SmartStop Self Storage REIT, Inc. (“SmartStop” or “the Company”), a self-managed and fully-integrated self-storage company, announced its overall results for the three and six months ended June 30, 2024.
“We are pleased with our second quarter operating results, with sector leading same-store revenue growth,” said H. Michael Schwartz, Chairman and Chief Executive Officer of SmartStop. “We saw improving customer demand throughout our peak rental season and achieved a strong quarter-end same-store occupancy of 92.9%. Our GTA portfolio continues to outperform, with same-store revenue and NOI growth of 4.3% and 6.0% on a constant currency basis, respectively. However, the recovery in the U.S. single-family home market activity did not come to fruition during the quarter, leading to a challenging move-in rate environment and continued sector-wide competition. I’m proud of the efforts of the SmartStop team, and for our continued focus on enhancing our technology, as a differentiated factor of our ability to compete in a competitive U.S. storage market.”
Three Months Ended June 30, 2024 Financial Highlights:
• Net loss attributable to common stockholders was approximately $3.8 million. This represents a decrease in the Company’s earnings of approximately $4.2 million when compared to the same period in 2023. Net loss per Class A and Class T shares (basic and diluted) was $0.04, an increase in net loss per share of $0.04 as compared to the same period in 2023.
• Total self storage-related revenues were approximately $55.0 million, an increase of approximately $1.1 million when compared to the same period in 2023.
• FFO, as adjusted (attributable to common stockholders and Operating Partnership (“OP”) unit holders), was approximately $12.4 million, a decrease of approximately $3.8 million when compared to the same period in 2023.
• FFO, as adjusted per share and OP unit outstanding – diluted was $0.11, a decrease of approximately $0.04 when compared to the same period in 2023.
• Same-store revenues and expenses increased by 1.3% and 5.3%, respectively, while same-store net operating income (“NOI”) decreased by 0.6% compared to the same period in 2023.
• Same-store average physical occupancy decreased by 1.1% to 92.5% compared to the same period in 2023.
• Same-store annualized rent per occupied square foot was approximately $20.15, an increase of approximately $0.36 when compared to the same period in 2023.
Six Months Ended June 30, 2024 Financial Highlights:
• Net loss attributable to common stockholders was approximately $8.5 million. This represents a decrease in the Company’s earnings of approximately $7.5 million when compared to the same period in 2023. Net loss per Class A and Class T shares (diluted) was $0.09, an increase in net loss per share of $0.08 when compared to the same period in 2023.
• Total self storage-related revenues were approximately $107.6 million, an increase of approximately $0.3 million when compared to the same period in 2023.
• FFO, as adjusted (attributable to common stockholders and Operating Partnership (“OP”) unit holders), was approximately $23.5 million, a decrease of approximately $8.3 million when compared to the same period in 2023.
• FFO, as adjusted per share and OP unit outstanding – diluted was $0.21, a decrease of approximately $0.08 when compared to the same period in 2023.
• Same-store revenues and net operating income (“NOI”) decreased by 0.2% and 2.3%, respectively, and same-store expenses increased by 4.4% compared to the same period in 2023.
• Same-store average physical occupancy decreased by 0.8% to 92.5% compared to the same period in 2023.
• Same-store annualized rent per occupied square foot was approximately $19.82, an increase of approximately $0.09 when compared to the same period in 2023.
External Growth
During the quarter, the Company acquired a self-storage property in Colorado Springs, Colorado, its second property in the Colorado Springs market. The property comprises 480 storage units and approximately 100 RV parking spaces, as well as additional land available for expansion.
During the quarter, the Company opened a 95,000 square foot, 930 unit storage facility in the Town of Markham in the Greater Toronto Area of Ontario. The facility was developed in partnership with SmartCentres (TSX: SRU.UN). This is SmartStop’s 33rd owned or managed operating location in the Greater Toronto Area and 35th in Canada, as of quarter end.
Capital Market Activities
Subsequent to quarter end, three of the Company’s joint ventures with SmartCentres closed on a $46 million CAD term loan (the “RBC JV Term Loan II”) with Royal Bank of Canada pursuant to which the Company’s joint venture subsidiaries that each own 50% of a joint venture property are borrowers. The RBC JV Term Loan is secured by first mortgages on such JV properties which were previously encumbered. The maturity date of the RBC JV Term Loan II is November 3, 2025, which may be extended by one additional year at the discretion of the lender. Interest is a fixed annual rate of 4.97%. The net proceeds from the RBC JV Term Loan II were used to fully repay the allocated loan amounts of approximately $46.4 million CAD or approximately $34.1 million USD under loans previously provided by SmartCentres for each of the three JV properties.
Managed REIT Platform Update
SmartStop, through an indirect subsidiary, serves as the sponsor of Strategic Storage Growth Trust III, Inc. (“SSGT III”) and Strategic Storage Trust VI, Inc. (“SST VI” and together with SSGT III, the “Managed REITs”). SmartStop receives asset management fees, property management fees, acquisition fees, and other fees and also receives substantially all of the tenant protection program revenue earned by the Managed REITs, which had a combined portfolio of 31 operating properties and approximately 24,500 units and 2.7 million rentable square feet at quarter end. Assets under management for the Managed REITs was approximately $744.0 million at quarter end. SmartStop also manages one additional property, not owned by the Managed REITs.
Declared Distributions
On June 26, 2024, our board of directors declared a distribution rate for the month of July 2024 of approximately $0.0508 per share on the outstanding shares of common stock payable to Class A and Class T stockholders of record of such shares as shown on our books at the close of business on July 31, 2024. Such distributions payable to each stockholder of record will be paid the following month.
On July 26, 2024, our board of directors declared a distribution rate for the month of August 2024 of approximately $0.0508 per share on the outstanding shares of common stock payable to Class A and Class T stockholders of record of such shares as shown on our books at the close of business on August 31, 2024. Such distributions payable to each stockholder of record will be paid the following month.
