Cubesmart · NYSE:CUBE
Cubesmart — Investor Presentation (November 2015)
29 slides from Cubesmart's investor presentation, Nov 10, 2015
Slide 1: Forward-looking statements
The forward-looking statements contained in this presentation are subject to various risks and uncertainties. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurance that its expectations will be achie
Slide 2: Self-storage REIT with expansive national platform
Self-storage REIT with expansive national platform Facilities1 629 Managed 191 Owned 438 Owned Portfolio by Market Boston 5 CT 21 Other Northeast 12 NY 50 Total Market Cap2 $6.0 billion Chicago 37 Other West 15 Ohio 20 hiladelphia 15 Balt/DC 26 CO/UT 13 Inland Empire 16 So. CA 12 Tenn 6 Other Southe
Slide 3: Innovative platforms, disciplined growth, and prudent funding have generated significant value
Innovative platforms, disciplined growth, and prudent funding have combined to generate significant value for shareholders Cumulative Total Returns1 4 1)Returns through September 30, 2015. Self-Storage REITs represent a straight average of cumulative total returns for the four largest publicly trade
Slide 4: Internal growth, external growth and financial strength
Internal Growth Maximize portfolio value through continued focus on customer service and operational advancement External Growth Continue to prudently build a portfolio of high-quality assets, with a focus on targeted markets Finance growth by accessing the full array of capital sources available th
Slide 5: 2015 Year-to-Date Same-Store Results
2015 Year-to-Date Same-Store Results1 Internal Growth NOI2 +9.1% Revenue +7.1% Expenses +2.8% Average Occupancy 92.3% (+150 bps YOY) 2015 Same-Store Guidance3 MaintCaionnBtiBnBu/eBtaoa2prinuvdeesnttmlyebnut igldraadpeobratflaonlicoeosfheet External Growth Revenue growth driven increasingly by effect
Slide 6: Enhancing the customer experience at all points of engagement
Enhancing the customer experience at all points of engagement through proprietary systems and processes Continued Engagement Attraction Reservation Rental - PREMIUM UNIT 7 Customer Service Internet Marketing Revenue Management 323 322 321 296 295 238 193-194 149 148 106 366 324 319 195 150 196 197 1
Slide 7: Adjusting to evolving marketing ecosystems and engagement mediums
Adjusting to evolving marketing ecosystems and engagement mediums Growing complexity of digital marketing platforms (i.e. social media, customer reviews, and search engine algorithms); Customers engage through a multitude of devices; personalized customer experiences Website maturation; Internet ad
Slide 8: Optimizing marketing efforts through industry-leading analytics
Optimizing marketing efforts and efficiently attracting customers through use of industry-leading analytics 9
Slide 9: Supplementing internet marketing with a traditional platform
Supplementing internet marketing initiatives with a traditional platform to take advantage of market depth and to reach customers offline Out-of-home placements in markets with high store concentration Hyper-targeted direct mail campaigns in select markets Selective local marketing efforts to target
Slide 10: Advanced data analytics to personalize experiences for each customer
Advanced data analytics to personalize experiences for each customer Custom Experience 1 Custom Experience 2 Custom Experience 3 Continued focus on capturing and leveraging insights about customers to create customized experiences that increase engagement and conversion Understanding the motivations
Slide 11: Revenue Management Landscape
Revenue Management Landscape Historically, advanced revenue management techniques have boosted revenue in a number of supply-constrained industries, beginning with airlines and then moving on to hotels Multi-family represents the closest analogy, but the unpredictable lengths of stay for self storag
Slide 12: Fundamental Pricing Issue
Fundamental Pricing Issue Pricing optimization requires consideration of a multi-dimensional demand landscape and dynamic capacity constraints Optimal Pricing Pricing Decisions Substitutability Competition Timing / Other Capacity / Economic Outcomes 13
Slide 13: Long-Term Revenue Maximization Strategy
Long-Term Revenue Maximization Strategy Demand Forecast/ Revenue Optimization Price optimization requires consideration of a multi-dimensional demand landscape & dynamic capacity constraints Balance Between Street Rates, Discounts, and Concessions Goal of providing the most compelling offer to the c
Slide 14: Mission of simplifying organizational challenges through unparalleled customer service
Striving to fulfill our mission of simplifying organizational challenges through unparalleled customer service Focus on customer service throughout all touch-points (store, sales center, and website) to create a fully integrated interaction with each customer Modern offices and operational training
Slide 15: An award-winning service culture
An award-winning service culture 16
Slide 16: Investment Strategy
Investment Strategy MaFxoimcuiszoenphoirgthf-oqluioalvitayluperotpherrotiuegs hinchoignhti-nbuarerdiefr-otcou-s Internal Growth on ceuntsrtyomaerrkesetsrvice and operational advancement Leverage relationships with development partners to invest selectively in accretive development and built-to-sui
Slide 17: Focus on adding scale in attractive, high-barrier-to-entry markets
Focus on adding scale in attractive, high-barrier-to-entry markets Investment Activity Since 2008 Acquisitions1,2 $2.1 billion 201 Stores Dispositions1 $460 million 147 Stores Acquisitions, 2008 – November 5, 2015 Dispositions, 2008 – November 5, 2015 Development Properties, 2014 – November 5, 2015
Slide 18: Significant evolution over past seven years
Significant evolution over past seven years Acquisitions 2008 – November 5, 2015 2 Total Portfolio November 5, 2015 2 Total Portfolio January 2008 2 Dispositions, 2008 – November 5, 2015 Note: Bubbles sized by revenue. 1)Realized annual rent per occupied sq ft is computed by dividing rental income b
Slide 19: Development
Development Development transactions generate highest returns Utilize partners for local market expertise $182.3M Brooklyn, NY Arlington, VA Bronx, NY Note: Dollar amounts represent 100% of estimated CubeSmart investment. 20 1Q16 Queens, NY $32.1M Queens, NY $19.0M 3Q16 Washington, DC $25.4M 4Q1
Slide 20: Purchase at Completion
Purchase at Completion These transactions allow us to acquire high-quality, purpose-built assets without taking on development risk Our proven operational platform creates value by mitigating lease-up risk Dallas, TX 21 Note: Facilities to be purchased upon completion are subject to due diligenc
Slide 21: Enhancing our portfolio by adding purpose-built Class A facilities
Enhancing our portfolio by adding purpose-built Class A facilities 22
Slide 22: Third-party management leverages our operating platform
Third-party management allows us to leverage our operating platform and generate additional economies of scale Platform has grown to 191 properties since its inception in 2009 Purchased 57 properties from our managed portfolio for $527 million1 since 2010 23 1)Includes acquisitions closed or und
Slide 23: Financial Strength Approach and 2015 Activity
Approach MaFxuimndizeextpeornratfloglrioowvtahluineatmhraonungehr ccoonnsitsitneunet dwiftohcouusr Internal Growth objective of maintaining our investment grade credit on customer service and operational advancement ratings Conservative balance sheet strategy provides capacity and flexibility to c
Slide 24: Funding growth consistent with a conservative balance sheet
Objective of funding growth in manner consistent with a conservative balance sheet 36% Debt + Preferred / Gross Assets Weighted Average As of September 30, 2015 2 25 1)Based on EBITDA and average debt outstanding during 3Q15. 2)Pro-forma to include impact of $250 million senior unsecured notes issua
Slide 25: Conservative balance sheet management continues to improve credit metrics
Strong operating performance coupled with conservative balance sheet management continues to improve credit metrics 1) 2) 3) Source: Company Filings. Sources: SNL, Company Filings. 26 Dividend payout ratio calculated as annual common distributions declared per share / funds from operations per share
Slide 26: Summary of organic growth, external growth and financial strength
Robust organic growth fueled by a focus on customer service, continued enhancement of operational infrastructure, and a widening divide between large and small operators Meaningful external growth through a disciplined investment process supplemented by a competitive and expanding third party mana
Slide 27: Same-Store Performance, External Growth, Trading & Valuation Metrics
S am e - S tore Pe rf orm an c e 1 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 Ex te rn al G row th T radin g & Valu ation Me tric s 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
Slide 28: Investor Relations Contact
Investor Relations Contact Charles Place Director, Investor Relations 5 Old Lancaster Rd. Malvern, PA 19355 610.535.5700 cplace@cubesmart..com Date
Slide 29: Investor Relations Contact
Gb) cusesmarr Investor Relations Contact Charles Place Director, Investor Relations 5 Old Lancaster Rd. Malvern, PA 19355 610.535.5700 cplace@cubesmart.com