CubeSmart reports solid Q3 2025 results, increasing guidance as operational metrics improve and new supply pressures ease.

Ladies and gentlemen, thank you for standing by. My name is Colby and I'll be your conference operator today. At this time, I'd like to welcome you to CubeSmart third quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise and after the speaker's remarks there will be a question and answer session. If you would like to ask a question at that time, please press Star, then the number one on your telephone keypad. If you would like to withdraw your question at any time, please press Star one again. I will now turn the call over to Josh Schitzer, Vice President of Finance.

Thank you, Colby. Good morning everyone. Welcome to CubeSmart's third quarter 2025 earnings call. Participants on today's call include Chris Maher, President and Chief Executive Officer, and Tim Martin, Chief Financial Officer. Our prepared remarks will be followed by a Q and A session. In addition to our earnings release which. was issued yesterday evening, supplemental financial data. Is available under the Investor Relations section of the company's website@www.cubesmart.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 securities and Exchange Commission, Specifically the Form 8K we filed this morning together with our earnings release filed with the form 8K and the risk factors section in the Company's annual report on Form 10K. In addition, the Company's remarks include reference to non GAAP measures. Reconciliation between GAAP and non GAAP measures can be found in the third quarter financial supplement posted on the company's website at www.cubesmart.com. I will now turn the call over to Chris. Thank you, Josh. Happy Halloween and welcome everyone to our third quarter call. It was a very solid third quarter for Cube 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 field 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 Tim Martin for his commentary.

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 adjusted of 65 cents. 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. We 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 adding 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 10 year senior unsecured notes on August 20. The offering has a yield of maturity of 5.29% and 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 unsecured 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 penny raise at the midpoint of our FFO per share is 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 1.5% 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's comments, we expect trends to continue to stabilize through the remainder of the year, putting us on better footing heading into 2026 than 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 of 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. And at this time, Colby, let's open up the call for some questions.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press Star, then the number one on your telephone keypad to raise your hand and enter the queue. If you'd like to withdraw your question at any time, simply press Star one again. Thank you. Your first line, your first question comes from the line of Samir Kunal with Bank of America. The line is open.

Yeah. 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, when you think about those two, those Two levers, rate and occupancy. You know, you have the elasticity of demand that one has to deal with. And so when we look at those markets that, you know, 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 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 still perhaps down year over year. And those examples would be Miami and la, 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 you know, those would be the same, the same markets we've talked about all year, Atlanta, Phoenix, Cape Coral, Charlotte, you know, the Sun Belt market. So really varies quite, 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 two-and-a-half percent 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, from where we were at this point last year. And the average rent on rentals, that two and a half that you quoted for the quarter in October is in that 1.92% range.

Okay, thanks a lot.

Your next question comes from the line of Nicholas Ulico from Scotiabank. Your line is open.

Hello, this is Victor Paduon with Kulikom. On your last call, you said that most demand still comes from traditional search and you're working with your partners or Gemini integration. 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?

Yeah, the leads coming through the LLMs, which is primarily chatgpt at this point for us, are about less than 1%.

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

I'm sorry. I think we got a little bit more clarity on the question if we could. Merchant builder sellers. Yeah, yeah. Sellers. Yeah.

Whether you can see now more of them or not really. Versus for example Q2.

Yeah. Yep. No, haven't really seen a change. You know, again, there's no, there's no. And there typically isn't like significant duress in our sector. And so I think what you have is, you know, 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 you know, financial institutions for the most part are cooperating.

Got it. Thank you.

Thanks.

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

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 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 4 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 in the cycle?

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

Okay. And then you know, some of your peers I think ran promotions are implemented newer discounting strategies during the quarter. I was just wondering if you can speak to whether, you know, whether Cube participated or what discounting strategies might have been implemented during the peak season and how you're thinking about pricing, you know, promotions and discounting in the off peak season. As you know, occupancy typically pulls back. A bit here.

Yeah, so I guess there was some new vernacular introduced recently with this gross net kind of concept that 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. All right, thank you.

Thanks, Todd.

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

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

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 and we've talked about here for the past several quarters is pretty consistent view from the buying side of the table as to what, as to what return thresholds look like. I don't think that's changed much at all. Hasn't for us. I don't think it's changed change 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 and you're starting to see things move a little bit. I 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, has shrunk to the point where you're starting to see some things get done.

Thanks. And then just 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 a bit stronger?

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, you know, portfolio construct. Again where we are at this part of the cycle. You know, 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.

Your next question comes from the line of Eric Wolf with Citi. The line is open.

Hey, thanks for taking my questions. I think you said a moment ago that conservatively that same store revenue might not turn positive until the back half of 2026. But I mean, if you're already at, you know, 2 to 3%, you know, move in rate growth, is there some reason to believe that 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 ecri? I'm just trying to understand why, you know, if you're already, I call it positive move in rents today that it's going to take until the back half of 2026 to be positive on same store revenue. Right.

I mean, not sarcastically. It's math. So we are, you know, in a business where 4 to 5% of our existence, 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, we don't foresee a catalyst for that. It just takes time. So you will just gradually see, you know, that, that slightly negative same store revenue growth begin to move in a positive direction and you know, exactly when that crossover occurs. You know, we're not providing guidance at this point and we don't do quarterly guidance from a same store perspective. But you know, again, I think to be fair, at this point in October 31st, you know what I, what I shared is kind of the conservative outlook at the moment.

Got it. And then I guess to the move in rents that you provide in the sup. 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 2 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 to your point, but I guess I'm just wondering about the, you know, if you can really just kind of take these moving rent growth and then assume you're going to 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.

I'll jump in. I, if you think about the, if you think about your, your premise there of, of 2 to 3, 2 to 4% type type, year over year improvement in pricing then, and you held everything else constant. Then ultimately after, you know, call it 12 months, when you've churned 5% of your portfolio each month at that type of churn, then eventually that's where you would get to. And then, and then it would, it would probably be helped a little bit then by some of those other factors. You probably get a little bit more. Out of your ecri. You probably get a little bit of occupancy if you're in that environment, if you have that type of pricing power, normal pricing power, over a prolonged period of time. So back to Chris's point earlier here is it just takes time to flow through because it's 4 to 5% a month and it builds and builds and builds. So if you had that for a prolonged period of time, I think that's ultimately where you get to from a revenue growth perspective. Plus or minus.

Thanks. And then does the moving rents include promotions or is that like a separate calculation we should make? Meaning that that I think was up like mid twos this, this quarter is that flat with promotion?

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. Got it.

Thank you. Thanks.

Your next question comes from the line of Michael Griffin with Evercore isi. Your line is open.

Great, thanks. Chris. Maybe you can expand a bit on whether or not you've seen any changes in new customer behavior. I mean, it 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, you know, with storage, but any incremental home buyer customers coming back or is it still, you know, they haven't really materialized yet?

Yeah, I think, I think what, what you're finding is you're just able to get rate in these markets that are not typically the home buyer and seller movement market. So you're leading year over year improvement and rate to new customers. Manhattan, Queens, Brooklyn, Chicago, Washington, D.C. and then the laggards where you're just still trying to find footing in terms of where is that balance and at what rate can you get that customer to convert? Continue to be, you know, Atlanta, Phoenix, Charlotte, some, 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.

Yeah, I'm sorry, one last piece. 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 deliveries. While deliveries overall are down, you know, they are still occurring all too frequently 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 yes, great.

And then maybe next just on sort of the ECRIS and outlook there, I mean I realized that the you know, rent roll downs, the move in to move out is 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 strategically where you can?

Yeah, the customer help which we continue to really focus in on and again 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 ECRI and our overall approach has been consistent throughout 2020.

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

Your next question comes from the line of Ravi Vaida with Mizuho. Your line's open.

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 this to increase again or maybe who are 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, I appreciate the question. So on our third party management program we talk about the stores that we add to the platform because that's ultimately what we control. That's our new business development team is is looking for opportunities to add owners to add stores to the platform. This year we have exceeded adding 130 stores for the eighth 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 when you have that churn. Part of this year's churn was self inflicted earlier in the year when we 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, 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, in the store count on the 3pm platform is an impossible task. So we control what we can control and we, you 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, you know, 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, and sell the asset to someone else.

That's helpful. Thank you. Thank you.

Your next question comes from the line of Spencer Klimcher from Green Street. Your line is open.

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, and then on the flip side, are there any markets that are sort of redlined right now just because there's still too much operational uncertainty, maybe outside of the obvious supply heavy markets?

Yeah, I mean just the nuanced response is we're comfortable underwriting everywhere. I think embedded in our underwriting are obviously going to, going to be different. You know, risk, you know, risk hurdles based on some of those characteristics that you would refer to. Perhaps the best deal that we can find right now would be in a market that's more challenged because, you know, others, others don't see maybe what we see. And so we don't have a bias necessarily to, you know, to blacklist a particular market because of supply as an example or, or some other criteria. But, 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, take on that uncertainty. So those markets create more challenge from an underwriting standpoint to try to look at where rates are today perhaps and where rates might be in a year or two. It is a challenging but not impossible underwrite. When you have a store in particular, because it's such a micro market business, when you have a store that is competing against new supply, to 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 make a really nice risk adjusted return. So we're not avoiding markets, but certainly considering all of those risk factors.

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?

Those three assets are a little bit of a mixed bag between stable and not stable going in. When you look across the three, we're going 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.

Okay, thank you so much. Thank you.

Your next question comes from Brendan lynch from Barclays. The line is open.

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 Sunbelt. 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.

Yep. So it's going to be partly what you just said. So again the, the boroughs really non existent new supply impacts. So you're really stable from that perspective. You have a, you know, a more need based customer. And then obviously 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 in a market that in this part of the cycle is just doing very well. Other Northeast Philadelphia, Boston, little bit of a mixture there. You've got supply as opposed to the boroughs and you have a little bit 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 kind of a combination of those two things and you see that similarly in urban Chicago. You see it in. A few of. The other urban markets.

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.

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, would have a need. From a, 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, surely there are opportunities somewhere. But the, the fruit is pretty high up in the tree and you know, for us to find an opportunity, it's going to be, it's going to be something that we're pretty excited about.

Great next step. Thank you.

Your next question comes from the line of Eric Lupjo from Wells Fargo. Your line is open.

Thanks for the question. Can you comment a little bit on. Any trends you're seeing on your average length this stay? It seems like vacates have been kind of muted across the industry this year. Obviously helps from a roll down perspective, but you know, 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.

Sure. When you think about those trends, I would macro say they're consistent, you know, still elevated. So our customers who have been with us greater than a year are up 50 basis points year over year. And again if you kind of compare it to Pre Covid so third quarter of 2019, it's plus 260 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 3Q19 so continue to be pretty consistent, have come down a bit off of peak but still elevated relative to historical metrics.

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. Obviously if we get a housing catalyst, if we see a pickup in customer mobility, moving rates, you know, continue to find stability, start growing, do you think it's reasonable we could get back to more historical levels of growth by, you know, maybe the second half of next year, certainly into 2027 and then, you know, potentially even higher, you know, beyond that, especially given some of the supply delivery commentary. Just wanted to get your temperature on, you know, what you see over the next few years and not just into 26.

Yeah, I do see that bull case as playing out the way you described. Again 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, you know, 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, et cetera, of the world should rebound quite nicely. And I think well positioned from, you know, obviously to get the rate. We've shown that we can do that through this cycle, you know, increasingly more so over the last couple of months. And then, you know, on the, on the occupancy side, then you get the pickup there as well. And you know, to your point, you could see, and I would expect if those conditions were to occur, you would see more elevated performance.

Okay, I appreciate it. Thanks guys.

Your next question comes from the line of Michael Mueller with J.P. morgan. Your line is open.

Yeah, 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 have a little bit longer of a Runway without meaningful supply?

Yeah, I think, I think that that crystal ball is 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, you know, recovery in move in rates. So you'll still have to see some progress there. And I think the developers, again, who have, you know, opened in 22 and are sort of trying to figure out how to hang on at this point, you know, may not be likely to want to get back into it again until they deal with, you know, exiting the store that they have. And then ultimately, you know, the primary lenders to the space for the developers, those local and regional banks have to be, you know, 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 as well. So, you know, again, at least you look out through next year, probably at least 1H27. I think, you know, we'll continue to see some restraint. Again there are the markets I've called out that, that appear to have no guardrails. But I think we'll continue to see some constraint. And then if you just think practically, if it picks back up again, you know, Takes six months to sort of get everything going and then another 12 months to build. So you're, you know, 18 months out from, from whenever that happens.

Got it. Okay, thank you.

Your next question comes from the line of Michael Goldsmith with ubs. Your line is open. Good morning.

Thanks a lot for taking my questions. Move in rate was up 2 1/2% 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.

Yeah, move in 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, you know, 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, you know, kind of consistent with the last couple of years is what we've seen.

Got it. And you've said on the call maybe. A couple of times. But just like stabilizing trends and encouraging signs, by stabilizing trends, are you referring to the same sort of revenue growth and by encouraging signs, you're suggesting the move in rate? Is that, is that kind of what you're pointing to?

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

Thank you very much. Port Chester looks great. Good luck in the fourth quarter.

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

I'm good, but thanks.

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

Okay, thank you everybody for participating. Again, stabilizing trends, encouraged by the direction overall that 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.

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