MALVERN, PA — Self-storage real estate investment trust CubeSmart (NYSE: CUBE) reported second-quarter results that reflect steady operational performance and improved financial guidance, despite modest year-over-year declines in some key metrics.
For the quarter ended June 30, 2025, CubeSmart reported diluted earnings per share of $0.36, down from $0.41 in the same period last year. Net income attributable to common shareholders was $83.0 million, compared to $94.0 million a year earlier.
However, adjusted funds from operations (FFO), a key industry performance metric, increased slightly. FFO, as adjusted, rose to $148.9 million, or $0.65 per diluted share, up from $146.0 million and $0.64 per share in the second quarter of 2024. This 1.6% increase came despite some operational pressure.
“Stabilizing operating fundamentals coupled with tighter expense control generated FFO per share at the high end of our guidance range,” said CFO Tim Martin. “A more constructive environment positions us to raise the midpoints of our full-year FFO per share and same-store ranges.”
Operational Performance and Market Conditions
Same-store net operating income (NOI) across 606 stores declined 1.1% year over year, driven by a 0.5% dip in revenues and a 1.2% increase in expenses. Same-store physical occupancy averaged 90.6% during the quarter and ended June at 91.1%, slightly below last year’s 91.8%.
CEO Christopher P. Marr noted that rental activity improved compared to last year’s second quarter. “Fundamentals have continued to stabilize, supported by a lessening impact of new supply, better seasonal pricing to new customers, and the continued health of the existing customer,” he said.
Total revenue increased $16.1 million over Q2 2024, supported by growth from recent acquisitions and new developments. Property operating expenses also rose by $5.9 million over the same period. Consolidated portfolio occupancy stood at 90.8% at the end of the quarter.
Investment and Development Activity
No new store acquisitions were made during the second quarter. However, earlier in the year, CubeSmart completed a $452.8 million acquisition of the remaining 80% interest in HVP IV, a 28-store joint venture in which the company previously held a 20% stake.
On the development front, CubeSmart continues to pursue high-barrier-to-entry markets. As of June 30, the company had two joint-venture projects under construction in New York, with $27 million already invested out of a planned $36.9 million. Both locations are expected to open in the third quarter.
Third-Party Management Expansion
CubeSmart’s third-party management platform continues to expand. The company added 30 stores during the second quarter, bringing its total to 873 managed locations representing 56.6 million rentable square feet. Over the first half of 2025, 63 new stores joined the platform.
Capital and Financing Activity
The company did not issue any equity through its at-the-market program during the second quarter. As of June 30, 13.5 million shares remained available for future issuance.
Interest expenses rose sharply—up $6.3 million year over year—to $29.1 million. This was attributed to higher debt levels and rising interest rates. The average debt balance increased from $2.96 billion to $3.43 billion, while the average effective interest rate climbed from 3.01% to 3.32%.
Dividend and Guidance
CubeSmart paid a quarterly dividend of $0.52 per share on July 15 to shareholders of record as of July 1. The company reaffirmed its commitment to delivering shareholder value through consistent dividends and prudent capital allocation.
Looking ahead, CubeSmart raised its guidance midpoint. The company now expects full-year 2025 diluted EPS to range between $1.44 and $1.50, and adjusted FFO per share to land between $2.54 and $2.60. These projections exclude the impact of any speculative future transactions.
With strong third-party growth, stable occupancy, and tighter financial controls, CubeSmart appears well-positioned to navigate a shifting market while continuing to return value to shareholders.
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