SmartStop Self Storage REIT, Inc.SMA
Scheduled
SmartStop Self Storage REIT, Inc. 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
PeriodQ2 2026
Key takeaways
- SmartStop Self Storage REIT reported a 150 basis points year-over-year margin expansion, up from 30 basis points last quarter, driven by operating expense savings in payroll, repairs and maintenance, property insurance, and utilities.
- Payroll expenses decreased by about 2.3% for the quarter, attributed to increased market density and clustering effects, notably in the Denver market where operating expenses dropped substantially after expanding from 9 to over 50 properties.
- The company expects a broader occupancy inflection by the fourth quarter, with occupancy slightly negative relative to 2025 but at or better than 2025 levels, supported by strong customer health and length of stay.
- Second quarter move-in rates were down 4.4% year over year, improving from the first quarter, while web rates were down about 3.5%. In July, web rates rose 1% year over year and occupancy was 92.1%, down about 65 basis points year over year.
- The Asheville market, the best performing in 2025 with 6% same store revenue growth, is recovering from occupancy declines due to eminent domain proceedings and flooding, with occupancy currently at 91.8%. A property destroyed by flooding will be rebuilt in early 2027, 83% larger than the original.
- The Canadian Greater Toronto Area (GTA) portfolio consists of 13 stabilized properties with same store revenue down 1% in Q2 on a constant currency basis due to tough comps, but joint venture properties grew revenue 6.7% and NOI 9.4%.
- SmartStop's Canadian bad debt is less than half of U.S. levels and improving. New supply in the GTA is expected to moderate over the next two years. The company remains committed to the Canadian market and welcomes increased competition from Public Storage's pending acquisition.
- The third-party management platform integration of Argus properties is progressing, improving property performance and margin expansion, with Denver margins up 430 basis points year to date.
- The company has a bridge lending joint venture pipeline exceeding $100 million with target yields of 10-14%, currently holding $20 million in preferred notes on six properties, and is exploring various financing structures.
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