Moody's affirmed the senior unsecured ratings of CubeSmart's operating partnership at Baa2 and its issuer rating at Baa2, while keeping the ratings outlook at stable.
The rating agency also assigned a (P)Baa3 rating to CubeSmart's preferred shelf and a (P)Baa2 rating to the operating partnership's senior unsecured debt shelf.
Moody's attributed the Baa2 senior unsecured rating to CubeSmart's high-quality self-storage portfolio concentrated in markets with historically lower supply than the national average, as well as its conservative balance sheet backed by a large pool of unencumbered assets.
However, the rating agency cited the highly competitive and management-intensive self-storage sector, risk of geographic concentration and an increasing supply that is expected to continue to affect the overall sector as key credit challenges.
The stable outlook takes into account Moody's view that CubeSmart will conservatively manage its capital structure, deliver stable operating performance and sustain good financial flexibility as it works toward further expansion.