Investor Presentation May 2 2015 015
The forward-looking statements contained in this presentation are subject to various risks and uncertainties. Although the Company believes the expectations reflected in such forward- looking statements are based on reasonable assumptions, there can be no assurance that its expectations will be achieved. You should not rely on our forward-looking statements because the matters they describe are subject to known and unknown risks and uncertainties that could cause the Company’s future results, performance, or achievements to differ significantly from the results, performance, or achievements expressed or implied by such statements. Such risks are set forth under the captions “Item 1A. Risk Factors” and “Forward- Looking Statements” in our annual report on Form 10-K and under the caption “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” (or similar captions) in our quarterly reports on Form 10-Q, and described from time to time in the Company’s filings with the SEC. Forward-looking statements are not guarantees of performance. For forward-looking statements herein, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company assumes no obligation to update or supplement forward- looking statements that become untrue because of subsequent events. 2
Self-storage R Se REIT with e expan ansiv ive natio ional p al plat atform Facilities 1 Owned Managed 181 609 428 Owned Portfolio by Market Boston 5 CT Other 21 Northeast NY Total Market Chicago 11 49 Other West 37 Ohio 15 Cap 2 Philadelphia 20 CO/UT 15 13 $5.3 billion Inland Balt/DC Empire 23 16 Tenn So. CA Other AZ/LV 6 12 Southeast 32 Headquarters 6 Atlanta Other Malvern, PA 16 Midwest 10 Major TX 48 Other FL 54 Miami 19 1) Property count as of March 31, 2015. 3 2) Market value of common and book value of preferred equity and debt as of March 31, 2015.
Inno nnovative p e platforms, d discipline ned growth, a and nd prud uden ent fund funding ng h have e com ombined t to g o genera rate si significant v value f for sha or shareholders rs Cumulative Total Returns 1 1) Returns through March 31, 2015. Self-Storage REITs represent a straight average of cumulative total returns for the four 4 largest publicly traded storage REITs.
Internal al Maximize p e portfo folio v value e through c conti tinued f focu cus s Grow Growth on customer er s service a e and oper erat ational al a advancem emen ent External al Continue nue to to prudentl tly y build ild a portfolio io o of h hig igh- Grow Growth qu qual ality as asset ets, w with a a fo focus o on tar argeted mar arket ets Finance g growth b by y acce ccess ssing th the f full a array of ca capi pital Finan ancia ial l sources a availa ilable le t through a h a BBB/B /Baa2 aa2 i inves estmen ent g grad ade Streng ength bal alance s sheet eet 5
ults 1 2015 2015 First Qu t Quarter S Same-Store R e Res esul Internal al Maximize p e portfo folio v value e through c conti tinued f focu cus s Re Reve venue Expe xpense ses NOI NOI 2 Aver erag age O e Occupan ancy on customer er s service a e and oper erat ational al a advancem emen ent Grow Growth +7.0 +7.0% +2.0 +2.0% +9.5 +9.5% 90.7 90.7% (+180 b +180 bps YO YOY) Y) nce 3 2015 S 2015 Same-Store G e Gui uidanc Mainta tain BBB/B /Baa2 aa2 i inves estment g grad ade b e balan ance sheet et External al Continue nue to to prudentl tly y build ild a a portfolio io of OI 2 Rev evenue enue Expens enses es NOI that at affo affords broad ac acces ess t to t the fu full ar array o of c f cap apital high gh-quality a ty assets ts, w with a a fo focus o on tar arget eted Growth Grow source ces +5.25% t 25% to +6.25% 25% +3. +3.0% to to +3. 3.75% 75% +6.25% t 25% to +7.25% 25% mar arket ets Revenue growth driven increasingly by effective rent growth Finan ancia ial l Expense growth is expected to remain inflationary, Streng ength except for continued pressure on real estate taxes 1) Financial data from January 1, 2015 through March 31, 2015 2) Net operating income, or revenues less property operating expenses. Please refer to CubeSmart’s public filings for a detailed 6 explanation of NOI and how it reconciles to a GAAP measure. 3) As provided in the Company’s Earnings Release dated April 30, 2015
Customer Internet Revenue Service Management Marketing Enh nhanc thr hrough p ncing ng t the Customer Referrals prop Marketing Efforts e cus OFFICE 10 27 52 9 EXIT 37 36 38 39 055-056 54 53 roprietary sy 8 35 34 33 32 MECH ROOM 7 323 322 321 296 295 238 193-194 149 148 106 Management 324 319 195 150 366 325 318 196 Attract 317 300 197 316 301 198 153 EXIT 315 302 380 379 378 377 381 362 314 303 Inventory ustomer 405 382 361 330 313 304 156 404 383 360 331 312 305 157 97 96 95 94 75 403 384 359 332 311 306 158 402 385 358 333 310 204 159 401 386 357 334 309 205 160 ENTRY 353 354 355 356 278 279 280 282 283 252 206 207 161-62 118 78 79 400 348 335 271 225 134-35 93 80 399 347 336 270 224 398 389 346 269 223 214 169 132-33 397 390 345 268 222 170 396 391 344 267 262 221 171 130-131 395 392 343 263 220 217 394 393 342 341 219 218 129 501 513 ction EXIT 780 777 736 735 734 733 657 655-656 617 581 697 615 837 781 776 738 694 619 782 620 836 775 739 693 613-14 835 774 730 692 621 834 773 691 622 611-12 833 785 772 742 700 690 662 623 ENTRY 832 786 787 788 789 744 745 746 747 702 703 663-664 665 625 587 628 609 574 831 794 771 752 726 688 668 629 607-08 709 on 830 795 687 669 630 710 829 796 686 605-06 828 797 768 755 723 711 685 827 798 756 722 684 633 603-04 712 er ex 799 721 683 634 800 765 720 713 635 601-02 824 801 764 759 719 714 636 763 760 715 676 637 599-600 823 762 761 716 677 638 - ECONOMY UNIT - NORMAL UNIT - PREMIUM UNIT 805 806 807 810 811 812 813 552 553 554 556 557 558 562 541 820 ENTRY ENTRY EXIT syst exper stems a Attractive Discount erienc Sales Center Reser Website s and proc nce ervation e at a process on all points o sses Email Confirmation Store Managers Attractive Offer of eng Rental f engagem al emen Customer Center ent In-Place Rate Social Media Engagement Increases Continue nued nt 7 7
Adjus usting ng t to ev evolving ng marketing ng ec ecosys ystem ems and nd eng engagem emen ent m med ediums Growing complexity of digital marketing platforms (i.e. social media, customer reviews, and search engine algorithms); Customers Website maturation; tion engage through a Internet ad spend multitude of devices; predominant marketing cati personalized customer stica budget item; mobile an experiences increasingly important Sophisti traffic driver Early online advertising; websites accessed via desktop computers and Yellow Page serve as digital flyers advertising; engagement primarily via land-line phone and in-person Time 8
Optimizing ng m marketing ng effo efforts and nd effi efficien ently attracting ng cus ustomer ers throug ugh us use o e of i f ind ndus ustry-le lead adin ing a analy alytics 9
Suppleme menti ting i g inte ternet m t marketi ting initi tiati tive ves with a a t traditi tional p platform to take a e advantage o e of f market d dep epth a and nd to o rea each c cus ustomers offl ffline Out-of-home placements in markets with high store concentration Hyper-targeted direct mail campaigns in select markets Selective local marketing efforts to target specific customer segments 10
Advanced data a ana nalytics t to o per ersonalize ex e exper erienc nces es fo for ea each c cus ustomer Custom Experience 1 Custom Experience 2 Custom Experience 3 Continued focus on capturing and leveraging insights about customers to create customized experiences that increase engagement and conversion Understanding the motivations of different customers and engaging with them through methods they trust 11
Rev evenue enue Mana nagem ement L Land ndscape Historically, advanced revenue management techniques have boosted revenue in a number of supply-constrained industries, beginning with airlines and then moving on to hotels Multi-family represents the closest analogy, but the unpredictable lengths of stay for self storage customers adds additional complexity 12
Fund undamental Pricing ng I Issue ue Pricing optimization requires consideration of a multi-dimensional demand landscape and dynamic capacity constraints Optimal Pricing Pricing Decisions Substitutability Competition Timing / Other Capacity / Economic Outcomes 13
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