Business Context and Reporting Period
This Form 8-K Current Report was filed by CubeSmart (CubeSmart, L.P.) on March 4, 2020. CubeSmart is a Maryland real estate investment trust (REIT) with its principal executive offices in Malvern, Pennsylvania. The filing reports the entry into material definitive agreements regarding an equity offering program.
Key Financial Metrics and Transaction Details
The filing details a new "at-the-market" (ATM) offering program rather than reporting periodic financial performance metrics such as revenue or profit.
- Securities Authorized: Up to 14,559,259 common shares of beneficial interest ($0.01 par value).
- Sales Agents: Wells Fargo Securities, LLC; BofA Securities, Inc.; BMO Capital Markets Corp.; Jefferies LLC; and Barclays Capital Inc.
- Commission Rate: Sales agents are entitled to compensation not to exceed 1.5% of the gross sales price of shares sold.
- Registration: Shares are offered pursuant to an automatic shelf registration statement (Form S-3, No. 333-236886) effective immediately upon filing.
Material Changes and Agreements
On March 4, 2020, the Company and the Operating Partnership entered into Second Amended and Restated Equity Distribution Agreements. These agreements replace the previous equity distribution agreements dated July 27, 2018. The new agreements allow the Company to sell shares through ordinary brokers' transactions on the New York Stock Exchange (NYSE), in negotiated transactions, or in block transactions at prices related to prevailing market prices.
Outlook, Use of Proceeds, and Risks
Use of Proceeds: The Company intends to contribute net proceeds to the Operating Partnership in exchange for partnership units. The Operating Partnership plans to use these funds for general business purposes, including:
- Repayment of outstanding debt.
- Store acquisitions and developments.
- Joint ventures and capital expenditures.
- Working capital and other general corporate purposes.
Termination and Risks: The offering may be terminated by the Company or Sales Agents upon three days' notice. Sales agents may also terminate the agreement in certain circumstances, including the suspension of trading of Common Shares on the NYSE or the occurrence of a material adverse change in the Company's business. The Company retains the right to instruct agents not to sell shares if sales cannot be effected at or above a designated minimum price.
Investor Verification Checklist
- Verify the current market price of CubeSmart (CUBE) shares to assess the potential dilution impact of the 14,559,259 shares available under the ATM program.
- Review the Company's most recent 10-Q or 10-K to determine current debt levels and liquidity needs, as proceeds are earmarked for debt repayment and acquisitions.
- Monitor future filings for placement notices or actual sales volumes under the new distribution agreements.
- Confirm the status of the shelf registration statement (No. 333-236886) on the SEC EDGAR database.