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    SMA
    Earnings call· Jun 2026(Q2 FY26)

    SmartStop Self Storage REIT Q2 FY26 earnings call SMA

    Aug 6, 2026 Source

    Executive summary

    SmartStop Self Storage Q2 FY26 — Strong Same-Store NOI Growth and Raised Guidance

    SmartStop Self Storage delivered strong Q2 FY26 results, highlighted by robust same-store NOI growth and significant FFO per share expansion, driven by effective expense control and revenue management. The company raised its full-year guidance, reflecting better-than-expected momentum into the second half, and is executing its DECA initiative for long-term value creation, including strategic acquisitions and platform scaling.

    Highlights

    5

    • Same-store revenue growth of 1.3% in Q2 FY26.

    • Same-store operating expenses decreased by 3.4% in Q2 FY26.

    • Same-store NOI grew by 3.7% in Q2 FY26.

    • FFO as adjusted per share was 49 cents, up 17.6% year over year.

    • Raised midpoint of full-year same-store revenue, NOI, and FFO as adjusted per share guidance.

    Concerns

    4

    • Web rates were down 3.8% during Q2 FY26.

    • Achieved move-in rates per square foot were down 4.4% on average in Q2 FY26.

    • Occupancy in July was 92.1%, down 65 basis points year over year.

    • Seven properties impacted by LA County Fire ECRI restrictions posted negative 2% same-store revenue growth in Q2 FY26.

    Guidance & targets

    5
    CategoryTargetConfidence
    Same-store revenue growth
    0.5% to 1.5%
    high materiality
    High
    Overall operating expense growth
    0.25% to 1.25%
    medium materiality
    High
    NOI growth midpoint
    positive 1.15%
    high materiality
    High
    FFO as adjusted per share
    $1.98 to $2.04
    high materiality
    High
    Full-year capital deployment
    $55 million to $75 million
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Company-wide Same-Store Pool
    Posted strong same-store revenue growth and significant operating expense decrease, leading to robust NOI growth and improved operating margins. This is the second consecutive quarter of improved margins.
    Operating expense decrease: 3.4%NOI increase: 3.7%Average occupancy: 92.5%Operating margin increase: 150 bps YoY
    		1.3%1.3%—67.3%
    Canadian Joint Venture Properties
    These 10 properties, totaling 900,000 square feet, are more recently stabilized assets and showed strong revenue and NOI growth.
    NOI growth: 9.4% YoYReoccurring revenue stream growth: 14%Occupancy: 92.3%
    		6.7%6.7%—9.4%
    GTA Same-Store Portfolio
    Consists of 13 seasoned stabilized properties, representing 1.1 million square feet. Revenue was down on a constant currency basis due to tough comps from 2025 outperformance. Expected to run modestly below the US portfolio for the full year.
    Occupancy (end of July): 92.2% (down 60 bps YoY)
    		-1%-1%——
    Asheville Market
    Seven properties impacted by LA County Fire ECRI restrictions posted negative same-store revenue growth. Occupancy gap has narrowed, and web rates are improving. Overall, expected to be a relative underperformer in 2026, specifically through Q3.
    Occupancy: 91.8%Occupancy gap (Q2): down 230 bps YoYWeb rates: positive YoY in July
    		-2%-2%——

    Operational metrics

    22
    Same-store operating margin
    67.3%up 150 bps YoY
    Q2 FY26

    Second consecutive quarter of improved margins.

    Web rates
    down 3.8%YoY
    Q2 FY26

    Company-wide web rates.

    Achieved move-in rates per square foot
    down 4.4%on average
    Q2 FY26

    Company-wide average.

    Occupancy
    92.1%down 65 bps YoY
    July

    Company-wide occupancy.

    Web rates
    up 1.2%YoY
    July

    Company-wide web rates.

    Cash flow leverage
    6.2xorganic reduction
    Q2 FY26

    Organic reduction to cash flow leverage, even while deploying capital.

    Property insurance renewal
    —
    April

    Occurred in April, part of a general softening in that particular market, expected to carry forward through the rest of the year.

    Payroll decrease
    2.3%
    Q2 FY26

    Part of overall distribution clustering and economies of scale.

    Operating expenses
    —down substantially
    Q2 FY26

    Almost entirely attributable to payroll, driven by increased presence from 9 to over 50 properties (owned and managed).

    Margin improvement
    430 bps
    YTD

    Overall margin improvement in Denver due to economies of scale and clustering.

    Move-in rents
    down 5%YoY
    July

    Company-wide move-in rents.

    In-place rates
    up over 2%YoY
    July

    Company-wide in-place rates.

    Same-store occupancy gap
    down 230 bpsYoY
    Q2 FY26

    Gap has narrowed dramatically since December.

    Web rates
    positiveYoY
    July

    Stronger than anticipated at the beginning of the year.

    Bad debt
    —less than half of U.S. levels
    Current

    Canadian bad debt is improving year over year.

    Occupancy growth
    15%
    Past two quarters

    Alberta portfolio has grown its own occupancy.

    Bridge lending book
    $20 million
    As of June 30th

    Book of bridge loans, all properties have property management.

    Bridge lending blended yield
    just under 11%
    Current

    Blended yield across all current bridge lending investments.

    Onboarded net rentable square feet
    90,000
    Q2 FY26

    Net rentable square feet from onboarded stores on the Argus platform.

    Off-boarded net rentable square feet
    52,000
    Q2 FY26

    Net rentable square feet from off-boarded stores on the Argus platform.

    Average square feet of onboarded store
    73%larger than off-boards
    Q2 FY26

    Onboarded stores are significantly larger, leading to higher overall revenues.

    ECRI approach
    low 20s percents
    2026

    Blended average for rate increases to existing customers.

    Industry KPIs

    2
    MetricValueDetails
    Move in rate growth churndown 4.4%%
    Self storage same store revenue noi growth3.7%%

    Orderbook & backlog

    2
    Bridge Lending Pipelinein excess of $100 millionQ2 FY26

    Target yields in the 10% to 14% range, typically structured as mezzanine or preferred.

    Asheville Rebuild Development83% larger than original propertyQ2 FY26

    Expected delivery late 2027/early 2028.

    Deals & partnerships

    3
    nullthree property portfolio of high quality self storage propertiesapproximately $30 million

    Acquired three properties on balance sheet in Spartanburg, South Carolina.

    nullpreferred investment on a property$16.3 million

    Closed on a preferred investment on a property in Goleta, California, and assumed property management of that asset at the end of June.

    Public Storageacquisition of PS Canada

    Public Storage is moving into the Canadian market through a pending acquisition of PS Canada, which will increase competition.

    Capital programs

    2
    DECA Initiativeunderway$10 billion capitalization level
    Start: July

    Benefit: outsized long-term value creation, relative outperformance, margin expansion, and outsized FFO as adjusted per share growth

    Multi-year strategic framework guiding decision making through six defined pillars for outsized long-term value creation, aiming for a $10 billion capitalization level.

    Asheville Property Rebuildplanned
    Start: early 2027 (groundbreaking)

    Benefit: 83% larger than original property

    Rebuilding a property destroyed by flooding in Asheville, which will be 83% larger than the original asset.

    Risks & headwinds

    4
    LA County Fire ECRI restrictionsQ2 FY26

    negative 2% same store revenue growth in Q2 for 7 properties

    Mitigation: Restrictions lifted, anticipating returning to positive same store revenue growth for the remainder of the year.

    Macro uncertainty/geopolitical noiseH2 FY26

    Assumed in guidance, potential for choppiness in back half of year

    Mitigation: Guidance assumes some volatility; if not, top end of range is achievable.

    Tough comps in GTAQ2 FY26, full year FY26

    Same store revenue down 1% in Q2

    Mitigation: Primarily a function of GTA's outperformance in 2025; new supply peaking and moderating.

    Pricing regulations (surveillance pricing)Ongoing

    Regulations passed in New York

    Mitigation: Monitoring and evaluating, working with local associations, proprietary systems constantly evolving, focus on transparency to consumers.

    What to watch in Q3 FY26

    5

    Same-store revenue growth for LA County Fire ECRI impacted properties

    Remainder of the year (Q3/Q4 FY26)
    Currentnegative 2% in Q2
    Targetpositive growth

    Why it matters

    Indicates recovery from regulatory impact🌐 and contributes to overall revenue growth.

    Our seven properties that were impacted by LA County Fire ECRI restrictions posted negative 2% same store revenue growth in the second quarter. However, with the lift of these restrictions, we are anticipating those returning to positive same store revenue growth for the remainder of the year.

    Q&A highlights

    6

    Are you expecting to transact around a similar cap rate of the 5.9% seen this quarter for acquisitions?

    Yes, the target is mid-5s cap rates in the US and 4-5% in Canadian markets. The current acquisition cycle is solid, driven by properties from over-leveraged COVID-era buyers. The company has reduced cash flow leverage and raised its full-year capital deployment guidance to $55M-$75M, focusing on accretive opportunities.

    “I think that's kind of what our target is. I think if I step back, I want to kind of reinforce that we do believe this is a solid acquisition cycle. It is here, and it's driven by primarily individuals and the community. that have built or bought during COVID heyday.”

    asked by Wes Galladay · answered by Unknown Speaker

    2 min read6 chapters

    Detailed Narrative

    01

    DECA Initiative for Long-Term Value Creation

    In July, SmartStop introduced the DECA initiative, a multi-year strategic framework for 'Disciplined Execution, Compounding Appreciation.' This initiative guides decision-making through six defined pillars, aiming for outsized long-term value creation, margin expansion, and FFO as adjusted per share growth. The company targets a $10 billion capitalization level as an output of executing these goals, believing it will allow the platform to recognize its full potential.

    02

    Strong Expense Control Driving Margin Expansion

    SmartStop demonstrated strong expense control in Q2 FY26, with same-store operating expenses decreasing by 3.4% year-over-year. This led to a 150 basis point increase in same-store operating margin, reaching 67.3%. Key drivers included decreases in payroll (down 2.3%), property insurance, repairs and maintenance, and utilities. The company attributes structural payroll savings to economies of scale and clustering in markets like Denver, where operating expenses were substantially reduced.

    03

    Asheville Market Recovery and Development Plans

    The Asheville market, previously impacted by eminent domain proceedings and a natural disaster, is showing signs of recovery. Occupancy is at a solid 91.8%, and web rates turned positive in July, indicating a traditional cadence of recovery post-natural disaster. The company plans to rebuild a property destroyed by flooding, making it 83% larger than the original, with groundbreaking in early 2027 and delivery expected in late 2027 or early 2028.

    04

    Canadian Market Performance and Competitive Dynamics

    SmartStop's GTA same-store portfolio experienced a 1% revenue decline in Q2 FY26 due to tough year-over-year comps, while Canadian joint venture properties saw 9.4% NOI growth. New supply in the GTA is believed to have peaked and is expected to moderate📎 over the next two years. The recent entry of Public Storage into the Canadian market through an acquisition is viewed by SmartStop as a validation of its long-term Canadian vision and strategy, despite anticipating increased competition.

    05

    Strategic Capital Deployment and Bridge Lending Program

    The company acquired a three-property portfolio in Spartanburg, South Carolina, for approximately $30 million at a high 5% cap rate and closed a $16.3 million preferred investment in Goleta, California, at a double-digit yield. The bridge lending program has a pipeline exceeding $100 million, with target yields of 10-14%, and currently holds a $20 million book with a blended yield of just under 11%. This program also serves as a pipeline for future acquisitions and generates third-party management assignments.

    06

    Argus Third-Party Management Platform Integration

    Integration of the Argus third-party management platform is progressing, with owners expressing satisfaction with lead flow and improved property performance. The company is observing a gradual migration of private label owners to the SmartStop platform, with onboarded stores being 73% larger on average than off-boarded ones, leading to higher overall revenues. While full margin synergies are expected in 2027, early signs of scale benefits, such as 430 basis point margin improvement in Denver, are already visible.

    AI-generated summary of the company’s earnings call. Not investment advice.