CubeSmart CEO Chris Marr is brimming with optimism about the direction of the self-storage industry.
Pandemic-driven demand and a robust housing market have “absolutely created the best environment I’ve seen” in the self-storage sector, Marr told Wall Street analysts during CubeSmart’s July 30 second-quarter earnings call. And while that type of environment is new, “I don’t see it coming to some sort of screeching halt,” he added.
“I think this positive momentum continues. We do continue to have a belief that some level of more typical seasonality will eventually return to the industry, but have yet to see that occur,” Marr said.
How long will the hot streak last?
Marr predicts that CubeSmart’s solid operating results will continue into at least early 2022, with a strong summertime rental season perhaps extending the streak until next August or September.
To say that Marr’s self-storage REIT is reaping the rewards of a healthy self-storage market is a vast understatement.
During the second quarter, CubeSmart’s same-store revenue soared by 14% — the highest quarterly growth number in the company’s history — while same-store NOI skyrocketed by 17.6%. Meanwhile, CubeSmart closed the second quarter with a same-store occupancy rate of 96.1%, up from 93.7% at the same point in 2020.
“Safe to say that it’s certainly a great time to be in the self-storage business,” Tim Martin, chief financial officer of Malvern, PA-based CubeSmart, told Wall Street analysts.
Given the stellar performance so far this year, CubeSmart now expects same-store revenue to climb 10.25% to 11.25% in 2020, compared with the previous forecast of 4.75% to 5.75%.
Other highlights of CubeSmart’s second-quarter results include:
- CubeSmart also has raised its outlook for same-store NOI growth this year: from a range of 5.25% to 6.25% to a range of 13% to 14%.
- Same-store revenue growth is projected to remain at 4% to 5%.
- The addition of 45 facilities to the third-party management program.
- Two facility acquisitions for a total of $34.1 million.