Chris Marr, president and CEO of CubeSmart, expects the “fairly muted” environment for self-storage development to continue for a while. However, he says, a rise in self-storage supply could come in 2023 or 2024.
Yet Marr believes any near-term uptick in supply will be “manageable” for the self-storage industry, he told Wall Street analysts Nov. 5 during a call to discuss the REIT’s third-quarter financial results.
“I think we’ve demonstrated as a sector that we can absorb it, and it’s not a doomsday scenario and we’ll be just fine,” said Marr, adding that it’s “incredibly challenging” to develop new facilities. Marr cited supply chain issues for raw materials, inability to retain labor and a “rational lending environment” as factors keeping a lid on self-storage development.
CubeSmart expects to spend just $96.1 million this year on opening brand-new facilities. As of Sept. 30, the REIT had invested another $39.6 million on three under-construction properties being developed through joint ventures.
Meanwhile, CubeSmart purchased two wholly owned facilities for a total of $33 million during the third quarter and another three facilities in joint ventures for just under $90 million. On top of that, $85.8 million in wholly owned facilities are under contract, and $66.3 million of facilities are under contract through joint ventures.
Other highlights of the third-quarter financial results of Malvern, PA-based CubeSmart’s include:
- The REIT introduced its SmartView mobile app, which provides metrics to customers of CubeSmart’s third-party management platform.
- Same-store revenue climbed 15.6% compared with the same time last year.
- Same-store NOI jumped 21.1% compared with the same time last year.
- Same-store occupancy averaged 95.6%.
- The REIT added 33 facilities to its third-party management platform.
- The 2021 projection for same-store revenue growth increased from a range of 10.25% to 11.25% to a range of 12.5% to 13.50%.
- The 2021 projection for same-store NOI growth increased from a range of 13% to 14% to a range of 16.5% to 17.5%.
- The 2021 projection for same-store expense growth narrowed from a range of 4% to 5% to a range of 4% to 4.75%.