CubeSmart cut to Sector Weight at KeyBanc as expenses may lead to difficult '26 comps

[Photo of Cube Smart self storage facility building Brickell]
felixmizioznikov

KeyBanc Capital Markets downgraded self-storage REIT CubeSmart (CUBE [https://seekingalpha.com/symbol/CUBE]) to Sector Weight from Overweight as lower-than-expected expenses this year could set the company up for more difficult comparisons next year.

CubeSmart (CUBE [https://seekingalpha.com/symbol/CUBE]) stock fell 3.0% in Monday afternoon trading.

Also, while the REIT's New York City area has performed well, with Q3 same-store revenue growth improving 80 basis points from Q2, several of its top-10 markets aren't holding up well, including Miami, Dallas/Ft. Worth, Phoenix, and Las Vegas, which in total represent ~20% of CubeSmart's (CUBE [https://seekingalpha.com/symbol/CUBE]) same-store revenue and experienced ~3.5% decrease in Y/Y same-store revenue growth, analyst Todd M. Thomas wrote in a note to clients.

Its NYC-area operations, which represent ~24.8% of its same-store net operating income, are expected to remain strong due to a sharp decrease in new supply growth in the area. But in Q3, only two of the company's top 10 markets saw sequential increase in same-store revenue growth — Atlanta and San Diego.

In discussing CubeSmart's (CUBE [https://seekingalpha.com/symbol/CUBE]) operating expenses, Thomas wrote, "While revenue growth may inflect in 4Q with growth improving in 2026, difficult expense growth comps may offset improving top-line trends that could cause CUBE to experience elevated expense growth in 2026 vs. peers. This may delay an NOI recovery and could put modest pressure CUBE’s same-store NOI and AFFO trajectory, which would also prohibit the company’s NAV from inflecting higher."

KeyBanc's Sector Weight rating on CubeSmart (CUBE [https://seekingalpha.com/symbol/CUBE]) aligns with the SA Quant rating [https://seekingalpha.com/symbol/CUBE/ratings/quant-ratings] of Hold and contrasts with the average Wall Street rating [https://seekingalpha.com/symbol/CUBE/ratings/sell-side-ratings] of Buy.

MORE ON CUBESMART

* CubeSmart (CUBE) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4836445-cubesmart-cube-q3-2025-earnings-call-transcript]
* CubeSmart: Resilient Self-Storage REIT Offering Solid Dividends And Long-Term Upside [https://seekingalpha.com/article/4831711-cubesmart-resilient-self-storage-reit-offering-solid-dividends-and-long-term-upside]
* CubeSmart: Great Dividend With Good Growth Prospects [https://seekingalpha.com/article/4817481-cubesmart-great-dividend-with-good-growth-prospects]
* CubeSmart outlines gradual stabilization and improved NOI outlook for 2026 amid diminishing supply headwinds [https://seekingalpha.com/news/4512551-cubesmart-outlines-gradual-stabilization-and-improved-noi-outlook-for-2026-amid-diminishing]
* CubeSmart FFO of $0.65 in-line, revenue of $285.08M beats by $1.43M [https://seekingalpha.com/news/4511781-cubesmart-ffo-of-0_65-in-line-revenue-of-285_08m-beats-by-1_43m]