Note: This is an earnings call transcript. Content may contain errors.

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DATE

Friday, Oct. 31, 2025, at 11 a.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Christopher P. Marr
  • Chief Financial Officer — Timothy M. Martin

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TAKEAWAYS

  • Funds From Operations (FFO) per Share -- FFO per share was $0.65, consistent with company expectations for the quarter.
  • Same-Store Revenue -- Same-store revenue declined 1% compared to last year, reflecting generally stable but not accelerating demand.
  • Same-Store Average Occupancy -- Average same-store occupancy was 89.9%, Same-store average occupancy was down 80 basis points compared to last year.
  • Same-Store Operating Expenses -- Same-store operating expenses increased 0.3% compared to the same period last year, attributed to effective expense management and lower utilities and property insurance costs.
  • Same-Store Net Operating Income (NOI) -- Same-store NOI declined 1.5% compared to the same period last year.
  • Move-In Rate Growth -- Move-in rate increased 2.5% year over year in the same-store portfolio, marking the first positive YOY move-in rate since Q1 2022; Move-in rate growth moderated to 1.9% in October.
  • Customer Churn -- Customer churn remained at 4%-5% monthly, aligning with historical norms.
  • Portfolio Growth -- Three stores are under contract to be acquired in Q4; one joint venture project completed in Port Chester, NY, and another scheduled to open in New Rochelle, NY in Q4.
  • Third-Party Management -- The platform increased by 46 stores, reaching 863 stores under management at period end.
  • Debt and Capital Markets Activity -- Secured $450 million of 10-year senior unsecured notes with a 5.29% yield to maturity in August; net debt to EBITDA at quarter end was 4.7x.
  • Guidance Updates -- The company raised the midpoint of same-store revenue and expense guidance for full year 2025 while maintaining FFO per share as adjusted; The revised annual same-store NOI midpoint is −1.25% for fiscal year 2025 guidance.
  • Regional Performance -- Mid-Atlantic and Northeast urban markets continued to outperform, while the East Coast of Florida stabilized and several Sunbelt markets remained challenged by supply and demand uncertainties.
  • Cap Rates on Q4 Acquisitions -- Management is underwriting acquisition cap rates in the low 5% range at closing, stabilizing around 6% by year two or three.
  • AI Lead Generation -- Less than 1% of leads currently originate from large language models such as ChatGPT, according to management on the Q3 2025 earnings call.

SUMMARY

The Q3 2025 earnings call for CubeSmart (CUBE 1.96%) highlighted guidance increases across key metrics and ongoing stabilization of operational performance, with management noting diminished supply headwinds and improved pricing activity in several core markets. While Sunbelt markets continued to experience operational headwinds tied to newly delivered supply. The company issued $450 million of ten-year senior unsecured notes at a 5.29% yield on August 20, 2025, with near-term debt maturities set to be managed through the company's existing credit facility. Guidance for full-year same-store NOI was updated to a midpoint of −1.25%, accompanied by the caveat that positive same-store revenue growth is not expected before 2026, according to management commentary on the Q3 2025 earnings call. The management team also expanded its third-party management portfolio and proceeded with new developments and near-term acquisitions, highlighting ongoing discipline in underwriting standards and risk assessment.

  • Christopher P. Marr stated, "this was the first quarter since Q1 2022 in which move-in rates in the same-store portfolio were positive year over year."
  • Timothy M. Martin said, "Our leverage levels remain quite conservative with net debt to EBITDA at 4.7 times at quarter end," providing explicit clarity on balance sheet status.
  • Portfolio length of stay metrics showed customers staying more than one year increased by 50 basis points year over year, reflecting ongoing customer retention trends.
  • Guidance for Q4 same-store revenue growth implies negative results but at an improved trajectory compared to the prior quarter, pending no major change in demand conditions.

INDUSTRY GLOSSARY

  • Same-Store: Refers to properties owned and operated throughout both the current and prior comparison periods, providing a like-for-like operational performance metric.
  • FFO (Funds From Operations): A primary REIT earnings measure, reflecting net income excluding gains or losses from property sales and adding back real estate depreciation and amortization.
  • NOI (Net Operating Income): Total property-level revenue less operating expenses, excluding depreciation, amortization, and corporate-level costs.
  • ECRI (Existing Customer Rate Increase): Rental rate increases applied to tenants currently renting storage units, used to drive same-store revenue growth.

Full Conference Call Transcript

Christopher P. Marr: Thank you, Josh. Happy Halloween. And welcome, everyone, to our third quarter call. It was a very solid third quarter for CubeSmart, which resulted in guidance increases across our key same-store and earnings metrics. Across all markets, our existing customer KPIs remain strong with key credit and attrition metrics remaining consistent within historical normal ranges. We are continuing to feel diminishing headwinds from new supply as the stores placed in service over the last three years lease up and the forward pipeline continues shrinking. As evident by two consecutive quarters of improved guidance expectations, the year has played out a bit better than we expected.

Which we attribute to the lessening impact of new supply, a more constructive pricing environment during our busy rental season, and the continued health of the consumer. We foresee continued gradual improvement in operational metrics. We are not anticipating a catalyst for a sharp reacceleration. We are prepared and operating under the expectation that the stabilizing trends as well as deliveries of new stores will vary by market. Market level performance was similar to what we have been discussing for the last couple of quarters. Top performers continue to be the more urban Mid-Atlantic and Northeast markets. The East Coast of Florida is experiencing stabilizing trends. And some of the Sun Belt markets are still finding their footing.

In summary, it's a slow, steady stabilization without a catalyst for rapid acceleration. Just like we laid out when we entered the year. We've seen some better pricing power that started earlier in the year, for the reasons I've previously shared. While overall demand levels are mostly stable, but not growing significantly. It takes time for improving fundamentals to flow through to revenue, with only 4% to 5% monthly customer churn, and this was the first quarter since Q1 2022 where move-in rates in the same-store portfolio were positive year over year. Assuming these stabilizing trends continue through the end of the year, we should be on improved footing heading into 2026.

Now I'd like to turn the call over to our Chief Financial Officer, Timothy M. Martin, for his commentary.

Timothy M. Martin: Thanks, Chris. Good morning, and thank you to everyone for taking the time to join us today. For the quarter, we performed in line with our expectations, reporting FFO per share as of $0.65. Same-store revenues declined 1% compared to last year with average occupancy for our same-store portfolio down 80 basis points to 89.9%. Same-store operating expenses grew just 0.3% over last year, again reflecting our keen focus on expense control, saw favorable year-over-year variances in utilities expenses, and in property insurance following our successful renewal back in May, which we discussed last quarter. So negative 1% revenue growth combined with 0.3% expense growth yielded negative 1.5% same-store NOI growth for the quarter.

From an external growth perspective, we're starting to see a little momentum here late in the year as we're under contract to acquire three stores in the fourth quarter. We also completed and opened our joint venture development in Port Chester, New York during the quarter and are scheduled to open our project in New Rochelle, New York during the fourth quarter. On the third-party management front, we had another productive quarter at 46 stores to our platform, bringing us to 863 stores under management at quarter end. On the balance sheet, we successfully completed our issuance of $450 million of ten-year senior unsecured notes on August 20.

The offering has a yield to maturity of 5.29%, was our first time back to the market in four years. We were delighted with the execution and delighted with the support we received from our fixed income investor base. Our 2025 notes mature later this month, and we intend to satisfy those initially through borrowings under our credit facility and then ultimately term that out. By accessing the bond market again in the coming months. Our leverage levels remain quite conservative with net debt to EBITDA at 4.7 times at quarter end. From a guidance perspective, we updated our full-year expectations and underlying assumptions in our press release last evening.

Highlights of the guidance changes include a $0 raise at the midpoint of our FFO per share as adjusted. On same-store revenue growth, we improved the midpoint of our guidance range. Our expense growth guidance range improved as well with a revised midpoint of 15% for the year. All of that translates into improved same-store NOI expectations for the year with a revised midpoint of negative 1.25%. Picking up on Chris' comments, we expect trends to continue to stabilize through the remainder of the year, putting us on better footing heading into 2026. Where we entered this year. Our guidance implies negative revenue growth in Q4, although acceleration from Q3 at the midpoint.

While we're still not anticipating things snapping all the way back to normalized levels growth quickly, we're seeing encouraging signs that are starting to flow through the portfolio. Thanks again for joining us on the call this morning. Happy Halloween.

Christopher P. Marr: And at this time, Colby, let's open up the call for some questions.

Operator: Thank you. We will now begin the question and answer session. Thank you. Your first question comes from the line of Samir Khanal with Bank of America. Your line is open.

Samir Khanal: Yes. Good morning, everybody. Hey, Chris. I guess just how are you thinking about the balance between rate and occupancy right now? In an environment where demand seems to be stable as you try to get that new customer in the door? Thanks. So ultimately, the systems are focusing in on maximizing the revenue from each customer and so trying to find that balance. And it varies by market. So when you think about those two levers, rate and occupancy, you have elasticity of demand that one has to deal with.

And so when we look at those markets that we would describe as having been solid for a while, kind of the rock stars in this part of the cycle. Where you're getting both rate and occupancy. I'd call out New York City, Washington, D.C., MSA, Chicago. Then you have those markets that are stabilizing, you know, so their rate and occupancy are moving in a good direction, albeit you know, still perhaps down year over year. And those examples would be Miami and Los Angeles.

And then those markets that are still trying to find their footing where again, the systems every day are trying to navigate through that dynamic of new move-in customer rate versus occupancy and testing is the demand there. At any price. And those would be the same markets we've talked about all year, Atlanta, Phoenix, Cape Coral, Charlotte, you know, the Sunbelt market. So really varies quite a lot by market. As the systems try to find that balance. And maybe as a follow-up here, I know you talked about move-in rates that were positive in the quarter. Kind of 2.5% better on rate versus occupancy.

I mean, can you provide some color around on October as well what you're seeing kind of trends in October? Thanks. Yeah. So the occupancy gap to last year, has contracted from the end of the third quarter as of yesterday. We're down 100 basis points from where we were at this point last year. And the average rent on rentals that 2.5% that you quoted for the quarter in October is kind of in that 1.92% kind of range. Okay. Thanks a lot.

Operator: Your next question comes from the line of Nicholas Yulico from Scotiabank. Your line is open.

Nicholas Yulico: Hello. This is Victor Federwan with In Qlikon. On your last call, you said that most demand still comes from traditional search and you're working with your partners or Gemini integration. So what percentage of leads and bookings are now AI influenced today? And how does overall the cost per AI leads compared to traditional search engine leads so far?

Christopher P. Marr: Yeah. The leads coming through the LLMs, which is primarily chat deep GPT at this point for us are about less than 1%.

Nicholas Yulico: Got it. And then, you also mentioned last call that merchant builder exit ways is kind of coming to the market and trying to understand whether it has intensified recently what does it mean for you and kind of for your potential acquisition pool?

Christopher P. Marr: I'm sorry. I think we got a little bit more clarity on the question, if we could. Merchant builder sellers,

Nicholas Yulico: Yeah. Yeah. Yeah. Sellers. Yeah. Whether they're you can see now more of them or not really. Versus, for example, Q2.

Christopher P. Marr: Yep. No. I haven't really seen a change. Again, there's no and there typically isn't, like, significant duress in our sector. So I think what you have is folks who may have opened a store in 2022 where they were underwriting cash flows based on the spectacular storage performance during COVID are clearly not meeting their pro formas. But I think what we're finding is everyone's just looking for ways to extend out and anticipate stabilizing trends and better times ahead and financial institutions for the most part, are cooperating.

Nicholas Yulico: Got it. Thank you. Thanks.

Operator: Your next question comes from Todd Thomas with KeyBanc. Your line is open.

Todd Michael Thomas: Hi, thanks. Good morning. Chris, Tim, your comments about the improving trends and third quarter being the first period of higher move-in rents and seems like that continued in October. Your guidance assumes an improving revenue growth trend in 4Q albeit still negative, you mentioned that. But just your comments overall suggesting that trend of improving revenue growth, early sort of read into '26, is it fair to assume that you would expect all else equal that trend to continue from here just given the four to 5% churn and the time it takes for that to translate to revenue growth. Is that how you're thinking about it at this point? The cycle?

Christopher P. Marr: Yes. As you think about '26 macro, again, assuming the consumer health remains where it is, the economy continues to do okay. We would anticipate that the trend from Q3 to Q4 and again, we talked about in Q2 that Q3 had a little bit of anomaly in that was going to create that decel from the prior quarter. But yes, that trend should continue. Again, do we inflect positive in same-store revenue growth. As we sit here today, yes, When might that occur? Again, as we sit here today, I would conservatively expect that's probably the 2026.

Todd Michael Thomas: Okay. And then, you know, some of your peers I think, ran, you know, promotions or implemented newer discounting strategies during the quarter. Was just wondering if you can speak to whether CubeSmart participated or what discounting strategies might have been implemented during the peak season and how you're thinking about pricing, promotions and discounting in the off-peak season as occupancy typically pulls back a bit here? Yes. So I guess there was some new vernacular introduced recently with this gross net kind of concept. The 2.5% gross move-in rate year-over-year growth that we saw is for us, it is also the net We have not had any change in our discounting. Okay.

Are you changing your promotional offerings, though, or changing your discount strategies at all? Okay. Alright. Thank you. Thanks, Todd.

Operator: Your next question comes from the line of Juan Sanabria with BMO Capital Markets. Your line is open.

Juan Carlos Sanabria: Hi, good morning. Thanks for the time. Just on the acquisition side, of your peers have become more aggressive talking about more opportunities or deal flow. Just curious what you're seeing and or willingness or appetite to increase the external investments?

Christopher P. Marr: Thanks, Juan. Appreciate the question. I guess we have three stores under contract, so that's movement. In the right direction. I think what we have seen we've talked about here for the past several quarters is pretty consistent view from the buying side of the table as to what return thresholds look like. I don't think that's changed much at all. It hasn't for us. I don't think it's changed much for others either. I think the change is that the seller side of the equation has gotten a little bit more constructive from the buyer's perspective. You're starting to see things move a little bit. Think you saw that from some of our peers.

I think you see that from us. With the three stores that we have under contract. So nothing I wouldn't say there's any earth-shattering move other than the market becomes a little bit more constructive as the gap between buyer and seller has shrunk to the point where you're starting to see some things get done.

Juan Carlos Sanabria: The incentives to as a follow-up, your rent per occupied square foot was strong in the quarter up 2.4%. Quarter over quarter, flat year over year better than peers. What do you think allowed you to push that in place rate relative to the industry if it's stronger?

Christopher P. Marr: Yeah. I think, again, you're just everybody's system, I assume, is trying to do the same thing, which is, you know, find that balance between the levels of demand that are out there for storage and then pricing to capture that customer as well as the marketing tools to capture that customer. I think some of it is portfolio construct, Again, where we are at this part of the cycle, our strategy and our quality focus, I think, is very helpful to our results. And then part of it actually is just sort of the normal seasonality that one would expect to see from Q2 into Q3.

Operator: Your next question comes from the line of Eric Wolfe with Citi. Your line is open.

Eric Wolfe: Hey, thanks for taking my questions. Think you said a moment ago that conservatively that same-store revenue might not turn positive until the 2026. But I mean, if you're already at you know, two to 3% you know, moving rate growth. Is there some reason to believe that stays there that you wouldn't just go to, like, 2% to 3% same-store revenue growth? Is there some kind of offset on the ETI just trying to understand why if you're already, I call it positive move-in rents, today, that it's gonna take until the back half of 2026 to be positive on same-store revenue.

Christopher P. Marr: Yes. I mean, not sarcastically, it's math. So we are, you know, in a business where four to 5% of our existing customers churn on a monthly basis. And so barring again some sort of change to the good on the demand side again, which we don't foresee a catalyst for that, it just takes time. So you will just gradually see that slightly negative same-store revenue growth begin to move in a positive direction. And exactly when that crossover occurs, we're not providing guidance at this point, and we don't do quarterly guidance from a same-store perspective.

But again, I think to be fair at this point in October 31, you know, what I shared is kind of the conservative outlook at the moment.

Eric Wolfe: Got it. And then I guess to the move-in rents, that you provide in the South, I mean, does that include promotions? I'm probably asking because I'm just thinking through, like, if we continue to see just positive move-in rent growth, like, I don't know, say 2% to 3% or two to 4%, does that eventually translate into kind of 2% to 4% you know, same-store revenue growth? I know occupancy obviously plays a factor.

Your point, but I guess I'm just wondering about the if you can really just kind of take these move-in rent growth and then assume you're going get a similar eCRI component to it, and take that as a leading indicator of where same-store revenue growth is going or you know, we're mistakenly not including promotions or not including something else into that. Into that calculation.

Timothy M. Martin: I'll jump in. If you think about the if you think about your premise there of 2% to 3%, 2% to 4% type year-over-year improvement in pricing. Then and you held everything else constant, then, ultimately, after, you know, call it twelve months when you've churned 5% of your portfolio each month at that type of churn, eventually, that's where you would get to. And then it would it would probably be helped a little bit then by some of those other You probably get a little bit more out of your ECRIs. You probably get a little bit of occupancy if you're in that environment.

When you have if you have that type of pricing power, normal pricing power over a prolonged period of time. So back to Chris' point earlier here, it just takes time to flow through because it's four to 5% a month, and it builds and builds and builds. So, you know, if you had that a prolonged period of time, I think that's that's ultimately where you get to from a revenue growth perspective, plus or minus.

Eric Wolfe: Thanks. And then does the move-in rents include promotions or is that, a separate calculation we should make? Meaning that's up I think it's up, like, mid twos this quarter. Is that flat with promotion?

Christopher P. Marr: Yeah. So that two and a half percent is gross. And it for us, is the same as the net because our promotions have not changed. The amount or the magnitude.

Eric Wolfe: Got it. Thank you.

Operator: Thanks. Your next question comes from the line of Michael Griffin with Evercore ISI. Your line is open.

Michael A. Griffin: Great, thanks. Chris, maybe you can expand a bit on whether or not you've seen any changes in new customer behavior. I mean, seems like if you're able to raise these new customer rents, maybe there's less price sensitivity or customers shopping around. And I know it's always a topical point with storage, but any incremental homebuyer customers coming back or it still they haven't really materialized yet? Yes. I think what you're finding is, you're just able to get rate in these markets that are that are not typically the home buyer and seller movement market.

So you're leading year-over-year improvement in rate to new customers Manhattan, Queens, Brooklyn, Chicago, Washington DC, and then, you know, the laggards where you're just still trying to find your footing. In terms of where is that balance. And at what rate can you get that customer to convert continue to be Atlanta, Phoenix, Charlotte, some in Texas, some of the major Texas markets are moving in that direction. As well. So it really is just market from our perspective, which then sort of ties into your question, which is it's you know, customer use case. Thanks. Appreciate the context there. On the one Yeah. I'm sorry. One last piece of this.

And then, ultimately, it's still when we talk about supply and those headwinds are diminishing, across the portfolio, but that also varies. Pretty significantly by market. So not surprising, those Sunbelt markets that you know, a, tended to rely historically on a little bit more of that home buyer and seller are also the markets that continue to get delivery while deliveries overall are down. They are still occurring all too in Atlanta, in Phoenix, you know, in the West Coast Of Florida. So it's kind of a double whammy for those Sunbelt markets, so to say? Great. And then maybe next, just on sort of the ECRIs and outlook there.

I mean, realized that the rent roll downs, the move in to move out is still pretty wide. But has your strategy changed there at all? Have customers become more sensitive to rate increases? Or are they typically still willing to accept them and you're able to push, you know, strategically where you can? Yeah. The customer the customer health, which, you know, we continue to really focus in on and again varies by varies by economic strata and parts of the country. Generally across the portfolio continues to be very good. And we have not seen any change in customer behavior as it relates to ECRIs and our overall approach has been consistent throughout 2025. Great.

That's it for me. Thanks for the time.

Operator: Yeah. Your next question comes from the line of Ravi Vaidya with Mizuho. Your line's open.

Ravi Vijay Vaidya: Hi there. Good morning. Hope you guys are doing well. I wanted to ask for the third-party management business. Saw a couple stores came off on a net basis. Is there something that looking ahead, should we expect it to increase again? Or maybe it's where some of the new private operators that you're partnering with, and how can that be used as a hedge for higher supply? Thanks. Yeah. Appreciate the question. So on our on our third-party program, we talk about the stores that we add to the platform because that's that's ultimately what we what we control. That's our new business development team is looking for opportunities to add owners, to add stores to the platform.

This year, we have exceeded adding 130 stores for the consecutive at least 130 stores a year for the eighth consecutive year. So that part of the business remains healthy. The part that is very difficult to predict is when stores are going to leave the platform. And part of this year, you have that churn, part of this year's churn was self-inflicted earlier in the year when we bought 28 stores that were that were in that third-party managed bucket. You just have a lot of stores that are that are you know, leave the platform most often. That is because they have they have transacted. They have sold to somebody that either self-manages or has a different relationship.

And so you know, the trying to predict the net growth in the store count on the 3PM platform is an impossible task. So we control what we can control, and we know, we look when stores leave the platform, we've talked about in the past, we feel like it's job well done. We've helped that owner create the value. We've stabilized and improved performance, and in most cases, we set them up to achieve their desired results as they transact and sell the asset to someone else. Got it. That's helpful. Thank you. Thank you.

Operator: Your next question comes from the line of Spenser Glimcher from Green Street. Line is open.

Spenser Bowes Glimcher: Yeah. Thank you. Maybe just going back to the acquisition front, are there certain markets or geographies that you guys are more comfortable underwriting? Just due to greater stabilization of fundamentals? And then on the flip side, are there any markets are sort of redlined right now just because there's still too much operational uncertainty? Maybe outside of the obvious supply-heavy markets.

Christopher P. Marr: Yeah. I mean, just the Nuance response is we're comfortable underwriting it. Everywhere. I think embedded in our underwriting are obviously going to be different risk hurdles based on some of those characteristics that you had referred to. Perhaps the best deal that we can find right now would be in a market that's more challenged because you know, others don't see maybe what we see. So we don't have a bias necessarily to blacklist a particular market because of supply as an example or some other criteria, but what we would do in that standpoint is to make sure that from a risk-adjusted standpoint, we're getting paid to, you know, to take on that on uncertainty.

Those markets create more challenge from an underwriting standpoint to try to you know, look at where rates are today perhaps and where rates might be in a year or two. It is challenging but not impossible underwrite when you have an when you have a store in particular because it's such a micro business, when you have a store that's competing against new supply, be able to have confidence in your ability to project where rates in that small market are going to stabilize once that new supply leases up is a challenge. It's the fun part of the investments team and what they do.

Because those deals that have a little bit of hair on them are the most challenging, but also very interesting and perhaps the place that you can that you can make a really nice risk return. So we're not avoiding markets, but certainly considering all of those risk factors.

Spenser Bowes Glimcher: Okay. Yeah. That's very helpful. And then can you just share what stabilized cap rates you guys are underwriting on the three assets you're acquiring in 4Q?

Christopher P. Marr: Those three assets are a little bit of a mixed bag stable and not stable. Going in, when you look across three, we're going in, in the low fives and stabilizing across the board fairly early on in year two or three. At right around a six across the board for those three opportunities.

Spenser Bowes Glimcher: Okay. Thank you so much.

Operator: Thank you. Your next question comes from Brendan Lynch from Barclays. Line is open.

Brendan Lynch: Great. Thank you for taking my question. New York City continues to perform quite well. And it continues to outperform other large markets in the Northeast. Maybe you can just kind of compare and contrast what is leading to that outperformance. Obviously, there's a lot of supply issues in the Sun Belt, maybe it's the same. In the Northeast. But just kind of any color that you can provide on New York relative to some of these other markets? In the region?

Christopher P. Marr: Yep. So it's going to be partly what you just said. So, again, the, the boroughs really nonexistent new supply impact. So you're really, stable from that perspective. You have a, you know, a more need-based customer, and then, we have, a very significant position there and one in which the asset quality is extremely high. So we just have everything in our favor a market that in this part of the cycle is just doing very well. Other Northeast, Philadelphia, little bit of a mixture there. You've got supply as opposed to the boroughs.

And you have a little bit of more of a mix in the customer base, it's it's not quite Sunbelt like, but you do have a little bit more of that mover, so to speak, than you might have in say, The Bronx. So I think it's it's kind of a combination of those two things. And you see, you know, that similarly in, you know, urban Chicago. You see it in, you know, a few of the other urban markets.

Brendan Lynch: Great. Thanks, Chris. And then maybe just sticking with New York City, you've got the new development coming there. It's a relatively small investment. I think $19 million. Maybe just talk about what would allow you to get more assertive or aggressive on development in the New York City area?

Christopher P. Marr: It's really looking for opportunities that have a that are located in a spot that would be complementary to our existing portfolio and, frankly, would have a need from a demand standpoint for there to be new product. Obviously, it's not as easy to pencil out deals in the boroughs as it used to be because the tax incentives aren't there any longer. So surely there are opportunities somewhere. But the fruit is pretty high up in the tree. And for us to find an opportunity, it's going to be something that we're pretty excited about.

Brendan Lynch: Great. Thank you.

Operator: Your next question comes from the line of Eric Luebchow from Wells Fargo. Your line is open.

Eric Luebchow: Thanks for the question. Can you comment a little bit on any trends you're seeing on your average length of stay? It seems like vacates have been kind of muted across the industry. This year. Obviously, it helps from a roll down perspective, but perhaps takes a little bit longer for some of these better moving rates to flow through the portfolio. So any commentary on that would be helpful.

Christopher P. Marr: Sure. When you think about, those trends, I would macro say they're consistent still elevated. So our customers who have been with us greater than a year That's up 50 basis points year over year. And again, if you kind of compare it to pre-COVID, so 2019, it's plus two sixty basis points. And then those customers who have been with us greater than two years, which is about 40% of our customers, that's actually down year over year about 140 basis points, but again up. 50 basis points what we saw in 3Q 'nineteen. So continue to be pretty consistent, have come down a bit off of peak but still elevated relative to historical metrics.

Eric Luebchow: I appreciate that. And I know you provided a little bit of directional commentary on '26, but just trying to take maybe more of the bull case. So obviously, if we get a housing catalyst, if we see a pickup in customer mobility, moving rates, continue to find stability, start growing. Do you think it's reasonable we could get back to more historical levels of growth by maybe the 2027? And then potentially even higher beyond that, especially given some of the supply delivery commentary. Just wanted to get your temperature on what you see over the next few years and not just in the twenty six.

Christopher P. Marr: Yeah. I do see that bull case as, playing out the way you described. Again, it's it's sort of finding that catalyst for demand. And if that occurs, you know, housing being the easiest thing to point at, We continue to have a healthy consumer. I think you then start to see consistent performance from those solid markets that we've experienced here over the last couple of quarters, those steady eddies continue. And then you're overall helped by the fact that the Charlottes and the Nashvilles, etcetera, the world should rebound quite nicely. And I think we're well positioned from obviously, to get the rate We've shown that, that we can do that through this cycle.

Increasingly more so over the last couple of months. And then on the occupancy side, then you get the pickup there as well. And to your point, you could see and I would expect if those conditions were to occur, you would see more elevated performance. Okay. Appreciate it. Thanks, guys.

Operator: Thank you. Your next question from the line of Michael Mueller with JPMorgan. Your line is open.

Michael William Mueller: Yes. Hi. I just go back to development supply. I mean, what's your gut feeling tell you about how quickly supply may come back in some of the markets? As they improve over the next couple of years? I mean, do you see a lot of competitive projects in near you where people are just kind of waiting for the right time to kick off? Or do you think you're going to a little bit longer of a runway without meaningful supply?

Christopher P. Marr: Yes. I think that crystal ball's complicated and maybe a little fuzzy. So I think I think it will be slower. I think that you have a couple of factors. Again, we still have elevated cost I think it will, to our point, be a more gradual recovery and move in rate. So you'll still have to see some progress there. And I think the developers, who have you know, opened in '22 and are sort of trying to figure out how to hang on at this point know, may not be likely to wanna get back into it again until they deal with exiting the store that they have.

And then ultimately, the primary lenders to the space for the developers, those local and regional banks have to be. If they continue to be constructive in terms of how they think about underwriting and how they think about providing that leverage, I think that should constrain things well. So again, at least you look out through next year, probably at least the '7, I think we'll continue to see some restraint. Again, there are the markets I've called out that appear to have no guardrails. But I think we'll continue to see some constraint.

And then if you just think if it picks back up again, you know, takes six months to sort of get everything going and then another twelve months to build. So you're eighteen months out from whenever that happens.

Michael William Mueller: Got it. Okay. Thank you.

Operator: Your next question comes from the line of Michael Goldsmith with UBS. Line is open.

Michael Goldsmith: Good morning. Thanks a lot for taking my questions. Move in rate was up 2.5% during the quarter, apparently both on a gross and a net basis. But came down in October. So how did the move in trend during the quarter? Did it peak in October or did it peak kind of earlier than during the period? And is that how it normally plays out? Thanks.

Christopher P. Marr: Yeah. Moving trend, was historically normal. You see kind of that peak in July. And then trends tend to sequentially start to slow down. But again, I think the message here is that the road is a bit windy. We've got markets that are continuing to move in a fairly straight line in an upward trajectory. And then there are markets, again, pick on the Sunbelt, where the road's a little bit more windy. So overall, I would say kind of consistent with the last couple of years is what we've seen.

Michael Goldsmith: Got it. And you said on the call maybe a couple times, but just really stabilizing trends and encouraging signs by stabilizing trends, are you referring to same-store revenue growth? By encouraging signs, you're you're suggesting the moving rate. Is that is that kinda what you're pointing to?

Christopher P. Marr: Yeah. So, again, the top line metric, same-store revenue growth, we'll just kind of beat the drum again. It takes time for that to move given the relatively low churn in the customer base. So when we talk about stabilizing trends, we're talking about move-in rates, and demand levels, which again have been weaker than historical but fairly consistent. And occupancy. So it's more of the KPIs that are every day. Which will then gradually bleed into same-store revenue result, which will then gradually move that in a positive direction.

Michael Goldsmith: Thank you very much. Port Chester looks great. Luck in the fourth quarter.

Christopher P. Marr: Thank you. Super excited about it. We have units available if you'd like to be

Michael Goldsmith: I'm good, but thanks.

Operator: Thank you. And with no further questions in queue, I'd like to turn the conference back over to Chris Marr for closing remarks.

Christopher P. Marr: Okay. Thank you, everybody, for participating. Again, stabilizing trends encouraged by the direction overall, the portfolio is moving. Assuming these continue, we expect to be on improved footing heading into 2026. We look forward to seeing some of you at upcoming conferences and next time we're on a quarterly call, we'll share our specific expectations for 2026. So thank you all. Happy Halloween.

Operator: This concludes today's conference call. You may now disconnect.