it creates that setup for next year.

Speaker #3: Yeah, thanks Michael. I am optimistic. The first part of the year here has been pretty strong and broad-based in terms of the demand. And I think, again to my comment, I think we've lost a little bit of our focus on how resilient the business is.

Chris P. Marr: Yeah. Thanks, Michael. I am optimistic. The first part of the year here has been pretty strong and broad-based in terms of the demand. I think, again, to my comment, I think we've lost a little bit of our focus on how resilient the business is. It's everyday acts of life that create an opportunity for a customer to experience the joy of self-storage. I think we're just seeing that. I think we also have maybe lost a little bit of the focus on the fact that the number 1, 2, 3 issue for our industry, is and always has been supply. I think what we're experiencing is we're really starting to see the benefits of that reduction in the impact of supply in many markets, right?

Chris Marr: Yeah. Thanks, Michael. I am optimistic. The first part of the year here has been pretty strong and broad-based in terms of the demand. I think, again, to my comment, I think we've lost a little bit of our focus on how resilient the business is. It's everyday acts of life that create an opportunity for a customer to experience the joy of self-storage. I think we're just seeing that. I think we also have maybe lost a little bit of the focus on the fact that the number 1, 2, 3 issue for our industry, is and always has been supply. I think what we're experiencing is we're really starting to see the benefits of that reduction in the impact of supply in many markets, right?

Speaker #3: It's every day acts of life that create an opportunity for a customer to experience the joy of self-storage. And so I think we're just seeing that.

Speaker #3: I think we also have maybe lost a little bit of the focus on the fact that the number one, two, three issue for our industry isn't always has been supply.

Speaker #3: And I think what we're experiencing see the benefits of that reduction in the impact of supply in many markets, right? I can pick to Cape Coral, Florida, which may take years and years to finally overcome the burden of the amount of new deliveries there.

Chris P. Marr: I can pick to Cape Coral, Florida, which may take years and years to finally overcome the burden of the amount of new deliveries there. As you take it broadly across, we're starting to positive about the direction that we're moving here at CubeSmart. I think we're also obviously seeing the positive impact of the highest quality portfolio that we have. I think that portfolio-

Chris Marr: I can pick to Cape Coral, Florida, which may take years and years to finally overcome the burden of the amount of new deliveries there. As you take it broadly across, we're starting to positive about the direction that we're moving here at CubeSmart. I think we're also obviously seeing the positive impact of the highest quality portfolio that we have. I think that portfolio---

Speaker #3: But as you take it broadly across, we're starting to feel positive about the direction that we're moving here at Q2. I think we're also obviously seeing the positive impact of the high-quality, highest-quality portfolio that we have.

Speaker #3: And I think that portfolio.

Speaker #1: Ladies and gentlemen, we are experiencing some technical difficulties. Please hold.

Operator: Ladies and gentlemen, we are experiencing some technical difficulties. Please hold.

Speaker #6: We are experiencing technical difficulties and have placed the call on hold. Please stay on the line. The event will resume shortly.

Operator: We are experiencing technical difficulties and have placed the call on hold. Please stay on the line. The event will resume shortly.

Speaker #1: Ladies and gentlemen, thank you for your patience. We will now resume the broadcast. We have Michael Goldsmith on the line.

Operator: Ladies and gentlemen, thank you for your patience. We will now resume the broadcast. We have Michael Goldsmith on the line.

Speaker #3: Michael, I'm not sure when first of all, let me apologize for the technical problems, but we're back. I don't know when I was disconnected there, Michael, because I was on fire.

Chris P. Marr: Michael, first of all, let me apologize for the technical problems. We're back. I don't know when I was disconnected there, Michael, because I was on fire. To just, I think, pick up on the back half of your question on cadence of timing. As we not going to pick a date specific, I think we see trends that have been very positive and those positive trends continuing. Whether that's at some point in Q3 or Q4, on average over H2, we do see a return to both +cash flow growth and +earnings growth.

Chris Marr: Michael, first of all, let me apologize for the technical problems. We're back. I don't know when I was disconnected there, Michael, because I was on fire. To just, I think, pick up on the back half of your question on cadence of timing. As we not going to pick a date specific, I think we see trends that have been very positive and those positive trends continuing. Whether that's at some point in Q3 or Q4, on average over H2, we do see a return to both +cash flow growth and +earnings growth.

Speaker #3: But to just, I think, pick up on the back half of your question on cadence of timing, I think as we look at it, there have been trends that have been very positive and those positive trends are continuing.

Speaker #3: So whether that's at some point in the third quarter or the fourth quarter, on average over the back half of the year, we do see a return to both positive cash flow growth and positive earnings growth.

Speaker #1: Your next question comes from the line of Spencer Glimcher with CubeSmart. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Spenser Glimcher with CubeSmart. Your line is open. Please go ahead.

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

Speaker #3: Spencer, I don't know if this can get any— I don't know if this can get any funnier, but I don't know when you joined CubeSmart, but welcome.

Chris P. Marr: Spenser, I don't know if this can get any funnier. I don't know when you joined CubeSmart. Welcome. Your onboarding will be next week. We'll have a little orientation for you.

Chris Marr: Spenser, I don't know if this can get any funnier. I don't know when you joined CubeSmart. Welcome. Your onboarding will be next week. We'll have a little orientation for you.

Speaker #3: You're onboarding. We'll be next week. We'll have a little orientation for you.

Speaker #4: Well, naturally, I have no questions then. But yeah, okay. Just one for me. Look, regulation efforts aren't new to this sector, but there's been slightly more success in passing through legislation on pricing transparency and I just wanted to get your thoughts on the impact of the recent legislation passed in New York regarding surveillance pricing and whether or not this affects how you set prices in the New York Metro.

Spenser Glimcher: Well, naturally, I have no questions then. Yeah. Okay, just one for me. Look, regulation efforts aren't new to this sector, but there's been slightly more success in passing through legislation on pricing transparency, and I just wanted to get your thoughts on the impact of the recent legislation passed in New York regarding surveillance pricing and whether or not this affects how you set prices in the New York metro.

Speaker #3: Yeah, thanks, Spencer. So the CubeSmart way, if you just think about how we operate, is we strongly in all with all of our stakeholders in all of the municipalities in which we operate or wish to operate, we believe in an open, professional, responsible, and reasonable dialogue with our stakeholders in those municipalities.

Chris P. Marr: Yeah. Thanks, Spenser. The CubeSmart way, if you just think about how we operate, is we strongly with all of our stakeholders in all of the municipalities in which we operate or wish to operate, we believe in an open, professional, responsible, and reasonable dialogue with our stakeholders in those municipalities, whether that be around

Chris Marr: Yeah. Thanks, Spenser. The CubeSmart way, if you just think about how we operate, is we strongly with all of our stakeholders in all of the municipalities in which we operate or wish to operate, we believe in an open, professional, responsible, and reasonable dialogue with our stakeholders in those municipalities, whether that be around

Speaker #3: Whether that be around a proposed new development of self-storage and having a would believe that self-storage in that location is an ideal use, or whether it be how we operate our stores in those markets and getting that feedback.

Chris P. Marr: A proposed new development of self-storage and having a discussion about certainly why we would believe that self-storage in that location is an ideal use, or whether it be how we operate our stores in those markets and getting that feedback. The reality is, often, but not always, those are productive and healthy dialogues where we see everybody's point of view. Specific to New York, but frankly any municipality in which we operate, as long as that dialogue exists in a responsible and open way, we obviously want to listen to the points of view of the stakeholders, and we want to share our points of view with the hope we get to a reasonable place. As often in those discussions, it's ideal if both parties feel like they didn't get everything they wanted, but we reach a good meeting of the minds.

Chris Marr: A proposed new development of self-storage and having a discussion about certainly why we would believe that self-storage in that location is an ideal use, or whether it be how we operate our stores in those markets and getting that feedback. The reality is, often, but not always, those are productive and healthy dialogues where we see everybody's point of view. Specific to New York, but frankly any municipality in which we operate, as long as that dialogue exists in a responsible and open way, we obviously want to listen to the points of view of the stakeholders, and we want to share our points of view with the hope we get to a reasonable place. As often in those discussions, it's ideal if both parties feel like they didn't get everything they wanted, but we reach a good meeting of the minds.

Speaker #3: So the reality is often, but not always, those are productive and healthy dialogues where we see everybody's point of view. And so specific to New York, but frankly, any municipality in which we operate, as long as that as long as that dialogue exists and a responsible and open way, we obviously want to listen to the points of view of the stakeholders, and we want to share our points of view with the hope we get to a reasonable place and as often in those discussions, it's ideal if both parties feel like they didn't get everything they wanted, but we reach a good meeting of the mind.

Speaker #3: So, I think specifically as it relates to that pricing, we will continue to look at how we price the tools that we use, and be respectful of any sort of guardrails that are set up in the municipalities in which we operate.

Tim M. Martin: I think as it specifically relates to that pricing, we will continue to look at how we price the tools that we used and be respectful of any sort of guardrails that are set up in the municipalities in which we operate.

Chris Marr: I think as it specifically relates to that pricing, we will continue to look at how we price the tools that we used and be respectful of any sort of guardrails that are set up in the municipalities in which we operate.

Speaker #4: Great. Okay, I appreciate that color. Thank you, guys.

Spenser Glimcher: Great. Okay, appreciate that color. Thank you, guys.

Speaker #3: Thanks.

Tim M. Martin: Thanks.

Chris Marr: Thanks.

Speaker #1: Your next question comes from the line of Ravi Vidaya with Mizuho. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Ravi Vaidya with Mizuho. Your line is open. Please go ahead.

Speaker #5: Hi, good morning. Thanks for taking my question. Your guidance forecasts a pretty significant moderation in expenses in the back half of the year. Which line items do you think are most likely to benefit here going forward?

Ravi Vaidya: Hi. Good morning. Thanks for taking my question. Your guidance forecasts a pretty significant moderation in expenses in the H2. Which line items do you think are most likely to benefit here going forward? Thanks.

Speaker #5: Thanks.

Speaker #3: Hey, good morning. Thanks for the question. So yeah, a couple of things going on there. If you recall from last quarter, we had some pretty heavy winter expenses that impacted the first quarter.

Tim M. Martin: Hey, good morning. Thanks for that question. You have a couple of things going on there. If you'll recall from last quarter, we had some pretty heavy winter expenses that impacted the Q1, so that created some pressure on the run rate. You also had last quarter, a pretty big year-over-year increase in marketing spend, which had a lot to do with timing of when we deployed marketing spend last year versus when we did this year. Some of our marketing spend was a little front-loaded this year. I think you'll see a moderation on those two line items. We had a successful property insurance renewal in May, so a little bit of that flows through to some lower property insurance premiums in the H2. Also touched on, we expect a little bit of moderation on the personnel line item.

Tim Martin: Hey, good morning. Thanks for that question. You have a couple of things going on there. If you'll recall from last quarter, we had some pretty heavy winter expenses that impacted the Q1, so that created some pressure on the run rate. You also had last quarter, a pretty big year-over-year increase in marketing spend, which had a lot to do with timing of when we deployed marketing spend last year versus when we did this year. Some of our marketing spend was a little front-loaded this year. I think you'll see a moderation on those two line items. We had a successful property insurance renewal in May, so a little bit of that flows through to some lower property insurance premiums in the H2. Also touched on, we expect a little bit of moderation on the personnel line item.

Speaker #3: So, that created some pressure on the run rate. You also had, last quarter, a pretty big year-over-year increase in marketing spend, which had a lot to do with the timing of when we deployed marketing spend last year versus when we did this year.

Speaker #3: So some of our marketing spend was a little front-loaded this year. So I think you'll see a moderation on those two line items. We had a successful property insurance renewal in May.

Speaker #3: So a little bit of that flows through to some lower property insurance premiums in the back half of the year. And then also touched on we expect a little bit of moderation on the personnel line item.

Speaker #3: So it's not really one line item in particular; it's across a bunch of them. And just this year, we happen to have a little bit of pressure when comparing year-over-year in the first half of the year. If you look through the guidance, you nailed it.

Tim M. Martin: It's not really one line item in particular. It's across a bunch of them, and it's just this year we happen to have a little bit of pressure when comparing year-over-year in the H1, and if you look through the guidance, you nailed it. There's a pretty big moderation in expense growth, and appreciate you asking the question so I could say it again.

Tim Martin: It's not really one line item in particular. It's across a bunch of them, and it's just this year we happen to have a little bit of pressure when comparing year-over-year in the H1, and if you look through the guidance, you nailed it. There's a pretty big moderation in expense growth, and appreciate you asking the question so I could say it again.

Speaker #3: There's a pretty big moderation in expense growth, and I appreciate you asking the question so I could say it again.

Speaker #5: Thank you. Appreciate it.

Ravi Vaidya: Thank you. Appreciate it.

Tim M. Martin: Thank you.

Tim Martin: Thank you.

Speaker #3: Thank you.

Speaker #1: Your next question comes from the line of Juan Senabria. With BMO Capital Markets. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Juan Sanabria with BMO Capital Markets. Your line is open. Please go ahead.

Speaker #6: Hi. Good morning. Just to start, just curious if you could comment on the July move in trends and how that trended throughout the second quarter.

Juan Sanabria: Hi. Good morning. Just to start, just curious if you could comment on the July move-in trends and how that trended throughout the second quarter. Maybe if you could comment as part of that, around when you expect to return to the long-term same-store revenue growth trajectory. I believe previously you had said H2 2027, but wondering if that gets pulled forward with your renewed enthusiasm.

Speaker #6: And maybe if you could comment as part of that, around when you expect to return to the long-term same-store revenue growth trajectory, I believe previously you'd said the second half '27, but wondering if that gets pulled forward with your renewed enthusiasm.

Speaker #3: Yeah, thanks, Juan. So, when you think about July, as I mentioned in my prepared remarks, as of yesterday's close, we were at a physical occupancy of 91.1%.

Tim M. Martin: Thanks, Juan. When you think about July, as I mentioned in my prepared remarks, as of yesterday close, we were at a physical occupancy of 91.1%. That's 30 basis point increase over 30 July 2025. Our rentals for the month of July were 3% higher than they were through 30 July last year. On the vacate side, our vacates are also -3%, down 3% from where we were through 30 July last year. On the cadence, obviously we continue to see, as I said, green lights that are encouraging and getting us very optimistic about next year. The exact pace and how we hit it is obviously going to be pretty varied based on a variety of factors. I think we just continue to see that steady growth.

Tim Martin: Thanks, Juan. When you think about July, as I mentioned in my prepared remarks, as of yesterday close, we were at a physical occupancy of 91.1%. That's 30 basis point increase over 30 July 2025. Our rentals for the month of July were 3% higher than they were through 30 July last year. On the vacate side, our vacates are also -3%, down 3% from where we were through 30 July last year. On the cadence, obviously we continue to see, as I said, green lights that are encouraging and getting us very optimistic about next year. The exact pace and how we hit it is obviously going to be pretty varied based on a variety of factors. I think we just continue to see that steady growth.

Speaker #3: That's a 30 basis point increase over July 30, 2025. Our rentals for the month of July were 3% higher through the 30th than they were through the 30th of July last year.

Speaker #3: And on the vacate side, our vacates are also negative 3%, down 3% from where we were through the 30th of July last year. On the cadence, obviously, we continue to see as I said, green lights that are encouraging and getting us very optimistic about next year.

Speaker #3: The exact pace and how we hit it is obviously going to be pretty varied based on a variety of factors. So I think we just continue to see that steady growth.

Speaker #3: We have that inflection to positive cash flow and earnings in the back half of this year, and then continue to build off that each quarter through 2027.

Tim M. Martin: We have that inflection to positive cash flow and earnings in the H2 of this year and then continue to build off that each quarter through 2027.

Tim Martin: We have that inflection to positive cash flow and earnings in the H2 of this year and then continue to build off that each quarter through 2027.

Speaker #6: Great. Could you just let us know what the July move-in rate was? I apologize if that wasn't clear.

Juan Sanabria: Great. Could you just let us know what the July move-in rate was? Apologies if that wasn't clear.

Speaker #3: Yeah. As we think about it, as I mentioned, our pricing systems are optimizing by leaning a bit more towards volume versus rate, which is a little bit different than this time last year.

Tim M. Martin: Yeah. As we think about, as I mentioned, our pricing systems are optimizing by leaning a bit more towards volume versus rate, which is a little bit different than this time last year. This has been built into our expectations. We would expect in our base case that early Q3, we don't see growth year-over-year in asking rents, those metrics return to positive as we get deeper into Q3 and through Q4. I'll caveat all that with the fact that we price in real time, our strategy may change from week to week.

Tim Martin: Yeah. As we think about, as I mentioned, our pricing systems are optimizing by leaning a bit more towards volume versus rate, which is a little bit different than this time last year. This has been built into our expectations. We would expect in our base case that early Q3, we don't see growth year-over-year in asking rents, those metrics return to positive as we get deeper into Q3 and through Q4. I'll caveat all that with the fact that we price in real time, our strategy may change from week to week.

Speaker #3: This has been built into our expectation. So, we would expect that in our base case, in the early third quarter, we don't see growth year-over-year in asking rents. Then, those metrics return to positive as we get deeper into the third quarter and through Q4.

Speaker #3: And I'll caveat all that with the fact that we price in real-time. And so our strategy may change from week to week.

Speaker #6: Appreciate it. Thank you.

Juan Sanabria: Appreciate it. Thank you.

Speaker #3: Thanks.

Speaker #1: Your next question comes from the line of Victor Fedev with Scotiabank. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Viktor Fediv with Scotiabank. Your line is open. Please go ahead.

Speaker #5: Thank you. Good morning, everyone. On the Hyatman JV, should we think of this as a completion of broader portfolio optimization effort or have you identified some additional assets that could be candidates for similar transactions in the near term?

Viktor Fediv: Thank you. Good morning, everyone. On the Heitman JV, should we think of this as a completion of broader portfolio optimization effort, or have you identified some additional assets that could be candidates for similar transactions in the near term? What will be the capital structure of this JV, including expected leverage at the entity level?

Speaker #5: And what will be the capital structure of this JV, including expected leverage and identity level?

Speaker #3: Yeah. Thanks for the question. So the that's it for now for us on finding opportunities to sell or contribute assets into a venture. I wouldn't consider this necessarily portfolio burning.

Tim M. Martin: Yeah. Thanks for the question. That's it for now for us on finding opportunities to sell or contribute assets into a venture. I wouldn't consider this necessarily portfolio pruning. We really like our portfolio. This transaction was more geared towards in the current environment, what can we do to increase our ability to fund share repurchases in a way that's leverage neutral? This was a good opportunity for us to accomplish a number of things from a strategic standpoint, improving the quality of the portfolio, having an additional path for future external growth with a long-term partner in Heitman. From a leverage standpoint, the venture does expect to put leverage on the venture. The amount and the timing of that is still a little bit up in the air.

Tim Martin: Yeah. Thanks for the question. That's it for now for us on finding opportunities to sell or contribute assets into a venture. I wouldn't consider this necessarily portfolio pruning. We really like our portfolio. This transaction was more geared towards in the current environment, what can we do to increase our ability to fund share repurchases in a way that's leverage neutral? This was a good opportunity for us to accomplish a number of things from a strategic standpoint, improving the quality of the portfolio, having an additional path for future external growth with a long-term partner in Heitman. From a leverage standpoint, the venture does expect to put leverage on the venture. The amount and the timing of that is still a little bit up in the air.

Speaker #3: We really like our portfolio. This transaction was more geared towards, in the current environment, what can we do to increase our ability to fund share repurchases in a way that's leverage-neutral?

Speaker #3: And this was a good opportunity for us to accomplish a number of things. From a strategic standpoint, improving the quality of the portfolio, having an additional path for future external growth with a long-term partner in Hyatman.

Speaker #3: And from a leverage standpoint, the venture does leverage on the venture. The amount and the timing of that is still a little bit up in the air.

Speaker #3: We don't expect to close on this until the fourth quarter, so there's a little bit of time to settle all those moving pieces. But it wouldn't surprise me if, ultimately, we ended up having somewhere in the neighborhood of 50% leverage on the venture, but that's still to be decided.

Tim M. Martin: We don't expect to close on this until Q4, so there's a little bit of time to settle all those moving pieces. It wouldn't surprise me if ultimately we ended up having somewhere in the neighborhood of 50% leverage on the venture, but that's still to be decided.

Tim Martin: We don't expect to close on this until Q4, so there's a little bit of time to settle all those moving pieces. It wouldn't surprise me if ultimately we ended up having somewhere in the neighborhood of 50% leverage on the venture, but that's still to be decided.

Speaker #5: Understood. Thank you.

Viktor Fediv: Understood. Thank you.

Speaker #3: Thank you.

Tim M. Martin: Thank you.

Tim Martin: Thank you.

Speaker #1: Your next question comes from the line of Todd Thomas with KeyBank. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Todd Thomas with KeyBank. Your line is open. Please go ahead.

Speaker #5: Hi, thanks. I wanted to ask about occupancy. Specifically, you saw occupancy continue to build through quarter end and commented that occupancy has increased slightly higher in July.

Todd Thomas: Hi. Thanks. I wanted to ask about occupancy. Specifically, you saw occupancy continue to build through quarter end and commented that occupancy has increased slightly higher in July. Rentals up 3% in July, too. Seems like the rental season's extended a bit further than prior years. Has the strength in rental activity persisted throughout the July period? Is there any sense whether that might continue into August, sort of up until the Labor Day weekend, which I think historically has been more typical of the leasing season. Any sense what's driving the improving trends and really more of this traditional leasing season versus some of the more prior years?

Speaker #5: Rentals were up 3% in July, too. It seems like the rental season has extended a bit further than in prior years. Has this strengthened rental activity persisted throughout the July period?

Speaker #5: Is there any sense whether that might continue into August, sort of up until sort of think historically has been more typical of the leasing season?

Speaker #5: In any sense, what's driving the improving trends and really more of this traditional leasing season versus some of the more prior years?

Speaker #3: Yep, thanks. Great question. So, the trends we have seen are not quite at those levels. Again, we always struggle with what's normal here, looking backwards.

Tim M. Martin: Yep. Thanks. Great question. The trends we have seen are not quite at those levels that, again, we always struggle with what's normal here looking backwards. If you think about that 2016, 2018 sort of time period, typically, we would have seen peak a little bit deeper into July. This is a lot closer to that than certainly we've seen over the last three years, not all the way back there. As we base case expectations, we would assume as we get into August here and we start to see the college students vacate and go back to school, and the other typical patterns that we'll have, we see good green lights for August, but don't expect to see any aberration in sort of normal behavior. That's sort of our base case expectation as we get through the fall and into the winter.

Tim Martin: Yep. Thanks. Great question. The trends we have seen are not quite at those levels that, again, we always struggle with what's normal here looking backwards. If you think about that 2016, 2018 sort of time period, typically, we would have seen peak a little bit deeper into July. This is a lot closer to that than certainly we've seen over the last three years, not all the way back there. As we base case expectations, we would assume as we get into August here and we start to see the college students vacate and go back to school, and the other typical patterns that we'll have, we see good green lights for August, but don't expect to see any aberration in sort of normal behavior. That's sort of our base case expectation as we get through the fall and into the winter.

Speaker #3: But if you think about that 2016-2018 sort of time period, typically, we would have seen the peak a little bit deeper into July. So, this is a lot closer to that than certainly we've seen over the last three years—not all the way back there.

Speaker #3: So, as we base case expectations, we would assume as we get into August here and we start to see the college students vacate and go back to school and the other typical patterns that we'll have. We see good green lights for August, but don't expect to see any aberration in sort of normal behavior.

Speaker #3: And then that's sort of our base case expectation as we get through the fall and into the winter. So I think the cause of the positive trends, again, I go back to the resilience of the business and the fact that we're not reliant upon one particular source of demand.

Tim M. Martin: I think the cause of the positive trends, again, I go back to the resilience of the business and the fact that we're not reliant upon one particular source of demand. I think it is just this continued awareness of the product, continued awareness of our brand, and I think the continued reduction in the impact of new supply, which again, I would place as probably the primary reason for why we're experiencing what we're experiencing.

Tim Martin: I think the cause of the positive trends, again, I go back to the resilience of the business and the fact that we're not reliant upon one particular source of demand. I think it is just this continued awareness of the product, continued awareness of our brand, and I think the continued reduction in the impact of new supply, which again, I would place as probably the primary reason for why we're experiencing what we're experiencing.

Speaker #3: So I think it is just this continued awareness of the product, continued awareness of our brand, and I think the continued reduction in the impact of new supply, which, again, I would place as probably the primary reason for why we're experiencing what we're experiencing.

Speaker #5: Okay. And then I wanted to go back to the question around New York City regulation on pricing and licensing requirements. Just curious to get your thoughts—does that impact asset pricing or underwriting in any way?

Todd Thomas: Okay. I wanted to go back to the question around New York City regulation on pricing and licensing requirements. Just curious to get your thoughts whether, does that impact asset pricing or underwriting in any way? Does that sort of change the landscape in New York City at all, in your view?

Speaker #5: Does that sort of change the landscape in New York City at all in your view?

Speaker #3: No, I think the thing that it changes in the landscape in New York City is, unfortunately—and we feel bad for the smaller operators—I think the ultimate burden is significantly higher on them.

Tim M. Martin: No, I think the thing that it changes in the landscape in New York City is, unfortunately, and we feel bad for the smaller operators, I think the ultimate burden is significantly higher on them. When you think about the types of things that are being discussed, many of them are already ingrained in the day-to-day practices of us and our larger peers. I think it only will make it more attractive for folks to look at CubeSmart and our position and our execution in that market. You can see the metrics that are disclosed.

Tim Martin: No, I think the thing that it changes in the landscape in New York City is, unfortunately, and we feel bad for the smaller operators, I think the ultimate burden is significantly higher on them. When you think about the types of things that are being discussed, many of them are already ingrained in the day-to-day practices of us and our larger peers. I think it only will make it more attractive for folks to look at CubeSmart and our position and our execution in that market. You can see the metrics that are disclosed.

Speaker #3: When you think about the types of things that are being discussed, many of them are already ingrained in the day-to-day practices of us and our larger peers.

Speaker #3: So I think it only will make it more attractive for folks to look at Qube and our position and our execution in that market, and you can see the metrics that are disclosed.

Speaker #3: We are outperforming in the New York MSA, and I think we will continue to do that. That will make us even more attractive as an option—either as an owner of that asset if that small operator wishes to sell, or as a third-party manager if they wish to partner up with us.

Tim M. Martin: We are outperforming in the New York MSA, and I think we will continue to do that, and that will make us even more attractive as an option, either as an owner of that asset if that small operator wishes to sell or as the third-party manager if they wish to partner up with them.

Tim Martin: We are outperforming in the New York MSA, and I think we will continue to do that, and that will make us even more attractive as an option, either as an owner of that asset if that small operator wishes to sell or as the third-party manager if they wish to partner up with them.

Speaker #5: Okay. Thank you.

Todd Thomas: Okay. Thank you.

Speaker #1: Your next question comes from the line of Nick Joseph with Citibank. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Nicholas Joseph with Citi. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Nick Joseph with Citi. Your line is open. Please go ahead.

Speaker #2: Thanks. Maybe just following up on that question—it sounds like you're already doing many of the requirements in New York City, but have you had to implement any new practices ahead of it?

Nicholas Joseph: Thanks. Maybe just following up on that question. It sounds like you're already doing many of the requirements in New York City, but have you had to implement any new practices ahead of it, like allergen testing or anything else to comply?

Nick Joseph: Thanks. Maybe just following up on that question. It sounds like you're already doing many of the requirements in New York City, but have you had to implement any new practices ahead of it, like allergen testing or anything else to comply?

Speaker #2: Like allergen testing or anything else to comply?

Speaker #3: Yeah. At this point, anything we have not done anything meaningfully different than we have been doing in New York State or elsewhere in the country.

Tim M. Martin: Yeah. At this point, we have not done anything meaningfully different than we have been doing in New York State or elsewhere in the country. I think we're all sort of navigating through all of this as it's sort of evolving but have not identified anything yet that would be a material deviation to our normal practices.

Tim Martin: Yeah. At this point, we have not done anything meaningfully different than we have been doing in New York State or elsewhere in the country. I think we're all sort of navigating through all of this as it's sort of evolving but have not identified anything yet that would be a material deviation to our normal practices.

Speaker #3: I think we're all sort of navigating through all of this as it is evolving, but have not identified anything yet that would be a material deviation from our normal practices.

Speaker #2: Thanks. You talked about the debt markets earlier. Just curious where you think you could price 10-year debt today if you go down that road.

Nicholas Joseph: Thanks. You talked about kind of the debt markets earlier. Just curious where you think you could price 10-year debt today if you go down that road.

Nick Joseph: Thanks. You talked about kind of the debt markets earlier. Just curious where you think you could price 10-year debt today if you go down that road.

Speaker #3: Yeah, so if we were looking at a 10-year today, it would probably be in the mid-fives, maybe a little higher. And then a seven-year, call it 50 basis points inside of that.

Tim M. Martin: Yeah. If we were looking at a 10 year today, it would probably be in the mid fives, maybe a little higher. Then a 7 year, call it 50 basis points inside of that. We're actively monitoring the markets. The 10 year obviously has been pushing up a little bit here in recent weeks, and there's an awful lot of volatility in the world. That's the not so great news. The good news is that we have a tremendous amount of flexibility as we have additional capacity on the revolver, and we have nothing maturing in 2027. We have a good bit of time to be patient and opportunistic as we think about long-term strategy from a debt perspective.

Tim Martin: Yeah. If we were looking at a 10 year today, it would probably be in the mid fives, maybe a little higher. Then a 7 year, call it 50 basis points inside of that. We're actively monitoring the markets. The 10 year obviously has been pushing up a little bit here in recent weeks, and there's an awful lot of volatility in the world. That's the not so great news. The good news is that we have a tremendous amount of flexibility as we have additional capacity on the revolver, and we have nothing maturing in 2027. We have a good bit of time to be patient and opportunistic as we think about long-term strategy from a debt perspective.

Speaker #3: So, we are actively monitoring the markets. The 10-year, obviously, has been pushing up a little bit here in recent weeks, and there's an awful lot of volatility in the world.

Speaker #3: And so, that's the not-so-great news. The good news is that we have a tremendous amount of flexibility, as we have additional capacity on the revolver, and we have nothing maturing until 2027.

Speaker #3: So, we have a good bit of time to be patient and opportunistic as we think about long-term strategy from a debt perspective.

Speaker #2: Thank you.

Nicholas Joseph: Thank you.

Nick Joseph: Thank you.

Speaker #3: Thank you.

Tim M. Martin: Thank you.

Tim Martin: Thank you.

Speaker #1: Your next question comes from the line of Michael Mueller with JP Morgan. Your line is open. Please go ahead.

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

Speaker #5: Yeah. Thanks. So Chris, outside of COVID, when you look back at recoveries over the past 30-plus years or so, what was the largest same-store revenue increase that you remember seeing in a single year?

Michael Mueller: Yeah, thanks. Chris, outside of COVID, when you look back at recoveries over the past 30 plus years or so, what was the largest same-store revenue increase that you remember seeing in a single year?

Speaker #3: Yeah, 30 years is a long time. So I'm not sure I'm going to get this 100%, but I think if you eliminate the COVID years, something in that 7% to 8% kind of quarterly same-store revenue growth was probably the next highest.

Tim M. Martin: Yeah. 30 years is a long time, I'm not sure I'm going to get this 100%, but I think if you eliminate the COVID years, something in that 7% to 8% kind of quarterly same-store revenue growth was probably the next highest. I think that was for a couple of straight years. I think that was like 2012, 2013, 2014. Yeah, coming out of the GFC, there was no supply. That's right. The complete lack of supply led to multiple years of seven plus percent type top-line growth.

Tim Martin: Yeah. 30 years is a long time, I'm not sure I'm going to get this 100%, but I think if you eliminate the COVID years, something in that 7% to 8% kind of quarterly same-store revenue growth was probably the next highest. I think that was for a couple of straight years. I think that was like 2012, 2013, 2014. Yeah, coming out of the GFC, there was no supply. That's right. The complete lack of supply led to multiple years of seven plus percent type top-line growth.

Speaker #3: And I think that was for a couple of straight years. I think that was like 2012, 2013, 2014, coming out of the GFC, and there was no supply.

Speaker #3: So the complete lack of supply led to multiple years of, I think it was, 7-plus percent type top-line growth.

Speaker #5: Got it. Okay. And if you're thinking about a level of improvement from one year to the next—for example, if you're starting at zero—what was the most you recall seeing in a year? That wasn't 7% revenue improvement a year, was it?

Michael Mueller: Got it. Okay. If you're thinking about a level of improvement from one year to the next, for example, if you're starting at a zero, what was the most you recall seeing in a year? That wasn't a 7% revenue improvement year, was it?

Speaker #3: No, I'd have to go back. My memory is not that good. I think, again, if you even think about COVID and how quickly that happened, it's because of the churn, right?

Tim M. Martin: No. I'd have to go back. My memory's not that good. Again, even if you think about COVID and how quickly that happened, it's because of the churn, right? There's only so many customers vacating each month, which is, that churn is lower than it was historically. It takes a couple of quarters to get elevated to that level.

Tim Martin: No. I'd have to go back. My memory's not that good. Again, even if you think about COVID and how quickly that happened, it's because of the churn, right? There's only so many customers vacating each month, which is, that churn is lower than it was historically. It takes a couple of quarters to get elevated to that level.

Speaker #3: There are only so many customers vacating each month, which is why churn is lower than it was historically. It takes a couple of quarters to get elevated to that level.

Speaker #5: Okay. Okay. Thank you.

Michael Mueller: Okay. Thank you.

Speaker #3: Yep. Thanks.

Tim M. Martin: Yeah, thanks.

Tim Martin: Yeah, thanks.

Speaker #1: Your next question comes from the line of Brendan Lynch with Barclays. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Brendan Lynch with Barclays. Your line is open. Please go ahead.

Speaker #5: Great, thanks for taking my questions. You guys have been kind of talking up the setup for 2027. Certainly, supply can't come back online fast enough to impact next year.

Brendan Lynch: Great. Thanks for taking my questions. You guys have been kind of talking up the setup for 2027. Certainly, supply can't come back online fast enough to impact next year. Chris, you also mentioned the resiliency of the self-storage demand. We've seen lots of counter-cyclical demand drivers in past challenging macro environments. I guess the question is, what are the risks that could cause a deceleration relative to the outlook that you're kind of presenting here today?

Speaker #5: Chris, you also mentioned the resiliency of self-storage demand. We've seen lots of countercyclical demand drivers in past challenging macro environments. So, I guess the question is: what are the risks that could cause a deceleration relative to the outlook that you're presenting here today?

Speaker #3: Yeah, great question. Again, I'll keep coming back and pounding the drum that the biggest headwind for storage is, and always has been, supply. And as you noted, we don't see, at this stage of 2026, any material increase in supply or its impact—certainly not in '27.

Tim M. Martin: Great question. Again, I'll keep coming back and pounding the drum that the biggest headwind for storage is and always has been supply. As you noted, we don't see, at this stage of 2026, any material increase in supply, or its impact certainly in 2027. At this stage, I would say that risk is low. I think the second risk that has always created a near-term challenge for our industry is any sort of black swan event that causes the consumer to freeze in place. You think about some of the unfortunate events, the onset of COVID, the GFC and related bankruptcies. You can go all the way back to 9/11. Those typically have a short-term impact on move-ins as consumers tend to freeze in place and stop making decisions. They also then tend to have the corresponding effect where you see vacate volumes decline.

Tim Martin: Great question. Again, I'll keep coming back and pounding the drum that the biggest headwind for storage is and always has been supply. As you noted, we don't see, at this stage of 2026, any material increase in supply, or its impact certainly in 2027. At this stage, I would say that risk is low. I think the second risk that has always created a near-term challenge for our industry is any sort of black swan event that causes the consumer to freeze in place. You think about some of the unfortunate events, the onset of COVID, the GFC and related bankruptcies. You can go all the way back to 9/11. Those typically have a short-term impact on move-ins as consumers tend to freeze in place and stop making decisions. They also then tend to have the corresponding effect where you see vacate volumes decline.

Speaker #3: So, at this stage, I would say that risk is low. I think the second risk that has always created a near-term challenge for our industry is any sort of black swan event that causes the consumer to freeze in place.

Speaker #3: So you think about some of the unfortunate events—the onset of COVID, the GFC and related bankruptcies. You go all the way back to 9/11.

Speaker #3: Those typically have a short-term impact on move-ins, as consumers tend to freeze in place and stop making decisions. They also then tend to have the corresponding effect, where you see vacate volumes decline.

Speaker #3: And it takes a while until the consumer recovers, but those type of impacts have typically been weeks, maybe a month or two, and then the industry tends to bounce right back.

Tim M. Martin: It takes a while until the consumer recovers, those type impacts have typically been weeks, if maybe a month or two months, and then the industry tends to bounce right back.

Tim Martin: It takes a while until the consumer recovers, those type impacts have typically been weeks, if maybe a month or two months, and then the industry tends to bounce right back.

Speaker #5: Great, thanks. That's helpful. And then maybe one for Tim, just on calibrating labor. I think you suggested there's going to be some moderation in the year-over-year comp for personnel.

Brendan Lynch: Great. Thanks. That's helpful. Maybe one for Tim, just on calibrating labor. I think you suggested there's going to be some moderation in the year-over-year comp for personnel. Just walk us through your thoughts on running a little bit leaner on the labor front versus maybe adding a little bit more headcount to maintain the in-person relationships in the facilities themselves.

Speaker #5: Just walk us through your thoughts on running a little bit leaner on the labor front versus maybe adding a little bit more headcount to maintain the in-person relationships in the facilities themselves.

Speaker #3: Yeah, I think it's always that balance of trying to find the optimal staffing levels to provide the level of customer service that we insist on providing.

Tim M. Martin: I think it's always that balance of trying to find the optimal staffing levels to provide the level of customer service that we insist on providing. The changes and the evolution on that line item really date back to things that we did last year. Later in 2025, we saw a little bit of pressure on that line item as we were adding back some store hours and making some adjustments that increased the level from where we had reduced it to. I think what you're going to see here in H2 is just getting up against those comps. H1 saw a more difficult comp for adjustments that we made over time during 2025.

Tim Martin: I think it's always that balance of trying to find the optimal staffing levels to provide the level of customer service that we insist on providing. The changes and the evolution on that line item really date back to things that we did last year. Later in 2025, we saw a little bit of pressure on that line item as we were adding back some store hours and making some adjustments that increased the level from where we had reduced it to. I think what you're going to see here in H2 is just getting up against those comps. H1 saw a more difficult comp for adjustments that we made over time during 2025.

Speaker #3: And the changes and the evolution on that line item really date back to things that we did last year. And so, later in 2025, we saw a little bit of pressure on that line item as we were adding back some store hours and making some adjustments that increased the level from where we had reduced it to.

Speaker #3: And so I think what you're going to see here in the back half of the year is just getting up against those comps. And so the first half of the year saw a more difficult comp for adjustments that we made over time during 2025.

Speaker #3: We feel like we're in a great spot right now, due to a combination of staffing, technology, and our approach to attracting new customers and making sure that we're providing great service to our existing customers.

Tim M. Martin: We feel like we're in a great spot right now from a combination of staffing technology and our approach to attracting new customers and making sure that we're providing great service to our existing customers. Nothing that we're doing today, more stuff that we did about a year ago.

Tim Martin: We feel like we're in a great spot right now from a combination of staffing technology and our approach to attracting new customers and making sure that we're providing great service to our existing customers. Nothing that we're doing today, more stuff that we did about a year ago.

Speaker #3: And so, nothing that we're doing today—more stuff that we did about a year ago.

Speaker #5: Great. Thank you.

Brendan Lynch: Great. Thank you.

Speaker #3: Thank you.

Tim M. Martin: Thank you.

Tim Martin: Thank you.

Speaker #1: Your next question comes from the line of Omoteo Okasanya with Deutsche Bank. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Omotayo Okusanya with Deutsche Bank. Your line is open. Please go ahead.

Speaker #2: Hi. Yes, good afternoon, everyone. Quick question—just on Sunbelt markets and some of your earlier comments. Can you talk us through how you're thinking about recovery in quite a few of those markets?

Omotayo Okusanya: Hi, yes. Good afternoon, everyone. Quick question just the Sun Belt markets and some of your earlier comments. Can you just kind of talk us through how you're thinking about recovery in quite a few of those markets? Again, you did mention that oversupply in places like Fort Myers really could be a multi-year problem. As you just kind of think through those markets and you kind of think about potential inflection, how should we be thinking about that, whether it's a year away, 2 years away, or just whatever your crystal ball is telling you? Some insight would be appreciated.

Speaker #2: Again, you did mention that oversupply in places like Fort Myers really could be a multi-year problem. But I was just kind of thinking through those markets, and you kind of think about potential inflection.

Speaker #2: How should we be thinking about that, whether it's a year away, two years away, or just whatever your crystal ball is telling you? Some insight would be appreciated.

Speaker #3: Yep. So, I think as everyone knows, this is a micro-market business. So even within Sunbelt markets, we see pockets that are improving more rapidly than others.

Tim M. Martin: Yeah. I think as everyone knows, this is a micro market business. Even within Sun Belt markets, we see pockets that are improving more rapidly than others, likely and largely due to, again, that impact of the new construction, the new supply that has been brought on board adjacent to those same stores in those markets. I think it's improving. If you look at the sequential results, as we mentioned, you're seeing the same store revenues going in a good direction. I think it will be unique to each individual market. Let's use Miami as an example. There you had an awful lot of supply, but an attractive and continues to be an attractive place both for individuals and businesses to work and live.

Tim Martin: Yeah. I think as everyone knows, this is a micro market business. Even within Sun Belt markets, we see pockets that are improving more rapidly than others, likely and largely due to, again, that impact of the new construction, the new supply that has been brought on board adjacent to those same stores in those markets. I think it's improving. If you look at the sequential results, as we mentioned, you're seeing the same store revenues going in a good direction. I think it will be unique to each individual market. Let's use Miami as an example. There you had an awful lot of supply, but an attractive and continues to be an attractive place both for individuals and businesses to work and live.

Speaker #3: Likely and largely due to, again, that impact of the new construction—the new supply that has been brought on board adjacent to those same stores in those markets.

Speaker #3: So I think it's improving. If you look at the sequential results, as we mentioned, you're seeing the same-store revenues going in a good direction.

Speaker #3: I think it will be unique to each individual market. Let's use Miami as an example. There, you had an awful lot of supply, but it's an attractive—and continues to be an attractive—place both for individuals and businesses to work and live.

Speaker #3: And I think we saw that supply get absorbed fairly expediently, and you've seen results in Miami move a little bit quicker toward and into positive growth territory.

Tim M. Martin: I think we saw that supply get absorbed fairly expediently, and you've seen results in Miami move a little bit quicker towards and into positive growth territory. I think the major Texas markets and the Southwest, it will be a bit slower and gradual. How to predict which quarter or which date things flip positive, that's really difficult to say. I do think we'll just kind of see this continued gradual recovery throughout the balance of 2026.

Tim Martin: I think we saw that supply get absorbed fairly expediently, and you've seen results in Miami move a little bit quicker towards and into positive growth territory. I think the major Texas markets and the Southwest, it will be a bit slower and gradual. How to predict which quarter or which date things flip positive, that's really difficult to say. I do think we'll just kind of see this continued gradual recovery throughout the balance of 2026.

Speaker #3: I think in the major Texas markets and the Southwest, it will be a bit slower and more gradual. How do you predict which quarter or which date things flip positive?

Speaker #3: That's really difficult to say. But I do think we'll just kind of see this continued gradual recovery throughout the balance of 2026.

Speaker #2: Thank you.

Omotayo Okusanya: Thank you.

Speaker #1: Your next question comes from the line of Juan Sanabrio with BMO Capital Markets. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Juan Sanabria with BMO Capital Markets. Your line is open. Please go ahead.

Speaker #4: Storage is so sexy, I had to come in twice. Just hoping he's following up on the JV and investments discussion. For CBRE and Hyattman, is the thought that going forward, those two ventures would acquire in the open market to grow?

Juan Sanabria: George is so sexy, I had to come in twice. Just hoping, following up on the JV and investments discussion. For CBRE and Heitman, is the thought that going forward, those two ventures would acquire in the open market going forward to grow? I think, Tim, you said something about a thawing or something in your prepared remarks. I'm just curious if you could elaborate on that.

Speaker #4: And I think, Tim, you said something about a thawing or something in your prepared remarks, and I'm just curious if you could elaborate on that.

Speaker #3: Yeah, I think the most likely avenue for growth in each of those ventures would be open market opportunities—perhaps things that we manage currently that we can find a home for. Each of those ventures, and each of those partners, have areas of focus that range from the type of opportunity—as far as return profile, early-stage lease-up, stabilized—looking at different markets.

Tim M. Martin: Yeah, I think the most likely avenue for growth in each of those ventures would be open market opportunities, perhaps things that we manage currently that we can find a home for. Each of those ventures and each of those partners have areas of focus that range from the type of opportunity as far as return profile, early stage lease up, stabilized, looking at different markets. The great thing for our investments team, having each of those partners gives us the ability to pursue a pretty wide range of opportunities, and that's pretty exciting. What was the second part of your question?

Tim Martin: Yeah, I think the most likely avenue for growth in each of those ventures would be open market opportunities, perhaps things that we manage currently that we can find a home for. Each of those ventures and each of those partners have areas of focus that range from the type of opportunity as far as return profile, early stage lease up, stabilized, looking at different markets. The great thing for our investments team, having each of those partners gives us the ability to pursue a pretty wide range of opportunities, and that's pretty exciting. What was the second part of your question?

Speaker #3: And so the great thing for our investments team, having each of those partners, is it gives us the ability to pursue a pretty wide range of opportunities.

Speaker #3: And that's pretty exciting. I think—what was the second part of your question?

Speaker #4: You mentioned, I think, some thawing in the acquisition market—maybe more product coming to market. I'm just hoping you can elaborate.

Juan Sanabria: You mentioned, I think, some thawing in the acquisition market, maybe more product coming to market. I'm just kind of hoping you'd elaborate.

Speaker #3: Yeah, yeah. It hasn't thawed all that much for us, but I think you're starting to see some momentum in a lot more things. I think the brokerage community is pretty excited about the things that are starting to come across their plates.

Tim M. Martin: Yeah, it hasn't fallen all that much for us, but I think you're starting to see some momentum in a lot more things that are I think the brokerage community is pretty excited about the things that are starting to come across their plates. I think there continues to be an evolution that the market is what the market is. I think sellers understand where buyers are and vice versa, and it feels like it's getting a little bit more constructive. The thing that hasn't changed is that it certainly feels like there's a wave of opportunity that is coming, and we've talked about that in prior quarters. I just think you have an awful lot of self-storage assets that are held by folks who want liquidity, some who are going to need liquidity. You have things in closed-end funds that ultimately have to close.

Tim Martin: Yeah, it hasn't fallen all that much for us, but I think you're starting to see some momentum in a lot more things that are I think the brokerage community is pretty excited about the things that are starting to come across their plates. I think there continues to be an evolution that the market is what the market is. I think sellers understand where buyers are and vice versa, and it feels like it's getting a little bit more constructive. The thing that hasn't changed is that it certainly feels like there's a wave of opportunity that is coming, and we've talked about that in prior quarters. I just think you have an awful lot of self-storage assets that are held by folks who want liquidity, some who are going to need liquidity. You have things in closed-end funds that ultimately have to close.

Speaker #3: I think there continues to be an evolution, that the market is what the market is. And I think sellers understand where buyers are, and vice versa.

Speaker #3: And it feels like it's getting a little bit more constructive. The thing that hasn't changed is that it certainly feels like there's a wave of opportunity that is coming.

Speaker #3: And we've talked about that in prior quarters. I just think you have an awful lot of self-storage assets that are held by folks who want liquidity, and some who are going to need liquidity.

Speaker #3: You have things in closed-end funds that ultimately have to close. And you've had a fairly— you've had a fairly modest amount of transactions here now for two years running.

Tim M. Martin: You've had a fairly modest amount of transactions here now for two years running. So certainly feel like the dam is going to break, and when it does, there's going to be an awful lot of opportunity. From a CubeSmart perspective, we want to make sure that we're in the best position we can be in to take advantage of that, and that's what we're preparing to do.

Tim Martin: You've had a fairly modest amount of transactions here now for two years running. So certainly feel like the dam is going to break, and when it does, there's going to be an awful lot of opportunity. From a CubeSmart perspective, we want to make sure that we're in the best position we can be in to take advantage of that, and that's what we're preparing to do.

Speaker #3: And so, certainly, it feels like the dam is going to break, and when it does, there's going to be an awful lot of opportunity. From a CubeSmart perspective, we want to make sure that we're in the best position we can be in to take advantage of that, and that's what we're preparing to do.

Speaker #4: Thanks. And then lastly, just to be sorry to be greedy here. On the labor front and the wages, just curious on where you think we are in the optimization of FTEs or what have you.

Juan Sanabria: Thanks. Lastly, sorry to be greedy here. On the labor front and the wages, just curious on where you think we are in the optimization of FTEs or what have you, and kind of are we at a max in terms of efficiency gains, or what you think the future may hold?

Speaker #4: And are we kind of at a max in terms of efficiency gains, or what do you think the future may hold?

Speaker #3: Yeah, thanks, Juan. I think that's an area that is likely subject to continued evolution. I think on the service delivery front, and especially in our more dense urban markets, you continue to see the value of having our teammates in the stores, keeping them clean, and providing great customer service.

Tim M. Martin: Yeah, thanks, Juan. I think that's an area that is likely subject to continued evolution. I think on the service delivery front, and especially in our more dense urban markets, you continue to see the value of having our teammates in the stores, keeping them clean, and providing great customer service. I think as we continue to evolve in our utilization of AI, looking for ways where that can enhance customer service, many of those will be hand in hand with our teammates delivering. Would expect that That will likely translate into revenue gains on the efficiency side more than necessarily focused on the cost side of things. At the markets that the technology and the opportunities to serve and then also our customers' preferences continue to evolve, we would expect those trends to be continuing as I described.

Tim Martin: Yeah, thanks, Juan. I think that's an area that is likely subject to continued evolution. I think on the service delivery front, and especially in our more dense urban markets, you continue to see the value of having our teammates in the stores, keeping them clean, and providing great customer service. I think as we continue to evolve in our utilization of AI, looking for ways where that can enhance customer service, many of those will be hand in hand with our teammates delivering. Would expect that That will likely translate into revenue gains on the efficiency side more than necessarily focused on the cost side of things. At the markets that the technology and the opportunities to serve and then also our customers' preferences continue to evolve, we would expect those trends to be continuing as I described.

Speaker #3: I think as we continue to evolve in our utilization of AI, looking for ways where that can enhance customer service, many of those will be hand in hand with our teammates delivering.

Speaker #3: And so, we would expect that, while that may not—that will likely translate into revenue gains on the efficiency side more than necessarily focused on the cost side of things.

Speaker #3: But the markets that the technology and the opportunities to serve, and then also our customers' preferences, continue to evolve. We would expect that; we would expect those trends to continue as I described.

Speaker #4: Thank you.

Juan Sanabria: Thank you.

Speaker #1: We have reached the end of the Q&A session. I will now turn the call back to Chris Marr for closing remarks.

Operator: We have reached the end of the Q&A session. I will now turn the call back to Chris Marr for closing remarks.

Speaker #3: All right. Thanks, everybody, for participating today. We apologize for the technical difficulties. I'm told that we can blame Michael Goldsmith if we need to.

Chris P. Marr: All right. Thanks, everybody for participating today. We apologize for the technical difficulties. I am told that we can blame Michael Goldsmith if we need to. As we look forward here, we are excited about the return to growth. Return to growth in cash flows, return to growth in earnings, returning to growing our assets under management, whether that be through our excellent third-party management platform, acquiring stores with our partners or on balance sheet. We will continue to execute on that growth in a very disciplined way, laser focused on creating shareholder value. Thank you all. Look forward to seeing you in the future and talking to you again next quarter.

Chris Marr: All right. Thanks, everybody for participating today. We apologize for the technical difficulties. I am told that we can blame Michael Goldsmith if we need to. As we look forward here, we are excited about the return to growth. Return to growth in cash flows, return to growth in earnings, returning to growing our assets under management, whether that be through our excellent third-party management platform, acquiring stores with our partners or on balance sheet. We will continue to execute on that growth in a very disciplined way, laser focused on creating shareholder value. Thank you all. Look forward to seeing you in the future and talking to you again next quarter.

Speaker #3: But as we look forward here, we are excited about the return to growth—return to growth in cash flows, return to growth in earnings, returning to growing our assets under management, whether that be through our excellent third-party management platform, acquiring stores with our partners or on balance sheet. We will continue to execute on that growth in a very disciplined way, laser-focused on creating shareholder value.

Speaker #3: So, thank you all. I look forward to seeing you in the future and talking to you again next quarter.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

Q2 2026 CubeSmart Earnings Call

Request DemoDemo

CubeSmart

Earnings