CubeSmart Reports Fourth Quarter and Annual 2012 Results; Same-Store Occupancy Increases 550 Basis Points; Same-Store NOI Grows

CubeSmart Reports Fourth Quarter and Annual 2012 Results; Same-Store Occupancy 
Increases 550 Basis Points; Same-Store NOI Grows 7.4% 
WAYNE, PA -- (Marketwire) -- 02/21/13 --  CubeSmart (NYSE: CUBE)
announced its operating results for the three months and year ended
December 31, 2012.  
"We saw accelerating operational performance throughout 2012,"
commented Chief Executive Officer Dean Jernigan. "Importantly, we are
positioned to maintain this fundamental momentum into 2013. With a
high-quality team, property portfolio, operating platform, and
balance sheet in place, all in the context of steady demand and
limited new supply, we remain optimistic about our business."  
Key Highlights for the Quarter 


 
--  Reported funds from operations ("FFO") per share, as adjusted, of
    $0.21, representing a year-over-year increase of 23.5%.
--  Increased same-store (313 facilities) net operating income ("NOI")
    7.4% year over year, driven by 5.2% revenue growth and a 1.2% increase
    in property operating expenses.
--  Gained 550 basis points year over year in period ending same-store
    occupancy, up from 79.1% at the end of 2011 to 84.6% at the end of
    2012.
--  Closed on five acquisitions totaling $25.6 million, bringing full-year
    acquisition volume to $442.7 million.
--  Closed on dispositions totaling $24.3 million, including eight assets
    in Ohio, two in Florida and one in Tennessee. Full-year disposition
    volume totaled $60.0 million.

  
Funds from Operations 
FFO, as adjusted, was $28.9 million for the fourth quarter of 2012,
compared with $20.5 million for the fourth quarter of 2011. FFO per
share, as adjusted, increased 23.5% to $0.21 for the fourth quarter
of 2012, compared with $0.17 for the same quarter last year.  
FFO, as adjusted, for the year ended December 31, 2012 was $96.4
million, compared with $70.9 million for the year ended December 31,
2011. FFO per share, as adjusted, increased 13.8% to $0.74 for the
year ended December 31, 2012, compared with $0.65 for the year ended
December 31, 2011.  
"Our keen focus on operational execution continues to drive
accelerating occupancy and revenue performance," noted Chris Marr,
President, Chief Operating Officer, and Chief Investment Officer. "We
also had a very productive 2012 from an external growth perspective,
as we exceeded our targets for acquisitions, dispositions, and
third-party management contracts in a disciplined manner that
meaningfully enhanced our portfolio." 
Investment Activity 
The Company acquired five assets for $25.6 million during the three
months ended December 31, 2012. These properties are located in
Florida, New Jersey, Pennsylvania and Texas. For the full year,
excluding assets associated with the previously announced Storage
Deluxe and joint venture transactions, the Company closed on the
acquisition of 22 assets for $128.4 million. Including these
transactions, full-year acquisition volume totaled $442.7 million. 
On the disposition front during the quarter, the Company sold 11
assets for total proceeds of $24.3 million. The facilities are
located in Ohio, Florida, and Tennessee. For the year, the Company
disposed of 26 assets for $60.0 million. 
Third-Party Management 
During the quarter, the Company was awarded eight new management
contracts for properties located predominantly in the Southeast. At
December 31, 2012, following the Company's acquisition of two
facilities from the third-party management platform and the removal
of five others due to sale, the Company managed for third parties 133
properties totaling 8.0 million square feet. 
Same-Store Results  
The Company's same-store pool at December 31, 2012 represented 313
facilities containing approximately 20.7 million rentable square feet
and included approximately 81.1% of the aggregate rentable square
feet of the Company's 381 owned facilities. These same-store
facilities represent approximately 72.8% of property net operating
income for the quarter ended December 31, 2012. 
Same-store physical occupancy at period end for the fourth quarter of
2012 was 84.6%, compared with 79.1% for the same quarter of last
year. Same-store net rental income for the fourth quarter of 2012
increased 3.9%, same-store total revenues increased 5.2%, and
same-store operating expenses increased 1.2% from the same quarter in
2011. Same-store net operating income increased 7.4%, as compared
with the same period in 2011. 
For the year ended December 31, 2012, same-store net rental income
increased 2.8%, same-store total revenues increased 3.8%, same-store
operating expenses decreased 0.1%, and same-store net operating
income increased 6.0%, as compared with the year ended December 31,
2011. 
Operating Results 
Total revenues increased $16.0 million and total property operating
expenses increased $4.6 million in the fourth quarter of 2012, as
compared with the same period in 2011. Increases in total revenues
are primarily attributable to increased occupancy levels in the
same-store portfolio and revenues generated from property
acquisitions. Increases in total property operating expenses are
attributable to the impact of newly acquired properties and an
increase in same-store expenses, which was largely driven by
increased advertising costs.  
Interest expense increased from $8.6 million in the fourth quarter of
2011 to $11.0 million in the current period due to a higher amount of
outstanding debt, primarily resulting from debt assumed and drawn in
conjunction with the Storage Deluxe and other acquisitions and offset
by lower interest rates on the Credit Facility in the 2012 period as
compared with the 2011 period. 
The Company's fourth quarter results include income of $0.1 million
from discontinued operations as of December 31, 2012, and $3.4
million of gains on disposition of discontinued operations. These
relate to the sale of 11 properties during the quarter.  
The Company reported a net loss attributable to the Company's common
shareholders of $0.02 million, or $0.00 per common share, in the
fourth quarter of 2012, compared with a net loss attributable to the
Company's common shareholders of $9.2 million, or $0.08 per common
share, in the fourth quarter of 2011. 
For the year ended December 31, 2012, the Company reported a net loss
attributable to the Company's common shareholders of $4.2 million, or
$0.03 per common share, compared with a net loss attributable to the
Company's common shareholders of $1.6 million, or $0.02 per common
share, for the year ended December 31, 2011.  
The Company's 381 owned facilities, containing 25.5 million rentable
square feet, had a physical occupancy at December 31, 2012 of 84.4%. 
"At-The-Market" Equity Program 
During the quarter, the Company sold 3.2 million common shares of
beneficial interest through its "at-the-market" equity program at an
average sales price of $13.60 per share, resulting in net proceeds of
$43.0 million, bringing full-year net proceeds from the program to
$102.2 million. At December 31, 2012, the Company had 3.9 million
shares available for sale under the existing Sales Agreement.  
Quarterly Dividend 
On December 10, 2012, the Company declared a dividend of $0.11 per
common share, representing a 37.5% increase from the previous
quarterly rate. The dividend was paid on January 15, 2013 to common
shareholders of record on January 2, 2013. 
Also on December 10, 2012, the Company declared a dividend of
$0.484375 for the 7.75% Series A Cumulative Redeemable Preferred
Shares. The dividend was paid on January 15,
 2013 to holders of
record on January 2, 2013.  
2013 Financial Outlook  
"Our expectations for 2013 reflect a continuation of the strong,
accelerating performance that we have seen in recent periods," stated
Tim Martin, Chief Financial Officer. "Our 2013 NOI guidance
contemplates healthy revenue growth as well as meaningful increases
in real estate taxes. Additionally, our balance sheet remains
well-positioned to support our strategic growth initiatives through
broad access to a variety of capital sources."  
The Company estimates that its fully diluted FFO per share for 2013
will be between $0.80 and $0.86, and that its fully diluted net
income (loss) per share for the period will be between ($0.03) and
$0.03. The Company's estimate is based on the following key
assumptions: 


 
--  For 2013, a same-store pool consisting of 333 assets totaling 22.1
    million square feet.
--  Same-store net operating income ("NOI") growth of 5.0% to 6.0% over
    2012, driven by revenue growth of 4.75% to 5.25% and expense growth of
    3.5% to 4.5%.
--  General and administrative expenses of approximately $29.0 million to
    $30.0 million.

  
Due to uncertainty related to the timing and terms of transactions, the
impact of future investment activity is excluded from guidance. For
2013, the Company is targeting $75 million to $125 million of
acquisitions and $20 million to $40 million of dispositions.  


 
                                                                            
2013 Full Year Guidance                                     Range or Value  
-------------------------------------------------------- -------------------
Loss per diluted share allocated to common shareholders  $(0.03)  to  $ 0.03
Plus: real estate depreciation and amortization            0.83         0.83
                                                         ------       ------
FFO per diluted share                                    $ 0.80   to  $ 0.86
                                                         ======       ======

 
The Company estimates that its fully-diluted FFO per share for the
quarter ending March 31, 2013 will be between $0.19 and $0.20, and
that its fully-diluted net loss per share for the period will be
between $0.02 and $0.03. 


 
                                                                            
1st Quarter 2013 Guidance                                  Range or Value   
------------------------------------------------------- ------------------- 
Loss per diluted share allocated to common shareholders $(0.03)  to  $(0.02)
Plus: real estate depreciation and amortization           0.22         0.22 
                                                        ------       ------ 
FFO per diluted share                                   $ 0.19   to  $ 0.20 
                                                        ======       ====== 

 
Conference Call  
Management will host a conference call at 11:00 a.m. ET on Friday,
February 22, 2013 to discuss financial results for the three months
and year ended December 31, 2012. 
A live webcast of the conference call will be available online from
the investor relations page of the Company's corporate website at
www.CubeSmart.com. The dial-in numbers are 1-888-317-6016 for
domestic callers, +1-412-317-6016 for international callers and
1-855-669-9657 for callers in Canada. After the live webcast, the
call will remain available on CubeSmart's website for 30 days. In
addition, a telephonic replay of the call will be available through
March 24, 2013. The replay dial-in number is 1-877-344-7529 for
domestic callers and +1-412-317-0088 for international callers. The
conference number for both is 10024576.  
Supplemental operating and financial data as of December 31, 2012 is
available on the Company's corporate website under Investor Relations
- Financial Information - Financial Reports. 
About CubeSmart 
CubeSmart is a self-administered and self-managed real estate
investment trust. The Company's self-storage facilities are designed
to offer affordable, easily accessible and secure storage space for
residential and commercial customers. According to the 2012
Self-Storage Almanac, CubeSmart is one of the top four owners and
operators of self-storage facilities in the United States.  
Non-GAAP Performance Measurements  
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, defines FFO as net income (computed
in accordance with GAAP), excluding gains (or losses) from sales of
property and real estate 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 the Company's facilities. Given the nature of its
business as a real estate owner and operator, the Company considers
FFO a key measure of its operating performance that is not
specifically defined by accounting principles generally accepted in
the United States. The Company believes that FFO is useful to
management and investors as a starting point in measuring its
operational performance because it excludes various items included in
net income that do not relate to or are not indicative of its
operating performance such as gains (or losses) from sales of
property, gains on remeasurement of investment in real estate
ventures, impairments of depreciable assets, and depreciation, which
can make periodic and peer analyses of operating performance more
difficult. FFO should not be considered as an alternative to net
income (determined in accordance with GAAP) as an indicator of the
Company's financial performance, is not an alternative to cash flow
from operating activities (determined in accordance with GAAP) as a
measure of the Company's liquidity, and is not indicative of funds
available to fund the Company's cash needs, including its ability to
make distributions.  
FFO, as adjusted represents FFO as defined above, excluding the
effects of acquisition related costs, gains or losses from early
extinguishment of debt, and other one-time items, which we believe
are not indicative of the Company's operating results. 
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 entities,
amounts attributable to noncontrolling interests, other expense,
depreciation and amortization expense, general and administrative
expense, and deducting from net income: income from discontinued
operations, gains on disposition of discontinued operations, other
income, gain on remeasurement of investment in real estate ventures,
and interest income. NOI is not a measure of performance calculated
in accordance with GAAP. 
Management uses NOI as a measure of operating performance at each of
our facilities, and for all of our facilities 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.  
Forward-Looking Statements  
This presentation, together with other statements and information
publicly disseminated by CubeSmart ("we," "us," "our" or the
"Company"), contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). 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. Risks, uncertainties and
other factors that might cause such differences, some of which could
be material, include, but are not limited to: 


 
--  national and local economic, business, real estate and other market
    conditions;
    
    
--  the competitive environment in which we operate, including our ability
    to raise rental rates;
    
    
--  the execution of our business plan;
    
    
--  the availability 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;
    
    
--  our ability to maintain our status as a real estate investment trust
    ("REIT") for federal income tax purposes;
    
    
--  acquisition and development risks;
    
    
--  increases in taxes, fees, and assessments from state and local
    jurisdictions;
    
    
--  risks of investing through joint ventures;
    
    
--  changes in real estate and zoning laws or regulations;
    
    
--  risks related to natural disasters;
    
    
--  potential environmental and other liabilities;
    
    
--  other factors affecting the real estate industry generally or the
    self-storage industry in particular; and
    
    
--  other risks identified in Item 1A of our Annual Report on Form 10-K
    and, from time to time, in other reports we file with the Securities
    and Exchange Commission (the "SEC") or in other documents that we
    publicly disseminate.

  
Given these uncertainties, 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 in securities laws. 


 
                                                                            
                                                                            
                         CUBESMART AND SUBSIDIARIES                         
                        CONSOLIDATED BALANCE SHEETS                         
                     (in thousands, except share data)                      
                                                                            
                                                December 31,   December 31, 
                                                    2012           2011     
                                               -------------  ------------- 
ASSETS                                                                      
Storage facilities                             $   2,443,022  $   2,107,469 
Less: Accumulated depreciation                      (353,315)      (318,749)
                                               -------------  ------------- 
Storage facilities, net                            2,089,707      1,788,720 
Cash and cash equivalents                              4,495          9,069 
Restricted cash                                        6,070         11,291 
Loan procurement costs, net of amortization            8,253          8,073 
Investment in real estate ventures, at equity              -         15,181 
Other assets, net                                     41,794         43,645 
                                               -------------  ------------- 
  Total assets                                 $   2,150,319  $   1,875,979 
                                               =============  ============= 
                                                                            
LIABILITIES AND EQUITY                                                      
                                                                            
Unsecured senior notes                         $     250,000  $           - 
Revolving credit facility                             45,000              - 
Unsecured term loans                                 500,000        400,000 
Mortgage loans and notes payable                     228,759        358,441 
Accounts payable, accrued expenses and other                                
 liabilities                                          60,708         51,025 
Distributions payable                                 16,419         11,401 
Deferred revenue                                      11,090          9,568 
Security deposits                                        444            490 
                                               -------------  ------------- 
  Total liabilities                                1,112,420        830,925 
                                               -------------  ------------- 
                                                                            
Noncontrolling interests in the Operating                                   
 Partnership                                          47,990         49,732 
                                               -------------  ------------- 
                                                                            
Commitments and contingencies                                               
                                                                            
Equity                                                                      
  7.75% Series A Preferred shares $.01 par                                  
   value, 3,220,000 shares authorized,                                      
   3,100,000 shares issued and outstanding at                               
   December 31, 2012 and December 31, 2011                31             31 
  Common shares $.01 par value, 200,000,000                                 
   shares authorized, 131,794,547 and                                       
   122,058,919 shares issued and outstanding                                
   at December 31, 2012 and December 31, 2011,                              
   respectively                                        1,318          1,221 
  Additional paid in capital                       1,418,463      1,309,505 
  Accumulated other comprehensive loss               (19,796)       (12,831)
  Accumulated deficit                               (410,225)      (342,013)
                                               -------------  ------------- 
    Total CubeSmart shareholders' equity             989,791        955,913 
                                               -------------  ------------- 
  Noncontrolling interest in subsidiaries                118         39,409 
                                               -------------  ------------- 
Total equity                                         989,909        995,322 
                                               -------------  ------------- 
Total liabilities and equity                   $   2,150,319  $   1,875,979 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                         CUBESMART AND SUBSIDIARIES                         
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
                     (in thousands, except share data)                      
                                                                            
                                     Three Months Ended      Year Ended     
                                        December 31,        December 31,    
                                     ------------------  ------------------ 
                                       2012      2011      2012      2011   
                                     --------  --------  --------  -------- 
                                                                            
REVENUES                                                                    
  Rental income                      $ 68,678  $ 54,606  $250,959  $202,762 
  Other property related income         7,568     5,589    27,776    20,715 
  Property management fee income        1,124     1,133     4,341     3,768 
                                     --------  --------  --------  -------- 
    Total revenues                     77,370    61,328   283,076   227,245 
                                     --------  --------  --------  --------
 
OPERATING EXPENSES                                                          
  Property operating expenses          28,807    24,174   110,821    94,630 
  Depreciation and amortization        31,906    20,845   113,874    65,955 
  General and administrative            6,549     6,343    26,131    24,693 
                                     --------  --------  --------  -------- 
    Total operating expenses           67,262    51,362   250,826   185,278 
                                     --------  --------  --------  -------- 
OPERATING INCOME                       10,108     9,966    32,250    41,967 
                                     --------  --------  --------  -------- 
OTHER (EXPENSE) INCOME                                                      
  Interest:                                                                 
    Interest expense on loans         (11,022)   (8,602)  (40,715)  (33,199)
    Loan procurement amortization                                           
     expense                             (695)     (903)   (3,279)   (5,028)
    Loan procurement amortization                                           
     expense - early repayment of                                           
     debt                                   -    (6,082)        -    (8,167)
  Acquisition related costs                 -    (3,194)   (3,086)   (3,823)
  Equity in losses of real estate                                           
   ventures                              (695)     (257)     (745)     (281)
  Gain from remeasurement of                                                
   investment in real estate venture        -         -     7,023         - 
  Other                                   268        96       256       (83)
                                     --------  --------  --------  -------- 
    Total other expense               (12,144)  (18,942)  (40,546)  (50,581)
                                     --------  --------  --------  -------- 
                                                                            
LOSS FROM CONTINUING OPERATIONS        (2,036)   (8,976)   (8,296)   (8,614)
                                                                            
DISCONTINUED OPERATIONS                                                     
  Income from discontinued                                                  
   operations                             108     1,055     2,113     7,158 
  Gain on disposition of                                                    
   discontinued operations              3,408       376     9,811     3,903 
                                     --------  --------  --------  -------- 
    Total discontinued operations       3,516     1,431    11,924    11,061 
                                     --------  --------  --------  -------- 
NET INCOME (LOSS)                       1,480    (7,545)    3,628     2,447 
  NET LOSS (INCOME) ATTRIBUTABLE TO                                         
    NONCONTROLLING INTERESTS                                                
  Noncontrolling interests in the                                           
   Operating Partnership                    1       333       107       (35)
  Noncontrolling interest in                                                
   subsidiaries                             -      (799)   (1,918)   (2,810)
                                     --------  --------  --------  -------- 
NET INCOME (LOSS) ATTRIBUTABLE TO                                           
 THE COMPANY                            1,481    (8,011)    1,817      (398)
                                     --------  --------  --------  -------- 
  Distribution to Preferred                                                 
   Shareholders                        (1,502)   (1,218)   (6,008)   (1,218)
NET LOSS ATTRIBUTABLE TO THE                                                
 COMPANY'S                                                                  
                                     --------  --------  --------  -------- 
  COMMON SHAREHOLDERS                $    (21) $ (9,229) $ (4,191) $ (1,616)
                                     ========  ========  ========  ======== 
                                                                            
Basic (loss) earnings per share from                                        
 continuing operations attributable                                         
 to common shareholders              $  (0.03) $  (0.09) $  (0.13) $  (0.12)
Basic earnings per share from                                               
 discontinued operations                                                    
 attributable to common shareholders $   0.03  $   0.01  $   0.10  $   0.10 
                                     --------  --------  --------  -------- 
Basic earnings (loss) per share                                             
 attributable to common shareholders $   0.00  $  (0.08) $  (0.03) $  (0.02)
                                     ========  ========  ========  ======== 
Weighted-average basic and diluted                                          
 shares outstanding                   129,111   115,260   124,548   102,976 
                                                                            
AMOUNTS ATTRIBUTABLE TO THE                                                 
 COMPANY'S                                                                  
  COMMON SHAREHOLDERS:                                                      
Loss from continuing operations      $ (3,453) $(10,594) $(15,829) $(12,168)
Total discontinued operations           3,432     1,365    11,638    10,552 
                                     --------  --------  --------  -------- 
Net loss                             $    (21) $ (9,229) $ (4,191) $ (1,616)
                                     ========  ========  ========  ======== 
                                                                            
                                                                            
                                                                            
                Same-store facility results (313 facilities)                
         (in thousands, except percentage and per square foot data)         
                                                                            
                                        Three months ended                  
                                           December 31,                     
                                    --------------------------              
                                                                  Percent   
                                        2012          2011         Change   
                                    ------------  ------------  ----------- 
                                                                            
REVENUES                                                                    
  Net rental income                 $     50,159  $     48,284          3.9%
  Other property related income            5,370         4,488         19.7%
                                    ------------  ------------  ----------- 
    Total revenues                        55,529        52,772          5.2%
                                    ------------  ------------  ----------- 
                                                                            
OPERATING EXPENSES                                                          
  Property taxes                           5,852         6,075         -3.7%
  Personnel expense                        5,793         5,645          2.6%
  Advertising                              1,196         1,035         15.6%
  Repair and maintenance                     810           711         13.9%
  Utilities                                1,878         1,888         -0.5%
  Property insurance                         656           644          1.9%
  Other expenses                           2,546         2,511          1.4%
                                    ------------  ------------  ----------- 
                                                                            
  Total operating expenses                18,731        18,509          1.2%
                                    ------------  ------------  ----------- 
                                                                            
  Net operating income (1)          $     36,798  $     34,263          7.4%
                                    ============  ============  =========== 
                                                                            
  Gross margin                              66.3%         64.9%             
                                                                            
  Period end occupancy (2)                  84.6%         79.1%             
                                                                            
  Period average occupancy (3)              84.7%         79.7%             
                                                                            
  Total rentable square feet              20,681        20,681              
                                                                            
  Realized annual rent per occupied                                         
   square foot (4)                  $      11.46  $      11.71         -2.1%
                                                                            
  Scheduled annual rent per square                                          
   foot (5)                         $      12.13  $      12.92         -6.1%
                                                                            
Reconciliation of Same-Store Net                                            
 Operating Income to Operating                                              
 Income                                                                     
                                                                            
Same-store net operating income (1) $     36,798  $     34,263              
Non same-store net operating income                                         
 (1)                                      13,772         4,550              
Indirect property overhead (6)            (2,007)       (1,659)             
Depreciation and amortization            (31,906)      (20,845)             
General and administrative expense        (6,549)       (6,343)             
                                    ------------  ------------              
                                                                            
Operating Income                    $     10,108  $      9,966              
                                    ============  ============              
                                                                            
                                                                            
(1)  Net operating income (NOI) is a non-GAAP (generally accepted accounting
     principles) financial measure that excludes from operating income the  
     impact of depreciation and general & administrative expense.           
(2)  Represents occupancy at December 31 of the respective year.            
(3)  Represents the weighted average occupancy for the period.              
(4)  Realized annual rent per occupied square foot is computed by dividing  
     rental income by the weighted average occupied square feet for the     
     period.                                                                
(5)  Scheduled annual rent per square foot represents annualized asking     
     rents per available square foot for the period.                        
(6)  Includes property management fee income earned in conjunction with     
     managed properties.                                                    
                                                                            
                                                                            
                                                                            
                Same-store facility results (313 facilities)                
         (in thousands, except percentage and per square foot data)         
                                                                            
                                      Year ended December 31,               
                                    --------------------------              
                                                                  Percent   
                                        2012          2011         Change   
                                    ------------  ------------  ----------- 
                                                                            
REVENUES                                                                    
  Net rental income                 $    196,556  $    191,222          2.8%
  Other property related income           20,331        17,811         14.1%
                                    ------------  ------------  ----------- 
    Total revenues                       216,887       209,033          3.8%
                                    ------------  ------------  ----------- 
                                                                            
OPERATING EXPENSES                                                          
  Property taxes                          24,550        24,896         -1.4%
  Personnel expense                       23,274        22,135          5.1%
  Advertising                              5,932         5,284         12.3%
  Repair and maintenance                   2,937         2,758          6.5%
  Utilities                                7,798         8,307         -6.1%
  Property insurance                       2,655         2,615          1.5%
  Other expenses                          10,320        11,523        -10.4%
                                    ------------  ------------  ----------- 
                                                                            
  Total operating expenses                77,466        77,518         -0.1%
                                    ------------  ------------  ----------- 
                                                                            
  Net operating income (1)          $    139,421  $    131,515          6.0%
                                    ============  ============  =========== 
                                                                            
  Gross margin                              64.3%         62.9%             
                                                                            
  Period end occupancy (2)                  84.6%         79.1%             
                                                                            
  Period average occupancy (3)              82.6%         79.2%             
                                                                            
  Total rentable square feet              20,681        20,681              
                                                                            
  Realized annual rent per occupied                                         
   square foot (4)                  $      11.51  $      11.67         -1.4%
                                                                            
  Scheduled annual rent per square                                          
   foot (5)                         $      12.27  $      12.76         -3.8%
                                                                            
Reconciliation of Same-Store Net                                            
 Operating Income to Operating                                              
 Income                                                                     
                                                                            
Same-store net operating income (1) $    139,421  $    131,515              
Non same-store net operating income                                         
 
(1)                                      40,365         7,764              
Indirect property overhead (6)            (7,531)       (6,664)             
Depreciation and amortization           (113,874)      (65,955)             
General and administrative expense       (26,131)      (24,693)             
                                    ------------  ------------              
                                                                            
Operating Income                    $     32,250  $     41,967              
                                    ============  ============              
                                                                            
(1)  Net operating income (NOI) is a non-GAAP (generally accepted accounting
     principles) financial measure that excludes from operating income the  
     impact of depreciation and general & administrative expense.           
(2)  Represents occupancy at December 31 of the respective year.            
(3)  Represents the weighted average occupancy for the period.              
(4)  Realized annual rent per occupied square foot is computed by dividing  
     rental income by the weighted average occupied square feet for the     
     period.                                                                
(5)  Scheduled annual rent per square foot represents annualized asking     
     rents per available square foot for the period.                        
(6)  Includes property management fee income earned in conjunction with     
     managed properties.                                                    
                                                                            
                                                                            
          Non-GAAP Measure - Computation of Funds From Operations           
                   (in thousands, except per share data)                    
                                                                            
                                  Three months ended        Year ended      
                                     December 31,          December 31,     
                                 --------------------  -------------------- 
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
                                                                            
                                                                            
Net loss attributable to common                                             
 shareholders                    $     (21) $  (9,229) $  (4,191) $  (1,616)
                                                                            
Add (deduct):                                                               
  Real estate depreciation and                                              
   amortization:                                                            
    Real property - continuing                                              
     operations                     31,557     20,489    112,449     64,319 
    Real property - discontinued                                            
     operations                         79        569      1,504      3,116 
    Company's share of                                                      
     unconsolidated real estate                                             
     ventures                            -        514      1,540        542 
    Noncontrolling interest's                                               
     share of consolidated real                                             
     estate ventures                     -       (408)    (1,049)    (1,731)
  Gains on sale of real estate      (3,408)      (376)    (9,811)    (3,903)
  Gain on remeasurement of                                                  
   investment in real estate                                                
   venture                               -          -     (7,023)         - 
  Noncontrolling interests in                                               
   the Operating Partnership            (1)      (333)      (107)        35 
                                                                            
                                 ---------  ---------  ---------  --------- 
FFO                              $  28,206  $  11,226  $  93,312  $  60,762 
                                 =========  =========  =========  ========= 
                                                                            
Add (deduct):                                                               
  Loan procurement amortization                                             
   expense - early repayment of                                             
   debt                                  -      6,082          -      8,167 
  Discontinued operations -                                                 
   settlement proceeds                   -          -          -     (1,895)
  Acquisition related costs            695      3,194      3,086      3,823 
                                                                            
                                 ---------  ---------  ---------  --------- 
FFO, as adjusted                 $  28,901  $  20,502  $  96,398  $  70,857 
                                 =========  =========  =========  ========= 
                                                                            
Earnings (loss) per share                                                   
 attributable to common                                                     
 shareholders - basic and                                                   
 diluted                         $    0.00  $   (0.08) $   (0.03) $   (0.02)
FFO per share and unit - fully                                              
 diluted                         $    0.21  $    0.09  $    0.71  $    0.56 
FFO, as adjusted per share and                                              
 unit - fully diluted            $    0.21  $    0.17  $    0.74  $    0.65 
                                                                            
Weighted-average basic and                                                  
 diluted shares outstanding        129,111    115,260    124,548    102,976 
Weighted-average diluted shares                                             
 and units outstanding             135,678    121,210    131,021    109,085 
                                                                            
Dividend per common share and                                               
 unit                            $    0.11  $    0.08  $    0.35  $    0.29 
Payout ratio of FFO, as adjusted        52%        47%        47%        45%

  
Contact: 
CubeSmart 
Daniel Ruble
Investor Relations
(610) 293-5700