MALVERN, PA — CubeSmart (NYSE: CUBE) has unveiled its operating results for the first quarter ended March 31, 2024. The Pennsylvania-based self-storage company reported a decrease in same-store net operating income (NOI), attributable to an increase in operating expenses. Despite this, the company hopes to make a turnaround by targeting the upcoming summer rental season.
The CEO of CubeSmart, Christopher P. Marr, expressed his enthusiasm over these positive trends in the company’s urban markets. Marr stated that their team is motivated and their marketing campaigns are intensifying, which will help in attracting customers across myriad channels. The company’s synergy will likely play a significant role in its performance in the forthcoming rental season.
CubeSmart reported diluted earnings per share (EPS) of $0.42, with adjusted funds from operations (FFO) per diluted share of $0.64. Interestingly, it showed an average same-store occupancy of 90.2% during the quarter. The company ended the first quarter with a slightly higher occupancy of 90.4%.
The company reported a decrease in net income compared to the same period last year, from $97.6 million to $94.5 million, leading to a diluted EPS fall from $0.43 to $0.42. The FFO as adjusted per share also saw a dip from $0.65 to $0.64.
Despite these figures, CubeSmart continued its growth strategy with the acquisition of two stores amounting to $20.2 million during the first quarter. The company further expanded its third-party management platform, adding 68 stores, bringing the total managed store count to 860.
As part of its development activity, CubeSmart has partnered with developers for the construction of new self-storage facilities. The company expects to invest a total of $94.2 million in four joint venture development properties located in high-barrier-to-entry locations in New Jersey and New York.
The company’s same-store portfolio continues to represent a significant part of CubeSmart’s overall operation, with 598 stores accounting for 96.9% of the aggregate rentable square feet of the company’s consolidated stores.
To boost its revenue, the company has focused on increased management fees and customer storage protection plan participation at their owned and managed stores. This strategic move, coupled with revenues generated from recently acquired properties, resulted in a revenue increase of $4.9 million in the first quarter of 2024.
The Company’s Chief Financial Officer, Tim Martin, expressed satisfaction with the performance of the quarter, attributing success to the growth of their third-party platform. He optimistically added that the company is on track with its financial expectations, maintaining its initial guidance ranges.
The financial outlook for 2024 is promising, with estimated fully diluted earnings per share of between $1.69 and $1.79 and a fully diluted FFO per share, as adjusted, of between $2.59 and $2.69.
While financial experts will closely watch CubeSmart’s performance in the forthcoming summer rental season, it is clear that the company is pulling all stops to ensure growth and profitability in a demanding market.
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