What's Happening?
SmartStop Self Storage REIT, Inc. held its Q3 earnings call, highlighting sector-leading revenue growth and strategic acquisitions. The company reported a robust third quarter with same-store revenue growth of
2.5% and an average occupancy rate of 92.6%. SmartStop successfully raised CAD 200 million in the Canadian Maple bond market and completed the acquisition of Argus Professional Storage Management, doubling its store count to over 460 properties across North America. Despite these achievements, the company faced challenges such as an industrial tenant default and unexpected costs, leading to FFO as adjusted per share of $0.47, slightly below expectations.
Why It's Important?
SmartStop's strategic moves, including acquisitions and market entries, position it well for sustained growth in the self-storage sector. The company's inclusion in the MSCI U.S. REIT Index enhances its visibility and credibility within the investment community. The acquisition of Argus and successful bond market entry bolster SmartStop's capital structure, supporting future expansion. However, challenges in the Toronto market and tenant defaults highlight potential risks. Investors and stakeholders should monitor SmartStop's ability to navigate these hurdles while capitalizing on growth opportunities.
What's Next?
SmartStop plans to maintain its full-year FFO guidance midpoint and focus on strategic initiatives such as the acquisition of Argus and further capital deployment. The company anticipates the impact of new supply in the Toronto market to diminish over time. Continued expansion and strengthening of its market position are expected, with SmartStop emphasizing its strategic vision for growth amid a recovering self-storage market.
