$33.15
$54.66
bear $33.15
base $44.02
bull $54.66
margin of safety $30.00
market price* $38.99
CubeSmart is a self-storage landlord. At the end of 2025 it owned or consolidated 662 stores with about 48 million rentable square feet, and it also earns fees for managing stores other people own. Customers rent month to month, so rents can be reset constantly and no single customer matters. Stores in New York, Florida, Texas and California brought in about 17%, 14%, 11% and 10% of 2025 revenue. How we value it. We value the stores first, as if the company had no debt, and then subtract what it owes lenders. The cash the stores produce for owners and lenders together is operating cash flow, less short-term working-capital swings, less stock-based pay (a real cost), less the spending needed to keep the stores competitive, plus the cash interest paid. For upkeep we used the company's 'additions and improvements to storage properties', which has run at about 4.9% of revenue for ten years ($44.8 million in 2025; $22.5 million in the first half of 2026). Spending to build or buy new stores is treated as expansion, and we give no credit for growth from it. Depreciation of $200-260 million a year is added back because the stores have held and grown their earning power on the smaller upkeep budget: rent per occupied square foot rose from $16.70 in 2018 to $22.73 in 2025. On that basis the stores produced about $617 million in 2022, $669 million in 2023, $653 million in 2024 and $665 million in 2025 (about $2.73, $2.96, $2.88 and $2.90 per share). The first half of 2026 came in at $332 million, 0.6% above the first half of 2025, with part of that from one extra month of the HVP IV stores bought in February 2025. We start from $665 million, the middle of 2023-2025. Those years cover the late-pandemic peak and the slowdown since, and all fall after the 2021 LAACO acquisition that shaped today's portfolio. We then take off about $8.5 million a year for the 80% share of 15 stores that CubeSmart agreed in July 2026 to put into a joint venture with Heitman for an agreed $197 million (closing expected in late 2026). That leaves a starting level of about $656 million, or $2.89 per share. What it owes. Senior notes of $2.95 billion (including $300 million that came due in September 2026), $451 million drawn on the credit line at June 30, 2026, $98 million of mortgages and $65 million of finance leases. We also subtract about $19 million still owed on a New York development and about $19 million belonging to partners in consolidated joint ventures, and credit about $158 million of cash expected from the Heitman deal. That is about $3.44 billion. Most of the notes were locked in years ago at 2.1% to 4.5% (the 2028, 2029, 2030, 2031 and 2032 notes), which is cheaper than borrowing at 6% until they mature. We credit that saving, worth about $250 million today, but only until each note matures. After that we assume the company pays a full market rate. Net of the saving, the company owes about $3.19 billion, or about $14.09 per share. The credit line was renewed in June 2026 as a $1.0 billion facility running to June 2030. The company complies with its covenants: total debt must stay under 60% of asset value and income must cover fixed charges at least 1.5 times. Store cash flow covers the current interest bill of roughly $120-130 million about five times, even in the bear case. Growth check. In 2025, owner earnings after interest fell 1.4% per share. Before interest, cash flow rose 0.8% per share, but only because of the HVP IV purchase. Same-store revenue fell 0.5% and same-store property income fell 1.1%. The first half of 2026 was roughly flat. The base case therefore assumes no growth in the next year. Base case, about $44 per share. Flat for the next year, 1% the year after, then 2% a year through year 10. That is below the rent growth the portfolio has shown over a full cycle, and it reflects property taxes and payroll rising alongside rents. After year 10, 1.5% a year to year 40, then flat to year 50, where we stop counting. What keeps it going is a structural fact: storage buildings on well-located land, kept up with modest spending, have kept raising rents for decades. The stores are worth about $13.18 billion ($58.11 per share). Less $3.19 billion of debt, the shares are worth about $9.98 billion, or $44.02 each. Bear case, about $33 per share. Weakness continues: store cash flow falls 3% next year and 2% the year after as rents that jumped in 2021-2022 keep coming down and occupancy keeps slipping, as it did in 2025. Growth is then zero in year 3, 1% a year through year 10 and 0.5% to year 40. The stores are worth about $10.71 billion ($47.24 per share). Less $3.19 billion of debt, that leaves about $7.52 billion, or $33.15 per share. Leverage is moderate, so even this case leaves the business well able to pay its lenders. Bull case, about $55 per share. 1% growth next year, 3% the year after, then 3.5% a year through year 10. That matches rent-per-square-foot growth across 2018-2025. Then 2% to year 40 and 1% to year 50. The stores are worth about $15.59 billion ($68.74 per share). Less $3.19 billion of debt, that leaves about $12.40 billion, or $54.66 per share. What was left out. We give no credit for new development, acquisitions or buybacks. The company bought back about 2 million shares in the first half of 2026. Buybacks help only if the price paid is below value, and that is not a business driver we can count on. We also give no credit for the lower 2026 upkeep plan, because it is a plan rather than a result. The first-half 2026 cash flow statement shows a small non-cash charge described as accretion of a 'put liability' ($2.4 million). The filing does not explain what obligation this relates to, and we could not reconcile it, so nothing is subtracted for it. About 1 million operating-partnership units are counted as shares. Change since our previous analysis. Our earlier estimate valued the cash left after today's interest payments and did not subtract the debt. That implicitly assumed the company could keep borrowing at 2-4% forever. We now value the stores first and subtract the $3.4 billion owed, crediting the cheap fixed-rate notes only until they mature. We also found that the first half of 2026 ran slightly better than our earlier assumption of a 1.5% decline, but we trimmed long-run growth. Taken together, the base case moves from about $53 to about $44. What would make this wrong. A long stretch of falling same-store rents from new supply or weak household moving activity, especially in New York and Florida. Refinancing at well above 6%. Or a return to large, debt-funded acquisitions that earn less than they cost. Margin-of-safety price. This is a steady, low-upkeep business with moderate leverage and some cyclical sensitivity in rents. The margin-of-safety price is about $30, roughly 32% below the base case and below the bear case. At that price, the roughly $2.14 annual dividend alone yields about 7%, and a move back toward the base value within three years implies about a 20% annual return in the base case.