1. As of March 31, 2020 3. Period ending December 31, 2019 2. Market value of common equity and book value of debt as of December 31, 2019 4. Annual dividends declared in period ending December 31, 2019
Moved Received Grew the portfolio by over Rebranded Arrival of current headquarters to Investment Grade $1.6 billion through management suburban company as credit rating from acquisitions and team Philadelphia CubeSmart Moody’s and S&P developments Acquired United Acquired 22 Began capital Stor-All to establish property Storage 3 rd Party Won 1 st ISS industry Opened 1000 th Deluxe portfolio, U-Store-It recycling program primarily in NYC, award for Best CubeSmart branded Initial Public to improve Management location Offering portfolio quality platform for $560 million Customer Service 1. Market value of common equity and book value of debt as of October 22, 2004 2. Market value of common equity and book value of debt as of March 31, 2020
Self-storage has been a top performing REIT sector through all phases of the economic cycle with 10-year returns averaging 17% 1 Greatest diversity of customer base of any REIT Sector, averaging over 650 customers per store Month-to-month rentals allow for rapid repricing in response to changing economic conditions High margins and low cap-ex requirements drive more cash flow to the bottom line with sector average NOI margins of 70.6% 2 1. Source: NAREIT Annual Returns by Property Sector 2. Full-year 2019 average same-store margins for four largest publicly traded self-storage REITs by market cap
• Multiple ways to continue • As a designated “essential serving our customers with business” all stores 100% of rentals now remained open contactless • Same-store occupancy • Launched SmartRental TM , our ended May at 93.1% • Up 10 bps from May 2019 fully online rental process • SmartRental TM usage now over • Rent collections in May 20% of all rentals were 93% • Paused delinquency process • Due to market uncertainty, and customer rate increases guidance was withdrawn in mid-March • Began to resume traditional operational processes on a state-by-state basis in mid-May as they reopened and regulations allowed
• Chris has been CEO of CubeSmart since January 2014 • Currently the longest-tenured CEO in the sector • Joined the company in 2006, and previously served as Chief Operating Officer, Chief Investment Officer, and Chief Financial Officer • Currently serves on the board of NAREIT • Tim has been CFO of CubeSmart since November 2008 • Joined the company in 2006 and previously served as Chief Accounting Officer • Prior to joining CubeSmart, Tim was employed by Brandywine Realty Trust in a variety of roles, including Chief Accounting Officer, Treasurer, and VP of Finance • Jeff has been Senior Vice President, Chief Legal Officer and Secretary since February 2009 • Prior to joining CubeSmart, Jeff served as SVP and Associate General Counsel of Gramercy Realty and as an associate with Morgan, Lewis & Bockius, LLP • Joel has been Chief Operating Officer since February 2020 • Joined the company in 2010 and previously served as SVP of Operations, VP of Marketing, and Director of Revenue Management • Previous experience in roles at United Store-All Management, Extra Space, and Storage USA • Previously served on the board of the Self Storage Association
• Execution on our core operations drove strong organic growth • Continued to grow the portfolio through all available avenues to maximize risk-adjusted returns for shareholders, including meaningful cash flow growth
Attracting the Proprietary Building a Award winning greatest share of systems and foundation of customer service potential demand processes to proprietary platform delivers through dynamically solutions to an unparalleled continually generate pricing improve experience evolving digital decisions in order operation encouraging platforms paired to maximize the efficiency and retention and with targeted value of each customer advocacy traditional customer interactions marketing efforts
• Website AB Testing • Optimized customer rate • SEO-focused content creation • Conversion funnel analysis and • Targeted local marketing efforts increase model • Award winning customer service • Exploratory marketing channels optimization by a team of data • Sophisticated brand • Internal data warehouse and scientists • Fully-integrated conversion- development campaigns analytics tools to better driven sales center understand customer behavior • SmartRental TM , our fully online • Automated paid search bidding rental process model • 3 rd generation proprietary • Hive, our proprietary point-of- sale platform is the foundation pricing optimization system • Mobile-optimized website for operational enhancements
1. Reported average full-year metrics for the other three largest publicly-traded storage REITs by market cap from January 1, 2014 through December 31, 2019
Boston 2% NY/NJ/LI 21% Chicago Staten Island Phila. 7% 0.4% 3% Wash DC Queens 7% North NJ 4% 5% Brooklyn Long Island So. CA 3% 2% 3% Westchester Bronx 2% 5% Atlanta Phoenix 3% 3% Dallas 6% Houston Orlando States with Owned Stores 2% 2% States with Managed Stores Only Miami Percentages represent % of total same- 9% store revenue by MSA 1. As of March 31, 2020
1. Source: Bank of America Merrill Lynch Research Report dated January 9, 2019 2. Source: Evercore ISI Research Report dated November 13, 2019
NYC square foot per High population density Renters boost demand creates a strong capita is substantially as renters are 3.9x demand profile around lower than the industry more likely to move average our stores than homeowners 2 1 1 00 1. Source: CubeSmart 3-mile portfolio demographics 2. CubeSmart internal market research
• In 2017, NYC passed a zoning amendment that required a special permit for self-storage to be built in the “Industrial Business Zones” • The IBZs reduced the land that was previously zoned by- right for storage by 49% 1 • NYC recently excluded all self-storage development from eligibility under the Industrial & Commercial Abatement Program for all new projects that don’t have permits as of July 1 st (ICAP remains available for all other product types) • The ICAP provides property tax abatements from 10-25 years on the value of all improvements • These abatements are critical for attractive returns on development in the boroughs given high land cost 1. Source: New York City Department of City Planning
Focus on markets with strong demographics to drive long- term value Build and acquire Class-A properties in core infill locations by leveraging local developer expertise Invest with partners to expand national footprint and improve returns for lease-up opportunities Expand scale of platform, generate fee revenue and build industry relationships 1. For the period January 1, 2015 through December 31, 2019 3. Net increase in stores under management between January 1, 2015 through 2. Valuation at 100% of venture acquisition price December 31, 2019
Our development projects are 11 Projects 3 Projects 2 Projects 2 Projects projected to create over $310 million in value at stabilization 1 2 Projects 1 Project 1 Project 1 Project 1. Proforma based on stabilized NOI projections and current market cap rates
Strong returns through levered structures and promotes Opportunity to purchase assets at the end of the hold period Fee revenue increases our return profile Market and cash flow diversification Mitigate dilution of lease-up properties 35 properties 21 properties 13 properties 14 properties $315.7 million Total $261.3 million Total $87.5 million Total $135.3 million Total CUBE Ownership: CUBE Ownership: CUBE Ownership: CUBE Ownership: 50% 20% 10% 10%
• Our participation as a 10% owner in venture accomplished a number of strategic goals: • Expanded relationship with our JV partner • Participated in portfolios with a mix of assets • Boosted returns through fee income • Shared in value creation through promoted returns • Acquired stores that fit our investment criteria • In 2019, we sold 50 of the assets unlocking our promoted interest • We reinvested our proceeds at an attractive all- Acquisition Portfolio (18) in yield, purchasing our partner’s interest in 18 Sale Portfolio (50) stores that best fit our strategy
stores on the CubeSmart management has grown to the second largest platform 1 national management platform 4 as we continue to expand our national footprint and brand while increasing efficiency Fees from the management business contribute anagement fees 2 meaningfully to FFO growth The management platform serves as an acquisition pipeline acquisitions for quality assets which allows us to leverage existing from relationships and our experience operating the stores, platform 3 resulting in lower investment risk 1. As of March 31, 2020 3. Since 2009 2. 12 Months Ended December 31, 2019 4. Source: 2020 Self-Storage Almanac
CubeSmart’s Baa2 senior unsecured rating reflects the REIT’s good financial flexibility and modest use of leverage. - Moody’s Investors Service 1. Source: Company Filings, as of December 31 of each stated year 2. Calculated as annual EBITDA / Interest Expense
Recommend
More recommend
