MALVERN, PA — CubeSmart (NYSE: CUBE) raised the midpoint of its 2026 earnings and operating guidance after improving occupancy and rental pricing supported second-quarter revenue growth, though higher property expenses pushed same-store net operating income lower.
The self-storage real estate investment trust now expects adjusted funds from operations of $2.54 to $2.60 per diluted share for 2026. Fully diluted earnings are projected at $1.58 to $1.64 per share.
CubeSmart indicated that first-half performance supported higher midpoints for its same-store revenue, net operating income and adjusted FFO forecasts. The company excluded potential future investment transactions because their timing and terms remain uncertain.
Second-quarter net income attributable to common shareholders increased to $89.6 million, or 39 cents per diluted share, from $83 million, or 36 cents per share, a year earlier.
Adjusted FFO declined to $143.1 million from $148.9 million. On a per-share basis, adjusted FFO fell 3.1% to 63 cents from 65 cents.
Same-store revenue increased 0.8%, supported primarily by higher rental rates, while operating expenses rose 4.4% because of increased personnel costs and property taxes. The imbalance caused same-store net operating income to decline 0.7%.
The same-store portfolio averaged 90.4% occupancy during the quarter and ended June at 91%, unchanged from a year earlier.
President and Chief Executive Officer Christopher P. Marr attributed the improving revenue trend to stronger new-customer pricing and occupancy.
“Second quarter results reflected continued momentum in operating fundamentals, highlighted by steady acceleration in same-store revenue growth,” Marr stated.
CubeSmart entered an agreement after the quarter to contribute 15 wholly owned stores to a joint venture with an affiliate of Heitman Capital Management at an agreed value of $197 million.
CubeSmart will receive cash and retain a 20% interest, while Heitman will hold the remaining 80%. The properties contain about 900,000 square feet across Connecticut, Georgia, North Carolina, Ohio, Texas, Utah and Virginia.
The transaction is expected to close during the fourth quarter. Marr described the venture as a source of capital for share repurchases while preserving capacity for future investments.
CubeSmart repurchased 1.1 million shares during the quarter for $42.5 million, paying an average of $38.96 per share. About 10.1 million shares remained authorized for repurchase as of June 30.
The company also expanded its unsecured revolving credit facility to $1 billion from $850 million, reduced its borrowing costs and extended the maturity to June 2030 from February 2027.
Average outstanding debt increased to $3.51 billion from $3.43 billion a year earlier. Interest expense rose to $30.3 million from $29.1 million as both debt balances and borrowing rates increased.
CubeSmart’s consolidated portfolio included 662 stores totaling 48.5 million rentable square feet at the end of June, with occupancy of 90.7%.
Its third-party management platform grew to 872 stores and 57.5 million rentable square feet after adding 25 properties during the quarter and 58 during the first half.
The company had one joint-venture development project under construction in New York. CubeSmart expects to invest $28 million in the property, including $8.7 million contributed through June, with an opening planned for the third quarter of 2027.
CubeSmart also paid a quarterly dividend of 53 cents per common share on July 15 to shareholders of record as of July 1.
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