Cubesmart · NYSE:CUBE
Cubesmart — Investor Presentation (November 2020)
33 slides from Cubesmart's investor presentation, November 2020
Slide 1: November 2020
November 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement The forward-looking statements 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 assur
Slide 3: CubeSmart at a glance
1. As of September 30, 2020 3. Period ending December 31, 2019 2. Market value of common equity and book value of debt as of September 30, 2020 4. Annual dividends declared in period ending December 31, 2019
Slide 4: Arrival of current management team
Moved Received Grew the portfolio by over Arrival of current headquarters to Rebranded Investment Grade $1.6 billion through management suburban company as credit rating from acquisitions and team Philadelphia CubeSmart Moody’s and S&P developments Acquired United Acquired 22 Began capital Stor-All
Slide 5: Value Creation Strategy
Value Creation Strategy Generate sustainable growth to maximize long-term shareholder value Building an industry leading platform to generate outsized growth from our high quality portfolio, maximizing long-term shareholder value 5| CuBESMART’ Attractive Industry Experienced Management Team Sophisti
Slide 6: Self-storage has been a top performing REIT sector through all phases of the economic cycle
Self-storage has been a top performing REIT sector through all phases of the economic cycle with 10-year returns averaging 17%1 Most diverse customer base of any REIT sector, averaging over 650 customers per store Month-to-month rentals allow for rapid repricing in response to changing economic cond
Slide 7: Attractive fundamentals have driven continued evolution of the industry
Attractive fundamentals have driven continued evolution of the industry New ) Sus Strong Went returns pave led to increased Continued growth in awareness & utilization new development across many core markets has increased demand for the product | ia! Favors returns have been driving ae Sophisticati
Slide 8: Executive management team
• Chris has been CEO of CubeSmart since January 2014 • Currently the longest-tenured CEO in the sector • Joined the company in 2006, and previously served as Chief Operating Officer, Chief Investment Officer, and Chief Financial Officer • Currently serves on the board of NAREIT • Tim has been CFO of
Slide 9: Execution on our core operations has driven strong organic growth
• Execution on our core operations has driven strong organic growth • We continue to grow the portfolio through all available avenues to maximize risk-adjusted returns for shareholders, including meaningful cash flow growth
Slide 10: Attracting the greatest share of potential demand
Attracting the Proprietary Building a Award winning greatest share of systems and foundation of customer service potential demand processes to proprietary platform delivers through dynamically solutions to an unparalleled continually generate pricing improve experience evolving digital decisions in
Slide 11: Marketing, sales and operations platform
• SEO-focused content creation • Website AB Testing • Optimized customer rate • Targeted local marketing efforts • Conversion funnel analysis and increase model • Exploratory marketing channels optimization by a team of data • Award winning customer service • Sophisticated brand scientists • Interna
Slide 12: Mobile app and online rental tools
Launched: April 2020 Launched: September 2020 • Ability to rent online from any web-enabled device • Rent a cube and find new locations, contact-free • Customers can reserve their unit, sign a lease, pay & • Access personal gates codes move in without interaction with CubeSmart • Pay bills & set up
Slide 13: Same-store performance versus peers
1. Reported average full-year metrics for the other three largest publicly-traded storage REITs by market cap from January 1, 2014 through December 31, 2019
Slide 14: Portfolio by market
Boston 2% NY/NJ/LI Chicago 21% Staten Island 7% Phila. 0.4% 3% Wash DC Queens 7% 4% North NJ 5% Brooklyn Long Island So. CA 3% 2% 3% Westchester Bronx 2% Atlanta 5% Phoenix 3% 3% Dallas 6% States with Owned Stores Houston Orlando 2% 2% States with Managed Stores Only Percentages represent % of total
Slide 15: Research on supply and valuation in New York
1. Source: Bank of America Merrill Lynch Research Report dated January 9, 2019 2. Source: Evercore ISI Research Report dated November 13, 2019
Slide 16: High population density creates a strong demand profile around our stores
High population density Renters boost demand NYC square foot per creates a strong as they are 3.9x more capita is substantially demand profile around likely to move than lower than the industry our stores homeowners average 1 1 2 00 1. Source: CubeSmart 3-mile portfolio demographics 2. CubeSmart int
Slide 17: NYC zoning and tax abatement changes
• In 2017, NYC passed a zoning amendment that required a special permit for self-storage to be built in the Industrial Business Zones (IBZs) • The IBZs reduced the land that was previously zoned by- right for storage by 49%1 • NYC recently excluded all self-storage development from eligibility under
Slide 18: Transaction Summary
• On October 21st, we entered into an agreement to purchase an eight-property portfolio in the New York Transaction City Boroughs for $540 million Summary • Transaction is subject to typical due-diligence and loan assumptions, with a projected closing in the fourth quarter of 2020 • 5 properties in
Slide 19: Strategic rationale for NYC acquisition
Solidifies our strong market position and enhances our competitive advantage in the NYC 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 w
Slide 20: Development and joint venture strategy
Focus on markets with strong demographics to drive long- term value Build and acquire Class-A properties in core infill locations by leveraging local developer expertise Invest with partners to expand national footprint and improve returns for lease-up opportunities Expand scale of platform, generat
Slide 21: Development projects
1 Our development projects are 12 Projects 3 Projects 2 Projects 2 Projects projected to create over $340 million in value at stabilization2 2 Projects 1 Project 1 Project 1 Project 1 1. As of September 30, 2020 2. Proforma based on stabilized NOI projections and current market cap rates
Slide 22: Joint venture investments
Strong returns through levered structures and promotes Opportunity to purchase assets at the end of the hold period Fee revenue increases our return profile Market and cash flow diversification Mitigates dilution of lease-up properties 35 properties 21 properties 13 properties 14 properties $315.7 m
Slide 23: Venture sale and reinvestment
• Our participation as a 10% owner in venture accomplished a number of strategic goals: • Expanded relationship with our JV partner • Participated in portfolios with a mix of assets • Boosted returns through fee income • Shared in value creation through promoted returns • Acquired stores that fit ou
Slide 24: Third-party management platform
stores on the CubeSmart management has grown to the second largest platform1 national management platform4 as we continue to expand our national footprint and brand while increasing efficiency anagement Fees from the management business contribute fees2 meaningfully to FFO growth The management plat
Slide 25: Investment-grade balance sheet and Baa2 rating
CubeSmart’s Baa2 senior unsecured rating reflects the REIT’s good financial flexibility and modest use of leverage. - Moody’s Investors Service 1. Source: Company Filings, as of December 31 of each stated year 2. Calculated as annual EBITDA / Interest Expense
Slide 26: Ample liquidity to manage near-term capital needs
Ample liquidity to manage near-term capital needs Proven ability to access a variety of sources of Capital Needs: $129.2M through 2021 capital, raising $4.2 billion since 2010 • $54.9M of debt maturities1 • Common Equity: raised $1.4 billion in net proceeds • $74.3M of remaining development commitme
Slide 27: Environmental initiatives
Since 2015, CubeSmart has completed Since 2010, CubeSmart has installed 76 lighting retrofits at 134 owned stores in energy management systems at owned 17 states and DC. These lighting stores to monitor and control a store’s upgrades save approximately 150,000 energy usage which decreased electricit
Slide 28: Engaging with our customers, teammates and communities
Engaging with our customers, teammates and communities Charitable Donations = Investments in Our Teammates | Establishment of programs designed to increase Teammate Match employee contributions to charitable engagement, recognition and development organizations through our Gift Matching Program ha,
Slide 29: Corporate governance
• Annual election of trustees • Separate position of Board • Share ownership guidelines for • Annual say-on-pay votes Chair & Chief Executive executive officers and trustees • Single voting class of stock Officer • Anti-hedging & anti-pledging • Shareholder right to call special • Regular executive
Slide 30: Third quarter 2020 results
1. Same-store results for the period from January 1, 2020 through September 30, 2020 3. As of the date of our earnings release, November 5, 2020 2. For the period from January 1, 2020 through September 30, 2020 4. As of September 30, 2020
Slide 31: Investment summary
Maximizing property cash flows to generate long-term value through a continually evolving marketing, revenue management, and customer service platform An investment-grade balance sheet provides the strength and flexibility to access the full array of capital sources to finance growth opportunities P
Slide 32: Supplemental performance and valuation metrics
1. Performance as reported for the same-store pool as it was constituted at the end of the respective year 2. Year-ending values as detailed in Company's supplemental packages 3. Calculated as ending common share price / funds from operations per share, as adjusted. Please refer to CubeSmart’s publi
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