10-Q

sts

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)
☑	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2019.
	or
☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from                                       to                                       .

Commission file number:
001-32324 (CubeSmart)
000-54462 (CubeSmart, L.P.)

CUBESMART

CUBESMART, L.P.

(Exact Name of Registrant as Specified in its Charter)

Maryland (CubeSmart) Delaware (CubeSmart, L.P.)	20-1024732 34-1837021
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
5 Old Lancaster Rd. Malvern, Pennsylvania	19355
(Address of Principal Executive Offices)	(Zip Code)

(610) 535-5000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Shares, $0.01 par value per share, of CubeSmart	CUBE	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

CubeSmart	Yes ☑ No ◻
CubeSmart, L.P.	Yes ☑ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

CubeSmart	Yes ☑ No ◻
CubeSmart, L.P.	Yes ☑ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

CubeSmart:
Large accelerated filer ☑	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐	Emerging growth company ☐
CubeSmart, L.P.:
Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☑	Smaller reporting company ☐	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

CubeSmart	◻
CubeSmart, L.P.	◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

CubeSmart	Yes ☐ No ☑
CubeSmart, L.P.	Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class	Outstanding at October 23, 2019
Common shares, $0.01 par value per share, of CubeSmart	193,555,022

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended September 30, 2019 of CubeSmart (the “Parent Company” or “CubeSmart”) and CubeSmart, L.P. (the “Operating Partnership”). The Parent Company is a Maryland real estate investment trust, or REIT, that owns its assets and conducts its operations through the Operating Partnership, a Delaware limited partnership, and subsidiaries of the Operating Partnership. The Parent Company, the Operating Partnership and their consolidated subsidiaries are collectively referred to in this report as the “Company”. In addition, terms such as “we”, “us”, or “our” used in this report may refer to the Company, the Parent Company or the Operating Partnership.

The Parent Company is the sole general partner of the Operating Partnership and, as of September 30, 2019, owned a 99.0% interest in the Operating Partnership. The remaining 1.0% interest consists of common units of limited partnership interest issued by the Operating Partnership to third parties in exchange for contributions of properties to the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has full and complete authority over the Operating Partnership’s day-to-day operations and management.

Management operates the Parent Company and the Operating Partnership as one enterprise. The management teams of the Parent Company and the Operating Partnership are identical, and their constituents are officers of both the Parent Company and of the Operating Partnership.

There are a few differences between the Parent Company and the Operating Partnership, which are reflected in the note disclosures in this report. The Company believes it is important to understand the differences between the Parent Company and the Operating Partnership in the context of how these entities operate as a consolidated enterprise. The Parent Company is a REIT, whose only material asset is its ownership of the partnership interests of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing the debt obligations of the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company and, directly or indirectly, holds the ownership interests in the Company’s real estate ventures. The Operating Partnership conducts the operations of the Company’s business and is structured as a partnership with no publicly traded equity. Except for net proceeds from equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s direct or indirect incurrence of indebtedness or through the issuance of partnership units of the Operating Partnership or equity interests in subsidiaries of the Operating Partnership.

The substantive difference between the Parent Company’s and the Operating Partnership’s filings is the fact that the Parent Company is a REIT with public equity, while the Operating Partnership is a partnership with no publicly traded equity. In the financial statements, this difference is primarily reflected in the equity (or capital for the Operating Partnership) section of the consolidated balance sheets and in the consolidated statements of equity (or capital). Apart from the different equity treatment, the consolidated financial statements of the Parent Company and the Operating Partnership are nearly identical.

The Company believes that combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into a single report will:

● facilitate a better understanding by the investors of the Parent Company and the Operating Partnership by enabling them to view the business as a whole in the same manner as management views and operates the business;

● remove duplicative disclosures and provide a more straightforward presentation in light of the fact that a substantial portion of the disclosure applies to both the Parent Company and the Operating Partnership; and

● create time and cost efficiencies through the preparation of one combined report instead of two separate reports.

2

In order to highlight the differences between the Parent Company and the Operating Partnership, the separate sections in this report for the Parent Company and the Operating Partnership specifically refer to the Parent Company and the Operating Partnership. In the sections that combine disclosures of the Parent Company and the Operating Partnership, this report refers to such disclosures as those of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and real estate ventures and holds assets and debt, reference to the Company is appropriate because the business is one enterprise and the Parent Company operates the business through the Operating Partnership.

As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have significant assets other than its investment in the Operating Partnership. Therefore, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements. The separate discussions of the Parent Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company’s operations on a consolidated basis and how management operates the Company.

This report also includes separate Item 4 - Controls and Procedures sections, signature pages and Exhibits 31 and 32, certifications for each of the Parent Company and the Operating Partnership, in order to establish that the Chief Executive Officer and the Chief Financial Officer of the Parent Company and the Chief Executive Officer and the Chief Financial Officer of the Operating Partnership have made the requisite certifications and that the Parent Company and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.

3

TABLE OF CONTENTS

Part I. FINANCIAL INFORMATION
Item 1. Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3. Quantitative and Qualitative Disclosures About Market Risk	50
Item 4. Controls and Procedures	51
Part II. OTHER INFORMATION
Item 1. Legal Proceedings	52
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 6. Exhibits	53

Filing Format

This combined Form 10-Q is being filed separately by CubeSmart and CubeSmart, L.P.

4

Forward-Looking Statements

This Quarterly Report on Form 10-Q, or “this Report”, together with other statements and information publicly disseminated by the Parent Company and the Operating Partnership, contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the “Exchange Act.” Forward-looking statements include statements concerning the Company’s plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information.  In some cases, forward-looking statements can be identified by terminology such as “believes”, “expects”, “estimates”, “may”, “will”, “should”, “anticipates”, or “intends” or the negative of such terms or other comparable terminology, or by discussions of strategy.  Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, future events and actual results, performance, transactions or achievements, financial and otherwise, may differ materially from the results, performance, transactions or achievements expressed or implied by the forward-looking statements. As a result, you should not rely on or construe any forward-looking statements in this Report, or which management or persons acting on their behalf may make orally or in writing from time to time, as predictions of future events or as guarantees of future performance.  We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this Report or as of the dates otherwise indicated in such forward-looking statements.  All of our forward-looking statements, including those in this Report, are qualified in their entirety by this statement.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this Report.  Any forward-looking statements should be considered in light of the risks and uncertainties referred to in Item 1A. “Risk Factors” in the Parent Company’s and the Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, 2018 and in our other filings with the Securities and Exchange Commission (“SEC”).  These risks include, but are not limited to, the following:

● adverse changes in the national and local economic, business, real estate and other market conditions;

● the effect of competition from existing and new self-storage properties on our ability to maintain or raise occupancy and rental rates;

● the execution of our business plan;

● reduced availability and increased costs of external sources of capital;

● financing risks, including the risk of over-leverage and the corresponding risk of default on our mortgage and other debt and potential inability to refinance existing indebtedness;

● increases in interest rates and operating costs;

● counterparty non-performance related to the use of derivative financial instruments;

● risks related to our ability to maintain our Parent Company’s qualification as a REIT for federal income tax purposes;

● the failure of acquisitions and developments to close on expected terms, or at all, or to perform as expected;

● increases in taxes, fees and assessments from state and local jurisdictions;

● the failure of our joint venture partners to fulfill their obligations to us or their pursuit of actions that are inconsistent with our objectives;

● reductions in asset valuations and related impairment charges;

● cyber security breaches or a failure of our networks, systems or technology, which could adversely impact our business, customer and employee relationships;

● changes in real estate and zoning laws or regulations;

● risks related to natural disasters or acts of violence, terrorism, or war that affect the markets in which we operate;

5

● potential environmental and other liabilities;

● uninsured losses and the ability to obtain insurance coverage against risks and losses;

● the ability to attract and retain talent in the current labor market;

● other factors affecting the real estate industry generally or the self-storage industry in particular; and

● other risks identified in the Parent Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2018 and, from time to time, in other reports that we file with the SEC or in other documents that we publicly disseminate.

Given these uncertainties and the other risks identified elsewhere in this Report, we caution readers not to place undue reliance on forward-looking statements. We undertake no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise except as may be required by securities laws. Because of the factors referred to above, the future events discussed in or incorporated by reference in this Report may not occur and actual results, performance or achievement could differ materially from that anticipated or implied in the forward-looking statements.

6

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CUBESMART AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	September 30,		December 31,
	2019		2018
	(unaudited)
ASSETS
Storage properties	$	4,674,717	$	4,463,455
Less: Accumulated depreciation		(936,862)		(862,487)
Storage properties, net (including VIE assets of $87,428 and $330,986, respectively)		3,737,855		3,600,968
Cash and cash equivalents		7,293		3,764
Restricted cash		5,555		2,718
Loan procurement costs, net of amortization		4,284		963
Investment in real estate ventures, at equity		88,812		95,796
Assets held for sale		2,403		—
Other assets, net		104,128		48,763
Total assets	$	3,950,330	$	3,752,972
LIABILITIES AND EQUITY
Unsecured senior notes, net	$	1,489,483	$	1,143,524
Revolving credit facility		237,980		195,525
Unsecured term loans, net		—		299,799
Mortgage loans and notes payable, net		96,810		108,246
Accounts payable, accrued expenses and other liabilities		150,532		149,914
Distributions payable		62,645		60,627
Deferred revenue		25,611		22,595
Security deposits		470		474
Liabilities held for sale		53		—
Total liabilities		2,063,584		1,980,704
Noncontrolling interests in the Operating Partnership		65,108		55,819
Commitments and contingencies
Equity
Common shares $.01 par value, 400,000,000 shares authorized, 193,554,347 and 187,145,103 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		1,936		1,871
Additional paid-in capital		2,673,440		2,500,751
Accumulated other comprehensive loss		(749)		(1,029)
Accumulated deficit		(860,985)		(791,915)
Total CubeSmart shareholders’ equity		1,813,642		1,709,678
Noncontrolling interests in subsidiaries		7,996		6,771
Total equity		1,821,638		1,716,449
Total liabilities and equity	$	3,950,330	$	3,752,972

See accompanying notes to the unaudited consolidated financial statements.

7

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
REVENUES
Rental income	$	142,207	$	132,476	$	409,826	$	384,480
Other property related income		18,054		15,494		50,651		44,788
Property management fee income		6,286		5,400		17,932		14,794
Total revenues		166,547		153,370		478,409		444,062
OPERATING EXPENSES
Property operating expenses		53,465		48,755		155,010		147,037
Depreciation and amortization		43,379		35,239		122,484		105,251
General and administrative		10,011		9,780		28,958		26,865
Total operating expenses		106,855		93,774		306,452		279,153
OTHER (EXPENSE) INCOME
Interest:
Interest expense on loans		(18,207)		(15,191)		(53,858)		(45,797)
Loan procurement amortization expense		(687)		(578)		(2,082)		(1,735)
Equity in earnings (losses) of real estate ventures		152		(292)		10,940		(785)
Other		1,647		(233)		1,304		260
Total other expense		(17,095)		(16,294)		(43,696)		(48,057)
NET INCOME		42,597		43,302		128,261		116,852
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
Noncontrolling interests in the Operating Partnership		(426)		(476)		(1,283)		(1,285)
Noncontrolling interest in subsidiaries		(17)		74		94		166
NET INCOME ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS	$	42,154	$	42,900	$	127,072	$	115,733
Basic earnings per share attributable to common shareholders	$	0.22	$	0.23	$	0.67	$	0.63
Diluted earnings per share attributable to common shareholders	$	0.22	$	0.23	$	0.67	$	0.63
Weighted average basic shares outstanding		192,927		186,074		189,970		184,036
Weighted average diluted shares outstanding		193,817		186,916		190,774		184,829

See accompanying notes to the unaudited consolidated financial statements.

8

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
NET INCOME	$	42,597	$	43,302	$	128,261	$	116,852
Other comprehensive income (loss):
Unrealized gains on interest rate swaps		—		—		232		60
Reclassification of realized losses (gains) on interest rate swaps		20		—		50		(60)
OTHER COMPREHENSIVE INCOME		20		—		282		—
COMPREHENSIVE INCOME		42,617		43,302		128,543		116,852
Comprehensive income attributable to noncontrolling interests in the Operating Partnership		(426)		(476)		(1,285)		(1,289)
Comprehensive (income) loss attributable to noncontrolling interest in subsidiaries		(17)		74		94		166
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY	$	42,174	$	42,900	$	127,352	$	115,729

See accompanying notes to the unaudited consolidated financial statements.

9

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EQUITY

(in thousands)

(unaudited)

																Noncontrolling
				Additional		Accumulated Other				Total		Noncontrolling				Interests in the
	Common Shares			Paid in		Comprehensive		Accumulated		Shareholders’		Interest in		Total		Operating
	Number	Amount		Capital		Income (Loss)		Deficit		Equity		Subsidiaries		Equity		Partnership
Balance at December 31, 2018	187,145	$	1,871	$	2,500,751	$	(1,029)	$	(791,915)	$	1,709,678	$	6,771	$	1,716,449	$	55,819
Contributions from noncontrolling interests in subsidiaries													4,828		4,828
Distributions paid to noncontrolling interests in subsidiaries													(66)		(66)
Acquisition of noncontrolling interest in subsidiary					(9,728)						(9,728)		(272)		(10,000)
Issuance of common shares	773		8		24,572						24,580				24,580
Issuance of restricted shares	19
Conversion from units to shares	60		1		1,841						1,842				1,842		(1,842)
Exercise of stock options	140		1		1,048						1,049				1,049
Amortization of restricted shares					798						798				798
Share compensation expense					468						468				468
Adjustment for noncontrolling interests in the Operating Partnership									(6,681)		(6,681)				(6,681)		6,681
Net income (loss)									35,498		35,498		(70)		35,428		358
Other comprehensive income, net							240				240				240		2
Common share distributions ($0.32 per share)									(60,375)		(60,375)				(60,375)		(604)
Balance at March 31, 2019	188,137	$	1,881	$	2,519,750	$	(789)	$	(823,473)	$	1,697,369	$	11,191	$	1,708,560	$	60,414
Distributions paid to noncontrolling interests in subsidiaries													(8)		(8)
Acquisition of noncontrolling interest in subsidiary					(22,573)						(22,573)		(5,045)		(27,618)
Issuance of common shares	3,353		34		110,487						110,521				110,521
Issuance of restricted shares	31
Conversion from units to shares	20				644						644				644		(644)
Exercise of stock options	85		1		961						962				962
Amortization of restricted shares					1,231						1,231				1,231
Share compensation expense					439						439				439
Adjustment for noncontrolling interests in the Operating Partnership									(2,713)		(2,713)				(2,713)		2,713
Net income (loss)									49,420		49,420		(41)		49,379		499
Other comprehensive income, net							20				20				20
Common share distributions ($0.32 per share)									(61,431)		(61,431)				(61,431)		(597)
Balance at June 30, 2019	191,626	$	1,916	$	2,610,939	$	(769)	$	(838,197)	$	1,773,889	$	6,097	$	1,779,986	$	62,385
Contributions from noncontrolling interests in subsidiaries													2,548		2,548
Distributions paid to noncontrolling interests in subsidiaries													(68)		(68)
Acquisition of noncontrolling interest in subsidiary					(2,020)						(2,020)		(598)		(2,618)
Issuance of common shares	1,773		18		61,214						61,232				61,232
Issuance of restricted shares	1
Exercise of stock options	154		2		1,653						1,655				1,655
Amortization of restricted shares					1,214						1,214				1,214
Share compensation expense					440						440				440
Adjustment for noncontrolling interests in the Operating Partnership									(2,894)		(2,894)				(2,894)		2,894
Net income									42,154		42,154		17		42,171		426
Other comprehensive income, net							20				20				20
Common share distributions ($0.32 per share)									(62,048)		(62,048)				(62,048)		(597)
Balance at September 30, 2019	193,554	$	1,936	$	2,673,440	$	(749)	$	(860,985)	$	1,813,642	$	7,996	$	1,821,638	$	65,108

See accompanying notes to the unaudited consolidated financial statements.

10

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EQUITY

(in thousands)

(unaudited)

																Noncontrolling
				Additional		Accumulated Other				Total		Noncontrolling				Interests in the
	Common Shares			Paid in		Comprehensive		Accumulated		Shareholders’		Interest in		Total		Operating
	Number	Amount		Capital		Income		Deficit		Equity		Subsidiaries		Equity		Partnership
Balance at December 31, 2017	182,216	$	1,822	$	2,356,620	$	3	$	(729,311)	$	1,629,134	$	6,236	$	1,635,370	$	54,320
Contributions from noncontrolling interests in subsidiaries													738		738
Issuance of common shares					(44)						(44)				(44)
Issuance of restricted shares	64		1								1				1
Issuance of OP units																	4,782
Exercise of stock options					2						2				2
Amortization of restricted shares					(242)						(242)				(242)
Share compensation expense					423						423				423
Adjustment for noncontrolling interest in the Operating Partnership									1,169		1,169				1,169		(1,169)
Net income (loss)									34,423		34,423		(7)		34,416		383
Other comprehensive income, net							276				276				276		3
Common share distributions ($0.30 per share)									(54,780)		(54,780)				(54,780)		(614)
Balance at March 31, 2018	182,280	$	1,823	$	2,356,759	$	279	$	(748,499)	$	1,610,362	$	6,967	$	1,617,329	$	57,705
Contributions from noncontrolling interests in subsidiaries													105		105
Distributions paid to noncontrolling interests in subsidiaries													(80)		(80)
Issuance of common shares	3,134		32		95,434						95,466				95,466
Issuance of restricted shares	20
Conversion from units to shares	44				1,342						1,342				1,342		(1,342)
Exercise of stock options	399		4		3,777						3,781				3,781
Amortization of restricted shares					865						865				865
Share compensation expense					344						344				344
Adjustment for noncontrolling interest in the Operating Partnership									(8,323)		(8,323)				(8,323)		8,323
Net income (loss)									38,410		38,410		(85)		38,325		426
Other comprehensive income, net							(279)		405		126				126		1
Common share distributions ($0.30 per share)									(55,842)		(55,842)				(55,842)		(601)
Balance at June 30, 2018	185,877	$	1,859	$	2,458,521	$	—	$	(773,849)	$	1,686,531	$	6,907	$	1,693,438	$	64,512
Contributions from noncontrolling interests in subsidiaries													74		74
Distributions paid to noncontrolling interests in subsidiaries													(54)		(54)
Issuance of common shares	420		4		12,909						12,913				12,913
Issuance of restricted shares	1
Issuance of OP units																	1,460
Exercise of stock options	6				52						52				52
Amortization of restricted shares					970						970				970
Share compensation expense					387						387				387
Adjustment for noncontrolling interest in the Operating Partnership									7,388		7,388				7,388		(7,388)
Net income (loss)									42,900		42,900		(74)		42,826		476
Common share distributions ($0.30 per share)									(55,972)		(55,972)				(55,972)		(614)
Balance at September 30, 2018	186,304	$	1,863	$	2,472,839	$	—	$	(779,533)	$	1,695,169	$	6,853	$	1,702,022	$	58,446

See accompanying notes to the unaudited consolidated financial statements.

11

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended September 30,
	2019		2018
Operating Activities
Net income	$	128,261	$	116,852
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		124,566		106,986
Equity in (earnings) losses of real estate ventures		(10,940)		785
Equity compensation expense		4,990		4,196
Accretion of fair market value adjustment of debt		(541)		(553)
Changes in other operating accounts:
Other assets		(8,094)		(5,765)
Accounts payable and accrued expenses		19,336		10,821
Other liabilities		2,274		1,240
Net cash provided by operating activities	$	259,852	$	234,562
Investing Activities
Acquisitions of storage properties		(63,499)		(83,399)
Additions and improvements to storage properties		(28,520)		(19,174)
Development costs		(94,251)		(69,715)
Cash paid for partner's interest in real estate venture, net of cash, cash equivalents and restricted cash acquired		(117,959)		—
Investment in real estate ventures		(6,558)		(19,154)
Cash distributed from real estate ventures		5,513		6,419
Net cash used in investing activities	$	(305,274)	$	(185,023)
Financing Activities
Proceeds from:
Unsecured senior notes		347,746		—
Revolving credit facility		856,011		452,460
Principal payments on:
Revolving credit facility		(917,494)		(439,910)
Unsecured term loans		(200,000)		—
Mortgage loans and notes payable		(11,027)		(9,137)
Loan procurement costs		(3,104)		—
Settlement of hedge transactions		(807)		—
Acquisition of noncontrolling interest in subsidiary, net		(35,408)		—
Proceeds from issuance of common shares, net		196,333		108,336
Cash paid upon vesting of restricted shares		(400)		(1,449)
Exercise of stock options		3,666		3,835
Contributions from noncontrolling interests in subsidiaries		48		917
Distributions paid to noncontrolling interests in subsidiaries		(142)		(134)
Distributions paid to common shareholders		(181,811)		(165,357)
Distributions paid to noncontrolling interests in Operating Partnership		(1,823)		(1,779)
Net cash provided by (used in) financing activities	$	51,788	$	(52,218)
Change in cash, cash equivalents and restricted cash		6,366		(2,679)
Cash, cash equivalents and restricted cash at beginning of period		6,482		9,158
Cash, cash equivalents and restricted cash at end of period	$	12,848	$	6,479
Supplemental Cash Flow and Noncash Information
Cash paid for interest, net of interest capitalized	$	53,176	$	48,794
Supplemental disclosure of noncash activities:
Proceeds held in escrow from real estate venture's sale of real estate (see note 4)	$	8,288	$	—
Noncash consideration for acquisition of partner's interest in real estate venture (see note 4)	$	(8,288)	$	—
Discount on issuance of unsecured senior notes	$	2,254	$	—
Noncash drawdown on revolving credit facility	$	103,938	$	—
Mortgage loan assumptions	$	—	$	7,166
Repayment of unsecured term loan through noncash drawdown on revolving credit facility	$	(100,000)	$	—
Accretion of put liability	$	4,671	$	20,877
Derivative valuation adjustment	$	282	$	406
Loan procurement costs	$	(3,770)	$	—
Issuance of OP units	$	—	$	6,242
Acquisition of noncontrolling interest in subsidiary	$	(4,828)	$	—
Contributions from noncontrolling interests in subsidiaries	$	7,328	$	—

See accompanying notes to the unaudited consolidated financial statements.

12

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

	September 30,		December 31,
	2019		2018
	(unaudited)
ASSETS
Storage properties	$	4,674,717	$	4,463,455
Less: Accumulated depreciation		(936,862)		(862,487)
Storage properties, net (including VIE assets of $87,428 and $330,986, respectively)		3,737,855		3,600,968
Cash and cash equivalents		7,293		3,764
Restricted cash		5,555		2,718
Loan procurement costs, net of amortization		4,284		963
Investment in real estate ventures, at equity		88,812		95,796
Assets held for sale		2,403		—
Other assets, net		104,128		48,763
Total assets	$	3,950,330	$	3,752,972
LIABILITIES AND CAPITAL
Unsecured senior notes, net	$	1,489,483	$	1,143,524
Revolving credit facility		237,980		195,525
Unsecured term loans, net		—		299,799
Mortgage loans and notes payable, net		96,810		108,246
Accounts payable, accrued expenses and other liabilities		150,532		149,914
Distributions payable		62,645		60,627
Deferred revenue		25,611		22,595
Security deposits		470		474
Liabilities held for sale		53		—
Total liabilities		2,063,584		1,980,704
Limited Partnership interests of third parties		65,108		55,819
Commitments and contingencies
Capital
Operating Partner		1,814,391		1,710,707
Accumulated other comprehensive loss		(749)		(1,029)
Total CubeSmart, L.P. capital		1,813,642		1,709,678
Noncontrolling interests in subsidiaries		7,996		6,771
Total capital		1,821,638		1,716,449
Total liabilities and capital	$	3,950,330	$	3,752,972

See accompanying notes to the unaudited consolidated financial statements.

13

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per common unit data)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
REVENUES
Rental income	$	142,207	$	132,476	$	409,826	$	384,480
Other property related income		18,054		15,494		50,651		44,788
Property management fee income		6,286		5,400		17,932		14,794
Total revenues		166,547		153,370		478,409		444,062
OPERATING EXPENSES
Property operating expenses		53,465		48,755		155,010		147,037
Depreciation and amortization		43,379		35,239		122,484		105,251
General and administrative		10,011		9,780		28,958		26,865
Total operating expenses		106,855		93,774		306,452		279,153
OTHER (EXPENSE) INCOME
Interest:
Interest expense on loans		(18,207)		(15,191)		(53,858)		(45,797)
Loan procurement amortization expense		(687)		(578)		(2,082)		(1,735)
Equity in earnings (losses) of real estate ventures		152		(292)		10,940		(785)
Other		1,647		(233)		1,304		260
Total other expense		(17,095)		(16,294)		(43,696)		(48,057)
NET INCOME		42,597		43,302		128,261		116,852
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
Noncontrolling interest in subsidiaries		(17)		74		94		166
NET INCOME ATTRIBUTABLE TO CUBESMART L.P.		42,580		43,376		128,355		117,018
Operating Partnership interests of third parties		(426)		(476)		(1,283)		(1,285)
NET INCOME ATTRIBUTABLE TO COMMON UNITHOLDERS	$	42,154	$	42,900	$	127,072	$	115,733
Basic earnings per unit attributable to common unitholders	$	0.22	$	0.23	$	0.67	$	0.63
Diluted earnings per unit attributable to common unitholders	$	0.22	$	0.23	$	0.67	$	0.63
Weighted average basic units outstanding		192,927		186,074		189,970		184,036
Weighted average diluted units outstanding		193,817		186,916		190,774		184,829

See accompanying notes to the unaudited consolidated financial statements.

14

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
NET INCOME	$	42,597	$	43,302	$	128,261	$	116,852
Other comprehensive income (loss):
Unrealized gains on interest rate swaps		—		—		232		60
Reclassification of realized losses (gains) on interest rate swaps		20		—		50		(60)
OTHER COMPREHENSIVE INCOME		20		—		282		—
COMPREHENSIVE INCOME		42,617		43,302		128,543		116,852
Comprehensive income attributable to Operating Partnership interests of third parties		(426)		(476)		(1,285)		(1,289)
Comprehensive (income) loss attributable to noncontrolling interest in subsidiaries		(17)		74		94		166
COMPREHENSIVE INCOME ATTRIBUTABLE TO OPERATING PARTNER	$	42,174	$	42,900	$	127,352	$	115,729

See accompanying notes to the unaudited consolidated financial statements.

15

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CAPITAL

(in thousands)

(unaudited)

	Number of					Total						Operating
	Common			Accumulated Other		CubeSmart		Noncontrolling				Partnership
	OP Units	Operating		Comprehensive		L.P.		Interests in		Total		Interest
	Outstanding	Partner		Income (Loss)		Capital		Subsidiaries		Capital		of Third Parties
Balance at December 31, 2018	187,145	$	1,710,707	$	(1,029)	$	1,709,678	$	6,771	$	1,716,449	$	55,819
Contributions from noncontrolling interests in subsidiaries									4,828		4,828
Distributions to noncontrolling interests in subsidiaries									(66)		(66)
Acquisition of noncontrolling interest in subsidiary			(9,728)				(9,728)		(272)		(10,000)
Issuance of common OP units	773		24,580				24,580				24,580
Issuance of restricted OP units	19
Conversion from OP units to shares	60		1,842				1,842				1,842		(1,842)
Exercise of OP unit options	140		1,049				1,049				1,049
Amortization of restricted OP units			798				798				798
OP unit compensation expense			468				468				468
Adjustment for Limited Partnership interests of third parties			(6,681)				(6,681)				(6,681)		6,681
Net income (loss)			35,498				35,498		(70)		35,428		358
Other comprehensive income, net					240		240				240		2
Common OP unit distributions ($0.32 per unit)			(60,375)				(60,375)				(60,375)		(604)
Balance at March 31, 2019	188,137	$	1,698,158	$	(789)	$	1,697,369	$	11,191	$	1,708,560	$	60,414
Distributions to noncontrolling interests in subsidiaries									(8)		(8)
Acquisition of noncontrolling interest in subsidiary			(22,573)				(22,573)		(5,045)		(27,618)
Issuance of common OP units	3,353		110,521				110,521				110,521
Issuance of restricted OP units	31
Conversion from OP units to shares	20		644				644				644		(644)
Exercise of OP unit options	85		962				962				962
Amortization of restricted OP units			1,231				1,231				1,231
OP unit compensation expense			439				439				439
Adjustment for Limited Partnership interests of third parties			(2,713)				(2,713)				(2,713)		2,713
Net income (loss)			49,420				49,420		(41)		49,379		499
Other comprehensive income, net					20		20				20
Common OP unit distributions ($0.32 per unit)			(61,431)				(61,431)				(61,431)		(597)
Balance at June 30, 2019	191,626	$	1,774,658	$	(769)	$	1,773,889	$	6,097	$	1,779,986	$	62,385
Contributions from noncontrolling interests in subsidiaries									2,548		2,548
Distributions to noncontrolling interests in subsidiaries									(68)		(68)
Acquisition of noncontrolling interest in subsidiary			(2,020)				(2,020)		(598)		(2,618)
Issuance of common OP units	1,773		61,232				61,232				61,232
Issuance of restricted OP units	1
Exercise of OP unit options	154		1,655				1,655				1,655
Amortization of restricted OP units			1,214				1,214				1,214
OP unit compensation expense			440				440				440
Adjustment for Limited Partnership interests of third parties			(2,894)				(2,894)				(2,894)		2,894
Net income			42,154				42,154		17		42,171		426
Other comprehensive income, net					20		20				20
Common OP unit distributions ($0.32 per unit)			(62,048)				(62,048)				(62,048)		(597)
Balance at September 30, 2019	193,554	$	1,814,391	$	(749)	$	1,813,642	$	7,996	$	1,821,638	$	65,108

See accompanying notes to the unaudited consolidated financial statements.

16

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CAPITAL

(in thousands)

(unaudited)

	Number of					Total						Operating
	Common			Accumulated Other		CubeSmart		Noncontrolling				Partnership
	OP Units	Operating		Comprehensive		L.P.		Interests in		Total		Interest
	Outstanding	Partner		Income		Capital		Subsidiaries		Capital		of Third Parties
Balance at December 31, 2017	182,216	$	1,629,131	$	3	$	1,629,134	$	6,236	$	1,635,370	$	54,320
Contributions from noncontrolling interests in subsidiaries									738		738
Issuance of common OP units			(44)				(44)				(44)
Issuance of restricted OP units	64		1				1				1
Issuance of OP units													4,782
Exercise of OP unit options			2				2				2
Amortization of restricted OP units			(242)				(242)				(242)
OP unit compensation expense			423				423				423
Adjustment for Operating Partnership interests of third parties			1,169				1,169				1,169		(1,169)
Net income (loss)			34,423				34,423		(7)		34,416		383
Other comprehensive income, net					276		276				276		3
Common OP unit distributions ($0.30 per unit)			(54,780)				(54,780)				(54,780)		(614)
Balance at March 31, 2018	182,280	$	1,610,083	$	279	$	1,610,362	$	6,967	$	1,617,329	$	57,705
Contributions from noncontrolling interests in subsidiaries									105		105
Distributions to noncontrolling interests in subsidiaries									(80)		(80)
Issuance of common OP units	3,134		95,466				95,466				95,466
Issuance of restricted OP units	20
Conversion from units to shares	44		1,342				1,342				1,342		(1,342)
Exercise of OP unit options	399		3,781				3,781				3,781
Amortization of restricted OP units			865				865				865
OP unit compensation expense			344				344				344
Adjustment for Operating Partnership interests of third parties			(8,323)				(8,323)				(8,323)		8,323
Net income (loss)			38,410				38,410		(85)		38,325		426
Other comprehensive income, net			405		(279)		126				126		1
Common OP unit distributions ($0.30 per unit)			(55,842)				(55,842)				(55,842)		(601)
Balance at June 30, 2018	185,877	$	1,686,531	$	—	$	1,686,531	$	6,907	$	1,693,438	$	64,512
Contributions from noncontrolling interests in subsidiaries									74		74
Distributions to noncontrolling interests in subsidiaries									(54)		(54)
Issuance of common OP units	420		12,913				12,913				12,913
Issuance of restricted OP units	1
Issuance of OP units													1,460
Exercise of OP unit options	6		52				52				52
Amortization of restricted OP units			970				970				970
OP unit compensation expense			387				387				387
Adjustment for Operating Partnership interests of third parties			7,388				7,388				7,388		(7,388)
Net income (loss)			42,900				42,900		(74)		42,826		476
Common OP unit distributions ($0.30 per unit)			(55,972)				(55,972)				(55,972)		(614)
Balance at September 30, 2018	186,304	$	1,695,169	$	—	$	1,695,169	$	6,853	$	1,702,022	$	58,446

See accompanying notes to the unaudited consolidated financial statements.

17

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended September 30,
	2019		2018
Operating Activities
Net income	$	128,261	$	116,852
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		124,566		106,986
Equity in (earnings) losses of real estate ventures		(10,940)		785
Equity compensation expense		4,990		4,196
Accretion of fair market value adjustment of debt		(541)		(553)
Changes in other operating accounts:
Other assets		(8,094)		(5,765)
Accounts payable and accrued expenses		19,336		10,821
Other liabilities		2,274		1,240
Net cash provided by operating activities	$	259,852	$	234,562
Investing Activities
Acquisitions of storage properties		(63,499)		(83,399)
Additions and improvements to storage properties		(28,520)		(19,174)
Development costs		(94,251)		(69,715)
Cash paid for partner's interest in real estate venture, net of cash, cash equivalents and restricted cash acquired		(117,959)		—
Investment in real estate ventures		(6,558)		(19,154)
Cash distributed from real estate ventures		5,513		6,419
Net cash used in investing activities	$	(305,274)	$	(185,023)
Financing Activities
Proceeds from:
Unsecured senior notes		347,746		—
Revolving credit facility		856,011		452,460
Principal payments on:
Revolving credit facility		(917,494)		(439,910)
Unsecured term loans		(200,000)		—
Mortgage loans and notes payable		(11,027)		(9,137)
Loan procurement costs		(3,104)		—
Settlement of hedge transactions		(807)		—
Acquisition of noncontrolling interest in subsidiary, net		(35,408)		—
Proceeds from issuance of common OP units		196,333		108,336
Cash paid upon vesting of restricted OP units		(400)		(1,449)
Exercise of OP unit options		3,666		3,835
Contributions from noncontrolling interests in subsidiaries		48		917
Distributions paid to noncontrolling interests in subsidiaries		(142)		(134)
Distributions paid to common OP unitholders		(183,634)		(167,136)
Net cash provided by (used in) financing activities	$	51,788	$	(52,218)
Change in cash, cash equivalents and restricted cash		6,366		(2,679)
Cash, cash equivalents and restricted cash at beginning of period		6,482		9,158
Cash, cash equivalents and restricted cash at end of period	$	12,848	$	6,479
Supplemental Cash Flow and Noncash Information
Cash paid for interest, net of interest capitalized	$	53,176	$	48,794
Supplemental disclosure of noncash activities:
Proceeds held in escrow from real estate venture's sale of real estate (see note 4)	$	8,288	$	—
Noncash consideration for acquisition of partner's interest in real estate venture (see note 4)	$	(8,288)	$	—
Discount on issuance of unsecured senior notes	$	2,254	$	—
Noncash drawdown on revolving credit facility	$	103,938	$	—
Mortgage loan assumptions	$	—	$	7,166
Repayment of unsecured term loan through noncash drawdown on revolving credit facility	$	(100,000)	$	—
Accretion of put liability	$	4,671	$	20,877
Derivative valuation adjustment	$	282	$	406
Loan procurement costs	$	(3,770)	$	—
Issuance of OP units	$	—	$	6,242
Acquisition of noncontrolling interest in subsidiary	$	(4,828)	$	—
Contributions from noncontrolling interests in subsidiaries	$	7,328	$	—

See accompanying notes to the unaudited consolidated financial statements.

18

CUBESMART AND CUBESMART, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND NATURE OF OPERATIONS

CubeSmart (the “Parent Company”) operates as a self-managed and self-administered real estate investment trust (“REIT”) with its operations conducted solely through CubeSmart, L.P. and its subsidiaries. CubeSmart, L.P., a Delaware limited partnership (the “Operating Partnership”), operates through an umbrella partnership structure, with the Parent Company, a Maryland REIT, as its sole general partner. In the notes to the consolidated financial statements, we use the terms “the Company”, “we” or “our” to refer to the Parent Company and the Operating Partnership together, unless the context indicates otherwise. As of September 30, 2019, the Company owned self-storage properties located in 24 states throughout the United States and the District of Columbia that are presented under one reportable segment: the Company owns, operates, develops, manages and acquires self-storage properties.

As of September 30, 2019, the Parent Company owned approximately 99.0% of the partnership interests (“OP Units”) of the Operating Partnership. The remaining OP Units, consisting exclusively of limited partner interests, are held by persons who contributed their interests in properties to the Operating Partnership in exchange for OP Units. Under the partnership agreement, these persons have the right to tender their OP Units for redemption to the Operating Partnership at any time following a specified restricted period for cash equal to the fair value of an equivalent number of common shares of the Parent Company. In lieu of delivering cash, however, the Parent Company, as the Operating Partnership’s general partner, may, at its option, choose to acquire any OP Units so tendered by issuing common shares in exchange for the tendered OP Units. If the Parent Company so chooses, its common shares will be exchanged for OP Units on a one-for-one basis. This one-for-one exchange ratio is subject to adjustment to prevent dilution. With each such exchange or redemption, the Parent Company’s percentage ownership in the Operating Partnership will increase. In addition, whenever the Parent Company issues common or other classes of its shares, it contributes the net proceeds it receives from the issuance to the Operating Partnership and the Operating Partnership issues to the Parent Company an equal number of OP Units or other partnership interests having preferences and rights that mirror the preferences and rights of the shares issued. This structure is commonly referred to as an umbrella partnership REIT or “UPREIT”.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting and, in the opinion of each of the Parent Company’s and Operating Partnership’s respective management, include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of financial position, results of operations and cash flows for each respective company for the interim periods presented in accordance with generally accepted accounting principles in the United States (“GAAP”). Accordingly, readers of this Quarterly Report on Form 10-Q should refer to the Parent Company’s and the Operating Partnership’s audited financial statements prepared in accordance with GAAP, and the related notes thereto, for the year ended December 31, 2018, which are included in the Parent Company’s and the Operating Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The results of operations for the three and nine months ended September 30, 2019 and 2018 are not necessarily indicative of the results of operations to be expected for any future period or the full year.

The Operating Partnership meets the criteria as a variable interest entity (“VIE”). The Parent Company’s sole significant asset is its investment in the Operating Partnership. As a result, substantially all of the Parent Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership. All of the Parent Company’s debt is an obligation of the Operating Partnership.

Recent Accounting Pronouncements

In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The

19

purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The standard became effective on January 1, 2019. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02 - Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less are accounted for similar to previous guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases and operating leases. The Company adopted the standard on January 1, 2019, the date it became effective for public companies, using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated. There was no net cumulative effect adjustment to retained earnings as of January 1, 2019 as a result of this adoption. Upon adoption, the Company elected the package of practical expedients permitted within the standard, which among other things, allows for the carryforward of historical lease classification. The Company also elected the practical expedient provided to lessors in a subsequent amendment to the standard that removed the requirement to separate lease and nonlease components, provided certain conditions were met. Refer to note 13 for the impact of the adoption of ASU No. 2016-02 – Leases (Topic 842) on the Company’s consolidated financial statements.

3. STORAGE PROPERTIES

The book value of the Company’s real estate assets is summarized as follows:

	September 30,		December 31,
	2019		2018
	(in thousands)
Land	$	849,874	$	806,916
Buildings and improvements		3,579,904		3,343,173
Equipment		159,833		176,583
Construction in progress		85,106		136,783
Storage properties		4,674,717		4,463,455
Less: Accumulated depreciation		(936,862)		(862,487)
Storage properties, net	$	3,737,855	$	3,600,968

20

The following table summarizes the Company’s acquisition and disposition activity during the period beginning on January 1, 2018 through September 30, 2019.

			Number of	Purchase / Sale Price
Asset/Portfolio	Market	Transaction Date	Stores	(in thousands)
2019 Acquisitions:
Maryland Asset	Baltimore / DC	March 2019	1	$	22,000
Florida Assets	Florida Markets - Other	April 2019	2		19,000
Arizona Asset	Phoenix	May 2019	1		1,550
HVP III Assets	Various (see note 4)	June 2019	18		128,250	(1)
Georgia Asset	Atlanta	August 2019	1		14,600
South Carolina Asset	Charleston	August 2019	1		3,300
			24	$	188,700
2018 Acquisitions:
Texas Asset	Texas Markets - Major	January 2018	1	$	12,200
Texas Asset	Texas Markets - Major	May 2018	1		19,000
Metro DC Asset	Baltimore / DC	July 2018	1		34,200
Nevada Asset	Las Vegas	September 2018	1		14,350
North Carolina Asset	Charlotte	September 2018	1		11,000
California Asset	Los Angeles	October 2018	1		53,250
Texas Asset	Texas Markets - Major	October 2018	1		23,150
California Asset	San Diego	November 2018	1		19,118
New York Asset	New York / Northern NJ	November 2018	1		37,000
Illinois Asset	Chicago	December 2018	1		4,250
			10	$	227,518
2018 Dispositions:
Arizona Assets	Phoenix	November 2018	2	$	17,502
			2	$	17,502

(1) Amount represents the purchase price for 90% of the ownership interest in 191 III CUBE LLC (“HVP III”), which at the time of the acquisition, owned 18 storage properties (see note 4).

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4. INVESTMENT ACTIVITY

2019 Acquisitions

During the nine months ended September 30, 2019, the Company acquired six stores located in Arizona (1), Florida (2), Georgia (1), Maryland (1) and South Carolina (1) for an aggregate purchase price of approximately $60.5 million. In connection with these transactions, which were accounted for as asset acquisitions, the Company allocated the purchase price and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consisted of in-place leases, which aggregated to $2.4 million at the time of the acquisitions and prior to amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the three and nine months ended September 30, 2019 was approximately $0.5 million and $1.0 million, respectively.

Additionally, on June 6, 2019, the Company acquired its partner’s 90% ownership interest in HVP III, an unconsolidated real estate venture in which the Company previously owned a 10% noncontrolling interest and that was accounted for under the equity method of accounting. As of the date of acquisition, HVP III owned 18 stores located in Georgia (1), Massachusetts (7), North Carolina (1), South Carolina (7) and Tennessee (2) (the “HVP III Assets”). The purchase price for the 90% ownership interest was $128.3 million, which was comprised of cash consideration of $120.0 million and $8.3 million of the Company’s escrowed proceeds from HVP III’s sale of 50 properties to an unaffiliated buyer on June 5, 2019 (see note 5). The HVP III Assets were recorded by the Company at $137.5 million, which consisted of the $128.3 million purchase price plus the Company’s $10.6 million carryover basis of its previously held equity interest in HVP III, offset by $1.4 million of acquired cash. As a result of the transaction, which was accounted for as an asset acquisition, the HVP III Assets became wholly-owned by the Company and are now consolidated within its financial statements. No gain or loss was recognized as a result of the transaction. In connection with the transaction, the Company allocated the value of the HVP III Assets and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consisted of in-place leases, which aggregated to $14.3 million at the time of the acquisition and prior to amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the three and nine months ended September 30, 2019 was approximately $3.6 million and $4.8 million, respectively.

The following table summarizes the Company’s revenue and losses associated with the 2019 acquisitions, from the acquisition date, that are included in the consolidated statements of operations for the three and nine months ended September 30, 2019:

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(in thousands)
Total revenue	$	4,439	$	6,069
Net loss		(2,382)		(3,513)

As of September 30, 2019, the Company had made aggregate deposits of $3.0 million associated with five stores that were under contract to be acquired for an aggregate acquisition price of $87.9 million. The deposits are reflected in Other assets, net on the Company’s consolidated balance sheets.

Asset Held for Sale

As of September 30, 2019, the Company was under contract to sell a store located in Texas for a sales price of $4.1 million. The assets and liabilities associated with this store have been classified as “held for sale” within the Company’s September 30, 2019 consolidated balance sheets. As of September 30, 2019, the estimated fair value less selling costs of the store was greater than its carrying value, and therefore no loss has been recorded in the current period. The sale of this store, which occurred during the fourth quarter of 2019 (see note 17), does not represent a strategic shift that has, or will have, a major effect on the Company’s operations or financial results.

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2018 Acquisitions

During the year ended December 31, 2018, the Company acquired ten stores located throughout the United States, including one store upon completion of construction and the issuance of a certificate of occupancy, for an aggregate purchase price of approximately $227.5 million. In connection with these transactions, which were accounted for as asset acquisitions, the Company allocated the purchase price and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consist of in-place leases, which aggregated $11.3 million at the time of the acquisitions and prior to any amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the three and nine months ended September 30, 2019 was approximately $2.3 million and $7.7 million, respectively. In connection with one of the acquired stores, the Company assumed a $7.2 million mortgage loan that was immediately repaid by the Company. The remainder of the purchase price was funded with $0.2 million of cash and $4.8 million through the issuance of 168,011 OP Units (see note 12). The holder may tender the OP units for redemption by the Operating Partnership for a cash amount per OP Unit equal to the market value of an equivalent number of common shares of the Company. The Company has the right, but not the obligation, to assume and satisfy the redemption obligation of the Operating Partnership by issuing one common share in exchange for each OP Unit tendered for redemption.

2018 Dispositions

On November 28, 2018, the Company sold two stores in Arizona for an aggregate sales price of approximately $17.5 million. In connection with these sales, the Company recorded gains that totaled approximately $10.6 million.

Development Activity

As of September 30, 2019, the Company had invested in joint ventures to develop five self-storage properties located in Massachusetts (1), New York (2), Pennsylvania (1) and Virginia (1). Construction for all projects is expected to be completed by the second quarter of 2021 (see note 12). As of September 30, 2019, development costs incurred to date for these projects totaled $72.4 million. Total construction costs for these projects are expected to be $137.6 million. These costs are capitalized to construction in progress while the projects are under development and are reflected in Storage properties on the Company’s consolidated balance sheets.

The Company has completed the construction and opened for operation the following stores during the period beginning on January 1, 2018 through September 30, 2019. The costs associated with the construction of these stores are capitalized to land, building and improvements, as well as equipment and are reflected in Storage properties on the Company’s consolidated balance sheets.

			CubeSmart
	Number of		Ownership	Total
Store Location	Stores	Date Opened	Interest	Construction Costs
				(in thousands)
Waltham, MA (1)	1	Q3 2019	100%	$	18,000
Queens, NY (2)	1	Q2 2019	100%		47,500
Bayonne, NJ (2) (3)	1	Q2 2019	100%		25,100
Bronx, NY (2)	1	Q3 2018	100%		92,100
	4			$	182,700

(1) On August 8, 2019, the Company, through a joint venture in which the Company owned a 90% interest and that it previously consolidated, completed the construction and opened for operation a store located in Waltham, MA. On September 6, 2019, the Company acquired the noncontrolling member’s 10% interest in the venture for $2.6 million.  Prior to this transaction, the noncontrolling member’s interest was reported in Noncontrolling interests in subsidiaries on the consolidated balance sheets. Since the Company retained its controlling interest in the joint venture and the store is now wholly owned, this transaction was accounted for as an equity transaction. The carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase and the $2.0 million difference between the purchase price paid by the Company and the carrying amount of the noncontrolling interest was recorded as an adjustment to equity attributable to the Company, with no gain or

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loss recorded.  In conjunction with the Company’s acquisition of the noncontrolling interest, the $10.5 million related party loan extended by the Company to the venture during the construction period was repaid in full.

(2) These stores were previously owned by three separate consolidated joint ventures, of which the Company held a 51% ownership interest in each. On February 15, 2019, the noncontrolling member in the venture that owned the Bronx, NY store put its 49% interest in the venture to the Company for $37.8 million. On June 25, 2019, the noncontrolling member in the venture that owned the Bayonne, NJ store put its 49% interest in the venture to the Company for $11.5 million. On September 17, 2019, the noncontrolling member in the venture that owned the Queens, NY store put its 49% interest in the venture to the Company for $15.2 million. These amounts are included in Development costs in the consolidated statements of cash flows.

(3) This property is subject to a ground lease.

During the fourth quarter of 2015 and the third quarter of 2017, the Company, through two separate joint ventures in which it owned a 90% interest in each and that were previously consolidated, completed the construction and opened for operation a store located in Queens, NY and a store located in New York, NY, respectively. On June 25, 2019, the Company acquired the noncontrolling member’s 10% interest in the venture that owned the New York, NY store for $18.5 million, and on June 28, 2019, the Company acquired the noncontrolling member’s 10% interest in the venture that owned the Queens, NY store for $9.0 million. Prior to these transactions, the noncontrolling members’ interest in each venture was reported in Noncontrolling interests in subsidiaries on the consolidated balance sheets. Since the Company retained its controlling interest in each joint venture and the stores are now wholly owned, these transactions were accounted for as equity transactions. In each case, the carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase, and the difference between the purchase price paid by the Company and the carrying amount of the noncontrolling interest, which aggregated to $22.6 million, was recorded as an adjustment to equity attributable to the Company, with no gain or loss recorded. The $12.4 million related party loan extended by the Company to the venture that owned the Queens, NY store was repaid in conjunction with the Company’s acquisition of the noncontrolling member’s ownership interest.

5. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

The Company’s investments in real estate ventures, in which it holds a common ownership interest, are summarized as follows (in thousands):

	CubeSmart	Number of Stores		Carrying Value of Investment
	Ownership	September 30,	December 31,	September 30,		December 31,
Unconsolidated Real Estate Ventures	Interest	2019	2018	2019		2018
191 IV CUBE LLC ("HVP IV") (1)	20%	19	13	$	19,999	$	14,791
CUBE HHF Northeast Venture LLC ("HHFNE") (2)	10%	13	13		2,131		2,411
191 III CUBE LLC ("HVP III") (3)	10%	—	68		—		9,183
CUBE HHF Limited Partnership ("HHF") (4)	50%	35	35		66,682		69,411
		67	129	$	88,812	$	95,796

(1) The stores owned by HVP IV are located in Arizona (2), Connecticut (2), Florida (4), Georgia (2), Maryland (1), Pennsylvania (1) and Texas (7). The Company’s total contribution to HVP IV in connection with these store acquisitions was $22.6 million. As of September 30, 2019, HVP IV had $82.2 million outstanding on its $107.0 million loan facility, which bears interest at LIBOR plus 1.70% per annum, and matures on May 16, 2021 with options to extend the maturity date through May 16, 2023, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. As of September 30, 2019, HVP IV also had $40.5 million outstanding under a separate loan that bears interest at LIBOR plus 2.75% per annum, and matures on June 9, 2022 with options to extend the maturity date through June 9, 2024, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. As of September 30, 2019, HVP IV was under contract, and had made aggregate deposits of $1.2 million, to acquire two stores located in Minnesota (1) and Texas (1) for an aggregate purchase price of $34.3 million.

(2) The stores owned by HHFNE are located in Connecticut (3), Massachusetts (6), Rhode Island (2) and Vermont (2). The Company’s total contribution to HHFNE in connection with these store acquisitions was $3.8 million.

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As of September 30, 2019, HHFNE had an outstanding $44.5 million loan facility, which bears interest at LIBOR plus 1.90% per annum and matures on December 15, 2019 with options to extend the maturity date through December 15, 2021, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. As of September 30, 2019, HHFNE is in the process of amending and restating its loan facility.

(3) On June 5, 2019, HVP III sold 50 stores located in Florida (3), Georgia (4), Michigan (17), North Carolina (3), South Carolina (15) and Tennessee (8), to an unaffiliated third party buyer for an aggregate sales price of $293.5 million. As of the transaction date, HVP III had five mortgage loans with an aggregate outstanding balance of $22.9 million, as well as $179.5 million outstanding on its $185.5 million loan facility, all of which were defeased or repaid in full at the time of the sale. Net proceeds to the venture from the transaction totaled $82.9 million. The venture recorded gains which aggregated to approximately $106.7 million in connection with the sale. Subsequent to the sale, the Company acquired its partner’s 90% ownership interest in HVP III, which at the time of the acquisition, owned the remaining 18 storage properties (see note 4).

(4) The stores owned by HHF are located in North Carolina (1) and Texas (34). As of September 30, 2019, HHF had an outstanding $100.0 million secured loan, which bears interest at 3.59% per annum and matures on April 30, 2021.

Based upon the facts and circumstances at formation of HVP IV, HHFNE, HVP III and HHF (the “Ventures”), the Company determined that the Ventures are not VIEs in accordance with the accounting standard for the consolidation of VIEs. As a result, the Company used the voting interest model under the accounting standard for consolidation in order to determine whether to consolidate the Ventures. Based upon each member's substantive participating rights over the activities of each entity as stipulated in the operating agreements, the Ventures are not consolidated by the Company and are accounted for under the equity method of accounting (except for HVP III, which was consolidated as of June 6, 2019). The Company’s investments in the Ventures are included in Investment in real estate ventures, at equity on the Company’s consolidated balance sheets and the Company’s earnings from its investments in the Ventures are presented in Equity in earnings (losses) of real estate ventures on the Company’s consolidated statements of operations.

The amounts reflected in the following table are based on the historical financial information of the Ventures.

The following is a summary of the financial position of the Ventures as of September 30, 2019 and December 31, 2018 (in thousands).

	September 30,		December 31,
	2019 (1)		2018
Assets
Storage properties, net	$	521,701	$	741,209
Other assets		18,835		16,042
Total assets	$	540,536	$	757,251
Liabilities and equity
Other liabilities	$	14,210	$	7,911
Debt		264,855		413,848
Equity
CubeSmart		88,812		95,796
Joint venture partners		172,659		239,696
Total liabilities and equity	$	540,536	$	757,251

(1) Excludes HVP III as it was consolidated by the Company on June 6, 2019.

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The following is a summary of results of operations of the Ventures for the three and nine months ended September 30, 2019 and 2018 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019 (1)		2018
Total revenues	$	14,027	$	23,463	$	58,305	$	66,665
Operating expenses		(6,518)		(9,583)		(25,762)		(28,269)
Other expense		(34)		(242)		(3,113)		(807)
Interest expense, net		(2,606)		(3,494)		(11,911)		(9,515)
Depreciation and amortization		(5,908)		(11,223)		(23,829)		(31,042)
Gains from sale of real estate		—		—		106,667		—
Net (loss) income	$	(1,039)	$	(1,079)	$	100,357	$	(2,968)
Company’s share of net income (loss)	$	152	$	(292)	$	10,940	$	(785)

(1) HVP III’s results of operations included through June 6, 2019 (date of consolidation).

Capital Storage Partners, LLC (“Capital Storage”)

On September 5, 2018, the Company invested $5.0 million in exchange for 100% of the Class A Preferred Units of Capital Storage Partners, LLC, a newly formed venture that acquired 22 self-storage properties located in Florida (4), Oklahoma (5) and Texas (13). The Class A Preferred Units earn an 11% cumulative dividend prior to any other distributions. The Company’s investment in Capital Storage and the related dividends are included in Other assets, net on the Company’s consolidated balance sheets and in Other income on the Company’s consolidated statements of operations, respectively.

6. UNSECURED SENIOR NOTES

The Company’s unsecured senior notes are summarized as follows (collectively referred to as the “Senior Notes”):

	September 30,		December 31,		Effective		Issuance	Maturity
Unsecured Senior Notes	2019		2018		Interest Rate		Date	Date
	(in thousands)
$250M 4.800% Guaranteed Notes due 2022	$	250,000	$	250,000	4.82	%	Jun-12	Jul-22
$300M 4.375% Guaranteed Notes due 2023 (1)		300,000		300,000	4.33	%	Various (1)	Dec-23
$300M 4.000% Guaranteed Notes due 2025 (2)		300,000		300,000	3.99	%	Various (2)	Nov-25
$300M 3.125% Guaranteed Notes due 2026		300,000		300,000	3.18	%	Aug-16	Sep-26
$350M 4.375% Guaranteed Notes due 2029		350,000		—	4.46	%	Jan-19	Feb-29
Principal balance outstanding		1,500,000		1,150,000
Less: Discount on issuance of unsecured senior notes, net		(2,635)		(568)
Less: Loan procurement costs, net		(7,882)		(5,908)
Total unsecured senior notes, net	$	1,489,483	$	1,143,524

(1) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.375% senior notes due 2023, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.375% senior notes due December 15, 2023 issued on December 17, 2013. The $50.0 million and $250.0 million tranches were priced at 105.040% and 98.995%, respectively, of the principal amount to yield 3.495% and 4.501%, respectively, to maturity. The combined weighted average effective interest rate of the 2023 notes is 4.330%.

(2) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.000% senior notes due 2025, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.000% senior notes due November 15, 2025 issued on October 26, 2015. The $50.0 million and $250.0 million tranches were

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priced at 101.343% and 99.735%, respectively, of the principal amount to yield 3.811% and 4.032%, respectively, to maturity. The combined weighted average effective interest rate of the 2025 notes is 3.994%.

The indenture under which the Senior Notes were issued restricts the ability of the Operating Partnership and its subsidiaries to incur debt unless the Operating Partnership and its consolidated subsidiaries comply with a leverage ratio not to exceed 60% and an interest coverage ratio of more than 1.5:1.0 after giving effect to the incurrence of the debt. The indenture also restricts the ability of the Operating Partnership and its subsidiaries to incur secured debt unless the Operating Partnership and its consolidated subsidiaries comply with a secured debt leverage ratio not to exceed 40% after giving effect to the incurrence of the debt. The indenture also contains other financial and customary covenants, including a covenant not to own unencumbered assets with a value less than 150% of the unsecured indebtedness of the Operating Partnership and its consolidated subsidiaries. As of September 30, 2019, the Operating Partnership was in compliance with all of the financial covenants under the Senior Notes.

7. REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS

On December 9, 2011, the Company entered into a credit agreement (the “Credit Facility”), which was subsequently amended on April 5, 2012, June 18, 2013 and April 22, 2015 to provide for, among other things, a $200.0 million unsecured term loan with a maturity date of January 31, 2019 and a $500.0 million unsecured revolving facility with a maturity date of April 22, 2020. On June 19, 2019, the Company amended and restated, in its entirety, the Credit Facility (the “Amended and Restated Credit Facility”) which, subsequent to the amendment and restatement, is comprised of a $750.0 million unsecured revolving facility (the “Revolver”) maturing on June 19, 2024. Under the Amended and Restated Credit Facility, pricing on the Revolver is dependent upon the Company’s unsecured debt credit ratings. At the Company’s current Baa2/BBB level, amounts drawn under the Revolver are priced at 1.10% over LIBOR, inclusive of a facility fee of 0.15%. The Company incurred costs of $3.9 million in 2019 in connection with amending and restating the Credit Facility and capitalized such costs as a component of Loan procurement costs, net of amortization on the consolidated balance sheets.

As of September 30, 2019, borrowings under the Revolver had an effective weighted average interest rate of 3.12%. Additionally, as of September 30, 2019, $511.3 million was available for borrowing under the Revolver. The available balance under the Revolver is reduced by an outstanding letter of credit of $0.7 million.

On June 20, 2011, the Company entered into an unsecured term loan agreement (the “Term Loan Facility”), which was subsequently amended on June 18, 2013 and August 5, 2014, consisting of, among other things, a $100.0 million unsecured term loan with a seven-year maturity that was repaid on June 19, 2019.

The Company’s unsecured term loans under the Credit Facility and Term Loan Facility are summarized below:

	Carrying Value as of:				Effective Interest
	September 30,		December 31,		Rate as of		Maturity
Unsecured Term Loans	2019		2018		September 30, 2019		Date
	(in thousands)
Credit Facility
Unsecured term loan (1)	$	—	$	200,000	—	%	Jan-19
Term Loan Facility
Unsecured term loan (2)		—		100,000	—	%	Jan-20
Principal balance outstanding		—		300,000
Less: Loan procurement costs, net		—		(201)
Total unsecured term loans, net	$	—	$	299,799

(1) On January 31, 2019, the Company used a portion of the net proceeds from the issuance of $350.0 million of 4.375% Senior Notes due 2029 (the “2029 Notes”) to repay all of the outstanding indebtedness under the unsecured term loan portion of the Credit Facility. 

(2) On June 19, 2019, the Company used an initial advance at closing of the Amended and Restated Credit Facility to repay all of the outstanding indebtedness under the unsecured term loan portion of the Term Loan Facility

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that was scheduled to mature in January 2020. Unamortized loan procurement costs of $0.1 million were written off in conjunction with the repayment.

Under the Amended and Restated Credit Facility, the Company’s ability to borrow under the Revolver is subject to ongoing compliance with certain financial covenants which include, among other things, (1) a maximum total indebtedness to total asset value of 60.0%, and (2) a minimum fixed charge coverage ratio of 1.50:1.00. As of September 30, 2019, the Company was in compliance with all of its financial covenants.

8. MORTGAGE LOANS AND NOTES PAYABLE

The Company’s mortgage loans and notes payable are summarized as follows:

	Carrying Value as of:
	September 30,		December 31,		Effective		Maturity
Mortgage Loans and Notes Payable	2019		2018		Interest Rate		Date
	(in thousands)
YSI 33 (1)	$	—	$	9,214	6.42	%	Jul-19
YSI 26		7,861		8,022	4.56	%	Nov-20
YSI 57		2,760		2,816	4.61	%	Nov-20
YSI 55		21,674		22,041	4.85	%	Jun-21
YSI 24		24,260		24,893	4.64	%	Jun-21
YSI 65		2,326		2,363	3.85	%	Jun-23
YSI 66		30,737		31,171	3.51	%	Jun-23
YSI 68		5,501		5,626	3.78	%	May-24
Principal balance outstanding		95,119		106,146
Plus: Unamortized fair value adjustment		2,010		2,551
Less: Loan procurement costs, net		(319)		(451)
Total mortgage loans and notes payable, net	$	96,810	$	108,246

(1) YSI 33 was repaid in full on July 1, 2019.

As of September 30, 2019 and December 31, 2018, the Company’s mortgage loans payable were secured by certain of its self-storage properties with net book values of approximately $207.4 million and $231.0 million, respectively. The following table represents the future principal payment requirements on the outstanding mortgage loans and notes payable as of September 30, 2019 (in thousands):

2019	$	625
2020		12,791
2021		45,057
2022		923
2023		31,019
2024 and thereafter		4,704
Total mortgage payments		95,119
Plus: Unamortized fair value adjustment		2,010
Less: Loan procurement costs, net		(319)
Total mortgage loans and notes payable, net	$	96,810

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9. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table summarizes the changes in accumulated other comprehensive loss by component for the nine months ended September 30, 2019 (in thousands):

	Unrealized Gains (Losses)
	on Interest Rate Swaps
Other comprehensive gain before reclassifications	$	230
Amounts reclassified from accumulated other comprehensive loss		50	(1)
Net current-period other comprehensive income		280
Balance at December 31, 2018		(1,029)
Balance at September 30, 2019	$	(749)

(1) See note 10 for additional information about the effects of the amounts reclassified.

10. RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS

The Company’s use of derivative instruments is limited to the utilization of interest rate swap agreements or other instruments to manage interest rate risk exposures and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure, as well as to hedge specific transactions. The counterparties to these arrangements are major financial institutions with which the Company and its subsidiaries may also have other financial relationships. The Company is potentially exposed to credit loss in the event of non-performance by these counterparties. However, because of the high credit ratings of the counterparties, the Company does not anticipate any of the counterparties will fail to meet these obligations as they come due. The Company does not hedge credit or property value market risks.

During 2018, the Company entered into interest rate swap agreements that qualified and were designated as cash flow hedges designed to reduce the impact of interest rate changes on a forecasted issuance of long-term debt. Therefore, the interest rate swaps were recorded on the consolidated balance sheet at fair value and the related gains or losses were deferred in shareholders’ equity as accumulated other comprehensive income or loss. These deferred gains and losses are amortized into interest expense during the period or periods in which the related interest payments affect earnings.

The Company formally assessed, both at inception of the hedge and on an on-going basis, whether each derivative was highly-effective in offsetting changes in cash flows of the hedged item. If management determined that the derivative was highly-effective as a hedge, then the Company accounted for the derivative using hedge accounting, pursuant to which gains or losses inherent in the derivative did not impact the Company’s results of operations. If management determined that the derivative was not highly-effective as a hedge or if a derivative ceased to be a highly-effective hedge, the Company discontinued hedge accounting prospectively and reflected in its statement of operations realized and unrealized gains and losses with respect to the derivative.

The following table summarizes the terms and fair values of the Company’s derivative financial instruments as of September 30, 2019 and December 31, 2018, respectively (dollars in thousands):

Hedge	Hedge	Notional Amount						Effective		Fair Value
Product	Type	September 30, 2019		December 31, 2018		Strike		Date	Maturity	September 30, 2019		December 31, 2018
Swap	Cash flow (1)	$	—	$	75,000	2.8015	%	6/28/2019	6/28/2029	$	—	$	(516)
Swap	Cash flow (1)		—		50,000	2.8030	%	6/28/2019	6/28/2029		—		(350)
Swap	Cash flow (1)		—		25,000	2.8020	%	6/28/2019	6/28/2029		—		(173)
		$	—	$	150,000					$	—	$	(1,039)

(1) These interest rate swaps were entered into on December 24, 2018 to protect the Company against adverse fluctuations in interest rates by reducing exposure to variability in cash flows relating to interest payments on a

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forecasted issuance of long-term debt. On January 24, 2019, in conjunction with the issuance of the 2029 Notes, the Company settled these interest rate swaps for $0.8 million. The termination premium will be reclassified from accumulated other comprehensive loss as an increase to interest expense over the life of the 2029 Notes, which mature on February 15, 2029.

The Company measured its derivative instruments at fair value and recorded them in the balance sheet as either an asset or liability. As of September 30, 2019, all derivative instruments had been settled. As of December 31, 2018, all derivative instruments were included in accounts payable, accrued expenses and other liabilities on the accompanying consolidated balance sheets. The effective portions of changes in the fair value of the derivatives are reported in accumulated other comprehensive loss. Amounts reported in accumulated other comprehensive loss related to derivatives are reclassified to interest expense as interest payments are made on the Company’s 2029 Notes. The change in unrealized losses on interest rate swaps reflects a reclassification of twenty thousand dollars and fifty thousand dollars of unrealized losses from accumulated other comprehensive loss as an increase to interest expense during the three and nine months ended September 30, 2019, respectively. The Company estimates that $0.1 million will be reclassified as an increase to interest expense in the next 12 months.

11. FAIR VALUE MEASUREMENTS

The Company applies the methods of determining fair value as described in authoritative guidance, to value its financial assets and liabilities. As defined in the guidance, fair value is based on the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible, as well as considering counterparty credit risk in its assessment of fair value.

There were no financial assets or liabilities carried at fair value as of September 30, 2019. Financial assets and liabilities carried at fair value as of December 31, 2018 are classified in the table below in one of the three categories described above (in thousands):

	Level 1		Level 2		Level 3
Interest rate swap derivative liabilities	$	—	$	1,039	$	—
Total liabilities at fair value	$	—	$	1,039	$	—

Financial assets and liabilities carried at fair value were classified as Level 2 inputs. For financial liabilities that utilize Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including LIBOR yield curves, bank price quotes for forward starting swaps, NYMEX futures pricing and common stock price quotes. Below is a summary of valuation techniques for Level 2 financial liabilities:

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● Interest rate swap derivative assets and liabilities – valued using LIBOR yield curves at the reporting date. Counterparties to these contracts are most often highly rated financial institutions, none of which experienced any significant downgrades that would reduce the amount owed by the Company. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the Company’s derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and the counterparties. However, as of the reporting dates, the Company has assessed the significance of the effect of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The fair values of financial instruments, including cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate their respective carrying values at September 30, 2019 and December 31, 2018. The aggregate carrying value of the Company’s debt was $1,824.3 million and $1,747.1 million at September 30, 2019 and December 31, 2018, respectively. The estimated fair value of the Company’s debt was $1,926.0 million and $1,731.9 million at September 30, 2019 and December 31, 2018, respectively. The fair value of debt estimates were based on a discounted cash flow analysis assuming market interest rates for comparable obligations at September 30, 2019 and December 31, 2018. The Company estimates the fair value of its fixed rate debt and the credit spreads over variable market rates on its variable rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of the debt obligation with similar credit policies, which is classified within level 2 of the fair value hierarchy. Rates and credit spreads take into consideration general market conditions and maturity.

12. NONCONTROLLING INTERESTS

Interests in Consolidated Joint Ventures

Noncontrolling interests in subsidiaries represent the ownership interests of third parties in the Company’s consolidated real estate ventures. The Company has determined that these ventures are VIEs, and that the Company is the primary beneficiary. Accordingly, the Company consolidates the assets, liabilities and results of operations of the real estate ventures in the table below (dollars in thousands):

			Date Opened /	CubeSmart
	Number		Estimated	Ownership	September 30, 2019
Consolidated Joint Ventures	of Stores	Location	Opening	Interest	Total Assets		Total Liabilities
CS Valley Forge Village Storage, LLC ("VFV") (1)	1	King of Prussia, PA	Q2 2021 (est.)	70%	$	3,402	$	3
Shirlington Rd II, LLC ("SH2") (2)	1	Arlington, VA	Q1 2021 (est.)	90%		8,548		2
CS 2087 Hempstead Tpk, LLC ("Hempstead") (3)	1	East Meadow, NY	Q4 2020 (est.)	51%		10,717		2,279
CS SDP Newtonville, LLC ("Newton") (1)	1	Newton, MA	Q3 2020 (est.)	90%		9,585		3,060
CS 1158 McDonald Ave, LLC ("McDonald Ave") (3)	1	Brooklyn, NY	Q4 2019 (est.)	51%		40,582		11,307
Shirlington Rd, LLC ("SH1") (2)	1	Arlington, VA	Q2 2015	90%		14,969		159
	6				$	87,803	$	16,810

(1) The Company has a related party loan commitment to VFV and Newton to fund a portion of the construction costs. As of September 30, 2019, the Company has funded $1.8 million of the total $12.1 million loan commitment to Newton, which is included in the total liability amount within the table above. This loan and the related interest were eliminated for consolidation purposes. As of September 30, 2019, the Company had not funded any of its $12.4 million loan commitment to VFV.

(2) On March 7, 2019, the Company acquired the noncontrolling member’s ownership interest in SH1, inclusive of its promoted interest in the venture, for $10.0 million. Prior to this transaction, the noncontrolling member’s

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interest was reported in Noncontrolling interests in subsidiaries on the consolidated balance sheets. Since the Company retained its controlling interest in the joint venture, this transaction was accounted for as an equity transaction. The carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase, and the $9.7 million difference between the purchase price paid by the Company and the carrying amount of the noncontrolling interest was recorded as an adjustment to equity attributable to the Company. In conjunction with the Company’s acquisition of the noncontrolling interest in SH1, the $12.2 million related party loan extended by the Company to the venture during the construction period was repaid in full. Subsequently, the noncontrolling member re-acquired a 10% interest in SH1 and a 10% interest in SH2 for a combined $4.8 million, which is included in Noncontrolling interests in subsidiaries on the consolidated balance sheets.

(3) The noncontrolling members of Hempstead and McDonald Ave have the option to put their ownership interest in the ventures to the Company for $6.6 million and $10.0 million, respectively, within the one-year period after construction of each store is substantially complete. Additionally, the Company has a one-year option to call the ownership interest of the noncontrolling members of Hempstead and McDonald Ave for $6.6 million and $10.0 million, respectively, beginning on the second anniversary of the respective store’s construction being substantially complete. The Company, at its sole discretion, may pay cash and/or issue OP Units in exchange for the noncontrolling member’s interest in Hempstead and McDonald. The Company is accreting the respective liabilities during the development periods and, as of September 30, 2019, has accrued $1.9 million and $9.4 million, related to Hempstead and McDonald Ave, respectively, which are included in Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets.

On May 30, 2019, the Company sold its 90% ownership interest in CS SJM E 92nd Street, LLC, a previously consolidated development joint venture, for $3.7 million. In conjunction with the sale, $0.7 million of the $1.7 million related party loan extended by the Company to the venture was repaid. The remaining $1.0 million was recorded as a note receivable and was repaid during the third quarter of 2019. Additionally, as a result of the transaction, the Company was released from its obligations under the venture’s ground lease, and right-of-use assets and lease liabilities totaling $13.4 million and $14.6 million, respectively, were removed from the Company’s consolidated balance sheets.

Operating Partnership Ownership

The Company follows guidance regarding the classification and measurement of redeemable securities. Under this guidance, securities that are redeemable for cash or other assets, at the option of the holder and not solely within the control of the issuer, must be classified outside of permanent equity/capital. This classification results in certain outside ownership interests being included as redeemable noncontrolling interests outside of permanent equity/capital in the consolidated balance sheets. The Company makes this determination based on terms in applicable agreements, specifically in relation to redemption provisions.

Additionally, with respect to redeemable ownership interests in the Operating Partnership held by third parties for which CubeSmart has a choice to settle the redemption by delivery of its own shares, the Operating Partnership considered the guidance regarding accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own shares, to evaluate whether CubeSmart controls the actions or events necessary to presume share settlement. The guidance also requires that noncontrolling interests classified outside of permanent capital be adjusted each period to the greater of the carrying value based on the accumulation of historical cost or the redemption value.

Approximately 1.0% of the outstanding OP Units, as of September 30, 2019 and December 31, 2018, were not owned by CubeSmart, the sole general partner. The interests in the Operating Partnership represented by these OP Units were a component of the consideration that the Operating Partnership paid to acquire certain self-storage properties. The holders of the OP Units are limited partners in the Operating Partnership and have the right to require CubeSmart to redeem all or part of their OP Units for, at the general partner’s option, an equivalent number of common shares of CubeSmart or cash based upon the fair value of an equivalent number of common shares of CubeSmart. However, the partnership agreement contains certain provisions that could result in a settlement outside the control of CubeSmart and the Operating Partnership, as CubeSmart does not have the ability to settle in unregistered shares. Accordingly, consistent with the guidance, the Operating Partnership will record the OP Units owned by third parties outside of permanent

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capital in the consolidated balance sheets. Net income or loss related to the OP Units owned by third parties is excluded from net income or loss attributable to Operating Partner in the consolidated statements of operations.

On January 31, 2018, the Company acquired a store in Texas for $12.2 million and assumed an existing mortgage loan with an outstanding balance of approximately $7.2 million, which was immediately repaid by the Company. In conjunction with the closing, the Company paid $0.2 million in cash and issued 168,011 OP Units, valued at approximately $4.8 million, to pay the remaining consideration.

As of September 30, 2019 and December 31, 2018, 1,865,570 and 1,945,570 OP units, respectively, were held by third parties. The per unit cash redemption amount of the outstanding OP units was calculated based upon the average of the closing prices of the common shares of CubeSmart on the New York Stock Exchange for the final 10 trading days of the quarter. Based on the Company’s evaluation of the redemption value of the redeemable noncontrolling interest, the Company has reflected these interests at their redemption value at September 30, 2019 and December 31, 2018. As of September 30, 2019 and December 31, 2018, the Operating Partnership recorded increases in the value of OP Units owned by third parties and corresponding decreases to capital of $12.3 million and $0.3 million, respectively.

13. LEASES

CubeSmart as Lessor

The Company derives revenue primarily from rents received from customers who rent cubes at its self-storage properties under month-to-month leases for personal or business use. The self-storage lease agreements utilized by the Company vary slightly to comply with state-specific laws and regulations, but generally provide for automatic monthly renewals, flexibility to increase rental rates over time as market conditions permit and the collection of contingent fees such as administrative and late fees. None of the self-storage lease agreements contain options that allow the customer to purchase the leased space at any time during, or at the expiration of, the lease term. All self-storage leases in which the Company serves as lessor have been classified as operating leases. Accordingly, storage cubes are carried at historical cost less accumulated depreciation and impairment, if any, and are included in Storage properties on the Company’s consolidated balance sheets. Operating lease income for amounts received under the Company’s self-storage lease agreements is recognized on a straight-line basis which, due to the month-to-month nature of the leases, results in the recognition of income during the initial term and each subsequent monthly renewal using the then-in-place rent amount. Operating lease income is included in Rental income within the Company’s consolidated statements of operations. Variable lease income related to the Company’s self-storage lease agreements consists of administrative and late fees charged to customers. For the three and nine months ended September 30, 2019, administrative and late fees totaled $5.9 million and $17.0 million, respectively, and are included in Other property related income within the Company’s consolidated statements of operations.

CubeSmart as Lessee

The Company serves as lessee in lease agreements for land, office space, automobiles and certain equipment, which have remaining lease terms ranging from one year to 45 years. Certain of the Company’s leases contain provisions that (1) provide for one or more options to renew, with renewal options that can extend the lease term from one year to 69 years, (2) allow for early termination at certain points during the lease term and/or (3) give the Company the option to purchase the leased property. In all cases, the exercise of the lease renewal, termination and purchase options, if provided for in the lease, are at the Company’s sole discretion. Certain of the Company’s lease agreements, particularly its land leases, require rental payments that are periodically adjusted for inflation using a defined index. None of the Company’s lease agreements contain any material residual value guarantees or material restrictive covenants. As a result of the Company’s election of the package of practical expedients permitted within ASC 842, which among other things, allows for the carryforward of historical lease classification, all of the Company’s lease agreements have been classified as operating leases. Lease expense for payments related to the Company’s operating leases is recognized on a straight-line basis over the related lease term, which includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

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Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments as specified in the lease. Right-of-use assets and lease liabilities related to the Company’s operating leases are recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available surrounding the Company’s unsecured borrowing rates and implied secured spread at the lease commencement date in determining the present value of lease payments. The right-of-use asset also includes any lease payments made at or before lease commencement less any lease incentives. Upon adoption of ASC 842 on January 1, 2019, the Company had right-of-use assets and lease liabilities related to its operating leases of $55.7 million and $60.7 million, respectively. As of September 30, 2019, the Company had right-of-use assets and lease liabilities related to its operating leases of $41.7 million and $46.2 million, which are included in Other assets, net and Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets, respectively. As of September 30, 2019, the Company’s weighted average remaining lease term and weighted average discount rate related to its operating leases were 36.1 years and 4.74%, respectively.

For the three and nine months ended September 30, 2019, the Company’s lease cost consists of the following components, each of which is included in Property operating expenses within the Company’s consolidated statements of operations:

	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
	(in thousands)
Operating lease cost	$	749	$	2,558
Short-term lease cost (1)		294		907
Total lease cost	$	1,043	$	3,465

(1) Represents automobile leases that have a lease term of 12 months. The Company has made an accounting policy election not to apply the recognition requirements of ASC 842 to this asset class. The lease cost associated with these leases is recognized on a straight-line basis over the related lease term.

The following table represents the future operating lease liability maturities as of September 30, 2019 (in thousands):

2019	$	556
2020		2,222
2021		2,279
2022		2,436
2023		2,500
2024 and thereafter		93,512
Total operating lease payments		103,505
Less: Imputed interest		(57,283)
Present value of operating lease liabilities	$	46,222

During the three and nine months ended September 30, 2019, the cash paid for amounts included in the measurement of lease liabilities related to the Company’s operating leases was approximately $0.6 million and $1.9 million, respectively, which is included as an operating cash outflow within the consolidated statements of cash flows. During the three and nine months ended September 30 2019, the Company did not enter into any lease agreements set to commence in the future.

14. COMMITMENTS AND CONTINGENCIES

The Company is involved in claims from time to time, which arise in the ordinary course of business. In accordance with applicable accounting guidance, management establishes an accrued liability for claim expenses, insurance retention and litigation costs when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be exposure to loss in excess of those amounts accrued. The estimated loss, if any, is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known

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and unknown uncertainties. In the opinion of management, the Company has made adequate provisions for potential liabilities, arising from any such matters, which are included in Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets. 

On January 11, 2019, a settlement agreement was entered into for a class action alleging violation of a state specific deceptive and unfair trade practices act. During the year ended December 31, 2018, the Company recorded a $1.8 million charge related to this legal action, which is included in General and administrative on the Company’s consolidated statements of operations. On August 2, 2019, the court granted final approval of the settlement for the class action.

15. RELATED PARTY TRANSACTIONS

The Company provides management services to certain joint ventures and other related parties. Management agreements provide for fee income to the Company based on a percentage of revenues at the managed stores. Total management fees for unconsolidated real estate ventures or other entities in which the Company held an ownership interest for the three and nine months ended September 30, 2019 totaled $0.7 million and $3.1 million, respectively. Total management fees for unconsolidated real estate ventures or other entities in which the Company held an ownership interest for the three and nine months ended September 30, 2018 totaled $1.2 million and $3.2 million, respectively.

The management agreements for certain joint ventures, other related parties and third-party stores provide for the reimbursement to the Company for certain expenses incurred to manage the stores. These amounts consist of amounts due for management fees, payroll, and other store expenses. The amounts due to the Company were $11.1 million and $10.6 million as of September 30, 2019 and December 31, 2018, respectively, and are reflected in Other assets, net on the Company’s consolidated balance sheets. Additionally, as discussed in note 12, the Company had outstanding mortgage loans receivable from consolidated joint ventures of $1.8 million and $33.2 million as of September 30, 2019 and December 31, 2018, respectively, which are eliminated for consolidation purposes. The Company believes that all of these related-party receivables are fully collectible.

The HVP III, HVP IV and HHFNE operating agreements provide for acquisition, disposition and other fees payable from HVP III, HVP IV and HHFNE to the Company upon the closing of a property transaction by HVP III, HVP IV and HHFNE, or any of their subsidiaries and completion of certain measures as defined in the operating agreements. During the three and nine months ended September 30, 2019, the Company recognized $1.7 million and $1.9 million, respectively, in fees associated with property transactions. During the three and nine months ended September 30, 2018, the Company recognized $0.1 million and $0.6 million, respectively, in property transaction fees. Property transaction fees are included in Other income on the consolidated statements of operations.

16. PRO FORMA FINANCIAL INFORMATION

During the nine months ended September 30, 2019 and the year ended December 31, 2018, the Company acquired 24 stores for an aggregate purchase price of $188.7 million (see note 3) and ten stores for an aggregate purchase price of approximately $227.5 million, respectively.

The condensed consolidated pro forma financial information set forth below reflects adjustments to the Company’s historical financial data to give effect to each of the acquisitions and related financing activity (including the issuance of common shares) that occurred during 2019 and 2018 as if each had occurred as of January 1, 2018 and 2017, respectively. The unaudited pro forma information presented below does not purport to represent what the Company’s actual results of operations would have been for the periods indicated, nor does it purport to represent the Company’s future results of operations.

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The following table summarizes, on a pro forma basis, the Company’s consolidated results of operations for the nine months ended September 30, 2019 and 2018 based on the assumptions described above:

	Nine Months Ended September 30,
	2019		2018
	(in thousands, except per share data)
Pro forma revenues	$	486,100	$	466,590
Pro forma net income	$	144,747	$	114,310
Earnings per share attributable to common shareholders:
Basic - as reported	$	0.67	$	0.63
Diluted - as reported	$	0.67	$	0.63
Basic - as pro forma	$	0.76	$	0.62
Diluted - as pro forma	$	0.75	$	0.61

17. SUBSEQUENT EVENTS

On October 25, 2019, the Company acquired a self-storage property located in Texas for a purchase price of $7.3 million.

On October 11, 2019, the Operating Partnership issued $350.0 million in aggregate principal amount of unsecured senior notes due February 15, 2030, which bear interest at a rate of 3.000% per annum (the “2030 Notes”). The 2030 Notes were priced at 99.623% of the principal amount to yield 3.043% to maturity. Net proceeds from the offering of $346.4 million were used to repay all of the outstanding indebtedness under the Revolver and for working capital and other general corporate purposes.

On October 7, 2019, the Company sold a self-storage property located in Texas, which was held for sale as of September 30, 2019, for a sales price of $4.1 million.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Report. Some of the statements we make in this section are forward-looking statements within the meaning of the federal securities laws. For a discussion of forward-looking statements, see the section in this Report entitled “Forward-Looking Statements”. Certain risk factors may cause actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a complete discussion of such risk factors, see the section entitled “Risk Factors” in the Parent Company’s and Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, 2018.

Overview

We are an integrated self-storage real estate company, and as such we have in-house capabilities in the operation, design, development, leasing, management and acquisition of self-storage properties. The Parent Company’s operations are conducted solely through the Operating Partnership and its subsidiaries. The Parent Company has elected to be taxed as a REIT for U.S. federal income tax purposes. As of September 30, 2019 and December 31, 2018, we owned 519 self-storage properties totaling approximately 36.3 million rentable square feet and 493 self-storage properties totaling approximately 34.6 million rentable square feet, respectively. As of September 30, 2019, we owned stores in the District of Columbia and the following 24 states: Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah and Virginia. In addition, as of September 30, 2019, we managed 652 stores for third parties (including 89 stores containing an aggregate of approximately 6.1 million rentable square feet as part of four separate unconsolidated real estate ventures) bringing the total number of stores which we owned and/or managed to 1,171. As of September 30, 2019, we managed stores for third parties in the District of Columbia and the following 37 states: Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington and Wisconsin.

We derive revenues principally from rents received from customers who rent cubes at our self-storage properties under month-to-month leases. Therefore, our operating results depend materially on our ability to retain our existing customers and lease our available self-storage cubes to new customers while maintaining and, where possible, increasing our pricing levels. In addition, our operating results depend on the ability of our customers to make required rental payments to us. Our approach to the management and operation of our stores combines centralized marketing, revenue management and other operational support with local operations teams that provide market-level oversight and management. We believe this approach allows us to respond quickly and effectively to changes in local market conditions, and to maximize revenues by managing rental rates and occupancy levels.

We typically experience seasonal fluctuations in the occupancy levels of our stores, which are generally slightly higher during the summer months due to increased moving activity.

Our results of operations may be sensitive to changes in overall economic conditions that impact consumer spending, including discretionary spending, as well as to increased bad debts due to recessionary pressures. Adverse economic conditions affecting disposable consumer income, such as employment levels, business conditions, interest rates, tax rates, fuel and energy costs, inflation and other matters could reduce consumer spending or cause consumers to shift their spending to other products and services. A general reduction in the level of discretionary spending or shifts in consumer discretionary spending could adversely affect our growth and profitability.

We continue our focus on maximizing internal growth opportunities and selectively pursuing targeted acquisitions and developments of self-storage properties.

We have one reportable segment: we own, operate, develop, manage and acquire self-storage properties.

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Our self-storage properties are located in major metropolitan and suburban areas and have numerous customers per store. No single customer represents a significant concentration of our revenues. Our stores in Florida, New York, Texas and California provided approximately 16%, 16%, 10% and 8%, respectively, of total revenues for the nine months ended September 30, 2019.

Summary of Critical Accounting Policies and Estimates

Set forth below is a summary of the accounting policies and estimates that management believes are critical to the preparation of the unaudited consolidated financial statements included in this Report. Certain of the accounting policies used in the preparation of these consolidated financial statements are particularly important for an understanding of the financial position and results of operations presented in the historical consolidated financial statements included in this Report. A summary of significant accounting policies is also provided in the aforementioned notes to our consolidated financial statements (see note 2 to the unaudited consolidated financial statements). These policies require the application of judgment and assumptions by management and, as a result, are subject to a degree of uncertainty. Due to this uncertainty, actual results could differ materially from estimates calculated and utilized by management.

Basis of Presentation

The accompanying consolidated financial statements include all of the accounts of the Company, and its majority-owned and/or controlled subsidiaries.  The portion of these entities not owned by the Company is presented as noncontrolling interests as of and during the periods presented.  All significant intercompany accounts and transactions have been eliminated in consolidation.

When the Company obtains an economic interest in an entity, the Company evaluates the entity to determine if the entity is deemed a variable interest entity (“VIE”), and if the Company is deemed to be the primary beneficiary, in accordance with authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) on the consolidation of VIEs.  When an entity is not deemed to be a VIE, the Company considers the provisions of additional FASB guidance to determine whether a general partner, or the general partners as a group, controls a limited partnership or similar entity when the limited partners have certain rights.  The Company consolidates (i) entities that are VIEs and of which the Company is deemed to be the primary beneficiary and (ii) entities that are non-VIEs which the Company controls and in which the limited partners do not have substantive participating rights, or the ability to dissolve the entity or remove the Company without cause.

Self-Storage Properties

The Company records self-storage properties at cost less accumulated depreciation. Depreciation on the buildings and equipment is recorded on a straight-line basis over their estimated useful lives, which range from five to 39 years. Expenditures for significant renovations or improvements that extend the useful life of assets are capitalized. Repairs and maintenance costs are expensed as incurred.

When stores are acquired, the purchase price and acquisition related costs are allocated to the tangible and intangible assets acquired and liabilities assumed based on estimated fair values.  Allocations to the individual assets and liabilities are based upon their respective fair values as estimated by management.

In allocating the purchase price and acquisition related costs for an acquisition, the Company determines whether the acquisition includes intangible assets or liabilities. The Company allocates a portion of the purchase price to an intangible asset attributable to the value of in-place leases. This intangible asset is generally amortized to expense over the expected remaining term of the respective leases. Substantially all of the leases in place at acquired stores are at market rates, as the majority of the leases are month-to-month contracts. Accordingly, to date no portion of the purchase price for an acquired property has been allocated to above- or below-market lease intangibles. To date, no intangible asset has been recorded for the value of customer relationships, because the Company does not have any concentrations of significant customers and the average customer turnover is fairly frequent.

Long-lived assets classified as “held for use” are reviewed for impairment when events and circumstances such as declines in occupancy and operating results indicate that there may be an impairment. The carrying value of these long-lived assets is compared to the undiscounted future net operating cash flows, plus a terminal value, attributable to the assets to determine if the store’s basis is recoverable. If a store’s basis is not considered recoverable, an impairment loss

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is recorded to the extent the net carrying value of the asset exceeds the fair value. The impairment loss recognized equals the excess of net carrying value over the related fair value of the asset. There were no impairment losses recognized in accordance with these procedures during the nine months ended September 30, 2019 and 2018.

The Company considers long-lived assets to be “held for sale” upon satisfaction of the following criteria: (a) management commits to a plan to sell a store (or group of stores), (b) the store is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such stores, (c) an active program to locate a buyer and other actions required to complete the plan to sell the store have been initiated, (d) the sale of the store is probable and transfer of the asset is expected to be completed within one year, (e) the store is being actively marketed for sale at a price that is reasonable in relation to its current fair value and (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Typically these criteria are all met when the relevant asset is under contract, significant non-refundable deposits have been made by the potential buyer, the assets are immediately available for transfer and there are no contingencies related to the sale that may prevent the transaction from closing. However, each potential transaction is evaluated based on its separate facts and circumstances. Stores classified as held for sale are reported at the lesser of carrying value or fair value less estimated costs to sell. There was one store classified as held for sale as of September 30, 2019.

Investments in Unconsolidated Real Estate Ventures

The Company accounts for its investments in unconsolidated real estate ventures under the equity method of accounting when it is determined that the Company has the ability to exercise significant influence over the venture. Under the equity method, investments in unconsolidated real estate ventures are recorded initially at cost, as investments in real estate entities, and subsequently adjusted for equity in earnings (losses), cash contributions, less distributions and impairments. On a periodic basis, management also assesses whether there are any indicators that the carrying value of the Company’s investments in unconsolidated real estate entities may be other than temporarily impaired. An investment is impaired only if the fair value of the investment, as estimated by management, is less than the carrying value of the investment and the decline is other than temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the fair value of the investment, as estimated by management. The determination as to whether impairment exists requires significant management judgment about the fair value of its ownership interest. Fair value is determined through various valuation techniques, including but not limited to, discounted cash flow models, quoted market values and third party appraisals. There were no impairment losses related to the Company’s investments in unconsolidated real estate ventures recognized during the nine months ended September 30, 2019 and 2018.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements affecting our business, see note 2 to the consolidated financial statements.

Results of Operations

The following discussion of our results of operations should be read in conjunction with the consolidated financial statements and the accompanying notes thereto. Historical results set forth in the consolidated statements of operations reflect only the existing stores and should not be taken as indicative of future operations. We consider our same-store portfolio to consist of only those stores owned and operated on a stabilized basis at the beginning and at the end of the applicable periods presented. We consider a store to be stabilized once it has achieved an occupancy rate that we believe, based on our assessment of market-specific data, is representative of similar self-storage assets in the applicable market for a full year measured as of the most recent January 1 and has not been significantly damaged by natural disaster or undergone significant renovation. We believe that same-store results are useful to investors in evaluating our performance because they provide information relating to changes in store-level operating performance without taking into account the effects of acquisitions, developments or dispositions. As of September 30, 2019, we owned 467 same-store properties and 52 non-same-store properties. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this Report.

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Acquisition and Development Activities

The comparability of our results of operations is affected by the timing of acquisition and disposition activities during the periods reported. As of September 30, 2019 and 2018, we owned 519 and 490 self-storage properties and related assets, respectively. The following table summarizes the change in number of owned stores from January 1, 2018 through September 30, 2019:

	2019	2018
Balance - January 1	493	484
Stores acquired	1	1
Balance - March 31	494	485
Stores acquired	21	1
Stores developed	2	—
Stores combined (1)	(1)	—
Balance - June 30	516	486
Stores acquired	2	3
Stores developed	1	1
Balance - September 30	519	490
Stores acquired		5
Stores sold		(2)
Balance - December 31		493

(1) On May 24, 2019, the Company acquired a store located in Tempe, AZ for approximately $1.6 million, which is located adjacent to an existing wholly-owned store. Given their proximity to each other, the stores have been combined in our store count, as well as for operational and reporting purposes.

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Comparison of the three months ended September 30, 2019 to the three months ended September 30, 2018 (in thousands)

											Non Same-Store						Other/
	Same-Store Property Portfolio										Properties						Eliminations				Total Portfolio
							Increase/		%																		Increase/		%
	2019			2018			(Decrease)		Change		2019			2018			2019		2018		2019			2018			(Decrease)		Change
REVENUES:
Rental income	$	129,423		$	127,920		$	1,503	1.2	%	$	12,784		$	4,556		$	—	$	—	$	142,207		$	132,476		$	9,731	7.3	%
Other property related income		13,843			13,176			667	5.1	%		1,582			676			2,629		1,642		18,054			15,494			2,560	16.5	%
Property management fee income		—			—			—	0.0	%		—			—			6,286		5,400		6,286			5,400			886	16.4	%
Total revenues		143,266			141,096			2,170	1.5	%		14,366			5,232			8,915		7,042		166,547			153,370			13,177	8.6	%
OPERATING EXPENSES:
Property operating expenses		41,454			39,354			2,100	5.3	%		5,266			2,555			6,745		6,846		53,465			48,755			4,710	9.7	%
NET OPERATING INCOME		101,812			101,742			70	0.1	%		9,100			2,677			2,170		196		113,082			104,615			8,467	8.1	%
Store count		467			467							52			23							519			490
Total square footage		32,426			32,426							3,865			2,030							36,291			34,456
Period end occupancy (1)		92.5	%		92.5	%						74.0	%		57.3	%						90.6	%		90.4	%
Period average occupancy (2)		93.1	%		93.2	%
Realized annual rent per occupied sq. ft. (3)	$	17.15		$	16.96
Depreciation and amortization																						43,379			35,239			8,140	23.1	%
General and administrative																						10,011			9,780			231	2.4	%
Subtotal																						53,390			45,019			8,371	18.6	%
OTHER (EXPENSE) INCOME
Interest:
Interest expense on loans																						(18,207)			(15,191)			(3,016)	(19.9)	%
Loan procurement amortization expense																						(687)			(578)			(109)	(18.9)	%
Equity in earnings (losses) of real estate ventures																						152			(292)			444	152.1	%
Other																						1,647			(233)			1,880	(806.9)	%
Total other expense																						(17,095)			(16,294)			(801)	(4.9)	%
NET INCOME																						42,597			43,302			(705)	(1.6)	%
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
Noncontrolling interests in the Operating Partnership																						(426)			(476)			50	10.5	%
Noncontrolling interests in subsidiaries																						(17)			74			(91)	(123.0)	%
NET INCOME ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS																					$	42,154		$	42,900		$	(746)	(1.7)	%

(1) Represents occupancy at September 30^th of the respective period.

(2) Represents the weighted average occupancy for the period.

(3) Realized annual rent per occupied square foot is computed by dividing rental income by the weighted average occupied square feet for the period.

Revenues

Rental income increased from $132.5 million during the three months ended September 30, 2018 to $142.2 million during the three months ended September 30, 2019, an increase of $9.7 million, or 7.3%. The $1.5 million increase in same-store rental income was due primarily to higher rental rates. Realized annual rent per square foot on our same-store portfolio increased 1.1% as a result of higher rental rates for new and existing customers for the three months ended September 30, 2019 as compared to the three months ended September 30, 2018. The remaining increase is primarily attributable to $8.2 million of additional rental income from the stores acquired or opened in 2018 and 2019 included in our non-same store portfolio.

Other property related income increased from $15.5 million during the three months ended September 30, 2018 to $18.1 million during the three months ended September 30, 2019, an increase of $2.6 million, or 16.5%. The $0.7 million increase in same-store other property related income is mainly attributable to increased customer insurance participation and convenience fee payments. The remainder of the increase is attributable to $0.9 million of additional other property related income derived from the stores acquired or opened in 2018 and 2019 included in our non-same store portfolio and $1.0 million resulting primarily from increased customer insurance participation at our managed stores.

Property management fee income increased from $5.4 million during the three months ended September 30, 2018 to $6.3 million during the three months ended September 30, 2019, an increase of $0.9 million, or 16.4%. This increase was attributable to an increase in management fees related to the third-party management business resulting from more stores under management (652 stores as of September 30, 2019 compared to 582 stores as of September 30, 2018) and higher revenue at these managed stores.

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Operating Expenses

Property operating expenses increased from $48.8 million during the three months ended September 30, 2018 to $53.5 million during the three months ended September 30, 2019, an increase of $4.7 million, or 9.7%. The $2.1 million increase in property operating expenses on the same-store portfolio was primarily due to higher property taxes. The remainder of the increase is attributable to $2.7 million of increased expenses associated with newly acquired or developed stores.

Depreciation and amortization increased from $35.2 million during the three months ended September 30, 2018 to $43.4 million during the three months ended September 30, 2019, an increase of $8.1 million, or 23.1%. This increase is primarily attributable to depreciation and amortization expense related to stores acquired and developed during 2018 and 2019.

Other (Expense) Income

Interest expense increased from $15.2 million during the three months ended September 30, 2018 to $18.2 million during the three months ended September 30, 2019, an increase of $3.0 million, or 19.9%. The increase is attributable to a higher amount of outstanding debt during the three months ended September 30, 2019 as compared to the three months ended September 30, 2018, and higher interest rates during the 2019 period. The average outstanding debt balance increased $195.9 million to $1,852.4 million during the three months ended September 30, 2019 as compared to $1,656.5 million during the three months ended September 30, 2018 as the result of borrowings to fund a portion of the Company’s acquisition activity. The weighted average effective interest rate on our outstanding debt increased from 3.91% for the three months ended September 30, 2018 to 4.05% for the three months ended September 30, 2019.

Other income increased $1.9 million from the three months ended September 30, 2018 to the three months ended September 30, 2019, primarily due to fees earned in connection with the HVP III and HVP IV property transactions during 2019.

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Comparison of the nine months ended September 30, 2019 to the nine months ended September 30, 2018 (in thousands)

											Non Same-Store						Other/
	Same-Store Property Portfolio										Properties						Eliminations				Total Portfolio
							Increase/		%																		Increase/		%
	2019			2018			(Decrease)		Change		2019			2018			2019		2018		2019			2018			(Decrease)		Change
REVENUES:
Rental income	$	380,257		$	373,403		$	6,854	1.8	%	$	29,569		$	11,077		$	—	$	—	$	409,826		$	384,480		$	25,346	6.6	%
Other property related income		40,296			38,716			1,580	4.1	%		3,528			1,685			6,827		4,387		50,651			44,788			5,863	13.1	%
Property management fee income		—			—			—	0.0	%		—			—			17,932		14,794		17,932			14,794			3,138	21.2	%
Total revenues		420,553			412,119			8,434	2.0	%		33,097			12,762			24,759		19,181		478,409			444,062			34,347	7.7	%
OPERATING EXPENSES:
Property operating expenses		123,654			119,150			4,504	3.8	%		13,110			6,493			18,246		21,394		155,010			147,037			7,973	5.4	%
NET OPERATING INCOME (LOSS):		296,899			292,969			3,930	1.3	%		19,987			6,269			6,513		(2,213)		323,399			297,025			26,374	8.9	%
Store count		467			467							52			23							519			490
Total square footage		32,426			32,426							3,865			2,030							36,291			34,456
Period end occupancy (1)		92.5	%		92.5	%						74.0	%		57.3	%						90.6	%		90.4	%
Period average occupancy (2)		92.6	%		92.7	%
Realized annual rent per occupied sq. ft. (3)	$	16.89		$	16.57
Depreciation and amortization																						122,484			105,251			17,233	16.4	%
General and administrative																						28,958			26,865			2,093	7.8	%
Subtotal																						151,442			132,116			19,326	14.6	%
OTHER (EXPENSE) INCOME
Interest:
Interest expense on loans																						(53,858)			(45,797)			(8,061)	(17.6)	%
Loan procurement amortization expense																						(2,082)			(1,735)			(347)	(20.0)	%
Equity in earnings (losses) of real estate ventures																						10,940			(785)			11,725	1,493.6	%
Other																						1,304			260			1,044	401.5	%
Total other expense																						(43,696)			(48,057)			4,361	9.1	%
NET INCOME																						128,261			116,852			11,409	9.8	%
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
Noncontrolling interests in the Operating Partnership																						(1,283)			(1,285)			2	0.2	%
Noncontrolling interests in subsidiaries																						94			166			(72)	(43.4)	%
NET INCOME ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS																					$	127,072		$	115,733		$	11,339	9.8	%

(1) Represents occupancy at September 30^th of the respective period.

(2) Represents the weighted average occupancy for the period.

(3) Realized annual rent per occupied square foot is computed by dividing rental income by the weighted average occupied square feet for the period.

Revenues

Rental income increased from $384.5 million during the nine months ended September 30, 2018 to $409.8 million during the nine months ended September 30, 2019, an increase of $25.3 million, or 6.6%. The $6.9 million increase in same-store rental income was due primarily to higher rental rates. Realized annual rent per square foot on our same-store portfolio increased 1.9% as a result of higher rental rates for new and existing customers for the nine months ended September 30, 2019 as compared to the nine months ended September 30, 2018. The remaining increase is primarily attributable to $18.5 million of additional rental income from the stores acquired or opened in 2018 and 2019 included in our non-same store portfolio.

Other property related income increased from $44.8 million during the nine months ended September 30, 2018 to $50.7 million during the nine months ended September 30, 2019, an increase of $5.9 million, or 13.1%. The $1.6 million increase in same-store other property related income is mainly attributable to increased customer insurance participation. The remainder of the increase is attributable to $1.8 million of additional other property related income derived from the stores acquired or opened in 2018 and 2019 included in our non-same store portfolio and $2.4 million resulting primarily from increased customer insurance participation at our managed stores.

Property management fee income increased from $14.8 million during the nine months ended September 30, 2018 to $17.9 million during the nine months ended September 30, 2019, an increase of $3.1 million, or 21.2%. This increase was attributable to an increase in management fees related to the third-party management business resulting from more stores under management (652 stores as of September 30, 2019 compared to 582 stores as of September 30, 2018) and higher revenue at these managed stores.

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Operating Expenses

Property operating expenses increased from $147.0 million during the nine months ended September 30, 2018 to $155.0 million during the nine months ended September 30, 2019, an increase of $8.0 million, or 5.4%. This increase was primarily attributable to a $4.5 million increase in property operating expenses on the same-store portfolio primarily due to higher property taxes and payroll expenses. The remainder of the increase is attributable to $6.6 million of increased expenses associated with newly acquired or developed stores.

Depreciation and amortization increased from $105.3 million during the nine months ended September 30, 2018 to $122.5 million during the nine months ended September 30, 2019, an increase of $17.2 million, or 16.4%. This increase is primarily attributable to depreciation and amortization expense related to stores acquired and developed during 2018 and 2019.

General and administrative expenses increased from $26.9 million during the nine months ended September 30, 2018 to $29.0 million during the nine months ended September 30, 2019, an increase of $2.1 million, or 7.8%. The change is primarily attributable to increased payroll expenses resulting from additional employee headcount to support our growth.

Other (Expense) Income

Interest expense increased from $45.8 million during the nine months ended September 30, 2018 to $53.9 million during the nine months ended September 30, 2019, an increase of $8.1 million, or 17.6%. The increase is attributable to a higher amount of outstanding debt during the nine months ended September 30, 2019 as compared to the nine months ended September 30, 2018, and higher interest rates during the 2019 period. The average outstanding debt balance increased $151.3 million to $1,828.4 million during the nine months ended September 30, 2019 as compared to $1,677.1 million during the nine months ended September 30, 2018 as the result of borrowings to fund a portion of the Company’s acquisition activity. The weighted average effective interest rate on our outstanding debt increased from 3.89% for the nine months ended September 30, 2018 to 4.09% for the nine months ended September 30, 2019.

Equity in earnings (losses) of real estate ventures increased $11.7 million from the nine months ended September 30, 2018 to the nine months ended September 30, 2019. The change is mainly driven by our share of the gains attributable to HVP III, a real estate venture in which we previously owned a 10% interest. The gains were recorded in connection with HVP III’s sale of 50 properties during the nine months ended September 30, 2019.

Other income increased $1.0 million from the nine months ended September 30, 2018 to the nine months ended September 30, 2019, primarily due to fees earned in connection with the HVP III and HVP IV property transactions during 2019.

Cash Flows

Comparison of the nine months ended September 30, 2019 to the nine months ended September 30, 2018

A comparison of cash flow from operating, investing and financing activities for the nine months ended September 30, 2019 and 2018 is as follows:

	Nine Months Ended September 30,
Net cash provided by (used in):	2019		2018		Change
	(in thousands)
Operating activities	$	259,852	$	234,562	$	25,290
Investing activities	$	(305,274)	$	(185,023)	$	(120,251)
Financing activities	$	51,788	$	(52,218)	$	104,006

Cash provided by operating activities for the nine months ended September 30, 2019 and 2018 was $259.9 million and $234.6 million, respectively, reflecting an increase of $25.3 million. Our increased cash flow from operating activities was primarily attributable to stores acquired and developed during 2018 and 2019, as well as increased net operating income levels on the same-store portfolio in the 2019 period as compared to the 2018 period.

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Cash used in investing activities increased from $185.0 million for the nine months ended September 30, 2018 to $305.3 million for the nine months ended September 30, 2019, reflecting an increase of $120.3 million. The change was primarily driven by an increase in cash used for acquisitions of storage properties and the remaining interest in HVP III, a previously unconsolidated real estate venture. Including the HVP III membership interest acquisition, cash used during the nine months ended September 30, 2019 related to the acquisition of 24 stores for an aggregate net purchase price of $180.4 million, while cash used during the nine months ended September 30, 2018 related to the acquisition of five stores for an aggregate net purchase price of $90.8 million, inclusive of $7.2 million of assumed debt and $4.8 million of OP units issued. Additionally, there was a $24.5 million increase in development costs from the nine months ended September 30, 2018 compared to the nine months ended September 30, 2019 resulting from the payment of put liabilities associated with three previously consolidated development joint ventures during the 2019 period.

Cash provided by financing activities was $51.8 million during the nine months ended September 30, 2019 compared to $52.2 million of cash used in financing activities during the nine months ended September 30, 2018, reflecting a change of $104.0 million. This change is primarily the result of $347.7 million of net proceeds from our issuance of unsecured senior notes in January 2019 and an increase of $88.0 million in proceeds received from the issuance of common shares during the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018. These cash inflows are offset by a $200.0 million cash payment made to repay our unsecured term loan in January 2019 and a $74.0 million net increase in revolving credit facility payments during the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018. The change is also impacted by the combined $35.4 million cash outflow for the acquisition of the noncontrolling members’ interests in four separate consolidated joint ventures during the nine months ended September 30, 2019 with no comparable cash outflow during the 2018 period. Additionally, cash distributions paid to common shareholders and noncontrolling interests in the Operating Partnership increased $16.5 million from the nine months ended September 30, 2018 to the nine months ended September 30, 2019 resulting from the increase in the common dividend per share and number of shares outstanding.

Liquidity and Capital Resources

Liquidity Overview

Our cash flow from operations has historically been one of our primary sources of liquidity used to fund debt service, distributions and capital expenditures. We derive substantially all of our revenue from customers who lease space at our stores and fees earned from managing stores. Therefore, our ability to generate cash from operations is dependent on the rents that we are able to charge and collect from our customers. We believe that the properties in which we invest, self-storage properties, are less sensitive than other real estate product types to near-term economic downturns. However, prolonged economic downturns will adversely affect our cash flows from operations.

In order to qualify as a REIT for federal income tax purposes, the Parent Company is required to distribute at least 90% of REIT taxable income, excluding capital gains, to its shareholders on an annual basis or pay federal income tax. The nature of our business, coupled with the requirement that we distribute a substantial portion of our income on an annual basis, will cause us to have substantial liquidity needs over both the short term and the long term.

Our short-term liquidity needs consist primarily of funds necessary to pay operating expenses associated with our stores, refinancing of certain mortgage indebtedness, interest expense and scheduled principal payments on debt, expected distributions to limited partners and shareholders, capital expenditures and the development of new stores. These funding requirements will vary from year to year, in some cases significantly. For the remainder of the 2019 fiscal year, we expect recurring capital expenditures to be approximately $4.0 million to $8.0 million, planned capital improvements and store upgrades to be approximately $1.0 million to $3.0 million and costs associated with the development of new stores to be approximately $9.0 million to $19.0 million.  Our currently scheduled principal payments on our outstanding debt are approximately $0.6 million for the remainder of 2019.

Our most restrictive financial covenants limit the amount of additional leverage we can add; however, we believe cash flows from operations, access to equity financing, including through our “at-the-market” equity program, and available borrowings under our Credit Facility provide adequate sources of liquidity to enable us to execute our current business plan and remain in compliance with our covenants.

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Our liquidity needs beyond 2019 consist primarily of contractual obligations which include repayments of indebtedness at maturity, as well as potential discretionary expenditures such as (i) non-recurring capital expenditures; (ii) redevelopment of operating stores; (iii) acquisitions of additional stores; and (iv) development of new stores. We will have to satisfy the portion of our needs not covered by cash flow from operations through additional borrowings, including borrowings under our Amended and Restated Credit Facility, sales of common or preferred shares of the Parent Company and common or preferred units of the Operating Partnership and/or cash generated through store dispositions and joint venture transactions.

We believe that, as a publicly traded REIT, we will have access to multiple sources of capital to fund our long-term liquidity requirements, including the incurrence of additional debt and the issuance of additional equity. However, we cannot provide any assurance that this will be the case. Our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders. In addition, dislocation in the United States debt markets may significantly reduce the availability and increase the cost of long-term debt capital, including conventional mortgage financing and commercial mortgage-backed securities financing. There can be no assurance that such capital will be readily available in the future. Our ability to access the equity capital markets will be dependent on a number of factors as well, including general market conditions for REITs and market perceptions about us.

As of September 30, 2019, we had approximately $7.3 million in available cash and cash equivalents. In addition, we had approximately $511.3 million of availability for borrowings under our Amended and Restated Credit Facility.

Unsecured Senior Notes

Our unsecured senior notes are summarized as follows (collectively referred to as the “Senior Notes”):

	September 30,		December 31,		Effective		Issuance	Maturity
Unsecured Senior Notes	2019		2018		Interest Rate		Date	Date
	(in thousands)
$250M 4.800% Guaranteed Notes due 2022	$	250,000	$	250,000	4.82	%	Jun-12	Jul-22
$300M 4.375% Guaranteed Notes due 2023 (1)		300,000		300,000	4.33	%	Various (1)	Dec-23
$300M 4.000% Guaranteed Notes due 2025 (2)		300,000		300,000	3.99	%	Various (2)	Nov-25
$300M 3.125% Guaranteed Notes due 2026		300,000		300,000	3.18	%	Aug-16	Sep-26
$350M 4.375% Guaranteed Notes due 2029		350,000		—	4.46	%	Jan-19	Feb-29
Principal balance outstanding		1,500,000		1,150,000
Less: Discount on issuance of unsecured senior notes, net		(2,635)		(568)
Less: Loan procurement costs, net		(7,882)		(5,908)
Total unsecured senior notes, net	$	1,489,483	$	1,143,524

(1) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.375% senior notes due 2023, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.375% senior notes due December 15, 2023 issued on December 17, 2013. The $50.0 million and $250.0 million tranches were priced at 105.040% and 98.995%, respectively, of the principal amount to yield 3.495% and 4.501%, respectively, to maturity. The combined weighted average effective interest rate of the 2023 notes is 4.330%.

(2) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.000% senior notes due 2025, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.000% senior notes due November 15, 2025 issued on October 26, 2015. The $50.0 million and $250.0 million tranches were priced at 101.343% and 99.735%, respectively, of the principal amount to yield 3.811% and 4.032%, respectively, to maturity. The combined weighted average effective interest rate of the 2025 notes is 3.994%.

The indenture under which the Senior Notes were issued restricts the ability of the Operating Partnership and its subsidiaries to incur debt unless the Operating Partnership and its consolidated subsidiaries comply with a leverage ratio not to exceed 60% and an interest coverage ratio of more than 1.5:1.0 after giving effect to the incurrence of the debt.

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The indenture also restricts the ability of the Operating Partnership and its subsidiaries to incur secured debt unless the Operating Partnership and its consolidated subsidiaries comply with a secured debt leverage ratio not to exceed 40% after giving effect to the incurrence of the debt. The indenture also contains other financial and customary covenants, including a covenant not to own unencumbered assets with a value less than 150% of the unsecured indebtedness of the Operating Partnership and its consolidated subsidiaries. As of September 30, 2019, the Operating Partnership was in compliance with all of the financial covenants under the Senior Notes.

Revolving Credit Facility and Unsecured Term Loans

On December 9, 2011, we entered into a credit agreement (the “Credit Facility”), which was subsequently amended on April 5, 2012, June 18, 2013 and April 22, 2015 to provide for, among other things, a $200.0 million unsecured term loan with a maturity date of January 31, 2019 and a $500.0 million unsecured revolving facility with a maturity date of April 22, 2020. On June 19, 2019, we amended and restated, in its entirety, the Credit Facility (the “Amended and Restated Credit Facility”) which, subsequent to the amendment and restatement, is comprised of a $750.0 million unsecured revolving facility (the “Revolver”) maturing on June 19, 2024. Under the Amended and Restated Credit Facility, pricing on the Revolver is dependent upon our unsecured debt credit ratings. At the Company’s current Baa2/BBB level, amounts drawn under the Revolver are priced at 1.10% over LIBOR, inclusive of a facility fee of 0.15%. We incurred costs of $3.9 million in 2019 in connection with amending and restating the Credit Facility and capitalized such costs as a component of Loan procurement costs, net of amortization on the consolidated balance sheets.

As of September 30, 2019, borrowings under the Revolver had an effective weighted average interest rate of 3.12%. Additionally, as of September 30, 2019, $511.3 million was available for borrowing under the Revolver. The available balance under the Revolver is reduced by an outstanding letter of credit of $0.7 million.

On June 20, 2011, we entered into an unsecured term loan agreement (the “Term Loan Facility”), which was subsequently amended on June 18, 2013 and August 5, 2014, consisting of, among other things, a $100.0 million unsecured term loan with a seven-year maturity that was repaid on June 19, 2019.

Our unsecured term loans under the Credit Facility and Term Loan Facility are summarized below:

	Carrying Value as of:				Effective Interest
	September 30,		December 31,		Rate as of		Maturity
Unsecured Term Loans	2019		2018		September 30, 2019		Date
	(in thousands)
Credit Facility
Unsecured term loan (1)	$	—	$	200,000	—	%	Jan-19
Term Loan Facility
Unsecured term loan (2)		—		100,000	—	%	Jan-20
Principal balance outstanding		—		300,000
Less: Loan procurement costs, net		—		(201)
Total unsecured term loans, net	$	—	$	299,799

(1) On January 31, 2019, we used a portion of the net proceeds from the issuance of $350.0 million of 4.375% Senior Notes due 2029 (the “2029 Notes”) to repay all of the outstanding indebtedness under the unsecured term loan portion of the Credit Facility. 

(2) On June 19, 2019, we used an initial advance at closing of the Amended and Restated Credit Facility to repay all of the outstanding indebtedness under the unsecured term loan portion of the Term Loan Facility that was scheduled to mature in January 2020. Unamortized loan procurement costs of $0.1 million were written off in conjunction with the repayment.

Under the Amended and Restated Credit Facility, our ability to borrow under the Revolver is subject to ongoing compliance with certain financial covenants which include, among other things, (1) a maximum total indebtedness to total asset value of 60.0%, and (2) a minimum fixed charge coverage ratio of 1.5:1.0. As of September 30, 2019, we were in compliance with all of our financial covenants.

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At-the-Market Equity Program

We maintain an “at-the-market” equity program that enables us to sell up to 50.0 million common shares through sales agents pursuant to equity distribution agreements (the “Equity Distribution Agreements”).

During the nine months ended September 30, 2019, we sold a total of 5.9 million common shares under the Equity Distribution Agreements at an average sales price of $33.64 per share, resulting in gross proceeds of $198.4 million under the program. We incurred $2.1 million of offering costs in conjunction with the sales during the nine months ended September 30, 2019. We used proceeds from the sales conducted during the nine months ended September 30, 2019 to fund acquisitions of self-storage properties and for general corporate purposes. As of September 30, 2019, 4.6 million common shares remained available for issuance under the Equity Distribution Agreements.

Recent Developments

On October 25, 2019, we acquired a self-storage property located in Texas for a purchase price of $7.3 million.

On October 11, 2019, we issued $350.0 million in aggregate principal amount of unsecured senior notes due February 15, 2030, which bear interest at a rate of 3.000% per annum (the “2030 Notes”). The 2030 Notes were priced at 99.623% of the principal amount to yield 3.043% to maturity. Net proceeds from the offering of $346.4 million were used to repay all of the outstanding indebtedness under the Revolver and for working capital and other general corporate purposes.

On October 7, 2019, we sold a self-storage property located in Texas, which was held for sale as of September 30, 2019, for a sales price of $4.1 million.

Non-GAAP Financial Measures

NOI

We define net operating income, which we refer to as “NOI”, as total continuing revenues less continuing property operating expenses.  NOI also can be calculated by adding back to net income (loss): interest expense on loans, loan procurement amortization expense, loan procurement amortization expense - early repayment of debt, acquisition related costs, equity in losses of real estate ventures, other expense, depreciation and amortization expense, general and administrative expense, and deducting from net income (loss): gains from sale of real estate, net, other income, gains from remeasurement of investments in real estate ventures and interest income.  NOI is not a measure of performance calculated in accordance with GAAP.

We use NOI as a measure of operating performance at each of our stores, and for all of our stores in the aggregate. NOI should not be considered as a substitute for operating income, net income, cash flows provided by operating, investing and financing activities, or other income statement or cash flow statement data prepared in accordance with GAAP.

We believe NOI is useful to investors in evaluating our operating performance because:

● it is one of the primary measures used by our management and our store managers to evaluate the economic productivity of our stores, including our ability to lease our stores, increase pricing and occupancy and control our property operating expenses;

● it is widely used in the real estate industry and the self-storage industry to measure the performance and value of real estate assets without regard to various items included in net income that do not relate to or are not indicative of operating performance, such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets; and

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● it helps our investors to meaningfully compare the results of our operating performance from period to period by removing the impact of our capital structure (primarily interest expense on our outstanding indebtedness) and depreciation of our basis in our assets from our operating results.

There are material limitations to using a measure such as NOI, including the difficulty associated with comparing results among more than one company and the inability to analyze certain significant items, including depreciation and interest expense, that directly affect our net income.  We compensate for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with our analysis of net income.  NOI should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues, operating income and net income.

FFO

Funds from operations (“FFO”) is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance.  The April 2002 National Policy Bulletin of the National Association of Real Estate Investment Trusts (the “White Paper”), as amended and restated, defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of real estate and related impairment charges, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.

Management uses FFO as a key performance indicator in evaluating the operations of our stores. Given the nature of our business as a real estate owner and operator, we consider FFO a key measure of our operating performance that is not specifically defined by accounting principles generally accepted in the United States.  We believe that FFO is useful to management and investors as a starting point in measuring our operational performance because FFO excludes various items included in net income that do not relate to or are not indicative of our operating performance such as gains (or losses) from sales of real estate, gains from remeasurement of investments in real estate ventures, impairments of depreciable assets, and depreciation, which can make periodic and peer analyses of operating performance more difficult. Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies.

FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance. FFO does not represent cash generated from operating activities determined in accordance with GAAP and is not a measure of liquidity or an indicator of our ability to make cash distributions. We believe that to further understand our performance, FFO should be compared with our reported net income and considered in addition to cash flows computed in accordance with GAAP, as presented in our Consolidated Financial Statements.

FFO, as adjusted

FFO, as adjusted represents FFO as defined above, excluding the effects of acquisition related costs, gains or losses from early extinguishment of debt, and non-recurring items, which we believe are not indicative of the Company’s operating results.  We present FFO, as adjusted because we believe it is a helpful measure in understanding our results of operations insofar as we believe that the items noted above that are included in FFO, but excluded from FFO, as adjusted are not indicative of our ongoing operating results.  We also believe that the analyst community considers our FFO, as adjusted (or similar measures using different terminology) when evaluating us.  Because other REITs or real estate companies may not compute FFO, as adjusted in the same manner as we do, and may use different terminology, our computation of FFO, as adjusted may not be comparable to FFO, as adjusted reported by other REITs or real estate companies.

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The following table presents a reconciliation of net income attributable to the Company’s common shareholders to FFO attributable to common shareholders and OP unitholders for the three and nine months ended September 30, 2019 and 2018 (in thousands).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net income attributable to the Company’s common shareholders	$	42,154	$	42,900	$	127,072	$	115,733
Add (deduct):
Real estate depreciation and amortization:
Real property		42,599		34,537		120,228		103,142
Company’s share of unconsolidated real estate ventures		1,612		2,752		5,368		7,763
Gains from sale of real estate, net (1)		—		—		(10,667)		—
Noncontrolling interests in the Operating Partnership		426		476		1,283		1,285
FFO attributable to common shareholders and OP unitholders	$	86,791	$	80,665	$	243,284	$	227,923
Add:
Loan procurement amortization expense - early repayment of debt		—		—		141		—
FFO, as adjusted, attributable to common shareholders and OP unitholders	$	86,791	$	80,665	$	243,425	$	227,923
Weighted average diluted shares outstanding		193,817		186,916		190,774		184,829
Weighted average diluted units outstanding		1,866		2,038		1,886		2,017
Weighted average diluted shares and units outstanding		195,683		188,954		192,660		186,846

(1) The nine months ended September 30, 2019 include $10.7 million of gains from sale of real estate, net that are included in the Company’s share of equity in earnings of real estate ventures.

Off-Balance Sheet Arrangements

We do not have off-balance sheet arrangements, financings or other relationships with other unconsolidated entities (other than our co-investment partnerships) or other persons, also known as variable interest entities not previously discussed.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our future income, cash flows and fair values relevant to financial instruments depend upon prevailing market interest rates.

Market Risk

Our investment policy relating to cash and cash equivalents is to preserve principal and liquidity while maximizing the return through investment of available funds.

Effect of Changes in Interest Rates on our Outstanding Debt

Our interest rate risk objectives are to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, we manage our exposure to fluctuations in market interest rates for a portion of our borrowings through the use of derivative financial instruments such as interest rate

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swaps or caps to mitigate our interest rate risk on a related financial instrument or to effectively lock the interest rate on a portion of our variable rate debt.  The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market rates.  The range of changes chosen reflects our view of changes which are reasonably possible over a one-year period.  Market values are the present value of projected future cash flows based on the market rates chosen.

As of September 30, 2019, our consolidated debt consisted of $1,595.1 million of outstanding mortgages and unsecured senior notes that are subject to fixed rates.  Additionally, as of September 30, 2019, there were $238.0 million of outstanding credit facility borrowings subject to floating rates.  Changes in market interest rates have different impacts on the fixed and variable rate portions of our debt portfolio.  A change in market interest rates on the fixed portion of the debt portfolio impacts the net financial instrument position, but has no impact on interest incurred or cash flows.  A change in market interest rates on the variable portion of the debt portfolio impacts the interest incurred and cash flows, but does not impact the net financial instrument position.

If market interest rates on our variable rate debt increase by 100 basis points, the increase in annual interest expense on our variable rate debt would decrease future earnings and cash flows by approximately $2.4 million a year. If market interest rates on our variable rate debt decrease by 100 basis points, the decrease in interest expense on our variable rate debt would increase future earnings and cash flows by approximately $2.4 million a year.

If market rates of interest increase by 100 basis points, the fair value of our outstanding fixed-rate mortgage debt and unsecured senior notes would decrease by approximately $84.3 million.  If market rates of interest decrease by 100 basis points, the fair value of our outstanding fixed-rate mortgage debt and unsecured senior notes would increase by approximately $93.6 million.

ITEM 4. CONTROLS AND PROCEDURES

Controls and Procedures (Parent Company)

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Report, the Parent Company carried out an evaluation, under the supervision and with the participation of its management, including its chief executive officer and chief financial officer, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act).

Based on that evaluation, the Parent Company’s chief executive officer and chief financial officer have concluded that the Parent Company’s disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information required to be disclosed by the Parent Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Parent Company’s management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in the Parent Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

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Controls and Procedures (Operating Partnership)

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Report, the Operating Partnership carried out an evaluation, under the supervision and with the participation of its management, including the Operating Partnership’s chief executive officer and chief financial officer, of the effectiveness of the design and operation of the Operating Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act).

Based on that evaluation, the Operating Partnership’s chief executive officer and chief financial officer have concluded that the Operating Partnership’s disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information required to be disclosed by the Operating Partnership in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Operating Partnership’s management, including the Operating Partnership’s chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in the Operating Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

To our knowledge and except as otherwise disclosed in this quarterly report, no legal proceedings are pending against us, other than routine actions and administrative proceedings, and other actions not deemed material, and which, in the aggregate, are not expected to have a material adverse effect on our financial condition, results of operations, or cash flows.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Repurchases of Parent Company Common Shares

The following table provides information about repurchases of the Parent Company’s common shares during the three months ended September 30, 2019:

	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1 - July 31	322	$	33.23	N/A	3,000,000
August 1 - August 31	166	$	35.21	N/A	3,000,000
September 1 - September 30	230	$	35.11	N/A	3,000,000
Total	718	$	34.29	N/A	3,000,000

(1) Represents common shares withheld by the Parent Company upon the vesting of restricted shares to cover employee tax obligations.

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On September 27, 2007, the Parent Company announced that the Board of Trustees approved a share repurchase program for up to 3.0 million of the Parent Company’s outstanding common shares. Unless terminated earlier by resolution of the Board of Trustees, the program will expire when the number of authorized shares has been repurchased. The Parent Company has made no repurchases under this program to date.

ITEM 6. EXHIBITS

Exhibit No.	Exhibit Description
4.1	Form of $350.0 million aggregate principal amount of the Operating Partnership’s 3.000% senior notes due February 15, 2030, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on October 11, 2019.
4.2	Form of CubeSmart Guarantee, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on October 11, 2019.
4.3	Seventh Supplemental Indenture, dated of as October 11, 2019, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on October 11, 2019.
10.1	First Amendment to the Amended and Restated Equity Distribution Agreement, dated July 29, 2019, by and among CubeSmart, CubeSmart, L.P. and Wells Fargo Securities, LLC. (filed herewith)
10.2	First Amendment to the Amended and Restated Equity Distribution Agreement, dated July 29, 2019, by and among CubeSmart, CubeSmart, L.P. and Barclays Capital Inc. (filed herewith)
10.3	First Amendment to the Amended and Restated Equity Distribution Agreement, dated July 29, 2019, by and among CubeSmart, CubeSmart, L.P. and BofA Securities, Inc. (filed herewith)
10.4	First Amendment to the Amended and Restated Equity Distribution Agreement, dated July 29, 2019, by and among CubeSmart, CubeSmart, L.P. and Jefferies LLC. (filed herewith)
10.5	First Amendment to the Amended and Restated Equity Distribution Agreement, dated July 29, 2019, by and among CubeSmart, CubeSmart, L.P. and RBC Capital Markets, LLC. (filed herewith)
31.1	Certification of Chief Executive Officer of CubeSmart as required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
31.2	Certification of Chief Financial Officer of CubeSmart as required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
31.3	Certification of Chief Executive Officer of CubeSmart, L.P., as required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
31.4	Certification of Chief Financial Officer of CubeSmart, L.P., as required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
32.1	Certification of Chief Executive Officer and Chief Financial Officer of CubeSmart pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)

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32.2	Certification of Chief Executive Officer and Chief Financial Officer of CubeSmart, L.P., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)
101	The following CubeSmart and CubeSmart, L.P. financial information for the nine months ended September 30, 2019, formatted in iXBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Cash Flows, and (iv) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text. (filed herewith)
104	Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

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SIGNATURES OF REGISTRANT

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CUBESMART
	(Registrant)
Date: October 25, 2019	By:	/s/ Christopher P. Marr
		Christopher P. Marr, Chief Executive Officer
		(Principal Executive Officer)
Date: October 25, 2019	By:	/s/ Timothy M. Martin
		Timothy M. Martin, Chief Financial Officer
		(Principal Financial Officer)

SIGNATURES OF REGISTRANT

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CUBESMART, L.P.
	(Registrant)
Date: October 25, 2019	By:	/s/ Christopher P. Marr
		Christopher P. Marr, Chief Executive Officer
		(Principal Executive Officer)
Date: October 25, 2019	By:	/s/ Timothy M. Martin
		Timothy M. Martin, Chief Financial Officer
		(Principal Financial Officer)

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EX-10.1

Exhibit 10.1

CUBESMART

AMENDMENT NO. 1 TO THE AMENDED AND RESTATED

EQUITY DISTRIBUTION AGREEMENT

July 29, 2019

Wells Fargo Securities, LLC

375 Park Avenue

New York, New York 10152

Ladies and Gentlemen:

Reference is made to the Amended and Restated Equity Distribution Agreement (the “Agreement”), dated as of July 27, 2018, by and among CubeSmart, a Maryland real estate investment trust (the “Company”), and CubeSmart, L.P., a Delaware limited partnership (the “Operating Partnership” and together with the Company, the “Transaction Entities”), on the one hand, and Wells Fargo Securities, LLC (the “Manager”), on the other hand. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.

In connection with the foregoing, the Transaction Entities and the Manager wish to amend the Agreement through this Amendment No. 1 to Amended and Restated Equity Distribution Agreement (this “Amendment”) to make certain changes to the Agreement with effect on and after the date hereof (the “Effective Date”).   

SECTION 1. The following language will be added as a new Section 20 to the Agreement:

“20.  Recognition of the U.S. Special Resolution Regimes.  

(a) In the event that the Manager is a Covered Entity and becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from the Manager of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

(b) In the event that the Manager is a Covered Entity and becomes, or a BHC Act Affiliate of the Manager becomes, subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against the Manager are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

As used in this Section 20, “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b), (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b) or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

SECTION 2. No Other Amendments; References to Agreements.  Except as set forth in this Amendment, all other terms and provisions of the Agreement shall continue in full force and effect.  All references to the Agreement in the Agreement or in any other document executed or delivered in connection therewith shall, from the date hereof,

be deemed a reference to the Agreement as amended by this Amendment.   Notwithstanding anything to the contrary contained herein, this Amendment shall not have any effect on offerings or sales of the Shares prior to the Effective Date or on the terms of the Agreement and the rights and obligations of the parties thereunder, insofar as they relate to such offerings or sales, including, without limitation, the representations, warranties and agreements (including the indemnification and contribution provisions) contained in the Agreement.

SECTION 3. Applicable Law.  This Amendment will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.

SECTION 4. Effect of Headings.  The Section headings herein are for convenience only and shall not affect the construction hereof.

SECTION 5. Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery of an executed Amendment by one party to the other may be made by facsimile or e-mail transmission.

[Signature Page Follows]

2

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement by and among the Transaction Entities and the Manager in accordance with its terms.

Very truly yours,
CUBESMART
By:	/s/ Timothy M. Martin
Name:	Timothy M. Martin
Title:	Chief Financial Officer
CUBESMART, L.P.
By:	/s/ Timothy M. Martin
Name:	Timothy M. Martin
Title:	Chief Financial Officer

CONFIRMED AND ACCEPTED, as of the date first above written:
WELLS FARGO SECURITIES, LLC
By:	/s/ Elizabeth Alverez
Name:	Elizabeth Alverez
Title:	Managing Director

3

EX-10.2

Exhibit 10.2

CUBESMART

AMENDMENT NO. 1 TO THE AMENDED AND RESTATED

EQUITY DISTRIBUTION AGREEMENT

July 29, 2019

Barclays Capital Inc.

745 Seventh Avenue

New York, New York 10019

Ladies and Gentlemen:

Reference is made to the Amended and Restated Equity Distribution Agreement (the “Agreement”), dated as of July 27, 2018, by and among CubeSmart, a Maryland real estate investment trust (the “Company”), and CubeSmart, L.P., a Delaware limited partnership (the “Operating Partnership” and together with the Company, the “Transaction Entities”), on the one hand, and Barclays Capital Inc. (the “Manager”), on the other hand. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.

In connection with the foregoing, the Transaction Entities and the Manager wish to amend the Agreement through this Amendment No. 1 to Amended and Restated Equity Distribution Agreement (this “Amendment”) to make certain changes to the Agreement with effect on and after the date hereof (the “Effective Date”).   

SECTION 1. The following language will be added as a new Section 20 to the Agreement:

“20.  Recognition of the U.S. Special Resolution Regimes.  

(a) In the event that the Manager is a Covered Entity and becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from the Manager of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

(b) In the event that the Manager is a Covered Entity and becomes, or a BHC Act Affiliate of the Manager becomes, subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against the Manager are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

As used in this Section 20, “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b), (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b) or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

SECTION 2. No Other Amendments; References to Agreements.  Except as set forth in this Amendment, all other terms and provisions of the Agreement shall continue in full force and effect.  All references to the Agreement in the Agreement or in any other document executed or delivered in connection therewith shall, from the date hereof,

be deemed a reference to the Agreement as amended by this Amendment.   Notwithstanding anything to the contrary contained herein, this Amendment shall not have any effect on offerings or sales of the Shares prior to the Effective Date or on the terms of the Agreement and the rights and obligations of the parties thereunder, insofar as they relate to such offerings or sales, including, without limitation, the representations, warranties and agreements (including the indemnification and contribution provisions) contained in the Agreement.

SECTION 3. Applicable Law.  This Amendment will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.

SECTION 4. Effect of Headings.  The Section headings herein are for convenience only and shall not affect the construction hereof.

SECTION 5. Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery of an executed Amendment by one party to the other may be made by facsimile or e-mail transmission.

[Signature Page Follows]

2

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement by and among the Transaction Entities and the Manager in accordance with its terms.

Very truly yours,
CUBESMART
By:	/s/ Timothy M. Martin
Name:	Timothy M. Martin
Title:	Chief Financial Officer
CUBESMART, L.P.
By:	/s/ Timothy M. Martin
Name:	Timothy M. Martin
Title:	Chief Financial Officer

CONFIRMED AND ACCEPTED, as of the date first above written:
BARCLAYS CAPITAL INC.
By:	/s/ Nicholas Cunningham
Name:	Nicholas Cunningham
Title:	Managing Director

3

EX-10.3

Exhibit 10.3

CUBESMART

AMENDMENT NO. 1 TO THE AMENDED AND RESTATED

EQUITY DISTRIBUTION AGREEMENT

July 29, 2019

BofA Securities, Inc.

One Bryant Park, 30th Floor

New York, New York 10036

Ladies and Gentlemen:

Reference is made to the Amended and Restated Equity Distribution Agreement (the “Agreement”), dated as of July 27, 2018, by and among CubeSmart, a Maryland real estate investment trust (the “Company”), and CubeSmart, L.P., a Delaware limited partnership (the “Operating Partnership” and together with the Company, the “Transaction Entities”), on the one hand, and BofA Securities, Inc. (an assignee of Merrill Lynch, Pierce, Fenner & Smith Incorporated) (the “Manager”), on the other hand. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.

In connection with the foregoing, the Transaction Entities and the Manager wish to amend the Agreement through this Amendment No. 1 to Amended and Restated Equity Distribution Agreement (this “Amendment”) to make certain changes to the Agreement with effect on and after the date hereof (the “Effective Date”).   

SECTION 1. The following language will be added as a new Section 20 to the Agreement:

“20.  Recognition of the U.S. Special Resolution Regimes.  

(a) In the event that the Manager is a Covered Entity and becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from the Manager of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

(b) In the event that the Manager is a Covered Entity and becomes, or a BHC Act Affiliate of the Manager becomes, subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against the Manager are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

As used in this Section 20, “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b), (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b) or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

SECTION 2. No Other Amendments; References to Agreements.  Except as set forth in this Amendment, all other terms and provisions of the Agreement shall continue in full force and effect.  All references to the Agreement

in the Agreement or in any other document executed or delivered in connection therewith shall, from the date hereof, be deemed a reference to the Agreement as amended by this Amendment.   Notwithstanding anything to the contrary contained herein, this Amendment shall not have any effect on offerings or sales of the Shares prior to the Effective Date or on the terms of the Agreement and the rights and obligations of the parties thereunder, insofar as they relate to such offerings or sales, including, without limitation, the representations, warranties and agreements (including the indemnification and contribution provisions) contained in the Agreement.

SECTION 3. Applicable Law.  This Amendment will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.

SECTION 4. Effect of Headings.  The Section headings herein are for convenience only and shall not affect the construction hereof.

SECTION 5. Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery of an executed Amendment by one party to the other may be made by facsimile or e-mail transmission.

[Signature Page Follows]

2

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement by and among the Transaction Entities and the Manager in accordance with its terms.

Very truly yours,
CUBESMART
By:	/s/ Timothy M. Martin
Name:	Timothy M. Martin
Title:	Chief Financial Officer
CUBESMART, L.P.
By:	/s/ Timothy M. Martin
Name:	Timothy M. Martin
Title:	Chief Financial Officer

CONFIRMED AND ACCEPTED, as of the date first above written:
BOFA SECURITIES, INC.
By:	/s/ Jake Mendelsohn
Name:	Jake Mendelsohn
Title:	Managing Director

3

EX-10.4

Exhibit 10.4

CUBESMART

AMENDMENT NO. 1 TO THE AMENDED AND RESTATED

EQUITY DISTRIBUTION AGREEMENT

July 29, 2019

Jefferies LLC

520 Madison Avenue

New York, New York 10022

Ladies and Gentlemen:

Reference is made to the Amended and Restated Equity Distribution Agreement (the “Agreement”), dated as of July 27, 2018, by and among CubeSmart, a Maryland real estate investment trust (the “Company”), and CubeSmart, L.P., a Delaware limited partnership (the “Operating Partnership” and together with the Company, the “Transaction Entities”), on the one hand, and Jefferies LLC (the “Manager”), on the other hand. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.

In connection with the foregoing, the Transaction Entities and the Manager wish to amend the Agreement through this Amendment No. 1 to Amended and Restated Equity Distribution Agreement (this “Amendment”) to make certain changes to the Agreement with effect on and after the date hereof (the “Effective Date”).   

SECTION 1. The following language will be added as a new Section 20 to the Agreement:

“20.  Recognition of the U.S. Special Resolution Regimes.  

(a) In the event that the Manager is a Covered Entity and becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from the Manager of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

(b) In the event that the Manager is a Covered Entity and becomes, or a BHC Act Affiliate of the Manager becomes, subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against the Manager are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

As used in this Section 20, “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b), (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b) or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

SECTION 2. No Other Amendments; References to Agreements.  Except as set forth in this Amendment, all other terms and provisions of the Agreement shall continue in full force and effect.  All references to the Agreement in the Agreement or in any other document executed or delivered in connection therewith shall, from the date hereof,

be deemed a reference to the Agreement as amended by this Amendment.   Notwithstanding anything to the contrary contained herein, this Amendment shall not have any effect on offerings or sales of the Shares prior to the Effective Date or on the terms of the Agreement and the rights and obligations of the parties thereunder, insofar as they relate to such offerings or sales, including, without limitation, the representations, warranties and agreements (including the indemnification and contribution provisions) contained in the Agreement.

SECTION 3. Applicable Law.  This Amendment will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.

SECTION 4. Effect of Headings.  The Section headings herein are for convenience only and shall not affect the construction hereof.

SECTION 5. Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery of an executed Amendment by one party to the other may be made by facsimile or e-mail transmission.

[Signature Page Follows]

2

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement by and among the Transaction Entities and the Manager in accordance with its terms.

Very truly yours,
CUBESMART
By:	/s/ Timothy M. Martin
Name:	Timothy M. Martin
Title:	Chief Financial Officer
CUBESMART, L.P.
By:	/s/ Timothy M. Martin
Name:	Timothy M. Martin
Title:	Chief Financial Officer

CONFIRMED AND ACCEPTED, as of the date first above written:
JEFFERIES LLC
By:	/s/ Donald Lynaugh
Name:	Donald Lynaugh
Title:	Managing Director, ECM

3

EX-10.5

Exhibit 10.5

CUBESMART

AMENDMENT NO. 1 TO THE AMENDED AND RESTATED

EQUITY DISTRIBUTION AGREEMENT

July 29, 2019

RBC Capital Markets, LLC

200 Vesey Street, 8th Floor

New York, New York 10281

Ladies and Gentlemen:

Reference is made to the Amended and Restated Equity Distribution Agreement (the “Agreement”), dated as of July 27, 2018, by and among CubeSmart, a Maryland real estate investment trust (the “Company”), and CubeSmart, L.P., a Delaware limited partnership (the “Operating Partnership” and together with the Company, the “Transaction Entities”), on the one hand, and RBC Capital Markets, LLC (the “Manager”), on the other hand. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.

In connection with the foregoing, the Transaction Entities and the Manager wish to amend the Agreement through this Amendment No. 1 to Amended and Restated Equity Distribution Agreement (this “Amendment”) to make certain changes to the Agreement with effect on and after the date hereof (the “Effective Date”).   

SECTION 1. The following language will be added as a new Section 20 to the Agreement:

“20.  Recognition of the U.S. Special Resolution Regimes.  

(a) In the event that the Manager is a Covered Entity and becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from the Manager of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

(b) In the event that the Manager is a Covered Entity and becomes, or a BHC Act Affiliate of the Manager becomes, subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against the Manager are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

As used in this Section 20, “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b), (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b) or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

SECTION 2. No Other Amendments; References to Agreements.  Except as set forth in this Amendment, all other terms and provisions of the Agreement shall continue in full force and effect.  All references to the Agreement in the Agreement or in any other document executed or delivered in connection therewith shall, from the date hereof,

be deemed a reference to the Agreement as amended by this Amendment.   Notwithstanding anything to the contrary contained herein, this Amendment shall not have any effect on offerings or sales of the Shares prior to the Effective Date or on the terms of the Agreement and the rights and obligations of the parties thereunder, insofar as they relate to such offerings or sales, including, without limitation, the representations, warranties and agreements (including the indemnification and contribution provisions) contained in the Agreement.

SECTION 3. Applicable Law.  This Amendment will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.

SECTION 4. Effect of Headings.  The Section headings herein are for convenience only and shall not affect the construction hereof.

SECTION 5. Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery of an executed Amendment by one party to the other may be made by facsimile or e-mail transmission.

[Signature Page Follows]

2

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement by and among the Transaction Entities and the Manager in accordance with its terms.

Very truly yours,
CUBESMART
By:	/s/ Timothy M. Martin
Name:	Timothy M. Martin
Title:	Chief Financial Officer
CUBESMART, L.P.
By:	/s/ Timothy M. Martin
Name:	Timothy M. Martin
Title:	Chief Financial Officer

CONFIRMED AND ACCEPTED, as of the date first above written:
RBC CAPITAL MARKETS, LLC
By:	/s/ John Perkins
Name:	John Perkins
Title:	Managing Director, Group Co-Head

3

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Christopher P. Marr, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CubeSmart;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Trustees (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October  25, 2019	/s/ Christopher P. Marr
	Christopher P. Marr
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Timothy M. Martin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CubeSmart;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Trustees (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 25, 2019	/s/ Timothy M. Martin
	Timothy M. Martin
	Chief Financial Officer

EX-31.3

Exhibit 31.3

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Christopher P. Marr, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CubeSmart L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Trustees (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 25, 2019	/s/ Christopher P. Marr
	Christopher P. Marr
	Chief Executive Officer

EX-31.4

Exhibit 31.4

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Timothy M. Martin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CubeSmart L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Trustees (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 25, 2019	/s/ Timothy M. Martin
	Timothy M. Martin
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

The undersigned, the Chief Executive Officer and Chief Financial Officer of CubeSmart (the “Company”), each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(a) The Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2019 (the “Report”) filed on the date hereof with the Securities and Exchange Commission fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 25, 2019	/s/ Christopher P. Marr
	Christopher P. Marr
	Chief Executive Officer
Date: October 25, 2019	/s/ Timothy M. Martin
	Timothy M. Martin
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

The undersigned, the Chief Executive Officer and Chief Financial Officer of CubeSmart L.P. (the “Company”), each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(a) The Quarterly Report on Form 10-Q of the Company for the period ended September  30, 2019 (the “Report”) filed on the date hereof with the Securities and Exchange Commission fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 25, 2019	/s/ Christopher P. Marr
	Christopher P. Marr
	Chief Executive Officer
Date: October 25, 2019	/s/ Timothy M. Martin
	Timothy M. Martin
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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LEASES

9 Months Ended

Sep. 30, 2019

LEASES

LEASES

13. LEASES

CubeSmart as Lessor

The Company derives revenue primarily from rents received from customers who rent cubes at its self-storage properties under month-to-month leases for personal or business use. The self-storage lease agreements utilized by the Company vary slightly to comply with state-specific laws and regulations, but generally provide for automatic monthly renewals, flexibility to increase rental rates over time as market conditions permit and the collection of contingent fees such as administrative and late fees. None of the self-storage lease agreements contain options that allow the customer to purchase the leased space at any time during, or at the expiration of, the lease term. All self-storage leases in which the Company serves as lessor have been classified as operating leases. Accordingly, storage cubes are carried at historical cost less accumulated depreciation and impairment, if any, and are included in Storage properties on the Company’s consolidated balance sheets. Operating lease income for amounts received under the Company’s self-storage lease agreements is recognized on a straight-line basis which, due to the month-to-month nature of the leases, results in the recognition of income during the initial term and each subsequent monthly renewal using the then-in-place rent amount. Operating lease income is included in Rental income within the Company’s consolidated statements of operations. Variable lease income related to the Company’s self-storage lease agreements consists of administrative and late fees charged to customers. For the three and nine months ended September 30, 2019, administrative and late fees totaled $5.9 million and $17.0 million, respectively, and are included in Other property related income within the Company’s consolidated statements of operations.

CubeSmart as Lessee

The Company serves as lessee in lease agreements for land, office space, automobiles and certain equipment, which have remaining lease terms ranging from one year to 45 years. Certain of the Company’s leases contain provisions that (1) provide for one or more options to renew, with renewal options that can extend the lease term from one year to 69 years, (2) allow for early termination at certain points during the lease term and/or (3) give the Company the option to purchase the leased property. In all cases, the exercise of the lease renewal, termination and purchase options, if provided for in the lease, are at the Company’s sole discretion. Certain of the Company’s lease agreements, particularly its land leases, require rental payments that are periodically adjusted for inflation using a defined index. None of the Company’s lease agreements contain any material residual value guarantees or material restrictive covenants. As a result of the Company’s election of the package of practical expedients permitted within ASC 842, which among other things, allows for the carryforward of historical lease classification, all of the Company’s lease agreements have been classified as operating leases. Lease expense for payments related to the Company’s operating leases is recognized on a straight-line basis over the related lease term, which includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments as specified in the lease. Right-of-use assets and lease liabilities related to the Company’s operating leases are recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available surrounding the Company’s unsecured borrowing rates and implied secured spread at the lease commencement date in determining the present value of lease payments. The right-of-use asset also includes any lease payments made at or before lease commencement less any lease incentives. Upon adoption of ASC 842 on January 1, 2019, the Company had right-of-use assets and lease liabilities related to its operating leases of $55.7 million and $60.7 million, respectively. As of September 30, 2019, the Company had right-of-use assets and lease liabilities related to its operating leases of $41.7 million and $46.2 million, which are included in Other assets, net and Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets, respectively. As of September 30, 2019, the Company’s weighted average remaining lease term and weighted average discount rate related to its operating leases were 36.1 years and 4.74%, respectively.

For the three and nine months ended September 30, 2019, the Company’s lease cost consists of the following components, each of which is included in Property operating expenses within the Company’s consolidated statements of operations:

	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
	(in thousands)
Operating lease cost	$	749	$	2,558
Short-term lease cost (1)		294		907
Total lease cost	$	1,043	$	3,465

(1) Represents automobile leases that have a lease term of 12 months. The Company has made an accounting policy election not to apply the recognition requirements of ASC 842 to this asset class. The lease cost associated with these leases is recognized on a straight-line basis over the related lease term.

The following table represents the future operating lease liability maturities as of September 30, 2019 (in thousands):

2019	$	556
2020		2,222
2021		2,279
2022		2,436
2023		2,500
2024 and thereafter		93,512
Total operating lease payments		103,505
Less: Imputed interest		(57,283)
Present value of operating lease liabilities	$	46,222

During the three and nine months ended September 30, 2019, the cash paid for amounts included in the measurement of lease liabilities related to the Company’s operating leases was approximately $0.6 million and $1.9 million, respectively, which is included as an operating cash outflow within the consolidated statements of cash flows. During the three and nine months ended September 30 2019, the Company did not enter into any lease agreements set to commence in the future.

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2019

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

17. SUBSEQUENT EVENTS

On October 25, 2019, the Company acquired a self-storage property located in Texas for a purchase price of $7.3 million.

On October 11, 2019, the Operating Partnership issued $350.0 million in aggregate principal amount of unsecured senior notes due February 15, 2030, which bear interest at a rate of 3.000% per annum (the “2030 Notes”). The 2030 Notes were priced at 99.623% of the principal amount to yield 3.043% to maturity. Net proceeds from the offering of $346.4 million were used to repay all of the outstanding indebtedness under the Revolver and for working capital and other general corporate purposes.

On October 7, 2019, the Company sold a self-storage property located in Texas, which was held for sale as of September 30, 2019, for a sales price of $4.1 million.

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INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE (Tables)

9 Months Ended

Sep. 30, 2019

INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

Schedule of investments in real estate ventures

	CubeSmart	Number of Stores		Carrying Value of Investment
	Ownership	September 30,	December 31,	September 30,		December 31,
Unconsolidated Real Estate Ventures	Interest	2019	2018	2019		2018
191 IV CUBE LLC ("HVP IV") (1)	20%	19	13	$	19,999	$	14,791
CUBE HHF Northeast Venture LLC ("HHFNE") (2)	10%	13	13		2,131		2,411
191 III CUBE LLC ("HVP III") (3)	10%	—	68		—		9,183
CUBE HHF Limited Partnership ("HHF") (4)	50%	35	35		66,682		69,411
		67	129	$	88,812	$	95,796

(1) The stores owned by HVP IV are located in Arizona (2), Connecticut (2), Florida (4), Georgia (2), Maryland (1), Pennsylvania (1) and Texas (7). The Company’s total contribution to HVP IV in connection with these store acquisitions was $22.6 million. As of September 30, 2019, HVP IV had $82.2 million outstanding on its $107.0 million loan facility, which bears interest at LIBOR plus 1.70% per annum, and matures on May 16, 2021 with options to extend the maturity date through May 16, 2023, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. As of September 30, 2019, HVP IV also had $40.5 million outstanding under a separate loan that bears interest at LIBOR plus 2.75% per annum, and matures on June 9, 2022 with options to extend the maturity date through June 9, 2024, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. As of September 30, 2019, HVP IV was under contract, and had made aggregate deposits of $1.2 million, to acquire two stores located in Minnesota (1) and Texas (1) for an aggregate purchase price of $34.3 million.

(2) The stores owned by HHFNE are located in Connecticut (3), Massachusetts (6), Rhode Island (2) and Vermont (2). The Company’s total contribution to HHFNE in connection with these store acquisitions was $3.8 million.

As of September 30, 2019, HHFNE had an outstanding $44.5 million loan facility, which bears interest at LIBOR plus 1.90% per annum and matures on December 15, 2019 with options to extend the maturity date through December 15, 2021, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. As of September 30, 2019, HHFNE is in the process of amending and restating its loan facility.

(3) On June 5, 2019, HVP III sold 50 stores located in Florida (3), Georgia (4), Michigan (17), North Carolina (3), South Carolina (15) and Tennessee (8), to an unaffiliated third party buyer for an aggregate sales price of $293.5 million. As of the transaction date, HVP III had five mortgage loans with an aggregate outstanding balance of $22.9 million, as well as $179.5 million outstanding on its $185.5 million loan facility, all of which were defeased or repaid in full at the time of the sale. Net proceeds to the venture from the transaction totaled $82.9 million. The venture recorded gains which aggregated to approximately $106.7 million in connection with the sale. Subsequent to the sale, the Company acquired its partner’s 90% ownership interest in HVP III, which at the time of the acquisition, owned the remaining 18 storage properties (see note 4).

(4) The stores owned by HHF are located in North Carolina (1) and Texas (34). As of September 30, 2019, HHF had an outstanding $100.0 million secured loan, which bears interest at 3.59% per annum and matures on April 30, 2021.

Summary of the financial position of the ventures

	September 30,		December 31,
	2019 (1)		2018
Assets
Storage properties, net	$	521,701	$	741,209
Other assets		18,835		16,042
Total assets	$	540,536	$	757,251
Liabilities and equity
Other liabilities	$	14,210	$	7,911
Debt		264,855		413,848
Equity
CubeSmart		88,812		95,796
Joint venture partners		172,659		239,696
Total liabilities and equity	$	540,536	$	757,251

(1) Excludes HVP III as it was consolidated by the Company on June 6, 2019.

Summary of results of operations of the ventures

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019 (1)		2018
Total revenues	$	14,027	$	23,463	$	58,305	$	66,665
Operating expenses		(6,518)		(9,583)		(25,762)		(28,269)
Other expense		(34)		(242)		(3,113)		(807)
Interest expense, net		(2,606)		(3,494)		(11,911)		(9,515)
Depreciation and amortization		(5,908)		(11,223)		(23,829)		(31,042)
Gains from sale of real estate		—		—		106,667		—
Net (loss) income	$	(1,039)	$	(1,079)	$	100,357	$	(2,968)
Company’s share of net income (loss)	$	152	$	(292)	$	10,940	$	(785)

(1) HVP III’s results of operations included through June 6, 2019 (date of consolidation).

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Changes in accumulated other comprehensive income by component
Beginning balance	$ (1,029)
Ending balance	(749)
Unrealized losses on interest rate swaps
Changes in accumulated other comprehensive income by component
Beginning balance	(1,029)
Other comprehensive gain before reclassifications	230
Amounts reclassified from accumulated other comprehensive loss	50
Net current-period other comprehensive income	280
Ending balance	$ (749)

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Storage properties	$ 3,737,855	$ 3,600,968
Common shares, par value (in dollars per share)	$ 0.01	$ 0.01
Common shares, shares authorized	400,000,000	400,000,000
Common shares, shares issued	193,554,347	187,145,103
Common shares, shares outstanding	193,554,347	187,145,103
VIE
Storage properties	$ 87,428	$ 330,986

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UNSECURED SENIOR NOTES (Details) $ in Thousands				9 Months Ended
	Apr. 04, 2017 USD ($)	Oct. 26, 2015 USD ($)	Dec. 17, 2013 USD ($)	Sep. 30, 2019 USD ($)	Jan. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Mortgage loans and Notes payable
Less: Loan procurement costs, net				$ (4,284)		$ (963)
Total unsecured senior notes, net				1,489,483		1,143,524
Cubesmart, L P and Subsidiaries
Mortgage loans and Notes payable
Less: Loan procurement costs, net				(4,284)		(963)
Total unsecured senior notes, net				1,489,483		1,143,524
Senior Notes
Mortgage loans and Notes payable
Carrying value				1,500,000		1,150,000
Less: Discount on issuance of notes, net				(2,635)		(568)
Less: Loan procurement costs, net				(7,882)		(5,908)
Total unsecured senior notes, net				$ 1,489,483		1,143,524
Senior Notes | Maximum
Mortgage loans and Notes payable
Consolidated leverage ratio				0.60
Secured debt leverage ratio				0.40
Senior Notes | Minimum
Mortgage loans and Notes payable
Consolidated interest coverage ratio				1.50
Financial and customary covenant, minimum unencumbered asset (as a percent)				150.00%
Senior notes 4.800% due 2022
Mortgage loans and Notes payable
Interest rate (as a percent)				4.80%
Carrying value				$ 250,000		250,000
Effective interest rate (as a percent)				4.82%
Senior notes 4.375% due 2023
Mortgage loans and Notes payable
Senior notes, principal amount	$ 50,000		$ 250,000
Interest rate (as a percent)	4.375%		4.375%	4.375%
Carrying value				$ 300,000		300,000
Effective interest rate (as a percent)	3.495%		4.501%	4.33%
Effective weighted average interest rate (as a percent)				4.33%
Proceeds from senior notes	$ 50,000		$ 250,000
Debt instrument, redemption percentage	105.04%		98.995%
Senior notes 4.000% due 2025
Mortgage loans and Notes payable
Senior notes, principal amount	$ 50,000	$ 250,000
Interest rate (as a percent)	4.00%	4.00%		4.00%
Carrying value				$ 300,000		300,000
Effective interest rate (as a percent)	3.811%	4.032%		3.99%
Effective weighted average interest rate (as a percent)				3.994%
Proceeds from senior notes	$ 50,000	$ 250,000
Debt instrument, redemption percentage	101.343%	99.735%
Senior Notes 3.125% Due 2026
Mortgage loans and Notes payable
Interest rate (as a percent)				3.125%
Carrying value				$ 300,000		300,000
Effective interest rate (as a percent)				3.18%
Senior Notes 4.375 % Due 2029
Mortgage loans and Notes payable
Senior notes, principal amount					$ 350,000
Interest rate (as a percent)				4.375%	4.375%
Carrying value				$ 350,000
Effective interest rate (as a percent)				4.46%
Credit Facility
Mortgage loans and Notes payable
Less: Loan procurement costs, net						$ (201)

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STORAGE PROPERTIES - Summary (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
STORAGE FACILITIES
Storage properties	$ 4,674,717	$ 4,463,455
Less: Accumulated depreciation	(936,862)	(862,487)
Storage properties, net (including VIE assets of $87,428 and $330,986, respectively)	3,737,855	3,600,968
Land
STORAGE FACILITIES
Storage properties	849,874	806,916
Buildings and improvements
STORAGE FACILITIES
Storage properties	3,579,904	3,343,173
Equipment
STORAGE FACILITIES
Storage properties	159,833	176,583
Construction in progress
STORAGE FACILITIES
Storage properties	$ 85,106	$ 136,783

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CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018
CONSOLIDATED STATEMENTS OF EQUITY
Common share distributions (in dollars per share)	$ 0.32	$ 0.32	$ 0.32	$ 0.30	$ 0.30	$ 0.30

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (LP cube) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Other comprehensive income (loss):
Unrealized gains on interest rate swaps			$ 232	$ 60
Reclassification of realized losses (gains) on interest rate swaps	$ 20		50	(60)
OTHER COMPREHENSIVE INCOME	20		282
COMPREHENSIVE INCOME	42,617	$ 43,302	128,543	116,852
Comprehensive income attributable to Operating Partnership interests of third parties	(426)	(476)	(1,285)	(1,289)
Comprehensive (income) loss attributable to noncontrolling interests in subsidiaries	(17)	74	94	166
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY	42,174	42,900	127,352	115,729
Cubesmart, L P and Subsidiaries
NET INCOME	42,597	43,302	128,261	116,852
Other comprehensive income (loss):
Unrealized gains on interest rate swaps			232	60
Reclassification of realized losses (gains) on interest rate swaps	20		50	(60)
OTHER COMPREHENSIVE INCOME	20		282
COMPREHENSIVE INCOME	42,617	43,302	128,543	116,852
Comprehensive income attributable to Operating Partnership interests of third parties	(426)	(476)	(1,285)	(1,289)
Comprehensive (income) loss attributable to noncontrolling interests in subsidiaries	(17)	74	94	166
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY	$ 42,174	$ 42,900	$ 127,352	$ 115,729

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NONCONTROLLING INTERESTS - Interests in Consolidated Real Estate Joint Ventures (Details) $ in Thousands			3 Months Ended						9 Months Ended	12 Months Ended
	May 30, 2019 USD ($)	Mar. 07, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Sep. 30, 2019 USD ($) facility	Dec. 31, 2018 USD ($)	May 29, 2019 USD ($)
Interests in Consolidated Real Estate Joint Ventures
Elimination of noncontrolling interest in subsidiaries due to acquisition			$ 2,618	$ 27,618	$ 10,000				$ 12,300	$ 300
Noncontrolling interests in subsidiaries			7,996						7,996	$ 6,771
Reduction to additional paid in capital			2,548		$ 4,828	$ 74	$ 105	$ 738
CS 2087 Hempstead Tpk LLC
Interests in Consolidated Real Estate Joint Ventures
Option to call ownership interest of another member									6,600
Accretion liability									1,900
CS SJM E 92nd Street LLC
Interests in Consolidated Real Estate Joint Ventures
Percentage of the Variable Interest Entity sold	90.00%
Carrying amount of mortgage loans											$ 1,700
Proceeds from sales of facilities, net	$ 3,700
Note receivable	1,000
Amount of debt repaid	700
Increase (Decrease) Operating Lease Liability	(14,600)
Increase (decrease) in operating lease, right-of-use asset	$ (13,400)
CS 1158 McDonald Ave LLC
Interests in Consolidated Real Estate Joint Ventures
Option to call ownership interest of another member									10,000
Accretion liability									$ 9,400
Shirlington Rd LLC
Interests in Consolidated Real Estate Joint Ventures
Elimination of noncontrolling interest in subsidiaries due to acquisition		$ 10,000
Noncontrolling interests in subsidiaries		0
Reduction to additional paid in capital		9,700
Amount of debt repaid		12,200
VIE
Interests in Consolidated Real Estate Joint Ventures
Number of self-storage facilities owned and operated | facility									6
Total assets			87,803						$ 87,803
Total liabilities			16,810						$ 16,810
Period of option to call ownership interest of another member									1 year
Period of option to put ownership interest in venture									1 year
Payment made for acquisition of interest in real estate ventures		$ 4,800
VIE | CS Valley Forge Village Storage LLC
Interests in Consolidated Real Estate Joint Ventures
Number of self-storage facilities owned and operated | facility									1
Ownership interest held by the entity (as a percent)									70.00%
Total assets			3,402						$ 3,402
Total liabilities			3						3
Amount of mortgage loan commitment			12,400						$ 12,400
VIE | Shirlington Rd II LLC
Interests in Consolidated Real Estate Joint Ventures
Number of self-storage facilities owned and operated | facility									1
Ownership interest held by the entity (as a percent)									90.00%
Total assets			8,548						$ 8,548
Total liabilities			2						$ 2
Percentage of interest acquired		10.00%
VIE | CS 2087 Hempstead Tpk LLC
Interests in Consolidated Real Estate Joint Ventures
Number of self-storage facilities owned and operated | facility									1
Ownership interest held by the entity (as a percent)									51.00%
Total assets			10,717						$ 10,717
Total liabilities			2,279						2,279
Option to put ownership interest in the venture									$ 6,600
VIE | CS SDP Newtonville LLC
Interests in Consolidated Real Estate Joint Ventures
Number of self-storage facilities owned and operated | facility									1
Ownership interest held by the entity (as a percent)									90.00%
Total assets			9,585						$ 9,585
Total liabilities			3,060						3,060
Carrying amount of mortgage loans			1,800						1,800
Amount of mortgage loan commitment			12,100						$ 12,100
VIE | CS 1158 McDonald Ave LLC
Interests in Consolidated Real Estate Joint Ventures
Number of self-storage facilities owned and operated | facility									1
Ownership interest held by the entity (as a percent)									51.00%
Total assets			40,582						$ 40,582
Total liabilities			11,307						11,307
Option to put ownership interest in the venture									$ 10,000
VIE | Shirlington Rd LLC
Interests in Consolidated Real Estate Joint Ventures
Number of self-storage facilities owned and operated | facility									1
Ownership interest held by the entity (as a percent)									90.00%
Total assets			14,969						$ 14,969
Total liabilities			$ 159						$ 159
Percentage of interest acquired		10.00%

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LEASES - Future Operating Lease Liability Maturities (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Jan. 01, 2019
Future operating lease liability maturities
2019	$ 556	$ 556
2020	2,222	2,222
2021	2,279	2,279
2022	2,436	2,436
2023	2,500	2,500
2024 and thereafter	93,512	93,512
Total operating lease payments	103,505	103,505
Less: Imputed interest	(57,283)	(57,283)
Present value of operating lease liabilities	46,222	46,222	$ 60,700
Operating lease amount paid	$ 600	$ 1,900

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SUBSEQUENT EVENTS (Details) $ in Millions	Oct. 25, 2019 USD ($) facility	Oct. 11, 2019 USD ($)	Oct. 07, 2019 USD ($) facility	Jan. 31, 2018 USD ($)
Texas
Subsequent Events
Total consideration				$ 12.2
Subsequent event | Texas
Subsequent Events
Number of self-storage facilities acquired | facility	1
Number of Facilities, dispositions (in properties) | facility			1
Total consideration	$ 7.3
Sale Price			$ 4.1
Subsequent event | Cubesmart, L P and Subsidiaries | Senior notes 3.000% due February, 15 2030
Subsequent Events
Senior notes, principal amount		$ 350.0
Interest rate (as a percent)		3.00%
Debt Instrument, Redemption Price, Percentage		99.623%
Debt Instrument, Interest Rate, Effective Percentage		3.043%
Proceeds from senior notes		$ 346.4

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INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

9 Months Ended

Sep. 30, 2019

INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

5. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

The Company’s investments in real estate ventures, in which it holds a common ownership interest, are summarized as follows (in thousands):

	CubeSmart	Number of Stores		Carrying Value of Investment
	Ownership	September 30,	December 31,	September 30,		December 31,
Unconsolidated Real Estate Ventures	Interest	2019	2018	2019		2018
191 IV CUBE LLC ("HVP IV") (1)	20%	19	13	$	19,999	$	14,791
CUBE HHF Northeast Venture LLC ("HHFNE") (2)	10%	13	13		2,131		2,411
191 III CUBE LLC ("HVP III") (3)	10%	—	68		—		9,183
CUBE HHF Limited Partnership ("HHF") (4)	50%	35	35		66,682		69,411
		67	129	$	88,812	$	95,796

(1) The stores owned by HVP IV are located in Arizona (2), Connecticut (2), Florida (4), Georgia (2), Maryland (1), Pennsylvania (1) and Texas (7). The Company’s total contribution to HVP IV in connection with these store acquisitions was $22.6 million. As of September 30, 2019, HVP IV had $82.2 million outstanding on its $107.0 million loan facility, which bears interest at LIBOR plus 1.70% per annum, and matures on May 16, 2021 with options to extend the maturity date through May 16, 2023, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. As of September 30, 2019, HVP IV also had $40.5 million outstanding under a separate loan that bears interest at LIBOR plus 2.75% per annum, and matures on June 9, 2022 with options to extend the maturity date through June 9, 2024, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. As of September 30, 2019, HVP IV was under contract, and had made aggregate deposits of $1.2 million, to acquire two stores located in Minnesota (1) and Texas (1) for an aggregate purchase price of $34.3 million.

(2) The stores owned by HHFNE are located in Connecticut (3), Massachusetts (6), Rhode Island (2) and Vermont (2). The Company’s total contribution to HHFNE in connection with these store acquisitions was $3.8 million.

As of September 30, 2019, HHFNE had an outstanding $44.5 million loan facility, which bears interest at LIBOR plus 1.90% per annum and matures on December 15, 2019 with options to extend the maturity date through December 15, 2021, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. As of September 30, 2019, HHFNE is in the process of amending and restating its loan facility.

(3) On June 5, 2019, HVP III sold 50 stores located in Florida (3), Georgia (4), Michigan (17), North Carolina (3), South Carolina (15) and Tennessee (8), to an unaffiliated third party buyer for an aggregate sales price of $293.5 million. As of the transaction date, HVP III had five mortgage loans with an aggregate outstanding balance of $22.9 million, as well as $179.5 million outstanding on its $185.5 million loan facility, all of which were defeased or repaid in full at the time of the sale. Net proceeds to the venture from the transaction totaled $82.9 million. The venture recorded gains which aggregated to approximately $106.7 million in connection with the sale. Subsequent to the sale, the Company acquired its partner’s 90% ownership interest in HVP III, which at the time of the acquisition, owned the remaining 18 storage properties (see note 4).

(4) The stores owned by HHF are located in North Carolina (1) and Texas (34). As of September 30, 2019, HHF had an outstanding $100.0 million secured loan, which bears interest at 3.59% per annum and matures on April 30, 2021.

Based upon the facts and circumstances at formation of HVP IV, HHFNE, HVP III and HHF (the “Ventures”), the Company determined that the Ventures are not VIEs in accordance with the accounting standard for the consolidation of VIEs. As a result, the Company used the voting interest model under the accounting standard for consolidation in order to determine whether to consolidate the Ventures. Based upon each member's substantive participating rights over the activities of each entity as stipulated in the operating agreements, the Ventures are not consolidated by the Company and are accounted for under the equity method of accounting (except for HVP III, which was consolidated as of June 6, 2019). The Company’s investments in the Ventures are included in Investment in real estate ventures, at equity on the Company’s consolidated balance sheets and the Company’s earnings from its investments in the Ventures are presented in Equity in earnings (losses) of real estate ventures on the Company’s consolidated statements of operations.

The amounts reflected in the following table are based on the historical financial information of the Ventures.

The following is a summary of the financial position of the Ventures as of September 30, 2019 and December 31, 2018 (in thousands).

	September 30,		December 31,
	2019 (1)		2018
Assets
Storage properties, net	$	521,701	$	741,209
Other assets		18,835		16,042
Total assets	$	540,536	$	757,251
Liabilities and equity
Other liabilities	$	14,210	$	7,911
Debt		264,855		413,848
Equity
CubeSmart		88,812		95,796
Joint venture partners		172,659		239,696
Total liabilities and equity	$	540,536	$	757,251

(1) Excludes HVP III as it was consolidated by the Company on June 6, 2019.

The following is a summary of results of operations of the Ventures for the three and nine months ended September 30, 2019 and 2018 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019 (1)		2018
Total revenues	$	14,027	$	23,463	$	58,305	$	66,665
Operating expenses		(6,518)		(9,583)		(25,762)		(28,269)
Other expense		(34)		(242)		(3,113)		(807)
Interest expense, net		(2,606)		(3,494)		(11,911)		(9,515)
Depreciation and amortization		(5,908)		(11,223)		(23,829)		(31,042)
Gains from sale of real estate		—		—		106,667		—
Net (loss) income	$	(1,039)	$	(1,079)	$	100,357	$	(2,968)
Company’s share of net income (loss)	$	152	$	(292)	$	10,940	$	(785)

(1) HVP III’s results of operations included through June 6, 2019 (date of consolidation).

Capital Storage Partners, LLC (“Capital Storage”)

On September 5, 2018, the Company invested $5.0 million in exchange for 100% of the Class A Preferred Units of Capital Storage Partners, LLC, a newly formed venture that acquired 22 self-storage properties located in Florida (4), Oklahoma (5) and Texas (13). The Class A Preferred Units earn an 11% cumulative dividend prior to any other distributions. The Company’s investment in Capital Storage and the related dividends are included in Other assets, net on the Company’s consolidated balance sheets and in Other income on the Company’s consolidated statements of operations, respectively.

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ACCUMULATED OTHER COMPREHENSIVE LOSS

9 Months Ended

Sep. 30, 2019

ACCUMULATED OTHER COMPREHENSIVE LOSS

ACCUMULATED OTHER COMPREHENSIVE LOSS

9. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table summarizes the changes in accumulated other comprehensive loss by component for the nine months ended September 30, 2019 (in thousands):

	Unrealized Gains (Losses)
	on Interest Rate Swaps
Other comprehensive gain before reclassifications	$	230
Amounts reclassified from accumulated other comprehensive loss		50	(1)
Net current-period other comprehensive income		280
Balance at December 31, 2018		(1,029)
Balance at September 30, 2019	$	(749)

(1) See note 10 for additional information about the effects of the amounts reclassified.

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PRO FORMA FINANCIAL INFORMATION (Tables)

9 Months Ended

Sep. 30, 2019

PRO FORMA FINANCIAL INFORMATION

Schedule of consolidated results of operations on a pro forma basis

	Nine Months Ended September 30,
	2019		2018
	(in thousands, except per share data)
Pro forma revenues	$	486,100	$	466,590
Pro forma net income	$	144,747	$	114,310
Earnings per share attributable to common shareholders:
Basic - as reported	$	0.67	$	0.63
Diluted - as reported	$	0.67	$	0.63
Basic - as pro forma	$	0.76	$	0.62
Diluted - as pro forma	$	0.75	$	0.61

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RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2019

RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS

Summary of terms and fair values of the derivative financial instruments

The following table summarizes the terms and fair values of the Company’s derivative financial instruments as of September 30, 2019 and December 31, 2018, respectively (dollars in thousands):

Hedge	Hedge	Notional Amount						Effective		Fair Value
Product	Type	September 30, 2019		December 31, 2018		Strike		Date	Maturity	September 30, 2019		December 31, 2018
Swap	Cash flow (1)	$	—	$	75,000	2.8015	%	6/28/2019	6/28/2029	$	—	$	(516)
Swap	Cash flow (1)		—		50,000	2.8030	%	6/28/2019	6/28/2029		—		(350)
Swap	Cash flow (1)		—		25,000	2.8020	%	6/28/2019	6/28/2029		—		(173)
		$	—	$	150,000					$	—	$	(1,039)

(1) These interest rate swaps were entered into on December 24, 2018 to protect the Company against adverse fluctuations in interest rates by reducing exposure to variability in cash flows relating to interest payments on a

forecasted issuance of long-term debt. On January 24, 2019, in conjunction with the issuance of the 2029 Notes, the Company settled these interest rate swaps for $0.8 million. The termination premium will be reclassified from accumulated other comprehensive loss as an increase to interest expense over the life of the 2029 Notes, which mature on February 15, 2029.

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UNSECURED SENIOR NOTES (Tables)

9 Months Ended

Sep. 30, 2019

Senior Notes

Summary of debt

	September 30,		December 31,		Effective		Issuance	Maturity
Unsecured Senior Notes	2019		2018		Interest Rate		Date	Date
	(in thousands)
$250M 4.800% Guaranteed Notes due 2022	$	250,000	$	250,000	4.82	%	Jun-12	Jul-22
$300M 4.375% Guaranteed Notes due 2023 (1)		300,000		300,000	4.33	%	Various (1)	Dec-23
$300M 4.000% Guaranteed Notes due 2025 (2)		300,000		300,000	3.99	%	Various (2)	Nov-25
$300M 3.125% Guaranteed Notes due 2026		300,000		300,000	3.18	%	Aug-16	Sep-26
$350M 4.375% Guaranteed Notes due 2029		350,000		—	4.46	%	Jan-19	Feb-29
Principal balance outstanding		1,500,000		1,150,000
Less: Discount on issuance of unsecured senior notes, net		(2,635)		(568)
Less: Loan procurement costs, net		(7,882)		(5,908)
Total unsecured senior notes, net	$	1,489,483	$	1,143,524

(1) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.375% senior notes due 2023, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.375% senior notes due December 15, 2023 issued on December 17, 2013. The $50.0 million and $250.0 million tranches were priced at 105.040% and 98.995%, respectively, of the principal amount to yield 3.495% and 4.501%, respectively, to maturity. The combined weighted average effective interest rate of the 2023 notes is 4.330%.

(2) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.000% senior notes due 2025, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.000% senior notes due November 15, 2025 issued on October 26, 2015. The $50.0 million and $250.0 million tranches were

priced at 101.343% and 99.735%, respectively, of the principal amount to yield 3.811% and 4.032%, respectively, to maturity. The combined weighted average effective interest rate of the 2025 notes is 3.994%.

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PRO FORMA FINANCIAL INFORMATION (Details) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019 $ / shares	Sep. 30, 2018 $ / shares	Sep. 30, 2019 USD ($) facility $ / shares	Sep. 30, 2018 USD ($) $ / shares	Dec. 31, 2018 USD ($) property
Consolidated results of operations on a pro forma basis
Pro forma revenue | $			$ 486,100	$ 466,590
Pro forma income | $			$ 144,747	$ 114,310
Earnings per share from continuing operations:
Basic - as reported (in dollars per share)	$ 0.22	$ 0.23	$ 0.67	$ 0.63
Diluted - as reported (in dollars per share)	$ 0.22	$ 0.23	0.67	0.63
Basic - as pro forma (in dollars per share)			0.76	0.62
Diluted - as pro forma (in dollars per share)			$ 0.75	$ 0.61
Self-storage facilities
Self-storage facilities
Number of self-storage facilities acquired			24		10
Aggregate purchase price | $			$ 188,700		$ 227,500

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FAIR VALUE MEASUREMENTS (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($) item	Dec. 31, 2018 USD ($)
Fair value of financial assets and liabilities carried at fair value
Derivative Assets	$ 0
Derivative Liabilities	0
Aggregate carrying value of total debt	1,824,300	$ 1,747,100
Estimated fair value of total debt	$ 1,926,000	1,731,900
Interest rate swap
Fair value of financial assets and liabilities carried at fair value
Number of counterparties to derivative contracts who experienced significant downgrades in 2017 | item	0
Level 2
Fair value of financial assets and liabilities carried at fair value
Total liabilities at fair value		1,039
Level 2 | Interest rate swap
Fair value of financial assets and liabilities carried at fair value
Derivative Liabilities		$ 1,039

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LEASES - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
LEASES
Operating lease cost	$ 749	$ 2,558
Short-term lease cost	294	907
Total lease cost	$ 1,043	$ 3,465

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INVESTMENT ACTIVITY

9 Months Ended

Sep. 30, 2019

INVESTMENT ACTIVITY

INVESTMENT ACTIVITY

4. INVESTMENT ACTIVITY

2019 Acquisitions

During the nine months ended September 30, 2019, the Company acquired six stores located in Arizona (1), Florida (2), Georgia (1), Maryland (1) and South Carolina (1) for an aggregate purchase price of approximately $60.5 million. In connection with these transactions, which were accounted for as asset acquisitions, the Company allocated the purchase price and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consisted of in-place leases, which aggregated to $2.4 million at the time of the acquisitions and prior to amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the three and nine months ended September 30, 2019 was approximately $0.5 million and $1.0 million, respectively.

Additionally, on June 6, 2019, the Company acquired its partner’s 90% ownership interest in HVP III, an unconsolidated real estate venture in which the Company previously owned a 10% noncontrolling interest and that was accounted for under the equity method of accounting. As of the date of acquisition, HVP III owned 18 stores located in Georgia (1), Massachusetts (7), North Carolina (1), South Carolina (7) and Tennessee (2) (the “HVP III Assets”). The purchase price for the 90% ownership interest was $128.3 million, which was comprised of cash consideration of $120.0 million and $8.3 million of the Company’s escrowed proceeds from HVP III’s sale of 50 properties to an unaffiliated buyer on June 5, 2019 (see note 5). The HVP III Assets were recorded by the Company at $137.5 million, which consisted of the $128.3 million purchase price plus the Company’s $10.6 million carryover basis of its previously held equity interest in HVP III, offset by $1.4 million of acquired cash. As a result of the transaction, which was accounted for as an asset acquisition, the HVP III Assets became wholly-owned by the Company and are now consolidated within its financial statements. No gain or loss was recognized as a result of the transaction. In connection with the transaction, the Company allocated the value of the HVP III Assets and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consisted of in-place leases, which aggregated to $14.3 million at the time of the acquisition and prior to amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the three and nine months ended September 30, 2019 was approximately $3.6 million and $4.8 million, respectively.

The following table summarizes the Company’s revenue and losses associated with the 2019 acquisitions, from the acquisition date, that are included in the consolidated statements of operations for the three and nine months ended September 30, 2019:

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(in thousands)
Total revenue	$	4,439	$	6,069
Net loss		(2,382)		(3,513)

As of September 30, 2019, the Company had made aggregate deposits of $3.0 million associated with five stores that were under contract to be acquired for an aggregate acquisition price of $87.9 million. The deposits are reflected in Other assets, net on the Company’s consolidated balance sheets.

Asset Held for Sale

As of September 30, 2019, the Company was under contract to sell a store located in Texas for a sales price of $4.1 million. The assets and liabilities associated with this store have been classified as “held for sale” within the Company’s September 30, 2019 consolidated balance sheets. As of September 30, 2019, the estimated fair value less selling costs of the store was greater than its carrying value, and therefore no loss has been recorded in the current period. The sale of this store, which occurred during the fourth quarter of 2019 (see note 17), does not represent a strategic shift that has, or will have, a major effect on the Company’s operations or financial results.

2018 Acquisitions

During the year ended December 31, 2018, the Company acquired ten stores located throughout the United States, including one store upon completion of construction and the issuance of a certificate of occupancy, for an aggregate purchase price of approximately $227.5 million. In connection with these transactions, which were accounted for as asset acquisitions, the Company allocated the purchase price and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consist of in-place leases, which aggregated $11.3 million at the time of the acquisitions and prior to any amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the three and nine months ended September 30, 2019 was approximately $2.3 million and $7.7 million, respectively. In connection with one of the acquired stores, the Company assumed a $7.2 million mortgage loan that was immediately repaid by the Company. The remainder of the purchase price was funded with $0.2 million of cash and $4.8 million through the issuance of 168,011 OP Units (see note 12). The holder may tender the OP units for redemption by the Operating Partnership for a cash amount per OP Unit equal to the market value of an equivalent number of common shares of the Company. The Company has the right, but not the obligation, to assume and satisfy the redemption obligation of the Operating Partnership by issuing one common share in exchange for each OP Unit tendered for redemption.

2018 Dispositions

On November 28, 2018, the Company sold two stores in Arizona for an aggregate sales price of approximately $17.5 million. In connection with these sales, the Company recorded gains that totaled approximately $10.6 million.

Development Activity

As of September 30, 2019, the Company had invested in joint ventures to develop five self-storage properties located in Massachusetts (1), New York (2), Pennsylvania (1) and Virginia (1). Construction for all projects is expected to be completed by the second quarter of 2021 (see note 12). As of September 30, 2019, development costs incurred to date for these projects totaled $72.4 million. Total construction costs for these projects are expected to be $137.6 million. These costs are capitalized to construction in progress while the projects are under development and are reflected in Storage properties on the Company’s consolidated balance sheets.

The Company has completed the construction and opened for operation the following stores during the period beginning on January 1, 2018 through September 30, 2019. The costs associated with the construction of these stores are capitalized to land, building and improvements, as well as equipment and are reflected in Storage properties on the Company’s consolidated balance sheets.

			CubeSmart
	Number of		Ownership	Total
Store Location	Stores	Date Opened	Interest	Construction Costs
				(in thousands)
Waltham, MA (1)	1	Q3 2019	100%	$	18,000
Queens, NY (2)	1	Q2 2019	100%		47,500
Bayonne, NJ (2) (3)	1	Q2 2019	100%		25,100
Bronx, NY (2)	1	Q3 2018	100%		92,100
	4			$	182,700

(1) On August 8, 2019, the Company, through a joint venture in which the Company owned a 90% interest and that it previously consolidated, completed the construction and opened for operation a store located in Waltham, MA. On September 6, 2019, the Company acquired the noncontrolling member’s 10% interest in the venture for $2.6 million.  Prior to this transaction, the noncontrolling member’s interest was reported in Noncontrolling interests in subsidiaries on the consolidated balance sheets. Since the Company retained its controlling interest in the joint venture and the store is now wholly owned, this transaction was accounted for as an equity transaction. The carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase and the $2.0 million difference between the purchase price paid by the Company and the carrying amount of the noncontrolling interest was recorded as an adjustment to equity attributable to the Company, with no gain or

loss recorded.  In conjunction with the Company’s acquisition of the noncontrolling interest, the $10.5 million related party loan extended by the Company to the venture during the construction period was repaid in full.

(2) These stores were previously owned by three separate consolidated joint ventures, of which the Company held a 51% ownership interest in each. On February 15, 2019, the noncontrolling member in the venture that owned the Bronx, NY store put its 49% interest in the venture to the Company for $37.8 million. On June 25, 2019, the noncontrolling member in the venture that owned the Bayonne, NJ store put its 49% interest in the venture to the Company for $11.5 million. On September 17, 2019, the noncontrolling member in the venture that owned the Queens, NY store put its 49% interest in the venture to the Company for $15.2 million. These amounts are included in Development costs in the consolidated statements of cash flows.

(3) This property is subject to a ground lease.

During the fourth quarter of 2015 and the third quarter of 2017, the Company, through two separate joint ventures in which it owned a 90% interest in each and that were previously consolidated, completed the construction and opened for operation a store located in Queens, NY and a store located in New York, NY, respectively. On June 25, 2019, the Company acquired the noncontrolling member’s 10% interest in the venture that owned the New York, NY store for $18.5 million, and on June 28, 2019, the Company acquired the noncontrolling member’s 10% interest in the venture that owned the Queens, NY store for $9.0 million. Prior to these transactions, the noncontrolling members’ interest in each venture was reported in Noncontrolling interests in subsidiaries on the consolidated balance sheets. Since the Company retained its controlling interest in each joint venture and the stores are now wholly owned, these transactions were accounted for as equity transactions. In each case, the carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase, and the difference between the purchase price paid by the Company and the carrying amount of the noncontrolling interest, which aggregated to $22.6 million, was recorded as an adjustment to equity attributable to the Company, with no gain or loss recorded. The $12.4 million related party loan extended by the Company to the venture that owned the Queens, NY store was repaid in conjunction with the Company’s acquisition of the noncontrolling member’s ownership interest.

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MORTGAGE LOANS AND NOTES PAYABLE

9 Months Ended

Sep. 30, 2019

MORTGAGE LOANS AND NOTES PAYABLE

MORTGAGE LOANS AND NOTES PAYABLE

8. MORTGAGE LOANS AND NOTES PAYABLE

The Company’s mortgage loans and notes payable are summarized as follows:

	Carrying Value as of:
	September 30,		December 31,		Effective		Maturity
Mortgage Loans and Notes Payable	2019		2018		Interest Rate		Date
	(in thousands)
YSI 33 (1)	$	—	$	9,214	6.42	%	Jul-19
YSI 26		7,861		8,022	4.56	%	Nov-20
YSI 57		2,760		2,816	4.61	%	Nov-20
YSI 55		21,674		22,041	4.85	%	Jun-21
YSI 24		24,260		24,893	4.64	%	Jun-21
YSI 65		2,326		2,363	3.85	%	Jun-23
YSI 66		30,737		31,171	3.51	%	Jun-23
YSI 68		5,501		5,626	3.78	%	May-24
Principal balance outstanding		95,119		106,146
Plus: Unamortized fair value adjustment		2,010		2,551
Less: Loan procurement costs, net		(319)		(451)
Total mortgage loans and notes payable, net	$	96,810	$	108,246

(1) YSI 33 was repaid in full on July 1, 2019.

As of September 30, 2019 and December 31, 2018, the Company’s mortgage loans payable were secured by certain of its self-storage properties with net book values of approximately $207.4 million and $231.0 million, respectively. The following table represents the future principal payment requirements on the outstanding mortgage loans and notes payable as of September 30, 2019 (in thousands):

2019	$	625
2020		12,791
2021		45,057
2022		923
2023		31,019
2024 and thereafter		4,704
Total mortgage payments		95,119
Plus: Unamortized fair value adjustment		2,010
Less: Loan procurement costs, net		(319)
Total mortgage loans and notes payable, net	$	96,810

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2019

FAIR VALUE MEASUREMENTS

Schedule of financial assets and liabilities carried at fair value

	Level 1		Level 2		Level 3
Interest rate swap derivative liabilities	$	—	$	1,039	$	—
Total liabilities at fair value	$	—	$	1,039	$	—

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REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS (Tables)

9 Months Ended

Sep. 30, 2019

Credit Facility and Term Loan Facility

Summary of debt

	Carrying Value as of:				Effective Interest
	September 30,		December 31,		Rate as of		Maturity
Unsecured Term Loans	2019		2018		September 30, 2019		Date
	(in thousands)
Credit Facility
Unsecured term loan (1)	$	—	$	200,000	—	%	Jan-19
Term Loan Facility
Unsecured term loan (2)		—		100,000	—	%	Jan-20
Principal balance outstanding		—		300,000
Less: Loan procurement costs, net		—		(201)
Total unsecured term loans, net	$	—	$	299,799

(1) On January 31, 2019, the Company used a portion of the net proceeds from the issuance of $350.0 million of 4.375% Senior Notes due 2029 (the “2029 Notes”) to repay all of the outstanding indebtedness under the unsecured term loan portion of the Credit Facility. 

(2) On June 19, 2019, the Company used an initial advance at closing of the Amended and Restated Credit Facility to repay all of the outstanding indebtedness under the unsecured term loan portion of the Term Loan Facility

that was scheduled to mature in January 2020. Unamortized loan procurement costs of $0.1 million were written off in conjunction with the repayment.

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ORGANIZATION AND NATURE OF OPERATIONS (Details)	9 Months Ended
	Sep. 30, 2019 segment state
Number of states in which self-storage facilities are located | state	24
Number of reportable segments | segment	1
Common stock, conversion ratio	1
Cubesmart
Percentage of the entity's partnership interest in Operating Partnership	99.00%

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INVESTMENT ACTIVITY (Tables)

9 Months Ended

Sep. 30, 2019

INVESTMENT ACTIVITY

Schedule of revenue and earnings from acquisitions since the acquisition dates included in consolidated statement of operations

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(in thousands)
Total revenue	$	4,439	$	6,069
Net loss		(2,382)		(3,513)

Schedule of capitalized costs for investments in storage properties

			CubeSmart
	Number of		Ownership	Total
Store Location	Stores	Date Opened	Interest	Construction Costs
				(in thousands)
Waltham, MA (1)	1	Q3 2019	100%	$	18,000
Queens, NY (2)	1	Q2 2019	100%		47,500
Bayonne, NJ (2) (3)	1	Q2 2019	100%		25,100
Bronx, NY (2)	1	Q3 2018	100%		92,100
	4			$	182,700

(1) On August 8, 2019, the Company, through a joint venture in which the Company owned a 90% interest and that it previously consolidated, completed the construction and opened for operation a store located in Waltham, MA. On September 6, 2019, the Company acquired the noncontrolling member’s 10% interest in the venture for $2.6 million.  Prior to this transaction, the noncontrolling member’s interest was reported in Noncontrolling interests in subsidiaries on the consolidated balance sheets. Since the Company retained its controlling interest in the joint venture and the store is now wholly owned, this transaction was accounted for as an equity transaction. The carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase and the $2.0 million difference between the purchase price paid by the Company and the carrying amount of the noncontrolling interest was recorded as an adjustment to equity attributable to the Company, with no gain or

loss recorded.  In conjunction with the Company’s acquisition of the noncontrolling interest, the $10.5 million related party loan extended by the Company to the venture during the construction period was repaid in full.

(2) These stores were previously owned by three separate consolidated joint ventures, of which the Company held a 51% ownership interest in each. On February 15, 2019, the noncontrolling member in the venture that owned the Bronx, NY store put its 49% interest in the venture to the Company for $37.8 million. On June 25, 2019, the noncontrolling member in the venture that owned the Bayonne, NJ store put its 49% interest in the venture to the Company for $11.5 million. On September 17, 2019, the noncontrolling member in the venture that owned the Queens, NY store put its 49% interest in the venture to the Company for $15.2 million. These amounts are included in Development costs in the consolidated statements of cash flows.

(3) This property is subject to a ground lease.

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NONCONTROLLING INTERESTS

9 Months Ended

Sep. 30, 2019

NONCONTROLLING INTERESTS

NONCONTROLLING INTERESTS

12. NONCONTROLLING INTERESTS

Interests in Consolidated Joint Ventures

Noncontrolling interests in subsidiaries represent the ownership interests of third parties in the Company’s consolidated real estate ventures. The Company has determined that these ventures are VIEs, and that the Company is the primary beneficiary. Accordingly, the Company consolidates the assets, liabilities and results of operations of the real estate ventures in the table below (dollars in thousands):

			Date Opened /	CubeSmart
	Number		Estimated	Ownership	September 30, 2019
Consolidated Joint Ventures	of Stores	Location	Opening	Interest	Total Assets		Total Liabilities
CS Valley Forge Village Storage, LLC ("VFV") (1)	1	King of Prussia, PA	Q2 2021 (est.)	70%	$	3,402	$	3
Shirlington Rd II, LLC ("SH2") (2)	1	Arlington, VA	Q1 2021 (est.)	90%		8,548		2
CS 2087 Hempstead Tpk, LLC ("Hempstead") (3)	1	East Meadow, NY	Q4 2020 (est.)	51%		10,717		2,279
CS SDP Newtonville, LLC ("Newton") (1)	1	Newton, MA	Q3 2020 (est.)	90%		9,585		3,060
CS 1158 McDonald Ave, LLC ("McDonald Ave") (3)	1	Brooklyn, NY	Q4 2019 (est.)	51%		40,582		11,307
Shirlington Rd, LLC ("SH1") (2)	1	Arlington, VA	Q2 2015	90%		14,969		159
	6				$	87,803	$	16,810

(1) The Company has a related party loan commitment to VFV and Newton to fund a portion of the construction costs. As of September 30, 2019, the Company has funded $1.8 million of the total $12.1 million loan commitment to Newton, which is included in the total liability amount within the table above. This loan and the related interest were eliminated for consolidation purposes. As of September 30, 2019, the Company had not funded any of its $12.4 million loan commitment to VFV.

(2) On March 7, 2019, the Company acquired the noncontrolling member’s ownership interest in SH1, inclusive of its promoted interest in the venture, for $10.0 million. Prior to this transaction, the noncontrolling member’s

interest was reported in Noncontrolling interests in subsidiaries on the consolidated balance sheets. Since the Company retained its controlling interest in the joint venture, this transaction was accounted for as an equity transaction. The carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase, and the $9.7 million difference between the purchase price paid by the Company and the carrying amount of the noncontrolling interest was recorded as an adjustment to equity attributable to the Company. In conjunction with the Company’s acquisition of the noncontrolling interest in SH1, the $12.2 million related party loan extended by the Company to the venture during the construction period was repaid in full. Subsequently, the noncontrolling member re-acquired a 10% interest in SH1 and a 10% interest in SH2 for a combined $4.8 million, which is included in Noncontrolling interests in subsidiaries on the consolidated balance sheets.

(3) The noncontrolling members of Hempstead and McDonald Ave have the option to put their ownership interest in the ventures to the Company for $6.6 million and $10.0 million, respectively, within the one-year period after construction of each store is substantially complete. Additionally, the Company has a one-year option to call the ownership interest of the noncontrolling members of Hempstead and McDonald Ave for $6.6 million and $10.0 million, respectively, beginning on the second anniversary of the respective store’s construction being substantially complete. The Company, at its sole discretion, may pay cash and/or issue OP Units in exchange for the noncontrolling member’s interest in Hempstead and McDonald. The Company is accreting the respective liabilities during the development periods and, as of September 30, 2019, has accrued $1.9 million and $9.4 million, related to Hempstead and McDonald Ave, respectively, which are included in Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets.

On May 30, 2019, the Company sold its 90% ownership interest in CS SJM E 92nd Street, LLC, a previously consolidated development joint venture, for $3.7 million. In conjunction with the sale, $0.7 million of the $1.7 million related party loan extended by the Company to the venture was repaid. The remaining $1.0 million was recorded as a note receivable and was repaid during the third quarter of 2019. Additionally, as a result of the transaction, the Company was released from its obligations under the venture’s ground lease, and right-of-use assets and lease liabilities totaling $13.4 million and $14.6 million, respectively, were removed from the Company’s consolidated balance sheets.

Operating Partnership Ownership

The Company follows guidance regarding the classification and measurement of redeemable securities. Under this guidance, securities that are redeemable for cash or other assets, at the option of the holder and not solely within the control of the issuer, must be classified outside of permanent equity/capital. This classification results in certain outside ownership interests being included as redeemable noncontrolling interests outside of permanent equity/capital in the consolidated balance sheets. The Company makes this determination based on terms in applicable agreements, specifically in relation to redemption provisions.

Additionally, with respect to redeemable ownership interests in the Operating Partnership held by third parties for which CubeSmart has a choice to settle the redemption by delivery of its own shares, the Operating Partnership considered the guidance regarding accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own shares, to evaluate whether CubeSmart controls the actions or events necessary to presume share settlement. The guidance also requires that noncontrolling interests classified outside of permanent capital be adjusted each period to the greater of the carrying value based on the accumulation of historical cost or the redemption value.

Approximately 1.0% of the outstanding OP Units, as of September 30, 2019 and December 31, 2018, were not owned by CubeSmart, the sole general partner. The interests in the Operating Partnership represented by these OP Units were a component of the consideration that the Operating Partnership paid to acquire certain self-storage properties. The holders of the OP Units are limited partners in the Operating Partnership and have the right to require CubeSmart to redeem all or part of their OP Units for, at the general partner’s option, an equivalent number of common shares of CubeSmart or cash based upon the fair value of an equivalent number of common shares of CubeSmart. However, the partnership agreement contains certain provisions that could result in a settlement outside the control of CubeSmart and the Operating Partnership, as CubeSmart does not have the ability to settle in unregistered shares. Accordingly, consistent with the guidance, the Operating Partnership will record the OP Units owned by third parties outside of permanent

capital in the consolidated balance sheets. Net income or loss related to the OP Units owned by third parties is excluded from net income or loss attributable to Operating Partner in the consolidated statements of operations.

On January 31, 2018, the Company acquired a store in Texas for $12.2 million and assumed an existing mortgage loan with an outstanding balance of approximately $7.2 million, which was immediately repaid by the Company. In conjunction with the closing, the Company paid $0.2 million in cash and issued 168,011 OP Units, valued at approximately $4.8 million, to pay the remaining consideration.

As of September 30, 2019 and December 31, 2018, 1,865,570 and 1,945,570 OP units, respectively, were held by third parties. The per unit cash redemption amount of the outstanding OP units was calculated based upon the average of the closing prices of the common shares of CubeSmart on the New York Stock Exchange for the final 10 trading days of the quarter. Based on the Company’s evaluation of the redemption value of the redeemable noncontrolling interest, the Company has reflected these interests at their redemption value at September 30, 2019 and December 31, 2018. As of September 30, 2019 and December 31, 2018, the Operating Partnership recorded increases in the value of OP Units owned by third parties and corresponding decreases to capital of $12.3 million and $0.3 million, respectively.

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PRO FORMA FINANCIAL INFORMATION

9 Months Ended

Sep. 30, 2019

PRO FORMA FINANCIAL INFORMATION

PRO FORMA FINANCIAL INFORMATION

16. PRO FORMA FINANCIAL INFORMATION

During the nine months ended September 30, 2019 and the year ended December 31, 2018, the Company acquired 24 stores for an aggregate purchase price of $188.7 million (see note 3) and ten stores for an aggregate purchase price of approximately $227.5 million, respectively.

The condensed consolidated pro forma financial information set forth below reflects adjustments to the Company’s historical financial data to give effect to each of the acquisitions and related financing activity (including the issuance of common shares) that occurred during 2019 and 2018 as if each had occurred as of January 1, 2018 and 2017, respectively. The unaudited pro forma information presented below does not purport to represent what the Company’s actual results of operations would have been for the periods indicated, nor does it purport to represent the Company’s future results of operations.

The following table summarizes, on a pro forma basis, the Company’s consolidated results of operations for the nine months ended September 30, 2019 and 2018 based on the assumptions described above:

	Nine Months Ended September 30,
	2019		2018
	(in thousands, except per share data)
Pro forma revenues	$	486,100	$	466,590
Pro forma net income	$	144,747	$	114,310
Earnings per share attributable to common shareholders:
Basic - as reported	$	0.67	$	0.63
Diluted - as reported	$	0.67	$	0.63
Basic - as pro forma	$	0.76	$	0.62
Diluted - as pro forma	$	0.75	$	0.61

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
ASSETS
Storage properties	$ 4,674,717	$ 4,463,455
Less: Accumulated depreciation	(936,862)	(862,487)
Storage properties, net (including VIE assets of $87,428 and $330,986, respectively)	3,737,855	3,600,968
Cash and cash equivalents	7,293	3,764
Restricted cash	5,555	2,718
Loan procurement costs, net of amortization	4,284	963
Investment in real estate venture, at equity	88,812	95,796
Assets held for sale	2,403
Other assets, net	104,128	48,763
Total assets	3,950,330	3,752,972
LIABILITIES AND EQUITY
Unsecured senior notes, net	1,489,483	1,143,524
Revolving credit facility	237,980	195,525
Unsecured term loans, net		299,799
Mortgage loans and notes payable, net	96,810	108,246
Accounts payable, accrued expenses and other liabilities	150,532	149,914
Distributions payable	62,645	60,627
Deferred revenue	25,611	22,595
Security deposits	470	474
Liabilities held for sale	53
Total liabilities	2,063,584	1,980,704
Noncontrolling interests in the Operating Partnership	65,108	55,819
Commitments and contingencies
Equity
Common shares $.01 par value, 400,000,000 shares authorized, 193,554,347 and 187,145,103 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively	1,936	1,871
Additional paid in capital	2,673,440	2,500,751
Accumulated other comprehensive loss	(749)	(1,029)
Accumulated deficit	(860,985)	(791,915)
Total CubeSmart shareholders' equity	1,813,642	1,709,678
Noncontrolling interests in subsidiaries	7,996	6,771
Total equity	1,821,638	1,716,449
Total liabilities and equity	$ 3,950,330	$ 3,752,972

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REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS (Details) - USD ($) $ in Thousands						9 Months Ended
	Jun. 19, 2019	Apr. 04, 2017	Oct. 26, 2015	Dec. 17, 2013	Jun. 20, 2011	Sep. 30, 2019	Jan. 31, 2019	Dec. 31, 2018	Apr. 22, 2015
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Loan procurement costs, net of amortization						$ 4,284		$ 963
Unsecured term loan								299,799
Less: Loan procurement costs, net						(4,284)		(963)
Term Loan
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Write off of unamortized cost	$ 100
Term Loan B
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Unsecured term loan								100,000
Revolver
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Remaining borrowing capacity						511,300
Outstanding letter of credit						$ 700
Effective weighted average interest rate (as a percent)						3.12%
Term Loan Facility | Maximum
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Total indebtedness to total asset value ratio (as a percent)						60.00%
Term Loan Facility | Term Loan B
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Maximum borrowing capacity					$ 100,000
Term of debt instrument					7 years
Credit Facility
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Loan procurement costs capitalized	3,900
Loan procurement costs, net of amortization								201
Unsecured term loan								300,000
Less: Loan procurement costs, net								(201)
Total unsecured term loans, net								299,799
Credit Facility | Minimum
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Fixed charge coverage ratio						1.50
Credit Facility | Maximum
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Total indebtedness to total asset value ratio (as a percent)						60.00%
Credit Facility | Revolver
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Maximum borrowing capacity	$ 750,000								$ 500,000
Interest rate, basis spread (as a percent)						1.10%
Facility fee (as a percent)						0.15%
Credit Facility | Unsecured term loan
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Debt amount									$ 200,000
Unsecured term loan								$ 200,000
Senior notes 4.375% due 2023
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Debt amount		$ 50,000		$ 250,000
Proceeds from senior notes		$ 50,000		$ 250,000
Interest rate (as a percent)		4.375%		4.375%		4.375%
Effective interest rate (as a percent)		3.495%		4.501%		4.33%
Effective weighted average interest rate (as a percent)						4.33%
Senior notes 4.000% due 2025
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Debt amount		$ 50,000	$ 250,000
Proceeds from senior notes		$ 50,000	$ 250,000
Interest rate (as a percent)		4.00%	4.00%			4.00%
Effective interest rate (as a percent)		3.811%	4.032%			3.99%
Effective weighted average interest rate (as a percent)						3.994%
Senior Notes 4.375 % Due 2029
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS
Debt amount							$ 350,000
Interest rate (as a percent)						4.375%	4.375%
Effective interest rate (as a percent)						4.46%

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STORAGE PROPERTIES - Activity (Details) $ in Thousands		1 Months Ended	9 Months Ended			12 Months Ended
	Jun. 06, 2019 property	Nov. 30, 2018 USD ($) facility	Sep. 30, 2019 property	Sep. 30, 2019 facility	Sep. 30, 2019 USD ($)	Dec. 31, 2018 USD ($) facility
HVP III
STORAGE FACILITIES
Number of self-storage facilities | property	18
HVP III
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | property	18
Percentage of interest acquired	90.00%
2019 Acquisitions
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties)			6	24
Purchase Price					$ 188,700
2019 Acquisitions | Maryland Asset March 2019
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility				1
Purchase Price					22,000
2019 Acquisitions | Florida Assets April 2019
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility				2
Purchase Price					19,000
2019 Acquisitions | Arizona Asset May 2019
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility				1
Purchase Price					1,550
2019 Acquisitions | HVP III Assets June 2019
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility				18
Purchase Price					128,250
2019 Acquisitions | Georgia Asset August 2019
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility				1
Purchase Price					14,600
2019 Acquisitions | South Carolina Asset August 2019
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility				1
Purchase Price					$ 3,300
2018 Acquisitions
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility						10
Purchase Price						$ 227,518
2018 Acquisitions | Texas Asset January 2018
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility						1
Purchase Price						$ 12,200
2018 Acquisitions | Texas Asset May 2018
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility						1
Purchase Price						$ 19,000
2018 Acquisitions | Metro DC Asset July 2018
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility						1
Purchase Price						$ 34,200
2018 Acquisitions | Nevada Asset September 2018
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility						1
Purchase Price						$ 14,350
2018 Acquisitions | North Carolina Asset September 2018
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility						1
Purchase Price						$ 11,000
2018 Acquisitions | California Asset October 2018
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility						1
Purchase Price						$ 53,250
2018 Acquisitions | Texas Asset October 2018
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility						1
Purchase Price						$ 23,150
2018 Acquisitions | California Asset November 2018
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility						1
Purchase Price						$ 19,118
2018 Acquisitions | New York Asset November 2018
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility						1
Purchase Price						$ 37,000
2018 Acquisitions | Illinois Asset December 2018
STORAGE FACILITIES
Number of Facilities, acquisitions (in properties) | facility						1
Purchase Price						$ 4,250
2018 Dispositions
STORAGE FACILITIES
Number of Facilities, dispositions (in properties) | facility						2
Sale Price						$ 17,502
2018 Dispositions | Arizona Asset
STORAGE FACILITIES
Number of Facilities, dispositions (in properties) | facility		2				2
Sale Price		$ 17,500				$ 17,502

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CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands	Total Shareholders' Equity	Common Shares	Additional Paid-in Capital	Accumulated Other Comprehensive (Loss) Income	Accumulated Deficit	Noncontrolling Interest in Subsidiaries	Noncontrolling Interests in Operating Partnership	Total
Balance at Dec. 31, 2017	$ 1,629,134	$ 1,822	$ 2,356,620	$ 3	$ (729,311)	$ 6,236		$ 1,635,370
Balance (in shares) at Dec. 31, 2017		182,216
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2017							$ 54,320
Increase (Decrease) in Stockholders' Equity
Contributions from noncontrolling interests in subsidiaries						738		738
Issuance of common shares	(44)		(44)					(44)
Issuance of restricted shares	1	$ 1						1
Issuance of restricted shares (in shares)		64
Issuance of OP units							4,782
Exercise of stock options	2		2					2
Amortization of restricted shares	(242)		(242)					(242)
Share compensation expense	423		423					423
Adjustment for noncontrolling interest in the Operating Partnership	1,169				1,169		(1,169)	1,169
Net income (loss)	34,423				34,423	(7)		34,416
Net income (loss)							383
Other comprehensive income, net	276			276				276
Other comprehensive income, net							3
Common share distributions	(54,780)				(54,780)		(614)	(54,780)
Balance at Mar. 31, 2018	1,610,362	$ 1,823	2,356,759	279	(748,499)	6,967		1,617,329
Balance (in shares) at Mar. 31, 2018		182,280
Balance of Noncontrolling Interests in the Operating Partnership at Mar. 31, 2018							57,705
Balance at Dec. 31, 2017	1,629,134	$ 1,822	2,356,620	3	(729,311)	6,236		1,635,370
Balance (in shares) at Dec. 31, 2017		182,216
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2017							54,320
Increase (Decrease) in Stockholders' Equity
Acquisition of noncontrolling interest in subsidiary								(300)
Balance at Dec. 31, 2018	1,709,678	$ 1,871	2,500,751	(1,029)	(791,915)	6,771		1,716,449
Balance (in shares) at Dec. 31, 2018		187,145
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2018							55,819	55,819
Balance at Mar. 31, 2018	1,610,362	$ 1,823	2,356,759	279	(748,499)	6,967		1,617,329
Balance (in shares) at Mar. 31, 2018		182,280
Balance of Noncontrolling Interests in the Operating Partnership at Mar. 31, 2018							57,705
Increase (Decrease) in Stockholders' Equity
Contributions from noncontrolling interests in subsidiaries						105		105
Distributions paid to noncontrolling interests in subsidiaries						(80)		(80)
Issuance of common shares	95,466	$ 32	95,434					95,466
Issuance of common shares (in shares)		3,134
Issuance of restricted shares (in shares)		20
Conversion from units to shares	1,342		1,342				(1,342)	1,342
Conversion from units to shares (in shares)		44
Exercise of stock options	3,781	$ 4	3,777					3,781
Exercise of stock options (in shares)		399
Amortization of restricted shares	865		865					865
Share compensation expense	344		344					344
Adjustment for noncontrolling interest in the Operating Partnership	(8,323)				(8,323)		8,323	(8,323)
Net income (loss)	38,410				38,410	(85)		38,325
Net income (loss)							426
Other comprehensive income, net	126			(279)	405			126
Other comprehensive income, net							1
Common share distributions	(55,842)				(55,842)		(601)	(55,842)
Balance at Jun. 30, 2018	1,686,531	$ 1,859	2,458,521		(773,849)	6,907		1,693,438
Balance (in shares) at Jun. 30, 2018		185,877
Balance of Noncontrolling Interests in the Operating Partnership at Jun. 30, 2018							64,512
Increase (Decrease) in Stockholders' Equity
Contributions from noncontrolling interests in subsidiaries						74		74
Distributions paid to noncontrolling interests in subsidiaries						(54)		(54)
Issuance of common shares	12,913	$ 4	12,909					12,913
Issuance of common shares (in shares)		420
Issuance of restricted shares (in shares)		1
Issuance of OP units							1,460
Exercise of stock options	52		52					52
Exercise of stock options (in shares)		6
Amortization of restricted shares	970		970					970
Share compensation expense	387		387					387
Adjustment for noncontrolling interest in the Operating Partnership	7,388				7,388		(7,388)	7,388
Net income (loss)	42,900				42,900	(74)		42,826
Net income (loss)							476
Common share distributions	(55,972)				(55,972)		(614)	(55,972)
Balance at Sep. 30, 2018	1,695,169	$ 1,863	2,472,839		(779,533)	6,853		1,702,022
Balance (in shares) at Sep. 30, 2018		186,304
Balance of Noncontrolling Interests in the Operating Partnership at Sep. 30, 2018							58,446
Balance at Dec. 31, 2018	1,709,678	$ 1,871	2,500,751	(1,029)	(791,915)	6,771		1,716,449
Balance (in shares) at Dec. 31, 2018		187,145
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2018							55,819	55,819
Increase (Decrease) in Stockholders' Equity
Contributions from noncontrolling interests in subsidiaries						4,828		4,828
Distributions paid to noncontrolling interests in subsidiaries						(66)		(66)
Acquisition of noncontrolling interest in subsidiary	(9,728)		(9,728)			(272)		(10,000)
Issuance of common shares	24,580	$ 8	24,572					24,580
Issuance of common shares (in shares)		773
Issuance of restricted shares (in shares)		19
Conversion from units to shares	1,842	$ 1	1,841				(1,842)	1,842
Conversion from units to shares (in shares)		60
Exercise of stock options	1,049	$ 1	1,048					1,049
Exercise of stock options (in shares)		140
Amortization of restricted shares	798		798					798
Share compensation expense	468		468					468
Adjustment for noncontrolling interest in the Operating Partnership	(6,681)				(6,681)		6,681	(6,681)
Net income (loss)	35,498				35,498	(70)		35,428
Net income (loss)							358
Other comprehensive income, net	240			240				240
Other comprehensive income, net							2
Common share distributions	(60,375)				(60,375)		(604)	(60,375)
Balance at Mar. 31, 2019	1,697,369	$ 1,881	2,519,750	(789)	(823,473)	11,191		1,708,560
Balance (in shares) at Mar. 31, 2019		188,137
Balance of Noncontrolling Interests in the Operating Partnership at Mar. 31, 2019							60,414
Balance at Dec. 31, 2018	1,709,678	$ 1,871	2,500,751	(1,029)	(791,915)	6,771		1,716,449
Balance (in shares) at Dec. 31, 2018		187,145
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2018							55,819	55,819
Increase (Decrease) in Stockholders' Equity
Acquisition of noncontrolling interest in subsidiary								(12,300)
Balance at Sep. 30, 2019	1,813,642	$ 1,936	2,673,440	(749)	(860,985)	7,996		1,821,638
Balance (in shares) at Sep. 30, 2019		193,554
Balance of Noncontrolling Interests in the Operating Partnership at Sep. 30, 2019							65,108	65,108
Balance at Mar. 31, 2019	1,697,369	$ 1,881	2,519,750	(789)	(823,473)	11,191		1,708,560
Balance (in shares) at Mar. 31, 2019		188,137
Balance of Noncontrolling Interests in the Operating Partnership at Mar. 31, 2019							60,414
Increase (Decrease) in Stockholders' Equity
Distributions paid to noncontrolling interests in subsidiaries						(8)		(8)
Acquisition of noncontrolling interest in subsidiary	(22,573)		(22,573)			(5,045)		(27,618)
Issuance of common shares	110,521	$ 34	110,487					110,521
Issuance of common shares (in shares)		3,353
Issuance of restricted shares (in shares)		31
Conversion from units to shares	644		644				(644)	644
Conversion from units to shares (in shares)		20
Exercise of stock options	962	$ 1	961					962
Exercise of stock options (in shares)		85
Amortization of restricted shares	1,231		1,231					1,231
Share compensation expense	439		439					439
Adjustment for noncontrolling interest in the Operating Partnership	(2,713)				(2,713)		2,713	(2,713)
Net income (loss)	49,420				49,420	(41)		49,379
Net income (loss)							499
Other comprehensive income, net	20			20				20
Common share distributions	(61,431)				(61,431)		(597)	(61,431)
Balance at Jun. 30, 2019	1,773,889	$ 1,916	2,610,939	(769)	(838,197)	6,097		1,779,986
Balance (in shares) at Jun. 30, 2019		191,626
Balance of Noncontrolling Interests in the Operating Partnership at Jun. 30, 2019							62,385
Increase (Decrease) in Stockholders' Equity
Contributions from noncontrolling interests in subsidiaries						2,548		2,548
Distributions paid to noncontrolling interests in subsidiaries						(68)		(68)
Acquisition of noncontrolling interest in subsidiary	(2,020)		(2,020)			(598)		(2,618)
Issuance of common shares	61,232	$ 18	61,214					61,232
Issuance of common shares (in shares)		1,773
Issuance of restricted shares (in shares)		1
Exercise of stock options	1,655	$ 2	1,653					1,655
Exercise of stock options (in shares)		154
Amortization of restricted shares	1,214		1,214					1,214
Share compensation expense	440		440					440
Adjustment for noncontrolling interest in the Operating Partnership	(2,894)				(2,894)		2,894	(2,894)
Net income (loss)	42,154				42,154	17		42,171
Net income (loss)							426
Other comprehensive income, net	20			20				20
Common share distributions	(62,048)				(62,048)		(597)	(62,048)
Balance at Sep. 30, 2019	$ 1,813,642	$ 1,936	$ 2,673,440	$ (749)	$ (860,985)	$ 7,996		1,821,638
Balance (in shares) at Sep. 30, 2019		193,554
Balance of Noncontrolling Interests in the Operating Partnership at Sep. 30, 2019							$ 65,108	$ 65,108

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RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
	Jan. 24, 2019	Sep. 30, 2019	Sep. 30, 2019	Dec. 31, 2018
Derivative financial instruments
Fair Value		$ 0	$ 0
Settlement of hedge transactions			807
Realized losses reclassified from accumulated other comprehensive loss		$ 20	50
Amount estimated to be reclassified as an increase to interest expense			$ 100
Designated | Cash flow | Interest rate swap
Derivative financial instruments
Notional Amount				$ 150,000
Fair Value				(1,039)
Settlement of hedge transactions	$ 800
Designated | Cash flow | Hedge Product, Swap one
Derivative financial instruments
Notional Amount				75,000
Swap, Strike rate (as a percent)		2.8015%	2.8015%
Fair Value				(516)
Designated | Cash flow | Hedge Product, Swap two
Derivative financial instruments
Notional Amount				50,000
Swap, Strike rate (as a percent)		2.803%	2.803%
Fair Value				(350)
Designated | Cash flow | Hedge Product, Swap three
Derivative financial instruments
Notional Amount				25,000
Swap, Strike rate (as a percent)		2.802%	2.802%
Fair Value				$ (173)

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CONSOLIDATED STATEMENTS OF OPERATIONS (LP cube) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
REVENUES
Rental income	$ 142,207	$ 132,476	$ 409,826	$ 384,480
Total revenues	166,547	153,370	478,409	444,062
OPERATING EXPENSES
Property operating expenses	53,465	48,755	155,010	147,037
Depreciation and amortization	43,379	35,239	122,484	105,251
General and administrative	10,011	9,780	28,958	26,865
Total operating expenses	106,855	93,774	306,452	279,153
Interest:
Interest expense on loans	(18,207)	(15,191)	(53,858)	(45,797)
Loan procurement amortization expense	(687)	(578)	(2,082)	(1,735)
Equity in earnings (losses) of real estate ventures	152	(292)	10,940	(785)
Other	1,647	(233)	1,304	260
Total other expense	(17,095)	(16,294)	(43,696)	(48,057)
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
Operating Partnership interests of third parties	$ (426)	$ (476)	$ (1,283)	$ (1,285)
Diluted earnings per share attributable to common shareholders (in dollars per share)	$ 0.22	$ 0.23	$ 0.67	$ 0.63
Weighted-average basic units outstanding (in units)	192,927	186,074	189,970	184,036
Weighted-average diluted units outstanding (in units)	193,817	186,916	190,774	184,829
Other Property Related Income
REVENUES
Property related income	$ 18,054	$ 15,494	$ 50,651	$ 44,788
Property Management Fee Income
REVENUES
Property related income	6,286	5,400	17,932	14,794
Cubesmart, L P and Subsidiaries
REVENUES
Rental income	142,207	132,476	409,826	384,480
Total revenues	166,547	153,370	478,409	444,062
OPERATING EXPENSES
Property operating expenses	53,465	48,755	155,010	147,037
Depreciation and amortization	43,379	35,239	122,484	105,251
General and administrative	10,011	9,780	28,958	26,865
Total operating expenses	106,855	93,774	306,452	279,153
Interest:
Interest expense on loans	(18,207)	(15,191)	(53,858)	(45,797)
Loan procurement amortization expense	(687)	(578)	(2,082)	(1,735)
Equity in earnings (losses) of real estate ventures	152	(292)	10,940	(785)
Other	1,647	(233)	1,304	260
Total other expense	(17,095)	(16,294)	(43,696)	(48,057)
NET INCOME	42,597	43,302	128,261	116,852
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
Noncontrolling interest in subsidiaries	(17)	74	94	166
NET INCOME ATTRIBUTABLE TO CUBESMART L.P.	42,580	43,376	128,355	117,018
Operating Partnership interests of third parties	(426)	(476)	(1,283)	(1,285)
NET INCOME ATTRIBUTABLE TO COMMON UNITHOLDERS	$ 42,154	$ 42,900	$ 127,072	$ 115,733
Basic earnings per unit attributable to common unitholders	$ 0.22	$ 0.23	$ 0.67	$ 0.63
Diluted earnings per share attributable to common shareholders (in dollars per share)	$ 0.22	$ 0.23	$ 0.67	$ 0.63
Weighted-average basic units outstanding (in units)	192,927	186,074	189,970	184,036
Weighted-average diluted units outstanding (in units)	193,817	186,916	190,774	184,829
Cubesmart, L P and Subsidiaries | Other Property Related Income
REVENUES
Property related income	$ 18,054	$ 15,494	$ 50,651	$ 44,788
Cubesmart, L P and Subsidiaries | Property Management Fee Income
REVENUES
Property related income	$ 6,286	$ 5,400	$ 17,932	$ 14,794

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CONSOLIDATED STATEMENTS OF CASH FLOWS (LP cube) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Operating Activities
Net income	$ 128,261	$ 116,852
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	124,566	106,986
Equity in (earnings) losses of real estate ventures	(10,940)	785
Equity compensation expense	4,990	4,196
Accretion of fair market value adjustment of debt	(541)	(553)
Changes in other operating accounts:
Other assets	(8,094)	(5,765)
Accounts payable and accrued expenses	19,336	10,821
Other liabilities	2,274	1,240
Net cash provided by operating activities	259,852	234,562
Investing Activities
Acquisitions of storage facilities	(63,499)	(83,399)
Additions and improvements to storage properties	(28,520)	(19,174)
Development costs	(94,251)	(69,715)
Cash paid for partner's interest in real estate venture, net of cash, cash equivalents and restricted cash acquired	(117,959)
Investment in real estate ventures	(6,558)	(19,154)
Net cash used in investing activities	(305,274)	(185,023)
Cash distributed from real estate ventures	5,513	6,419
Proceeds from:
Unsecured senior notes	347,746
Revolving credit facility	856,011	452,460
Principal payments on:
Revolving credit facility	(917,494)	(439,910)
Unsecured term loans	(200,000)
Mortgage loans and notes payable	(11,027)	(9,137)
Loan procurement costs	(3,104)
Settlement of hedge transactions	(807)
Acquisition of noncontrolling interest in subsidiary	(35,408)
Cash paid upon vesting of restricted OP units	(400)	(1,449)
Contributions from noncontrolling interests in subsidiaries	48	917
Distributions paid to noncontrolling interests in subsidiaries	(142)	(134)
Distributions paid to common OP unitholders	(181,811)	(165,357)
Net cash provided by (used in) financing activities	51,788	(52,218)
Cash paid for acquisition of noncontrolling interest	(35,408)
Change in cash, cash equivalents, and restricted cash	6,366	(2,679)
Cash, cash equivalents, and restricted cash at beginning of period	6,482	9,158
Cash, cash equivalents, and restricted cash at end of period	12,848	6,479
Supplemental Cash Flow and Noncash Information
Cash paid for interest, net of interest capitalized	53,176	48,794
Supplemental disclosure of noncash activities:
Proceeds held in escrow from real estate venture's sale of real estate (see note 4)	8,288
Noncash consideration for acquisition of partner's interest in real estate venture (see note 4)	(8,288)
Discount on issuance of unsecured senior notes	2,254
Noncash drawdown on revolving credit facility	103,938
Mortgage loan assumptions		7,166
Repayment of unsecured term loan through noncash drawdown on revolving credit faciltiy	(100,000)
Accretion of put liability	4,671	20,877
Derivative valuation adjustment	(282)	(406)
Loan procurement costs	(3,770)
Issuance of OP units		(6,242)
Acquisition of noncontrolling interest in subsidiary	(4,828)
Contributions from noncontrolling interests in subsidiaries	7,328
Cubesmart, L P and Subsidiaries
Operating Activities
Net income	128,261	116,852
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	124,566	106,986
Equity in (earnings) losses of real estate ventures	(10,940)	785
Equity compensation expense	4,990	4,196
Accretion of fair market value adjustment of debt	(541)	(553)
Changes in other operating accounts:
Other assets	(8,094)	(5,765)
Accounts payable and accrued expenses	19,336	10,821
Other liabilities	2,274	1,240
Net cash provided by operating activities	259,852	234,562
Investing Activities
Acquisitions of storage facilities	(63,499)	(83,399)
Additions and improvements to storage properties	(28,520)	(19,174)
Development costs	(94,251)	(69,715)
Cash paid for partner's interest in real estate venture, net of cash, cash equivalents and restricted cash acquired	(117,959)
Investment in real estate ventures	(6,558)	(19,154)
Cash distributed from real estate ventures	5,513	6,419
Net cash used in investing activities	(305,274)	(185,023)
Proceeds from:
Unsecured senior notes	347,746
Revolving credit facility	856,011	452,460
Principal payments on:
Revolving credit facility	(917,494)	(439,910)
Unsecured term loans	(200,000)
Mortgage loans and notes payable	(11,027)	(9,137)
Loan procurement costs	(3,104)
Settlement of hedge transactions	(807)
Acquisition of noncontrolling interest in subsidiary	(35,408)
Proceeds from issuance of common OP units	196,333	108,336
Cash paid upon vesting of restricted OP units	(400)	(1,449)
Exercise of OP unit options	3,666	3,835
Contributions from noncontrolling interests in subsidiaries	48	917
Distributions paid to noncontrolling interests in subsidiaries	(142)	(134)
Distributions paid to common OP unitholders	(183,634)	(167,136)
Net cash provided by (used in) financing activities	51,788	(52,218)
Cash paid for acquisition of noncontrolling interest	(35,408)
Change in cash, cash equivalents, and restricted cash	6,366	(2,679)
Cash, cash equivalents, and restricted cash at beginning of period	6,482	9,158
Cash, cash equivalents, and restricted cash at end of period	12,848	6,479
Supplemental Cash Flow and Noncash Information
Cash paid for interest, net of interest capitalized	53,176	48,794
Supplemental disclosure of noncash activities:
Proceeds held in escrow from real estate venture's sale of real estate (see note 4)	8,288
Noncash consideration for acquisition of partner's interest in real estate venture (see note 4)	(8,288)
Discount on issuance of unsecured senior notes	2,254
Noncash drawdown on revolving credit facility	103,938
Mortgage loan assumptions		7,166
Repayment of unsecured term loan through noncash drawdown on revolving credit faciltiy	(100,000)
Accretion of put liability	4,671	20,877
Derivative valuation adjustment	282	406
Loan procurement costs	(3,770)
Issuance of OP units		$ 6,242
Acquisition of noncontrolling interest in subsidiary	(4,828)
Contributions from noncontrolling interests in subsidiaries	$ 7,328

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NONCONTROLLING INTERESTS - Operating Partnership Ownership (Details) - USD ($) $ in Thousands		3 Months Ended						9 Months Ended	12 Months Ended
	Jan. 31, 2018	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Dec. 31, 2018
Operating Partnership Ownership
OP Units outstanding which are not owned by the general partner (as a percent)		1.00%						1.00%	1.00%
Elimination of noncontrolling interest in subsidiaries due to acquisition		$ 2,618	$ 27,618	$ 10,000				$ 12,300	$ 300
Adjustment for noncontrolling interest in the Operating Partnership		$ (2,894)	(2,713)	(6,681)	$ 7,388	$ (8,323)	$ 1,169
Texas
Operating Partnership Ownership
OP units issued (in shares)	168,011
Issuance of OP Shares	$ 4,800
Total consideration	12,200
Cash paid for acquisition	200
Amount of mortgage loan commitment	$ 7,200
Cubesmart, L P and Subsidiaries
Operating Partnership Ownership
OP units outstanding (in shares)		1,865,570						1,865,570	1,945,570
Number of trading days used to determine average of the closing prices of the shares								10 days
Elimination of noncontrolling interest in subsidiaries due to acquisition		$ 2,618	27,618	10,000
Adjustment for noncontrolling interest in the Operating Partnership		$ (2,894)	$ (2,713)	$ (6,681)	$ 7,388	$ (8,323)	$ 1,169

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COMMITMENTS AND CONTINGENCIES - Insurance Recoveries (Details) $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)
State Specific Deceptive and Unfair Trade Practices Act [Member]
Commitments and contingencies line items
Loss contingency provision	$ 1.8

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LEASES (Tables)

9 Months Ended

Sep. 30, 2019

LEASES

Summary of lease cost

	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
	(in thousands)
Operating lease cost	$	749	$	2,558
Short-term lease cost (1)		294		907
Total lease cost	$	1,043	$	3,465

(1) Represents automobile leases that have a lease term of 12 months. The Company has made an accounting policy election not to apply the recognition requirements of ASC 842 to this asset class. The lease cost associated with these leases is recognized on a straight-line basis over the related lease term.

Schedule of future operating lease liability maturities

The following table represents the future operating lease liability maturities as of September 30, 2019 (in thousands):

2019	$	556
2020		2,222
2021		2,279
2022		2,436
2023		2,500
2024 and thereafter		93,512
Total operating lease payments		103,505
Less: Imputed interest		(57,283)
Present value of operating lease liabilities	$	46,222

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

9 Months Ended

Sep. 30, 2019

ACCUMULATED OTHER COMPREHENSIVE LOSS

Summary of changes in accumulated other comprehensive loss by component

	Unrealized Gains (Losses)
	on Interest Rate Swaps
Other comprehensive gain before reclassifications	$	230
Amounts reclassified from accumulated other comprehensive loss		50	(1)
Net current-period other comprehensive income		280
Balance at December 31, 2018		(1,029)
Balance at September 30, 2019	$	(749)

(1) See note 10 for additional information about the effects of the amounts reclassified.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2019

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting and, in the opinion of each of the Parent Company’s and Operating Partnership’s respective management, include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of financial position, results of operations and cash flows for each respective company for the interim periods presented in accordance with generally accepted accounting principles in the United States (“GAAP”). Accordingly, readers of this Quarterly Report on Form 10-Q should refer to the Parent Company’s and the Operating Partnership’s audited financial statements prepared in accordance with GAAP, and the related notes thereto, for the year ended December 31, 2018, which are included in the Parent Company’s and the Operating Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The results of operations for the three and nine months ended September 30, 2019 and 2018 are not necessarily indicative of the results of operations to be expected for any future period or the full year.

The Operating Partnership meets the criteria as a variable interest entity (“VIE”). The Parent Company’s sole significant asset is its investment in the Operating Partnership. As a result, substantially all of the Parent Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership. All of the Parent Company’s debt is an obligation of the Operating Partnership.

Recent Accounting Pronouncements

In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The

purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The standard became effective on January 1, 2019. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02 - Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less are accounted for similar to previous guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases and operating leases. The Company adopted the standard on January 1, 2019, the date it became effective for public companies, using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated. There was no net cumulative effect adjustment to retained earnings as of January 1, 2019 as a result of this adoption. Upon adoption, the Company elected the package of practical expedients permitted within the standard, which among other things, allows for the carryforward of historical lease classification. The Company also elected the practical expedient provided to lessors in a subsequent amendment to the standard that removed the requirement to separate lease and nonlease components, provided certain conditions were met. Refer to note 13 for the impact of the adoption of ASU No. 2016-02 – Leases (Topic 842) on the Company’s consolidated financial statements.

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UNSECURED SENIOR NOTES

9 Months Ended

Sep. 30, 2019

UNSECURED SENIOR NOTES

UNSECURED SENIOR NOTES

6. UNSECURED SENIOR NOTES

The Company’s unsecured senior notes are summarized as follows (collectively referred to as the “Senior Notes”):

	September 30,		December 31,		Effective		Issuance	Maturity
Unsecured Senior Notes	2019		2018		Interest Rate		Date	Date
	(in thousands)
$250M 4.800% Guaranteed Notes due 2022	$	250,000	$	250,000	4.82	%	Jun-12	Jul-22
$300M 4.375% Guaranteed Notes due 2023 (1)		300,000		300,000	4.33	%	Various (1)	Dec-23
$300M 4.000% Guaranteed Notes due 2025 (2)		300,000		300,000	3.99	%	Various (2)	Nov-25
$300M 3.125% Guaranteed Notes due 2026		300,000		300,000	3.18	%	Aug-16	Sep-26
$350M 4.375% Guaranteed Notes due 2029		350,000		—	4.46	%	Jan-19	Feb-29
Principal balance outstanding		1,500,000		1,150,000
Less: Discount on issuance of unsecured senior notes, net		(2,635)		(568)
Less: Loan procurement costs, net		(7,882)		(5,908)
Total unsecured senior notes, net	$	1,489,483	$	1,143,524

(1) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.375% senior notes due 2023, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.375% senior notes due December 15, 2023 issued on December 17, 2013. The $50.0 million and $250.0 million tranches were priced at 105.040% and 98.995%, respectively, of the principal amount to yield 3.495% and 4.501%, respectively, to maturity. The combined weighted average effective interest rate of the 2023 notes is 4.330%.

(2) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.000% senior notes due 2025, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.000% senior notes due November 15, 2025 issued on October 26, 2015. The $50.0 million and $250.0 million tranches were

priced at 101.343% and 99.735%, respectively, of the principal amount to yield 3.811% and 4.032%, respectively, to maturity. The combined weighted average effective interest rate of the 2025 notes is 3.994%.

The indenture under which the Senior Notes were issued restricts the ability of the Operating Partnership and its subsidiaries to incur debt unless the Operating Partnership and its consolidated subsidiaries comply with a leverage ratio not to exceed 60% and an interest coverage ratio of more than 1.5:1.0 after giving effect to the incurrence of the debt. The indenture also restricts the ability of the Operating Partnership and its subsidiaries to incur secured debt unless the Operating Partnership and its consolidated subsidiaries comply with a secured debt leverage ratio not to exceed 40% after giving effect to the incurrence of the debt. The indenture also contains other financial and customary covenants, including a covenant not to own unencumbered assets with a value less than 150% of the unsecured indebtedness of the Operating Partnership and its consolidated subsidiaries. As of September 30, 2019, the Operating Partnership was in compliance with all of the financial covenants under the Senior Notes.

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RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2019

RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS

RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS

10. RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS

The Company’s use of derivative instruments is limited to the utilization of interest rate swap agreements or other instruments to manage interest rate risk exposures and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure, as well as to hedge specific transactions. The counterparties to these arrangements are major financial institutions with which the Company and its subsidiaries may also have other financial relationships. The Company is potentially exposed to credit loss in the event of non-performance by these counterparties. However, because of the high credit ratings of the counterparties, the Company does not anticipate any of the counterparties will fail to meet these obligations as they come due. The Company does not hedge credit or property value market risks.

During 2018, the Company entered into interest rate swap agreements that qualified and were designated as cash flow hedges designed to reduce the impact of interest rate changes on a forecasted issuance of long-term debt. Therefore, the interest rate swaps were recorded on the consolidated balance sheet at fair value and the related gains or losses were deferred in shareholders’ equity as accumulated other comprehensive income or loss. These deferred gains and losses are amortized into interest expense during the period or periods in which the related interest payments affect earnings.

The Company formally assessed, both at inception of the hedge and on an on-going basis, whether each derivative was highly-effective in offsetting changes in cash flows of the hedged item. If management determined that the derivative was highly-effective as a hedge, then the Company accounted for the derivative using hedge accounting, pursuant to which gains or losses inherent in the derivative did not impact the Company’s results of operations. If management determined that the derivative was not highly-effective as a hedge or if a derivative ceased to be a highly-effective hedge, the Company discontinued hedge accounting prospectively and reflected in its statement of operations realized and unrealized gains and losses with respect to the derivative.

The following table summarizes the terms and fair values of the Company’s derivative financial instruments as of September 30, 2019 and December 31, 2018, respectively (dollars in thousands):

Hedge	Hedge	Notional Amount						Effective		Fair Value
Product	Type	September 30, 2019		December 31, 2018		Strike		Date	Maturity	September 30, 2019		December 31, 2018
Swap	Cash flow (1)	$	—	$	75,000	2.8015	%	6/28/2019	6/28/2029	$	—	$	(516)
Swap	Cash flow (1)		—		50,000	2.8030	%	6/28/2019	6/28/2029		—		(350)
Swap	Cash flow (1)		—		25,000	2.8020	%	6/28/2019	6/28/2029		—		(173)
		$	—	$	150,000					$	—	$	(1,039)

(1) These interest rate swaps were entered into on December 24, 2018 to protect the Company against adverse fluctuations in interest rates by reducing exposure to variability in cash flows relating to interest payments on a

forecasted issuance of long-term debt. On January 24, 2019, in conjunction with the issuance of the 2029 Notes, the Company settled these interest rate swaps for $0.8 million. The termination premium will be reclassified from accumulated other comprehensive loss as an increase to interest expense over the life of the 2029 Notes, which mature on February 15, 2029.

The Company measured its derivative instruments at fair value and recorded them in the balance sheet as either an asset or liability. As of September 30, 2019, all derivative instruments had been settled. As of December 31, 2018, all derivative instruments were included in accounts payable, accrued expenses and other liabilities on the accompanying consolidated balance sheets. The effective portions of changes in the fair value of the derivatives are reported in accumulated other comprehensive loss. Amounts reported in accumulated other comprehensive loss related to derivatives are reclassified to interest expense as interest payments are made on the Company’s 2029 Notes. The change in unrealized losses on interest rate swaps reflects a reclassification of twenty thousand dollars and fifty thousand dollars of unrealized losses from accumulated other comprehensive loss as an increase to interest expense during the three and nine months ended September 30, 2019, respectively. The Company estimates that $0.1 million will be reclassified as an increase to interest expense in the next 12 months.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2019

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

14. COMMITMENTS AND CONTINGENCIES

The Company is involved in claims from time to time, which arise in the ordinary course of business. In accordance with applicable accounting guidance, management establishes an accrued liability for claim expenses, insurance retention and litigation costs when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be exposure to loss in excess of those amounts accrued. The estimated loss, if any, is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known

and unknown uncertainties. In the opinion of management, the Company has made adequate provisions for potential liabilities, arising from any such matters, which are included in Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets. 

On January 11, 2019, a settlement agreement was entered into for a class action alleging violation of a state specific deceptive and unfair trade practices act. During the year ended December 31, 2018, the Company recorded a $1.8 million charge related to this legal action, which is included in General and administrative on the Company’s consolidated statements of operations. On August 2, 2019, the court granted final approval of the settlement for the class action.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2019

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting and, in the opinion of each of the Parent Company’s and Operating Partnership’s respective management, include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of financial position, results of operations and cash flows for each respective company for the interim periods presented in accordance with generally accepted accounting principles in the United States (“GAAP”). Accordingly, readers of this Quarterly Report on Form 10-Q should refer to the Parent Company’s and the Operating Partnership’s audited financial statements prepared in accordance with GAAP, and the related notes thereto, for the year ended December 31, 2018, which are included in the Parent Company’s and the Operating Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The results of operations for the three and nine months ended September 30, 2019 and 2018 are not necessarily indicative of the results of operations to be expected for any future period or the full year.

The Operating Partnership meets the criteria as a variable interest entity (“VIE”). The Parent Company’s sole significant asset is its investment in the Operating Partnership. As a result, substantially all of the Parent Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership. All of the Parent Company’s debt is an obligation of the Operating Partnership.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The

purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The standard became effective on January 1, 2019. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02 - Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less are accounted for similar to previous guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases and operating leases. The Company adopted the standard on January 1, 2019, the date it became effective for public companies, using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated. There was no net cumulative effect adjustment to retained earnings as of January 1, 2019 as a result of this adoption. Upon adoption, the Company elected the package of practical expedients permitted within the standard, which among other things, allows for the carryforward of historical lease classification. The Company also elected the practical expedient provided to lessors in a subsequent amendment to the standard that removed the requirement to separate lease and nonlease components, provided certain conditions were met. Refer to note 13 for the impact of the adoption of ASU No. 2016-02 – Leases (Topic 842) on the Company’s consolidated financial statements.

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CONSOLIDATED BALANCE SHEETS (LP cube) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
ASSETS
Storage properties	$ 4,674,717	$ 4,463,455
Less: Accumulated depreciation	(936,862)	(862,487)
Storage properties, net (including VIE assets of $87,428 and $330,986, respectively)	3,737,855	3,600,968
Cash and cash equivalents	7,293	3,764
Restricted cash	5,555	2,718
Loan procurement costs, net of amortization	4,284	963
Investment in real estate venture, at equity	88,812	95,796
Assets held for sale	2,403
Other assets, net	104,128	48,763
Total assets	3,950,330	3,752,972
LIABILITIES AND CAPITAL
Unsecured senior notes, net	1,489,483	1,143,524
Revolving credit facility	237,980	195,525
Unsecured term loan		299,799
Mortgage loans and notes payable, net	96,810	108,246
Accounts payable, accrued expenses and other liabilities	150,532	149,914
Distributions payable	62,645	60,627
Deferred revenue	25,611	22,595
Security deposits	470	474
Liabilities held for sale	53
Total liabilities	2,063,584	1,980,704
Limited Partnership interests of third parties	65,108	55,819
Commitments and contingencies
Capital
Accumulated other comprehensive loss	(749)	(1,029)
Total liabilities and equity	3,950,330	3,752,972
Cubesmart, L P and Subsidiaries
ASSETS
Storage properties	4,674,717	4,463,455
Less: Accumulated depreciation	(936,862)	(862,487)
Storage properties, net (including VIE assets of $87,428 and $330,986, respectively)	3,737,855	3,600,968
Cash and cash equivalents	7,293	3,764
Restricted cash	5,555	2,718
Loan procurement costs, net of amortization	4,284	963
Investment in real estate venture, at equity	88,812	95,796
Assets held for sale	2,403
Other assets, net	104,128	48,763
Total assets	3,950,330	3,752,972
LIABILITIES AND CAPITAL
Unsecured senior notes, net	1,489,483	1,143,524
Revolving credit facility	237,980	195,525
Unsecured term loan		299,799
Mortgage loans and notes payable, net	96,810	108,246
Accounts payable, accrued expenses and other liabilities	150,532	149,914
Distributions payable	62,645	60,627
Deferred revenue	25,611	22,595
Security deposits	470	474
Liabilities held for sale	53
Total liabilities	2,063,584	1,980,704
Limited Partnership interests of third parties	65,108	55,819
Capital
Operating Partner	1,814,391	1,710,707
Accumulated other comprehensive loss	(749)	(1,029)
Total CubeSmart, L.P. capital	1,813,642	1,709,678
Noncontrolling interests in subsidiaries	7,996	6,771
Total capital	1,821,638	1,716,449
Total liabilities and equity	$ 3,950,330	$ 3,752,972

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CONSOLIDATED STATEMENTS OF CAPITAL (LP cube) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended	12 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Dec. 31, 2018
Increase (Decrease) in Partners' Capital
Balance of Noncontrolling Interests in the Operating Partnership			$ 55,819				$ 55,819
Contributions from noncontrolling interests in subsidiaries	$ 2,548		4,828	$ 74	$ 105	$ 738
Distributions paid to noncontrolling interests in subsidiaries	(68)	$ (8)	(66)	(54)	(80)
Acquisition of noncontrolling interest in subsidiary	(2,618)	(27,618)	(10,000)				(12,300)	$ (300)
Adjustment for Operating Partnership interests of third parties	(2,894)	(2,713)	(6,681)	7,388	(8,323)	1,169
Net income (loss)	42,171	49,379	35,428	42,826	38,325	34,416
Other comprehensive income, net	20	20	240		126	276
Balance of Noncontrolling Interests in the Operating Partnership	65,108						65,108	55,819
Noncontrolling Interests in Operating Partnership
Increase (Decrease) in Partners' Capital
Balance of Noncontrolling Interests in the Operating Partnership	62,385	60,414	55,819	64,512	57,705	54,320	55,819	54,320
Issuance of OP units				1,460		4,782
Adjustment for Operating Partnership interests of third parties	2,894	2,713	6,681	(7,388)	8,323	(1,169)
Net income (loss)	426	499	358	476	426	383
Other comprehensive income, net			2		1	3
Balance of Noncontrolling Interests in the Operating Partnership	65,108	62,385	60,414	58,446	64,512	57,705	65,108	55,819
Cubesmart, L P and Subsidiaries
Increase (Decrease) in Partners' Capital
Balance	$ 1,779,986	1,708,560	1,716,449	1,693,438	1,617,329	1,635,370	1,716,449	1,635,370
Balance (in units)	191,626
Balance of Noncontrolling Interests in the Operating Partnership			55,819				55,819
Contributions from noncontrolling interests in subsidiaries	$ 2,548		4,828	74	105	738
Distributions paid to noncontrolling interests in subsidiaries	(68)	(8)	(66)	(54)	(80)
Acquisition of noncontrolling interest in subsidiary	(2,618)	(27,618)	(10,000)
Preferred OP unit redemption						(44)
Issuance of common OP units	61,232	$ 110,521	24,580	12,913	95,466
Issuance of common OP units (in units)		3,353
Issuance of common OP units						(44)
Issuance of restricted OP units						1
Issuance of restricted OP units (in units)		31
Conversion from OP units to shares		$ 644	1,842		1,342
Conversion from OP units to shares (in units)		20
Exercise of OP unit options	1,655	$ 962	1,049	52	3,781	2
Exercise of OP unit options (in units)		85
Amortization of restricted OP units	1,214	$ 1,231	798	970	865	(242)
OP unit compensation expense	440	439	468	387	344	423
Adjustment for Operating Partnership interests of third parties	(2,894)	(2,713)	(6,681)	7,388	(8,323)	1,169
Net income (loss)	42,171	49,379	35,428	42,826	38,325	34,416
Other comprehensive income, net	20	20	240		126	276
Common OP unit distributions	(62,048)	(61,431)	(60,375)	(55,972)	(55,842)	(54,780)
Balance	1,821,638	$ 1,779,986	1,708,560	1,702,022	1,693,438	1,617,329	1,821,638	1,716,449
Balance (in units)		191,626
Balance of Noncontrolling Interests in the Operating Partnership	65,108						65,108	55,819
Cubesmart, L P and Subsidiaries | Noncontrolling Interests in Operating Partnership
Increase (Decrease) in Partners' Capital
Balance of Noncontrolling Interests in the Operating Partnership	62,385	$ 60,414	55,819	64,512	57,705	54,320	55,819	54,320
Issuance of OP units				1,460		4,782
Conversion from OP units to shares		(644)	(1,842)		(1,342)
Adjustment for Operating Partnership interests of third parties	2,894	2,713	6,681	(7,388)	8,323	(1,169)
Net income (loss)	426	499	358	476	426	383
Other comprehensive income, net			2		1	3
Common OP unit distributions	(597)	(597)	(604)	(614)	(601)	(614)
Balance of Noncontrolling Interests in the Operating Partnership	65,108	62,385	60,414	58,446	64,512	57,705	65,108	55,819
Cubesmart, L P and Subsidiaries | Total Shareholders' Equity
Increase (Decrease) in Partners' Capital
Balance	1,773,889	1,697,369	1,709,678	1,686,531	1,610,362	1,629,134	1,709,678	1,629,134
Acquisition of noncontrolling interest in subsidiary	(2,020)	(22,573)	(9,728)
Preferred OP unit redemption						(44)
Issuance of common OP units	61,232	110,521	24,580	12,913	95,466
Issuance of common OP units						(44)
Issuance of restricted OP units						1
Conversion from OP units to shares		644	1,842		1,342
Exercise of OP unit options	1,655	962	1,049	52	3,781	2
Amortization of restricted OP units	1,214	1,231	798	970	865	(242)
OP unit compensation expense	440	439	468	387	344	423
Adjustment for Operating Partnership interests of third parties	(2,894)	(2,713)	(6,681)	7,388	(8,323)	1,169
Net income (loss)	42,154	49,420	35,498	42,900	38,410	34,423
Other comprehensive income, net	20	20	240		126	276
Common OP unit distributions	(62,048)	(61,431)	(60,375)	(55,972)	(55,842)	(54,780)
Balance	1,813,642	1,773,889	1,697,369	1,695,169	1,686,531	1,610,362	1,813,642	1,709,678
Cubesmart, L P and Subsidiaries | Operating Partner
Increase (Decrease) in Partners' Capital
Balance	1,774,658	$ 1,698,158	$ 1,710,707	$ 1,686,531	$ 1,610,083	$ 1,629,131	$ 1,710,707	$ 1,629,131
Balance (in units)		188,137	187,145	185,877	182,280	182,216	187,145	182,216
Acquisition of noncontrolling interest in subsidiary	(2,020)	$ (22,573)	$ (9,728)
Preferred OP unit redemption						$ (44)
Issuance of common OP units	$ 61,232	110,521	$ 24,580	$ 12,913	$ 95,466
Issuance of common OP units (in units)	1,773		773	420	3,134
Issuance of common OP units						(44)
Issuance of restricted OP units						$ 1
Issuance of restricted OP units (in units)	1		19	1	20	64
Conversion from OP units to shares		644	$ 1,842		$ 1,342
Conversion from OP units to shares (in units)			60		44
Exercise of OP unit options	$ 1,655	962	$ 1,049	$ 52	$ 3,781	$ 2
Exercise of OP unit options (in units)	154		140	6	399
Amortization of restricted OP units	$ 1,214	1,231	$ 798	$ 970	$ 865	(242)
OP unit compensation expense	440	439	468	387	344	423
Adjustment for Operating Partnership interests of third parties	(2,894)	(2,713)	(6,681)	7,388	(8,323)	1,169
Net income (loss)	42,154	49,420	35,498	42,900	38,410	34,423
Other comprehensive income, net					405
Common OP unit distributions	(62,048)	(61,431)	(60,375)	(55,972)	(55,842)	(54,780)
Balance	$ 1,814,391	1,774,658	$ 1,698,158	$ 1,695,169	$ 1,686,531	$ 1,610,083	$ 1,814,391	$ 1,710,707
Balance (in units)	193,554		188,137	186,304	185,877	182,280	193,554	187,145
Cubesmart, L P and Subsidiaries | Accumulated Other Comprehensive (Loss) Income
Increase (Decrease) in Partners' Capital
Balance	$ (769)	(789)	$ (1,029)		$ 279	$ 3	$ (1,029)	$ 3
Other comprehensive income, net	20	20	240		(279)	276
Balance	(749)	(769)	(789)			279	(749)	(1,029)
Cubesmart, L P and Subsidiaries | Noncontrolling Interest in Subsidiaries
Increase (Decrease) in Partners' Capital
Balance	6,097	11,191	6,771	$ 6,907	6,967	6,236	6,771	6,236
Contributions from noncontrolling interests in subsidiaries	2,548		4,828	74	105	738
Distributions paid to noncontrolling interests in subsidiaries	(68)	(8)	(66)	(54)	(80)
Acquisition of noncontrolling interest in subsidiary	(598)	(5,045)	(272)
Net income (loss)	17	(41)	(70)	(74)	(85)	(7)
Balance	$ 7,996	$ 6,097	$ 11,191	$ 6,853	$ 6,907	$ 6,967	$ 7,996	$ 6,771

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MORTGAGE LOANS AND NOTES PAYABLE - Future Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Future principal payment requirements on the outstanding mortgage loans and notes payable at year end
Less: Loan procurement costs, net	$ (4,284)	$ (963)
Total mortgage loans and notes payable, net	96,810	108,246
Mortgages
Future principal payment requirements on the outstanding mortgage loans and notes payable at year end
2019	625
2020	12,791
2021	45,057
2022	923
2023	31,019
2024 and thereafter	4,704
Total mortgage payments	95,119	106,146
Plus: Unamortized fair value adjustment	2,010	2,551
Less: Loan procurement costs, net	(319)	(451)
Total mortgage loans and notes payable, net	$ 96,810	$ 108,246

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INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE (Details) $ in Thousands						3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 06, 2019 property	Jun. 05, 2019 USD ($) property item	Sep. 05, 2018 USD ($) property	Jan. 31, 2018 USD ($)	Dec. 15, 2016	Sep. 30, 2019 USD ($) property	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) property	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($) property
Investment in Unconsolidated Real Estate Venture
Investment in real estate entities						$ 88,812		$ 88,812		$ 95,796
Acquisitions of storage facilities								63,499	$ 83,399
Summary of results of operations of the real estate venture
Company's share of net income (loss)						152	$ (292)	10,940	(785)
HHFNE
Investment in Unconsolidated Real Estate Venture
Investment in real estate entities						$ 2,131		$ 2,131		$ 2,411
Ownership interest in partnership (as a percent)						10.00%		10.00%
Number of storage facilities owned by investee | property								13		13
HHFNE | Secured Debt Due December 2019
Investment in Unconsolidated Real Estate Venture
Outstanding debt						$ 44,500		$ 44,500
HHFNE | LIBOR
Investment in Unconsolidated Real Estate Venture
Interest rate (as percentage)					1.90%
HHFNE | LIBOR | Secured Debt Due December 2019
Investment in Unconsolidated Real Estate Venture
Interest rate (as percentage)								1.90%
HVP III
Investment in Unconsolidated Real Estate Venture
Investment in real estate entities										$ 9,183
Ownership interest in partnership (as a percent)						10.00%		10.00%
Number of storage facilities owned by investee | property										68
Number of assets sold | property		50
Aggregate sale price		$ 293,500
Number of mortgage loans | item		5
HVP III | Term Loan Facility
Investment in Unconsolidated Real Estate Venture
Outstanding debt		$ 22,900
HVP III | Credit Facility
Investment in Unconsolidated Real Estate Venture
Outstanding debt		179,500
Principal amount of debt		$ 185,500
HVP IV
Investment in Unconsolidated Real Estate Venture
Investment in real estate entities						$ 19,999		$ 19,999		$ 14,791
Ownership interest in partnership (as a percent)						20.00%		20.00%
Number of storage facilities owned by investee | property								19		13
Number of properties to be acquired under the contract | property						2		2
Contract amount to purchase real estate						$ 34,300		$ 34,300
Contribution of storage property to real estate venture								1,200
HVP IV | Secured Loan Due May 2021
Investment in Unconsolidated Real Estate Venture
Outstanding debt						82,200		82,200
Principal amount of debt						107,000		107,000
HVP IV | Secured Debt Due June 2024
Investment in Unconsolidated Real Estate Venture
Outstanding debt						40,500		$ 40,500
HVP IV | LIBOR | Secured Loan Due May 2021
Investment in Unconsolidated Real Estate Venture
Interest rate (as percentage)								1.70%
HVP IV | LIBOR | Secured Debt Due June 2024
Investment in Unconsolidated Real Estate Venture
Interest rate (as percentage)								2.75%
HHF
Investment in Unconsolidated Real Estate Venture
Investment in real estate entities						$ 66,682		$ 66,682		$ 69,411
Ownership interest in partnership (as a percent)						50.00%		50.00%
Number of storage facilities owned by investee | property								35		35
Arizona | HVP IV
Investment in Unconsolidated Real Estate Venture
Number of storage facilities owned by investee | property								2
Maryland | HVP IV
Investment in Unconsolidated Real Estate Venture
Number of storage facilities owned by investee | property								1
Michigan | HVP III
Investment in Unconsolidated Real Estate Venture
Number of assets sold | property		17
Connecticut | HHFNE
Investment in Unconsolidated Real Estate Venture
Number of storage facilities owned by investee | property								3
Connecticut | HVP IV
Investment in Unconsolidated Real Estate Venture
Number of storage facilities owned by investee | property								2
Massachusetts | HHFNE
Investment in Unconsolidated Real Estate Venture
Number of storage facilities owned by investee | property								6
Minnesota | HVP IV
Investment in Unconsolidated Real Estate Venture
Number of properties to be acquired under the contract | property						1		1
Rhode Island | HHFNE
Investment in Unconsolidated Real Estate Venture
Number of storage facilities owned by investee | property								2
Vermont | HHFNE
Investment in Unconsolidated Real Estate Venture
Number of storage facilities owned by investee | property								2
Tennessee | HVP III
Investment in Unconsolidated Real Estate Venture
Number of assets sold | property		8
Florida | HVP III
Investment in Unconsolidated Real Estate Venture
Number of assets sold | property		3
Florida | HVP IV
Investment in Unconsolidated Real Estate Venture
Number of storage facilities owned by investee | property								4
Texas
Investment in Unconsolidated Real Estate Venture
Cash paid for acquisition of remaining interest in real estate ventures				$ 200
Texas | HVP IV
Investment in Unconsolidated Real Estate Venture
Number of storage facilities owned by investee | property								7
Number of properties to be acquired under the contract | property						1		1
Texas | HHF
Investment in Unconsolidated Real Estate Venture
Number of storage facilities owned by investee | property								34
North Carolina | HVP III
Investment in Unconsolidated Real Estate Venture
Number of assets sold | property		3
North Carolina | HHF
Investment in Unconsolidated Real Estate Venture
Number of storage facilities owned by investee | property								1
South Carolina | HVP III
Investment in Unconsolidated Real Estate Venture
Number of assets sold | property		15
Georgia | HVP III
Investment in Unconsolidated Real Estate Venture
Number of assets sold | property		4
Georgia | HVP IV
Investment in Unconsolidated Real Estate Venture
Number of storage facilities owned by investee | property								2
Pennsylvania | HVP IV
Investment in Unconsolidated Real Estate Venture
Number of storage facilities owned by investee | property								1
Ventures
Investment in Unconsolidated Real Estate Venture
Investment in real estate entities						$ 88,812		$ 88,812		$ 95,796
Number of storage facilities owned by investee | property								67		129
Assets
Storage facilities, net						521,701		$ 521,701		$ 741,209
Other assets						18,835		18,835		16,042
Total Assets						540,536		540,536		757,251
Liabilities and equity
Other liabilities						14,210		14,210		7,911
Debt						264,855		264,855		413,848
Equity
CubeSmart						88,812		88,812		95,796
Joint venture partner						172,659		172,659		239,696
Total liabilities and equity						540,536		540,536		$ 757,251
Summary of results of operations of the real estate venture
Total revenues						14,027	23,463	58,305	66,665
Operating expenses						(6,518)	(9,583)	(25,762)	(28,269)
Other expenses						(34)	(242)	(3,113)	(807)
Interest expense, net						(2,606)	(3,494)	(11,911)	(9,515)
Depreciation and amortization						(5,908)	(11,223)	(23,829)	(31,042)
Gain from sale of real estate								106,667
Net income (loss)						(1,039)	(1,079)	100,357	(2,968)
Company's share of net income (loss)						152	$ (292)	10,940	$ (785)
HHFNE
Investment in Unconsolidated Real Estate Venture
Investment in real estate entities						$ 3,800		$ 3,800
HVP III
Investment in Unconsolidated Real Estate Venture
Ownership interest in partnership (as a percent)						90.00%		90.00%
Number of storage facilities owned by investee | property	18
Number of assets sold | property		50
Net proceeds from sale of assets		$ 82,900
Summary of results of operations of the real estate venture
Gain from sale of real estate		$ 106,700
HVP IV
Investment in Unconsolidated Real Estate Venture
Investment in real estate entities						$ 22,600		$ 22,600
HHF | Secured loan 3.59% due April 30, 2021
Investment in Unconsolidated Real Estate Venture
Amount of loan obtained						$ 100,000		$ 100,000
Interest on real estate venture debt						3.59%		3.59%
Capital Storage Partners, LLC
Investment in Unconsolidated Real Estate Venture
Investment in real estate entities			$ 5,000
Ownership interest in partnership (as a percent)			100.00%
Number of self-storage facilities acquired | property			22
Series A Preferred shares, percentage			11.00%
Capital Storage Partners, LLC | Florida
Investment in Unconsolidated Real Estate Venture
Number of self-storage facilities acquired | property			4
Capital Storage Partners, LLC | Texas
Investment in Unconsolidated Real Estate Venture
Number of self-storage facilities acquired | property			13
Capital Storage Partners, LLC | Oklahoma
Investment in Unconsolidated Real Estate Venture
Number of self-storage facilities acquired | property			5

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
REVENUES
Rental income	$ 142,207	$ 132,476	$ 409,826	$ 384,480
Total revenues	166,547	153,370	478,409	444,062
OPERATING EXPENSES
Property operating expenses	53,465	48,755	155,010	147,037
Depreciation and amortization	43,379	35,239	122,484	105,251
General and administrative	10,011	9,780	28,958	26,865
Total operating expenses	106,855	93,774	306,452	279,153
Interest:
Interest expense on loans	(18,207)	(15,191)	(53,858)	(45,797)
Loan procurement amortization expense	(687)	(578)	(2,082)	(1,735)
Equity in earnings (losses) of real estate ventures	152	(292)	10,940	(785)
Other	1,647	(233)	1,304	260
Total other expense	(17,095)	(16,294)	(43,696)	(48,057)
NET INCOME	42,597	43,302	128,261	116,852
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
Noncontrolling interests in the Operating Partnership	(426)	(476)	(1,283)	(1,285)
Noncontrolling interest in subsidiaries	(17)	74	94	166
NET INCOME ATTRIBUTABLE TO THE COMPANY'S COMMON SHAREHOLDERS	$ 42,154	$ 42,900	$ 127,072	$ 115,733
Basic earnings per share attributable to common shareholders (in dollars per share)	$ 0.22	$ 0.23	$ 0.67	$ 0.63
Diluted earnings per share attributable to common shareholders (in dollars per share)	$ 0.22	$ 0.23	$ 0.67	$ 0.63
Weighted-average basic shares outstanding (in shares)	192,927	186,074	189,970	184,036
Weighted-average diluted shares outstanding (in shares)	193,817	186,916	190,774	184,829
Other Property Related Income
REVENUES
Property related income	$ 18,054	$ 15,494	$ 50,651	$ 44,788
Property Management Fee Income
REVENUES
Property related income	$ 6,286	$ 5,400	$ 17,932	$ 14,794

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Operating Activities
Net income	$ 128,261	$ 116,852
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	124,566	106,986
Equity in (earnings) losses of real estate ventures	(10,940)	785
Equity compensation expense	4,990	4,196
Accretion of fair market value adjustment of debt	(541)	(553)
Changes in other operating accounts:
Other assets	(8,094)	(5,765)
Accounts payable and accrued expenses	19,336	10,821
Other liabilities	2,274	1,240
Net cash provided by operating activities	259,852	234,562
Investing Activities
Acquisitions of storage facilities	(63,499)	(83,399)
Additions and improvements to storage properties	(28,520)	(19,174)
Development costs	(94,251)	(69,715)
Cash paid for partner's interest in real estate venture, net of cash, cash equivalents and restricted cash acquired	(117,959)
Investment in real estate ventures	(6,558)	(19,154)
Cash distributed from real estate ventures	5,513	6,419
Net cash used in investing activities	(305,274)	(185,023)
Proceeds from:
Unsecured senior notes	347,746
Revolving credit facility	856,011	452,460
Principal payments on:
Revolving credit facility	(917,494)	(439,910)
Unsecured term loans	(200,000)
Mortgage loans and notes payable	(11,027)	(9,137)
Loan procurement costs	(3,104)
Settlement of hedge transactions	(807)
Acquisition of noncontrolling interest in subsidiary	(35,408)
Proceeds from issuance of common shares, net	196,333	108,336
Cash paid upon vesting of restricted shares	(400)	(1,449)
Exercise of stock options	3,666	3,835
Contributions from noncontrolling interests in subsidiaries	48	917
Distributions paid to noncontrolling interests in subsidiaries	(142)	(134)
Distributions paid to common shareholders	(181,811)	(165,357)
Distributions paid to noncontrolling interests in Operating Partnership	(1,823)	(1,779)
Net cash provided by (used in) financing activities	51,788	(52,218)
Change in cash, cash equivalents, and restricted cash	6,366	(2,679)
Cash, cash equivalents, and restricted cash at beginning of period	6,482	9,158
Cash, cash equivalents, and restricted cash at end of period	12,848	6,479
Supplemental Cash Flow and Noncash Information
Cash paid for interest, net of interest capitalized	53,176	48,794
Supplemental disclosure of noncash activities:
Proceeds held in escrow from real estate venture's sale of real estate (see note 4)	8,288
Noncash consideration for acquisition of partner's interest in real estate venture (see note 4)	(8,288)
Discount on issuance of unsecured senior notes	2,254
Noncash drawdown on revolving credit facility	103,938
Mortgage loan assumptions		7,166
Repayment of unsecured term loan through noncash drawdown on revolving credit faciltiy	(100,000)
Accretion of put liability	4,671	20,877
Derivative valuation adjustment	282	406
Loan procurement costs	(3,770)
Issuance of OP units		$ (6,242)
Acquisition of noncontrolling interest in subsidiary	(4,828)
Contributions from noncontrolling interests in subsidiaries	$ 7,328

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2019

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

15. RELATED PARTY TRANSACTIONS

The Company provides management services to certain joint ventures and other related parties. Management agreements provide for fee income to the Company based on a percentage of revenues at the managed stores. Total management fees for unconsolidated real estate ventures or other entities in which the Company held an ownership interest for the three and nine months ended September 30, 2019 totaled $0.7 million and $3.1 million, respectively. Total management fees for unconsolidated real estate ventures or other entities in which the Company held an ownership interest for the three and nine months ended September 30, 2018 totaled $1.2 million and $3.2 million, respectively.

The management agreements for certain joint ventures, other related parties and third-party stores provide for the reimbursement to the Company for certain expenses incurred to manage the stores. These amounts consist of amounts due for management fees, payroll, and other store expenses. The amounts due to the Company were $11.1 million and $10.6 million as of September 30, 2019 and December 31, 2018, respectively, and are reflected in Other assets, net on the Company’s consolidated balance sheets. Additionally, as discussed in note 12, the Company had outstanding mortgage loans receivable from consolidated joint ventures of $1.8 million and $33.2 million as of September 30, 2019 and December 31, 2018, respectively, which are eliminated for consolidation purposes. The Company believes that all of these related-party receivables are fully collectible.

The HVP III, HVP IV and HHFNE operating agreements provide for acquisition, disposition and other fees payable from HVP III, HVP IV and HHFNE to the Company upon the closing of a property transaction by HVP III, HVP IV and HHFNE, or any of their subsidiaries and completion of certain measures as defined in the operating agreements. During the three and nine months ended September 30, 2019, the Company recognized $1.7 million and $1.9 million, respectively, in fees associated with property transactions. During the three and nine months ended September 30, 2018, the Company recognized $0.1 million and $0.6 million, respectively, in property transaction fees. Property transaction fees are included in Other income on the consolidated statements of operations.

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STORAGE PROPERTIES (Tables)

9 Months Ended

Sep. 30, 2019

STORAGE PROPERTIES

Summary of real estate assets

	September 30,		December 31,
	2019		2018
	(in thousands)
Land	$	849,874	$	806,916
Buildings and improvements		3,579,904		3,343,173
Equipment		159,833		176,583
Construction in progress		85,106		136,783
Storage properties		4,674,717		4,463,455
Less: Accumulated depreciation		(936,862)		(862,487)
Storage properties, net	$	3,737,855	$	3,600,968

Schedule of acquisitions and dispositions of real estate assets

The following table summarizes the Company’s acquisition and disposition activity during the period beginning on January 1, 2018 through September 30, 2019.

			Number of	Purchase / Sale Price
Asset/Portfolio	Market	Transaction Date	Stores	(in thousands)
2019 Acquisitions:
Maryland Asset	Baltimore / DC	March 2019	1	$	22,000
Florida Assets	Florida Markets - Other	April 2019	2		19,000
Arizona Asset	Phoenix	May 2019	1		1,550
HVP III Assets	Various (see note 4)	June 2019	18		128,250	(1)
Georgia Asset	Atlanta	August 2019	1		14,600
South Carolina Asset	Charleston	August 2019	1		3,300
			24	$	188,700
2018 Acquisitions:
Texas Asset	Texas Markets - Major	January 2018	1	$	12,200
Texas Asset	Texas Markets - Major	May 2018	1		19,000
Metro DC Asset	Baltimore / DC	July 2018	1		34,200
Nevada Asset	Las Vegas	September 2018	1		14,350
North Carolina Asset	Charlotte	September 2018	1		11,000
California Asset	Los Angeles	October 2018	1		53,250
Texas Asset	Texas Markets - Major	October 2018	1		23,150
California Asset	San Diego	November 2018	1		19,118
New York Asset	New York / Northern NJ	November 2018	1		37,000
Illinois Asset	Chicago	December 2018	1		4,250
			10	$	227,518
2018 Dispositions:
Arizona Assets	Phoenix	November 2018	2	$	17,502
			2	$	17,502

(1) Amount represents the purchase price for 90% of the ownership interest in 191 III CUBE LLC (“HVP III”), which at the time of the acquisition, owned 18 storage properties (see note 4).

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (LP cube) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Storage facilities, net	$ 3,737,855	$ 3,600,968
VIE
Storage facilities, net	87,428	330,986
Cubesmart, L P and Subsidiaries
Storage facilities, net	3,737,855	3,600,968
Cubesmart, L P and Subsidiaries | VIE
Storage facilities, net	$ 87,428	$ 330,986

XML

CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) (LP cube) - $ / shares	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018
Cubesmart, L P and Subsidiaries
Common OP unit distributions (in dollars per share)	$ 0.32	$ 0.32	$ 0.32	$ 0.30	$ 0.30	$ 0.30

XML

ORGANIZATION AND NATURE OF OPERATIONS

9 Months Ended

Sep. 30, 2019

ORGANIZATION AND NATURE OF OPERATIONS

ORGANIZATION AND NATURE OF OPERATIONS

1. ORGANIZATION AND NATURE OF OPERATIONS

CubeSmart (the “Parent Company”) operates as a self-managed and self-administered real estate investment trust (“REIT”) with its operations conducted solely through CubeSmart, L.P. and its subsidiaries. CubeSmart, L.P., a Delaware limited partnership (the “Operating Partnership”), operates through an umbrella partnership structure, with the Parent Company, a Maryland REIT, as its sole general partner. In the notes to the consolidated financial statements, we use the terms “the Company”, “we” or “our” to refer to the Parent Company and the Operating Partnership together, unless the context indicates otherwise. As of September 30, 2019, the Company owned self-storage properties located in 24 states throughout the United States and the District of Columbia that are presented under one reportable segment: the Company owns, operates, develops, manages and acquires self-storage properties.

As of September 30, 2019, the Parent Company owned approximately 99.0% of the partnership interests (“OP Units”) of the Operating Partnership. The remaining OP Units, consisting exclusively of limited partner interests, are held by persons who contributed their interests in properties to the Operating Partnership in exchange for OP Units. Under the partnership agreement, these persons have the right to tender their OP Units for redemption to the Operating Partnership at any time following a specified restricted period for cash equal to the fair value of an equivalent number of common shares of the Parent Company. In lieu of delivering cash, however, the Parent Company, as the Operating Partnership’s general partner, may, at its option, choose to acquire any OP Units so tendered by issuing common shares in exchange for the tendered OP Units. If the Parent Company so chooses, its common shares will be exchanged for OP Units on a one-for-one basis. This one-for-one exchange ratio is subject to adjustment to prevent dilution. With each such exchange or redemption, the Parent Company’s percentage ownership in the Operating Partnership will increase. In addition, whenever the Parent Company issues common or other classes of its shares, it contributes the net proceeds it receives from the issuance to the Operating Partnership and the Operating Partnership issues to the Parent Company an equal number of OP Units or other partnership interests having preferences and rights that mirror the preferences and rights of the shares issued. This structure is commonly referred to as an umbrella partnership REIT or “UPREIT”.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Oct. 23, 2019
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2019
Entity File Number	001-32324
Entity Registrant Name	CUBESMART
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	20-1024732
Entity Address, Address Line One	5 Old Lancaster Rd. Malvern
Entity Address, City or Town	Malvern
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19355
City Area Code	610
Local Phone Number	535-5000
Title of 12(b) Security	Common Shares, $0.01 par value per share, of CubeSmart
Trading Symbol	CUBE
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		193,555,022
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001298675
Amendment Flag	false
Cubesmart, L P and Subsidiaries
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2019
Entity File Number	000-54462
Entity Registrant Name	CUBESMART, L.P.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	34-1837021
Entity Address, Address Line One	5 Old Lancaster Rd.
Entity Address, City or Town	Malvern
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19355
City Area Code	610
Local Phone Number	535-5000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001300485
Amendment Flag	false

XML

MORTGAGE LOANS AND NOTES PAYABLE - Summary (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Mortgage loans and Notes payable
Less: Loan procurement costs, net	$ (4,284)	$ (963)
Total mortgage loans and notes payable	96,810	108,246
Net book value of self-storage facilities	3,737,855	3,600,968
Mortgages
Mortgage loans and Notes payable
Carrying value	95,119	106,146
Plus: Unamortized fair value adjustment	2,010	2,551
Less: Loan procurement costs, net	(319)	(451)
Total mortgage loans and notes payable	96,810	108,246
Net book value of self-storage facilities	$ 207,400	231,000
YSI 33
Mortgage loans and Notes payable
Carrying value		9,214
Effective interest rate (as a percent)	6.42%
YSI 26
Mortgage loans and Notes payable
Carrying value	$ 7,861	8,022
Effective interest rate (as a percent)	4.56%
YSI 57
Mortgage loans and Notes payable
Carrying value	$ 2,760	2,816
Effective interest rate (as a percent)	4.61%
YSI 55
Mortgage loans and Notes payable
Carrying value	$ 21,674	22,041
Effective interest rate (as a percent)	4.85%
YSI 24
Mortgage loans and Notes payable
Carrying value	$ 24,260	24,893
Effective interest rate (as a percent)	4.64%
YSI 65
Mortgage loans and Notes payable
Carrying value	$ 2,326	2,363
Effective interest rate (as a percent)	3.85%
YSI 66
Mortgage loans and Notes payable
Carrying value	$ 30,737	31,171
Effective interest rate (as a percent)	3.51%
YSI 68
Mortgage loans and Notes payable
Carrying value	$ 5,501	$ 5,626
Effective interest rate (as a percent)	3.78%

XML

INVESTMENT ACTIVITY (Details)									1 Months Ended	3 Months Ended						9 Months Ended					12 Months Ended	18 Months Ended
	Sep. 17, 2019 USD ($)	Aug. 08, 2019 USD ($)	Jun. 28, 2019 USD ($)	Jun. 25, 2019 USD ($)	Jun. 06, 2019 USD ($) property	Jun. 05, 2019 USD ($) property	Feb. 15, 2019 USD ($)	Jan. 31, 2018 USD ($) shares	Nov. 30, 2018 USD ($) facility	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($) item	Sep. 30, 2018 USD ($)	Dec. 31, 2015 item	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($) property	Sep. 30, 2019 USD ($) facility	Sep. 30, 2019 USD ($)	Dec. 31, 2018 USD ($) facility property shares	Jun. 30, 2019 USD ($)
Self-storage facilities
Number of facilities under contract | property																		5
Number of facilities, construction completed and opened																						$ 4
Total Construction Costs																						$ 182,700,000
Storage properties										$ 4,674,717,000			$ 4,463,455,000			$ 4,674,717,000	$ 4,674,717,000	$ 4,674,717,000	$ 4,674,717,000	$ 4,674,717,000	$ 4,463,455,000
Restricted cash										5,555,000			2,718,000			5,555,000	$ 5,555,000	$ 5,555,000	$ 5,555,000	5,555,000	2,718,000
Common stock, conversion ratio																	1
Acquisition of noncontrolling interest										2,618,000	$ 27,618,000	$ 10,000,000								12,300,000	$ 300,000
Summary of the amounts of revenue and earnings of the 2016 and 2015 acquisitions since the acquisition dates
Total revenue										4,439,000										6,069,000
Net loss										(2,382,000)										(3,513,000)
HVP III
Self-storage facilities
Acquisition, assets recorded					$ 137,500,000
Acquistion, previously held equity interest					10,600,000
Acquisition, cash acquired					1,400,000
Acquisition, gain (loss) recognized					$ 0
Number of self-storage facilities acquired | property					18
Cash paid for acquisition					$ 120,000,000.0
Intangible value of the in-place leases					$ 14,300,000
Estimated life					12 months
Amortization expense										$ 3,600,000										4,800,000
Previous ownership percentage in real estate ventures (as a percent)					10.00%
Acquisition of remaining interest in real estate ventures (as a percent)					90.00%
Total consideration					$ 128,300,000
Amount of escrowed proceeds from sale of assets					8,300,000
Cash paid for acquisition of remaining interest in real estate ventures					$ 120,000,000.0
HVP III
Self-storage facilities
Number of self-storage facilities | property					18
Net proceeds from sale of assets						$ 82,900,000
Number of assets sold | property						50
Gain from sale of real estate, net						$ 106,700,000
Self Storage Facility in Queens, NY I
Self-storage facilities
Cash paid for acquisition			$ 9,000,000.0
Acquisition of remaining interest in real estate ventures (as a percent)			10.00%
Cash paid for acquisition of remaining interest in real estate ventures			$ 9,000,000.0
Acquisition of noncontrolling interest			22,600,000
Repayments of debt			$ 12,400,000
Self Storage Facility in Brooklyn, NY I
Self-storage facilities
Cash paid for acquisition				$ 18,500,000
Ownership interest held by the entity (as a percent)															90.00%
Number of joint ventures | item															2
Acquisition of remaining interest in real estate ventures (as a percent)				10.00%
Cash paid for acquisition of remaining interest in real estate ventures				$ 18,500,000
Self-storage Facility in Waltham, MA
Self-storage facilities
Cash paid for acquisition		$ 2,600,000
Ownership interest held by the entity (as a percent)		90.00%															100.00%
Number of facilities, construction completed and opened																				1
Total Construction Costs																				18,000,000
Acquisition of remaining interest in real estate ventures (as a percent)		10.00%
Cash paid for acquisition of remaining interest in real estate ventures		$ 2,600,000
Acquisition of noncontrolling interest		2,000,000.0
Repayments of debt		$ 10,500,000
Self-storage Facility in Bronx, NY
Self-storage facilities
Ownership interest held by the entity (as a percent)														100.00%
Number of facilities, construction completed and opened														$ 1
Total Construction Costs														$ 92,100,000
Self-storage Facility in Queens, NY
Self-storage facilities
Ownership interest held by the entity (as a percent)										100.00%
Number of facilities, construction completed and opened										$ 1
Total Construction Costs										$ 47,500,000
Self Storage Facility in Bayonne, NJ
Self-storage facilities
Ownership interest held by the entity (as a percent)										100.00%
Number of facilities, construction completed and opened										$ 1
Total Construction Costs										25,100,000
Option to put ownership interest in the venture							$ 37,800,000
Put option ownership percentage in joint venture exercised (as a percent)							49.00%
2019 Acquisitions
Self-storage facilities
Number of self-storage facilities acquired																		6	24
Aggregate purchase price																				188,700,000
Intangible value of the in-place leases										240,000,000						$ 240,000,000	$ 240,000,000	$ 240,000,000	$ 240,000,000	240,000,000
Estimated life																12 months
Amortization expense										50,000,000										100,000,000.0
2019 Acquisitions | Self storage under construction
Self-storage facilities
Number of facilities under contract | property																		5
Deposit										3,000,000.0						$ 3,000,000.0	3,000,000.0	$ 3,000,000.0	3,000,000.0	3,000,000.0
Expected aggregate purchase or sales price										87,900,000						87,900,000	87,900,000	87,900,000	$ 87,900,000	87,900,000
2019 Acquisitions | Self-storage facilities located in US
Self-storage facilities
Aggregate purchase price																				60,500,000
2019 Acquisitions | Maryland Asset March 2019
Self-storage facilities
Number of self-storage facilities acquired | facility																			1
Aggregate purchase price																				22,000,000
2018 Acquisitions
Self-storage facilities
Number of self-storage facilities acquired | facility																					10
Aggregate purchase price																					$ 227,518,000
2018 Acquisitions | Self storage under construction
Self-storage facilities
Number of facilities under contract | facility																					1
2018 Acquisitions | Self-storage facilities located in US
Self-storage facilities
Number of self-storage facilities acquired | facility																					10
Aggregate purchase price																					$ 227,500,000
Cash paid for acquisition																					200,000
Intangible value of the in-place leases													11,300,000								$ 11,300,000
Estimated life																					12 months
Amortization expense										2,300,000										7,700,000
Number of properties, assumed mortgage | facility																					1
Assumed mortgage debt, at fair value													$ 7,200,000								$ 7,200,000
OP units issued (in shares) | shares																					168,011
Issuance of OP Shares																					$ 4,800,000
Cash paid for acquisition of remaining interest in real estate ventures																					$ 200,000
2019 Dispositions
Self-storage facilities
Gain from sale of real estate, net																				0
Expected aggregate purchase or sales price										4,100,000						4,100,000	4,100,000	4,100,000	$ 4,100,000	4,100,000
2018 Dispositions
Self-storage facilities
Number of Facilities, dispositions (in properties) | facility																					2
Aggregate sale price																					$ 17,502,000
2018 Dispositions | Arizona Asset
Self-storage facilities
Number of Facilities, dispositions (in properties) | facility									2												2
Aggregate sale price									$ 17,500,000												$ 17,502,000
Gain from sale of real estate, net									$ 10,600,000
Real Estate Acquisitions Expected in 2019 | Self storage under construction
Self-storage facilities
Development costs										$ 72,400,000						$ 72,400,000	$ 72,400,000	$ 72,400,000	$ 72,400,000	72,400,000
Expected construction cost																				137,600,000
Self-storage facilities
Self-storage facilities
Number of self-storage facilities acquired																			24		10
Aggregate purchase price																				$ 188,700,000	$ 227,500,000
Texas
Self-storage facilities
Cash paid for acquisition								$ 200,000
OP units issued (in shares) | shares								168,011
Issuance of OP Shares								$ 4,800,000
Total consideration								12,200,000
Cash paid for acquisition of remaining interest in real estate ventures								$ 200,000
Florida | 2019 Acquisitions
Self-storage facilities
Number of self-storage facilities acquired | property																		2
New York | Self storage under construction
Self-storage facilities
Number of facilities under contract | facility																			2
Massachusetts | HVP III
Self-storage facilities
Number of self-storage facilities acquired | property					7
Massachusetts | Self storage under construction
Self-storage facilities
Number of facilities under contract | facility																			1
Massachusetts | Real Estate Acquisitions Expected in 2019 | Self storage under construction
Self-storage facilities
Number of facilities under contract | facility																			(1)
Maryland | 2019 Acquisitions
Self-storage facilities
Number of self-storage facilities acquired | property																		1
Virginia | Self storage under construction
Self-storage facilities
Number of facilities under contract | property																		1
Pennsylvania | Self storage under construction
Self-storage facilities
Number of facilities under contract | facility																			1
Arizona | 2019 Acquisitions
Self-storage facilities
Number of self-storage facilities acquired | property																		1
Georgia | HVP III
Self-storage facilities
Number of self-storage facilities acquired | property					1
Georgia | 2019 Acquisitions
Self-storage facilities
Number of self-storage facilities acquired | property																		1
North Carolina | HVP III
Self-storage facilities
Number of self-storage facilities acquired | property					1
South Carolina | HVP III
Self-storage facilities
Number of self-storage facilities acquired | property					7
South Carolina | 2019 Acquisitions
Self-storage facilities
Number of self-storage facilities acquired | property																		1
Tennessee | HVP III
Self-storage facilities
Number of self-storage facilities acquired | property					2
Joint Venture | Self Storage Facility in Queens, NY I
Self-storage facilities
Minority ownership interest (as a percent)			0.00%
Joint Venture | Self-storage Facility in Waltham, MA
Self-storage facilities
Minority ownership interest (as a percent)		0.00%
Joint Venture | Self Storage Facility in Bayonne, NJ
Self-storage facilities
Ownership interest held by the entity (as a percent)													51.00%
Number of joint ventures | item													3
Option to put ownership interest in the venture	$ 15,200,000			$ 11,500,000
Put option ownership percentage in joint venture exercised (as a percent)	49.00%			49.00%

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
NET INCOME	$ 42,597	$ 43,302	$ 128,261	$ 116,852
Other comprehensive income (loss):
Unrealized gains on interest rate swaps			232	60
Reclassification of realized losses (gains) on interest rate swaps	20		50	(60)
OTHER COMPREHENSIVE INCOME	20		282
COMPREHENSIVE INCOME	42,617	43,302	128,543	116,852
Comprehensive income attributable to noncontrolling interests in the Operating Partnership	(426)	(476)	(1,285)	(1,289)
Comprehensive (income) loss attributable to noncontrolling interests in subsidiaries	(17)	74	94	166
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY	$ 42,174	$ 42,900	$ 127,352	$ 115,729

XML

LEASES - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Jan. 01, 2019
LEASES
Lessor, Administrative and late fees income	$ 5,900	$ 17,000
Operating Lease, Income, Comprehensive Income [Extensible List]	cube:OtherpropertyRelatedIncomeMember	cube:OtherpropertyRelatedIncomeMember
Lessee, Operating Lease, Existence of Option to Extend [true false]		true
Lessee, Operating Lease, Existence of Option to Terminate [true false]		true
Operating lease right of use assets	$ 41,700	$ 41,700	$ 55,700
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssetsMember	us-gaap:OtherAssetsMember
Operating lease liabilities	$ 46,222	$ 46,222	$ 60,700
Operating Lease, Liability, Statement of Financial Position [Extensible List]	us-gaap:AccountsPayableAndAccruedLiabilitiesMember	us-gaap:AccountsPayableAndAccruedLiabilitiesMember
Operating lease weighted-average remaining lease term (in years)	36 years 1 month 6 days	36 years 1 month 6 days
Operating lease weighted-average discount rate	4.74%	4.74%
Operating lease amount paid	$ 600	$ 1,900
Minimum
LEASES
Operating lease term (in years)	1 year	1 year
Operating lease renewal term (in years)	1 year	1 year
Maximum
LEASES
Operating lease term (in years)	45 years	45 years
Operating lease renewal term (in years)	69 years	69 years

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RELATED PARTY TRANSACTIONS (Details) - Joint ventures related to affiliated real estate investments - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
RELATED PARTY TRANSACTIONS
Management fees	$ 0.7	$ 1.2	$ 3.1	$ 3.2
Amounts due to the Company from related parties	11.1		11.1		$ 10.6
Mortgage loans receivable from consolidated joint ventures	1.8		1.8		$ 33.2
Ventures
RELATED PARTY TRANSACTIONS
Acquisition fees	$ 1.7	$ 0.1	$ 1.9	$ 0.6

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NONCONTROLLING INTERESTS (Tables)

9 Months Ended

Sep. 30, 2019

NONCONTROLLING INTERESTS

Schedule of noncontrolling interests in subsidiaries

			Date Opened /	CubeSmart
	Number		Estimated	Ownership	September 30, 2019
Consolidated Joint Ventures	of Stores	Location	Opening	Interest	Total Assets		Total Liabilities
CS Valley Forge Village Storage, LLC ("VFV") (1)	1	King of Prussia, PA	Q2 2021 (est.)	70%	$	3,402	$	3
Shirlington Rd II, LLC ("SH2") (2)	1	Arlington, VA	Q1 2021 (est.)	90%		8,548		2
CS 2087 Hempstead Tpk, LLC ("Hempstead") (3)	1	East Meadow, NY	Q4 2020 (est.)	51%		10,717		2,279
CS SDP Newtonville, LLC ("Newton") (1)	1	Newton, MA	Q3 2020 (est.)	90%		9,585		3,060
CS 1158 McDonald Ave, LLC ("McDonald Ave") (3)	1	Brooklyn, NY	Q4 2019 (est.)	51%		40,582		11,307
Shirlington Rd, LLC ("SH1") (2)	1	Arlington, VA	Q2 2015	90%		14,969		159
	6				$	87,803	$	16,810

(1) The Company has a related party loan commitment to VFV and Newton to fund a portion of the construction costs. As of September 30, 2019, the Company has funded $1.8 million of the total $12.1 million loan commitment to Newton, which is included in the total liability amount within the table above. This loan and the related interest were eliminated for consolidation purposes. As of September 30, 2019, the Company had not funded any of its $12.4 million loan commitment to VFV.

(2) On March 7, 2019, the Company acquired the noncontrolling member’s ownership interest in SH1, inclusive of its promoted interest in the venture, for $10.0 million. Prior to this transaction, the noncontrolling member’s

interest was reported in Noncontrolling interests in subsidiaries on the consolidated balance sheets. Since the Company retained its controlling interest in the joint venture, this transaction was accounted for as an equity transaction. The carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase, and the $9.7 million difference between the purchase price paid by the Company and the carrying amount of the noncontrolling interest was recorded as an adjustment to equity attributable to the Company. In conjunction with the Company’s acquisition of the noncontrolling interest in SH1, the $12.2 million related party loan extended by the Company to the venture during the construction period was repaid in full. Subsequently, the noncontrolling member re-acquired a 10% interest in SH1 and a 10% interest in SH2 for a combined $4.8 million, which is included in Noncontrolling interests in subsidiaries on the consolidated balance sheets.

(3) The noncontrolling members of Hempstead and McDonald Ave have the option to put their ownership interest in the ventures to the Company for $6.6 million and $10.0 million, respectively, within the one-year period after construction of each store is substantially complete. Additionally, the Company has a one-year option to call the ownership interest of the noncontrolling members of Hempstead and McDonald Ave for $6.6 million and $10.0 million, respectively, beginning on the second anniversary of the respective store’s construction being substantially complete. The Company, at its sole discretion, may pay cash and/or issue OP Units in exchange for the noncontrolling member’s interest in Hempstead and McDonald. The Company is accreting the respective liabilities during the development periods and, as of September 30, 2019, has accrued $1.9 million and $9.4 million, related to Hempstead and McDonald Ave, respectively, which are included in Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets.

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MORTGAGE LOANS AND NOTES PAYABLE (Tables) - Mortgages

9 Months Ended

Sep. 30, 2019

Summary of debt

	Carrying Value as of:
	September 30,		December 31,		Effective		Maturity
Mortgage Loans and Notes Payable	2019		2018		Interest Rate		Date
	(in thousands)
YSI 33 (1)	$	—	$	9,214	6.42	%	Jul-19
YSI 26		7,861		8,022	4.56	%	Nov-20
YSI 57		2,760		2,816	4.61	%	Nov-20
YSI 55		21,674		22,041	4.85	%	Jun-21
YSI 24		24,260		24,893	4.64	%	Jun-21
YSI 65		2,326		2,363	3.85	%	Jun-23
YSI 66		30,737		31,171	3.51	%	Jun-23
YSI 68		5,501		5,626	3.78	%	May-24
Principal balance outstanding		95,119		106,146
Plus: Unamortized fair value adjustment		2,010		2,551
Less: Loan procurement costs, net		(319)		(451)
Total mortgage loans and notes payable, net	$	96,810	$	108,246

(1) YSI 33 was repaid in full on July 1, 2019.

Schedule of the future principal payment requirements on the outstanding mortgage loans and notes payable

The following table represents the future principal payment requirements on the outstanding mortgage loans and notes payable as of September 30, 2019 (in thousands):

2019	$	625
2020		12,791
2021		45,057
2022		923
2023		31,019
2024 and thereafter		4,704
Total mortgage payments		95,119
Plus: Unamortized fair value adjustment		2,010
Less: Loan procurement costs, net		(319)
Total mortgage loans and notes payable, net	$	96,810

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2019

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

11. FAIR VALUE MEASUREMENTS

The Company applies the methods of determining fair value as described in authoritative guidance, to value its financial assets and liabilities. As defined in the guidance, fair value is based on the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible, as well as considering counterparty credit risk in its assessment of fair value.

There were no financial assets or liabilities carried at fair value as of September 30, 2019. Financial assets and liabilities carried at fair value as of December 31, 2018 are classified in the table below in one of the three categories described above (in thousands):

	Level 1		Level 2		Level 3
Interest rate swap derivative liabilities	$	—	$	1,039	$	—
Total liabilities at fair value	$	—	$	1,039	$	—

Financial assets and liabilities carried at fair value were classified as Level 2 inputs. For financial liabilities that utilize Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including LIBOR yield curves, bank price quotes for forward starting swaps, NYMEX futures pricing and common stock price quotes. Below is a summary of valuation techniques for Level 2 financial liabilities:

● Interest rate swap derivative assets and liabilities – valued using LIBOR yield curves at the reporting date. Counterparties to these contracts are most often highly rated financial institutions, none of which experienced any significant downgrades that would reduce the amount owed by the Company. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the Company’s derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and the counterparties. However, as of the reporting dates, the Company has assessed the significance of the effect of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The fair values of financial instruments, including cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate their respective carrying values at September 30, 2019 and December 31, 2018. The aggregate carrying value of the Company’s debt was $1,824.3 million and $1,747.1 million at September 30, 2019 and December 31, 2018, respectively. The estimated fair value of the Company’s debt was $1,926.0 million and $1,731.9 million at September 30, 2019 and December 31, 2018, respectively. The fair value of debt estimates were based on a discounted cash flow analysis assuming market interest rates for comparable obligations at September 30, 2019 and December 31, 2018. The Company estimates the fair value of its fixed rate debt and the credit spreads over variable market rates on its variable rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of the debt obligation with similar credit policies, which is classified within level 2 of the fair value hierarchy. Rates and credit spreads take into consideration general market conditions and maturity.

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STORAGE PROPERTIES

9 Months Ended

Sep. 30, 2019

STORAGE PROPERTIES

STORAGE FACILITIES

3. STORAGE PROPERTIES

The book value of the Company’s real estate assets is summarized as follows:

	September 30,		December 31,
	2019		2018
	(in thousands)
Land	$	849,874	$	806,916
Buildings and improvements		3,579,904		3,343,173
Equipment		159,833		176,583
Construction in progress		85,106		136,783
Storage properties		4,674,717		4,463,455
Less: Accumulated depreciation		(936,862)		(862,487)
Storage properties, net	$	3,737,855	$	3,600,968

The following table summarizes the Company’s acquisition and disposition activity during the period beginning on January 1, 2018 through September 30, 2019.

			Number of	Purchase / Sale Price
Asset/Portfolio	Market	Transaction Date	Stores	(in thousands)
2019 Acquisitions:
Maryland Asset	Baltimore / DC	March 2019	1	$	22,000
Florida Assets	Florida Markets - Other	April 2019	2		19,000
Arizona Asset	Phoenix	May 2019	1		1,550
HVP III Assets	Various (see note 4)	June 2019	18		128,250	(1)
Georgia Asset	Atlanta	August 2019	1		14,600
South Carolina Asset	Charleston	August 2019	1		3,300
			24	$	188,700
2018 Acquisitions:
Texas Asset	Texas Markets - Major	January 2018	1	$	12,200
Texas Asset	Texas Markets - Major	May 2018	1		19,000
Metro DC Asset	Baltimore / DC	July 2018	1		34,200
Nevada Asset	Las Vegas	September 2018	1		14,350
North Carolina Asset	Charlotte	September 2018	1		11,000
California Asset	Los Angeles	October 2018	1		53,250
Texas Asset	Texas Markets - Major	October 2018	1		23,150
California Asset	San Diego	November 2018	1		19,118
New York Asset	New York / Northern NJ	November 2018	1		37,000
Illinois Asset	Chicago	December 2018	1		4,250
			10	$	227,518
2018 Dispositions:
Arizona Assets	Phoenix	November 2018	2	$	17,502
			2	$	17,502

(1) Amount represents the purchase price for 90% of the ownership interest in 191 III CUBE LLC (“HVP III”), which at the time of the acquisition, owned 18 storage properties (see note 4).

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REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS

9 Months Ended

Sep. 30, 2019

REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS

REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS

7. REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS

On December 9, 2011, the Company entered into a credit agreement (the “Credit Facility”), which was subsequently amended on April 5, 2012, June 18, 2013 and April 22, 2015 to provide for, among other things, a $200.0 million unsecured term loan with a maturity date of January 31, 2019 and a $500.0 million unsecured revolving facility with a maturity date of April 22, 2020. On June 19, 2019, the Company amended and restated, in its entirety, the Credit Facility (the “Amended and Restated Credit Facility”) which, subsequent to the amendment and restatement, is comprised of a $750.0 million unsecured revolving facility (the “Revolver”) maturing on June 19, 2024. Under the Amended and Restated Credit Facility, pricing on the Revolver is dependent upon the Company’s unsecured debt credit ratings. At the Company’s current Baa2/BBB level, amounts drawn under the Revolver are priced at 1.10% over LIBOR, inclusive of a facility fee of 0.15%. The Company incurred costs of $3.9 million in 2019 in connection with amending and restating the Credit Facility and capitalized such costs as a component of Loan procurement costs, net of amortization on the consolidated balance sheets.

As of September 30, 2019, borrowings under the Revolver had an effective weighted average interest rate of 3.12%. Additionally, as of September 30, 2019, $511.3 million was available for borrowing under the Revolver. The available balance under the Revolver is reduced by an outstanding letter of credit of $0.7 million.

On June 20, 2011, the Company entered into an unsecured term loan agreement (the “Term Loan Facility”), which was subsequently amended on June 18, 2013 and August 5, 2014, consisting of, among other things, a $100.0 million unsecured term loan with a seven-year maturity that was repaid on June 19, 2019.

The Company’s unsecured term loans under the Credit Facility and Term Loan Facility are summarized below:

	Carrying Value as of:				Effective Interest
	September 30,		December 31,		Rate as of		Maturity
Unsecured Term Loans	2019		2018		September 30, 2019		Date
	(in thousands)
Credit Facility
Unsecured term loan (1)	$	—	$	200,000	—	%	Jan-19
Term Loan Facility
Unsecured term loan (2)		—		100,000	—	%	Jan-20
Principal balance outstanding		—		300,000
Less: Loan procurement costs, net		—		(201)
Total unsecured term loans, net	$	—	$	299,799

(1) On January 31, 2019, the Company used a portion of the net proceeds from the issuance of $350.0 million of 4.375% Senior Notes due 2029 (the “2029 Notes”) to repay all of the outstanding indebtedness under the unsecured term loan portion of the Credit Facility. 

(2) On June 19, 2019, the Company used an initial advance at closing of the Amended and Restated Credit Facility to repay all of the outstanding indebtedness under the unsecured term loan portion of the Term Loan Facility

that was scheduled to mature in January 2020. Unamortized loan procurement costs of $0.1 million were written off in conjunction with the repayment.

Under the Amended and Restated Credit Facility, the Company’s ability to borrow under the Revolver is subject to ongoing compliance with certain financial covenants which include, among other things, (1) a maximum total indebtedness to total asset value of 60.0%, and (2) a minimum fixed charge coverage ratio of 1.50:1.00. As of September 30, 2019, the Company was in compliance with all of its financial covenants.