CubeSmart

Hello everyone, thank you for joining us and welcome to the CubeSmart second quarter 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press star 1 again. I will now hand the call over to Josh Schutzer, Senior Vice President of Finance. Josh, please go ahead.

Thank you, Sarah. Good morning, everyone. Welcome to Cubismart's second quarter 2026 earnings call. Participants on today's call include Chris Marr, President and Chief Executive Officer, and Tim Martin, Chief Financial Officer. Our prepared remarks will be followed by a Q&A session. In addition to our earnings release, which was issued yesterday evening, Supplemental operating and financial data is available under the investor relations section of the company's website at www.keepsmart.com. The company's remarks will include certain forward-looking statements regarding earnings and strategy that involve risks, uncertainties, and other factors that may cause the actual results to differ materially from these forward-looking statements. The risks and factors that could cause our actual results to differ materially from forward-looking statements are provided in documents the company furnishes to or files with the Security and Exchange Commission, specifically the Form 8K we filed this morning, together with our earnings release filed with the Form 8K, and the risk factor section of the company's annual report on Form 10K. In addition, the company's remarks include reference to non-GAAP measures. A reconciliation between GAAP and non-GAAP measures can be found in the second quarter financial supplement posted on the company's website at www.keepsmart.com. I will now turn the call over to Chris.

Thank you, Josh, and thank you everyone for joining us this morning. 2026 marks a year of inflection as we return to positive growth throughout the year. Following a stabilization in operating fundamentals in 2025, we saw same store revenues inflect positively in early 2026. Our base case expectation is for continued acceleration in revenues that will lead to a return to positive earnings growth in the second half of 2026, providing a strong setup entering 2027. Our key performance indicators are flashing green, showcasing the resilience of the self storage business and the value of having such a wide range of need based demand for our product, benefiting us from not being overly reliant on any one source. Same store revenues continue their positive momentum, reflecting the strength of our customer base, the declining impact of new supply in many of our core markets, and the quality of our portfolio and operating platform. Macro volatility is impacting the U.S. consumer. However, our customer's health remains strong with lower vacate activity, elongating lengths of stay and continued solid credit metrics. This environment continues to showcase the strength of our quality-focused strategy with primary markets outperforming and showcasing their lower beta characteristics. We had a positive and productive spring and summer busy rental season, closing the occupancy gap to 2025 by the end of June and that momentum has continued into July. Second quarter move-in rates for new customers at a year over year positive 1.7%, improved sequentially by 80 basis points and all other factors held constant provides an attractive setup for the back half of the year and heading into 2027. There continues to be a wide dispersion and move in rates for new customers across our major markets. Strength continues in the Acela Corridor, Boston, Stanford, New York, and Philadelphia, in the Midwest, Chicago, Columbus, and Cleveland, and very positive improving trends in our West Coast markets with our Inland Empire and Los Angeles properties exhibiting very strong sequential improvement and swinging second quarter same store revenue growth on a year over year basis back into positive territory. With another solid quarter of sequentially improving trends, we are optimistic for continued gradual recovery in our major Sunbelt markets. These markets are experiencing the most pressure from supply as well as macroeconomic factors impacting the consumer. resulting in a challenging new customer pricing environment. We have maintained our disciplined capital allocation strategy. During the quarter, we executed against several objectives we articulated earlier in the year, including a new joint venture, the continued execution of our share repurchase program, and the recast and increased capacity in our credit facility. And I know Tim is very excited to share the details with you during his prepared remarks. As we come to the end of July, our rental volumes are elevated over last year. As of July 30, our same store physical occupancy is 91.1%, a 30 basis point increase over July 30, 2025. Our pricing algorithms have informed us that it is optimal to maintain seasonal pricing trends and build physical occupancy as we move into the fall. Self-storage remains a tremendously resilient business as we continue to benefit from the diverse set of needs-based use cases for the product, even against the backdrop of volatile consumer confidence. We are optimistic about the outlook for our business as we continue to see steady acceleration and fundamentals. Our high quality portfolio, our sophisticated operating systems, and our customer service focused team are well positioned to continue to drive us forward as we inflect back to positive earnings growth in the second half of 2026. I'll now turn it over to Tim for more details on the quarter and our positively updated guidance ranges. Tim.

Thanks, Chris. Good morning, everyone. Thanks as always. We appreciate you taking the time to join us on the call today. Second quarter results were reflective of the positive environment that Chris touched on. with broad-based improvement across most markets as demand trends remain steady while headwinds from new supply continue to dissipate. Same-store year-over-year revenue growth accelerated from 0.6% in the first quarter to 0.8% in the second quarter. Move-in rates grew 1.7% year-over-year, while the occupancy gap improved to flat by the end of the quarter. Those stabilizing trends and first half results led us to improving our full year same store revenue guidance range to a new range of 0.5% to 1.25%, which implies at the midpoint our expectation that same store revenue growth will continue to accelerate in the back half of the year. Same store operating expenses grew 4.4% over last year in line with our expectations. As we previously discussed, we had some tough expense comps after four straight years of industry-leading expense control, especially in the first half of the year. We modestly improved our full-year guidance range for same-store expenses to a new range of 3.25% to 4.5%, reflecting our expectation of moderating expense growth in the back half of the year. Revenue growth of 0.8% combined with 4.4% expense growth yielded negative 0.7% same store NOI growth for the quarter. We reported FFO per share as adjusted of 63 cents for the quarter, which was at the midpoint of our guidance entering the quarter. As discussed last quarter, we continue to execute on our disciplined capital allocation strategy, looking for creative ways to create shareholder value in an environment that continues to have a disconnect between public and private market valuations. We announced last evening a new joint venture with Heitman, where we will be contributing 15 non-core assets to a newly formed joint venture in which we'll have a 20% ownership stake. The contributed assets were identified as non-core, meaning either they were in isolated markets or they were in outer ring locations in core markets. This transaction allows us to unlock value at a market rate for these assets, continue to participate in upside potential through both future growth as well as fees with a partner we have a very long and successful history with. It also improves the overall quality of our on-balance sheet portfolio. This initial transaction in the venture provides the seed portfolio with the opportunity to grow in the future, giving us yet another avenue for future external growth in addition to our on-balance sheet activity as well as our previously announced JV with CBRE. Proceeds from the transaction will be used to fund share repurchases, giving us a leveraged neutral opportunity to accretively invest in our shares as they trade at implied valuations that are disconnected from where high-quality storage assets are trading in the private market. We had additional share repurchases during the second quarter, totaling $42.5 million, bringing us to $75.8 million year to date, with much of that activity done with the Heitman JV in mind. The relative value of our portfolio has continued to make it our most attractive investment option. On the third-party management front, we added 25 stores to the platform in the second quarter and ended the quarter with 872 third-party stores under management. Also during the quarter, we closed on our extended and expanded revolving credit facility, extending the maturity from February of 27 to June of 2030. We increased the capacity of the facility from $850 million to $1 billion and improved the pricing. Quick thank you to our entire high quality bank group. We always appreciate your continued support. Our balance sheet is in great shape. We have a bond that matures next quarter and we've been actively monitoring the debt markets and will continue to do so in the coming months. The expanded capacity on the revolver combined with no debt maturities in 2027 gives us a lot of flexibility as we navigate through the next several quarters. Details of our 2026 earnings guidance and related assumptions were included in our press release last evening. Big picture, operating fundamentals continue to improve across most markets. Demand trends are steady. Headwinds from new supply continue to dissipate. We saw improvements in move-in rates as well as occupancy levels, and our customers remain strong with lower vacate activity, elongating lengths of stay, and no change to credit metrics. Our baseline expectation is for continued gradual improvement in top line growth for the balance of 2026. Our same store expense guidance implies lower expense growth for the rest of the year. The midpoint of our same store and OI range implies returning to positive growth in the second half of the year. And the midpoint of our FFO per shares adjusted guidance range also implies returning to positive earnings growth in the back half. So when you add it all up, we feel great about where we're positioned and see positive trends that are leading to a really nice setup for us in 2027. Thanks again for joining us on the call this morning. At this time, Sarah, why don't we open up the call for some questions?

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question. If you're muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Michael Griffin with Evercore ISI. Your line is open. Please go ahead.

Great, thanks so much. Chris, in your prepared remarks, you talked about some key performance indicators flashing green. I was wondering if you can expand on that. I mean, is this just really move-in rents getting better year over year as a result of maybe better comps, more moderating supply, or is there anything on the organic demand side that you're seeing differently within the business right now?

Yeah, thanks, Michael. I think it's that full menu. We're seeing very good top of funnel demand with a diverse set of use cases for the product we're continuing to see the existing customer health as we mentioned credit metrics etc be very positive we're continuing to see those existing customers stay with us on their storage journey a bit longer each as time goes by we're seeing some good trends uh across the board you know strengthen in the east coast uh in the middle part of the country some improving green shoots in the sunbelt on uh on customers uh move-in rates uh i think on the on the opex side as tim said you know we're seeing um the trends as we would have expected get better as we go in the back half of the year So I think just broadly feel very good about where we are at this point in the year.

Thanks, Chris. That's some helpful context. And then maybe, Tim, I appreciated your prepared remarks around the new joint venture. Is there anything you can share in terms of pricing or cap rate that that deal transacted at? I mean, it seems like the near-term priorities is share repurchases. I mean, are you seeing anything? I know you had the recently formed joint venture earlier this year, you know, maybe to go on offense in terms of JVs. It doesn't seem like wholly owned on balance sheet acquisition pencil, but just curious how you weigh kind of those proceeds being used for either share repurchases or potential acquisition opportunities in the future.

Thank you.

Thanks, Michael. I consider the share repurchases and the transaction that we just announced with Heitman to absolutely be playing offense. It's playing offense in the context of the environment that we're in. It gives us a great opportunity to be consistent with our operating strategy of improving the quality of our portfolio. It allows us to take advantage of being able to contribute these assets at a market valuation, which I would characterize to your first question in the in the mid fives from a cap rate perspective and you know being able to use those proceeds to take advantage of the disconnect of what we're seeing out there so that's a bit redundant to my prepared remarks but that's the you know that's the gist of the approach and then and then again it gives us yet another vehicle to look at future growth opportunities along with Heitman now that we have this seed portfolio in this venture gives us yet another path I think the The market is starting to open up and we're ready to get to that part of the offensive playbook as well when the time's right for us. Great. Thanks so much.

Thank you.

Your next question comes from the line of Michael Goldsmith with UBS. Your line is open. Please go ahead.

Good morning, thanks a lot for taking my questions. Chris, your prepared remarks, you sounded more optimistic than you've been in some time. So, you know, can you, and then you also talked about, you know, accelerating into strength into 2027. So, can you talk a little bit about, you know, what it is specifically that's driving that, and then also if you could talk a little bit about the cadence as it creates that setup for next year?

Yeah, thanks, Michael. I am optimistic. The first part of the year here has been pretty strong and broad-based in terms of the demand. And I think, again, to my comment, I think we've lost a little bit of our focus on how resilient the business is. It's everyday acts of life that create an opportunity for a customer to experience the joy of self-storage. I think we're just seeing that. I think we also have maybe lost a little bit of the focus on the fact that the number one, two, three issue for our industry is and always has been supply. And I think what we're experiencing is we're really starting to see the benefits of that of that reduction in the impact of supply in many markets. I can pick to Cape Coral, Florida, which may take years and years to finally overcome the burden of the amount of new deliveries there. But as you take it broadly across, we're starting to I think we're also obviously seeing the positive impact of the high quality, highest quality portfolio that we have. And I think that portfolio

Ladies and gentlemen, we are experiencing some technical difficulties. Please hold. Ladies and gentlemen, thank you for your patience. We will now resume the broadcast. We have Michael Goldsmith on the line.

Michael, I'm not sure when. First of all, let me apologize for the technical problems, but we're back. I don't know when I was disconnected there, Michael, because I was on fire. But to just, I think, pick up on the back half of your question on cadence of timing. I think as we, not going to pick a date specific, I think we see trends that have been very positive and those positive trends continuing. So whether that's at some point in the third quarter or the fourth quarter, on average, over the back half of the year, we do see a return to both positive cash flow growth and positive earnings growth.

Your next question comes from the line of Spencer Glimcher with CubeSmart. Your line is open. Please go ahead.

Spencer, I don't know if this can get any funnier, but I don't know when you joined CubeSmart, but welcome. Your onboarding will be next week. We'll have a little orientation for you.

Well, naturally, I have no questions then. Just one for me. Look, regulation efforts aren't new to this sector, but there's been slightly more success in passing through legislation on pricing transparency. And I just want to get your thoughts on the impact of the recent legislation passed in New York regarding surveillance pricing and whether or not this affects how you set prices in the New York metro.

Yeah, thanks Spencer. you know the cube smart way if you just think about how we operate is we strongly in all with all of our stakeholders in all of the municipalities in which we operate or wish to operate we believe in an open professional responsible and reasonable dialogue with with our stakeholders in those municipalities whether that be around a proposed new development of self-storage and having a discussion about certainly why we would believe that self-storage in that location is an ideal use or whether it be how we operate our stores in those markets and getting that feedback. The reality is often, but not always, those are productive and healthy dialogues where we see everybody's point of view. And so specific to New York, but frankly, any municipality in which we operate, as long as that dialogue exists in a responsible and open way, We obviously want to listen to the points of view of the stakeholders, and we want to share our points of view with the hope we get to a reasonable place. And as often in those discussions, it's ideal if both parties feel like they didn't get everything they wanted, but we reach a good meeting of the minds. I think it specifically relates to that pricing. We will continue to look at how we price the tools that we used and be respectful of of any sort of guardrails that are set up in the municipalities in which we operate.

Great. OK, I appreciate that color. Thank you, guys.

Thanks.

Your next question comes from the line of Ravi Videa with Mizuho. Your line is open. Please go ahead.

Ravi Videa Hi, good morning. Thanks for taking my question. Your guidance forecasts a pretty significant moderation in expenses in the back half of the year. Which line items do you think are most likely to benefit here going forward?

Hey, good morning. Thanks for the question. So you have a couple of things going on there. If you recall from last quarter, we had some pretty heavy winter expenses that impacted the first quarter. So that created some pressure on the run rate. You also had last quarter a pretty big year over year increase in marketing spend, which had a lot to do with timing of when we deployed marketing spend last year versus when we did this year. So some of our marketing spend was a little front loaded this year. So I think you'll see a moderation on those two line items. We had a successful property insurance renewal in May. So a little bit of that flows through to some lower property insurance premiums in the back half of the year. And then also touched on, we expect a little bit of moderation on the personnel line items. So it's not really one line item in particular, it's across a bunch of them. And it's just this year we happened to have a little bit of pressure when comparing year over year in the first half of the year. And if you look through the guidance, you nailed it. There's a pretty big moderation in expense growth. And I appreciate you asking the question so I can say it again.

Thank you. Appreciate it.

Thank you.

Your next question comes from the line of Juan Cenebria with BMO Capital Markets. Your line is open. Please go ahead.

Hi. Good morning. Just to start, just curious if you could comment on the July moving trends and how that trended throughout the second quarter. And maybe if you could comment as part of that around when you expect and a return to the long-term same-store revenue growth trajectory. I believe previously you'd said the second half 27, but wondering if that gets pulled forward with your renewed enthusiasm.

Yeah, thanks, Juan. So when you think about July, as I mentioned in my prepared remarks, as of yesterday close, we were at a physical occupancy of 91.1%. That's 30 basis point increase over July 30 of 2025. Our rentals for the month of July were 3% higher than they were through the 30th, than they were through the 30th of July last year. And on the vacate side, our vacates are also negative 3%, down 3% from where we were through the 30th of July last year. On the cadence, obviously we continue to see as I said, green lights that are encouraging and getting us very optimistic about next year. The exact pace and how we hit it is obviously going to be pretty varied based on a variety of factors. So I think we just continue to see that steady growth. We have that inflection to positive cash flow and earnings in the back half of this year and then continue to build off that each quarter through 2027. Great.

Could you just let us know what the July move-in rate was? Apologies if that wasn't clear.

Yeah, as we think about, as I mentioned, our pricing systems are optimizing by leaning a bit more towards volume versus rate, which is a little bit different than this time last year. This has been built into our expectations. So we would expect in our base case that early third quarter, we don't see growth year over year in asking rents. And then those metrics return to positive as we get deeper into the third quarter and through Q4. And I'll caveat all that with the fact that we price in real time. And so our strategy may change from week to week.

Appreciate it. Thank you.

Your next question comes from the line of Victor Fediv with the Scotiabank. Your line is open. Please go ahead.

Thank you. Good morning, everyone. On the Heitmann JV, should we think of this as a completion of broader portfolio optimization effort, or have you identified some additional assets that could be candidates for similar transactions in the near term? And what will be the capital structure of this JV, including expected leverage at the entity level?

Thanks for the question. So that's it for now for us on finding opportunities to sell or contribute assets into a venture. I wouldn't consider this necessarily portfolio of earning. We really like our portfolio. This transaction was more geared towards in the current environment, what can we do to increase our ability to fund share repurchases in a way that's leverage neutral. And this was a good opportunity for us to accomplish a number of things from a strategic standpoint, improving the quality of the portfolio, having an additional path for future external growth with a long-term partner in Heitman. And from a leverage standpoint, the venture does expect to put leverage Thank you.

Your next question comes from the line of Todd Thomas with KeyBank. Your line is open. Please go ahead.

Hi, thanks. I wanted to ask about occupancy specifically. You saw occupancy continue to build through quarter end and commented that occupancy has increased slightly higher in July. Rentals up 3% in July too. Seems like the rental season has extended a bit further than prior years. Has the strength in rental activity persisted throughout the July period. Is there any sense, you know, whether that might continue into August, you know, sort of up until, you know, sort of the Labor Day weekend, which I think historically has been more typical of the leasing season. And in any sense, what's driving the improving trends and, you know, really more of this traditional leasing season versus, you know, some of the more prior years?

Yep, thanks. Great question. So the trends we have seen are not quite at those levels that, you know, again, we always struggle with what's normal here looking backwards. But if you think about that 2016, 2018 sort of time period, typically you know we would have seen peak a little bit deeper into July so this is a lot closer to that than certainly we've seen over the last three years not not all the way back there. So as we you know base case expectations we would assume as we get into August here and we start to see the college students vacate and go back to school and the other typical patterns that We see good green lights for August, but don't expect to see any aberration in sort of normal behavior. And then that's sort of our base case expectation as we get through the fall and into the winter. I think the cause of the positive trends, again, I go back to the resilience of the business and the fact that we're not reliant upon one particular source of demand. So I think it is just this continued awareness of the product, continued awareness of our brand. And I think the continued reduction in the impact of new supply, which again, I would Okay.

And then I wanted to go back to the question around the New York City regulation on pricing and licensing requirements. Just curious to get your thoughts, whether, you know, does that impact asset pricing or underwriting in any way? Does that sort of change the landscape in New York City at all, in your view?

No, I think the thing that it changes in the landscape in New York City is, you know, unfortunately, and we feel bad for the smaller operators, I think it's, you know, the ultimate burden is significantly higher on them. When you think about the types of things that are being discussed, many of them are already ingrained in the day-to-day practices of us and our larger peers. I think it only will make it more attractive for folks to look at CUBE and our position and our execution in that market and you can see the You can see the metrics that are disclosed. We are outperforming in the New York MSA and I think we will continue to do that. And that will make us even more attractive as a as an option, either as a as an owner of that asset if that small operator wishes to sell or as a third party manager if they wish to partner up with Okay, thank you.

Your next question comes from the line of Nick Joseph with Citibank. Your line is open. Please go ahead.

Thanks. Maybe just following up on that question, it sounds like you're already doing many of the requirements in New York City, but have you had to implement any new practices ahead of it, like allergen testing or anything else to comply?

Yeah, at this point, anything We have not done anything meaningfully different than we have been doing in New York State or elsewhere in the country. I think we're all sort of navigating through all of this as it's sort of evolving, but have not identified anything yet that would be a material deviation to our normal practices.

Thanks. You talked about kind of the debt markets earlier. Just curious where you think you could price 10-year debt today if you go down that road.

So if we were looking at a 10-year today, it would probably be in the mid-fives, maybe a little higher. And then a seven-year, call it 50 basis points inside of that. So we're actively monitoring the markets. The tenure, obviously, has been pushing up a little bit here in recent weeks. And there's an awful lot of volatility in the world. And so that's the not so great news. The good news is that we have a tremendous amount of flexibility as we have additional capacity on the revolver and we have nothing maturing in 2027. So we have a good bit of time to be patient and opportunistic as we think about long-term strategy from a debt perspective.

Thank you.

Thank you.

Your next question comes from the line of Michael Mueller with JP Morgan. Your line is open. Please go ahead.

Yeah, thanks. So Chris, outside of COVID, when you look back at recoveries over the past 30 plus years or so, what was the largest same store revenue increase that you remember seeing in a single year?

Yeah, 30 years is a long time. So I'm not sure I'm going to get this 100%. But I think if you eliminate the COVID year, something in that 7% to 8% kind of quarterly same-store revenue growth was probably the next highest. And I think that was for a couple straight years.

I think that was like 2012, 13, 14, coming out of GFC, and there was no supply. That's right. So the complete lack of supply led to multiple years of 7% plus type top-line growth.

Got it. Okay. And if you're thinking about a level of improvement from one year to the next, for example, if you're starting at a zero, what was the most you recall seeing in a year? That wasn't a 7% revenue improvement year, was it?

No, I'd have to go back. My memory is not that good. I think, again, I think even if you think about COVID and how quickly that happened, it's Your next question comes from the line of Brendan Lynch with Barclays. Your line is open. Please go ahead.

Great, thanks for taking my questions. You guys have been kind of talking up the setup for 2027. Certainly supply can't come back online fast enough to impact next year. Chris, you also mentioned the resiliency of the self-storage demand. We've seen a lot of counter cyclical demand drivers and past challenging macro environments. So I guess the question is, what are the risks that could cause a deceleration relative to the outlook that you're kind of presenting here today?

yeah great question again I'll keep coming back and pounding the drum that you know the the the biggest headwind for storage is and always has been supply and as you noted we don't see at this stage of 2026 any any material increase in supply or its impact certainly in in 27 so at this stage I would say that risk is is low. I think the second risk that has always created a near-term challenge for our industry is any sort of black swan event that causes the consumer to freeze in place. So you think about some of the unfortunate events, the onset of COVID, the GFC and related bankruptcies go all the way back to 9-11. Those typically have a short-term impact on move-ins as consumers tend to freeze in place and stop making decisions. They also then tend to have the corresponding effect where you see vacate volumes decline. and it takes a while until the consumer recovers, but those type impacts have typically been weeks, if maybe a month or two months, and then the industry tends to bounce right back.

Great. Thanks. That's helpful. And then maybe one for Tim, just on calibrating labor. You suggested there's going to be some moderation in the year-over-year comp for personnel. walk us through your thoughts on running a little bit leaner on the labor front versus maybe adding a little bit more headcount to maintain the in-person relationships in the facilities themselves.

I think it's always that balance of trying to find the optimal staffing levels to provide the level of customer service that we insist on providing. The changes and the evolution on that line item really date back to things that we did last year. And so later in 2025, we saw a little bit of pressure on that line item as we were adding back some store hours and making some adjustments that increased the level from where we had reduced it to. And so I think What you're going to see here in the back half of the year is just getting up against those comps. And so the first half of the year saw a more difficult comp for adjustments that we made over time during 2025. We feel like we're in a great spot right now from a combination of staffing technology and our approach to attracting new customers and making sure that we're providing great service to our existing customers. And so nothing that we're doing today, more stuff that we did about a year ago.

Great, thank you.

Thank you.

Your next question comes from the line of Omoteo Akasanya with Deutsche Bank. Your line is open. Please go ahead.

Hi, yes. Good afternoon, everyone. Quick question just to Sunbelt Markets and some of your earlier comments. Can you kind of talk us through how you were thinking about recovery in part a few of those markets. Again, you did mention that, you know, oversupply in places like Fort Myers really could be a multi-year problem, but I was just kind of think through those markets and you kind of think about potential inflection. How should we be thinking about that, whether it's, you know, a year away, two years away, or just whatever kind of, whatever your crystal ball is telling you, some insight would be appreciated.

Yep, so I think as everyone knows, this is a micro market business, so even within Sunbelt markets, we see pockets that are improving more rapidly than others, likely and largely due to, again, that impact of the new construction, the new supply that has been brought on board adjacent to those same stores in those markets. I think it's it's improving you know if you look at the sequential results as we mentioned you're seeing you know the the same store revenues going in a good direction I think it will be unique to each individual market like let's use Miami as an example there you had an awful lot of supply but you know an attractive and continues to be an attractive place both for individuals and businesses to work and live. And I think we saw that supply get absorbed fairly expediently. And you've seen results in Miami move a little bit quicker towards and into positive growth territory. I think the major Texas markets and the Southwest, it will be a bit slower and gradual. How to predict which quarter or which date Things flip positive. That's really difficult to say, but I do think we'll just kind of see this continued gradual recovery throughout the balance of 2026.

Thank you.

Your next question comes from the line of Juan Sanabria with BMO Capital Markets. Your line is open. Please go ahead.

Just following up on the JV and investments discussion, for CBRE and Heitman, is the thought that going forward those two ventures would acquire in the open market going forward to grow? And I think, Kim, you said something about like a thawing or something in your prepared remarks. I'm just curious if you could elaborate on that.

I think the most likely avenue for growth in each of those ventures would be open market opportunities, perhaps things that we manage currently that we can find a home for, and each of those ventures and each of those partners have areas of focus that range from the type of opportunity as far as return profile, early stage lease up, stabilized, looking at different markets. And so the great thing for our investments team, having each of those partners gives us the ability to pursue a pretty wide range of opportunities. And that's pretty exciting. I think the, what was the second part of your question?

You mentioned, I think, some thawing in the acquisition market, maybe more product coming to market.

Yeah, it hasn't thawed all that much for us, but I think you're starting to see some momentum in a lot more things that are, I think the brokerage community is pretty excited about the things that are starting to come across their plates. I think there continues to be an evolution that the market is what the market is, and and I think sellers understand where buyers are and vice versa and it feels like it's getting a little bit more constructive and the thing that hasn't changed is that it certainly feels like there's a wave of opportunity that is coming and we've talked about that in prior quarters. I just think you have an awful lot of self storage assets that are held by folks who want liquidity, some who are gonna need liquidity. You have things in closed end funds that ultimately have to close and uh and you've had a fairly you've had a fairly modest amount of transactions here now for for two years running and so um certainly feel like the the dam is going to break and when it does there's going to be an awful lot of opportunity and you know from a cube smart perspective we want to make sure that we're in the best position we can be in to take advantage of that and and uh and that's what we're preparing to do thanks and then lastly just to be sorry to be greedy here um

on the labor front and the wages, just curious on where you think we are in the optimization of FTEs or what have you and kind of are we at a max in terms of efficiency gains or what you think the future may hold?

Yeah, thanks Juan. I think that's an area that is likely subject to continued evolution I think on the On the service delivery front, and especially in our more dense urban markets, you continue to see the value of having our teammates in the stores, keeping them clean, and providing great customer service. I think as we continue to evolve in our utilization of AI, looking for ways where that can enhance customer service, many of those will be hand in hand with our with our teammates delivering and so would expect that that while that may not that will likely translate into revenue gains on the efficiency side more than necessarily focused on on the cost side of things but at the markets that the technology and the opportunities to serve and then also our customers preferences continue to evolve and we would expect that we would expect those trends to be continuing as I described.

Thank you.

We've reached the end of the Q&A session. I will now turn the call back to Chris Marr for closing remarks.

All right, thanks everybody for participating today. We apologize for the technical difficulties. I'm told that we can blame Michael Goldsmith if we need to. But as we look forward here, we are excited about the return to growth. Return to growth in cash flows, return to growth in earnings, returning to growing. our assets under management, whether that be through our excellent third party management platform, acquiring stores with our partners or on balance sheet. And we will continue to execute on that growth in a very disciplined way, laser focused on creating shareholder value. So thank you all. Look forward to seeing you in the future and talking to you again next quarter.

This concludes today's call. Thank you for attending. You may now disconnect