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SmartStop Self Storage REIT, Inc. Reports 2020 Third Quarter Results and Highlights

November 18, 2020

SmartStop Self Storage REIT, Inc. Reports 2020 Third Quarter Results and Highlights

November 17, 2020

LADERA RANCH, CA – November 17, 2020 – SmartStop Self Storage REIT, Inc. (“SmartStop”), a self-managed and fully integrated self storage company with approximately $1.7 billion of self storage assets under management, announced its overall results for the three and nine months ended September 30, 2020.

“SmartStop’s strong third quarter same-store results show the impact of continuous investments in our brand and technology, putting us at the top of our public peer group this quarter,” said H. Michael Schwartz, Executive Chairman of SmartStop. “In addition to our
robust operating performance in the third quarter, we were able to execute on strategic initiatives to drive further growth and scalability, including the announced merger agreement with Strategic Storage Trust IV and exercising our option to secure $50 million in further funding from Extra Space.”

Third Quarter 2020 Highlights:

• Total self storage-related revenues increased by approximately $1.3 million, or 4.8%, when compared to the same period in 2019.
• FFO, as adjusted, increased by approximately $1.8 million, or 104%, when compared to the same period in 2019.
• Same-store revenues increased by 3.3% compared to the same period in 2019, primarily due to higher occupancy, combined with higher annualized revenue per occupied square foot.
• Same-store NOI increased by 4.7% compared to the same period in 2019, primarily attributable to improved property operating margins.
• Same-store average physical occupancy increased by 190 basis points to 91.7% for the three months ended September 30, 2020, compared to 89.8% during the same period in 2019.
• Same-store annualized revenue per occupied square foot was approximately $16.03 for the third quarter of 2020, which represented an increase of approximately 1.1% when compared to the same period in 2019.
• Managed REIT Platform revenue increased by approximately $0.9 million, or 72%, when compared to the same period in 2019.

Nine Months Ended September 30, 2020 Highlights:

• Total self storage-related revenues increased by approximately $4.3 million, or 5.7%, when compared to the same period in 2019.
• FFO, as adjusted, increased by approximately $2.7 million, or 75%, when compared to the same period in 2019.
• Same-store revenues increased by 2.2% compared to the same period in 2019.
• Same-store NOI increased by 7.0% compared to the same period in 2019, primarily attributable to cost savings associated with the Self Administration Transaction on June 28, 2019.
• Same-store average physical occupancy increased by 120 basis points to 90.0% for the nine months ended September 30, 2020, compared to 88.8% during the same period in 2019.
• Same-store annualized revenue per occupied square foot was approximately $16.01 for the nine months ended September 30, 2020, which represented an increase of approximately 0.7% when compared to the same period in 2019.                                          • Managed REIT Platform revenue of approximately $5.7 million for the nine months ended September 30, 2020, up significantly from $1.2 million during the same period in 2019.

“The current operating environment reinforces the resilient nature of our portfolio and the emphasis on customer service that SmartStop provides,” said Michael McClure, Chief Executive Officer of SmartStop. “We remain humbled by the dedication of our
SmartStop team members in this current environment, who have continued working together and executing so diligently on behalf of our customers and stockholders.”

Announced All-Stock Acquisition of Strategic Storage Trust IV, Inc.

On November 10th, 2020, SmartStop announced the execution of a definitive merger agreement with Strategic Storage Trust IV, Inc. (“SST IV”), to be completed as an all-stock transaction. Per the merger agreement, SmartStop will acquire all of the real estate owned
by SST IV, consisting of 24 wholly-owned self storage facilities located across 9 states and 5 joint venture properties in various stages of development located in the Greater Toronto Area of Ontario, Canada. The total SST IV portfolio, including the estimated joint venture property data on a fully-developed basis, represents approximately 22,500 self storage units and 2.6 million net rentable square feet. Upon completion of the merger, SST IV will merge into a newly-formed subsidiary of SmartStop, creating a company with a combined portfolio of 136 wholly-owned self storage properties with a combined gross book value of approximately $1.5 billion.

The pending acquisition of SST IV is subject to customary closing conditions, including approval from SST IV’s stockholders. The transaction is expected to close during the first half of 2021.

Issuance of Series A Preferred Stock

On October 26, 2020, SmartStop exercised its option to issue an additional 50,000 shares of Series A Preferred Stock to Extra Space Storage LP, a subsidiary of Extra Space Storage Inc. (NYSE: EXR), pursuant to a preferred stock purchase agreement between SmartStop and Extra Space Storage LP announced in October of 2019. The proceeds from the $50 million issuance are expected to be used to pay down existing debt, finance self storage acquisitions, and for working capital or other general corporate purposes.

COVID-19 Pandemic Update

SmartStop continues to operate its stores with safety and social distancing procedures in place, including the use of masks and plastic dividers. Additionally, SmartStop’s corporate headquarters and dedicated call center continue to meet the needs of the business while
working remotely.

Many of the factors that slowed revenue growth in the second quarter improved throughout the third quarter, along with increased self storage demand, resulting in revenue returning to more normalized levels. SmartStop’s rental activity during the third quarter was strong, existing customer rate increases resumed in most markets, customer collections remained relatively consistent, and asking rates to new customers continued to improve on a year-over-year basis.

Below is a summary of the business indicators, drivers, and metrics which were impacted by the COVID-19 pandemic for the third quarter of 2020 as compared to the second quarter 2020:

• Resumed existing customer rate increases on a modified basis beginning July 2020 and through the third quarter 2020, as compared to no rate increases for SmartStop’s existing customers during second quarter 2020;
• A reduction in late fees during third quarter 2020 of approximately 17% on a same-store basis as compared to third quarter 2019, an improvement from second quarter 2020, in which same-store late fees declined 35% year-over-year;
• Same-store move-ins increased approximately 8% during third quarter 2020 as compared to third quarter 2019, an improvement from the decline of approximately 5% year-over-year during the second quarter 2020;
• Same-store move outs declined approximately 5% during third quarter 2020 as compared to third quarter 2019, as compared to the decline of approximately 12% year-over-year for the second quarter 2020;
• Same-store asking rates for new customers increased during the third quarter 2020 as compared to third quarter 2019, after a year-over-year decline during the second quarter 2020;
• Percentage of rents billed and collected within the same month, remained consistent on year-over-year basis at approximately 96% during the third and second quarters of 2020.

Investment in Managed REIT

On September 21, 2020, SmartStop invested approximately $6.5 million in preferred units of Strategic Storage Growth Trust II, Inc.’s operating partnership (“SSGT II Preferred Units”). On October 29, 2020 and November 4, 2020, SmartStop invested an additional
approximately $13 million and $13 million, respectively, in SSGT II Preferred Units, bringing SmartStop’s total investment to approximately $32.5 million. On November 12, 2020, approximately $19 million of SmartStop’s SSGT II Preferred Units were redeemed, reducing SmartStop’s investment to $13.5 million.

Declared Distributions

On September 25, 2020, SmartStop’s board of directors declared a distribution rate for the fourth quarter of 2020, of approximately $0.00164 per day per share on the outstanding shares of common stock payable to both Class A and Class T stockholders. Such
distributions payable to each stockholder of record during a month will be paid the following month.

Partial Reinstatement of Share Redemption Program

On August 20, 2020, SmartStop’s board of directors partially reinstated its Share Redemption Program (“SRP”), for redemptions requested in connection with a stockholder’s death, qualifying disability, or confinement to a long-term care facility. The board further
determined to revise the redemption price per share for all redemptions under the SRP to the most recently-published estimated net asset value per share.

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