SmartStop Self Storage REIT, Inc. (“SmartStop” or “the
Company”), a self-managed and fully-integrated self storage
company, announced its overall results for the three months ended
March 31, 2024.
“On the heels of the strongest 36-month period in the history of
the self storage industry and in conjunction with slowing economic
growth, our sector’s occupancy, same-store NOI growth and overall
results have continued to normalize,” said H. Michael Schwartz,
Chairman and Chief Executive Officer of SmartStop. “However, demand
for the self storage sector is dynamic with drivers that function
in a multitude of economic environments, and the self storage
customer remains strong across the U.S. and Canada. Improving
customer demand and moderating move out trends give us confidence
as we enter our peak rental season from a position of strength,
with same-store occupancy at 92.4% at the end of March. We are
confident in the ability of the SmartStop platform and team to
deliver strong results for our stockholders in 2024 and
beyond.”
Three Months Ended March 31, 2024
Financial Highlights:
- Net loss attributable to common stockholders was approximately
$4.6 million. This represents a decrease in the Company’s earnings
of approximately $3.3 million when compared to the same period in
2023. Net loss per Class A and Class T shares (basic and diluted)
was $0.05, an increase in net loss per share of $0.03 as compared
to the same period in 2023.
- Total self storage-related revenues were approximately $52.7
million, a decrease of approximately $0.8 million when compared to
the same period in 2023.
- FFO, as adjusted (attributable to common stockholders and
Operating Partnership (“OP”) unit holders), was approximately $11.1
million, a decrease of approximately $4.5 million when compared to
the same period in 2023.
- FFO, as adjusted per share and OP unit outstanding – diluted
was $0.10, a decrease of $0.04 when compared to the same period in
2023.
- Same-store revenues and net operating income (“NOI”) decreased
by 1.7% and 4.1%, respectively, compared to the same period in
2023, while same-store expenses increased by 3.5% compared to the
same period in 2023.
- Same-store average physical occupancy decreased by 0.4% to
92.5% compared to the same period in 2023.
- Same-store annualized rent per occupied square foot was
approximately $19.49, a decrease of approximately $0.18 when
compared to the same period in 2023.
External Growth
During the quarter, the Company opened an 87,700 square foot,
900 unit storage facility in the Town of Whitby in the Greater
Toronto Area of Ontario. The facility was developed in partnership
with SmartCentres (TSX: SRU.UN). This is SmartStop’s 32nd owned or
managed operating location in the Greater Toronto Area and 34th in
Canada.
Subsequent to quarter end, the Company announced the acquisition
of a self storage property in Colorado Springs, Colorado, its
second property in the Colorado Springs market. The property
comprises 480 storage units and approximately 100 RV parking
spaces, as well as additional land available for expansion.
Capital Market
Activities
In February, the Company entered into an amended and restated
multi-currency revolving credit facility (the “2024 Credit
Facility”) of up to $650 million with a syndicate of banks led by
KeyBank National Association, Bank of Montreal, JPMorgan Chase
Bank, N.A., M&T Bank, Truist Bank and Wells Fargo Bank, N.A.
The 2024 Credit Facility replaced the Company’s Credit Facility
that it entered into in March of 2021, and the Company immediately
drew down an aggregate amount of $576 million, which was used
primarily to pay off the amounts outstanding under the Credit
Facility. The 2024 Credit Facility has an accordion feature
permitting expansion of the 2024 Credit Facility up to a total
capacity of $1.5 billion, subject to certain conditions. The 2024
Credit Facility has a three-year term with a maturity date of
February 22, 2027 and a one-year extension option. Borrowings under
the 2024 Credit Facility may be in either U.S. dollars or Canadian
dollars at SmartStop’s election. Initial advances under the 2024
Credit Facility bear interest at a pricing grid consistent with the
previous revolving credit facility. The 2024 Credit Facility is
secured by a pledge of equity interests in certain of SmartStop’s
property owning subsidiaries. SmartStop can elect to release the
pledges upon the achievement of certain financial conditions,
making the 2024 Credit Facility fully unsecured and resulting in a
reduction in the applicable credit spread, among other changes.
In March, the Company entered into a term loan (the "2027 NBC
Loan") with National Bank of Canada (“NBC”) as administrative
agent, and certain other lenders. The 2027 NBC Loan has aggregate
borrowings of $75 million CAD and is secured by five Canadian
properties, four of which were previously included in the borrowing
base of the 2024 Credit Facility. The net proceeds from the 2027
NBC Loan were used to pay down the 2024 Credit Facility by
approximately $55.1 million USD. The 2027 NBC Loan has a maturity
date of March 7, 2027, and carries a floating interest rate that
has been fixed using an interest rate swap to a rate of 6.42%.
Managed REIT Platform
Update
SmartStop, through an indirect subsidiary, serves as the sponsor
of Strategic Storage Growth Trust III, Inc. (“SSGT III”) and
Strategic Storage Trust VI, Inc. (“SST VI” and together with SSGT
III, the “Managed REITs”). SmartStop receives asset management
fees, property management fees, acquisition fees, and other fees
and also receives substantially all of the tenant protection
program revenue earned by the Managed REITs, which had a combined
portfolio of 31 operating properties and approximately 24,500 units
and 2.7 million rentable square feet at quarter end. Assets under
management for the Managed REITs was $730.2 million at quarter end.
SmartStop also manages one additional property, not owned by the
Managed REITs.
Additionally, SmartStop has made investments in the Managed
REITs in the form of mezzanine loans, notes, subordinated limited
partnership interests, and preferred limited partnership interests
in the operating partnerships of the respective Managed REITs.
Declared Distributions
On March 28, 2024, our board of directors declared a
distribution rate for the month of April 2024 of approximately
$0.0492 per share on the outstanding shares of common stock payable
to Class A and Class T stockholders of record of such shares as
shown on our books at the close of business on April 30, 2024. Such
distributions payable to each stockholder of record will be paid
the following month.
On April 19, 2024, our board of directors declared a
distribution rate for the month of May 2024 of approximately
$0.0508 per share on the outstanding shares of common stock payable
to Class A and Class T stockholders of record of such shares as
shown on our books at the close of business on May 31, 2024. Such
distributions payable to each stockholder of record will be paid
the following month.
SMARTSTOP SELF STORAGE REIT,
INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
March 31, 2024
(Unaudited)
December 31, 2023
ASSETS
Real estate facilities:
Land
$
429,987,849
$
430,868,563
Buildings
1,398,893,933
1,401,981,394
Site improvements
91,775,505
91,896,415
1,920,657,287
1,924,746,372
Accumulated depreciation
(268,458,218
)
(255,844,284
)
1,652,199,069
1,668,902,088
Construction in process
8,338,093
5,976,946
Real estate facilities, net
1,660,537,162
1,674,879,034
Cash and cash equivalents
39,157,898
45,079,371
Restricted cash
6,913,534
8,347,805
Investments in unconsolidated real estate
ventures
36,155,596
35,831,600
Investments in and advances to Managed
REITs
36,070,661
34,390,866
Deferred tax assets
4,539,378
4,449,665
Other assets, net
23,656,576
21,701,107
Intangible assets, net of accumulated
amortization
1,108,769
1,170,100
Trademarks, net of accumulated
amortization
15,735,294
15,770,588
Goodwill
53,643,331
53,643,331
Debt issuance costs, net of accumulated
amortization
8,878,424
377,258
Total assets
$
1,886,396,623
$
1,895,640,725
LIABILITIES, TEMPORARY EQUITY,
AND EQUITY
Debt, net
$
1,093,200,523
$
1,087,401,334
Accounts payable and accrued
liabilities
38,256,292
28,977,714
Due to affiliates
415,980
415,980
Distributions payable
8,881,526
9,155,808
Deferred tax liabilities
6,106,530
6,193,675
Total liabilities
1,146,860,851
1,132,144,511
Commitments and contingencies
Redeemable common stock
68,311,548
71,277,195
Preferred stock, $0.001 par value;
200,000,000 shares authorized:
Series A Convertible Preferred Stock,
$0.001 par value; 200,000 shares authorized; 200,000 and 200,000
shares issued and outstanding at March 31, 2024 and December 31,
2023, respectively, with aggregate liquidation preferences of
$203,107,924 and $203,150,685 at March 31, 2024 and December 31,
2023, respectively
196,356,107
196,356,107
Equity:
SmartStop Self Storage REIT, Inc.:
Class A common stock, $0.001 par value;
350,000,000 shares authorized; 88,869,543 and 88,761,135 shares
issued and outstanding at March 31, 2024 and December 31, 2023,
respectively
88,870
88,762
Class T common stock, $0.001 par value;
350,000,000 shares authorized; 8,127,815 and 8,113,827 shares
issued and outstanding at March 31, 2024 and December 31, 2023,
respectively
8,128
8,114
Additional paid-in capital
894,796,414
894,856,554
Distributions
(338,633,835
)
(324,190,556
)
Accumulated deficit
(171,918,215
)
(167,270,293
)
Accumulated other comprehensive income
432,640
847,183
Total SmartStop Self Storage REIT, Inc.
equity
384,774,002
404,339,764
Noncontrolling interests in our Operating
Partnership
90,068,769
91,488,207
Other noncontrolling interests
25,346
34,941
Total noncontrolling interests
90,094,115
91,523,148
Total equity
474,868,117
495,862,912
Total liabilities, temporary equity and
equity
$
1,886,396,623
$
1,895,640,725
SMARTSTOP SELF STORAGE REIT,
INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)
Three Months Ended March
31,
2024
2023
Revenues:
Self storage rental revenue
$
50,469,142
$
51,276,898
Ancillary operating revenue
2,192,633
2,190,622
Managed REIT Platform revenue
2,734,207
2,276,535
Reimbursable costs from Managed REITs
1,646,075
1,391,210
Total revenues
57,042,057
57,135,265
Operating expenses:
Property operating expenses
17,389,955
16,533,452
Managed REIT Platform expenses
851,187
549,936
Reimbursable costs from Managed REITs
1,646,075
1,391,210
General and administrative
7,426,164
6,536,626
Depreciation
13,584,398
13,272,271
Intangible amortization expense
73,065
1,919,705
Acquisition expenses
70,876
31,190
Total operating expenses
41,041,720
40,234,390
Income from operations
16,000,337
16,900,875
Other income (expense):
Equity in earnings (losses) from
investments in JV Properties
(329,092
)
(405,111
)
Equity in earnings (losses) from
investments in Managed REITs
(451,562
)
(233,025
)
Other, net
507,515
750,978
Interest expense
(16,553,242
)
(14,703,897
)
Loss on debt extinguishment
(471,166
)
—
Income tax expense
(342,303
)
(277,220
)
Net income (loss)
(1,639,513
)
2,032,600
Net (income) loss attributable to
noncontrolling interests
99,515
(340,365
)
Less: Distributions to preferred
stockholders
(3,107,924
)
(3,082,192
)
Net loss attributable to SmartStop Self
Storage REIT, Inc. common stockholders
$
(4,647,922
)
$
(1,389,957
)
Net loss per Class A & Class T share –
basic and diluted
$
(0.05
)
$
(0.02
)
Weighted average Class A shares
outstanding – basic and diluted
88,714,643
88,735,173
Weighted average Class T shares
outstanding – basic and diluted
8,117,260
8,085,550
SMARTSTOP SELF STORAGE REIT,
INC. AND SUBSIDIARIES NON-GAAP MEASURE –
COMPUTATION OF FUNDS FROM
OPERATIONS, AS ADJUSTED
Three Months Ended March 31
(Unaudited)
2024
2023
Net loss (attributable to common
stockholders)
$
(4,647,922
)
$
(1,389,957
)
Add:
Depreciation of real estate
13,309,061
13,056,494
Amortization of real estate related
intangible assets
—
1,846,709
Depreciation and amortization of real
estate and intangible assets from unconsolidated entities
538,307
502,157
Deduct:
Adjustment for noncontrolling interests in
our Operating Partnership (1)
(1,652,942
)
(1,788,059
)
FFO (attributable to common
stockholders)
$
7,546,504
$
12,227,344
Other Adjustments:
—
—
Intangible amortization expense -
contracts (2)
73,065
72,996
Acquisition expenses (3)
70,876
31,190
Acquisition expenses and foreign currency
(gains) losses, net from unconsolidated entities
79,166
52,501
Accretion of fair market value of secured
debt
3,230
3,230
Foreign currency and interest rate
derivative (gains) losses, net (4)
(111,067
)
384,747
Offering related expenses (5)
326,665
—
Adjustment of deferred tax assets and
liabilities (2)
217,882
120,287
Sponsor funding reduction (6)
180,846
—
Amortization of debt issuance costs
(2)
801,883
710,351
Net loss on extinguishment of debt (7)
471,166
—
Adjustment for noncontrolling interests in
our Operating Partnership (1)
(252,758
)
(159,592
)
FFO, as adjusted (attributable to
common stockholders) (8)
$
9,407,458
$
13,443,054
FFO (attributable to common
stockholders)
$
7,546,504
$
12,227,344
Net income (loss) attributable to the
noncontrolling interests in our Operating Partnership
(208,869
)
232,943
Adjustment for noncontrolling interests in
our Operating Partnership(1)
1,652,942
1,788,059
FFO (attributable to common
stockholders and OP unit holders)
$
8,990,577
$
14,248,346
FFO, as adjusted (attributable to common
stockholders)
$
9,407,458
$
13,443,054
Net income (loss) attributable to the
noncontrolling interests in our Operating Partnership
(208,869
)
232,943
Adjustment for noncontrolling interests in
our Operating Partnership(1)
1,905,700
1,947,651
FFO, as adjusted (attributable to
common stockholders and OP unit holders) (8)
$
11,104,289
$
15,623,648
(1) This represents the portion of the
above stated adjustments in the calculations of FFO and FFO, as
adjusted, that are attributable to our noncontrolling interests in
our Operating Partnership.
(2) These items represent the
amortization, accretion, or adjustment of intangible assets, debt
issuance costs, or deferred tax assets and liabilities.
(3) This represents acquisition expenses
associated with investments in real estate that were incurred prior
to the acquisitions becoming probable and therefore not capitalized
in accordance with our capitalization policy.
(4) This represents the mark-to-market
adjustment for our derivative instruments not designated for hedge
accounting and the ineffective portion of the change in fair value
of derivatives recognized in earnings, as well as changes in
foreign currency related to our foreign equity investments not
classified as long term.
(5) Such costs relate to our filing of a
registration statement on Form S-11 and our pursuit of a potential
offering of our common stock. As this item is non-recurring and not
a primary driver in our decision-making process, FFO is adjusted
for its effect to arrive at FFO, as adjusted, as a means of
determining a comparable sustainable operating performance
metric.
(6) Pursuant to the Sponsor Funding
Agreement, SmartStop funds certain costs of SST VI's share sales,
and in return
receives Series C Units in Strategic
Storage Operating Partnership VI, L.P. The excess of the funding
over the value of the Series C Units received is accounted for as a
reduction of Managed REIT Platform revenues from SST VI over the
remaining estimated term of the management contracts with SST VI.
See Note 2 – Summary of Significant Accounting Policies to the
Consolidated Financial Statements of SmartStop's form 10-Q for the
three months ended March 31, 2024. FFO is adjusted for its effect
to arrive at FFO, as adjusted, as a means of determining a
comparable sustainable operating performance metric.
(7) The net loss associated with the
extinguishment of debt includes prepayment penalties, defeasance
costs, the write-off of unamortized deferred financing fees, and
other fees incurred.
(8) Our calculation of FFO, as adjusted
was modified in the period ended March 31, 2024, to add back the
amortization of debt issuance costs. Accordingly, the prior period
has been presented here based on the current calculation, which
differs from what was previously reported for such period. This
modification was made to reflect what management believes is a more
appropriate calculation in light of recently completed debt
refinancing.
SMARTSTOP SELF STORAGE REIT,
INC. AND SUBSIDIARIES
NON-GAAP MEASURE – COMPUTATION
OF FUNDS FROM OPERATIONS, AS ADJUSTED ATTRIBUTABLE TO COMMON
STOCKHOLDERS AND OP UNITS OUTSTANDING – DILUTED
The following is a reconciliation of FFO
and FFO, as adjusted (attributable to common stockholders), to FFO
and FFO, as adjusted (attributable to common stockholders and OP
Unit holders), for each of the periods presented below:
Three Months Ended March 31
(Unaudited)
2024
2023
FFO (attributable to common
stockholders and OP unit holders) Calculation:
FFO (attributable to common
stockholders)
$
7,546,504
$
12,227,344
Net income (loss) attributable to the
noncontrolling interests in our Operating Partnership
(208,869
)
232,943
Adjustment for noncontrolling interests in
our Operating Partnership (1)
1,652,942
1,788,059
FFO (attributable to common
stockholders and OP unit holders)
$
8,990,577
$
14,248,346
FFO, as adjusted (attributable to common
stockholders and OP unit holders) Calculation:
FFO, as adjusted (attributable to common
stockholders)
$
9,407,458
$
13,443,054
Net income (loss) attributable to the
noncontrolling interests in our Operating Partnership
(208,869
)
232,943
Adjustment for noncontrolling interests in
our Operating Partnership (1)
1,905,700
1,947,651
FFO, as adjusted (attributable to
common stockholders and OP unit holders) (3)
$
11,104,289
$
15,623,648
Weighted average Class A & T shares
outstanding – basic
96,831,903
96,820,723
Weighted average OP units outstanding
13,127,843
12,773,507
Weighted average other dilutive
securities
337,948
414,660
Weighted average shares & OP units
outstanding – diluted(2)
110,297,694
110,008,890
FFO, as adjusted per share & OP
unit outstanding – diluted
$
0.10
$
0.14
(1)
This represents the portion of the above
stated adjustments in the calculations of FFO and FFO, as adjusted,
that are attributable to our noncontrolling interests.
(2)
Includes all Class A Shares, Class T
Shares and OP Units, as well as the dilutive effect on FFO and FFO,
as adjusted of both unvested restricted stock and long term
incentive plan units (both time-based units and performance
based-units), and is calculated using the two-class, treasury stock
or if-converted method, as applicable. The outstanding convertible
preferred stock was excluded as the conversion of such shares was
antidilutive to FFO and FFO, as adjusted.
(3)
Our calculation of FFO, as adjusted was
modified in the period ended March 31, 2024, to add back the
amortization of debt issuance costs. Accordingly, the prior period
has been presented here based on the current calculation, which
differs from what was previously reported for such period. This
modification was made to reflect what management believes is a more
appropriate calculation in light of recently completed debt
refinancing.
SMARTSTOP SELF STORAGE REIT,
INC. AND SUBSIDIARIES
COMPUTATION OF SAME-STORE
OPERATING RESULTS
(Unaudited)
Same-Store Facility Results - three
months ended March 31, 2024 and 2023
The following table sets forth operating
data for SmartStop’s same-store facilities (stabilized and
comparable properties that have been included in the consolidated
results of operations since January 1, 2023, excluding four other
properties) for the three months ended March 31, 2024 and 2023.
SmartStop considers the following data to be meaningful as this
allows for the comparison of results without the effects of
acquisition, lease up, or development activity.
Same-Store Facilities
Non Same-Store
Facilities
Total
2024
2023
% Change
2024
2023
% Change
2024
2023
% Change
Revenue (1)
$
49,456,951
$
50,302,951
(1.7
)%
$
1,260,115
$
1,235,064
N/M
$
50,717,066
$
51,538,015
(1.6
)%
Property operating expenses (2)
16,419,540
15,866,265
3.5
%
870,415
609,062
N/M
17,289,955
16,475,327
4.9
%
Net operating income
$
33,037,411
$
34,436,686
(4.1
)%
$
389,700
$
626,002
N/M
$
33,427,111
$
35,062,688
(4.7
)%
Number of facilities
149
149
5
4
154
153
Rentable square feet (3)
11,457,035
11,440,030
432,800
354,700
11,889,835
11,794,730
Average physical occupancy (4)
92.5
%
92.9
%
(0.4
)%
N/M
N/M
N/M
91.9
%
92.6
%
(0.8
)%
Annualized rent per occupied square foot
(5)
19.49
19.67
(0.9
)%
N/M
N/M
N/M
19.39
19.64
(1.2
)%
N/M Not meaningful
(1)
Revenue includes rental revenue, certain
ancillary revenue, administrative and late fees, and excludes
Tenant Protection Program revenue.
(2)
Property operating expenses excludes
corporate general and administrative expenses, interest expense,
depreciation, amortization expense, Tenant Protection Program
related expense, and acquisition expenses.
(3)
Of the total rentable square feet, parking
represented approximately 1,017,000 square feet as of March 31,
2024 and 2023. On a same-store basis, for the same periods, parking
represented approximately 989,000 square feet.
(4)
Determined by dividing the sum of the
month-end occupied square feet for the applicable group of
facilities for each applicable period by the sum of their month-end
rentable square feet for the period.
(5)
Determined by dividing the aggregate
realized rental income for each applicable period by the aggregate
of the month-end occupied square feet for the period. Properties
are included in the respective calculations in their first full
month of operations, as appropriate. We have excluded the realized
rental revenue and occupied square feet related to parking herein
for the purpose of calculating annualized rent per occupied square
foot.
SmartStop's same-store revenue decreased by approximately $0.8
million, or approximately 1.7%, for the three months ended March
31, 2024 compared to the three months ended March 31, 2023 due to
lower annualized rent per occupied square foot of approximately
0.9%, as well as an approximately 0.4% decrease in average
occupancy. The increase in property operating expenses is primarily
attributable to compensation related expenses, property insurance,
and repairs and maintenance.
The following table presents a reconciliation of net income as
presented on SmartStop’s consolidated statements of operations to
net operating income, as stated above, for the periods
indicated:
For the Three Months Ended
March 31,
2024
2023
Net income (loss)
$
(1,639,513
)
$
2,032,600
Adjusted to exclude:
Tenant Protection Program revenue(1)
(1,944,709
)
(1,929,505
)
Tenant Protection Program related
expense
100,000
58,125
Managed REIT Platform revenue
(2,734,207
)
(2,276,535
)
Managed REIT Platform expenses
851,187
549,936
General and administrative
7,426,164
6,536,626
Depreciation
13,584,398
13,272,271
Intangible amortization expense
73,065
1,919,705
Acquisition expenses
70,876
31,190
Interest expense
16,553,242
14,703,897
Other, net
(507,515
)
(750,978
)
Earnings from our equity method
investments in the JV Properties
329,092
405,111
Earnings from our equity method
investments in Managed REITs
451,562
233,025
Loss on debt extinguishment
471,166
—
Income Tax
342,303
277,220
Total net operating income
$
33,427,111
$
35,062,688
(1)
Included within ancillary operating
revenue within our consolidated statements of operations,
approximately $1.9 million and $1.9 million of Tenant Protection
Program revenue was earned at same store facilities during the
three months ended March 31, 2024 and 2023, respectively, with the
remaining approximately $0.1 million and $0.1 million earned at non
same-store facilities during the three months ended March 31, 2024
and 2023, respectively.
ADDITIONAL INFORMATION REGARDING NOI, FFO,
and FFO, as adjusted
Net Operating Income
(“NOI”)
NOI is a non-GAAP measure that SmartStop defines as net income
(loss), computed in accordance with GAAP, generated from
properties, excluding tenant protection plan revenue, before
corporate general and administrative expenses, asset management
fees, interest expense, depreciation, amortization, acquisition
expenses and other non-property related expenses. SmartStop
believes that NOI is useful for investors as it provides a measure
of the operating performance of its operating assets because NOI
excludes certain items that are not associated with the ongoing
operation of the properties. Additionally, SmartStop believes that
NOI is a widely accepted measure of comparative operating
performance in the real estate community. However, SmartStop’s use
of the term NOI may not be comparable to that of other real estate
companies as they may have different methodologies for computing
this amount.
Funds from Operations (“FFO”) and FFO,
as Adjusted
Funds from Operations
Funds from operations ("FFO"), is a non-GAAP financial metric
promulgated by NAREIT that SmartStop believes is an appropriate
supplemental measure to reflect operating performance. SmartStop
defines FFO consistent with the standards established by the white
paper on FFO approved by the board of governors of NAREIT, or the
White Paper. The White Paper defines FFO as net income (loss)
computed in accordance with GAAP, excluding gains or losses from
sales of property and real estate related asset impairment write
downs, plus depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures. Additionally, gains
and losses from change in control are excluded from the
determination of FFO. Adjustments for unconsolidated partnerships
and joint ventures are calculated to reflect FFO on the same basis.
SmartStop’s FFO calculation complies with NAREIT’s policy described
above.
FFO, as Adjusted
SmartStop uses FFO, as adjusted, as an additional non-GAAP
financial measure to evaluate their operating performance. FFO, as
adjusted, provides investors with supplemental performance
information that is consistent with the performance models and
analysis used by management. In addition, FFO, as adjusted, is a
measure used among SmartStop’s peer group, which includes publicly
traded REITs. Further, SmartStop believes FFO, as adjusted, is
useful in comparing the sustainability of their operating
performance with the sustainability of the operating performance of
other real estate companies.
In determining FFO, as adjusted, SmartStop makes further
adjustments to the NAREIT computation of FFO to exclude the effects
of non-real estate related asset impairments and intangible
amortization, acquisition related costs, other write-offs incurred
in connection with acquisitions, contingent earnout expenses,
accretion of fair value of debt adjustments, amortization of debt
issuance costs, gains or losses from extinguishment of debt,
adjustments of deferred tax assets and liabilities, realized and
unrealized gains/losses on foreign exchange transactions,
gains/losses on foreign exchange and interest rate derivatives not
designated for hedge accounting, and other select non-recurring
income or expense items which SmartStop believes are not indicative
of their overall long-term operating performance. SmartStop
excludes these items from GAAP net income (loss) to arrive at FFO,
as adjusted, as they are not the primary drivers in their
decision-making process and excluding these items provides
investors a view of their continuing operating portfolio
performance over time, which in any respective period may
experience fluctuations in such acquisition, merger or other
similar activities that are not of a long-term operating
performance nature. FFO, as adjusted, also reflects adjustments for
unconsolidated partnerships and jointly owned investments.
SmartStop uses FFO, as adjusted, as one measure of their operating
performance when they formulate corporate goals and evaluate the
effectiveness of their strategies.
Presentation of FFO and FFO, as adjusted, is intended to provide
useful information to investors as they compare the operating
performance of different REITs. However, not all REITs calculate
FFO and FFO, as adjusted, the same way, so comparisons with other
REITs may not be meaningful. Furthermore, FFO and FFO, as adjusted,
are not necessarily indicative of cash flow available to fund cash
needs and should not be considered as an alternative to net income
(loss) as an indication of our performance, as an alternative to
cash flows from operations as an indication of SmartStop’s
liquidity or indicative of funds available to fund their cash needs
including their ability to make distributions to their
stockholders. FFO and FFO, as adjusted, should be reviewed in
conjunction with other measurements as an indication of our
performance.
Neither the SEC, NAREIT, nor any other regulatory body has
passed judgment on the acceptability of the adjustments that
SmartStop uses to calculate FFO or FFO, as adjusted. In the future,
the SEC, NAREIT or another regulatory body may decide to
standardize the allowable adjustments across the publicly
registered, non-traded REIT industry and SmartStop would have to
adjust its calculation and characterization of FFO or FFO, as
adjusted.
This press release, our Form 10-Q for the three months ended
March 31, 2024, a financial supplement, and additional information
about SmartStop are available on our website,
investors.smartstopselfstorage.com.
About SmartStop Self Storage REIT, Inc.
(“SmartStop”):
SmartStop Self Storage REIT, Inc. (“SmartStop”) is a
self-managed REIT with a fully integrated operations team of
approximately 500 self-storage professionals focused on growing the
SmartStop® Self Storage brand. SmartStop, through its indirect
subsidiary SmartStop REIT Advisors, LLC, also sponsors other
self-storage programs. As of May 14, 2024, SmartStop has an owned
or managed portfolio of 196 operating properties in 22 states and
Canada, comprising approximately 138,000 units and 15.6 million
rentable square feet. SmartStop and its affiliates own or manage 34
operating self-storage properties in Canada, which total
approximately 29,800 units and 3.1 million rentable square
feet.
Forward-Looking Statements
Certain of the matters discussed in this earnings release, other
than historical facts, constitute forward-looking statements within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements can
generally be identified by our use of forward-looking terminology
such as “may,” “will,” “expect,” “intend,” “anticipate,”
“estimate,” “believe,” “continue,” or other similar words. Readers
are cautioned not to place undue reliance on these forward-looking
statements and any such forward-looking statements are qualified in
their entirety by reference to the following cautionary statements.
There are several factors which could cause actual plans and
results to differ materially from those expressed or implied in
forward-looking statements, including, without limitation, the
following: (i) disruptions in the economy, including debt and
banking markets and foreign currency changes; (ii) significant
transaction costs, including financing costs, and unknown
liabilities; (iii) whether we will be successful in the pursuit of
our business plan; (iv) whether we will succeed in our investment
objectives; (v) changes in the political and economic climate,
economic conditions and fiscal imbalances in the United States, and
other major developments, including wars, natural disasters,
epidemics and pandemics, military actions, and terrorist attacks;
(vi) changes in tax and other laws and regulations; (vii)
difficulties in our ability to attract and retain qualified
personnel and management; or (viii) the effect of competition at
our self storage properties or from other storage alternatives,
which could cause rents and occupancy rates to decline.
Actual results may differ materially from those indicated by
such forward-looking statements. In addition, the forward-looking
statements represent SmartStop’s views as of the date on which such
statements were made. SmartStop anticipates that subsequent events
and developments may cause its views to change. These
forward-looking statements should not be relied upon as
representing SmartStop’s views as of any date subsequent to the
date hereof.
Additional factors that may affect the business or financial
results of SmartStop are described in the risk factors included in
SmartStop’s filings with the SEC, including SmartStop’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2023,
which factors are incorporated herein by reference, all of which
are filed with the SEC and available at www.sec.gov. All
forward-looking statements speak only as of the date hereof and are
based on current expectations and involve a number of assumptions,
risks and uncertainties that could cause the actual results to
differ materially from such forward-looking statements. SmartStop
expressly disclaims a duty to provide updates to forward-looking
statements, whether as a result of new information, future events
or other occurrences.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240513290626/en/
David Corak VP of Corporate Finance SmartStop Self
Storage REIT, Inc. investors.smartstopselfstorage.com
ir@smartstop.com