What's Happening?
SmartStop Self Storage REIT, Inc. recently held its Q3 earnings call, highlighting a mix of achievements and challenges. The company reported sector-leading same-store revenue growth of 2.5% and maintained
an average occupancy rate of 92.6%. SmartStop successfully returned to the Canadian Maple bond market, raising CAD 200 million, and completed the acquisition of Argus Professional Storage Management, doubling its store count to over 460 properties. Despite these successes, the company faced challenges, including an unexpected vacate of an industrial tenant and a one-time equity-based compensation expense, which led to FFO as adjusted per share being slightly below expectations.
Why It's Important?
The developments at SmartStop Self Storage REIT are significant for the self-storage industry and investors. The company's strategic acquisitions and financial maneuvers, such as entering the Canadian Maple bond market, bolster its capital structure and market position. The inclusion in the MSCI U.S. REIT Index enhances its visibility and credibility, potentially attracting more investors. However, challenges like the industrial tenant default and market supply issues in Toronto highlight the risks involved in the self-storage sector. Investors and stakeholders should monitor how SmartStop navigates these challenges while pursuing growth.
What's Next?
SmartStop plans to maintain its full-year FFO guidance midpoint and focus on strategic initiatives, including further acquisitions and capital deployment. The company anticipates the impact of new supply in the Toronto market to diminish over time, which could stabilize its operations in the region. Continued expansion and strengthening of its market position are expected, with SmartStop aiming to leverage its inclusion in the MSCI U.S. REIT Index for broader market presence.
