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): August 4, 2023 (August 3, 2023)

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 2.02    Results of Operations and Financial Condition.

On August 3, 2023, CubeSmart (the “Company”) announced its financial results for the three months and six months ended June 30, 2023. A copy of the Company’s earnings press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 7.01    Regulation FD Disclosure.

The information included in this Current Report on Form 8-K (including Exhibit 99.1 hereto) shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

The Company believes that certain statements in the information attached as Exhibit 99.1 may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are made on the basis of management’s views and assumptions regarding future events and business performance as of the time the statements are made. Actual results may differ materially from those expressed or implied. Information concerning factors that could cause actual results to differ materially from those in forward-looking statements is contained from time to time in the Company’s filings with the Securities and Exchange Commission.

Item 9.01    Financial Statements and Exhibits.

(a)    Not applicable.

(b)    Not applicable.

(c)    Not applicable.

(d)    Exhibits. The following exhibits are being furnished herewith to this Current Report on Form 8-K.

Exhibit No.	Description
99.1	CubeSmart Earnings Press Release, dated August 3, 2023, announcing the financial results for the three and six months ended June 30, 2023.
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.

2

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
	By:	/s/ Timothy M. Martin
	Name:	Timothy M. Martin
	Title:	Chief Financial Officer
Date: August 4, 2023
	CUBESMART, L.P.
	By CUBESMART, its general partner
	By:	/s/ Timothy M. Martin
	Name:	Timothy M. Martin
	Title:	Chief Financial Officer
Date: August 4, 2023

3

EXHIBIT INDEX

Exhibit No.	Description
99.1	CubeSmart Earnings Press Release, dated August 3, 2023, announcing the financial results for the three and six months ended June 30, 2023.
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.

4

5

EX-99.1

	Exhibit 99.1
	Earnings Release

CubeSmart Reports Second Quarter 2023 Results

MALVERN, PA -- (Globe Newswire) – August 3, 2023 -- CubeSmart (NYSE: CUBE) today announced its operating results for the three and six months ended June 30, 2023.

“Following two years of record sector performance, 2023 has been a year of inconsistent trends as operating fundamentals adjust to the evolving macro environment,” commented President and Chief Executive Officer Christopher P. Marr. “Overall, New York City and other urban markets have seen more stable performance with solid results across key metrics while demand in markets throughout the Sun Belt has normalized off post-pandemic highs. Occupancy trends have typified the inconsistent environment as we saw same-store portfolio occupancy grow in July to 92.9% following a slower June, ending the month 140 basis points behind 2022.”

Key Highlights for the Second Quarter

● Reported earnings per share (“EPS”) attributable to the Company’s common shareholders of $0.43.

● Reported funds from operations (“FFO”) per share of $0.66.

● Increased same-store (593 stores) net operating income (“NOI”) 5.0% year over year, driven by 4.6% revenue growth and a 3.6% increase in property operating expenses.

● Averaged same-store occupancy of 92.7% during the quarter and ended the quarter at 92.7%.

● Added 58 stores to our third-party management platform during the quarter, bringing our total third-party managed store count to 727.

Financial Results

Net income attributable to the Company’s common shareholders was $97.9 million for the second quarter of 2023, compared with $58.4 million for the second quarter of 2022. A significant driver of the year over year increase was decreased amortization of in-place lease intangibles related to stores acquired in 2021. EPS attributable to the Company’s common shareholders was $0.43 for the second quarter of 2023, compared with $0.26 for the same period last year.

FFO, as adjusted, was $149.5 million for the second quarter of 2023, compared with $140.2 million for the second quarter of 2022. FFO per share, as adjusted, increased6.5% to $0.66 for the second quarter of 2023, compared with $0.62 for the same period last year.

Investment Activity

Development Activity

The Company has agreements with developers for the construction of self-storage properties in high-barrier-to-entry locations. As of June 30, 2023, the Company had three joint venture development properties under construction. The Company anticipates investing a total of $75.2 million related to these projects and had invested $33.4 million of that total as of June 30, 2023. The stores are located in New Jersey (1) and New York (2) and are expected to open at various times between the first and fourth quarters of 2024.

SECOND QUARTER 2023 PAGE 1

‌

Earnings Release

Third-Party Management

As of June 30, 2023, the Company’s third-party management platform included 727 stores totaling 48.0 million rentable square feet. During the three and six months ended June 30, 2023, the Company added 58 stores and 83 stores, respectively, to its third-party management platform.

Same-Store Results

The Company’s same-store portfolio at June 30, 2023 included 593 stores containing 42.4 million rentable square feet, or approximately 96.2% of the aggregate rentable square feet of the Company’s 611 consolidated stores. These same-store properties represented approximately 97.3% of property NOI for the three months ended June 30, 2023.

Same-store physical occupancy as of June 30, 2023 and 2022 was 92.7% and 94.4%, respectively. Same-store revenues for the second quarter of 2023increased4.6% and same-store operating expenses increased3.6% from the same quarter in 2022. Same-store NOI increased5.0% from the second quarter of 2022 to the second quarter of 2023.

Operating Results

As of June 30, 2023, the Company’s total consolidated portfolio included 611 stores containing 44.1 million rentable square feet and had physical occupancy of 92.0%.

Revenues increased $12.1 million and property operating expenses increased $1.3 million in the second quarter of 2023, as compared to the same period in 2022. Increases in revenues were primarily attributable to increased rental rates on our same-store portfolio. Increases in property operating expenses were primarily attributable to increases in expenses from same-store properties primarily related to advertising costs and property insurance premiums.

Interest expense increased from $23.1 million during the three months ended June 30, 2022 to $23.5 million during the three months ended June 30, 2023, an increase of $0.4 million. The increase was attributable to higher interest rates during the 2023 period compared to the 2022 period, partially offset by a decrease in the average outstanding debt balance. The weighted average effective interest rate on our outstanding debt increased to 3.05% for the three months ended June 30, 2023 compared to 2.91% during the three months ended June 30, 2022. The average outstanding debt balance decreased to $3.04 billion during the three months ended June 30, 2023 as compared to $3.16 billion during the three months ended June 30, 2022.

Financing Activity

During the three months ended June 30, 2023, the Company did not sell any common shares of beneficial interest through its at-the-market ("ATM") equity program. As of June 30, 2023, the Company had 5.8 million shares available for issuance under the existing equity distribution agreements.

Quarterly Dividend

On May 16, 2023, the Company declared a quarterly dividend of $0.49 per common share. The dividend was paid on July 17, 2023 to common shareholders of record on July 3, 2023.

SECOND QUARTER 2023 PAGE 2

Earnings Release

2023 Financial Outlook

“We have remained disciplined in our investment approach as few transactions in the market have met both our quality standards and our return thresholds. As fundamentals have become more challenging for smaller operators, many of them are choosing the CubeSmart operating platform to maximize performance of their assets, creating a robust pipeline for growth in our third-party management business,” commented Chief Financial Officer Tim Martin. “With the busy rental season coming to an end, pricing to new customers has been on the more conservative end of our expectations, leading us to tighten the high end of our guidance ranges to best reflect current market conditions.”

The Company estimates that its fully diluted earnings per share for the year will be between $1.77 and $1.81 (previously $1.77 to $1.84), and that its fully diluted FFO per share, as adjusted, for 2023 will be between $2.64 and $2.68 (previously $2.64 to $2.71). Due to uncertainty related to the timing and terms of transactions, the impact of any potential future speculative investment activity is excluded from guidance. For 2023, the same-store pool consists of 593 properties totaling 42.4 million rentable square feet.

(1) Prior guidance as included in our first quarter earnings release dated April 27, 2023.

SECOND QUARTER 2023 PAGE 3

Earnings Release

Conference Call

Management will host a conference call at 11:00 a.m. ET on Friday, August 4, 2023 to discuss financial results for the three months ended June 30, 2023.

A live webcast of the conference call will be available online from the investor relations page of the Company’s corporate website at www.cubesmart.com. Telephone participants may join on the day of the call by dialing 1-888-886-7786 and using access code 08844301.

After the live webcast, the call will remain available on CubeSmart’s website for 15 days. In addition, a telephonic replay of the call will be available through August 18, 2023 by dialing 1-877-674-7070 using conference number 844301.

Supplemental operating and financial data as of June 30, 2023 is available in the Investor Relations section of the Company’s corporate website.

About CubeSmart

CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the 2023 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.

Non-GAAP Financial Measures

Funds from operations (“FFO”) is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance. The April 2002 National Policy Bulletin of the National Association of Real Estate Investment Trusts (the “White Paper”), as amended, defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of real estate and related impairment charges, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.

Management uses FFO as a key performance indicator in evaluating the operations of the Company's stores. Given the nature of its business as a real estate owner and operator, the Company considers FFO a key measure of its operating performance that is not specifically defined by accounting principles generally accepted in the United States. The Company believes that FFO is useful to management and investors as a starting point in measuring its operational performance because FFO excludes various items included in net income that do not relate to or are not indicative of its operating performance such as gains (or losses) from sales of real estate, gains from remeasurement of investments in real estate ventures, impairments of depreciable assets, and depreciation, which can make periodic and peer analyses of operating performance more difficult. The Company’s computation of FFO may not be comparable to FFO reported by other REITs or real estate companies.

FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of the Company’s performance. FFO does not represent cash generated from operating activities determined in accordance with GAAP and is not a measure of liquidity or an indicator of the Company’s ability to make cash distributions. The Company believes that to further understand its performance, FFO should be compared with its reported net income and considered in addition to cash flows computed in accordance with GAAP, as presented in its Consolidated Financial Statements.

SECOND QUARTER 2023 PAGE 4

Earnings Release

FFO, as adjusted represents FFO as defined above, excluding the effects of acquisition related costs, gains or losses from early extinguishment of debt, and other non-recurring items, which the Company believes are not indicative of the Company’s operating results.

The Company defines net operating income, which it refers to as “NOI,” as total continuing revenues less continuing property operating expenses. NOI also can be calculated by adding back to net income (loss): interest expense on loans, loan procurement amortization expense, loss on early extinguishment of debt, acquisition related costs, equity in losses of real estate ventures, other expense, depreciation and amortization expense, general and administrative expense, and deducting from net income (loss): equity in earnings of real estate ventures, gains from sales of real estate, net, other income, gains from remeasurement of investments in real estate ventures and interest income. NOI is a measure of performance that is not calculated in accordance with GAAP.

Management uses NOI as a measure of operating performance at each of its stores, and for all of its stores in the aggregate. NOI should not be considered as a substitute for net income, cash flows provided by operating, investing and financing activities, or other income statement or cash flow statement data prepared in accordance with GAAP. The Company believes NOI is useful to investors in evaluating operating performance because it is one of the primary measures used by management and store managers to evaluate the economic productivity of the Company’s stores, including the ability to lease stores, increase pricing and occupancy, and control property operating expenses. Additionally, NOI helps the Company’s investors meaningfully compare the results of its operating performance from period to period by removing the impact of its capital structure (primarily interest expense on outstanding indebtedness) and depreciation of the basis in its assets from operating results.

Forward-Looking Statements

This presentation, together with other statements and information publicly disseminated by CubeSmart (“we,” “us,” “our” or the “Company”), contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the “Exchange Act.” Forward-looking statements include statements concerning the Company’s plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information. In some cases, forward-looking statements can be identified by terminology such as “believes,” “expects,” “estimates,” “may,” “will,” “should,” “anticipates,” or “intends” or the negative of such terms or other comparable terminology, or by discussions of strategy. Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, future events and actual results, performance, transactions or achievements, financial and otherwise, may differ materially from the results, performance, transactions or achievements expressed or implied by the forward-looking statements. As a result, you should not rely on or construe any forward-looking statements in this presentation, or which management or persons acting on their behalf may make orally or in writing from time to time, as predictions of future events or as guarantees of future performance. We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this presentation or as of the dates otherwise indicated in such forward-looking statements. All of our forward-looking statements, including those in this presentation, are qualified in their entirety by this statement.

SECOND QUARTER 2023 PAGE 5

Earnings Release

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this presentation. Any forward-looking statements should be considered in light of the risks and uncertainties referred to in Item 1A. “Risk Factors” in our Annual Report on Form 10-K and in our other filings with the Securities and Exchange Commission (“SEC”).

These risks include, but are not limited to, the following:

● adverse changes in economic conditions in the real estate industry and in the markets in which we own and operate self-storage properties;

● the effect of competition from existing and new self-storage properties and operators on our ability to maintain or raise occupancy and rental rates;

● the failure to execute our business plan;

● adverse impacts from the COVID-19 pandemic, other pandemics, quarantines and stay at home orders, including the impact on our ability to operate our self-storage properties, the demand for self-storage, rental rates and fees and rent collection levels;

● reduced availability and increased costs of external sources of capital;

● increases in interest rates and operating costs;

● financing risks, including the risk of over-leverage and the corresponding risk of default on our mortgage and other debt and potential inability to refinance existing or future debt;

● counterparty non-performance related to the use of derivative financial instruments;

● risks related to our ability to maintain our qualification as a real estate investment trust (“REIT”) for federal income tax purposes;

● the failure of acquisitions and developments to close on expected terms, or at all, or to perform as expected;

● increases in taxes, fees and assessments from state and local jurisdictions;

● the failure of our joint venture partners to fulfill their obligations to us or their pursuit of actions that are inconsistent with our objectives;

● reductions in asset valuations and related impairment charges;

● cyber security breaches, cyber or ransomware attacks or a failure of our networks, systems or technology, which could adversely impact our business, customer and employee relationships or result in fraudulent payments;

● changes in real estate, zoning, use and occupancy laws or regulations;

● risks related to or a consequence of natural disasters or acts of violence, pandemics, active shooters, terrorism, insurrection or war that affect the markets in which we operate;

SECOND QUARTER 2023 PAGE 6

Earnings Release

● potential environmental and other liabilities;

● governmental, administrative and executive orders and laws, which could adversely impact our business operations, customer and employee relationships;

● uninsured or uninsurable losses and the ability to obtain insurance coverage or recovery from insurance against risks and losses;

● our ability to attract and retain talent in the current labor market;

● other factors affecting the real estate industry generally or the self-storage industry in particular; and

● other risks identified in Item 1A of our Annual Report on Form 10-K and, from time to time, in other reports that we file with the SEC or in other documents that we publicly disseminate.

Given these uncertainties, we caution readers not to place undue reliance on forward-looking statements. We undertake no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise except as may be required in securities laws.

Contact:

CubeSmart

Josh Schutzer

Vice President, Finance

(610) 535-5700

SECOND QUARTER 2023 PAGE 7

CUBESMART AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	June 30,		December 31,
	2023		2022
	(unaudited)
ASSETS
Storage properties	$	7,323,638	$	7,295,778
Less: Accumulated depreciation		(1,333,907)		(1,247,775)
Storage properties, net (including VIE assets of $142,326 and $167,180, respectively)		5,989,731		6,048,003
Cash and cash equivalents		9,220		6,064
Restricted cash		1,925		2,861
Loan procurement costs, net of amortization		4,591		5,182
Investment in real estate ventures, at equity		101,482		105,993
Assets held for sale		2,063		3,745
Other assets, net		172,137		153,982
Total assets	$	6,281,149	$	6,325,830
LIABILITIES AND EQUITY
Unsecured senior notes, net	$	2,774,420	$	2,772,350
Revolving credit facility		63,200		60,900
Mortgage loans and notes payable, net		130,070		162,918
Lease liabilities - finance leases		65,727		65,758
Accounts payable, accrued expenses and other liabilities		214,733		213,297
Distributions payable		111,280		111,190
Deferred revenue		40,245		38,757
Security deposits		1,086		1,087
Liabilities held for sale		1,402		1,773
Total liabilities		3,402,163		3,428,030
Noncontrolling interests in the Operating Partnership		63,352		57,419
Commitments and contingencies
Equity
Common shares $.01 par value, 400,000,000 shares authorized, 224,797,239 and 224,603,462 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		2,248		2,246
Additional paid-in capital		4,132,621		4,125,478
Accumulated other comprehensive loss		(451)		(491)
Accumulated deficit		(1,333,148)		(1,301,030)
Total CubeSmart shareholders’ equity		2,801,270		2,826,203
Noncontrolling interests in subsidiaries		14,364		14,178
Total equity		2,815,634		2,840,381
Total liabilities and equity	$	6,281,149	$	6,325,830

SECOND QUARTER 2023 PAGE 8

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share data)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
REVENUES
Rental income	$	225,910	$	216,133	$	449,494	$	424,504
Other property related income		25,760		23,861		50,144		46,141
Property management fee income		9,135		8,670		17,695		16,584
Total revenues		260,805		248,664		517,333		487,229
OPERATING EXPENSES
Property operating expenses		74,821		73,472		145,948		144,039
Depreciation and amortization		50,358		79,046		100,687		161,603
General and administrative		14,325		13,725		28,999		28,250
Total operating expenses		139,504		166,243		275,634		333,892
OTHER (EXPENSE) INCOME
Interest:
Interest expense on loans		(23,544)		(23,055)		(47,235)		(45,879)
Loan procurement amortization expense		(1,041)		(959)		(2,081)		(1,916)
Equity in earnings of real estate ventures		790		680		3,341		974
Other		777		(493)		501		(9,656)
Total other expense		(23,018)		(23,827)		(45,474)		(56,477)
NET INCOME		98,283		58,594		196,225		96,860
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
Noncontrolling interests in the Operating Partnership		(616)		(379)		(1,230)		(671)
Noncontrolling interest in subsidiaries		212		143		450		324
NET INCOME ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS	$	97,879	$	58,358	$	195,445	$	96,513
Basic earnings per share attributable to common shareholders	$	0.43	$	0.26	$	0.87	$	0.43
Diluted earnings per share attributable to common shareholders	$	0.43	$	0.26	$	0.86	$	0.43
Weighted average basic shares outstanding		225,388		224,960		225,342		224,812
Weighted average diluted shares outstanding		226,275		225,895		226,238		225,820

SECOND QUARTER 2023 PAGE 9

Same-Store Facility Results (593 stores)

(in thousands, except percentage and per square foot data)

(unaudited)

	Three Months Ended								Six Months Ended
	June 30,						Percent		June 30,						Percent
	2023			2022			Change		2023			2022			Change
REVENUES
Rental income	$	219,122		$	210,423		4.1	%	$	436,504		$	414,608		5.3	%
Other property related income		9,969			8,634		15.5	%		19,320			16,618		16.3	%
Total revenues		229,091			219,057		4.6	%		455,824			431,226		5.7	%
OPERATING EXPENSES
Property taxes (1)		24,375			24,022		1.5	%		49,063			47,842		2.6	%
Personnel expense		13,304			13,822		(3.7)	%		26,441			27,589		(4.2)	%
Advertising		6,569			5,396		21.7	%		9,911			8,439		17.4	%
Repair and maintenance		2,555			2,493		2.5	%		4,900			4,513		8.6	%
Utilities		5,147			5,062		1.7	%		10,926			10,983		(0.5)	%
Property insurance		2,609			2,022		29.0	%		4,745			3,935		20.6	%
Other expenses		8,777			8,315		5.6	%		17,424			17,299		0.7	%
Total operating expenses		63,336			61,132		3.6	%		123,410			120,600		2.3	%
Net operating income (2)	$	165,755		$	157,925		5.0	%	$	332,414		$	310,626		7.0	%
Gross margin		72.4	%		72.1	%				72.9	%		72.0	%
Period end occupancy		92.7	%		94.4	%				92.7	%		94.4	%
Period average occupancy		92.7	%		94.2	%				92.1	%		93.6	%
Total rentable square feet		42,398								42,398
Realized annual rent per occupied square foot (3)	$	22.30		$	21.07		5.8	%	$	22.35		$	20.89		7.0	%
Reconciliation of Same-Store Net Operating Income to Operating Income
Same-store net operating income (2)	$	165,755		$	157,925				$	332,414		$	310,626
Non same-store net operating income (2)		4,601			4,039					9,210			6,550
Indirect property overhead (4)		15,628			13,228					29,761			26,014
Depreciation and amortization		(50,358)			(79,046)					(100,687)			(161,603)
General and administrative expense		(14,325)			(13,725)					(28,999)			(28,250)
Interest expense on loans		(23,544)			(23,055)					(47,235)			(45,879)
Loan procurement amortization expense		(1,041)			(959)					(2,081)			(1,916)
Equity in earnings of real estate ventures		790			680					3,341			974
Other		777			(493)					501			(9,656)
Net income	$	98,283		$	58,594				$	196,225		$	96,860

(1) For comparability purposes, current year amounts related to the expiration of certain real estate tax abatements have been excluded from the same-store portfolio results ($164k and $329k for the three and six months ended June 30, 2023, respectively).

(2) Net operating income (“NOI”) is a non-GAAP (generally accepted accounting principles) financial measure. The above table reconciles same-store NOI to GAAP Net income.

(3) Realized annual rent per occupied square foot is computed by dividing rental income by the weighted average occupied square feet for the period.

(4) Includes property management income earned in conjunction with managed properties.

SECOND QUARTER 2023 PAGE 10

Non-GAAP Measure – Computation of Funds From Operations

(in thousands, except percentage and per share data)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023				2022		2023			2022
Net income attributable to the Company's common shareholders	$	97,879		$	58,358		$	195,445		$	96,513
Add (deduct):
Real estate depreciation and amortization:
Real property		48,898			77,989			97,814			159,492
Company's share of unconsolidated real estate ventures		2,115			2,368			4,249			4,906
Gains from sales of real estate, net (1)		—			—			(1,713)			—
Noncontrolling interests in the Operating Partnership		616			379			1,230			671
FFO attributable to common shareholders and OP unitholders	$	149,508		$	139,094		$	297,025		$	261,582
Add:
Transaction-related expenses (2)		—			1,138			—			10,546
FFO, as adjusted, attributable to common shareholders and OP unitholders	$	149,508		$	140,232		$	297,025		$	272,128
Earnings per share attributable to common shareholders - basic	$	0.43		$	0.26		$	0.87		$	0.43
Earnings per share attributable to common shareholders - diluted	$	0.43		$	0.26		$	0.86		$	0.43
FFO per share and unit - fully diluted	$	0.66		$	0.61		$	1.30		$	1.15
FFO, as adjusted per share and unit - fully diluted	$	0.66		$	0.62		$	1.30		$	1.20
Weighted average basic shares outstanding		225,388			224,960			225,342			224,812
Weighted average diluted shares outstanding		226,275			225,895			226,238			225,820
Weighted average diluted shares and units outstanding		227,694			227,355			227,659			227,408
Dividend per common share and unit	$	0.49		$	0.43		$	0.98		$	0.86
Payout ratio of FFO, as adjusted		74.2	%		69.4	%		75.4	%		71.7	%

(1) Represents distributions made to the Company in excess of its investment in the 191 IV CUBE Southeast LLC ("HVPSE") unconsolidated real estate venture. HVPSE sold all 14 of its properties on August 30, 2022. The distributions during the six months ended June 30, 2023 relate to proceeds that were held back at the time of the sale. This gain is included in the Company's share of equity in earnings of real estate ventures.

(2) For the three months ended June 30, 2022, transaction-related expenses represent severance expenses. For the six months ended June 30, 2022, transaction-related expenses include severance expenses ($10.3 million) and other transaction expenses ($0.2 million). Prior to our acquisition of LAACO, Ltd. on December 9, 2021, the predecessor company entered into severance agreements with certain employees, including members of their executive team. These costs were known to us and the assumption of the obligation to make these payments post-closing was contemplated in our net consideration paid in the transaction. In accordance with GAAP, and based on the specific details of the arrangements with the employees prior to closing, these costs are considered post-combination compensation expenses. Transaction-related expenses are included in the component of other income (expense) designated as Other.

SECOND QUARTER 2023 PAGE 11

XML

Document and Entity Information	Aug. 03, 2023
Document Type	8-K
Document Period End Date	Aug. 03, 2023
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	Aug. 03, 2023
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