Cubesmart · NYSE:CUBE
Cubesmart — Investor Presentation (September 2014)
24 slides from Cubesmart's investor presentation, Sep 10, 2014
Slide 1: Investor Presentation September 2014
Investor Presentation September 2014
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 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 ex
Slide 3: Introduction to CubeSmart
Introduction to CubeSmart Malvern, PA 3 Self-storage REIT with expansive national platform Property count as of August 7, 2014. As of June 30, 2014. Market value of common. Book value of preferred equity and debt. 389 559 170 Facilities1 Owned Managed Headquarters $4.0 billion Total Market Cap2 Owne
Slide 4: Self-Storage Industry Overview
Self-Storage Industry Overview 4 Broad tenant diversification Demand driven by mobility, life change Opportunity for consolidation Unsophisticated competition High operating margins Low cap-ex requirements Attractive industry with favorable economic characteristics Limited new supply REIT market sha
Slide 5: Long-Term Vision for Value Creation
Long-Term Vision for Value Creation 5 A balanced and disciplined approach External Growth Financial Strength Internal Growth Maximize portfolio value through continued focus on customer service and operational advancement Continue to prudently build a portfolio of high-quality assets, with a focus o
Slide 6: 2014 Year-to-Date Highlights
2014 Year-to-Date Highlights 6 Executing on strategic objectives Same-Store Results (YTD1): NOI3 +9.4% Revenue +7.3% Expenses +3.2% NOI Margin 68% (+120 bps) FFO/Share Growth4 +21% $247 million in acquisitions2 Amended agreement on $100 million term loan to improve pricing & extend term 20 new third
Slide 7: 2014 Internal Growth Drivers
2014 Internal Growth Drivers 7 External Growth Financial Strength Internal Growth Continued strength in revenue growth derived from a balanced mix of occupancy gains, which is gradually being replaced by accelerating realized rent growth. Expense growth is expected to be largely inflationary except
Slide 8: Robust Performance Trends
Robust Performance Trends Occupancy at period end. 2014 and 2013 data reflects that of the current same-store pool, as constituted on June 30, 2014. Occupancies in 2012 reflect those of the 2013 same-store pool, as constituted on December 31, 2013 and occupancies in 2011 reflect those of the 2012 sa
Slide 9: Improving Net Operating Income Margin
Improving Net Operating Income Margin Higher occupancies & operational efficiencies drive margin growth 9 67.5%1 Net operating income margin for the six months ended June 30, 2014. Annual same-store net operating income margin except as noted above. 2014 and 2013 data reflects that of the current sa
Slide 10: Performance Fueled by Innovation
Performance Fueled by Innovation 10 Enhancing the Customer experience at all points of engagement through proprietary systems and processes Reservation Attraction Rental Continued Engagement Sales Center Real-Time Reporting Paperless Leasing In-Store Experience Internet Marketing Revenue Management
Slide 11: An Award-Winning Service Culture
An Award-Winning Service Culture 11 Redefining service in the self-storage industry
Slide 12: 2014 Outlook
2014 Outlook Continuation of operational strength Full-Year Guidance1 $1.03 to $1.06 FFO2 per Share 8.25% to 9.25% NOI Growth 6.75% to 7.25% Revenue Growth 3.0% to 3.5% Expense Growth Same-Store Guidance Components: Represents 14.8% annual growth at the midpoint Driven by occupancy and rate gains Co
Slide 13: 2014 External Growth Drivers
2014 External Growth Drivers 13 External Growth Financial Strength Internal Growth Focus on quality properties in high-barrier-to-entry markets. Invest selectively in development and built-to-suit projects with experienced partners in targeted markets. Utilize third-party management program to lever
Slide 14: High-Quality Portfolio Evolution
High-Quality Portfolio Evolution 14 Significant evolution over past six years Note: Bubbles sized by revenue. Realized annual rent per occupied sq ft is computed by dividing rental income by the weighted occupied sq ft for the period. Includes transactions closed and announced and under contract as
Slide 15: Sector leading Demographics
Sector leading Demographics 15 Evolution has created a portfolio with strong demographic exposure 3-Mile Population 3-Mile Households 3-Mile Average Household Incomes Source: ISI Group LLC Real Estate Research Report dated September 5, 2014.
Slide 16: Prudent Portfolio Repositioning
Prudent Portfolio Repositioning Acquisitions 1 16 Focus on adding scale in attractive, high-barrier-to-entry markets Investment Activity Since 2008 $1.6 billion 153 Stores Transactions closed or announced and under contract from 2008 through June 30, 2014. Dispositions1 $422 million 139 Stores Acqui
Slide 17: Focused Investment Strategy
Focused Investment Strategy Geographic Exposure % of portfolio NOI 1 Pro forma net operating income; including acquisitions announced and under contract as of June 30, 2014. 17 Targeted investment markets represent 71% of portfolio NOI1
Slide 18: Capacity for New Supply
Capacity for New Supply Favorable supply levels across CUBE’s targeted investment markets 18 Source: 2014 Self-Storage Almanac, by MSA. National Average Rentable Square Footage per Person1 7.35
Slide 19: Value Creation Pipeline
Value Creation Pipeline Opportunistic development in high-barrier-to-entry markets Note: all dollar amounts are in thousands Represents 100% of estimated CubeSmart investment. These facilities are expected to be purchased upon completion and are subject to due diligence and other customary closing c
Slide 20: Attractive Capital Structure
Attractive Capital Structure 20 External Growth Financial Strength Internal Growth Baa3 rating from Moody’s with a positive outlook. BBB- rating from S&P with a positive outlook. Acquisitions will be funded in a manner consistent with our objective of achieving and maintaining a Baa2/BBB investment
Slide 21: Investment Grade Balance Sheet
Investment Grade Balance Sheet 21 Objective of funding growth in manner that maintains or improves metrics Investment Grade Rating As of June 30, 2014 Conservative Metrics 40% Debt / Gross Assets 43% Debt + Preferred / Gross Assets 5.7x Debt / EBITDA1 6.0x Debt + Preferred / EBITDA1 7.6% Secured Deb
Slide 22: Flexibility to Support Growth
Flexibility to Support Growth 22 Capital structure affords access to full spectrum of capital sources Capital Structure As of June 30, 2014 68% 2% 11% 6% 13% % of Total Market Capitalization 1 Market value of common equity. Book value of preferred equity and debt. Free Cash Flow Private Public Equit
Slide 23: Summary
Summary Limited new supply, a widening competitive divide between large and small operators, and continuing industry consolidation Robust organic growth fueled by a focus on customer service and continued enhancement of operational infrastructure Meaningful external growth through a disciplined inve
Slide 24: Investor Relations Contact
Date Investor Relations Contact Charles Place Director, Investor Relations 5 Old Lancaster Rd. Malvern, PA 19355 610.535.5700 cplace@cubesmart.com