CubeSmart (CUBE) 2026年第三季度业绩电话会：NOI与FFO增长转正

核心要点

• CubeSmart 公布 2026 年第三季度调整后 FFO 为 每股 0.66 美元，处于管理层指引的高端，且实现同比正增长。
• 同店营收增长 1.9%，较第二季度的 0.8%有所加速；同时同店净营业收入（NOI）恢复增长，增幅为 2.1%。
• 平均出租率同比提升 60 个基点。在经历了较温和的季节性回落后，季度末出租率比上年同期高出 90 个基点。
• 在 CubeSmart 最大的 20 个市场中，有 17 个市场的营收增长有所加速。管理层指出，东北部和中西部表现强劲，同时阳光地带和西海岸的趋势也在改善。
• 全年同店营收指引上调至 1.0%-1.4%，而预期的同店费用增长下调至 2.8%-3.8%。
• CubeSmart 在第三季度回购了 210 万股股票，耗资 8390 万美元，使 2026 年年初至今的回购总额达到 1.598 亿美元。

关键财务数据

业务与经营表现

截至 9 月的六个月中，有五个月的租赁量实现增长。管理层表示，其定价系统优先考虑总营收而非任何单一运营指标。随着 CubeSmart 追求更多租赁量，第三季度新入住租金率同比小幅下降，但到 9 月下旬转为正增长。

10 月份，新入住租金率同比录得低个位数百分比增长。租赁量与上年同期持平，而出租率则从容保持在 2025 年水平之上。

CubeSmart 将整体经营改善归因于需求稳定、新增供应减少以及客户转化率提升。管理层表示，在先前受到影响的市场（包括新泽西州北部），供应压力的减轻正带来更多建设性影响。阳光地带和西南部市场也在改善，不过其表现仍低于东北部和中西部。

纽约都会区实现了 5.4% 的同店营收增长。新泽西州北部领跑该地区，长岛的表现略高于都会区平均水平，纽约市接近平均水平，其中布鲁克林在各行政区中领先。

其他物业相关收入增长了 16.8%。公司表示，这反映了商品销售、管理费与便利费、滞纳金、卡车租赁及其他客户服务项目的广泛调整。管理层预计，随着公司在 2027 年经历这些调整的对比基期，高增长趋势将在放缓前暂时维持。

CubeSmart 在第三季度新增了 32 家第三方托管门店，季度末第三方托管门店总数达到 882 家。

资本配置与资产负债表

CubeSmart 继续将股票回购放在优先位置，因为管理层认为，与私募市场上质量较低的资产相比，公司现有的投资组合能提供更好的风险调整后收益。

管理层表示，私有市场上与 CubeSmart 资产组合平均质量相当的资产，其资本化率维持在 5.25%-5.5% 左右。相比之下，2026 年期间，CubeSmart 股票隐含的资本化率交易水平在 6% 以上，有时甚至达到 6% 中段。

计划与 Heitman 成立的合资企业仍按计划将于第四季度完成交割。CubeSmart 预计将获得约 1.7 亿美元的净收益，同时保留参与未来潜在上行收益的权利。

第三季度期间，公司偿还了一笔 3 亿美元的债券以及三笔总计 4030 万美元的担保贷款。季度末之后，CubeSmart 达成了一笔全新的 3 亿美元无担保定期贷款，定价为 SOFR 加 80 个基点。

截至第三季度末，公司在循环信贷额度下的提款额为 8.5 亿美元。在计入定期贷款资金和预计的 Heitman 交易所得后，在假设没有额外资本部署或融资的前提下，管理层预计年末循环信贷借款约为 4 亿美元。CubeSmart 的下一笔债务到期日要到 2028 年 12 月。

管理层业绩指引

管理层预计，如果需求趋势保持稳定，进入 2027 年的经营环境将继续保持建设性。公司预计东北部和中西部将继续保持领先地位，而阳光地带和西南部市场将实现进一步的环比改善。公司未提供正式的 2027 年业绩指引。

风险与关注点

• 住房市场依然低迷。管理层将住房市场的复苏视为需求更快增长的潜在来源，但未在其展望中假设会出现这一改善。
• 自助仓储行业的复苏节奏仍存在不确定性。管理层预计将是渐进式改善，而非大幅反弹。
• 利率波动可能会影响收购定价、杠杆买家以及资本部署或股票回购的时机。
• 房产税申诉结果难以预测，可能会造成季度费用的波动。
• 包括图森（Tucson）在内的部分市场仍受到较新供应的影响，需要更多时间来消化。
• 现有客户的租金仍高于新客户率。管理层预计这种负向的按市值计价差额（mark-to-market gap）随时间推移会收窄，但仍将保持为负数。

分析师问答亮点

供应与定价：管理层表示，施工量下降以及近期交付物业的消化正在支撑更为理性的新客户定价。CubeSmart 预计供应环境在进入 2027 年时仍将有利，不过具体收益会因市场而异。

市场份额增长：CubeSmart 将更强的客户转化归因于本地规模、品牌知名度、客户评价、数字营销及其收益管理工具。管理层表示，随着较新设施的空置库存减少，这些优势正变得日益重要。

收购环境：近期的利率波动导致部分交易重新回到市场，并可能减少来自杠杆买家的竞争。CubeSmart 表示，公司正在对更多机会进行承销评估，且对潜在收购的前景比前几个季度更加乐观。

费用杠杆效用：公司表示，其现有的企业平台能够支持显著的门店增长。增加 50 到 100 家物业需要一些运营支持，但不会实质性改变定价、商业智能或营销团队的人员配备需求。

人工智能：CubeSmart 已在全公司范围内部署了生成式 AI，并正在评估智能体 AI（agentic AI）应用。管理层看到了其在收益优化、运营效率以及加快软件开发方面的潜在应用前景。

业绩电话会议完整转录

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完整财报电话会议逐字稿

管理层陈述

Operator

Hello, everyone. Thank you for joining us, and welcome to the CubeSmart Third Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the call over to Josh Schutzer, Senior Vice President of Finance. Josh, please go ahead.

Joshua Schutzer

Thank you, Sarah. Good morning, everyone. Welcome to CubeSmart's Third 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.cubesmart.com. .

The company's remarks will include certain forward-looking statements regarding earnings and strategies 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 8-K we filed this morning together with our earnings release filed with the Form 8-K and the Risk Factors 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 third quarter financial supplement posted on the company's website at www.cubesmart.com.

I will now turn the call over to Chris.

Christopher Marr

Thank you, Josh. Good morning, everyone. A very solid quarter for CubeSmart as we emphatically delivered on our forecasted inflection to positive growth in both net operating income and funds from operations per share. 2026 has demonstrated both the resilience of the self-storage business and the strength of CubeSmart's operating platform and portfolio strategy. The wide range of need-based use cases for our product has supported stable demand despite a sluggish housing market, while reduced new supply pressure has created a more constructive operating backdrop across most markets.

Throughout the year, our systems have effectively balanced rate and volume at the individual store level producing higher revenue from move-ins strengthening occupancy and driving meaningful acceleration in same-store revenue growth. At the same time, strong customer service and a compelling value proposition, have supported lower vacate activity, longer lengths of stay and stable customer credit metrics. The breadth of the improvement is particularly encouraging. 17 of our top 20 markets generated accelerating revenue growth, led by strong absolute performance across our high-quality urban markets in the Northeast and Midwest, while many previously supply impacted Sunbelt and West Coast markets are showing meaningful second derivative improvement. That combination highlights the value of a portfolio designed to provide durability in more stable markets and growth as challenged markets recover.

Rental volume was positive in 5 of the last 6 months, helping to drive occupancy acceleration from flat year-over-year at the end of June to 90 basis points over last year at the end of September as we've seen less seasonal occupancy decline from the summer peak this year compared to prior years. As anticipated, move-in rates were down modestly year-over-year in Q3 as our system saw an opportunity to drive incremental volume by not pushing rates up further in July, ultimately generating higher revenue from move-ins in the quarter.

We saw a nice momentum through the end of the quarter as move-in rates returned to positive year-over-year growth by the end of September and improved further in October, now up low single digits. The strong results demonstrate the dynamic nature of our systems, responding to market and store-specific signals with the objective of maximizing revenue rather than any individual operational KPI.

We are also converting that top line momentum into stronger cash flow growth through disciplined expense management. Our 5-year record of sector-leading expense performance reflects a sustained focus on operating efficiency and expenses again performed better than our forecast without compromising the customer service and property quality that support long-term revenue. We view AI as a tailwind for our business. We have deployed generative AI across the company. and are in the early stages of genic AI use cases. We see a significant volume of potential opportunities to enhance revenue maximization, improve efficiency and speed up the deployment of software development.

In addition, we believe that our sophisticated digital tactics position us to be a brand of choice as consumers are shopping. The strength of our digital content, brand and customer reviews will remain valuable as generative and a genic AI become a larger part of the shopping process. Finally, our capital allocation activity demonstrates the flexibility and value embedded in the CubeSmart platform. We accelerated share repurchases because of the compelling relative value in our existing high-quality portfolio while the Heitman recapitalization allows us to monetize noncore assets at attractive private market pricing retain participation in future upside and establish another avenue for external growth.

Our ability to access the term loan market further reinforces the breadth of our capital relationships and provides liquidity and flexibility in a volatile macro environment. Together, the momentum in our operating business, the quality of our portfolio and the flexibility of our capital allocation platform provide multiple avenues to create shareholder value as we enter 2027.

Now I'd like to turn the call over to our Chief Financial Officer, Tim Martin.

Timothy Martin

Thanks, Chris. Good morning, everyone. Thanks for joining us today. Our third quarter came in at the high end of our expectations. And as Chris mentioned, our results delivered on what we pointed to last quarter, which was our expectation for a return to positive growth in both NOI and FFO per share.

Same-store revenue growth accelerated again this quarter after posting 0.8% growth last quarter. In the third quarter, our revenue growth was 1.9%. Our systems are designed to maximize the revenue generation from our portfolio without a focus on any individual operating metric, and our results reflect growth across the key underlying revenue components.

We saw growth in occupancy. 60 points of growth on our average occupancy during the quarter. We saw growth in realized brand, 50 basis points of growth during the quarter. So occupancy and rate combined to grow our RevPas, 1.2% for the quarter, which is an acceleration from the 0.5% growth we saw in Q2. On top of those, we saw growth in other property-related income of 16.8%. This line item includes a variety of things: merchandise sales, including locks and boxes, a variety of fees, including admin fees, late fees, convenience fees, other fees, truck rental income, et cetera.

We continuously look at the entirety of our offerings to our customers and have made adjustments over the past several quarters, which has led to some outsized growth on that line. We expect that growth to continue for a bit and then moderate once we've lapped some of those changes, but there's nothing onetime in nature that's driving this quarter's results.

Our strong third quarter performance and improvement in move-in rates late in the quarter and into October, led to our improved full year same-store revenue guidance range of 1% to 1.4%, which is up 33 basis points at the midpoint. For the fourth quarter then, that implies slight moderation to 1.5% growth at the midpoint and further acceleration to 2.3% at the high end of the range, which really sets up to be a strong footing heading into 2027.

We expected expense growth to moderate in the second half of the year given the timing of personnel and marketing spend as well as some difficult first quarter snow comps, and our performance has been even better than our expectations. Same-store operating expenses grew 1.3% over last year during the quarter, and we improved our full year expectation for same-store expense growth to a new range of 2.8% to 3.8%, a 58 basis point improvement at the midpoint. We're benefiting from successful property tax appeals, a better-than-expected insurance renewal and a continued focus on managing controllable expenses and utilizing technology initiatives across a number of operational areas, which has led to reduced growth across a range of items in the other expense category.

So revenue growth of 1.9% combined with 1.3% expense growth, you 2.1% same-store NOI growth for the quarter, which is that positive inflection point we were pointing to last quarter. We reported FFO per share as adjusted of $0.66 for the quarter, which was at the high end of our guidance entering the quarter. We allocate capital based on the best available risk-adjusted return. And so far this year, the relative valuation of Cube shares has made share repurchases attractive as investing in our own high-quality portfolio has been more attractive than acquiring lower-quality assets at private market valuations.

Our JV with Heitman that we discussed last quarter remains on track to close in the fourth quarter. That transaction allows us to monetize the public-private valuation disconnect, advances our portfolio strategy, preserve anticipation in future upside and establishes another avenue for future external growth. We continued our share repurchases in the third quarter, buying back 2.1 million shares for $83.9 million at an average purchase price of $39.09 per share. That brings our year-to-date share buybacks to $159.8 million at an average price of $38.52.

During the quarter, we repaid our $300 million bond that matured in September as well as 3 secured loans that totaled $40.3 million. And subsequent to quarter end, earlier this week, we closed on a new $300 million unsecured bank term loan that floats at SOFR plus 80 basis points. We had great support again this year from our bank group on that transaction, and it demonstrates the flexibility provided by our balance sheet and our banking relationships. Also allowed us to access attractively priced capital during a volatile period while retaining the flexibility to return to the unsecured bond market when conditions are more favorable.

So we ended the quarter with $850 million drawn on our revolver, with the $300 million of proceeds from the term loan and the upcoming expected net proceeds from the Heitman Venture of approximately $170 million, we expect to end the year with around $400 million drawn on the line absent any additional capital deployment or capital raising. We would expect to term out that balance sometime in 2027 through our more traditional unsecured bond market playbook. With our next debt maturity not until December of 2028, we're in great shape and could be patient and opportunistic.

On the third-party management front, we added 32 stores to the platform in the third quarter and ended the quarter with 882 third-party stores under management. As always, details of our 2026 earnings guidance and related assumptions were included in our release last evening. We're really excited about this quarter's results and the positive momentum we're seeing across the board. Same-store revenue growth, we're getting positive contributions from all components. Same-store expense growth, our continuous focus on controlling expenses has led not only to sector-leading expense control over the past 5 years, but has led to an improved outlook for the remainder of 2026 as well. Same-store NOI this quarter saw an inflection to positive growth and our revised annual guidance improved and now seeing positive NOI growth for the full year at the midpoint. FFO per share also inflected to positive year-over-year growth during the quarter and also now is expected to be positive for the full year at the midpoint of our improved guidance range.

Investments. Continued execution of our strategic plan of creating shareholder value with a continued focus on having the highest quality portfolio in the sector. Our JV and share repurchases demonstrate our ability to execute on that front even in a volatile environment with a disconnected private public market valuations.

Balance sheet. We've demonstrated continued access to the full spectrum of capital raising alternatives and have low leverage levels and a maturity schedule that has nothing to address until the very end of 2028. We feel great about the setup to close out a transitional year in 2026 and even better about the foundation we've established to set up an even better year 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.

Operator

[Operator Instructions] Your first question comes from the line of Samir Khanal with Bank of America.

分析师问答

Samir Khanal

Yes. I guess, Chris, maybe on the comments of move-in rates, you talked about in October being up in low single digits. I guess how should we think about pricing move-in rates as you look ahead into next year?

Christopher Marr

So through October, we've seen fairly consistent demand trends to what we had experienced in the third quarter. Rates have moved back, as I said, positive year-over-year, low single digits. Rental volume in line with last year, and we're maintaining occupancy levels nicely ahead of last year. We would expect that, that will create a backdrop going into '27. Again, absent any improvement in demand fundamentals, that will lead to continued growth in rents for new customers and I think continued opportunities to take more than our fair share of that demand. So I think the backdrop, as Tim said, entering into the beginning of '27 should be pretty positive for Cube.

Samir Khanal

Okay. And then I guess my second question is around supply. And I guess with new supply moderating here, how much of that benefit are you seeing in your markets today? And when would you expect it to translate into more meaningful pricing power here?

Christopher Marr

I think you can kind of look market by market there over time and see how the impact of new supply swings from negative to positive. I would point to the MSA data over the past 8 quarters or so before Washington, D.C. as an example. I think we're seeing it today in the North Jersey segment of our New York portfolio. There, you had a significant amount of an impact from new supply, and that was dragging down those results that has now swung the opposite direction and those stores in the North Jersey markets are outperforming relative to the overall MSA.

So I think it's going to end up being pocket by pocket. But when you see 17 of our 20 largest markets performing, as I said in the opening remarks, so well, and then when you look at commentary around the Sunbelt and the Southwest, while those haven't quite gotten yet to the levels of performance we've seen in other markets, those markets are moving in a positive direction. And I think that ties back to the absorption of the supply there. So I think supply, as you said, will continue to come down. And certainly, at this point, we have pretty good visibility for the deliveries in next year. And I just think the way the market is set up right now, it's hard to justify putting the shovel in the ground in many places. So I think the supply backdrop is going to continue to be helpful and constructive to more positive results.

Operator

Your next question comes from Michael Griffin with Evercore ISI.

Michael Griffin

I was wondering if you could expand a bit on how Cube is able to win greater as it relates to the market share of total customer demand. Is this more effective marketing spending? Dynamic pricing, maybe different promotional strategies. It just seems to me if the top of funnel demand isn't expanding, you're really going to need to emphasize those customer wins and market share. So if you can talk about that a little bit, that would be great. .

Christopher Marr

So I think it is really across the board, everything that you threw out there in your question. We have scaled in market, and we do believe that scale in market creates competitive advantage. We have a recognized brand and a brand that's appreciated for customer service. And I think that then translates into very positive reviews, which then translates into certainly helpful on the digital marketing side, getting that customer from an inquiry to a reservation to a rental. I think on the pricing side, again, the tools and techniques and that our data scientists have are on the cutting edge. And I think they are doing a great job continuously improving the quality of that analysis and that data, which is resulting in us having a better and better revenue maximization model.

And I think when you look across all of that, I think it gives Cube a big competitive advantage. And in a world where, as the supply is being absorbed, those newly opened stores or more recently opened stores have less inventory to offer. So now it really doesn't come down as much the price, it comes down to who can get that customer in the door and I think we're out competing on that front, and therefore, you're seeing it in the results.

Michael Griffin

That's super helpful, Chris. And I realize you guys aren't active in the acquisition market right now, but curious if you can comment on pricing you're seeing out there right now in terms of cap rates or return hurdles and a buyer or seller pricing expectations changed at all given the recent volatility we've seen in interest rates?

Timothy Martin

Yes, great question. Obviously, there has been a tremendous amount of volatility here over the past -- in particular, the past 4 or 5 weeks, going to have an impact on mostly in the short term, you're on levered buyers and their interest and ability to be competitive and aggressive in the market. We have seen a handful of transactions that had been tied up, have come back. Perhaps that creates some additional opportunities for us. I think the time frame here for this recent volatility is likely a little bit too short to see if it ultimately changes cap rates and pricing expectations, but it could, from a positive -- from a Cube standpoint, it could take some buyers away from the table and bring things to levels that make sense for us. .

We continue to see a lot of opportunities. We're underwriting a lot of opportunities and think we're going to be able to find some things that are going to be really good value-add for us once they get on our platform. And so we're more optimistic today than we were over the last couple of quarters.

Operator

Your next question comes from the line of Brad Heffern with RBC Capital Markets.

Brad Heffern

I was thinking back to your expectations for this year when you originally gave guidance, which I think was basically similar to 2025 unless there was some sort of housing catalyst obviously haven't gotten that, but it does seem like that you're shaping up better than you expected. Can you just talk broadly about what is different versus how you saw the year playing out originally?

Timothy Martin

I think the biggest impact to us is that things have just trended towards the positive side of the range that we had anticipated. The impact of waning supply has certainly been has turned from a headwind to feels like a tailwind because in a lot of those markets that were more supply impacted that Chris referenced earlier, I think those markets, we've seen better performance than we would have expected at the beginning of the year. .

I think overall levels of demand have been on the more positive side of where we would have expected. As you mentioned, when we established guidance, we were expecting no incremental customer coming from any change in the housing market. And so overall, I think things have just trended towards the higher end of our expectations, largely because of supply-impacted markets not being the drag that we would have anticipated.

Brad Heffern

Okay. Got it. And then on occupancy, obviously, a pretty impressive inflection there, and you talked about seeing less seasonal decline than in prior years. I just wanted to be clear on that. Is that just versus the past couple of years that were weak? Or was that a broader comment? And then what do you think the difference is that's held occupancy up for longer.

Christopher Marr

I think broadly, we're just seeing trends that look much more like pre-COVID trends than the trends that were experienced from '22 to '25. And again, I think that's back to the helpful impact from the declining supply. I also think a part of it is the strength of our platform in that we're seeing great conversion and great return on investment in a lot of the marketing initiatives. I don't think there's been a dramatic change in how our customers find us, but there has been some changes at the margin that we've been able to take advantage of. So I just think it's a more healthy overall kind of backdrop. And as Tim said, on a range going into the year. I think we've just found ourselves at the more healthy end of our expectations.

Timothy Martin

And then I think third quarter specific, you had a comparison that last year, in the third quarter, our systems were our systems, we're trying to maximize the result of the output from the systems was maximizing our revenue growth through pushing a little bit more on rate and sacrificing perhaps a little bit on the [indiscernible] this year in the third quarter, it slipped because we're not solving for either one, and we got a little bit more occupancy this third quarter and a little bit less rate on the asking side. And so that's going to ebb and flow as the systems try to solve for the best the best answer to maximize top line revenue. .

Operator

Your next question comes from the line of Spenser Glimcher with Green Street.

Spenser Allaway

Just in terms of your share repurchase program, I know you guys still have 8 million shares remaining. But just given where the stock period, have you guys discussed increasing the shares available for repurchase, and are there any outright dispositions being considered for future funding or buybacks?

Timothy Martin

Spenser, great question. So our program to the extent that we find a compelling opportunity to continue our share repurchases. It's not difficult to get an approval from the Board to authorize more shares. So I don't really view that as a limit. We have continued to explore opportunities such as we did with the Heitman Venture to the extent that the current environment or the environment that we've seen year-to-date here is still disconnected and it makes sense for us to find assets that check all those boxes, that if we were to dispose or contribute those to a joint venture, the result being an overall improvement in the quality of our portfolio, and to take those proceeds, take advantage of the disconnect between public and private market valuations and turn those proceeds into additional share repurchases. That is certainly something that is in the playbook. And if that environment persists, it is something that we would look at doing more of.

Spenser Allaway

Okay. Great. And then on the property tax front, we've been talking about the appeals for some time. I'm just curious, how much longer do you envision having to engage in these -- and what is the magnitude of the appeals on average, just maybe on a percentage basis? Or maybe there's a wide range. But just trying to get a sense of how substantial these are?

Timothy Martin

I think real estate tax appeals and the process that we go through has been that way forever. It's -- there are many municipalities that it's just the way it works. They send along a tax increase and you fight it. And in many cases, that takes multiple years. And so it is a little bit choppy, and it's a little bit hard to predict. We tend to start a year with an expectation that we're going to get some, because we always get some. There's always a little bit of variance between what we expect from a successful appeal standpoint on what we ultimately achieve. The timing and the magnitude of that is very, very difficult to predict even by looking at what has happened in the past, it's hard to get a whole lot of confidence around that being the best predictor of what's happening in the future. But there is no process that's coming to an end. The nature of this is that's always the way it works, and it will always of our process. .

Operator

Your next question comes from the line of Michael Goldsmith with UBS.

Michael Goldsmith

The guidance range implies a pretty wide range of outcomes for the fourth quarter. So I was kind of wondering what gets you to the low end? What gets you to the high end? And then also what are the assumptions for first Street rates, move-in rates for the quarter that gets you to the lower and the high end?

Timothy Martin

It's always interesting when you get to this part of the year and you're providing an annual guidance range that implies a fourth quarter range. It is one of the reasons why we don't provide individual components on same-store revenue or same-store expenses or same-store NOI on a quarter-by-quarter basis, but you're kind of forced there in the fourth quarter. So it does imply a fairly wide range. I kind of focus on the midpoint of those ranges. We talked about in the prepared remarks, the revenue guide implies at the midpoint, a slight deceleration in the growth from the third quarter.

At the high end of that range, it implies slight -- well, actually a nice little bit further acceleration. So on the revenue side, that's just going to be a combination we're not going to get into exactly where we think move-in rates are going to be. They're going to change tomorrow from what they are today. So hard to predict exactly what's going to underlie that. But we do have confidence given what's already kind of in the books for rentals through today and feel pretty good about where operating fundamentals are and demand levels are that the range that we have provided is going to capture all of that. I think the negative end of that range implied for the fourth quarter would be somewhat difficult to envision, but we have to establish a range. So that would be some pretty bad stuff.

On the expense side, the mid part of the full year guidance implies 1.7% expense growth for the fourth quarter and the entirety of the range is really consistent with all of the feedback that we've provided throughout the year that expense growth heavy in the first half. It was going to moderate in the back half for all the reasons that we've discussed. And then implicit in that is an NOI range at the midpoint of 1.6% for the for the quarter and 3.2% for the year.

The most important thing about all those ranges is that I'd like to say again because you gave me a chance to is that the great news there is that for the full year now, we expect that at the midpoint of our provided range is that revenue growth is positive, not only for the quarter in the third quarter, but positive for the full year, and NOI growth is now projected to be positive for the full year at the midpoint of our range. And so that is clearly an inflection point, and I think it is kind of the period on the end of the sentence that we thought this was going to be a transitional year. And in fact, it's played out that way.

Michael Goldsmith

And maybe moving on, Chris, you highlighted that 17 of your top 20 markets are accelerating revenue growth. maybe looking at the handful that are decelerating, is there a common theme? Or are these markets that benefited from lower supply earlier and have now kind of peaked and moderated. And if so, is that what kind of learnings does that imply for the markets that are accelerating now driven by supply? And does that just kind of mean like absent a incremental demand driver that is kind of like the way we're heading us back to improvement, but then ultimately back to moderating growth?

Christopher Marr

So when you look at those small number of markets, 3 that are not in the same bucket as the 17, you take a market like Tucson, it's a very small market. It was a market we owned for a long period of time. Success creates copy cats. And so you had a lot of development of new stores in that market and a large percentage of that then was third-party managed by the larger brands. And so our nice position we had there for a while where we were owning that market and flying under the radar is going to go through a churn as it becomes a more competitive and mature and sort of somewhat typical market for us where we have a degree of competition across the stores.

It will, at some point, absorb and it will stabilize and then it will inflect and you'll see a few quarters of some outsized top line growth and then things should revert back to the mean. So I think all the markets are generally moving in a good direction. We have a few like Tucson that are just behind the curve a little bit.

Operator

Next question comes from the line of Juan Sanabria with BMO Capital Markets.

Juan Sanabria

But just hoping you could talk a little bit about the other income and the fees there. You kind of had a step function changes and, I guess, what you're charging kind of double-digit growth a couple of times over the last couple of years. So just curious on what drove the decision to pull that lever. And have you seen any consumer price sensitivity that we read about as you push these fees or what's the lessons from those initiatives? .

Timothy Martin

I went through kind of all the things that are in that bucket. And it's merchandise sales, a variety of different fees, truck rental income and the like. We just think about it from the standpoint of -- we have an entirety of our customer offerings, and they include everything that's in revenue. And we're always trying to tweak and modify and have a presentation of our full array of offerings that the mix and match of those is all intended to maximize revenue.

Sometimes they end up in the red line items, sometimes end up in the fee line items. And so there are a number of initiatives that we have undertaken. You see those flow through the results. The thing that I was trying to point out in the prepared remarks is that they're not onetime in nature. There are things that we have done. Ultimately, those high levels of year-over-year growth will start to moderate when we've lapped each of those changes, but I would expect to have continued outsized growth in that line item, at least for a little bit longer until we do lap it sometime next year.

Juan Sanabria

Okay. And then just curious if you can comment on New York, I'm not sure if I heard correctly, but I think [indiscernible] New Jersey was mentioned as leading the MSA performance for same-store revenue, but hoping you could kind of break out the components of same-store revenue across the different major geographies within the New York MSA and how those should trend going forward with our kind of continuing its impressive run overall as an [indiscernible]?

Christopher Marr

Yes, Juan. So if you start with the MSA as a whole in the disclosure, quarterly revenue was up 5.4% on a year-over-year basis. if you think about New York City itself, it was basically right at that MSA average, just a scosh behind. And then you think about Long Island slightly ahead of that 5.4. Northern New Jersey led the pack for the quarter, and then you saw Westchester, where you have a little bit of -- well, we have a small number of stores, only 4. And so not statistically all that helpful, but that would have been the laggard. Westchester County as it relates to the individuals in the quarter.

So the borough is doing -- continuing to do well really led by at this point, Brooklyn, but all of the words are performing quite nicely. And now we are seeing in the suburbs what had been a little pull down on that overall MSA, certainly last year and earlier this year. It's now kind of caught up to the boroughs.

Operator

Your next question comes from the line of Viktor Fediv with Scotiabank.

Viktor Fediv

I have a question about the competitive environment. So how has that environment evolved over the last few months, particularly around the promotions and new customer pricing. And also, to what extent has a more rational competitive backdrop you were talking about during the Vegas conference contributed to your occupancy gains in Q3? And does that give you greater confidence in your building rate in 2027?

Christopher Marr

So I think you really touched on the answer there, yes, the entirety of this year, I would say the overall competitive environment has been constructive I think a contribution to that, certainly, going back to the theme is as that as that new supply has been absorbed over the last couple of years and those stores are starting to get to a level of physical occupancy where the owner manager is more comfortable on the rate side. That certainly helped market pricing for new customers. We see that continuing here into the fourth quarter.

Our expectation is that environment will remain constructive as we go into 2027. And I think all of that is 1 component, as Tim has articulated as to why we're so optimistic about the direction that fundamentals are going and why we're so optimistic about 2027. And I think, again, whether that's rate or occupancy, as Tim has said, we're just focused on how do you maximize revenue, how do you grow revenue in the most effective way to get the results that we've put up, which are very good. And I think that's our promise is we'll continue to focus on how do we maximize the opportunities that we see every day.

Viktor Fediv

Okay. And then [indiscernible] provided on different markets. But where are you seeing the clearest leading indicators of improvement for 2027. So which markets you are the most excited about in 2027 to outperform?

Christopher Marr

I think in this backdrop, the expectation is that the demand drivers remain consistent in '27 as they have been in '26. You will see our dominant markets in the Northeast and in the Midwest continue to lead. And our expectation is that, again, as I said in my opening remarks, those Sun Belt and Southwest markets will continue to show improvement. I think you'll continue to see that improvement quarter-by-quarter as we go through the end of this year and through 2027. .

Operator

Your next question comes from the line of Ravi Vaidya with Mizuho.

Ravi Vaidya

Apologies if I missed this, but I think you said earlier that the move-in rates for October are up mid-single digits. I wanted to get a sense of how occupancy has trended throughout October on a year-over-year basis and compared to September?

Christopher Marr

Yes. So through October, we've seen the fairly consistent demand trends of what we have seen in the third quarter. rates have moved back positive, low single digits year-over-year. Rental volume remains in line with last year, and we're maintaining occupancy levels that are nicely ahead of last year. So I would say, obviously, October is not finished, but the trends have continued that positive direction that we saw in the third quarter. .

Ravi Vaidya

Got it. That's helpful. And maybe can you please offer some comments on length of stay? How has that trended throughout the year? And how is that been impact. How has that driven your ECRI strategy going forward as customers are using the service longer?

Christopher Marr

So the median length of stay and what we're seeing on those customers is fairly consistent throughout the year. So again, when you think about the number of customers who have been with us over 2 years continues to tick in that about 40% range. and those long-term customers clearly are in the portfolio for that long because, a, we're providing a valuable service. But b, we're providing excellent customer service, which is certainly a component of that desire to stay longer. I think when you think about that relative to the ECRI program, there hasn't been a significant change in how we think about rates from that perspective to the existing customer base. Those trends in that philosophy and strategy has been fairly consistent now throughout the year. SP-3 Got it. Congrats on a good quarter.

Operator

Your next question comes from the line of Todd Thomas with KeyBanc Capital Markets.

Unknown Analyst

This is A.J. on for Todd. So real quick, the improvement, Chris, as you mentioned in your opening remarks kind of just broadened across the portfolio this quarter. How much of that reflects stronger underlying demand versus easier comps are changing your pricing strategy?

Christopher Marr

Thanks for the question. So not easier comps. I think it is a reflection of, again, stable demand fundamentals against the backdrop of less inventory for that customer to choose from, which then has led to a more constructive market pricing. But b, this just plays right into the sweet spot of Cube. You're having a higher focus on that customer who is now looking for the specific Cube size that they're interested in renting and our ability to both get those eyeballs on us at their beginning of the stage and then convert them first into a reservation and then a rental is a competitive advantage that we have in the markets in which we operate. mostly due to the fact that, a, we're incredibly good at it; and b, we have the best quality portfolio. So it's all kind of playing right into the playbook of Cube. And as a result, we're seeing kind of positive results that certainly the data shows in the third quarter. .

Unknown Analyst

Okay. I appreciate the added color. And then Tim, maybe 1 for you. I appreciate the information just around the other property income. Was that included in prior guidance that strategy? And was it generated across the portfolio? Or was the strategy more concentrated in certain markets?

Timothy Martin

I would describe those initiatives as being broad-based across the entirety of the portfolio. And we certainly anticipated some benefit from those initiatives in our guidance. And I would say relative to those expectations, we have been in line, maybe a little bit better on that line item than we would have thought, but mostly in line. .

Operator

Your next question comes from the line of Eric Wolfe with Citi.

Eric Wolfe

Within New York, your expense growth stepped up a bit. I was wondering if some of that was due to new license requirements and if you see any change in expenses in that market due to the new requirements? And I guess more broadly, as you look to sort of next year, maybe you could talk about some of the expense tailwinds or headwinds that you see?

Christopher Marr

Yes, Eric, thanks for the question. So the licensing requirement and the cost to get those licenses, not a super material impact in the quarter or really even in the full year in New York. The other costs around some of the changes in the boroughs also not moving the needle at the moment, that's significantly. So I think the change tends to just be quarter fluctuations and think some of it could be timing, but nothing in any individual line item to point out for that. I think it will all kind of balance itself out over the course of the year.

And then on the expectations, obviously, we're not providing guidance quite yet for next year. But from an expense standpoint, there weren't really any onetime items in 2026 that we need to point out. I think, hopefully, we have a milder winter in the Northeast in '27 than we did in 2026, but I can't think of anything other than that, that was onetime in nature in '26 that would create an easy or a difficult comp. We talked about taxes earlier in the call. That's always a little bit of a wildcard from a timing perspective. But overall, nothing to point out that you should need to think about when trying to forecast out what might happen next year at this point?

Eric Wolfe

And then you mentioned the volatility in the capital markets and rising rates. I was just curious if the changes over the last couple of months changed how you look at the decision to repurchase stock does it create some incremental risk that could be a bit harder to match the buybacks with proceeds. Just curious if the sort of evolving environment changes how you look at capital allocation, especially share repurchases?

Timothy Martin

Certainly, it does. I mean I think it impacts everybody in that way. I think ultimately, our strategy around share repurchases has not been to lever up the balance sheet to do so. As we started the year -- as we ended last year and started this year, our expectation was to effectively focus on our free cash flow and think about what the best use of that free cash flow was, and as we started the year, the best use of that free cash flow to fund share repurchases.

We started to think about how then could we on a leverage neutral basis supplement the share repurchases that led to the joint venture. I think the challenge in the execution of that venture is it takes time to put all that together and close and you have a period of time where you're where you have a little bit of a mismatch of certainty of something like that closing versus accelerating share repurchases in anticipation of it. So we live through this year already the real world example of trying to match proceeds and to do that in a volatile market.

Certainly, these past 4, 5, 6 weeks have taken that volatility and push down on that pedal a little bit more. So I think it's a challenge for everybody to think about how to evaluate their cost of capital, both in the short and the medium term. I think long term, you still have some pretty good conviction, but when evaluating alternatives to deploy capital, whether it's share repurchases, incremental investment activity either on balance sheet or through joint ventures, I think all of those things are considerations does make it a little bit harder, not easier.

Operator

Your next question comes from the line of Brendan Lynch with Barclays.

Unknown Analyst

This is [indiscernible] on for Brendan. Maybe just a follow-up on that last question. You've also done a great job of taking advantage of the difference in private and public valuations so far. Can you just give some color on the spread between those and how that spread has trended over the past year?

Timothy Martin

I would say just generically, everybody defines their cap rates a little bit differently, but I tend to generalize it to say most things that are attractive to us that would say would be kind of at the average of the quality of our portfolio. I would say cap rates for those types of assets stabilized, have been and for the moment, remains at that kind of 5.25% to 5.5% cap rate. And for much of this year, we've been trading the implied cap rate on where our shares have been trading has been north of 6 and at times kind of mid-6s. And so that was really -- that difference is quantifying what we've been talking about is the disconnect between public and private market valuations. Certainly, we're looking very much forward to the day when those inflect like they should. And -- but we're not quite there yet. So that's how we think about it from a high level.

Unknown Analyst

Okay. Great. That's helpful. And then it's been kind of a slow multiyear deceleration in industry fundamentals. But how that dynamics are inflecting positive, how do you think about the pace of recovery and what could drive the recovery to accelerate faster than kind of the last few years where it took to decelerate?

Christopher Marr

So yes, we are very optimistic that we're on track for a nice recovery here. I think when you think about demand 1 opportunity that could certainly create acceleration in the positive trajectory is the housing market. We've talked about that at nausea. I think the other driver that will continue to create positive momentum. And if this trend of less supply continues further, then you can just look at the time kind of post GFC as to the positive impact that can have on more accelerated top line growth. So I think probably those are the 2 items to look at if you're thinking about what could have an even more positive impact on trends. .

Operator

Your next question comes from the line of Linda Tsai with Truist Securities.

Linda Tsai

Just a couple of questions on expenses. How much of the down 11% advertising decline reflects better conversion versus spending timing?

Timothy Martin

It's mostly due to timing of just when we pushed on certain things this year relative to when we pushed on it last year. You saw that show up in spades early this year, especially in the first quarter. when our year-over-year in the first quarter was up, I think, north of 50%. So it's mostly timing related on the margin we're going to push the pedal a little bit harder, a little bit softer depending on where we see good returns and good value. But the majority of that variance year-over-year is just going to be timing in nature.

Linda Tsai

And then on quarterly G&A being roughly flat year-on-year, how much platform growth can you support before overhead steps up?

Timothy Martin

Well, that's a loaded question. there's certainly a lot that we can leverage with the existing platform. So adding -- when you think about the incremental things that happen when you add 100 stores you add 100 stores, you need to add some operational support. And when you get to that level of growth, you need to add some marginal additions from the corporate office.

But when you think about all of the platform things in nature, adding 50, 100 stores doesn't really change how we think about staffing for the pricing team and for is business intelligence team and for our marketing team. So there's a good bit of leverage. We certainly, though, are always mindful of the R&D portion of G&A and our consistent focus continuing to build an even better mousetrap. And so we consistently spend on areas of improvement from that perspective, and you should expect us to continue to do that.

Operator

Your next question comes from the line of Omotayo Okusanya with Deutsche Bank.

Omotayo Okusanya

Yes. Congrats on the quarter. Curious, you raised the low end of guidance a couple of times right now. Clearly, fundamentals are inflecting. How do we kind of think about -- again, it's close to the end of the year, but less so raising the high end of guidance or those close to the end of the year? And how do we kind of think about the setup into '27 specifically in regards to earnings growth. You've turned positive for the year, which is great. But as we kind of think about '27, some of the puts and takes there. .

Christopher Marr

Well, that's a difficult 1 to answer. What do you think? I'll tell you if I agree with you.

Omotayo Okusanya

I think you're definitely going to accelerate just kind of given what's happening with fundamentals. So that's good to see. I think the question most of us and investors are asking is, and I think it's come up on a couple of times with some of your peers is, can we ever kind of get back to what the goodwill is of storage, having some of the best earnings growth profile in the entire REIT today.

Christopher Marr

I think absolutely, you can get back to that. I think the million-dollar question is that. And I think what we and others in the sector have been trying to consistently convey is that things are moving in the right direction. The operating fundamentals are solid. It's showing up in the results. that improvement has been slow and steady. It takes time for it to churn through. And that said, that's the cautionary part of it. The positive part of it is everything is moving in the right direction. And the pace in which that happens is the million-dollar question.

I don't think anybody in the sector is anticipating a hockey stick recovery where things just all of a sudden go through the roof short of another pandemic or something like that. I think it's still slow and steady. And I think the underlying question for 2027 for the sector is going to be at what rate does that improvement continue. I think improvement is anticipated by everybody, in certainly including the large operators, I think the pace of that is still the wild card, and we'll obviously have some thoughts on that when we provide our initial guidance here next quarter.

Omotayo Okusanya

That's helpful. But if I can ask 1 more, just around the mark-to-market within the portfolio. Again, has there been a huge drag this year just because, again, move-out rates have been pretty constrained. But how do we kind of think about, again, that large negative mark-to-market in the portfolio not impacting earnings on a going-forward basis? Like is there we kind of clean up with that necessarily having a huge impact our numbers down the line.

Christopher Marr

I think that negative gap certainly has gotten a lot of focus here over the past 12 to 18 months. I think the thing to keep in mind that we always try to point out is that historically, even in those good old days that you referred to, there was always a negative gap, right? The in-place customer is always higher than the new customer coming in throughout very few exceptions to that. And so the magnitude of that gap certainly widened and it widened for all the reasons that you would anticipate with the accelerated demand that came with the pandemic.

I think it's also widened because there's more sophistication around maximizing revenue throughout the customer life cycle. And so rate increases to existing customers have also contributed a little bit to that gap. And so I think when it lands and we get back to the good old days, I think that gap will be larger than it used to be, but will be less than it is today. And so I don't think about it. Again, that's not a KPI for us. We're focused on trying to attract, and I think we do a really good job of attracting long-term customers, and I think we do a really good job of maximizing the revenue opportunity from those customers on the front end and throughout their life cycle. I just think the way that shows up in that particular indicator is going to -- that gap is going to narrow, but it's always going to be negative.

Operator

We've reached the end of the Q&A session. I will now turn the call back to Chris Marr for closing remarks.

Christopher Marr

Thank you, everybody, for participating in the call. Clearly, the optimistic spirit that was conveyed on the second quarter call continues here into the third quarter, and we're confident in that optimistic spirit as we move into 2027. We've moved from a time period where the questions were, will fundamentals get back to normal. We then move to when will fundamentals get back to more normal.

And now we're in the fun part of that where the questions are, as you've heard today, more, how will this recovery shape as positive fundamentals continue to trend in a very good way. So a great place to be in relative to certainly where we were and a great sense of optimism here at Cube that we're on the right track. So thanks, everyone, and we look forward to speaking with you all again at the end of the year. Take care.

Operator

This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded access the CubeSmart LP IR website for more information. This line will now disconnect.