CUBE

CubeSmart

NYSE · REAL ESTATE · REAL ESTATE INVESTMENT TRUSTS

40.16

+0.01 +0.02%

USD · close Oct 23

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MKT CAP $9.1BP/E 28.1DIV YIELD 5.23%FCF YIELD —REV TTM $1.1B +5.0%NET INCOME $325.3M −15.7%NET CASH —52W 35.36 – 42.50SEC XBRL · TTM TO Invalid Date

How CUBE rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

76%

of sentences unchanged

Added

new sentences

Dropped

sentences removed

Length

−30

words, now 11,150

New in FY2025

Adverse economic conditions affecting disposable consumer income, such as employment levels, wage levels, business conditions, inflation, deflation, interest rates, tax rates and fuel and energy costs, could reduce consumer spending or cause consumers to shift their spending to other products and services.
Our stores in New York, Florida, Texas and California provided approximately 17%, 14%, 11% and 10%, respectively, of total revenues for the year ended December 31, 2025.
As a result, if a liability were asserted against us based upon ownership of an acquired property, we might be required to pay significant sums to settle it, which could adversely affect our financial results and cash flow. In addition, we often do not obtain third-party appraisals of acquired properties and instead rely on internal valuation determinations. We will incur costs and will face integration challenges when we acquire or develop additional stores. As we acquire or develop additional self-storage properties and bring additional self-storage properties onto our third-party management platform, we will be subject to risks associated with integrating and managing new stores, including customer retention and mortgage default risks.
We cannot provide assurance that the performance of stores acquired by us will increase or be maintained under our management. Our development activities may be more costly or difficult to complete than we anticipate. We intend to continue to develop self-storage properties where market conditions warrant such investment.
If we are unable to obtain external sources of capital, we may not be able to acquire or develop properties when strategic opportunities exist, satisfy our debt obligations, make distributions to shareholders that would permit us to qualify as a REIT or avoid paying tax on our REIT taxable income. If we are unable to promptly re-lease our cubes or if the rates upon such re-leasing are significantly lower than expected, our business and results of operations would be adversely affected . We derive revenues principally from rents received from customers who rent units at our self-storage properties under month-to-month leases and fees earned from managing stores.
Any delay in re-leasing units as vacancies arise would reduce our revenues and harm our operating results.
We also carry environmental insurance coverage on certain properties in our portfolio.
Our results of operations could be materially impacted by claims and other expenses related to such insurance plans if future occurrences and claims differ from these assumptions and historical trends. Our insurance coverage may not comply with certain loan requirements. Certain of our properties serve as collateral for our mortgage-backed debt, some of which we assumed in connection with our acquisition of stores and requires us to maintain insurance, deductibles, retentions and other policy terms at levels that may not be commercially reasonable in the current insurance environment.
If we fail to comply with those laws, ordinances and regulations, we could be subject to significant fines or other governmental sanctions. Under various federal, state and local laws, ordinances and regulations, we, as an owner and operator of real estate, may be required to investigate and clean up hazardous or toxic substances or petroleum product releases at a property and may be held liable to a governmental entity or to third parties for property damage and for investigation and clean-up costs incurred by such parties in connection with contamination.
Such liability may be imposed whether or not we knew of, or were responsible for, the presence of these hazardous or toxic substances.
The cost of investigation, remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such substances, may adversely affect our ability to rent or sell such property or to borrow using such property as collateral.
In addition, in connection with the ownership, operation and management of self-storage properties, we are potentially liable for property damage or injuries to persons and property. Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of additional stores.
If we are required to make substantial modifications to comply with the ADA or similar state or local requirements, we may be required to incur significant unanticipated expenditures, which could have an adverse effect on our operating costs and our ability to make distributions to our shareholders. We face system security risks as we depend upon automated processes and the internet, and breaches of, or failures in the performance of, our information technology systems could damage our reputation, cause us to incur substantial additional costs and subject us to litigation. We are increasingly dependent upon automated information technology processes, including artificial intelligence, and internet commerce, and many of our new customers come from and interact with us on the telephone or over the internet.
We also rely extensively on third-party vendors to retain data, host software, process transactions (including payment transactions), and provide other systems and services.
Even if we are not targeted directly, cyberattacks on the U.S. government, financial markets, financial institutions, or other businesses, including our tenants, vendors, software creators, cloud providers, cybersecurity service providers, and other third parties with whom we work, may occur, and such events could disrupt our normal business operations and networks in the future. In addition to potentially experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
Additionally, proprietary, confidential, and/or sensitive information of ours or our tenants could be leaked, disclosed, or revealed as a result of or in connection with the use of generative artificial intelligence technologies. We currently incorporate artificial intelligence solutions into our business, and applications of artificial intelligence may become more important in our operations over time.
Events or conditions beyond our control that may adversely affect our operations or the value of our properties include but are not limited to: ● downturns in the national, regional and local economic climate; ● local or regional oversupply, increased competition or reduction in demand for self-storage space; ● vacancies or changes in market rents for self-storage space; ● inability to collect or delay in collecting rent from customers; ● increased operating costs, including maintenance, utilities, personnel, insurance premiums, customer acquisition costs and real estate taxes; ● changes in interest rates and availability of financing; ● hurricanes, earthquakes and other natural disasters, civil disturbances, terrorist acts or acts of war that may result in uninsured or underinsured losses; ● significant expenditures associated with acquisitions and development projects, such as debt service payments, real estate taxes, insurance and maintenance costs which are generally not reduced when circumstances cause a reduction in revenues from a property; ● costs of complying with changes in laws and governmental regulations, including those governing usage, zoning, the environment and taxes; and ● the relative illiquidity of real estate investments. In addition, prolonged periods of economic slowdown or recession, rising interest rates, declining demand for self-storage, geopolitical tensions, military conflicts, pandemics or the fear or public perception that any of these events may occur, could result in a general decline in rental revenues, which could impair our ability to satisfy our debt service obligations and to make distributions to our shareholders. Rental revenues are significantly influenced by demand for self-storage space generally, and a decrease in such demand would likely have a greater adverse effect on our rental revenues than if we owned a more diversified real estate portfolio. Because our real estate portfolio consists primarily of self-storage properties, we are subject to risks inherent in investments in a single industry.
This likely would have a significant adverse effect on our earnings and the value of our securities.
Consequently, there is uncertainty regarding our ability to access the credit markets in order to attract financing on reasonable terms, and there can be no assurance that we will be able to continue to issue common or preferred equity securities at a reasonable price.
Furthermore, we have experienced, and could continue to experience, a shortage of labor for certain positions due to certain market trends and conditions which could further decrease the pool of available talent for key functions. As of December 31, 2025, we had 2,618 property-level personnel involved in the management and operation of our stores and 503 employees at our principal executive office supporting our stores. Competitive pressures and the impact of inflation may require that we enhance our pay and benefits package to compete effectively for such personnel.
These factors include, but are not limited to: ● increases in market interest rates, relative to the dividend yield on our shares.
Thus, higher market interest rates could cause the market price of our equity securities to go down; ● anticipated benefit of an investment in our securities as compared to an investment in securities of companies in other industries (including benefits associated with tax treatment of dividends and distributions); ● perception by market professionals of REITs generally and REITs comparable to us in particular; ● level of institutional investor interest in our securities; ● trading volumes in securities of REITs; ● our results of operations and financial condition; ● investor confidence in the stock market generally; and ● additions and departures of key personnel. The market value of our equity securities is based primarily upon the market’s perception of our growth potential and our current and potential future earnings and cash distributions.
In light of generative artificial intelligence tools and large language models, there is also a risk that the dissemination of negative opinions or characterizations or disinformation may negatively impact the conclusions that these tools and models draw about our business, prospects and share price.
Between January 1, 2023 and December 31, 2025, the closing price per share of our common shares has ranged from a high of $54.55 (on September 16, 2024) to a low of $33.28 (on October 25, 2023).
If operating expenses continue to increase without a corresponding increase in revenues, our profitability could diminish and limit our ability to make distributions to our shareholders. The United States Federal Reserve Board and similar international bodies have increased interest rates at times in recent years to control and decrease the level of inflation.
Similar increases in interest rates could have a material effect on our financial performance, as further described under the heading “The terms and covenants relating to our indebtedness could adversely impact our financial performance.” We cannot assure our ability to pay dividends in the future. Historically, we have paid quarterly distributions to our shareholders, and we intend to continue to pay quarterly dividends and to make distributions to our shareholders in amounts such that all or substantially all of our taxable income in each year, subject to certain adjustments, is distributed.
In addition, changes in the regulatory environment affecting health care reimbursements, and increased compliance costs related to enforcement of federal and state wage and hour statutes and common law related to overtime, among others, could cause our expenses to increase without an ability to recoup any increased expenses through higher prices. Privacy concerns could result in regulatory changes that may harm our business. Personal privacy has become a significant issue in the jurisdictions in which we operate.
Failure to comply with such laws and regulations could result in consent orders or regulatory penalties and significant legal liability, including fines, which could damage our reputation and have an adverse effect on our results of operations or financial condition. Terrorist attacks, active shooter incidents and other acts of violence or war may adversely impact our performance and may affect the markets on which our securities are traded. Terrorist attacks at or against our stores, our employees, our interests or the United States, may negatively impact our operations and the value of our securities.

Gone since FY2024

Adverse economic conditions affecting disposable consumer income, such as employment levels, business conditions, inflation, deflation, interest rates, tax rates and fuel and energy costs, could reduce consumer spending or cause consumers to shift their spending to other products and services.
Our stores in New York, Florida, California and Texas accounted for approximately 18%, 14%, 11% and 9%, respectively, of our total 2024 revenues.
As a result, if a liability were asserted against us based upon ownership of an acquired property, we might be required to pay significant sums to settle it, which could adversely affect our financial results and cash flow. In addition, we often do not obtain third-party appraisals of acquired properties and instead rely on internal value determinations. We will incur costs and will face integration challenges when we acquire or develop additional stores. As we acquire or develop additional self-storage properties and bring additional self-storage properties onto our third-party management platform, we will be subject to risks associated with integrating and managing new stores, including customer retention and mortgage default risks.
We cannot assure that the performance of stores acquired by us will increase or be maintained under our management. Our development activities may be more costly or difficult to complete than we anticipate. We intend to continue to develop self-storage properties where market conditions warrant such investment.
If we are unable to obtain external sources of capital, we may not be able to acquire or develop properties when strategic opportunities exist, satisfy our debt obligations, make distributions to shareholders that would permit us to qualify as a REIT or avoid paying tax on our REIT taxable income. If we are unable to promptly re-lease our cubes or if the rates upon such re-letting are significantly lower than expected, our business and results of operations would be adversely affected . We derive revenues principally from rents received from customers who rent cubes at our self-storage properties under month-to-month leases and fees earned from managing stores.
Any delay in re-leasing cubes as vacancies arise would reduce our revenues and harm our operating results.
We also carry environmental insurance coverage on certain stores in our portfolio.
Our results of operations could be materially impacted by claims and other expenses related to such insurance plans if future occurrences and claims differ from these assumptions and historical trends. Our insurance coverage may not comply with certain loan requirements. Certain of our stores serve as collateral for our mortgage-backed debt, some of which we assumed in connection with our acquisition of stores and requires us to maintain insurance, deductibles, retentions and other policy terms at levels that may not be commercially reasonable in the current insurance environment.
If we fail to comply with those laws, ordinances and regulations, we could be subject to significant fines or other governmental sanctions. Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances or petroleum product releases at a property and may be held liable to a governmental entity or to third parties for property damage and for investigation and clean-up costs incurred by such parties in connection with contamination.
Such liability may be imposed whether or not the owner or operator knew of, or was responsible for, the presence of these hazardous or toxic substances.
The cost of investigation, remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such substances, may adversely affect our ability to sell or rent such property or to borrow using such property as collateral.
In addition, in connection with the ownership, operation and management of properties, we are potentially liable for property damage or injuries to persons and property. Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of additional stores.
If we are required to make substantial modifications to comply with the ADA or similar state or local requirements, we may be required to incur significant unanticipated expenditures, which could have an adverse effect on our operating costs and our ability to make distributions to our shareholders. We face system security risks as we depend upon automated processes and the internet, and breaches of, or failures in the performance of, our information technology systems could damage our reputation, cause us to incur substantial additional costs and subject us to litigation. We are increasingly dependent upon automated information technology processes, including artificial intelligence, and internet commerce, and many of our new customers come from the telephone or over the internet.
We also rely extensively on third-party vendors to retain data, host software, process transactions and provide other systems and services.
Even if we are not targeted directly, cyberattacks on the U.S. government, financial markets, financial institutions, or other businesses, including our tenants, vendors, software creators, cloud providers, cybersecurity service providers, and other third parties with whom we work, may occur, and such events could disrupt our normal business operations and networks in the future. In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
Additionally, proprietary, confidential, and/or sensitive information of us or our tenants could be leaked, disclosed, or revealed as a result of or in connection with the use of generative artificial intelligence technologies. We currently incorporate artificial intelligence solutions into our business, and applications of artificial intelligence may become more important in our operations over time.
Events or conditions beyond our control that may adversely affect our operations or the value of our properties include but are not limited to: ● downturns in the national, regional and local economic climate; ● local or regional oversupply, increased competition or reduction in demand for self-storage space; ● vacancies or changes in market rents for self-storage space; ● inability to collect or delay in collecting rent from customers; ● increased operating costs, including maintenance, personnel, insurance premiums, customer acquisition costs and real estate taxes; ● changes in interest rates and availability of financing; ● hurricanes, earthquakes and other natural disasters, civil disturbances, terrorist acts or acts of war that may result in uninsured or underinsured losses; ● significant expenditures associated with acquisitions and development projects, such as debt service payments, real estate taxes, insurance and maintenance costs which are generally not reduced when circumstances cause a reduction in revenues from a property; ● costs of complying with changes in laws and governmental regulations, including those governing usage, zoning, the environment and taxes; and ● the relative illiquidity of real estate investments. In addition, prolonged periods of economic slowdown or recession, rising interest rates, declining demand for self-storage, geopolitical tensions, military conflicts, pandemics or the fear or public perception that any of these events may occur, could result in a general decline in rental revenues, which could impair our ability to satisfy our debt service obligations and to make distributions to our shareholders. Rental revenues are significantly influenced by demand for self-storage space generally, and a decrease in such demand would likely have a greater adverse effect on our rental revenues than if we owned a more diversified real estate portfolio. Because our real estate portfolio consists primarily of self-storage properties, we are subject to risks inherent in investments in a single industry.
This likely would have a significant adverse effect on our earnings and likely would adversely affect the value of our securities.
Consequently, there is greater uncertainty regarding our ability to access the credit markets in order to attract financing on reasonable terms, and there can be no assurance that we will be able to continue to issue common or preferred equity securities at a reasonable price.
As previously announced, our Chief Operating Officer is scheduled to retire in 2025.
Furthermore, we have experienced, and could continue to experience, a shortage of labor for certain positions due to certain market trends and conditions which could further decrease the pool of available talent for key functions. As of December 31, 2024, we had 2,604 property-level personnel involved in the management and operation of our stores.
The customer service, marketing skills and knowledge of local market demand and competitive dynamics of our store managers are contributing factors to our ability to maximize our income and to achieve the highest sustainable rent levels at each of our stores. Competitive pressures and the impact of inflation may require that we enhance our pay and benefits package to compete effectively for such personnel.
These factors include: ● increases in market interest rates, relative to the dividend yield on our shares.
Thus, higher market interest rates could cause the market price of our equity securities to go down; ● anticipated benefit of an investment in our securities as compared to investment in securities of companies in other industries (including benefits associated with tax treatment of dividends and distributions); ● perception by market professionals of REITs generally and REITs comparable to us in particular; ● level of institutional investor interest in our securities; ● trading volumes in securities of REITs; ● our results of operations and financial condition; ● investor confidence in the stock market generally; and ● additions and departures of key personnel. The market value of our equity securities is based primarily upon the market’s perception of our growth potential and our current and potential future earnings and cash distributions.
In light of the recent proliferation of generative artificial intelligence tools and large language models, there is also a risk that the dissemination of negative opinions or characterizations or disinformation may negatively impact the conclusions that these tools and models draw about our business, prospects and share price.
Between January 1, 2022 and December 31, 2024, the closing price per share of our common shares has ranged from a high of $54.82 (on January 3, 2022) to a low of $33.28 (on October 25, 2023).
If operating expenses continue to increase without a corresponding increase in revenues, our profitability could diminish and limit our ability to make distributions to our shareholders. The United States Federal Reserve Board and similar international bodies have increased interest rates in recent years to control and decrease the level of inflation.
Such increases in interest rates could have a material effect on our financial performance, as further described under the heading “The terms and covenants relating to our indebtedness could adversely impact our financial performance.” We cannot assure our ability to pay dividends in the future. Historically, we have paid quarterly distributions to our shareholders, and we intend to continue to pay quarterly dividends and to make distributions to our shareholders in amounts such that all or substantially all of our taxable income in each year, subject to certain adjustments, is distributed.
In addition, changes in the regulatory environment affecting health care reimbursements, and increased compliance costs related to enforcement of federal and state wage and hour statutes and common law related to overtime, among others, could cause our expenses to increase without an ability to recoup any increased expenses through higher prices.
Privacy concerns could result in regulatory changes that may harm our business. Personal privacy has become a significant issue in the jurisdictions in which we operate.
Failure to comply with such laws and regulations could result in consent orders or regulatory penalties and significant legal liability, including fines, which could damage our reputation and have an adverse effect on our results of operations or financial condition. Terrorist attacks, active shooter incidents and other acts of violence or war may adversely impact our performance and may affect the markets on which our securities are traded. Terrorist attacks at or against our stores, our interests or the United States, may negatively impact our operations and the value of our securities.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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