CubeSmart has recently released its 10-Q report, providing insights into its financial performance and operations. The company operates as a self-managed and self-administered real estate investment trust (REIT) through CubeSmart, L.P. and its subsidiaries. As of March 31, 2024, CubeSmart owned or partially owned and consolidated self-storage properties in the District of Columbia and 24 states, with a total of 615 properties containing approximately 44.4 million rentable square feet.
In ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CubeSmart reported that it derives its revenue primarily from customers leasing space at its stores and fees earned from managing stores. The company's operating results depend on its ability to retain existing customers, lease available self-storage cubes to new customers, and maintain or increase pricing levels. CubeSmart also noted that it experiences seasonal fluctuations in store occupancy levels, with higher occupancy during the summer months due to increased moving activity.
The company highlighted that its results of operations are sensitive to changes in overall economic conditions impacting consumer spending, employment levels, business conditions, inflation, deflation, interest rates, and other economic factors. CubeSmart emphasized its focus on maximizing internal growth opportunities and selectively pursuing targeted acquisitions and developments of self-storage properties.
CubeSmart's unaudited consolidated financial statements include all accounts of the company and its majority-owned and/or controlled subsidiaries, with significant intercompany accounts and transactions eliminated in consolidation. The company records self-storage properties at cost less accumulated depreciation and reviews long-lived assets for impairment when declines in occupancy and operating results indicate potential impairment.
Additionally, CubeSmart accounts for its investments in unconsolidated real estate ventures under the equity method of accounting, recording investments initially at cost and subsequently adjusting for equity in earnings (losses) and cash contributions, less cash distributions and impairments. The company reported no impairment losses related to its investments in unconsolidated real estate ventures during the three and six months ended June 30, 2024 or 2023.
CubeSmart's results of operations were discussed in relation to its same-store portfolio, which consists of stores owned and operated on a stabilized basis. As of June 30, 2024, the company owned 598 same-store properties and 17 non same-store properties, with the non same-store property portfolio results including acquisitions and dispositions.
The market has reacted to these announcements by moving the company's shares 1.9% to a price of $48.72. If you want to know more, read the company's complete 10-Q report here.
