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 one on your telephone keypad. To withdraw your question, press star one 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 Cuba Smart'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 8-K we filed this morning, together with our earnings release filed with the Form 8-K. and the risk factor section of the company's annual report on Form 10-K. 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 post 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 US 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 you know move-in rents getting better year over year as a result of maybe you know better comps more moderating supplier 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 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, et cetera, 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 across the board. Strength in the East Coast and the middle part of the country. Some improving green shoots in the Sun Belt on customers' move-in rates. I think on the OpEx side, as Tim said, we're seeing 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, 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. Yeah, I mean, 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 and 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. And so 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 Thank you for having me. about the direction that we're moving here at Cube. 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.

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