8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT TO

SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 27, 2020 (October 21, 2020)

CUBESMART

CUBESMART, L.P.

(Exact Name of Registrant as Specified in Its Charter)

Maryland (CubeSmart)	001-32324	20-1024732
Delaware (CubeSmart, L.P.)	000-54462	34-1837021
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5 Old Lancaster Road

Malvern,

Pennsylvania

19355

(Address of Principal

Executive Offices)

(610) 535-5000

(Registrant’s telephone number, including area code)

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Shares, $0.01 par value per share, of CubeSmart	CUBE	New York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

Emerging Growth Company (CubeSmart) ☐

Emerging Growth Company (CubeSmart, L.P.) ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

CubeSmart ☐

CubeSmart, L.P. ☐

Item 3.02    Unregistered Sales of Equity Securities.

On October 21, 2020, CubeSmart, L.P. (the “Operating Partnership”), the operating partnership through which CubeSmart (“CubeSmart”, the “Company” or “we”) owns all of its assets and conducts its operations, entered into a purchase and contribution agreement (the “Purchase Agreement”) to acquire a portfolio of eight open and operating self-storage properties from certain affiliates of Storage Deluxe that contain an aggregate of approximately 780,425 rentable square feet. The properties are located in Brooklyn, NY, Long Island City (Queens), NY, Flushing (Queens), NY, College Point (Queens), NY and Bronx, NY. We refer to this acquisition as the “Storage Deluxe Acquisition.”

As discussed further in Item 8.01 of this Current Report, which Item 8.01 is incorporated herein by reference, approximately $183.7 of the purchase price for the Storage Deluxe Acquisition will be payable in the form of common units of the Operating Partnership, designated as “Class B Units.” Subject to a restriction of 12-months from the date of issuance of the Class B Units, a holder of Class B Units may tender its Class B Units for redemption by the Operating Partnership for a cash amount per unit equal to the market value of an equivalent number of common shares of the Company. The Company has the right, but not the obligation, to assume and satisfy the redemption obligation of the Operating Partnership by issuing one common share in exchange for each unit tendered for redemption.

The Class B Units are being offered and will be sold without being registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Act”), in reliance upon the exemption under Section 4(2) of the Act. Each of the Storage Deluxe affiliates has represented that it is an “accredited investor,” as that term is defined in Rule 501(a) of Regulation D under the Act.

Item 7.01    Regulation FD Disclosure.

On October 27, 2020, the Company and the Operating Partnership (i) issued a press release announcing the execution of the Purchase Agreement, a copy of which press release is furnished as Exhibit 99.1 hereto and (ii) posted to the Company’s corporate website a slide presentation that may be used in presentations to investors from time to time, a copy of which slide presentation is furnished as Exhibit 99.2 hereto.

Item 8.01 Other Events.

As stated above, on October 21, 2020, the Operating Partnership entered into the Purchase Agreement with respect to the Storage Deluxe Acquisition for an aggregate purchase price of approximately $540 million. Consideration for the properties in the Storage Deluxe Acquisition will consist of approximately $201.7 million payable in cash, approximately $183.7 million payable in Class B Units, and the assumption of approximately $154.6 million of existing fixed-rate secured debt (the “Assumed Debt”). In connection with the execution of the Purchase Agreement, we have deposited $27.0 million in escrow as earnest money. This escrow amount (excluding interest thereon) will be credited towards payment of the purchase price at the closing of the initial tranche of the acquisition. We expect to finance the balance of the cash portion of the purchase price at closing through cash on hand and borrowings under our unsecured revolving credit facility. The Class B Units issuable as part of the purchase price will be valued at the greater of (x) the average share price per common share of CubeSmart’s common shares on the New York Stock Exchange during the 90 days prior to seven (7) days prior to closing of the initial tranche of the acquisition, and (y) the consensus net asset value of the Operating Partnership as reported by SNL (“Spot NAV”) as of seven (7) days prior to such closing. We are not an affiliate of Storage Deluxe or any of its affiliates, and the terms of the Storage Deluxe Acquisition were determined through arm’s-length negotiation.

We expect to consummate the acquisition in two tranches during the fourth quarter of 2020. We anticipate closing on the purchase of six properties, with a purchase price of approximately $432 million, including the assumption of the Assumed Debt, immediately following completion of the loan assumption process. We also expect to consummate the closing on the remaining two properties, with a purchase price of approximately $108 million, during the fourth quarter of 2020.

The consummation of the Storage Deluxe Acquisition is subject to satisfaction of certain conditions, primarily with respect to certain title requirements for the properties, receipt of estoppels from lessors related to the leases to be assigned, deliverables from the association and the board of managers with respect to a condominium property, consents to the assumption of the Assumed Debt by the lenders of such Assumed Debt and other customary closing conditions. We cannot assure you that we will be able to complete the Storage Deluxe Acquisition on the terms contemplated, or at all.

We may elect to terminate the acquisition without penalty if consent of lenders to our assumption of the Assumed Debt has not been received by December 15, 2020. We may also elect to terminate the Purchase Agreement without penalty if certain title deficiencies are not remedied by the sellers. In the event that the sellers materially breach their obligations to consummate the Storage Deluxe Acquisition, we may either (i) terminate the Purchase Agreement, in which case we will be entitled to the return of the earnest money or (ii) specifically enforce the Purchase Agreement within 30 days of the breach. If the sellers breach any of their representations or

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warranties, our sole and exclusive remedy is to pursue a claim against the sellers within 30 days of closing for actual damages, which may not exceed $1.25 million, subject to minimum damages of $25,000 and other limitations. We have the right to terminate the Purchase Agreement if the sellers intentionally or willfully breach or default on certain of their obligations and the breach or default results in the failure of the lenders to approve the assumption of the Assumed Debt. We will have no right to terminate the Purchase Agreement if any of the properties are damaged or destroyed by fire or other casualty. If we breach our representations and warranties or fail to comply with our covenants in a material respect, the sellers may terminate the Purchase Agreement, in which case any remaining earnest money that has not been used in a prior closing will be paid to them as liquidated damages.

Cautionary Notice Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management’s current expectations, assumptions and beliefs. Forward-looking statements can often be identified by words such as “expect,” “intend” and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding the expected closing of the Storage Deluxe Acquisition, if at all. Forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and the Company’s other filings with the Securities and Exchange Commission for a more complete discussion of the risks and other factors that could affect any forward-looking statement. Except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this report.

Item 9.01    Financial Statements and Exhibits.

(a)    Not applicable.

(b)    Not applicable.

(c)    Not applicable.

(d)    Exhibits.

Exhibit No.	Description
99.1	Press Release dated October 27, 2020.
99.2	Slide Presentation dated October 2020.
104	Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CUBESMART
Date: October 27, 2020	By:	/s/ Jeffrey P. Foster
	Name:	Jeffrey P. Foster
	Title:	Chief Legal Officer & Secretary
	CUBESMART, L.P.
Date: October 27, 2020	By:	CUBESMART, its general partner
	By:	/s/ Jeffrey P. Foster
	Name:	Jeffrey P. Foster
	Title:	Chief Legal Officer & Secretary

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EX-99.1

Exhibit 99.1

CubeSmart Announces Agreement to Acquire $540 Million Self-Storage Portfolio

Malvern, Pennsylvania – (Globe Newswire) – October 27, 2020 – CubeSmart (NYSE: CUBE), today announced that it has entered into an agreement to acquire a portfolio of eight self-storage properties in New York City from Storage Deluxe for $540 million. The portfolio, currently professionally managed by and branded CubeSmart, consists of 780,425 rentable square feet located in Brooklyn, Queens, and the Bronx, NY.

“This exciting transaction represents the culmination of our ten-year strategic plan to establish our leading market position in New York City,” commented Christopher P. Marr, President and Chief Executive Officer. “The acquisition of this portfolio expands our presence in attractive submarkets within each outer borough that have positive demographic trends and a strong growth outlook. The timing of this opportunity allows us to take advantage of strong fundamental trends for self-storage in the boroughs.”

Consideration for the acquisition will consist of approximately $201.7 million payable in cash, approximately $183.7 million payable in Class B Operating Partnership Units, and the assumption of approximately $154.6 million of existing fixed-rate secured debt. The Company expects to finance the cash portion of the purchase price at closing through cash on hand and borrowings under the unsecured revolving credit facility.

Steven J. Guttman, Founder and Chairman of Storage Deluxe, commented, “When I began investing in self-storage in 1998, I identified New York City as the best market in the country and, over twenty years later, I still believe that. Over the last ten years we have been a seller, customer and partner of CubeSmart, and with this transaction we will add investor. CubeSmart has established a strong position in the New York City market which has been further solidified due to recent zoning restrictions. CubeSmart’s impressive operating platform, coupled with their position as a market leader in New York, makes us highly optimistic about the future performance of our investment in CUBE.”

The transaction is expected to close in two tranches, both in the fourth quarter of 2020, and is subject to customary closing conditions, including lender consent with respect to the debt that will be assumed. No assurance can be given that the transaction will be consummated on contemplated terms, or at all. Additional information on the transaction can be found in the presentation posted on our investor relations website at investors.cubesmart.com.

About CubeSmart

CubeSmart is a self-administered and self-managed real estate investment trust. CubeSmart owns or manages 1,256 self-storage properties across the United States. According to the 2020 Self Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the U.S.

The Company’s mission is to simplify the organizational and logistical challenges created by the many life events and business needs of its customers – through innovative solutions, unparalleled service, and genuine care. The Company's self-storage properties are designed to offer affordable, easily accessible, and secure storage space for residential and commercial customers.

For more information about business and personal storage or to learn more about the Company and find a nearby storage property, visit www.cubesmart.com or call CubeSmart toll free at 800-800-1717.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management’s current expectations, assumptions and beliefs. Forward-looking statements can often be identified by words such as “expect,” “intend” and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding the expected closing of the Storage Deluxe Acquisition, if at all. Forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement, which risks, uncertainties and assumptions include, but are not limited to, the ability of the parties to consummate the proposed transaction; satisfaction of closing conditions to the consummation of the proposed transaction; and CubeSmart’s ability to realize anticipated benefits of the proposed transaction. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and the Company’s other filings with the Securities and Exchange Commission for a more complete discussion of

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the risks and other factors that could affect any forward-looking statement. Except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this press release.

Company Contact:

Josh Schutzer

Senior Director, Finance

(610) 535-5700

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EX-99.2

Exhibit 99.2

/ / Cu Storage Deluxe Portfolio Acquisition October 2020

Safe Harbor Statement The forward-lookingstatements contained in this presentation are subject to various risks and known and unknown uncertainties. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurance that the Company's expectations will be achieved. Factors which could cause the Company's actual results, performance, or achievements to differ significantly from the results, performance, or achievements expressed or implied by such statements are set forth under the captions "Item 1A. Risk Factors" and "Forward-Looking Statements" in our annual report on Form 10-K and in our quarterly reports on Form 10-Q and described from time to time in the Company's filings with the SEC. Forward-looking statements are not guarantees of performance. For forward-looking statements herein, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. 2 I Storage Deluxe Portfolio Acquisition

Transaction Summary On October 21st, we entered into an agreement to purchase an eight-property portfolio in the New York City Boroughs for $540 million Transaction is subject to typical due-diligence and loan assumptions, with the projected closing in the fourth quarter of 2020 Portfolio Summary 5 properties in Queens, 2 in Brooklyn, and 1 in the Bronx Mix of 4 fully-stabilized properties and 4 properties that have not yet fully stabilized Expectation is that the portfolio fully stabilizes by mid-2023 All properties are currently branded and managed by CubeSmart Financing Summary $183.7M of consideration provided in the form of Operating Partnership Units $154.6M of assumed debt secured by five of the properties Remaining $201.7M initially funded from available cash and proceeds from the undrawn portion of our $750M credit facility

[LOGO] This transaction is an opportunity to further build on our leading market position in the three primary outer boroughs of New York City. It allows us to increase our market presenc e in Queens up to par with Brooklyn and the Bronx, cementing our brand leadership across those three boroughs. Grow the portfolio in attractive submarkets with strong demographic trends, including:entering the rapidly growing Gowanus section of Brooklyn set for further residential and retail development following impending rezoningexpanding our ownership in the attractive Long Island City submarket  building our presence in the vibrant Flushing/College Point section of Queens  adding another store in the highly desirable Riverdale neighborhood of the Bronx Invest a significant amount of capital in high quality assets that we anticipate will generate attractive returns, including meaningful embedded growth through stabilizing the portfolio and a future expansion of the 3 rd Avenue store in Gowanus Opportunistic timing to take advantage of: movement driven by the pandemic and an expected post pandemic economic resurgence  strong fundamentals following the recent development cycle  significant barriers to entry resulting from the recent changes to the ICAP tax abatement program which excludes self storage from eligibility Utilize OP units as a significant component of the capital required to fund the transaction, demonstrating the seller’s confidence in the transaction, the New York market , and the CubeSmart platform

This transaction is the culmination of a ten-year plan that created the market-leading portfolio in the country’s best self-storage market One NYC borough property in the legacy portfolio (Queens) Established a relationship with Storage Deluxe through the acquisition of a two-property portfolio, entering Brooklyn & the Bronx Agreed to acquire a 22-property portfolio from Storage Deluxe for $560M, including 16 properties in the NYC boroughs Opened our first NYC development property in the Bronx Acquired a portfolio of two operating & two C of O properties for $141.5M Opened 9 newly developed stores in the boroughs, including our entrance into Manhattan Agreed to acquire an 8-property NYC portfolio from Storage Deluxe for $540M

Over the last 10 years, we have assembled the highest quality portfolio of stores in New York City, providing both breadth of coverage across all five boroughs and depth within key submarkets Properties Pre-Transaction Transaction Total Brooklyn 13 2 15 Bronx 13 1 14 Queens 9 5 14 Manhattan 1 - 1 Staten Isl. 1 - 1 Total 37 8 45

The target assets are in more affluent submarkets within the boroughs where higher incomes support market-leading rental rates The target portfolio has median household incomes that are 45% above our existing portfolio in the NYC boroughs In-place rates for the portfolio average 6.5% above our existing same-store portfolio in the boroughs, led by the Brooklyn properties that have rates 10% ahead of our existing Brooklyn portfolio

This transaction will further enhance our market-leading position in New York City. Our portfolio in the New York MSA is well diversified across seven distinct markets. Each of these distinct markets have unique demographic trends and economic drivers that are supportive of strong self-storage demand. Trailing 12-month net operating income for total owned store portfolio Trailing 12-month net operating income for total owned store portfolio plus trailing 12-month net operating income for the eight acquisition properties

Each borough has a standalone economy with large populations and low levels of supply which support significantly higher rental rates than similarly-sized markets US Census Bureau 2020 Self Storage Almanac & CUBE Internal Market Research CUBE same-store quarterly average realized rent per occupied square foot for the 3 months ended September 30, 2020

The outer-boroughs are fundamentally different than Manhattan and each of them has a robust local economy influenced by a unique set of drivers Employers in the outer-boroughs are more blue-collar industries compared to the white-collar focus of Manhattan Education, health, and government services employ over half of workers across the outer-boroughs Source: US Census Bureau

New York City compares extremely favorably to the top 12 MSAs with the lowest SF per capita of any major market Supply per capita in all three boroughs is less than half the national average as overall supply remains low despite deliveries from the recent development cycle The supply outlook in the boroughs looks to be muted going forward as recent legislative changes that restrict self-storage from development in the IBZ industrial zones and exclude storage from eligibility for tax abatements under the ICAP program have increased barriers to entry Source: 2020 Self-Storage Almanac & YardiMatrix

Performance in the New York City boroughs has remained steady throughout this development cycle Over the last three years, our same-store portfolio in New York City has continued to post positive revenue growth while competing with the recent inflow of new supply We expect that changes to the ICAP legislation from earlier this year which specifically exclude self-storage from eligibility for the tax abatement on improvements will sharply curtail new self-storage development projects in the future Strong supply-demand dynamics should allow recent development deliveries to be absorbed and support long-term performance trends 1 1

Performance in the boroughs has accelerated with significant increases in demand muting the impact of new supply Storage fundamentals in New York City have proven resilient through the pandemic, with strong demand trends helping to grow occupancy through the third quarter High levels of demand have accelerated the lease up of recently opened development projects, reducing some of the shorter-term pressure from new supply We resumed delinquency processes and customer rate increases throughout the 3rd quarter and all were entirely in effect by the end of September

Brooklyn is a vibrant market with the highest population and density of the outer-boroughs, supported by a strong economic backdrop CUBE Market Share (post-transaction) Demographics3 Market Supply2 Local Economy3 As of September 30, 2020 Source: YardiMatrix, CUBE internal market data Source: US Census Bureau & Bureau of Economic Analysis

The Gowanus neighborhood has seen a significant transition which is expected to accelerate with a new retail corridor and over 8,000 new apartments set to be added by 2035 through the current development plan1 Net Rentable SF 70,225 Current Physical Occupancy2 94.1% In-Place Rate per Occupied SF2 $55.37 Net Rentable SF 77,696 Current Physical Occupancy2 80.2% In-Place Rate per Occupied SF2 $33.81 Source: Gowanus Neighborhood Rezoning Draft Scope of Work, NYC Department of City Planning As of September 30, 2020

The largest of the boroughs, Queens has the highest household incomes and the lowest levels of supply CUBE Market Share (post-transaction) Demographics3 Market Supply2 Local Economy3 As of September 30, 2020 Source: YardiMatrix, CUBE internal market data Source: US Census Bureau & Bureau of Economic Analysis

Long Island City saw incredible growth following a 2001 rezoning program, adding thousands of new apartments. That growth continues to this day, with hundreds of new units still under development.1 Net Rentable SF 66,269 Current Physical Occupancy2 96.0% In-Place Rate per Occupied SF2 $41.84 Net Rentable SF 81,630 Current Physical Occupancy2 95.5% In-Place Rate per Occupied SF2 $42.22 Source: Curbed NY https://ny.curbed.com/maps/long-island-city-development-boom-construction-map As of September 30, 2020

Long Island City saw incredible growth following a 2001 rezoning program, adding thousands of new apartments. That growth continues to this day, with hundreds of new units still under development.1 Source: Curbed NY https://ny.curbed.com/maps/long-island-city-development-boom-construction-map As of September 30, 2020

Flushing/College Point is a vibrant submarket, with strong growth in private sector employment helping attract further development1 Net Rentable SF 166,269 Current Physical Occupancy2 92.9% In-Place Rate per Occupied SF2 $38.66 Net Rentable SF 140,312 Current Physical Occupancy2 66.7% In-Place Rate per Occupied SF2 $31.18 Source: Office of the New York State Comptroller – An Economic Snapshot of Queens As of September 30, 2020

A dense population comprised mostly of renters in the Bronx supports strong demand trends CUBE Market Share (post-transaction) Demographics3 Market Supply2 Local Economy3 As of September 30, 2020 Source: YardiMatrix, CUBE internal market data Source: US Census Bureau & Bureau of Economic Analysis

Riverdale is an affluent submarket, with median household incomes and multifamily rents well above the average for the Bronx1 Source: 2018 American Community Survey As of September 30, 2020

Solidifies our strong market position and enhances our competitive advantage in the boroughs Expands our exposure to high-growth submarkets with strong demographics and attractive demand trends Opportunity to deploy a meaningful amount of capital to grow the Company in a way that is consistent with our strategy of investing in high-quality assets with attractive risk-adjusted returns Knowledge from being the market leader as well as managing all of the target assets significantly lowers underwriting and operational risks Leverages the strength of our currency and confidence in our platform through an OP Unit transaction Availability of attractive capital to fund the transaction

XML

Document and Entity Information	Oct. 21, 2020
Document Type	8-K
Document Period End Date	Oct. 21, 2020
Entity File Number	001-32324
Entity Registrant Name	CUBESMART
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	20-1024732
Entity Address, Address Line One	5 Old Lancaster Road
Entity Address, City or Town	Malvern
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19355
City Area Code	610
Local Phone Number	535-5000
Title of 12(b) Security	Common Shares, $0.01 par value per share, of CubeSmart
Trading Symbol	CUBE
Security Exchange Name	NYSE
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001298675
Amendment Flag	false
CUBESMART L.P.
Document Type	8-K
Document Period End Date	Oct. 21, 2020
Entity File Number	000-54462
Entity Registrant Name	CUBESMART, L.P.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	34-1837021
Entity Address, Address Line One	5 Old Lancaster Road
Entity Address, City or Town	Malvern
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19355
City Area Code	610
Local Phone Number	535-5000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001300485
Amendment Flag	false