This article first appeared on GuruFocus .
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Same-Store Revenue:Up 2% year-over-year (2.1% on a constant currency basis).
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Same-Store Operating Expenses:Decreased 3.8% year-over-year, driven by lower property taxes, insurance, repairs and maintenance, and utilities.
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Same-Store NOI:Grew 4.9% year-over-year (5.1% on a constant currency basis), described as sector-leading.
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Same-Store Operating Margin:68%, up 190 basis points year-over-year; third consecutive quarter of improved margins and highest 3Q operating margin since 2023.
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FFO as Adjusted per Share:$0.51, up approximately 9.4% year-over-year from $0.47 in Q3 2025.
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Occupancy:Quarter-ending occupancy of 92.1%; October occupancy of 92.2%.
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In-Place Rent per Occupied Square Foot:Up 2.6% year-over-year.
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Move-In Rates:Down 5.7% year-over-year on average as the company prioritized occupancy; move-ins up 5.6% year-over-year.
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Normalized Cash Flow Leverage:Reduced to 6x, or 5.6x assuming full settlement of forward ATM shares.
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Capital Deployment:Approximately $32.3 million of bridge capital deployed during the quarter; full-year capital deployment guidance raised to $200 million$220 million.
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Strategic Storage Canada LP:Estimated $53 million investment, expanding Canadian operating presence by over 30% to 70 stores.
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On-Balance Sheet Acquisitions:Under contract to acquire two properties for approximately $37 million in core SMA markets.
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GTA Smart Centers JV:Year-over-year NOI growth of 4.9% on a constant currency basis across 10 properties.
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Managed REIT Platform:Recurring revenues grew 16.3% year-over-year.
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Financing:Priced CAD200 million Maple Bond at 4.32%; issued approximately 2.4 million forward shares through ATM at an average price of $32.01.
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Full-Year 2026 Guidance:Same-store revenue raised to 1.25%1.75%; operating expense growth reduced to -25 bps to +25 bps; NOI growth midpoint raised to 2.25%; FFO as adjusted per share raised to $2.01$2.05 (midpoint $2.03).
Release Date: November 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Smartstop Self Storage REIT Inc ( NYSE:SMA ) delivered sector-leading same-store NOI growth of 4.9% (5.1% constant currency) in Q3 2026, driven by revenue management and expense efficiencies.
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Same-store operating expenses decreased 3.8% year-over-year, leading to a 190 basis point expansion in same-store operating margins to 68%, the highest third-quarter margin since 2023.
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FFO as adjusted per share rose 9.4% year-over-year to $0.51, and the company raised the midpoint of its full-year 2026 FFO guidance for the fourth time this year.
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Smartstop Self Storage REIT Inc ( NYSE:SMA ) is executing on its DECA initiative, including a $53 million investment in a Canadian joint venture that expands its Canadian presence by over 30% to 70 stores, and a new programmatic investment partnership with mid-teens blended yields.
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The company maintains a strong balance sheet with normalized cash flow leverage reduced to 6.0x (5.6x assuming full ATM settlement), and it priced a CAD 200 million Maple Bond at 4.32%, enhancing financial flexibility.
Negative Points
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Move-in rates per square foot declined 5.7% year-over-year in Q3 2026 as Smartstop Self Storage REIT Inc ( NYSE:SMA ) prioritized occupancy, which could pressure future revenue growth.
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Same-store revenue growth was modest at 2.0% (2.1% constant currency), reflecting limited pricing power amid a competitive operating environment.
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The company plans $75 million to $125 million of non-core dispositions beginning in early 2027, which could be initially dilutive to FFO per share and may not be immediately accretive.
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Canadian same-store revenue growth is expected to run modestly below the U.S. portfolio for the full year due to tougher 2025 comparables, and macro uncertainty from tariffs has caused hesitation in rental decisions in the GTA.
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Despite strong expense control, some of the improvement is cyclical (e.g., softer property insurance market and property tax benefits), and expense growth may normalize in 2027 against tougher comps.
Q & A Highlights
Q: How advanced is the $75 million to $125 million non-core disposition plan beginning in early 2027, and will the sales initially dilute 2027 FFO per share? A: CEO Michael Schwartz said the strategic asset management program is about clusteringmarkets with 10+ properties see margins improve by over 300 basis points, so capital in markets lacking a path to scale (such as two Nantucket properties) will be recycled into core markets, with closings expected in the first half of 2027. SVP David Corak added that cap rates on assets being bought are fairly similar to those being sold, so on a pure NOI-for-NOI basis there is little accretion or dilution, but factoring in efficiencies he leans toward accretion in the short to medium term; all deals will be 1031 exchanges with no tax implications, and management rights may be retained on some dispositions.
Q: With the move-in versus move-out rate spread among the widest in the peer group, is the strategy still focused on occupancy, and could the spread narrow in 2027? A: SVP David Corak explained the third-quarter strategy was to drive rate while above 92% occupancy in the busy season and then hold a good occupancy base into slower monthsmove-ins rose 5.6% year-over-year, occupancy fell only 30 basis points from August to September, and web rates were down 3.5% with significantly fewer concessions. In October, occupancy rose 10 basis points to 92.2%, concessions were down 25%30% year-over-year, and toward the end of the month the company began seeing benefits from both move-in rates and concessions, shifting strategy in markets like Toronto where web rates are now mid-single-digit higher than last year; he expects the spread to start compressing.
Q: Has the Alberta five-property portfolio performed in line with expectations, and what is the outlook for the Canadian operating environment? A: CEO Michael Schwartz said the Alberta portfolio exceeded expectations, gaining about 1,700 basis points of occupancy since acquisition in August 2025 and posting roughly 9.2% year-over-year revenue growth in the third quarter; the 29 owned Canadian properties grew revenue 8.5% year-over-year at 92.3% occupancy. GTA occupancy is 92.6%, up 10 basis points year-over-year, with the 10-property joint venture at 93% occupancy and 2.8% revenue growth, though the GTA is expected to run modestly below the US portfolio for the full year on tougher 2025 comps. Canadian bad debt is about 1%, less than half of US levels, and structural demand drivers remain intact.
Q: How should investors think about the expense backdrop heading into 2027how much of this year's improvement is structural versus cyclical? A: CFO James Barry said a big portion of the improvement is structural, citing roughly 300 basis points of margin improvement in MSAs with 10 or more properties, with markets like Miami, Denver and Chicago seeing 250300 basis points of year-to-date margin expansion, aided by the SmartStop 3PM platform. Some of the expense benefit is cyclical, including softer property insurance renewals and property tax benefits, but payroll efficiencies are real and sustainable, and the strategic asset management program will further reinforce clustering efficiencies.
Q: Given recent improvement in cost of capital, how does the investment outlook for 2027 look, and could the mix shift toward wholly owned acquisitions versus joint ventures and structured investments? A: CEO Michael Schwartz called this the most amazing transaction opportunity in storage since the Great Recession, driven by owners who built or bought on COVID numbers now needing to contribute capital, bringing high-quality assets to market in the US and Canada. He stressed the company will not chase volumea $300 million transaction would move market cap by 10%and everything must be accretive per share. The Strategic Storage Canada joint venture expanded Canadian presence by 30%, hits three DECA pillars, and provides a de-risked pipeline, while the balance sheet remains in a good place for disciplined capital allocation.
Q: Do you expect any change in the broader Canadian operating environment once PSA takes over operations for the portfolio it acquired? A: CEO Michael Schwartz said the company has not experienced any notable difference in the operating environment to date and that SmartStop competes daily with larger, regional and smaller operators in the US and markets like Las Vegas, giving it comfort that it can compete at a high level.
Q: Is the muted move-out dynamic versus move-in volumes in the GTA similar to what you are seeing in the US? A: CFO James Barry said vacates are more limited and muted overall after elevated levels through most of 2025, with no material change in customer attrition from the consistent ECRI strategy in either the US or Canadaeven as LA County ECRI restrictions faded at the end of the second quarter, attrition was less than expected and customers stayed longer. Length of stay is lengthening in 2026 in both countries, and move-outs were down year-over-year in the GTA portfolio.
Q: What drove the third-quarter results and the fourth guidance raise for 2026? A: CEO Michael Schwartz reported same-store revenue growth of 2%, operating expense decrease of 3.8% and sector-leading same-store NOI growth of 4.9% (5.1% constant currency), with same-store operating margins of 68%, up 190 basis points year-over-yearthe third consecutive quarter of margin improvement and the highest third-quarter margin since 2023. FFO as adjusted per share was $0.51, up about 9.4% year-over-year. CFO James Barry said full-year 2026 same-store revenue guidance was raised to 1.25%1.75%, opex growth guidance lowered to negative 25 basis points to positive 25 basis points, NOI growth midpoint raised to 2.25%, capital deployment guidance increased to $200 million$220 million, and FFO as adjusted per share guidance raised to $2.01$2.05.
Q: What transactions and capital markets activity occurred during the quarter under the DECA initiative? A: CEO Michael Schwartz highlighted an estimated $53 million investment in Strategic Storage Canada LP, expanding Canadian presence by over 30% to 70 stores; a new programmatic investment partnership with an institutional US developer carrying blended in-place yields in the mid-teens with property management rights and a pipeline of future deals; approximately $32
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
