Analysis of CubeSmart's Performance in Self-Storage Sector
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy CUBE?
Source: Fool
- Improving Industry Fundamentals: CubeSmart achieved its first year-over-year increase in move-in rates in Q3 2023 since early 2022, indicating a gradual recovery in the self-storage market after several challenging years, which could lay the groundwork for future market performance.
- Market Share Disadvantage: With only 4.9% of the U.S. self-storage market, CubeSmart lags significantly behind leaders Extra Space Storage at 14.4% and Public Storage at 11.2%, placing it at a competitive disadvantage that impacts its growth potential.
- Lack of Differentiated Growth Strategy: Unlike its competitors, CubeSmart lacks an effective differentiated growth strategy, as Extra Space Storage boasts a leading third-party management platform while Public Storage has strong in-house development capabilities, making it difficult for CubeSmart to stand out in the market.
- Joint Ventures Driving Growth: CubeSmart recently formed a $250 million joint venture with CBRE Investment Management to invest in high-growth markets, and is also constructing a $19 million joint venture development property, demonstrating its potential to accelerate growth through joint ventures.
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Analyst Views on CUBE
Wall Street analysts forecast CUBE stock price to rise
11 Analyst Rating
3 Buy
8 Hold
0 Sell
Moderate Buy
Current: 38.850
Low
37.00
Averages
41.11
High
48.00
Current: 38.850
Low
37.00
Averages
41.11
High
48.00
About CUBE
CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer climate-controlled storage space for residential and commercial customers. It owns its assets and conducts its operations through the CubeSmart, L.P. (Operating Partnership), and subsidiaries of the Operating Partnership. Its customers rent storage cubes for their exclusive use, on a month-to-month basis. Additionally, some of its stores offer outside storage areas for vehicles and boats. Its stores are designed to accommodate both residential and commercial customers, with features, such as wide aisles and load-bearing capabilities for large truck access. Its customers can access their storage cubes during business hours, and some of its stores provide customers with 24-hour access. It owns about 631 self-storage properties located in 25 states and in the District of Columbia, containing an aggregate of about 45.8 million rentable square feet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Analysis of CubeSmart's Self-Storage Market Performance
- Underperformance: CubeSmart has failed to outperform the market over the past decade, lagging behind the S&P 500 and its two larger rivals over the last one, three, and five years, indicating a lack of competitive strength in the self-storage sector.
- Improving Industry Fundamentals: Despite facing pressures from new supply due to low interest rates, CubeSmart achieved its first year-over-year increase in move-in rates since early 2022 in the third quarter, suggesting a gradual market recovery.
- Lack of Differentiation: With only 4.9% market share in the U.S. self-storage sector, significantly trailing Extra Space Storage's 14.4% and Public Storage's 11.2%, CubeSmart's ineffective growth strategy hampers its ability to increase market share.
- Joint Venture Opportunities: CubeSmart formed a $250 million joint venture with CBRE Investment Management to accelerate growth in high-growth markets, and with $900 million invested across existing joint ventures, leveraging this capital could drive future growth.
See More
Analysis of CubeSmart's Performance in Self-Storage Sector
- Improving Industry Fundamentals: CubeSmart achieved its first year-over-year increase in move-in rates in Q3 2023 since early 2022, indicating a gradual recovery in the self-storage market after several challenging years, which could lay the groundwork for future market performance.
- Market Share Disadvantage: With only 4.9% of the U.S. self-storage market, CubeSmart lags significantly behind leaders Extra Space Storage at 14.4% and Public Storage at 11.2%, placing it at a competitive disadvantage that impacts its growth potential.
- Lack of Differentiated Growth Strategy: Unlike its competitors, CubeSmart lacks an effective differentiated growth strategy, as Extra Space Storage boasts a leading third-party management platform while Public Storage has strong in-house development capabilities, making it difficult for CubeSmart to stand out in the market.
- Joint Ventures Driving Growth: CubeSmart recently formed a $250 million joint venture with CBRE Investment Management to invest in high-growth markets, and is also constructing a $19 million joint venture development property, demonstrating its potential to accelerate growth through joint ventures.
See More
CubeSmart Faces Market Challenges and Opportunities
- Underperformance: CubeSmart has underperformed the market over the past decade, holding only 4.9% of the U.S. self-storage market compared to Extra Space Storage's 14.4%, indicating a need for a differentiated growth strategy to enhance its competitive position.
- Supply-Demand Imbalance: The influx of new self-storage properties due to low interest rates post-pandemic has pressured CubeSmart, leading to declining occupancy and rental rates, which has adversely affected overall performance, necessitating close monitoring of market recovery.
- Joint Venture Opportunities: CubeSmart recently formed a $250 million joint venture with CBRE Investment Management to invest in high-growth markets, a strategic move that could provide new growth momentum and accelerate development in the coming years.
- Customer Growth Trend: Despite challenges, CubeSmart achieved its first year-over-year increase in move-in rates since early 2022 in Q3, indicating signs of market recovery, and if this trend continues, it could significantly improve the company's market performance.
See More
CubeSmart and CBRE Acquire Self-Storage Property in $250M Venture
- Joint Acquisition: CubeSmart and CBRE Investment Management have acquired a self-storage property in Phoenix, Arizona, marking the first project in a $250 million joint venture aimed at investing in high-growth U.S. markets.
- Clear Investment Strategy: The joint venture will focus on core, core-plus, and value-add opportunities, with CubeSmart managing the property, which aims to enhance market competitiveness through effective capital deployment.
- Management Platform Strength: CubeSmart President and CEO Christopher P. Marr stated that this collaboration highlights the company's creative and disciplined approach to capital deployment while enhancing its growth potential.
- Positive Stock Reaction: CubeSmart shares rose 1.7% in morning trading, reflecting market optimism regarding the joint venture and increased investor confidence.
See More
Wall Street Analysts Adjust Ratings on Key Stocks
- Rating Downgrade: Wolfe Research analyst Andrew Rosivach downgraded Public Storage (NYSE:PSA) from Outperform to Peer Perform, reflecting a cautious outlook on the company's future growth, with shares closing at $282.63 on Friday.
- Price Target Adjustment: Morgan Stanley analyst Hamza Fodderwala downgraded Varonis Systems Inc (NASDAQ:VRNS) from Overweight to Equal-Weight and lowered the price target from $44 to $41, indicating concerns about its profitability, with shares closing at $34.95 on Friday.
- Rating Change: Canaccord Genuity analyst Brian McNamara downgraded Lifetime Brands Inc (NASDAQ:LCUT) from Buy to Hold and cut the price target from $4 to $3.5, reflecting a conservative outlook on its market performance, with shares closing at $3.89 on Friday.
- Rating and Price Target Adjustment: DA Davidson analyst Peter Winter downgraded BOK Financial Corp (NASDAQ:BOKF) from Buy to Neutral while raising the price target from $125 to $135, indicating confidence in its future stability, with shares closing at $132.12 on Friday.
See More
CubeSmart Announces $2.08 Tax Allocation for 2025 Distributions
- Distribution Overview: CubeSmart announced a total distribution of $2.08 per share for 2025, with an ordinary dividend of $1.836104, reflecting the company's ongoing profitability and commitment to shareholder returns.
- Payment Schedule: The record dates for the four distributions in 2025 are January 2, April 1, July 1, and October 1, with payment dates on January 16, April 15, July 15, and October 15, ensuring timely returns for shareholders.
- Tax Treatment Note: According to tax regulations, the fourth quarter 2025 distribution is considered a 2026 distribution for federal income tax purposes, which may impact shareholders' tax planning and requires attention to related tax implications.
- Company Background: CubeSmart is a self-administered real estate investment trust managing 1,514 self-storage properties, ranking among the top three operators in the U.S. self-storage market, showcasing its leadership position in the industry.
See More
Analysis of CubeSmart's Self-Storage Market Performance
- Underperformance: CubeSmart has failed to outperform the market over the past decade, lagging behind the S&P 500 and its two larger rivals over the last one, three, and five years, indicating a lack of competitive strength in the self-storage sector.
- Improving Industry Fundamentals: Despite facing pressures from new supply due to low interest rates, CubeSmart achieved its first year-over-year increase in move-in rates since early 2022 in the third quarter, suggesting a gradual market recovery.
- Lack of Differentiation: With only 4.9% market share in the U.S. self-storage sector, significantly trailing Extra Space Storage's 14.4% and Public Storage's 11.2%, CubeSmart's ineffective growth strategy hampers its ability to increase market share.
- Joint Venture Opportunities: CubeSmart formed a $250 million joint venture with CBRE Investment Management to accelerate growth in high-growth markets, and with $900 million invested across existing joint ventures, leveraging this capital could drive future growth.
See More
Analysis of CubeSmart's Performance in Self-Storage Sector
- Improving Industry Fundamentals: CubeSmart achieved its first year-over-year increase in move-in rates in Q3 2023 since early 2022, indicating a gradual recovery in the self-storage market after several challenging years, which could lay the groundwork for future market performance.
- Market Share Disadvantage: With only 4.9% of the U.S. self-storage market, CubeSmart lags significantly behind leaders Extra Space Storage at 14.4% and Public Storage at 11.2%, placing it at a competitive disadvantage that impacts its growth potential.
- Lack of Differentiated Growth Strategy: Unlike its competitors, CubeSmart lacks an effective differentiated growth strategy, as Extra Space Storage boasts a leading third-party management platform while Public Storage has strong in-house development capabilities, making it difficult for CubeSmart to stand out in the market.
- Joint Ventures Driving Growth: CubeSmart recently formed a $250 million joint venture with CBRE Investment Management to invest in high-growth markets, and is also constructing a $19 million joint venture development property, demonstrating its potential to accelerate growth through joint ventures.
See More
CubeSmart Faces Market Challenges and Opportunities
- Underperformance: CubeSmart has underperformed the market over the past decade, holding only 4.9% of the U.S. self-storage market compared to Extra Space Storage's 14.4%, indicating a need for a differentiated growth strategy to enhance its competitive position.
- Supply-Demand Imbalance: The influx of new self-storage properties due to low interest rates post-pandemic has pressured CubeSmart, leading to declining occupancy and rental rates, which has adversely affected overall performance, necessitating close monitoring of market recovery.
- Joint Venture Opportunities: CubeSmart recently formed a $250 million joint venture with CBRE Investment Management to invest in high-growth markets, a strategic move that could provide new growth momentum and accelerate development in the coming years.
- Customer Growth Trend: Despite challenges, CubeSmart achieved its first year-over-year increase in move-in rates since early 2022 in Q3, indicating signs of market recovery, and if this trend continues, it could significantly improve the company's market performance.
See More
CubeSmart and CBRE Acquire Self-Storage Property in $250M Venture
- Joint Acquisition: CubeSmart and CBRE Investment Management have acquired a self-storage property in Phoenix, Arizona, marking the first project in a $250 million joint venture aimed at investing in high-growth U.S. markets.
- Clear Investment Strategy: The joint venture will focus on core, core-plus, and value-add opportunities, with CubeSmart managing the property, which aims to enhance market competitiveness through effective capital deployment.
- Management Platform Strength: CubeSmart President and CEO Christopher P. Marr stated that this collaboration highlights the company's creative and disciplined approach to capital deployment while enhancing its growth potential.
- Positive Stock Reaction: CubeSmart shares rose 1.7% in morning trading, reflecting market optimism regarding the joint venture and increased investor confidence.
See More
Wall Street Analysts Adjust Ratings on Key Stocks
- Rating Downgrade: Wolfe Research analyst Andrew Rosivach downgraded Public Storage (NYSE:PSA) from Outperform to Peer Perform, reflecting a cautious outlook on the company's future growth, with shares closing at $282.63 on Friday.
- Price Target Adjustment: Morgan Stanley analyst Hamza Fodderwala downgraded Varonis Systems Inc (NASDAQ:VRNS) from Overweight to Equal-Weight and lowered the price target from $44 to $41, indicating concerns about its profitability, with shares closing at $34.95 on Friday.
- Rating Change: Canaccord Genuity analyst Brian McNamara downgraded Lifetime Brands Inc (NASDAQ:LCUT) from Buy to Hold and cut the price target from $4 to $3.5, reflecting a conservative outlook on its market performance, with shares closing at $3.89 on Friday.
- Rating and Price Target Adjustment: DA Davidson analyst Peter Winter downgraded BOK Financial Corp (NASDAQ:BOKF) from Buy to Neutral while raising the price target from $125 to $135, indicating confidence in its future stability, with shares closing at $132.12 on Friday.
See More
CubeSmart Announces $2.08 Tax Allocation for 2025 Distributions
- Distribution Overview: CubeSmart announced a total distribution of $2.08 per share for 2025, with an ordinary dividend of $1.836104, reflecting the company's ongoing profitability and commitment to shareholder returns.
- Payment Schedule: The record dates for the four distributions in 2025 are January 2, April 1, July 1, and October 1, with payment dates on January 16, April 15, July 15, and October 15, ensuring timely returns for shareholders.
- Tax Treatment Note: According to tax regulations, the fourth quarter 2025 distribution is considered a 2026 distribution for federal income tax purposes, which may impact shareholders' tax planning and requires attention to related tax implications.
- Company Background: CubeSmart is a self-administered real estate investment trust managing 1,514 self-storage properties, ranking among the top three operators in the U.S. self-storage market, showcasing its leadership position in the industry.
See More
