SmartStop Self Storage REIT (SMA -4.14%), a major owner and operator of self-storage facilities across the U.S. and Canada, reported its first earnings as a publicly traded real estate investment trust on August 6, 2025, covering results for the second quarter. The company reported total revenues of $66.8 million, exceeding consensus GAAP estimates of $56.8329 million and increasing 12.9% over the prior year. Its adjusted funds from operations (FFO)—a critical measure for assessing financial performance in REITs—came in at $0.42 per diluted share and OP unit. While total growth was robust, the company’s underlying same-store results reflected some softness, with net operating income slipping 1.1% despite an uptick in occupancy. Overall, the quarter highlighted operational progress, successful execution of strategic transactions, and a strong capital position post-IPO.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.16) | ($0.01) | $(0.16) | 0% |
| Revenue (GAAP) | $66.8 million | $56.8 million | N/A | N/A |
| FFO, as Adjusted per share & OP unit outstanding – diluted (Non-GAAP) | $0.42 | $0.45 | (6.7 %) | |
| Same-store Average Physical Occupancy | 93.1 % | 92.2 % | 0.9 pp |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About SmartStop Self Storage REIT and Key Business Drivers
SmartStop Self Storage REIT operates and manages a large portfolio of self-storage properties. Its facilities are spread across major regions in the United States and Canada, with over 18.7 million rentable square feet and 230 properties in its combined owned and managed portfolio as of August 6, 2025, benefiting from life events such as moving, transitions, or downsizing—these are principal drivers of consistent demand for self-storage services.
A few factors shape the company’s recent strategy and performance. First, SmartStop relies on its significant scale to drive operational efficiencies. It operates a fully integrated business model, managing operations internally rather than contracting them out. The portfolio is geographically diversified across the United States and Canada.
Quarter in Review: Operational Trends and Financial Results
The quarter marked SmartStop's debut as a public company, following its initial public offering (IPO) and related capital raises totaling over $1.3 billion. These actions reshaped the balance sheet, with net proceeds helping to pay down debt and fund further acquisitions. At the end of the quarter, total debt (GAAP) had decreased to $950.0 million, a drop from $1.32 billion at year-end 2024.
Adjusted funds from operations (FFO) per diluted share and Operating Partnership (OP) unit reached $0.42 and supported by acquisition volume and improved top-line performance. However, this FFO, as adjusted per share and OP unit outstanding – diluted, did edge down slightly from $0.45 in Q2 2024, reflecting the drag from higher operating expenses and modest rent headwinds in the existing portfolio.
Within the core, or same-store, property portfolio, occupancy remained strong. Average physical occupancy rose to 93.1%, up 0.9 percentage points from the previous year, a sign SmartStop has effectively filled more units even in a stable market. Yet, other operating data outlined the challenges facing core growth. Same-store revenue ticked up just 0.4%, while same-store property operating expenses climbed 3.5%. That expense growth, driven largely by higher property taxes and payroll, outpaced the increase in revenue and caused net operating income on comparable properties to fall by 1.1%. At the same time, annualized rent collected per occupied square foot declined 1.0%.
New property acquisitions were a key part of SmartStop’s activity. The company invested nearly $200 million during the quarter, acquiring significant facilities in the U.S. and Canada, including a five-property portfolio in Houston and properties in Kelowna, British Columbia, and Lakewood, Colorado. These additions accounted for roughly 900,900 net rentable square feet and 8,260 units year-to-date. The managed REIT platform, which involves managing properties on behalf of affiliated real estate investment trusts such as Strategic Storage Growth Trust III and others, continued to expand, with assets under management of $973.9 million at quarter-end.
Financially, SmartStop’s balance sheet saw a transformation. The IPO and capital infusion allowed the company to move its debt profile toward fully unsecured facilities, improve pricing on credit lines, and earn investment-grade credit ratings. At period end, equity (GAAP) had risen to $1.30 billion, up from $412.5 million at year-end 2024, illustrating substantially increased financial strength. A distribution agreement with Orchard Securities also positioned the managed REIT side for wider exposure, with potential for additional recurring management fee income.
On the dividend front, SmartStop declared monthly distributions of $0.1315 per share for June and $0.1359 per share for July 2025, representing a slight increase. The dividend was paid to shareholders in July and August. The company’s ability to maintain distributions supports this dividend payout.
Looking Ahead: Guidance and Investor Considerations
Management updated its full-year 2025 guidance on August 6. It projected same-store net operating income growth of 0.6% to 1.6% in U.S. dollars and 1.0% to 2.3% in constant currency for the year, compared to the prior guidance range of 0.0% to 2.2% (in USD) and 0.5% to 2.7% (constant currency). Adjusted FFO per share and OP unit guidance (non-GAAP) was raised at the midpoint to $1.85–$1.93, up slightly from the earlier forecast of $1.84–$1.92. This outlook reflects confidence in overall portfolio performance and the potential for additional contributions from external growth, but it also acknowledges operating margin pressure from higher expenses.
The ability of SmartStop to manage costs, maintain high occupancy, and secure steady fee income from its managed REIT platform will be key areas for near-term monitoring. The company continues to scout acquisition opportunities, with several new facilities under contract in Canada as of August 6. With its stronger balance sheet and investment-grade ratings, SmartStop appears well-positioned to pursue disciplined growth while maintaining its dividend payout—a factor likely to attract income-focused investors.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
