A Note from the Founder 03.03.2025

Zachary Urow April 22, 2025

Consumer Confidence Declines Amid Economic Uncertainty

  • The Conference Board’s Consumer Confidence Index fell to 98.3 in February, a 7-point drop
    and the largest monthly decline since August 2021.
  • The Expectations Index, reflecting consumers’ short-term outlook, decreased to 72.9,
    dipping below the threshold that often signals a potential recession.
  • Factors contributing to this decline include persistent inflation concerns and apprehensions
    about potential trade policies, leading to increased consumer pessimism about future
    business and labor market conditions.

CubeSmart & Extra Space Storage Report Q4 2024 Earnings

  • CubeSmart reported a 1.6% decline in same-store revenue and a 3.7% drop in same-store NOI, with occupancy averaging 89.6% in Q4 2024. The company expanded its portfolio,
    acquiring 14 stores for $157.3M and adding 29 stores to its third-party management
    platform.
  • Extra Space Storage saw 3% YoY revenue growth to $821.9M, with 93.7% occupancy but a
    3.5% decline in same-store NOI due to rising expenses. The company continues integrating
    its Life Storage acquisition and expanding its bridge loan program.
  • Both companies expect a slow start to 2025, with rate pressures and expense growth
    continuing. CubeSmart projects FFO per share of $2.50–$2.59 for 2025, while Extra Space
    focuses on maintaining strong occupancy.

Our Thoughts

  • The decline in consumer confidence underscores the importance of strategic planning. Operators should monitor economic indicators closely, adjust marketing strategies to address consumer concerns, and explore opportunities for expansion or diversification to mitigate potential downturns.
  • Despite revenue pressures, self-storage REITs remain focused on long-term stability.
    CubeSmart continues expanding through acquisitions and third-party management, while
    Extra Space leverages its Life Storage integration and alternative revenue streams to
    navigate near-term challenges.