Operator: 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. . I will now hand the call over to Josh Schutzer, Senior Vice President of Finance. Josh, please go ahead.
Joshua Schutzer: Thanks, Sara. Good morning, everyone. Welcome to CubeSmart'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.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 filed 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 second quarter financial supplement posted on the company's website at www.kepsmart.com. I will now turn the call over to Chris.
Christopher Marr: Thank you, Josh, and thank you, everyone, for joining us this morning. 2026 marks a year of inflection as we returned 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 U.S. consumer However, our customers' 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 Accella corridor, Austin, Stamford, 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, and we continue to see steady acceleration in fundamentals. Our high-quality portfolio, our sophisticated operating SIMs 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?
Timothy Martin: 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 4 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 $0.63 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 Titan, where we will be contributing 15 noncore assets to a newly formed joint venture in which will have a 20% ownership stake. The contributed assets were identified as noncore, 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 leverage 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 improve the pricing. A 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 NOI range implies returning to positive growth in the second half of the year and the midpoint of our FFO per share 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.
Operator: . Your first question comes from the line of Michael Griffin with Evercore ISI. Your line is open. Please go ahead.
Michael Griffin: Great. Chris, in your prepared remarks, you talked about some key performance indicators in green. I was wondering if you can expand on that. I mean is this just really move-in rents getting better year-over-year as a result of maybe better comps, more moderating supply? Or is there anything on the organic demand side that you're seeing differently within the business right now?
Christopher Marr: Yes. Thanks, Michael. I think 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 Sunbelt on customers' move-in rates I think on the OpEx side, as Tim said, we're seeing the trends as we would have expected to get better as we go into the back half of the year. So I think just broadly, I feel very good about where we are at this point in the year.
Michael Griffin: Chris. That's some helpful context. And then Maybe, Tim, I appreciate your prepared remarks around the new joint venture. Is there anything you can share in terms of pricing or cap rates that, that deal transacted at? And 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?
Timothy Martin: Thanks, Michael. Yes, I mean I consider the share repurchases in 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 in the mid-5s from a cap rate perspective and 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 gist of the approach. And then -- and then again, it gives us yet another vehicle to look at future growth opportunities along with Titan. 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 is right for us.
Operator: Your next question comes from the line of Michael Goldsmith with UBS. Please go ahead.
Michael Goldsmith: Chris, in your prepared remarks, you sounded more optimistic than you've been in some time. So can you -- and then you also talked about accelerating into strength into 2027. So can you talk a little bit about 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 set up for next year.
Christopher Marr: Yes. Thanks, Michael. I am optimistic. The first part of the year here has been 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 1, 2, 3 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 of that reduction and the impact of supply in many markets, right? I can pick to Cape Coral Florida, which may take years and years to finally overcome the burden of the amount of new deliveries there. But as you take it broadly across, we're starting to positive 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... [Technical Difficulty]
Operator: Ladies and gentlemen, we are experiencing some technical difficulties. Please hold. Ladies and gentlemen, thank you for your patience. We will now resume the broadcast. We have Michael Goldsmith on the line.
Christopher Marr: Mike, I'm not sure when -- first of all, let me apologize for the technical problems, but we're back. I don't know when I was disconnected there, Michael, because I was on fire. But to just, I think, pick up on the back half of your question on cadence of timing. I think as we're not going to take a date specific, I think we see trends that have been very positive and those positive trends continuing. So whether that's at some point in the third quarter or the fourth quarter on average over the last half of the year, we do see a return to both positive cash flow growth and positive earnings growth.
Operator: Your next question comes from the line of Spencer Glimcher with CubeSmart. Please go ahead.
Christopher Marr: Spencer, I don't know this can get any funnier, but I don't know when you joined CubeSmart, welcome. Your onboarding will be next week. We'll have a little orientation.
Spenser Allaway: Well, naturally, I have no questions then. Still one for me. Look, regulation efforts aren't new to this sector, but there has been slightly more success in passing through legislation on pricing transparency and I just want to get your thoughts on the impact of the recent legislation passed in New York regarding surveillance pricing and whether or not this affects how you set prices of New York Metro.
Christopher Marr: Yes. Thanks, Spencer. So the CubeSmart way, if you just think about how we operate is we strongly in all -- with all of our stakeholders and all of the municipalities in which we operate or wish to operate. We believe in an open professional, responsible and reasonable dialogue with our stakeholders in those municipalities, whether that be around a proposed new development of self-storage and having a discussion about certainly why we would believe that self-storage in that location is an ideal use or whether it be how we operate our stores in those markets and getting that feedback. So the reality is often but not always, those are productive and healthy dialogues where we see everybody's point of view. And so specific to New York, but frankly, any municipality in which we operate. As long as that dialogue exists in a responsible and open way, we obviously want to listen to the points of view of the stakeholders and we want to share our point of view with the hope we get to a reasonable place. And as often in those discussions, it's ideal if both parties feel like they didn't get everything they wanted, but we reach a good meeting of the mine. So I think that specifically relates to that pricing, we will continue to look at how we price the tools that we used and be respectful of any sort of guardrails that are set up in the municipalities in which we operate.
Operator: Your next question comes from the line of Ravi Medea with Mizuho.
Ravi Vaidya: Your guidance forecasts a pretty significant moderation in expenses in the back half of the year. which line items do you think are most likely to benefit here going forward?
Christopher Marr: Yes, a couple of things going on there. If you recall from last quarter, we had some pretty heavy winter expenses that impacted the first quarter. So that created that created some pressure on the run rate. You also had last quarter, a pretty big year-over-year increase in marketing spend, which had a lot to do with timing of when we deployed marketing spend last year versus when we did this year. So some of our marketing spend was a little front loaded this year. So I think you'll see a moderation on those two line items. We had a successful property insurance renewal in May. So a little bit of that flows through to some lower property insurance premiums in the back half of the year. And then I also touched on we expect a little bit of moderation on the personnel line item. So it's not really one line item in particular. It's across a bunch of them. And it's just -- this year, we happen to have a little bit of pressure when comparing year-over-year in the first half of the year. And if you look through the guidance, you nailed it. There's a pretty big moderation in expense growth. And I appreciate you asking the question, so I could say it again.
Operator: Your next question comes from the line of Juan Sanabria with BMO Capital Markets.
Juan Sanabria: Just to start, just curious on if you could comment on the July moving trends and how that trended throughout the second quarter. And maybe if you could comment as part of that around when you expect to and a return to the long-term same-store revenue growth trajectory. I believe previously, you said the second half '27, but wondering if that gets pulled forward with your renewed enthusiasm.
Christopher Marr: Yes. Thanks, Juan. So when you think about July, as I mentioned in my prepared remarks, as of yesterday close, we were at a physical occupancy of 91.1%, that's a 30 basis point increase over July 30, 2025. Our rentals for the month of July were 3% higher than they were through the 30th than they were through the 30th of July last year. And on the vacate side, our vacates are also negative 3%, down 3% from where we were through the 30th of July last year. On the cadence, obviously, we continue to see, as I said, green lights that are encouraging and getting us very optimistic about next year. the exact pace and how we hit it is obviously going to be pretty varied based on a variety of factors. So I think we just continue to see that steady growth. We have that inflection to positive cash flow and earnings in the back half of this year and then continue to build off that each quarter through 2027.
Juan Sanabria: Could you just let us know what the July move-in rate was? Apologies if that wasn't clear.
Christopher Marr: Yes. As we think about, as I mentioned, our pricing systems are optimizing by leaning a bit more towards volume versus rate, which is a little bit different than this time last year. This has been built into our expectations. So we would expect in our base case that early third quarter, we don't see growth year-over-year in asking rents and then those metrics return to positive as we get deeper into the third quarter and through Q4. And I'll caveat all that with the fact that we price in real time. And so our strategy may change from [indiscernible].
Operator: Your next question comes from the line of Viktor Fadiv with Scotiabank.
Viktor Fediv: On the Heitman JV, should we think of this as the completion of broader portfolio optimization effort? Or have you identified some additional assets that could be candidates for similar transactions in the near term? And what will be the capital structure of this JV, including expected leverage at the entity level?
Christopher Marr: Yes. Thanks for the question. So the -- that's it for now for us on finding opportunities to sell or contribute assets into a venture I wouldn't consider this necessarily portfolio burning. We really like our portfolio. This transaction was more geared towards in the current environment, what can we do to increase our ability to fund share repurchases in a way that's leverage neutral. And this was a good opportunity for us to accomplish a number of things. from a strategic standpoint, improving the quality of the portfolio, having an additional path for future external growth with a long-term partner in Heitman and from a leverage standpoint, the venture does expect to put leverage on the venture the amount and the timing of that is still a little bit up in the air. We don't expect to close on this until the fourth quarter. So there's a little bit of time to settle all those moving pieces, but it wouldn't surprise me if ultimately, we ended up having somewhere in the neighborhood of 50% leverage on the venture, but that's still to be decided.
Operator: Your next question comes from the line of Todd Thomas with KeyBanc. Please go ahead.
Todd Thomas: I wanted to ask about occupancy specifically, you saw occupancy continue to build through quarter end and commented that occupancy has increased slightly higher in July rentals up 3% in July 2. It seems like the rental season extended a bit further than prior years. Has the strength in rental activity persisted throughout the July period? Is there any sense whether that might continue into August sort of up until sort of the Labor Day weekend, which I think historically has been more typical of the leasing season. And any sense what's driving the improving trends and really more of this traditional leasing season versus some of the more prior years?
Christopher Marr: Yes. Thanks. Great question. So the trends we have seen are not quite at those levels that, again, we always struggle with what's normal here looking backwards. But if you think about that 2016, 2018 sort of time period, typically, we would have seen peak a little bit deeper into July. So this is a lot closer to that than certainly we've seen over the last 3 years, not all the way back there. So as we -- base case expectations, we would assume as we get into August here, and we start to see the college students vacate and go back to school and the other typical patterns that we'll have -- we see good green lights for August, but don't expect to see any aberration in sort of normal behavior. And then that's sort of our base case expectation as we get through the fall and into the winter. So I think the cause of the positive trends. Again, I go back to the resilience of the business and the fact that we're not reliant upon one particular source of demand. So I think it is just this continued awareness of the product, continued awareness of our brand and I think the continued reduction in the impact of new supply, which again, I would place is probably the primary reason for why we're experiencing what we're experiencing.
Todd Thomas: Okay. And then I wanted to go back to the question around the New York City regulation on pricing and licensing requirements. Just curious to get your thoughts whether -- does that impact asset pricing or underwriting in any way? Does that sort of change the landscape in New York City at all in your view?
Christopher Marr: No. I think the thing that it changes in the landscape in New York City is, unfortunately, and we feel bad for the smaller operators, I think it's -- the ultimate burden is significantly higher on them. When you think about the types of things that are being discussed, many of them are already ingrained in the day-to-day practices of us and our larger peers. So I think it only will make it more attractive for folks look at Cube and our position and our execution in that market. And you can see the you can see the metrics that are disclosed. We are outperforming in the New York MSA, and I think we will to do that, and that will make us even more attractive as an option, either as an owner of that asset if that small operator wishes to sell or as a third-party manager if they wish to partner up with.
Operator: Your next question comes from the line of Nick Joseph with Citi Bank. Your line is open. Please go ahead.
Nicholas Joseph: Maybe just following up on that question. It sounds like you're already doing many of the requirements in New York City, but have you had to implement any new practices ahead of it, like allergen testing or anything else to comply?
Christopher Marr: Yes. At this point, anything, we have not done anything meaningfully different than we have been doing in New York state or elsewhere in the country. I think we're all sort of navigating through all of this as it's sort of evolving, but have not identified anything yet that would be a material deviation to our normal practices.
Nicholas Joseph: And you talked about kind of the debt markets earlier. Just curious where you think you could price 10-year debt today if you go down that road.
Christopher Marr: Yes. So if we were looking at a 10-year today, it would probably be in the mid-5s, maybe a little higher and then a 7-year call it, 50 basis points inside of that. So we're actively monitoring the markets. The 10-year obviously, has been pushing up a little bit here in recent weeks and there's an awful lot of volatility in the world. And so that's the not so great news. The good news is that we have a tremendous amount of flexibility as we have additional capacity on the revolver, and we have nothing maturing in 2027. So we have a good bit of time to be patient and opportunistic as we think about long-term strategy from a debt perspective.
Operator: Your next question comes from the line of Michael Mueller with JPMorgan.
Michael Mueller: So Chris, outside of COVID, when you look back at recoveries over the past 30-plus years or so, what was the largest same-store revenue increase that you remember seeing in a single year?
Christopher Marr: Yes, 30 years, a long time. So I'm not sure I'm going to get this 100%. But I think if you eliminate the COVID year something in that 7% to 8% kind of quarterly same-store revenue growth was probably the next highest and I think that was for a couple of straight years. I think that was like 2012, '13, '14.
Timothy Martin: Coming out of GFC, and there was no supply -- so the complete lack of supply led to multiple years of 7-plus percent type top line growth.
Nicholas Joseph: Got it. Okay. And if you're thinking about a level of improvement from 1 year to the next, for example, if you're starting at 0. What was the most you were calling in a year? That wasn't a 7% revenue improvement here?
Christopher Marr: I have -- my memory is not that good. I think again, I think if you -- even if you think about COVID and how quickly that happened, because of the churn, right, there's only so many customers vacating each month, which is -- that churn is lower than it was historically. It takes a couple of quarters to get elevated to that level.
Operator: Your next question comes from the line of Brendan Lynch with Barclays. Please go ahead.
Brendan Lynch: You guys have been kind of talking about the setup for 2027. Certainly, supply can't come back online fast enough to impact next year. Chris, you also mentioned the resiliency of the self-storage demand we've seen lots of countercyclical demand drivers and past challenging macro environments. So I guess the question is, what are the risks that could cause a deceleration relative to the outlook that you're kind of presenting here today?
Christopher Marr: Yes. Great question. Again, I'll keep coming back and pound in the drum that the biggest headwind for storage is and always has been supply. And as you noted, we don't see at this stage of 2026. Any material increase in supply or its impact certainly in '27. So at this stage, I would say that risk is low. I think the second risk that has always created a near-term challenge for our industry. Is any sort of black swan event that causes the consumer to freeze in place. So if you think about some of the unfortunate events, the onset of COVID, the GFC and the related bankruptcies can go all the way back to -- those typically have a short-term impact on move-ins as consumers tend to freeze in place and stop making decisions. They also then tend to have the corresponding effect where you see vacate volumes decline. And it takes a while until the consumer recovers. But those type impacts have typically been weeks if maybe a month or 2 months and then the industry tends to bounce right back.
Brendan Lynch: Great. That's helpful. And then maybe one for Tim, just on [indiscernible]. I think you suggested there's going to be some moderation in the year-over-year comp for personnel -- just walk us through your thoughts on running a little bit leaner on the labor front versus maybe adding a little bit more head count to maintain the in-person relationships in the facilities themselves.
Timothy Martin: Yes, I think it's always that balance of trying to find the optimal staffing levels to provide the level of customer service that we insist on providing. And the changes and the evolution on that line item really date back to things that we did last year. And so later in 2025 we saw a little bit of pressure on that line item as we were adding back some store hours and making some adjustments that increased the level from where we had reduced it to. And so I think what you're going to see here in the back half of the year is just getting up against those comps. And so the first half of the year saw a more difficult comp for adjustments that we made over time during 2025. We feel like we're in a great spot right now. from a combination of staffing, technology and our approach to attracting new customers and making sure that we're providing great service to our existing customers. And so nothing that we're doing today, more stuff that we did about a year ago.
Operator: Your next question comes from the line of Omotayo Okusanya with Deutsche Bank. Please go ahead.
Omotayo Okusanya: Quick question just the Sunbelt markets and some of your earlier comments. Can you just kind of talk us through how you're thinking about recovery in part of a few of those markets, again, you did mention that oversupply in places like Fort Myers, really could be a multiyear problem. But I just kind of think through those markets and you're trying to think about potential inflection. How should we be thinking about that, whether it's a year away, 2 years away? Or just whatever kind of Chris, whatever your comfort ball is telling you selling some of you appreciated?
Christopher Marr: Yes. So I think as everyone knows, this is a micro market business. So even within Sunbelt markets, we see pockets that are improving more rapidly than others, likely largely due to, again, that impact of the new construction, the new supply that has been brought on board adjacent to those same stores in those markets. So I think it's improving. If you look at the sequential results, as we mentioned, you're seeing the same-store revenues going in a good direction. I think it will be unique to each individual market, like let's use Miami as an example. There, you had an awful lot of supply, but an attractive and continues to be an attractive place both for individuals and businesses to work and live. And I think we saw that supply get absorbed fairly expediently and you've seen results in Miami move a little bit quicker towards and into positive growth territory. I think the major Texas markets and the Southwest, it will be a bit slower and gradual how to predict which quarter or which date things flip positive. That's really difficult to say. But I do think we'll just kind of see this continued gradual recovery throughout the balance of 2026.
Operator: Your next question comes from the line of Juan Sanabria with BMO Capital Markets. Please go ahead.
Juan Sanabria: Storage is so sexy I had to come in twice. Just hoping -- just following up on the JV and investments discussion for CBRE and Heitman, is the topic going forward, those 2 ventures would acquire in the open market going forward to grow. And I think Tim, you said something about like a falling or something in your prepared remarks and just curious if you could elaborate on that.
Timothy Martin: Yes, I think the most likely avenue for growth in each of those ventures would be would be open market opportunities, perhaps things that we manage currently that we can find a home for. And each of those ventures and each of those partners have areas of focus that range from the type of opportunity as far as return profile, early-stage lease-up, stabilized, looking at different markets. And so the great thing for our investments team having each of those partners is -- gives us the ability to pursue a pretty wide range of opportunities, and that's pretty exciting. I think the -- what was the second part of your question?
Juan Sanabria: You mentioned, I think, some falling in the acquisition market, maybe more product coming to market, just kind of elaborate.
Timothy Martin: Yes, hasn't fall off all that much for us, but I think you're starting to see some momentum and a lot more things that are -- I think the brokerage community is pretty excited about the things that are starting to come across their plates. I think there continues to be an evolution that the market is what the market is. And I think sellers understand where buyers are and vice versa, and it feels like it's getting a little bit more constructive and the thing that hasn't changed is that it certainly feels like there is a wave of opportunity that is coming, and we've talked about that in prior quarters. I just think you have an awful lot of self-storage assets that are held by folks who want liquidity, some who are going to need liquidity, you have things in closed-end funds that ultimately have to close. And you've had a fairly -- you've had a really modest amount of transactions here now for 2 years running. And so certainly feel like the dam is going to break, and when it does, there's going to be an awful lot of opportunity. And from a CubeSmart perspective, we want to make sure that we're in the best position we can be in to take advantage of that, and that's what we're preparing to do.
Juan Sanabria: And then lastly, just to be -- sorry to be greedy here. On the labor front and the wages, just curious on where you think we are in the optimization of FTEs or what have you. And kind of are we at a max in terms of efficiency gains? Or what you think the future may hold.
Christopher Marr: Yes. Thanks, Juan. I think that's an area that is likely subject to continued evolution. I think on the service delivery front and especially in our or more dense urban markets, you continue to see the value of having our teammates in the stores, keeping them clean and providing great customer service. I think as we as we continue to evolve in our utilization of AI looking for ways where that can enhance customer service. Many of those will be hand-in-hand with our teammates delivering. And so I would expect that while that may not that will likely translate into revenue gains on the efficiency side more than necessarily focused on the cost side of things. But the markets that the technology and the opportunities to serve and then also our customers' preferences continue to evolve, and we would expect that we would expect those trends to be continuing, as I described.
Operator: We have reached the end of the Q&A session. I will now turn the call back to Chris Marr for closing remarks.
Christopher Marr: All right. Thanks, everybody, for participating today. We apologize for the technical difficulties. I'm told that we can blame Michael Goldsmith if we need to. But as we look forward here, we are excited about the return to growth. return to growth in cash flows, return to growth in earnings, returning to growing our assets under management, whether that be through our excellent third-party management platform acquiring stores with our partners or on balance sheet, and we will continue to execute on that growth in a very disciplined way laser-focused on creating shareholder value. So thank you all. Look forward to seeing you in the future and talking to you again next quarter.
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
