Like its public peers, self-storage operator CubeSmart experienced another quarter of revenue decleration, which CEO Chris Marr said is likely to continue through the rest of the year.
“The magnitude quarter-by-quarter is going to be highly influenced by what happens as we move into the busy season,” Marr said during the company’s conference call with industry analysts.
Same-store revenue at CubeSmart grew 5.4 percent during the first quarter, compared to 8.4 percent revenue growth during the first quarter of last year. CubeSmart experience deceleration in most of its markets with the exception of Chicago and Phoenix.
Third-party bump
Deceleration isn’t just hitting the storage REITs, but private operators as well. That’s led to increased interested in CubeSmart’s third-party management platform.
“We’re seeing a bit of an uptick in interest from those existing property owners as their performance has slowed due to either new supply or the fact that they’ve maxed out on the occupancy side,” Marr said.
CubeSmart added 44 facilities to its management platform, 24 of which were existing facilities and 20 were new developments. The company now manages a total of 356 stores for third-party operators.
“I expect that we would continue to see new properties coming into the program…at a fairly good clip through rest of year,” Marr said.
Q1 snapshot
CubeSmart generated total revenue of $133 million during the quarter, up 11.9 percent compared to the previous year. Net income rose almost 59 percent with a total of $25.2 million earned.
The company increased occupancy compared to the first quarter last year, with an average of 92.2 percent during the period, compared to 91.8 percent last year. Realized annual rent rose 4.9 percent to a total of $15.78 per square foot.
