Cubesmart · NYSE:CUBE
Cubesmart — Investor Presentation (September 2020)
31 slides from Cubesmart's investor presentation, Sep 15, 2020
Slide 1: September 2020
September 2020
Slide 2: Safe Harbor Statement and Use of Non-GAAP Financial Measures
This presentation contains certain non-GAAP financial measures. The definitions of these terms, the reasons for their use, and reconciliations to the most directly comparable GAAP measures are included in our Earnings Release as well as the Non-GAAP Financial Measures section under the caption "Mana
Slide 3: Introduction to CubeSmart Self Storage
Introduction to CubeSmart Self Storage 2 Our Mission: To simplify the organizational and Logistical challenges created by the many Life events and business needs of our Customers-through innovative solutions, unparalleled service and genuine care JIC·--1. -As-of J-une-30,-202-0 ------------------3.
Slide 4: Company history and milestones
1. Market value of common equity and book value of debt as of October 22, 2004 2. Market value of common equity and book value of debt as of June 30, 2020 Began capital recycling program to improve portfolio quality Won 1st ISS industry award for Best Customer Service Opened 1,000th CubeSmart brande
Slide 5: Value Creation Strategy
Value Creation Strategy Generate sustainable growth to maximize long-term shareholder value Attractive Industry =Experienced Management Team Sophisticated Operating Platform E Best-in-Class Portfolio Investment Grade Balance Sheet Building an industry leading platform to generate outsized growth fro
Slide 6: Self-storage: a top performing REIT sector
Self-storage has been a top performing REIT sector through all phases of the economic cycle with 10-year returns averaging 17%1 Greatest diversity of customer base of any REIT sector, averaging over 650 customers per store Month-to-month rentals allow for rapid repricing in response to changing econ
Slide 7: Sector Trends
Sector Trends Attractive fundamentals have driven continued evolution of the industry New Supply Product Awareness Continued growth in awareness & utilization has increased demand for the product Strong historicalreturns have led to increased new development across many core markets InfluxofPrivate
Slide 8: COVID-19 operating update
guidance was withdrawn • As a designated “essential business” all stores remained open • Same-store occupancy ended August at 94.3% • Up 130 bps from August 2019 • Due to market uncertainty, • Multiple ways to continue serving our customers with 100% of rentals now contactless • Launched SmartRental
Slide 9: Management team
• Joel has been Chief Operating Officer since February 2020 • Joined the company in 2010 and previously served as SVP of Operations, VP of Marketing, and Director of Revenue Management • Previous experience in roles at United Store-All Management, Extra Space, and Storage USA • Previously served on
Slide 10: Growth through core operations and portfolio expansion
•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 11: Sophisticated operating platform
Attracting the greatest share of potential demand through continually evolving digital platforms paired with targeted traditional marketing efforts Proprietary systems and processes to dynamically generate pricing decisions in order to maximize the value of each customer Building a foundation of pro
Slide 12: Operating platform capabilities
• SmartRentalTM, our fully online rental process • Hive, our proprietary point-of-sale platform is the foundation for operational enhancements • Automated paid search bidding model • 3rd generation proprietary pricing optimization system • Mobile-optimized website • Optimized customer rate increase
Slide 13: SmartRental and mobile app launches
Launched: April 2020 Launched: September 2020 • • • • • • • Ability to rent online from any web-enabled device Customers can reserve their unit, sign a lease, pay & move in without interaction with CubeSmart teammates Rent a cube and find new locations, contact-free Access personal gates codes Pay b
Slide 14: Operational Strength Drives Results
Operational Strength Drives Results Proven track record of execution, generating meaningful growth Same-Store Revenue Growth Same-Store NOI Growth operational management, and Avg customer service has generated Same-Store Margin Growth Growth against sector metrics and driven CUBE CUBE Storage Avg St
Slide 15: Portfolio by market
Boston 2% NY/NJ/LI 21% Phila. Chicago 7% Staten Island 0.4% Wash DC 3% 7% Queens 4% North NJ 5% Long Island 2% Brooklyn 3% So. CA 3% Westchester 2% Bronx 5% Atlanta 3% Phoenix 3% Dallas 6% Houston 2% Orlando 2% States with Owned Stores States with Managed Stores Only Miami 9% Percentages represent %
Slide 16: Best-In-Class Portfolio
Best-In-Class Portfolio Sector-leading demographics produce a strong demand profile for the portfolio % of Assets in Top 25 MSAs1 Fo ng ur 100% 74% 68% 75% 62% 55% 50"/o 25% quality of the portfolio 0% PSA EXR LSI CUBE Median Houshold Incomes (OOO's)2 Average 3-mile Population (OOO's)2 200 $84 150 $
Slide 17: New York City market demand profile
1. Source: CubeSmart 3-mile portfolio demographics 2. CubeSmart internal market research NYC square foot per capita is substantially lower than the industry average 2 Renters boost demand as renters are 3.9x more likely to move than homeowners 1 High population density creates a strong demand profil
Slide 18: NYC regulatory changes for self-storage development
1. Source: New York City Department of City Planning • NYC recently excluded all self-storage development from eligibility under the Industrial & Commercial Abatement Program for all new projects that don’t have permits as of July 1st (ICAP remains available for all other product types) • The ICAP p
Slide 19: External growth 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, generate
Slide 20: Development projects value creation
Our development projects are projected to create over $340 million in value at stabilization2 12 Projects 3 Projects 2 Projects 2 Projects 2 Projects 1 Project 1 Project 1 Project 1 1. As of June 30, 2020 2. Proforma based on stabilized NOI projections and current market cap rates 1
Slide 21: 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 Mitigate dilution of lease-up properties 35 properties $315.7 million Total CUBE Ownership: 50% 21 propert
Slide 22: Joint venture portfolio 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 23: Third-party management platform
national management platform4 as we continue to expand from 1. As of June 30, 2020 3. Since 2009 2. 12 Months Ended December 31, 2019 4. Source: 2020 Self-Storage Almanac acquisitions platform3 ement fees2 CubeSmart management has grown to the second largest our national footprint and brand while in
Slide 24: Financial Strength
Financial Strength Ensuring stability while funding growth Debt to Gross Assets1 : 89.0% 80.0% 60.0% 40.0% 20.0% 2015 2016 2017 2018 2019 ' : 5.4x CubeSmart's Baa2 senior unsecured rating reflects the R EfT's good financial flexibility and modest use of leverage. -Moody's Investors Service ' Baa2 ST
Slide 25: Liquidity and access to capital
• $733.9M of remaining capacity on revolving • $391M of authorization under at-the-market • Retained free cash flow 1. As of June 30, 2020 Ample liquidity to manage near-term capital needs • Capital Needs: $105.8M through 2021 • $55.3M of debt maturities • $50.5M of remaining development commitments
Slide 26: Environmental initiatives
CubeSmart offers customers the option to opt into our “Plant a Tree” program. Since 2010, ~123,800 trees have been planted in reforestation projects, restoring approximately 619 acres. Since 2014, CubeSmart has upgraded 808 low-efficiency R-22 HVAC units with Energy Star, high-efficiency R410 units
Slide 27: Social Initiatives
Social Initiatives Engaging with our Customers, Teammates and Communities Investments in Our Teammates Charitable Donations Establishment of programs designed to increase Teammate engagement, recognition and development Match employee contributions to charitable organizations through our Gift Matchi
Slide 28: Trustees and governance
4 Trustees ➢ REIT Advisory Deep, Relevant Experience ➢Real Estate Law ➢Real Estate Development ➢Real Estate Management ➢Marketing3 Trustees ➢Logistics ➢Financial Management ➢M&A1 Trustee ➢Risk Management ➢Multi-unit Management < 5 Years5-10 Years> 10 Years •Annual election of trustees •Annual say-on
Slide 29: Recent 2020 Highlights
Recent 2020 Highlights Executing on Strategic Objectives Organic Growth1 -0.3°/o Revenue Growth -1.7°/o NOI Growth +3.1°/o Expense Growth 69.3°/o NOI Margin External Growth2 $74-7 million acquisitions Financing3 $733-9 million remaining capacity on revolver $55.3 million debt maturities through 2021
Slide 30: Footnotes
1. 2. 3. Performance as reported for the same-store pool as it was constituted at the end of the respective year Year-ending values as detailed in Company's supplemental packages Calculated as ending common share price / funds from operations per share, as adjusted. Please refer to CubeSmart’s publi
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