Archive: CubeSmart in Gainesville, Virginia, 2024. Ser Amantio di Nicolao / CC BY-SA 4.0, cropped. Not identified as a property in the proposed venture.
CubeSmart has agreed to put 15 self-storage properties, including three in Connecticut, into a $197 million joint venture with a Heitman affiliate, the company said Thursday.
The self-storage landlord would receive cash and retain a 20% interest in the venture, while Heitman would contribute cash and own the remaining 80%, according to CubeSmart’s October 29 third-quarter results release. The transaction is scheduled to close in the fourth quarter of 2026. It is an agreement, not a completed sale.
Three Connecticut properties in the package
The proposed venture covers about 900,000 square feet across seven states. Beyond the three Connecticut stores, the package includes one in Georgia, two in North Carolina, one in Ohio, two in Texas, four in Utah and two in Virginia, CubeSmart said.
The company did not identify the Connecticut properties by city or street address in the release. The $197 million figure is the agreed value of the full 15-property package, not the value of the Connecticut stores alone or the amount of cash CubeSmart expects to receive.
CubeSmart said the venture’s properties are expected to secure a $99.7 million loan maturing in November 2033. Its retained stake means the company would continue to have an ownership interest rather than exit the properties entirely.
New York project remains under construction
Separately, CubeSmart reported one joint-venture development under construction in New York as of September 30. The company expects to invest a total of $28 million in the project and had invested $10.8 million by quarter-end.
The development is expected to open in the third quarter of 2027, according to the company. That is a projected opening, not a facility already operating. The release did not disclose its city or address.
Occupancy supports operating growth
CubeSmart’s same-store net operating income rose 2.1% from a year earlier, as revenue increased 1.9% and property operating expenses rose 1.3%. The same-store comparison covers 623 properties and helps separate operating changes at existing stores from changes in the overall portfolio.
Average same-store occupancy was 90.5% during the quarter. Occupancy at September 30 was 89.9%, compared with 89.0% a year earlier. The quarterly average and quarter-end measures describe different points in the reporting period.
Net income attributable to common shareholders increased to $94.4 million, or 42 cents a diluted share, from $82.9 million, or 36 cents a share. Adjusted funds from operations rose to $150.3 million, or 66 cents a diluted share, from $149 million, or 65 cents a share. FFO is a supplemental property-company measure, not the same as profit under standard accounting rules.
The company also said it added 32 stores to its third-party management platform during the quarter, bringing that business to 882 stores. Those managed locations are separate from its consolidated portfolio of 662 stores.
CubeSmart now expects full-year adjusted FFO of $2.58 to $2.60 a diluted share, compared with its earlier range of $2.54 to $2.60. The forecast excludes potential future speculative investment activity and remains subject to uncertainty, including the timing and terms of transactions.
JBizNews Desk | Malvern, Pennsylvania
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