SmartStop Self Storage REIT Inc (SMA) 2025 Q4 法說會逐字稿

Hello everyone.

Thank you for joining us and welcome to the SmartStop Self storage REIT fourth quarter 2025 earnings call. (Operator Instructions)

I will now hand the call over to David Korak, Senior Vice President of Corporate Finance and strategy. Please go ahead.

Thank you, operator. Before we begin, I would like to remind everyone that certain statements made during today's call, including statements about our future plans, prospects, and expectations, may be considered forward-looking statements within the meeting of the safe harbor provisions of the Private Securities Litigation Reform Act. These forward-looking statements are subject to numerous risks and uncertainties as described in our filings with the Securities and Exchange Commission, and these risks could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in our earnings release that we issued last night along with the comments on this call are made only as of today. The company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. In addition, we will also refer to certain non-GAAP financial measures. Information regarding these financial measures or use of these measures and a reconciliation of these measures to GAAP measures can be found in our earnings release and supplemental disclosure that were issued last night and are available for download on our website at investors.smartstopselfstorage.com.

In addition to myself today we have H. Michael Schwartz, founder, Chairman, and CEO, as well as James Barry, our CFO. Now I'll turn it over to Michael.

Thank you, David, and thank you for joining us today for our fourth quarter earnings call to close out the year as a New York Stock Exchange listed company. I'll start with some introductory remarks on smart stock and the industry before I hand it over to James to discuss the quarter. After that, we'll open it up for Q&A with James, David, and myself.

Before we dive into the high level remarks, a few highlights of our fourth quarter results. We posted a strong fourth quarter with same store revenue growth of 40 basis points, an average occupancy of 92.3%. This capped off a year of sector leading revenue growth of 1.6% with average occupancy of 92.5%. Operationally we were pleased with how the quarter started, but the last 6 weeks of the year came in below our expectations. We saw a more competitive pricing environment paired with a higher than expected move out in several markets, most notably Asheville. With that said, 10 of our top 15 markets posted positive same store revenue growth and other areas of the business outperformed expectations. These included our recently acquired third-party management platform and property operating expenses.

We reported FFO has adjusted per share of $0.55, up 29.8% year over year. For the full year, we reported FFO has adjusted per share of $1.87 up 10% from 2024. We introduced our 2026 guidance highlighted by same store revenue growth of a 50 basis points to a 2% NOI growth of a 1.8% to a positive 1%, and FFO as adjusted per share of $1.93 to $2.05 representing about a 6% growth on the midpoint.

We had another robust quarter of activity. During the quarter, we acquired one Class A operating property on balance sheet in Orlando, MSA and a parcel of land in Canada that we intend to develop into a Class A storage in our Smart Center's joint venture. Our acquisitions have been Class A assets located in top markets for the full year. Our acquisitions totaled $369 million inclusive of the Argus transaction. Our managed REITs acquired 4 properties during the quarter resulting in AUM at year-end of over $1 billion. That represents over $200 million of AUM growth in 2025. We also completed our first bridge capital investment structured as a preferred to a third-party for approximately $5 million sourced through our third-party platform.

Last but certainly not least, we closed on Argus professional storage management, bringing on board over 220 managed properties and 400 employees to the Smartstop team. Between Argus, our lending business, and our on balance sheet acquisitions, we deployed about $61 million of capital during the quarter.

We've stayed busy into 2026. Recently completed the recast of $500 million syndicated bank facility at an all-in cost of about 30 basis points below the previous facility. Lastly, we recently added Wayne Johnson to our board of directors. Many of you know Wayne from industry and the South Side conferences over the years. He's a 30-year veteran of self storage. And he and I have been working together for 20 of those years. He has been a key leader in the company's growth since its formation, and we're thrilled to welcome him to our board.

Turning to the industry.

On the operations front, 2025 was incrementally better than 2024, but certainly not as strong as a more normalized year in storage. We continue to believe that the recovery in storage is happening, but the choppiness in customer demand continues as evidenced by our second and fourth quarter results. However, our strategy to maintain and build occupancy is working. In the fourth quarter we had another record setting quarter of lead conversions both online and through our call center. Reservations remained strong. We also posted the highest penetration rate on tenant protection in our company's history. The number of our customers on autopay is up 250 basis points year over year.

Our customers' health remains strong, delinquencies remain at below average levels and in fact are down year over year. ECRIs remain healthy without change in attrition. Our length of stay slightly increased for the first time since the COVID era. Industry move-in rates continue to stabilize but are still negative year over year, though significantly less negative than the previous two years. Those trends have continued into the new year. The demand is there, but it's driven by lower asking rents. Moving rents are down 8% year-to-date in 2026 across our same store portfolio, but we have seen healthy increases in our overall occupancy sitting at 92.8% today, even with some headwinds and hurricane markets.

Our outlook for 2026 is thematically consistent with our original outlook for 2025, and improving supply picture should lead to a slightly better year than the prior year, but with continued uncertainty and chopiness around demand. We still remain optimistic on the sector's slow and steady recovery in 2026. However, our guidance does not take into account a meaningful recovery. Of the US single family home market nor any material changes in the broader economies in either the United States or Canada.

We also have a variety of capital deployment options at attractive returns at our disposal that we can execute on both in the near term and at an accelerated pace given an improved cost of capital. For 2026, we're targeting an overall capital deployment range of $72million to $96 million consisting of acquisitions, bridge capital, development in our smart centers joint venture, and redevelopment and expansion projects. We are also investing in our technology platform, including our internal artificial intelligence capabilities which have been and will continue to be a focus for us in 2026. Beyond that, We see a tremendous growth opportunity in third-party management, both in the US and Canada as well as through our multiple product offerings in the managed BRL. Lastly, our guidance does not contemplate the formation of an institutional acquisitions joint venture, which is a priority for us in 2026.

Taking a step back, we have accomplished a tremendous amount in our short time as a publicly traded company. Without a doubt, we are in a choppy self storage market with volatile capital markets and plenty of uncertainty in the broader economic environment. However, through all the choppiness, we have executed exceptionally well on the things that are within our control.

With that said, our focus in 2026 is as follows disciplined capital allocation strategy, which includes on balance sheet acquisitions, development in our smart centers joint venture, expansions, redevelopments, and solar investments, bridge lending to support our third-party management business, technology platform including artificial intelligence, and a potential acquisitions joint venture. In addition, a focus on growing our third-party management business, the menagerie, continued balance sheet optimization, and last but not least, executing on our property operation strategy. Smartstop's accomplishments over the past 10 months have built a strong, solid foundation for future growth to take advantage of an improving self storage landscape. With that, I'll turn it over to James to discuss the quarter.

Thank you Michael.

Starting with our operating performance, our same store pool posted year over year revenue growth of 40 basis points with operating expense growth of 2% leading to an NOI decrease of 30 basis points. The FX impact from our 13 Canadian same store assets was effectively flat for the quarter with no change on a constant currency basis for the entire same store pool.

Revenue growth was below our expectations for the quarter, but we were able to make up some of the underperformance with better than expected property operating expenses. This was due to some wins on property taxes, improvement in property and general liability insurance premiums, as well as muted advertising spend. We accomplished the same store revenue growth with limited marketing dollars while maintaining strong occupancy of over 92%. Our same store pool ended the quarter at 92.1% occupancy down 10 basis points year over year while average occupancy was 92.3% up 10 basis points year over year.

These stats speak to the trends that Michael mentioned in his opening remarks regarding an increase in move outs in the back half of the quarter, specifically in Asheville, which was facing a tough fourth quarter comp due to the impact of Hurricane Helene in October 2024 and saw a large decline in occupancy in November and December, ending the year down 540 basis points in physical occupancy. This drop was more than we had anticipated in previous guidance. Broadening out the pricing environment in the fourth quarter was more competitive than expected from both institutional and smaller operators. Accordingly, we use concessions and discounting more than we had in the first 9 months of 2025. Our web rates were down about 8% year over year for the fourth quarter, while our achieved move-in rates were down 11% on average.

As we moved into the first quarter of 2026, we once again put a strong emphasis on maintaining physical occupancy throughout the slow season. In doing so, we actually grew our occupancy. Ending January at 92.7%, up about 60 basis points year to year, and more notably up 60 basis points from the end of December. As we moved into February, we stand at about 92.8% occupancy through this past weekend, roughly flat year over year, while move-in rates are down only 1% year over year.

On the external growth front, we acquired one Class A operating property on balance sheet in the Orlando MSA, as well as one parcel of land in Toronto within our Smart Center's joint venture that we intend to develop into Class A storage and of course Argus professional storage management for the full year. Our acquisition sold approximately $368 million inclusive of the Argus transaction.

Turning to the manage REIT platform, our three managed REIT funds, inclusive of the 1,031 eligible DST programs, ended the quarter with over $1 billion of assets under management. In the fourth quarter, we recognized gross fees of approximately $4.1 million and the managed REITs have a combined portfolio of 52 operating properties and approximately $4.5 million net rentable square feet as of quarter end. We also increased our loans and preferred investments to the managed REITs by approximately $20 million. The DST programs continue to successfully raise equity, and we are excited that SST 10 close on its first property as that program gets up and running.

Turning to our third-party management platform, we ended the quarter with 221 properties under management in line with our expectations.

EBITDA net of acquisition expenses for the quarter was approximately $670,000 and we continue to have near zero levels of unknown attrition both on the property side and no attrition on the employee's side.

The result of all of this is that for the fourth quarter of 2025 we posted fully diluted FFO as adjusted per share and unit of $0.55.

Turning to 2026 guidance that we provided last night, I'll give color on a few major pieces. We are expecting the same store revenue growth in the negative 50 basis points to 2% range with operating expense growth in the 2% to 4% range, resulting in an NOI growth range of 1.8% to 1%. For our non-same store properties, we're expecting NOI of between $18.5 million and $19.8 million. We are expecting mandatory EBITDA of $13.3million to $13.9 million and for third-party management we are assuming EBITDA of $1.8million to $3 million in line with our yield communicated when we close the transaction.

I will note that we are allocating about $250,000 of SmartStop's SG&A to third-party management expenses. For G&A, we are expecting a range of $32million to $34 million. In terms of capital deployment. First, we are expecting to deploy between $45million and $65 million between acquisitions and bridge lending for full year 2026. Second, we plan to spend about $10 million on development of properties under construction within our Smart Center joint ventures.

And third, we are expecting to spend about $2.5 million on our solar initiative. Lastly, we began expansion or redevelopment projects on a handful of already owned facilities with an estimated spend of $16 million to $18 million. This does include the redevelopment of the vacated industrial space at our Newark, New Jersey facility.

The result of all of these updates is that we are guiding to an FFO as adjusted per share range of $1.93 to $2.05.

Lastly, turning to the balance sheet, in October, we closed on a $160 million Canadian term loan within our Smart Center joint ventures, of which we are 50% owners. The loan is a 5-year term and bears a fixed interest rate of 3.87%. We use the proceeds to pay off all of the prior existing JV level debt which had a weighted average cost of 5.7%. With that JV debt issue knock over, we have fully hedged our Canadian FX exposure naturally from a cash flow perspective.

Additionally, 95% of our outstanding debt was fixed as of year end.

As Michael mentioned, our work on the balance sheet continued in the 2026. Last week, we completed the recast of our $500 million syndicated bank facility. The facility matures in February 2030 with a one-year extension option.

Our all-in cost to borrow came down about 30 basis points based on a reduced pricing grid and is one of the most competitive executions on the borrower side with leverage-based pricing.

The credit agreement also has built-in language that would allow for a further pricing step down upon receiving an investment grade rating from S&P or Moody's rating services.

The work that we've done on our balance sheet represents a tremendous accomplishment, putting SmartStop well ahead of a typical REIT in its first year on an exchange. The transformation of the balance sheet since the IPO sets us up well to execute on any growth opportunities moving forward.

And with that operator we will open it up to questions.

(Operator Instructions)

Victor (Fetev) with Scotiabank.

So what are your baseline assumptions for moving rate and ECRI at midpoint of the revenue guide, and how should we think about cadence of moving rate growth throughout the year?

Hey Victor, it's Korak. So I don't want to give exact building blocks, but I'll give you a little bit of a framework for 2026. So, on the move in front, moving rent front, we'll get some more color on this, but, some of the markets have already turned positive, a little bit over half of our. Markets have turned positive year-to-date in terms of year over year move rents. There's other markets that, supply markets that are still negative. You can probably imagine that Asheville is still negative and skewing some of those numbers, but we think by sort of the end of rental season on average we'll largely be back to a neutral sort of inflection point. On the occupancy front, we're forecasting, slightly positive results relative to 2025. Obviously there's a big exception in there with Asheville, but that should, kind of clean up as the year goes on, we are up in occupancy year-to-date on an average basis, and we would expect that to sort of level out over the course of the year.

In terms of ECRIs, we're modeling out, an at or better than 2025 level given the strength and the health of the existing customer, the exception there, of course, being that the California wildfire impacted assets, which we assume, as Michael mentioned, will be impacted for the full year.

Got it. And then a quick follow-up on your Q4 results. So obviously your move out volume was largely impacted by Asheville, but what was the actual achieved move out rate for the average Q4?

You're talking about specifically for Asheville or are you talking about for the entire, portfolio.

For the entire portfolio.

Yeah, so the move out rate in December, and is on a monthly basis is about $1.39.

Yeah, for the entire quarter of fourth quarter our move out rates were down about 5% on a year over year basis. They were down.

Juan Sanabria with BMO Capital Markets.

Hi, good morning. Just hoping you could talk a little bit about, your joint venture strategy and the opportunities, that you're looking at whether the focus would be in the US or Canada, would you contribute any on balance sheet assets and kind of where you see cap rates today in the market.

It's a great question. I mean, I think from an acquisition perspective there's just a tremendous amount of opportunity out there. I think, from my perspective, I think it's one of the better overall aggregate transaction environments that we've seen since, the Great Recession. We are seeing a tremendous amount of high-quality deals either built and or acquired at the wrong time during the kind of highs of COVID with low cap rates and rental rates that were a lot higher and then some of them with variable debt, some of them with, bridge loans attached to them. And the pretend and extend seems to be over and so those kind of transactions come in the market, based on our thesis that storage has, bottomed and or bottoming. I think that there's a really nice, I think, risk proposition with respect to acquiring these, top 25 markets. And so, we're looking for, an institutional Joint venture partner in the US on acquisitions that can kind of complement, what we've already built, within our platform and obviously provide, a creative returns to our overall and aggregate shareholders. So a lot of opportunities from onesies to twosies to small portfolios. We've been, I think, more active, I think, in the last 9 months, and we've been receiving a ton of calls with respect to people wanting us to put some value in our portfo, put some value on the portfolio. What we have seen is many of those assets are underwater, as you can imagine, and so some people are just trying to get out. So we think it's going to be a pretty tremendous opportunity with development being muted. And given where we are with overall performance in the sector, I think that could keep development also muted for an extended period of time, which I think just creates a really nice acquisition environment for us.

Great, thanks. And then just for the follow-up on the Argus or third-party management business, how should we think about entering Canada and kind of the leg work that needs to be done to do that and what that could mean for business and earnings growth.

You know what, there, there's no question that, part of the Argus strategy was to, expand into Canada in a in a meaningful way. And I just want to reiterate one of the things that you know we focused on was, the assimilation of the acquisition. That was incredibly important, as I told my team, it's not broken, so don't try to fix it. Let's just make it better. And so from that perspective, one of the things that we talked about in the last call that we've executed on, we had our inaugural owners meeting in San Diego. And not only us, but we did bring in a few individuals from Canada that had existing portfolios, developments, etc. And so we spent a good two days, introducing SmartStop, but more importantly demonstrating how, we operate in our entrepreneurial spirit and so. That perspective with, our team up there and how long we've been up there, a lot of the communication that we had with these individuals has transcended into additional conversations. I think overall from the Argus property management perspective, we're pretty excited about that opportunity, and we think that is.

One of the really solid growth opportunities not only this year but over the next couple of years. I think one of the things that we did is we not only the US and Canada, we spent a lot of time just listening to people. That was incredibly important and figuring out what they liked with the current environment.

Party managers and what they didn't like and so what we found is one size doesn't fit all. There are certain people that want you to take care of everything and just send them distributions and there's other individuals that want to be involved in some decisions and there are some individuals that want to be involved in a lot more decisions and I think that. We prepared ourselves in creating a platform that I think resonates with the different owner entrepreneurial operators out there. And so finally I think one of the biggest opportunities that we have, and I think it's primarily US right now is the existing owners that we have on our platform that have properties. With us, some of them have numerous properties with other third-party managers and so we've already had some pretty solid discussions in regards to moving some of those over to SmartStop or the SmartStop legacy platform. And so I think from our perspective, we believe we're going to see some very interesting growth in 2026 with a platform that's already up and running.

I'd say just to add to that and one of the takeaways from that owners' conference which Michael talked about is, our pipeline is filling up for some bridge lending opportunities as well, right? And so that's reflected in our guidance and that's kind of why we broke out the capital deployment strategy the way we did is we're going to be very selective and disciplined in our approach, but there are a lot of opportunities coming out of our conversations with our third-party clients to put out very attractive capital on a bridge lending basis.

Todd Thomas with Key Bank Capital Markets.

First, just following up on the growth outlook in 2026. I appreciate the comments about, occupancy and, ECRIs and rent trends, but how does that, sort of impact the cadence of revenue growth throughout the year, sort of, first half or second half just given some of the market shifts that you've experienced in Asheville and elsewhere and, just some of the comps that you're up against.

Yeah, Todd, without giving specific cadence, I think a lot of the growth year over year is just because of how lumpy the comps are. It's just going to sort of depend on the comps. I think that the exit rate as you push into 2026 and you look at where we are sitting in the first couple of months of the year, we've got a nice headwind into the year, but then, we've got some tougher comps as you as you get into the third quarter. So it'll be a little bit lumpy like last year, but I think it'll be less lumpy as you go through the course of the year.

Okay, and then, I wanted to ask about your two largest markets right now, Miami and, the GTA. They both, continue to perform above the portfolio average, Miami growth slowed, but, still one of the stronger markets and the GTA slow growth. Decelerate more sharply over the last few quarters, but it was one of the few markets that saw revenue growth improve, sequentially. Can you just talk about the outlook for, those markets and what you're sort of anticipating in 2026?

Absolutely, Todd. Let me start with, kind of our, Canadian, operating metrics. On a constant currency basis, as we reported, our same store revenue was up 60 basis points in the fourth quarter. The GTA had decelerated. We had some tougher comps for the first 3 quarters of 2025 and was the only market in the fourth quarter to re-accelerate. And so the comps in fourth quarter of 2024 was actually at 5%. So it was a much tougher comp than the US, which was negative. I'll also note that our move-in rates were actually up in the fourth quarter. In Canada, about 1%. Additionally, if you look at our joint venture Smart Center properties that would meet our definition of the same store, they actually did even better at around about a 5.3% year over year revenue growth on a constant currency basis. And so, as we've kind of just conveyed, we're sitting here today in February. With occupancy at 93.3%, that's up 80 basis points year over year, so the GAAP is wider than our comps in the state year over year. The length of stay remains solid, actually up slightly year over year. And ECRIs remain intact. Overall demand remains solid. Our platform continues to capture, outside amounts of demand. Now that being said, we have seen more aggressive discounting from competitors. But we feel given our operational advantages, our thesis on Canada remains unchanged, and so our outlook on the GTA portfolio is that it will perform slightly better on the US portfolio in 2026 even with tougher comps. And so definitely some potential upside for some of the government initiatives going on that could spur some economic growth, but we're also concerned that there could be some downsides there too if there's any economic pullback in Canada, so, US, yeah.

I'm going to dive into Miami and Todd, if you'll allow me, I'm also going to touch on our third largest market which is the LA MSA as well, briefly. So in terms of Miami, obviously it was one of our top performing markets in the 4th quarter and you know we chalk that up to largely just the density of that particular MSA, not to mention our clustering which also isn't is resulting in in enhanced margins and expansion. In those markets in in terms of our outlook for that particular market, we do expect it to be either at the portfolio average or slightly above average. It's the Miami MSA. I will say that is not the same for other pockets of Florida right where we have seen more supply, and I think when we see Florida supply numbers, a lot of cases it's on the outskirts, whereas our existing Miami MSA assets are a little more, in a little more dense pockets of that particular market.

Turning to LA as well, the LA MSA, this wasn't in our prepared remarks, but, overall we think that that market is strong despite the fact that there are those two counties with ECRI restrictions. Our guidance does not assume any lifting of those restrictions for the entirety of 2026. So to put it in perspective, that's impacting our overall same store revenue growth guide by about 15 to 20 basis points, so a little less than. Some of our peers, I will note, however, the LA MSA as we define it also includes other areas that are not in those counties, namely Orange County, and the rest of Southern California has performed quite well. We're very strong occupancies and it actually still outperformed in the fourth quarter relative to the portfolio average.

And so we'd expect those counties to be above average producers in 2026 as well.

And you will, we also know you probably know that LA County has extended the price restrictions until March 29th, which is not a surprise to us.

Okay great that's all really helpful color thank you.

Thank you, Todd. Thanks.

Michael Mueller with JP Morgan.

Yeah, hi, I guess first I think you said move in rates were down 11% year over year in the fourth quarter and they're down 1% today.

First, is that an apples to apples comparison? And if so, how much of that improvement's been driven by actually rates that are improving as opposed to, easier comps?

Hey Mike, it's Korak. So I'll give you just kind of the overview of where we are year-to-date and maybe add a little bit of color on there because I think you're on to something. When you think about, overall metrics for year-to-date, things have improved since the end of the 4th quarter for our 2026 a store pool. January ended the month with occupancy at 92.7%, up 60 basis points year over year and 60 basis points over December, which is a really nice sequential trend. Importantly, rentals were up 12.5% and move-ins were, move outs have normalized right from the end of the quarter. As of this past weekend in February, Michael mentioned this, we're at occupancy of 92.8% flat year over year, and move-in rates per square foot are down about 1% in February. About half of our markets have turned positive in terms of movement rents per square foot in January. About 65% of our markets have turned positive for moving rents per square foot in February. You can kind of imagine, but the down numbers are kind of skewed by a couple markets, namely Asheville. If you exclude Asheville, all of those metrics improved pretty materially. One of the trends that we've seen this year, and we saw in the fourth quarter is that we are renting larger units than we were in the same period last year. This is true of the past 5 months, basically. Specifically in 2026, our average unit size rented is up about 10% year over year. So the implications there are that while the move in rents per square foot are down as we discussed, the actual rents per unit are are up, specifically, and we talked about this.

Michael mentioned that the move in rents per square foot are down about 8% year-to-date, but the actual rents per unit are up 1% year over year. On all fronts, February results improved pretty dramatically over January. So, we're hesitant to draw conclusions from those, but I think it does speak to sort of the health of the consumer that they're renting. Some larger units versus 2025.

And when you take a look at the aggregate portfolio in January, our in-place rents were up 40 basis points year over year and in February thus far, I think that's through the 19th of February, our in-place rents are up 90 basis points year over year.

Got it. Okay, thank you.

Thank you.

Thanks a lot.

Mason Guell with Baird.

Hey everyone, thanks for taking my question.

Regarding your recently developed Nantucket property, I guess how has the lease have been trending versus your original expectation and when do you expect it to fully stabilize?

Yeah, thanks Mason. In terms of Nantucket, as you can imagine, that's, it's an island, right? And so you have a little bit of a captive, tenant base there. Also keep in mind it was opened in December, right? And so there's some very significant and more material seasonality in that particular market, relative to other markets in the states. I would say we're, it's still too early to tell. It's been operating for probably about 50 days at this point. And so we're monitoring it and we're going to continue to use the leverage at our disposal to fill it up.

And just to convey that that is a joint venture that's not wholly owned by Smartop, so we have a minority interest in that and we obviously handle the property management activities. We've been on that island for some time, so we kind of understand the dynamics associated with Nantucket and it tends to generate some really nice rents per square foot.

Great. And then on your managed rate, Am growth, do you expect this to be targeted in any specific managed rate or would it be kind of broad based across the three that you currently have?

As we, denoted, we're, we've reached that $1 billion in AUM. The AUM is defined by, the cost basis, not the true value of the portfolio. We have 4 additional developments in Canada that will come over the next, I think, 12 to 18 months. And so. We see the opportunity to grow AUM in 2026. However, in 2025 we were a little bit obviously occupied with respect to the IPO, and then we were, as we previously said, we transitioned over to a new managing broker dealer, which did set us back from a timing perspective. Now, having said that, we in 2025, we did have some nice growth with. Respect to our DST or Delaware Statutory Trust platform and so with respect to that, we, we've launched four of those programs, Blue Door One was a $30 million raise, which is completed. We're in the middle of the raise of Blue Door Two. It's about a $64 million raise, about third sold. Blue Door Three, which had some leverage on there for leverage, those the Blue Door one and 2 are cash, effectively. We just started the fundraising and, with that, and so I think, we are teed up for some more, DSTs, for the year to keep growing the platform. I think as we move into 2026, I think we feel that we have a more stable product line between the DSTs, Strategic Storage Trust 6 and Strategic Storage Trust 10, and now that we are set with our managing broker dealer partner and so. We are guiding modest increase in AUM, approximately $60 million. It's driven by the launch of some DSTs, the Preferred and Strategic Storage Trust 6, and then kind of the relaunch of Strategic Storage Trust 10 that we think will get some traction. So we're trying to balance out the timing of the potential acquisitions with which obviously can produce rather lumpy, fee streams on the expense side though, we've had a full year of expense structure with our new partner which is more cost effective structure for us so we feel pretty good going into 2026 on the manage re-platform.

Great, thanks for the color.

Thank you.

Spenser Glimcher with Green Street.

Thank you. On the capital allocation front, can you just remind us if you have a share repurchase program in place, and then if not, has the board contemplated the authorization of one just given where the stock trades today?

Hey Spencer, we do not have one in place, nor do we have an ATM into place at this point. You probably saw, that we put into place our S3 shelf registration which allows us to go out and do a variety of different capital features. We'll put an at-market ATM program into place here in the not too distant future that as we've previously communicated, but we don't have a repurchase plan in place at this point.

And you know I would just further, convey that, the following is that, when we take a look about, I guess the question is how do you grow from here and how are we going to prudently deploy capital. One of the things I'd like to convey is you've got to step back, we started this smart stop on January 2014. We started with no assets, no liabilities, and no shareholders, but a business plan. We went out and raised every single dollar. We built a very solid management team, from Wayne Johnson who has been with me for 20 years to James Barry 14 years, Joe Robinson, 7, Mike Treong, 17 years, Bliss 7 years, David Korak, 5 years. So a solid management team. We've executed on our business plan. We've acquired $500 million of Class A self storage properties in top 25 markets. That's increased our total capitalization by about 15% and so we never had a cost to capital advantage as we've grown this company to a $3 billion or so total cap. Now having said that, I think the question's relevant is that we are near our upper. Upper levels of leverage and I think we're comfortable taking our leverage slightly above 6 so as long as we can demonstrate a near term path to organically delever from there. I think the good thing for us is that we do have a solid amount of organic EBITA growth and we think there's a lot of growth potential in the. Third-party management platform in addition to some growth on the manage re platform, the bridge lending, in addition to the Smart Center's, joint venture. And so when we think about capital allocation in 2026, we are guiding to an overall capital deployment of about $72million to $96 million. And so, having said that, to break down our 2026 capital deployment guidance, we'll have 3 to 4 properties under construction with the Smart Center's joint venture. Those development yields remain very healthy, high single-digits, low to mid 10s on total return perspective, and potentially higher. The capital commitments are relatively low and so we feel pretty good about the use of capital there. In addition, we'll continue with our solar programs. We're expecting another batch of probably another 10 properties. Those have pretty attractive yields, about 10% before any tax incentives. We're also seeing a lot of opportunities in our current portfolio to expand, to redevelop. We're expecting to spend about $16million to $18 million this year. Those returns look pretty healthy and strong.

There's a lot of low hanging fruit from that perspective. And so, and then last is a combination of acquisition and loans. And so with respect to the acquisition. Environment both in the US and Canada, but also the lending opportunities that we're seeing through our third our third-party property management. And so one of the big opportunities that I've discussed and we are actively pursuing is this institutional joint venture in the US specifically for acquisitions. And so, we're waiting patiently, for the right partner, but and we haven't baked. That into any of our guidance and so you know what I'd like to do is just leave you that there are a ton of opportunities on many fronts for SmartStop and we're going to be very responsible from a leverage perspective and prudently deploy capital and so we're going to be patient and we're going to wait for our cost of capital to come back as the sector recovers and so with those, factors in mind, we're not planning on buying back our stock at this point.

Okay, great, thank you for all that color, and I know you provided an operational update for the portfolio overall and earlier in the call you noted that the Toronto market was where you expected to outperform in the year ahead, but I'm just curious if there's any additional color you could provide on the actual year-to-date performance of the Canadian markets.

I don't have that one.

Hey guys.

But our occupancy in the GTA right now has actually outperformed the US year-to-date. So we're running it at in the mid 93s, which is up about 80 basis points year to year. So it's outperforming the US, meanwhile, the in-place rates are also sort of outperforming. So, we are seeing a year-to-date a better performance. In Canada versus the US, that's the Toronto 13, same store properties specifically. We also have, properties in our non-sam store pool, in the portfolio that we bought last year. Those properties are, in the high 70s, low 80s in terms of overall occupancy and are, ramping up and leasing up, in line with our expectations. So we, we're. Happy on all fronts in our Canadian portfolio at this point.

Just to put a bow on that, we talked about the sequential increase in overall same store occupancy from December to January. That was more pronounced in Canada. We actually grew 130 basis points in our same store pool and we ended January at 70 basis points in occupancy, year over year as of January 31st.

Michael Mueller with JPM.

Hey, just a quick follow-up. So if you do add an acquisition, JV, how do you size up what goes into that venture versus the manage platform? And then, it cost of capital improves, do you emphasize the JV and just focus more again on balance sheet acquisitions? I mean, how are you thinking about those dynamics?

Well, it's a great question, and as you can imagine, we've been sponsoring multiple programs for the last 20 years, and so, we understand the dynamics associated with that. First and foremost, as we always have stated, Smart self storage has a right of first refusal, on all assets and whether developments or acquisitions when it comes to the joint venture. I think what we're looking is more I would consider elephant hunting, much larger aggregate portfolios that we wouldn't be able to take down 100% on our balance sheet or within the managed RI the managed REIT platform. And so I think that would be the big aggregate differentiator and let's face it, where we're at. Right now in our cost to capital what that opens up the ability to do numerous, joint ventures with acquisitions that we see, when that changes, obviously we're going to be cognizant of the fact of our joint venture partner but also, our institutional and retail shareholders and because we do want to keep growing on balance sheet.

There are no further questions at this time. I will now turn the call back to Michael Schwartz for closing remarks.

Well, thank you, operator. It's been an exciting 10 months as a publicly traded company. You know our team has accomplished a lot in a short period of time, which has nicely positioned us for the sector recovery. We thank our investors, both retail and institutional, for their support, and we look forward to growing together in 2026. In addition, we look forward to seeing many of you at the city conference next week. I want to thank you for your time and interest in Smartop self storage, the smarter way to store. Have a great day.

This concludes today's call.

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