SmartStop Lifts 2026 Same-Store Profit Outlook To 2.00%-2.50% As Property Costs Fall 3.8%
The self-storage REIT also raised its FFO-as-adjusted range to $2.01-$2.05 a share and is lining up a Canadian joint venture.
SmartStop Self Storage REIT, which owns and runs self-storage facilities in the US and Canada, raised its 2026 same-store profit outlook on Wednesday after third-quarter property operating costs at established stores fell 3.8%. Same-store net operating income, the profit from those properties, rose 4.9% on 2.0% revenue growth.
Costs did the heavy lifting
The company attributed the lower expenses mainly to decreased property insurance costs, property taxes, and repairs and maintenance. Same-store occupancy averaged 92.2%, down about 0.4% from a year earlier, while annualized rent per occupied square foot rose about 2.6% to about $20.99.
Net income attributable to common stockholders was about $9.0 million, or $0.16 a share, up from about $5.2 million a year earlier. FFO as adjusted, a standard REIT cash-earnings measure, was about $30.3 million, or $0.51 per share and OP unit, versus $0.47 a year earlier.
Chairman and CEO H. Michael Schwartz said the cost cut expanded operating margin by 190 basis points (1.9 percentage points), the third consecutive quarter of margin improvement. He said the results let the company raise full-year same-store NOI guidance "for the fourth time this year."
The new full-year ranges
Same-store NOI growth for 2026 is now guided at 2.00% to 2.50%, from 1.15% to 2.15% in the company's September 29 outlook. FFO as adjusted per share is guided at $2.01 to $2.05, up from $1.99 to $2.05.
For the first nine months, same-store NOI rose 3.6% and net income attributable to common stockholders was about $29.8 million, or $0.53 per share.
Canada bet and capital recycling
On September 29, SmartStop agreed to invest about $74.3 million CAD in a Canadian joint venture fund, Strategic Storage Canada, which it expects will own 14 properties. The company expects the deal to make it Canada's third-largest self-storage operator, with 70 operating properties. It needs approval under the Canadian Competition Act, and the company is targeting a fourth-quarter close.
SmartStop also began a program to sell non-core properties, initially targeting $75 million to $125 million of sales starting in early 2027, with proceeds recycled into core markets. It is under contract to buy two properties in Las Vegas and Asheville for about $37 million, also expected to close in the fourth quarter.
In the quarter it issued $200 million CAD of senior unsecured notes at about 4.32%.
Management hosts a conference call Thursday at 12:00 p.m. Eastern to discuss the results.
