SmartStop Self Storage REIT posts Q2 2026 profit
SmartStop Self Storage REIT, Inc. reported stronger Q2 2026 results, with total revenues of $79.276 million versus $66.816 million a year earlier.
SmartStop Self Storage REIT, Inc. reported stronger Q2 2026 results, with total revenues of $79.276 million versus $66.816 million a year earlier. Net income attributable to common stockholders was $11.246 million, or $0.20 per diluted share, compared with a net loss of $8.362 million, or $(0.16) per share in Q2 2025.
For the first six months of 2026, revenues were $157.586 million and net income attributable to common stockholders was $20.822 million, or $0.37 per diluted share, versus a loss of $16.767 million in the prior-year period. Growth was supported by higher self storage rental revenue, larger Managed Platform revenue, and higher investment and other income, while interest expense declined to $26.476 million.
As of June 30, 2026, total assets were $2.438 billion, including $2.056 billion of real estate facilities, net, funded in part by $1.120 billion of debt. Operating cash flow for the first half of 2026 rose to $43.911 million, and common stock distributions totaled $0.80 per share for the period.
Positive
- SmartStop generated a Q2 2026 net income attributable to common stockholders of $11.246 million, versus a $8.362 million loss in Q2 2025, and first-half operating cash flow increased to $43.911 million, indicating meaningfully stronger profitability and cash generation year over year.
Negative
- Debt, net totaled $1,119.645 million against total assets of $2,437.872 million at June 30, 2026, and interest expense for the first half was $26.476 million, representing a substantial ongoing financing burden.
Filing Explained
The authorized common-stock ceiling rose, while 55,368,903 shares were outstanding on June 30, 2026; this is capacity, not reported current dilution.
The Form 10-Q is an unaudited quarterly report covering the period ended
Authorization is a ceiling: if additional shares are issued, total shares increase and an existing holder’s percentage ownership declines absent offsetting changes. The reported difference between authorized and outstanding shares should therefore be read as unissued capacity, not current dilution.
The next equity statement is the relevant follow-up line item because it can show whether outstanding common shares change from the
Key Figures
Key Terms
Managed Platform revenue financial
contingent earnout adjustment financial
Reverse Stock Split financial
Series A Convertible Preferred Stock financial
noncontrolling interests financial
Earnings Snapshot
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How did SmartStop Self Storage REIT (SMA) perform financially in Q2 2026?
What were SmartStop (SMA)'s results for the first six months of 2026?
What is SmartStop (SMA)'s balance sheet position as of June 30, 2026?
How much cash flow did SmartStop (SMA) generate in the first half of 2026?
What distributions did SmartStop (SMA) pay to common stockholders in early 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
For the transition period from __________ to __________
Commission File Number:
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
(Address of principal executive offices)
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(Registrant’s telephone number)
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(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 5, 2026, there were
FORM 10-Q
SMARTSTOP SELF STORAGE REIT, INC.
TABLE OF CONTENTS
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Cautionary Note Regarding Forward-Looking Statements |
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PART I. |
FINANCIAL INFORMATION |
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Item 1. |
Consolidated Financial Statements (Unaudited): |
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Consolidated Balance Sheets as of June 30, 2026 (unaudited) and December 31, 2025 |
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Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2026 and 2025 (unaudited) |
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Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2026 and 2025 (unaudited) |
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Consolidated Statements of Equity and Temporary Equity for the Three and Six Months Ended June 30, 2026 and 2025 (unaudited) |
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Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 (unaudited) |
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Notes to Consolidated Financial Statements (unaudited) |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. |
Controls and Procedures |
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PART II. |
OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
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Item 1A. |
Risk Factors |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 3. |
Defaults Upon Senior Securities |
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Item 4. |
Mine Safety Disclosures |
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Item 5. |
Other Information |
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Item 6. |
Exhibits |
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SIGNATURES |
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2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Form 10-Q of SmartStop Self Storage REIT, Inc., other than historical facts, may be considered forward-looking statements within the meaning of the federal securities laws, and we intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in such federal securities laws. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “seek,” “continue,” or other similar words, or the negative of such terms or other comparable terminology, or by discussions of strategy. We may also make additional forward-looking statements from time to time. All such subsequent forward-looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements.
Such statements include, but are not limited to statements concerning our plans, strategies, initiatives, prospects, objectives, goals, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information. Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation:
All forward-looking statements, including without limitation, management’s examination of historical operating trends and estimates of future earnings, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them, but there can be no assurance that management’s expectations, beliefs and projections will result or be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the U.S. Securities and Exchange Commission (the “SEC”) and are not intended to be a guarantee of our performance in future periods. We cannot guarantee the accuracy of any such forward-looking statements contained in this Form 10-Q, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
3
For further information regarding risks and uncertainties associated with our business, and important factors that could cause our actual results to vary materially from those expressed or implied in such forward-looking statements, please refer to the factors listed and described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Risk Factors” sections of the documents we file from time to time with the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2025, as supplemented by the risk factors included in Part II, Item 1A of this Form 10-Q, copies of which may be obtained from our website at www.investors.smartstopselfstorage.com.
4
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The information included in the accompanying unaudited consolidated balance sheets and related consolidated statements of operations, comprehensive income (loss), equity and temporary equity, and cash flows reflects all adjustments (consisting of normal and recurring adjustments) that are, in management’s opinion, necessary for a fair and consistent presentation of the aforementioned consolidated financial statements.
The accompanying consolidated financial statements should be read in conjunction with the notes to our consolidated financial statements included in this report on Form 10-Q. The accompanying consolidated financial statements should also be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. Our results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the operating results expected for the full year.
5
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
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June 30, |
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December 31, |
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2026 |
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2025 |
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(unaudited) |
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ASSETS |
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Real estate facilities: |
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Land |
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$ |
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Buildings |
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Site improvements |
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Accumulated depreciation |
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Construction in process |
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Real estate facilities, net |
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Cash and cash equivalents |
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Restricted cash |
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Investments in unconsolidated real estate ventures (Note 6) |
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Investments in and advances to Managed REITs |
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Deferred tax assets |
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Other assets, net |
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Intangible assets, net |
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Trademarks, net |
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Goodwill |
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Debt issuance costs, net |
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Total assets |
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LIABILITIES AND EQUITY |
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Debt, net |
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Accounts payable and accrued liabilities |
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Distributions payable |
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Deferred tax liabilities |
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Total liabilities |
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Commitments and contingencies (Note 14) |
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Equity: |
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SmartStop Self Storage REIT, Inc.: |
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Common Stock, $ |
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Additional paid-in capital |
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Distributions |
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Accumulated deficit |
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Accumulated other comprehensive (loss) income |
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Total SmartStop Self Storage REIT, Inc. equity |
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Noncontrolling interests in our Operating Partnership |
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Total noncontrolling interests |
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Total equity |
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Total liabilities and equity |
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$ |
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$ |
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See notes to consolidated financial statements.
6
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands, except share and per share data)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Revenues: |
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Self storage rental revenue |
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$ |
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$ |
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$ |
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$ |
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Ancillary operating revenue |
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Managed Platform revenue |
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Reimbursable costs from Managed Platform |
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Total revenues |
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Operating expenses: |
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Property operating expenses |
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Managed Platform expenses |
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Reimbursable costs from Managed Platform |
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General and administrative |
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Depreciation |
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Intangible amortization expense |
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Acquisition expenses |
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Contingent earnout adjustment |
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Total operating expenses |
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Gain on disposition of real estate |
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Income from operations |
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Other income (expense): |
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Equity in losses from investments in unconsolidated real estate ventures |
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Equity in losses from investments in Managed REITs |
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Investment income, net |
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Other, net |
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Interest expense |
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Loss on debt extinguishment |
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Income tax expense |
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Net income (loss) |
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Net (income) loss attributable to noncontrolling interests |
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Less: Distributions to preferred stockholders |
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Less: Accretion - preferred equity costs |
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Net income (loss) attributable to SmartStop Self Storage REIT, Inc. common stockholders |
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$ |
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$ |
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Net income (loss) per Common Stock, Class A & Class T share: |
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Basic |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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Weighted average Common Stock, Class A & Class T shares outstanding: |
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Basic |
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Diluted |
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See notes to consolidated financial statements.
7
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(Amounts in thousands)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Net income (loss) |
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$ |
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$ |
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$ |
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Other comprehensive (loss) income: |
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Foreign currency translation adjustment |
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Foreign currency hedge contract losses |
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Interest rate swap and cap contract gains |
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Other comprehensive (loss) income |
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Comprehensive income (loss) |
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Comprehensive (income) loss attributable to noncontrolling interests: |
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Comprehensive (income) loss attributable to noncontrolling interests |
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Comprehensive income (loss) attributable to SmartStop Self Storage REIT, Inc. stockholders |
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$ |
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$ |
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$ |
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$ |
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See notes to consolidated financial statements.
8
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY AND TEMPORARY EQUITY
For the Three and Six Months Ended June 30, 2026 and 2025
(Unaudited)
(Amounts in thousands, except share and per share data)
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Common Stock |
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Number |
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Common |
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Additional |
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Distributions |
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Accumulated |
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Accumulated |
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Total |
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Noncontrolling |
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Total |
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Balance as of March 31, 2026 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Tax withholding (net settlement redemption) related to vesting of restricted stock |
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( |
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— |
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— |
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— |
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— |
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( |
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— |
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Issuance of restricted stock, net of forfeitures |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Distributions ($ |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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— |
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Distributions to noncontrolling interests in our Operating Partnership |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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Equity-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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Net income attributable to SmartStop Self Storage REIT, Inc. common stockholders |
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— |
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— |
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— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Net income attributable to the noncontrolling interests in our Operating Partnership |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance as of June 30, 2026 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
See notes to consolidated financial statements.
9
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
|
Common Stock |
|
|
Class A |
|
|
Class T |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
Number |
|
|
Common |
|
|
Number |
|
|
Common |
|
|
Number |
|
|
Common |
|
|
Additional |
|
|
Distributions |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
|
Noncontrolling |
|
|
Total |
|
|
Preferred |
|
|
Redeemable |
|
|||||||||||||||
Balance as of March 31, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||||
Issuance of shares in Underwritten Public Offering |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||||
Offering costs of Underwritten Public Offering |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Changes to redeemable common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Issuance of restricted stock, net of forfeitures |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Distributions ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Distributions to noncontrolling interests in our Operating Partnership |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Distributions to other noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Repurchase of noncontrolling interest in SST VI Advisor |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Redemption of Series A Convertible Preferred Stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||||
Net loss attributable to SmartStop Self Storage REIT, Inc. common stockholders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Net loss attributable to the noncontrolling interests in our Operating Partnership |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Net income attributable to other noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||||
Foreign currency hedge contract loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Interest rate hedge contract gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||||
Balance as of June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|||||||||||
See notes to consolidated financial statements.
10
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Number |
|
|
Common |
|
|
Additional |
|
|
Distributions |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
|
Noncontrolling |
|
|
Total |
|
|||||||||
Balance as of December 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Tax withholding (net settlement redemption) related to vesting of restricted stock |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Issuance of restricted stock, net of forfeitures |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Distributions ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Distributions to noncontrolling interests in our Operating Partnership |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to SmartStop Self Storage REIT, Inc. common stockholders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Net income attributable to the noncontrolling interests in our Operating Partnership |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance as of June 30, 2026 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
See notes to consolidated financial statements.
11
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
|
Common Stock |
|
|
Class A |
|
|
Class T |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
Number |
|
|
Common |
|
|
Number |
|
|
Common |
|
|
Number |
|
|
Common |
|
|
Additional |
|
|
Distributions |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
|
Noncontrolling |
|
|
Total |
|
|
Preferred |
|
|
Redeemable |
|
|||||||||||||||
Balance as of December 31, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||||
Issuance of shares in Underwritten Public Offering |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||||
Offering costs of Underwritten Public Offering |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Tax withholding (net settlement redemption) related to vesting of restricted stock |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Changes to redeemable common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Par value adjustment due to Reverse Stock Split |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
Issuance of restricted stock, net of forfeitures |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Distributions ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Distributions to noncontrolling interests in our Operating Partnership |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Distributions to other noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Issuance of shares for distribution reinvestment plan |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||||
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||||
Repurchase of noncontrolling interest in SST VI Advisor |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Redemption of Series A Convertible Preferred Stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Net loss attributable to SmartStop Self Storage REIT, Inc. common stockholders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Net loss attributable to the noncontrolling interests in our Operating Partnership |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Net income attributable to other noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||||
Foreign currency hedge contract loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Interest rate hedge contract gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
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|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||||
Balance as of June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|||||||||||
See notes to consolidated financial statements.
12
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
|
|
Six Months Ended June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Change in deferred tax assets and liabilities |
|
|
|
|
|
|
||
Accretion of fair market value adjustment of secured debt |
|
|
|
|
|
|
||
Amortization of debt issuance costs |
|
|
|
|
|
|
||
Equity-based compensation expense |
|
|
|
|
|
|
||
Non-cash adjustment - equity method investments in unconsolidated real estate ventures |
|
|
|
|
|
|
||
Non-cash adjustment - equity method investments in Managed REITs |
|
|
|
|
|
|
||
Accretion of financing fee revenues |
|
|
( |
) |
|
|
( |
) |
Contingent earnout adjustment |
|
|
|
|
|
|
||
Unrealized foreign currency and derivative (gains) losses |
|
|
( |
) |
|
|
( |
) |
Loss on debt extinguishment |
|
|
|
|
|
|
||
Non-cash adjustments |
|
|
|
|
|
|
||
Gain on disposition of real estate |
|
|
( |
) |
|
|
|
|
Increase (decrease) in cash from changes in assets and liabilities: |
|
|
|
|
|
|
||
Other assets, net |
|
|
( |
) |
|
|
|
|
Accounts payable and accrued liabilities |
|
|
|
|
|
( |
) |
|
Managed REITs receivables and other |
|
|
( |
) |
|
|
( |
) |
Due to affiliates |
|
|
|
|
|
( |
) |
|
Net cash provided by operating activities |
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchase of real estate |
|
|
( |
) |
|
|
( |
) |
Net proceeds from the disposition of real estate |
|
|
|
|
|
|
||
Additions to real estate and construction in process |
|
|
( |
) |
|
|
( |
) |
Deposits on acquisitions |
|
|
|
|
|
( |
) |
|
Insurance proceeds on insured property damage |
|
|
|
|
|
|
||
Capital distributions from unconsolidated real estate ventures |
|
|
|
|
|
|
||
Capital distributions from Managed REITs |
|
|
|
|
|
|
||
Investments in unconsolidated real estate ventures |
|
|
( |
) |
|
|
( |
) |
Funding of loans - SSGT III and SSGT III sponsored DSTs |
|
|
( |
) |
|
|
( |
) |
Repayment of loans - SSGT III and SSGT III sponsored DSTs |
|
|
|
|
|
|
||
Funding of loans- SST VI |
|
|
( |
) |
|
|
|
|
Purchase of SST VI Subordinated Class C Units |
|
|
|
|
|
( |
) |
|
Settlement of foreign currency hedges |
|
|
|
|
|
|
||
Purchase of other investments |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Scheduled principal payments on non-credit facility debt |
|
|
( |
) |
|
|
( |
) |
Proceeds from issuance of former credit facility debt |
|
|
|
|
|
|
||
Repayment of former credit facility debt |
|
|
( |
) |
|
|
( |
) |
Proceeds from issuance of current credit facility debt |
|
|
|
|
|
|
||
Repayments of current credit facility debt |
|
|
( |
) |
|
|
|
|
Gross proceeds - Underwritten Public Offering |
|
|
|
|
|
|
||
Offering costs |
|
|
|
|
|
( |
) |
|
Gross proceeds from issuance of 2028 Canadian Notes |
|
|
|
|
|
|
||
Gross proceeds - issuance of non-credit facility debt |
|
|
|
|
|
|
||
Repayment - non-credit facility debt |
|
|
( |
) |
|
|
( |
) |
Debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Payment of payroll withholding tax on stock vesting |
|
|
( |
) |
|
|
( |
) |
Distributions paid - common stockholders |
|
|
( |
) |
|
|
( |
) |
Distributions paid - noncontrolling interests in our OP |
|
|
( |
) |
|
|
( |
) |
Distributions paid - preferred stockholders |
|
|
|
|
|
( |
) |
|
Distributions paid - other noncontrolling interests |
|
|
|
|
|
( |
) |
|
Redemption of Series A Convertible Preferred Stock |
|
|
|
|
|
( |
) |
|
Repurchase of noncontrolling interest in SST VI Advisor |
|
|
|
|
|
( |
) |
|
Debt defeasance costs |
|
|
|
|
|
( |
) |
|
Net cash (used in) provided by financing activities |
|
|
( |
) |
|
|
|
|
Impact of foreign exchange rate changes on cash and restricted cash |
|
|
( |
) |
|
|
|
|
Change in cash, cash equivalents, and restricted cash |
|
|
( |
) |
|
|
|
|
Cash, cash equivalents, and restricted cash beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash end of period |
|
$ |
|
|
$ |
|
||
13
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
(Amounts in thousands)
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Cash paid for interest, net of capitalized interest |
|
$ |
|
|
$ |
|
||
Cash paid for income taxes |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of noncash activities: |
|
|
|
|
|
|
||
Acquisition of real estate through assumption of debt |
|
$ |
|
|
$ |
|
||
Issuance of shares pursuant to distribution reinvestment plan |
|
$ |
|
|
$ |
|
||
Distributions payable |
|
$ |
|
|
$ |
|
||
Real estate and construction in process included in accounts payable and accrued liabilities |
|
$ |
|
|
$ |
|
||
Deposit applied to the purchase of real estate |
|
$ |
|
|
$ |
|
||
Earnest deposits on acquisitions assigned to the Managed REITs, amounts reclassified to Managed REITs receivables |
|
$ |
|
|
$ |
|
||
See notes to consolidated financial statements.
14
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Note 1. Organization
SmartStop Self Storage REIT, Inc., a Maryland corporation (the “Company”), is a self-managed and fully-integrated self storage real estate investment trust (“REIT”), formed on
We acquire, own and operate self storage facilities. In addition, through our subsidiaries, we serve as the sponsor and property manager of various affiliated real estate programs and serve as the property manager for various third-party owners.
As of June 30, 2026, our wholly-owned portfolio consisted of
Additionally, as of June 30, 2026, we owned a
Through our Managed Platform (as defined below), we serve as the sponsor of Strategic Storage Trust VI, Inc., a publicly-registered non-traded REIT (“SST VI”), Strategic Storage Growth Trust III, Inc., a private REIT (“SSGT III”), and Strategic Storage Trust X, a private net asset value REIT, (“SST X” and together with SST VI and SSGT III, the “Managed REITs”). We manage the properties owned by the Managed REITs and the properties owned by the Delaware statutory trusts (“DSTs”) sponsored by one of the Managed REITs. As of June 30, 2026, we managed
On October 1, 2025, we acquired Argus Professional Storage Management, LLC (“Argus”), a third-party manager of self storage properties (the “Third Party Platform Acquisition”). See Note 4 – Third Party Platform Acquisition for additional information. As of June 30, 2026, we managed approximately
The Third Party Platform, the Managed REITs and the properties owned by the DSTs sponsored by one of the Managed REITs are collectively referred to as the “Managed Platform.” In total, as of June 30, 2026, we managed approximately
SmartStop OP, L.P. (our “Operating Partnership”) owns, directly or indirectly through one or more subsidiaries, all of the self storage properties that we own. As of June 30, 2026, we owned approximately
On March 20, 2025, we effected a one-for-four reverse common stock split (the “Reverse Stock Split”) of each then issued and outstanding share of Class A common stock (“Class A Common Stock”), $
15
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Immediately after the Reverse Stock Split, we reclassified and designated
On June 12, 2025, we filed Articles of Amendment to our charter to decrease our total number of authorized shares of stock from
On April 1, 2025, we executed our underwriting agreement, and on April 3, 2025, we closed our registered underwritten public offering (the “Underwritten Public Offering”) of
On October 1, 2025, the six-month anniversary of the listing of our Common Stock issued in our Underwritten Public Offering for trading on the NYSE, each share of Class A Common Stock and Class T Common Stock automatically converted into one share of our unclassified listed Common Stock. In preparation for this conversion, on July 30, 2025, we completed a fractional share redemption related to our Class A Common Stock and Class T Common Stock of approximately $
As of December 31, 2025, we had
16
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
On March 19, 2026, we entered into a distribution agreement (the “ATM Agreement”) with each of J.P. Morgan Securities, LLC, BMO Capital Markets Corp., Evercore Group L.L.C., Huntington Securities, Inc., KeyBanc Capital Markets Inc., M&T Securities, Inc., Raymond James & Associates, Inc., RBC Capital Markets, LLC, Robert W. Baird & Co. Incorporated, Scotia Capital (USA) Inc., Truist Securities, Inc., and Wells Fargo Securities, LLC, as sales agents (in such capacity, “Sales Agents”), the Forward Sellers (as defined below and together with the Sales Agents, the “Agents”) and the Forward Purchasers (as defined below). Pursuant to the ATM Agreement, we may issue and sell, from time to time, shares of our Common Stock having an aggregate offering price of up to $
The sales, if any, of the Shares under the ATM Agreement, made to or through the Agents, as our Sales Agents or as Forward Sellers on behalf of the Forward Purchasers, will be made in negotiated transactions, including block trades, or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, by means of ordinary brokers’ transactions at market prices prevailing at the time of sale, including sales made directly on the New York Stock Exchange, sales made to or through a market maker and sales made through other securities exchanges or electronic communications networks.
In the ATM Agreement, we made certain customary representations, warranties and covenants concerning us, our Operating Partnership and the Shelf Registration Statement (as defined below) and also agreed to indemnify the Agents and the Forward Purchasers against certain liabilities, including liabilities under the Securities Act.
The Shares sold in the offering will be issued pursuant to our automatic shelf registration statement on Form S-3 (File No. 333-292583) filed with the SEC on January 5, 2026 (the “Shelf Registration Statement”). On March 19, 2026, we filed with the SEC a prospectus supplement to the prospectus included in the Shelf Registration Statement relating to the offering contemplated by the ATM Agreement. As of June 30, 2026, we had
Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC.
The square footage, unit count, and occupancy percentage data and related disclosures included in these notes to the consolidated financial statements are outside the scope of our independent registered accounting firm’s review.
Reverse Equity Splits
As applicable and unless otherwise indicated, the consolidated financial statements and accompanying footnotes for all periods presented give effect to the retrospective effect to the Reverse Equity Splits as described above in Note 1 – Organization.
17
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Underwritten Public Offering Costs
Prior to the consummation of the Underwritten Public Offering, deferred costs pertaining to our Underwritten Public Offering were recorded in other assets, net in our consolidated balance sheets. Such costs were offset against the Underwritten Public Offering proceeds and were all reclassified to additional paid-in capital in our consolidated balance sheets in connection with the consummation of the Underwritten Public Offering. We incurred other transaction costs related to our Underwritten Public Offering activities that were not directly attributable to our equity raise, and therefore were not capitalized; such costs were included within the general and administrative expenses line item in our consolidated statements of operations.
Principles of Consolidation
Our financial statements, and the financial statements of our Operating Partnership, including its wholly-owned subsidiaries, are consolidated in the accompanying consolidated financial statements. The portion of these entities not wholly-owned by us is presented as noncontrolling interests. All intercompany accounts and transactions have been eliminated in consolidation.
Consolidation Considerations
Current accounting guidance provides a framework for identifying a variable interest entity (“VIE”) and determining when a company should include the assets, liabilities, noncontrolling interests, and results of activities of a VIE in its consolidated financial statements. In general, a VIE is an entity or other legal structure used to conduct activities or hold assets that either (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations. Generally, a VIE should be consolidated if a party with an ownership, contractual, or other financial interest in the VIE (a variable interest holder) has the power to direct the VIE’s most significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. An entity is required to consolidate a VIE if it is the primary beneficiary of the VIE.
Our Operating Partnership is deemed to be a VIE and is consolidated by us as we are currently the primary beneficiary. Our sole significant asset is our investment in our Operating Partnership; as a result, substantially all of our assets and liabilities represent those assets and liabilities of our Operating Partnership and its wholly-owned subsidiaries. Additionally, we are the primary beneficiary of our joint venture programs through which we offer our tenant insurance, tenant protection plans or similar programs (the “Tenant Protection Programs”) with SST VI, SSGT III and SST X. As a result, the Tenant Protection Program joint ventures are consolidated.
Our investments in real estate joint ventures where we have significant influence but not control, and joint ventures which are VIEs for which we are not the primary beneficiary, are recorded under the equity method of accounting.
Equity Investments
Investments
Other than our investments in the Managed REITs, we have two preferred equity investments in third parties. Both such investments require certain related properties to be managed by us while such investments are outstanding. Income from these investments is recorded in investment income, net in our consolidated statements of operations. These investments are included in other assets in our consolidated balance sheets.
18
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
On October 31, 2025, we, through SmartStop TRS, Inc., our taxable REIT subsidiary, invested approximately $
On June 26, 2026, we made a preferred equity investment in an unaffiliated entity that owns a self storage property located in Goleta, California (the “Goleta Preferred Investment”). The Goleta Preferred Investment was structured as preferred equity, carrying a
Investment Income, Net
We record the interest and related financing fees on our debt investments as well as the income on our preferred investments on the accrual basis and such income is included in investment income, net in our consolidated statements of operations. Investment income, net was approximately $
Investments in and Advances to Managed REITs
As of June 30, 2026 and December 31, 2025, we owned equity and debt investments in the Managed REITs; such amounts are included in investments in and advances to Managed REITs in our consolidated balance sheets. We account for the common and in substance common equity investments using the equity method of accounting as we have the ability to exercise significant influence, but not control, over the Managed REITs’ operating and financial policies through our advisory and property management agreements with the respective Managed REITs.
See Note 12 – Related Party Transactions for additional information.
Noncontrolling Interests in Consolidated Entities
We have accounted for the noncontrolling interests in our Operating Partnership, our Tenant Protection Programs joint ventures with SST VI, SSGT III, and SST X and, until June 18, 2025 (i.e. the redemption date of such noncontrolling interests in the SST VI advisor), the noncontrolling interests in the SST VI advisor, in accordance with the related accounting guidance.
Due to our control through our general partnership interest in our Operating Partnership and the limited rights of the limited partners, our Operating Partnership, including its wholly-owned subsidiaries, are consolidated with the Company and the limited partner interests are reflected as noncontrolling interests in the accompanying consolidated balance sheets. We also consolidate our interests in the SST VI, SSGT III, and SST X Tenant Protection Programs, and present the minority interests as noncontrolling interests in the accompanying consolidated balance sheets. The noncontrolling interests shall be attributed their share of income and losses.
19
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Use of Estimates
Cash and Cash Equivalents
We consider all short-term, highly liquid investments that are readily convertible to cash with a maturity of three months or less at the time of purchase to be cash equivalents.
We may maintain cash and cash equivalents in financial institutions in excess of insured limits. In an effort to mitigate this risk, we generally invest in or through major financial institutions.
Restricted Cash
Purchase Price Allocation and Treatment of Acquisition Costs
We account for asset acquisitions in accordance with GAAP which requires that we allocate the purchase price of a property to the tangible and intangible assets acquired and the liabilities assumed based on their relative fair values as of the date of acquisition. This guidance requires us to make significant estimates and assumptions, including fair value estimates, which requires the use of significant unobservable inputs as of the acquisition date. We engage independent third-party valuation specialists to assist in the determination of significant estimates and market-based assumptions used in the valuation models.
The value of the tangible assets, consisting of land and buildings, is determined as if vacant. Substantially all of the leases in place at acquired properties are at market rates, as the majority of the leases are month-to-month contracts. We also consider whether in-place, market leases represent an intangible asset. During the six months ended June 30, 2026 and 2025, we recorded approximately $
Allocation of purchase price to acquisitions of portfolios of facilities are allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates which take into account the relative size, age, and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available.
Acquisitions that do not meet the definition of a business, as defined under current GAAP, are accounted for as asset acquisitions. During the six months ended June 30, 2026 and 2025, our property acquisitions did not meet the definition of a business. To date, our property acquisitions have generally not met the definition of a business because substantially all of the fair value was concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets) and because the acquisitions did not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. As a result, once an acquisition is deemed probable, acquisition costs are capitalized rather than expensed.
20
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Intangible Assets Valuation
In connection with the acquisition of the Third Party Platform, we allocated a portion of the consideration to an intangible asset related to the property management contracts and the related customer relationships. We are amortizing such intangible asset on a straight-line basis over the estimated benefit period of the property management contracts and related customer relationships. We evaluate such intangible asset for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable. In such an event, an impairment charge would be recognized and the intangible asset would be marked down to its fair value.
Evaluation of Possible Impairment of Real Property Assets
Management monitors events and changes in circumstances that could indicate that the carrying amounts of our real property assets may not be recoverable. When indicators of potential impairment are present that indicate that the carrying amounts of the assets may not be recoverable, we will assess the recoverability of the assets by determining whether the carrying value of the real property assets will be recovered through the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, we will adjust the value of the real property assets to the fair value and recognize an impairment loss. For the six months ended June 30, 2026 and 2025,
Casualty Insurance Recoveries
In the event of a wind storm, flood, fire or other such event causing property damage, we estimate the carrying value of the damaged property and record a corresponding casualty loss. If we determine that an insurance recovery is probable, we record such estimated recovery as a receivable up to the amount of the casualty loss. Any amount of insurance recovery for such loss in excess of the amount of the casualty loss recorded is considered a gain contingency and is recognized when the claim is fully settled.
Goodwill Valuation
We initially recorded goodwill as a result of the Self Administration Transaction (as defined in Note 12 – Related Party Transactions), which occurred in 2019. Additionally, we recorded goodwill in connection with our Third Party Platform Acquisition (see Note 4 – Third Party Platform Acquisition for additional information). Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible assets and other intangible assets acquired. Goodwill is allocated to various reporting units, as applicable, and is not amortized. We perform an annual qualitative impairment assessment as of December 31 for goodwill; between annual assessments, we evaluate the recoverability of goodwill whenever events or changes in circumstances indicate that the carrying amount of goodwill may not be fully recoverable. If circumstances indicate the carrying amount may not be fully recoverable, we perform a quantitative analysis to compare the fair value of each reporting unit to its respective carrying amount. If the carrying amount of goodwill exceeds its fair value, an impairment charge will be recognized.
Trademarks Valuation
In connection with the Self Administration Transaction (as defined in Note 12 – Related Party Transactions), we recorded the fair value associated with the
Trademarks are based on the value of our brands. Trademarks are valued using the relief from royalty method, which presumes that without ownership of such trademarks, we would have to make a stream of payments to a brand or franchise owner in return for the right to use their name. By virtue of this asset, we avoid any such payments and record the related intangible fair value of our ownership of the brand name.
21
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
As of June 30, 2026 and December 31, 2025, $
We qualitatively evaluate whether any triggering events or changes in circumstances have occurred in addition to our annual impairment test that would indicate an impairment condition may exist. If any change in circumstance or triggering event occurs, and results in a significant impact to our revenue and profitability projections, or any significant assumption in our valuation methods is adversely impacted, the impact could result in a material impairment charge in the future.
Revenue Recognition
Self Storage Operations
Management believes that all of our leases are operating leases. Rental income is recognized in accordance with the terms of the leases, which generally are month-to-month. Revenues from any long-term operating leases are recognized on a straight-line basis over the term of the lease. The excess of rents received over amounts contractually due pursuant to the underlying leases is included in accounts payable and accrued liabilities in our consolidated balance sheets, and contractually due but unpaid rent is included in other assets in our consolidated balance sheets.
In accordance with ASC 842 – Lease Accounting, we review the collectability of lease payments on an ongoing basis. We consider collectability indicators when analyzing accounts receivable and historical bad debt levels, including current economic trends, all of which assist in evaluating the probability of outstanding and future rental income collections.
Additionally, we earn ancillary revenue from fees we receive related to providing tenant insurance or tenant protection plans to customers at our properties through our Tenant Protection Programs, and to a lesser extent, through the sale of various moving and packing supplies such as locks and boxes. We recognize such revenue in ancillary operating revenue in our consolidated statements of operations as the services are performed and as the goods are delivered.
Managed Platform
As applicable, we earn property management and asset management revenue, pursuant to the respective property management and advisory agreement contracts, in connection with providing services to the Managed REITs and from the owners of the properties we manage on our Third Party Platform. We have determined under ASC 606 – Revenue from Contracts with Customers (“ASC 606”), that the performance obligation for the property management services and asset management services are satisfied as the services are rendered. While we are compensated for our services on a monthly basis, these services represent a series of distinct daily services in accordance with ASC 606. Such revenue is recorded in Managed Platform revenue in our consolidated statements of operations.
The Managed REITs’ advisory agreements also provide for reimbursement to us of certain costs of providing administrative and management services to the Managed REITs. These reimbursements include costs incurred in relation to organization and offering services provided to the Managed REITs and include the reimbursement of salaries, bonuses, and other expenses related to benefits paid to our employees while performing services for the Managed REITs. The Managed REITs’ and the Third Party Platform’s property management agreements also provide reimbursement to us for the property manager’s costs of managing the properties. Reimbursable costs include wages and salaries and other expenses that relate to benefits that arise in operating, managing and maintaining the related properties.
Under ASC 606, direct reimbursement of such costs does not represent a separate performance obligation from our obligation to perform property management and asset management services. The reimbursement income is considered variable consideration, and is recognized as the costs are incurred, subject to limitations on the Managed Platform’s ability to incur offering costs or limitations imposed by the advisory agreements. We have elected to separately record such revenue in reimbursable costs from Managed Platform in our consolidated statements of operations.
22
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Additionally, we earn revenue in connection with our Tenant Protection Programs joint ventures with our Managed REITs. We also earn development and construction management revenue from certain services we provide in connection with the project design, coordination and oversight of development and certain capital improvement projects undertaken by the Managed REITs and certain properties we manage through our Third Party Platform. We recognize such revenue in Managed Platform revenue in our consolidated statements of operations, as the services are performed or delivered. See Note 12 – Related Party Transactions for additional information regarding revenue generated from our Managed Platform.
Sponsor Funding Agreement
On November 1, 2023, SmartStop REIT Advisors, LLC, a subsidiary of our Operating Partnership, entered into a sponsor funding agreement (the “Sponsor Funding Agreement”), with SST VI and Strategic Storage Operating Partnership VI, L.P. (“SST VI OP”) in connection with certain changes to the public offering of SST VI pursuant to which SmartStop received approximately
In accordance with ASC 606, the amount by which our funding exceeded the fair value of the Series C Units received was accounted for as a payment to a customer and was therefore recorded as a reduction to the transaction price for the services we provide to such customer. Each payment was initially included in other assets, net in our consolidated balance sheets and is subsequently being recorded as a reduction of Managed Platform revenue ratably over the remaining estimated life of our management contracts with SST VI.
Balance as of December 31, 2024 |
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$ |
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Amounts incurred |
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Recorded sponsor funding reduction |
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( |
) |
Balance as of December 31, 2025 |
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$ |
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Recorded sponsor funding reduction |
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( |
) |
Balance as of June 30, 2026 |
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$ |
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Allowance for Doubtful Accounts
Tenant accounts receivable is reported net of an allowance for doubtful accounts. Management records this general allowance estimate based upon a review of the current status of accounts receivable. It is reasonably possible that management’s estimate of the allowance will change in the future. As of June 30, 2026 and December 31, 2025, approximately $
Advertising Costs
Advertising costs are expensed in the period in which the cost is incurred and are included in property operating expenses and general and administrative expenses in our consolidated statements of operations, depending on the nature of the expense.
For the three months ended June 30, 2026 and 2025, approximately $
For the six months ended June 30, 2026 and 2025, approximately $
23
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Real Estate Facilities
We capitalize costs incurred to develop, construct, renovate and improve properties, including interest and property taxes incurred during the construction period. The construction period begins when expenditures for the real estate assets have been made and activities that are necessary to prepare the asset for its intended use are in progress. The construction period ends when the asset is substantially complete and ready for its intended use.
Depreciation of Real Property Assets
Our management is required to make subjective assessments as to the useful lives of our depreciable assets. We consider the period of future benefit of the asset to determine the appropriate useful lives.
Depreciation of our real property assets is charged to expense on a straight-line basis over the estimated useful lives
as follows:
Description |
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Standard Depreciable Life |
Land |
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Not Depreciated |
Buildings |
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Site Improvements |
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Depreciation of Personal Property Assets
Intangible Assets
We have allocated a portion of our real estate purchase price to in-place lease intangible assets, which amortize on a straight-line basis over the estimated future benefit period. Additionally, we have other contract related intangible assets. As of June 30, 2026 and December 31, 2025, the gross amount of the intangible assets was approximately $
The total estimated future amortization expense for our real estate related intangible assets for the years ending December 31, 2026, 2027, 2028, 2029, and thereafter is approximately $
In connection with the acquisition of the Third Party Platform, we allocated a portion of the consideration to an intangible asset related to the property management contracts and the related customer relationships. We are amortizing such intangible asset on a straight-line basis over the estimated benefit period of the property management contracts and related customer relationships. As of June 30, 2026 and December 31, 2025, the gross amount of such intangible asset was approximately $
The total estimated future amortization expense for our intangible asset acquired in the Third Party Platform Acquisition for the years ending December 31, 2026, 2027, 2028, 2029, and thereafter is approximately $
24
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
We perform an annual qualitative impairment assessment as of December 31 for our intangible assets; between annual assessments we evaluate whether any triggering events or changes in circumstances have occurred that would indicate an impairment condition may exist. If any change in circumstance or triggering event occurs, and results in a significant impact to our revenue and profitability projections, or any significant assumption in our valuations methods is adversely impacted, the impact could result in an impairment charge in the future.
Debt Issuance Costs
The net carrying value of costs incurred in connection with obtaining non-revolving debt are presented in our consolidated balance sheets as a deduction from debt; amounts incurred related to obtaining revolving debt are included in debt issuance costs, net of accumulated amortization in our consolidated balance sheets. See Note 7 – Debt for additional information. Debt issuance costs are amortized using the effective interest method, as applicable.
As of June 30, 2026 and December 31, 2025, the gross amount of debt issuance costs related to our revolving credit facility totaled approximately $
As of June 30, 2026 and December 31, 2025, the gross amount of debt issuance costs related to our non-revolving debt totaled approximately $
Foreign Currency Translation
For non-U.S. functional currency operations, assets and liabilities are translated to U.S. dollars at current exchange rates, as of the reporting date. Revenues and expenses are translated at the average rates for the period. All adjustments related to amounts classified as long term net investments are recorded in accumulated other comprehensive income (loss) as a separate component of equity. Transactions denominated in a currency other than the functional currency of the related operation are recorded at rates of exchange in effect at the date of the transaction.
Changes in our net investments not classified as long term are recorded in other, net in our consolidated statements of operations, along with transactions denominated in a currency other than the functional currency of such entity (excluding our foreign currency hedges, as applicable), and represented a gain of approximately $
The primary driver of the net amounts above is the foreign currency gain or loss associated with our Canadian Dollar denominated senior unsecured notes issued by our Operating Partnership. As of June 30, 2026, our Operating Partnership had issued $
Redeemable Common Stock
From our inception until April 29, 2025, we maintained a share redemption program (“SRP”) that enabled stockholders to sell their shares to us in limited circumstances. Upon the termination of our SRP on April 29, 2025, the maximum amount payable related to the SRP was reclassified from redeemable common stock (temporary equity) on our consolidated balance sheet to additional paid-in capital (permanent equity) in our consolidated statements of equity and temporary equity.
25
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
We evaluated the terms of our SRP, and we previously classified amounts that were potentially redeemable under the SRP as redeemable common stock in the accompanying consolidated balance sheets while the SRP was in effect. The maximum amount of redeemable shares under our SRP was limited to the net proceeds from the distribution reinvestment plan. However, accounting guidance required that determinable amounts that could become redeemable should be presented as redeemable when such amount is known. Therefore, the net proceeds from the distribution reinvestment plan were considered to be temporary equity and were previously presented as redeemable common stock in the accompanying consolidated balance sheets while the SRP was in effect.
In addition, the accounting guidance required, among other things, that financial instruments that represented a mandatory obligation of us to repurchase shares be classified as liabilities and reported at settlement value. When we determined that we had a mandatory obligation to repurchase shares under the SRP, we reclassified such obligations from temporary equity to a liability based upon their respective settlement values.
Accounting for Equity Awards
We have historically issued equity-based awards in two forms: (1) restricted stock awards consisting of shares of our common stock and (2) long-term incentive plan units of our Operating Partnership (“LTIP Units”), both of which may be issued subject to either time-based vesting criteria or performance-based vesting criteria. Performance-based vesting is based on either operational performance criteria or a market-based criteria. For time-based awards granted which contain a graded vesting schedule, compensation cost is recognized as an expense on a straight-line basis over the requisite service period as if the award was, in substance, a single award. For performance-based awards, which were issued prior to our Underwritten Public Offering, compensation cost is recognized over the requisite service period if and when we determine the performance condition is probable of being achieved. For performance-based awards with market-based criteria, which were issued subsequent to our Underwritten Public Offering, compensation is recognized as an expense on a straight-line basis over the requisite service period. We record the cost of such equity-based awards based on the grant date fair value and have elected to record forfeitures as they occur.
Employee Benefit Plan
We maintain a retirement savings plan under Section 401(k) of the Internal Revenue Code, as amended, under which eligible employees can contribute up to
Fair Value Measurements
Under GAAP, we are required to measure certain financial instruments at fair value on a recurring basis. In addition, we are required to measure other financial instruments and balances at fair value on a non-recurring basis. Fair value is defined by the accounting standard for fair value measurements and disclosures as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels. The following summarizes the three levels of inputs and hierarchy of fair value we use when measuring fair value:
26
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the fair value measurement will fall within the lowest level that is significant to the fair value measurement in its entirety.
The accounting guidance for fair value measurements and disclosures provides a framework for measuring fair value and establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. In determining fair value, we will utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value. Considerable judgment will be necessary to interpret Level 2 and 3 inputs in determining fair value of our financial and non-financial assets and liabilities. Accordingly, there can be no assurance that the fair values we will present will be indicative of amounts that may ultimately be realized upon sale or other disposition of these assets.
Financial and non-financial assets and liabilities measured at fair value on a non-recurring basis in our consolidated financial statements consist of real estate and related liabilities assumed related to our acquisitions along with the assets and liabilities described in Note 3 – Real Estate Facilities. The fair values of these assets and liabilities were determined as of the acquisition dates using widely accepted valuation techniques, including (i) discounted cash flow analysis, which considers, among other things, leasing assumptions, growth rates, discount rates and terminal capitalization rates, (ii) income capitalization approach, which considers prevailing market capitalization rates, and (iii) market approach, which considers comparable sales activity. Additionally, certain such assets and liabilities are required to be fair valued periodically or valued pursuant to ongoing fair value requirements and impairment analyses and have been valued subsequently utilizing the same techniques noted above. In general, we consider multiple valuation techniques when measuring fair values. However, in certain circumstances, a single valuation technique may be appropriate. All of the fair values of the assets and liabilities as of the acquisition dates were derived using Level 3 inputs.
The Series C Units (categorized within Level 3 of the fair value hierarchy) acquired in connection with the Sponsor Funding Agreement were measured at fair value at the time of acquisition, and are accounted for using the equity method of accounting as described in Note 12 – Related Party Transactions. The fair value of these units was determined upon purchase using a valuation model which considered the following key assumptions: the projected distribution rate of SST VI, implied share price volatility, risk free interest rate, current estimated net asset value, and the estimated effective life of the Series C Units.
The carrying amounts of cash and cash equivalents, restricted cash, receivables, other assets, accounts payable and accrued liabilities, distributions payable and amounts due to affiliates approximate fair value (categorized within Level 1 of the fair value hierarchy).
The estimated fair value of financial instruments is subjective in nature and is dependent on a number of important assumptions, including discount rates and relevant comparable market information associated with each financial instrument. The fair value of our fixed and variable rate debt was estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities (categorized within Level 2 of the fair value hierarchy). The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. As of June 30, 2026 and December 31, 2025, we believe the fair value of our variable rate debt was reasonably estimated at its notional amount as there have been minimal changes to the fixed spread portion of interest rates for similar loans observed in the market, and as the variable portion of our interest rates fluctuate with the associated market indices.
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June 30, 2026 |
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December 31, 2025 |
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Fair Value |
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Carrying Value |
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Fair Value |
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Carrying Value |
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||||
Fixed Rate Debt |
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$ |
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$ |
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$ |
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$ |
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27
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
During the six months ended June 30, 2025, we held interest rate cash flow hedges and foreign currency net investment and cash flow hedges to hedge our interest rate and foreign currency exposure (see Note 7 – Debt and Note 9 – Derivative Instruments). The fair value analyses of these instruments reflect the contractual terms of the derivatives, including the period to maturity, and used observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities, as applicable. The fair value of interest rate swap and cap agreements are determined using widely accepted valuation techniques, including discounted cash flow analyses on the expected cash flows of the instruments. Our fair values of our net investment hedges are based primarily on the change in the spot rate at the end of the period as compared with the strike price at inception.
To comply with GAAP, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of derivative contracts for the effect of non-performance risk, we consider the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.
Although we had determined that the majority of the inputs used to value our derivatives were within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilized Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparties. However, through the termination date of our derivatives, we had assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of our derivatives. As a result, we determined that our derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy.
As of June 30, 2026 and December 31, 2025, we held
Derivative Instruments and Hedging Activities
We record all derivatives on our balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. We may enter into derivative contracts that are intended to economically hedge certain of our risks, even though hedge accounting does not apply or we elect not to apply hedge accounting.
Income Taxes
We made an election to be taxed as a Real Estate Investment Trust (“REIT”), under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with our taxable year ended December 31, 2014. To qualify as a REIT, we must continue to meet certain organizational and operational requirements, including a requirement to distribute at least
For income tax purposes, distributions to common stockholders are characterized as ordinary dividends, capital gain dividends, or as nontaxable distributions. To the extent that we make a distribution in excess of our current or accumulated earnings and profits, the distribution will be a non-taxable return of capital, reducing the tax basis in each U.S. stockholder’s shares, and the amount of each distribution in excess of a U.S. stockholder’s tax basis in its shares will be taxable as gain realized from the sale of its shares.
28
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
As a REIT, we generally will not be subject to U.S. federal income tax on taxable income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to U.S. federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for U.S. federal income tax purposes for four years following the year during which qualification is lost unless the IRS grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT and intend to operate in the foreseeable future in such a manner that we will remain qualified as a REIT for U.S. federal income tax purposes.
Even if we continue to qualify for taxation as a REIT, we may be subject to certain state, local, and foreign taxes on our income and property, and federal income and excise taxes on our undistributed income.
We filed an election to treat our primary taxable REIT subsidiary (“TRS”) as a taxable REIT subsidiary effective January 1, 2014. In general, our TRS performs additional services for our customers and provides the advisory and property management services related to our Managed Platform and otherwise generally engages in non-real estate related business. The TRS is subject to corporate federal and state income tax.
We account for deferred income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes a change in our judgment about expected future tax consequences of events, is included in the tax provision when such changes occur. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes a change in our judgment about the realizability of the related deferred tax asset, is included in the tax provision when such changes occur.
Uncertain tax positions may arise where tax laws may allow for alternative interpretations or where the timing of recognition of income is subject to judgment. Under ASC 740 – Simplifying the Accounting for Income Taxes, tax positions are evaluated for recognition using a more–likely–than–not threshold, and those tax positions requiring recognition are measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Interest and penalties relating to uncertain tax positions will be recognized in income tax expense when incurred. As of June 30, 2026 and December 31, 2025, the Company had
Concentration
Segment Reporting
Our business is composed of
29
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Convertible Preferred Stock
We classified our Series A Convertible Preferred Stock (as defined in Note 8 – Preferred Equity) on our consolidated balance sheets using the guidance in ASC 480-10-S99. Per the original terms of our Series A Convertible Preferred Stock, it could be redeemed by us on or after the fifth anniversary of its issuance (October 29, 2024), or if certain events occur, such as the listing of our common stock on a national securities exchange, a change in control, or if a redemption would be required to maintain our REIT status. Additionally, if we did not maintain our REIT status the holder could require redemption. As the shares were contingently redeemable, and under certain circumstances not solely within our control, we had classified our Series A Convertible Preferred Stock as temporary equity prior to its redemption.
We analyzed whether the conversion features in our Series A Convertible Preferred Stock should be bifurcated under the guidance in ASC 815-10 and determined that bifurcation was not necessary.
Per Share Data
Basic earnings per share attributable to our common stockholders for all periods presented are computed by dividing net income (loss) attributable to our common stockholders for basic computations of earnings per share by the weighted average number of common shares outstanding during the period, excluding unvested restricted stock.
Diluted earnings per share is computed by including the dilutive effect (calculated using the two-class, treasury stock or if-converted method), as applicable, of the conversion of all potential common stock equivalents (which potentially includes unvested restricted stock, Series A Convertible Preferred Stock, OP Units, unvested LTIP Units and Contingent Earnout Units (as defined in Note 4 – Third Party Platform Acquisition)) and accordingly, as applicable, adjusting net income to add back any changes in earnings that reduce earnings per common share in the period associated with the potential common stock equivalents.
The computation of earnings per common share is as follows for the periods presented (amounts presented in thousands, except share and per share data):
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2025 |
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Net income (loss) |
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$ |
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Net (income) loss attributable to noncontrolling interests |
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Net income (loss) attributable to SmartStop Self Storage REIT, Inc. |
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Less: Distributions to preferred stockholders |
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Less: Accretion - preferred equity costs |
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Less: Distributions to participating securities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income (loss) attributable to common stockholders for basic computations: |
|
|
|
|
|
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Net income (loss) attributable to common stockholders for diluted computations: |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average Common Stock, Class A & Class T shares outstanding - basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unvested LTIP Units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unvested restricted stock awards |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average Common Stock, Class A & Class T shares outstanding - diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) per Common Stock, Class A & Class T share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Diluted |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
30
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The following table presents the weighted average Series A Convertible Preferred Stock, OP Units, unvested LTIP Units, unvested restricted stock awards and Contingent Earnout Units, that were excluded from the computation of diluted earnings per share above as their effect would have been antidilutive for the respective periods, and was calculated using the two-class, treasury stock or if-converted method, as applicable:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
|
|
Equivalent Shares (if converted) |
|
|
Equivalent Shares (if converted) |
|
||||||||||
OP Units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unvested LTIP Units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unvested restricted stock awards |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent Earnout Units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Series A Convertible Preferred Stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Recently Adopted Accounting Guidance
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740).” The guidance in ASU 2023-09 was issued to provide investors with information to better assess how an entity’s operations and related tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows. The amendment became effective for fiscal years beginning after December 15, 2024. Accordingly, we adopted this amendment during the year ended December 31, 2025 with no material impact on our consolidated financial statements. Such disclosures have been presented prospectively, in accordance with ASU 2023-09.
Recently Issued Accounting Guidance
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses (Topic 220).” The guidance in ASU 2024-03 was issued to provide investors with more disaggregated information about an entity’s expenses. In January 2025, the FASB issued ASU 2025-01 for the sole purpose of clarifying the effective date of ASU 2024-03. The amendment becomes effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. We are currently evaluating the impact upon adoption of the new standard on our consolidated financial statements or related disclosures.
Note 3. Real Estate Facilities
The following summarizes the activity in real estate facilities during the six months ended June 30, 2026 (in thousands):
Real estate facilities, cost |
|
|
|
|
Balance at December 31, 2025 |
|
$ |
|
|
Improvements and additions |
|
|
|
|
Acquisitions |
|
|
|
|
Disposition |
|
|
( |
) |
Impact of foreign exchange rate changes and other |
|
|
( |
) |
Balance at June 30, 2026 |
|
$ |
|
|
Accumulated depreciation |
|
|
|
|
Balance at December 31, 2025 |
|
$ |
( |
) |
Depreciation expense |
|
|
( |
) |
Disposition |
|
|
|
|
Impact of foreign exchange rate changes and other |
|
|
|
|
Balance at June 30, 2026 |
|
$ |
( |
) |
31
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Self Storage Facility Acquisitions
The following table summarizes the purchase price allocations for the real estate related assets acquired during the six months ended June 30, 2026 (in thousands):
|
|
Acquisition |
|
Occupancy Upon |
|
Real Estate |
|
|
|
|
|
|
|
|
2026 |
|
||||
Acquisition |
|
Date |
|
Acquisition (1) |
|
Assets |
|
|
Intangibles |
|
|
Total (2) |
|
|
Revenue (3) |
|
||||
Boiling Springs (4) |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
John B. White (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Main St. (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Potential Acquisition
As of August 7, 2026, we, through a wholly-owned subsidiary, were party to
We may assign this purchase and sale agreement to one of our Managed REITs or contribute such property to a joint venture.
Eminent Domain Proceedings
In May 2025, we learned that
On April 27, 2026, the North Carolina Department of Transportation (the “NC DOT”) took the majority of our Asheville III property and paid us approximately $
Subsequent to June 30, 2026, on July 27, 2026, the NC DOT took approximately
32
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Note 4. Third Party Platform Acquisition
Overview
On October 1, 2025, pursuant to a contribution agreement (the “Contribution Agreement”), our Operating Partnership acquired Argus, a third-party property management company that managed more than
Through the Contribution Agreement we assumed various amounts of current assets and liabilities, which were subject to working capital adjustments to the consideration otherwise provided and described above. The principal assets acquired were property management contracts and the related customer relationships, covering the management of approximately
Fair Value of Consideration Transferred
We accounted for the Contribution Agreement discussed above as a business combination under the acquisition method of accounting.
The estimated fair value of the consideration transferred on the date of the acquisition totaled approximately $
Estimated Fair Value of Consideration Transferred: |
|
|
|
|
Cash (1) |
|
$ |
|
|
OP Units |
|
|
|
|
Contingent earnout (2) |
|
|
|
|
Working capital adjustment payable |
|
|
|
|
Total Consideration Transferred |
|
$ |
|
|
The estimated fair value of the OP Units issued was determined using the Company’s closing stock price on the date of the transaction and further adjusted for an illiquidity discount of
33
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The estimated fair value of the contingent earnout was estimated based on a risk-adjusted forecast and a closed form Black Scholes call option model under a risk neutral framework that incorporates the payoff based on achievement of the requisite revenue thresholds. The portion of the earnout to be issued in OP Units was further adjusted for an illiquidity discount, as discussed immediately above.
These fair value measurements are based on significant inputs not observable in the market and thus represent a Level 3 measurement as discussed in Note 2 – Summary of Significant Accounting Policies. The key assumptions used in estimating the fair value of the contingent earnout consideration included (i) forecasted annual revenue during 2028, (ii) selection of risk-adjusted discount rates and (iii) a volatility assumption.
Allocation of Consideration
The consideration transferred pursuant to the Contribution Agreement was allocated to the assets acquired and liabilities assumed, based upon their estimated fair values as of the acquisition date.
Identifiable Assets Acquired at Fair Value: |
|
|
|
|
Cash and cash equivalents |
|
$ |
|
|
Equipment, furniture and fixtures |
|
|
|
|
Accounts receivable and advances |
|
|
|
|
Other assets |
|
|
|
|
Indemnification assets (1) |
|
|
|
|
Intangible asset - customer contracts and related relationships |
|
|
|
|
Total identifiable assets acquired |
|
$ |
|
|
|
|
|
|
|
Identifiable Liabilities Assumed at Fair Value: |
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
|
|
Other liabilities |
|
|
|
|
Deferred tax liabilities, net |
|
|
|
|
Total liabilities assumed |
|
$ |
|
|
|
|
|
|
|
Net identifiable assets acquired |
|
$ |
|
|
Goodwill (2) |
|
|
|
|
Net assets acquired |
|
$ |
|
|
The intangible assets acquired primarily consisted of an intangible asset related to the management contracts and customer relationships related to the approximately 220 properties that Argus managed as of October 1, 2025. The value of such was determined based on a discounted cash flow valuation of the projected cash flows of the acquired contracts. The deferred tax liability is the result of differences between the GAAP carrying value of certain amortizing assets and the carrying value for tax purposes.
The goodwill recognized is supported by several factors, including that Argus brings an established management platform and workforce of the more than 400 self storage professionals which provides for numerous benefits and opportunities, including continued organic growth, growth from new income streams and the ability to offer new services.
The results of the acquisition have been included in our consolidated statements of operations since the closing date of the transaction. See Note 11 – Segment Disclosures for more information about the results of operations attributable to the Third Party Platform Acquisition since closing.
34
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Note 5. Pro Forma Financial Information
We acquired our Third Party Platform effective October 1, 2025, which was accounted for as a business combination. The following pro forma information for the three and six months ended June 30, 2026 and 2025 has been prepared to give effect to the acquisition as if the acquisition occurred on January 1, 2024. Net income was excluded as it was impracticable to report expenses due to the lack of historical accrual basis accounting.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Pro forma total revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Note 6. Investments in Unconsolidated Real Estate Ventures
Nantucket Joint Venture
On July 18, 2024, we entered into a joint venture arrangement with an unaffiliated third party to develop a self storage property in Nantucket, Massachusetts (the “Nantucket Joint Venture”). On such date we agreed to purchase an indirect minority ownership in the property. This property became operational in late December 2025 and we serve as the property manager of this self storage property. This investment is accounted for pursuant to the equity method of accounting as we have the ability to exercise influence, but not control.
As of June 30, 2026 and December 31, 2025, the carrying value of this investment was approximately $
For the three months ended June 30, 2026 and 2025, we recorded a net aggregate loss of approximately $
SmartCentres Joint Ventures
We are party to joint venture agreements with a subsidiary of SmartCentres Real Estate Investment Trust (“SmartCentres”), an unaffiliated third party, to acquire, develop, and operate self storage facilities. In connection with such agreements, as
For the three months ended June 30, 2026 and 2025, we recorded net aggregate income of approximately $
35
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The following table summarizes our
|
|
Date Real Estate |
|
Carrying Value of Investment as of |
|
|||||
|
|
Venture Became |
|
June 30, |
|
|
December 31, |
|
||
Canadian JV Property |
|
Operational |
|
2026 |
|
|
2025 |
|
||
Dupont (1) |
|
|
$ |
|
|
$ |
|
|||
East York (1) |
|
|
|
|
|
|
|
|||
Brampton (1) |
|
|
|
|
|
|
|
|||
Vaughan (1) |
|
|
|
|
|
|
|
|||
Oshawa (1) |
|
|
|
|
|
|
|
|||
Scarborough (1) |
|
|
|
|
|
|
|
|||
Aurora (1) |
|
|
|
|
|
|
|
|||
Kingspoint (1) |
|
|
|
|
|
|
|
|||
Whitby (1) |
|
|
|
|
|
|
|
|||
Markham (1) |
|
|
|
|
|
|
|
|||
Regent (2) |
|
|
|
|
|
|
|
|||
Allard (2) |
|
|
|
|
|
|
|
|||
Finch (2) |
|
|
|
|
|
|
|
|||
127 Ave. (3) |
|
|
|
|
|
|
|
|||
|
|
|
|
$ |
|
|
$ |
|
||
As of June 30, 2026, we had ownership interests in the Canadian JV Properties and the Nantucket Joint Venture (collectively, the “JV Properties”).
RBC JV Term Loan III
On October 31, 2025, 10 of our joint ventures with SmartCentres closed on a $
As of June 30, 2026 and December 31, 2025, there was approximately $
36
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
RBC JV Term Loan II
On July 17, 2024, three of our joint ventures with SmartCentres closed on a $
As discussed above, the RBC JV Term Loan II was refinanced on October 31, 2025. As such, as of June 30, 2026 and December 31, 2025, there was no balance outstanding on the RBC JV Term Loan II.
RBC JV Term Loan
On November 3, 2023, five of our joint ventures with SmartCentres closed on a $
As discussed above, the RBC JV Term Loan was refinanced on October 31, 2025. As such, as of June 30, 2026 and December 31, 2025, there was no balance outstanding on the RBC JV Term Loan.
SmartCentres Financings
Through a series of prior transactions, we, through joint venture partnerships with SmartCentres, became party to two master mortgage commitment agreements (the “SmartCentres Financings”) with SmartCentres Storage Finance LP (the “SmartCentres Lender”). The SmartCentres Lender is an affiliate of SmartCentres.
As a result of the RBC JV Term Loan and RBC JV Term Loan II refinancings, and the RBC JV Term Loan III financing transaction during the year ended December 31, 2025 discussed above, only one borrower remained on the SmartCentres Financings, the Markham property. Interest on the SmartCentres Financings was incurred at a variable annual rate equal to the aggregate of: (i) the CORRA (as defined in Note 7 – Debt) rate, (ii) an adjustment of approximately
On October 31, 2025, the SmartCentres Financings (the then outstanding balance on the Markham property of approximately $
37
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Note 7. Debt
Our debt is summarized as follows (dollars in thousands):
|
|
June 30, |
|
|
December 31, |
|
|
Interest |
|
Maturity |
||
Loan |
|
2026 |
|
|
2025 |
|
|
Rate (1) |
|
Date (1) |
||
KeyBank CMBS Loan (2) |
|
$ |
|
|
$ |
|
|
|
||||
Ladera Office Loan |
|
|
|
|
|
|
|
|
||||
2027 Ladera Ranch Loan |
|
|
|
|
|
|
|
|
||||
2028 Canadian Notes (3) |
|
|
|
|
|
|
|
|
||||
Kelowna Canadian Property Loan (3) |
|
|
|
|
|
|
|
|
||||
2028 Canadian Term Loan (3) (4) |
|
|
|
|
|
|
|
|
||||
CMBS Loan (5) |
|
|
|
|
|
|
|
|
||||
SST IV CMBS Loan (6) |
|
|
|
|
|
|
|
|
||||
Credit Facility |
|
|
|
|
|
|
|
|
||||
2030 Canadian Notes (3) |
|
|
|
|
|
|
|
|
||||
2032 Private Placement Notes |
|
|
|
|
|
|
|
|
||||
Houston Property Loan |
|
|
|
|
|
|
|
|
||||
2024 Credit Facility |
|
|
|
|
|
|
|
|
|
|
||
Total debt principal outstanding |
|
$ |
|
|
$ |
|
|
|
|
|
||
Discount on secured debt, net |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Debt issuance costs, net |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Total debt, net |
|
$ |
|
|
$ |
|
|
|
|
|
||
The weighted average interest rate on our consolidated debt, excluding the impact of our interest rate hedging activities, as applicable, as of June 30, 2026 and December 31, 2025 was approximately
38
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The following is a schedule of maturities, including required principal amortization payments, for debt outstanding as of June 30, 2026 (in thousands):
2026 (1) |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 (1) |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
Credit Facility
On February 18, 2026, we, through our Operating Partnership (the “Borrower”), entered into a second amended and restated credit agreement with KeyBank, National Association, as administrative agent, certain others listed as joint book runners, joint lead arrangers, syndication agents and documentation agents, and certain other lenders party thereto (the “Credit Agreement”).
The Credit Agreement provides for a senior unsecured revolving credit facility (the “Credit Facility”) in an aggregate principal amount of $
In connection with entering into the Credit Agreement, certain lenders under the 2024 Credit Facility exited the arrangement. We recognized approximately $
The maturity date of the Credit Facility is
39
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Amounts borrowed under the Credit Facility bear interest based on the type of borrowing (either Base Rate Loans, secured overnight financing rate (“SOFR”) Loans, or Canadian Overnight Repo Rate Average (“CORRA”) Loans, each as defined in the Credit Agreement) and vary based upon our consolidated leverage ratio or credit rating. Base Rate Loans bear interest at the lesser of (x) the Base Rate (as defined in the Credit Agreement) plus the applicable rate, or (y) the maximum rate. SOFR Loans that are Daily Simple SOFR Loans bear interest at the lesser of (x) Daily Simple SOFR (as defined in the Credit Agreement) plus the applicable rate, or (y) the maximum rate. SOFR Loans that are Term SOFR Loans bear interest at the lesser of (x) Term SOFR (as defined in the Credit Agreement) for the interest period in effect plus the applicable rate, or (y) the maximum rate. CORRA Loans bear interest at the lesser of (x) Daily Simple CORRA (as defined in the Credit Agreement) plus the applicable rate, or (y) the maximum rate. Until we achieve an investment grade credit rating, the corresponding applicable rate varies between
The Credit Facility is fully recourse, jointly and severally, to us, the Borrower, and certain of our subsidiaries (the “Subsidiary Guarantors”). In connection with the Credit Facility, each of us, the Borrower and the Subsidiary Guarantors executed guarantees in favor of the lenders. It is an event of default under the Credit Facility if (a) there is a payment default by us, the Borrower or any Subsidiary Guarantor under any recourse debt for borrowed money of at least $
The Credit Facility is unsecured. The outstanding 2032 Private Placement Notes (as defined below), the outstanding 2028 Canadian Notes (as defined below) and the outstanding 2030 Canadian Notes (as defined below), previously issued by us, remain pari passu with the Credit Facility.
The Credit Facility contains certain customary representations and warranties, affirmative, negative and financial covenants, borrowing conditions, and events of default. In particular, the financial covenants imposed on us include: a maximum leverage ratio, a minimum fixed charge coverage ratio, a minimum tangible net worth, certain limits on both secured debt and secured recourse debt, a ratio of secured recourse debt to total asset value, an unencumbered pool leverage ratio, and an unsecured interest coverage ratio. If an event of default occurs and continues, we are subject to certain actions by the administrative agent, including, without limitation, the acceleration of repayment of all amounts outstanding under the Credit Facility.
As of June 30, 2026, based on the aforementioned information and borrowing base calculations, we had the ability to draw up to an additional approximately $
2030 Canadian Notes
On September 24, 2025, we, as guarantor, and our Operating Partnership, as issuer, sold on a private placement basis in Canada, an aggregate principal amount of $
The 2030 Canadian Notes were offered pursuant to an agency agreement entered into among us, our Operating Partnership, the Subsidiary Guarantors, BMO Nesbitt Burns Inc., National Bank Financial Inc., Scotia Capital Inc. and RBC Dominion Securities Inc. The sale and purchase of the 2030 Canadian Notes occurred on September 24, 2025.
The 2030 Canadian Notes were issued pursuant to the Base Indenture, as amended and supplemented by a second supplemental indenture to the Base Indenture among us, our Operating Partnership and the Subsidiary Guarantors (the “Second Supplemental Indenture” and together with the Base Indenture, the “Second Indenture”).
The 2030 Canadian Notes bear interest at a rate of approximately
40
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Our Operating Partnership will be permitted to redeem at any time all, or from time to time any part of, the 2030 Canadian Notes then outstanding at a redemption price equal to the greater of (i) 100% of the principal amount so prepaid and (ii) the Canada Yield Price, together in each case, with accrued and unpaid interest, if any, to the date fixed for redemption. The “Canada Yield Price” means a price equal to the price of a note calculated to provide a yield to the maturity date, compounded semi-annually and calculated in accordance with generally accepted financial practice, equal to the government of Canada yield plus
The Second Indenture contains certain customary representations and warranties, affirmative, negative and financial covenants, and events of default. In addition, if an event of default occurs and is continuing, the trustee may, in its discretion, and will, upon receiving instruction from the holders of
The 2030 Canadian Notes were issued on a pari passu basis with our 2024 Credit Facility (as defined below), our 2028 Canadian Notes and the 2032 Private Placement Notes (as defined below), and as such, we and the Subsidiary Guarantors under such loans have fully and unconditionally guaranteed our Operating Partnership’s obligations under the 2030 Canadian Notes. The Second Indenture requires any of our subsidiaries that incurs or guarantees indebtedness under the other pari passu loans in the future to also provide a note guarantee in favor of the holders of the 2030 Canadian Notes.
2028 Canadian Notes
On June 11, 2025, we, as guarantor, and our Operating Partnership, as issuer, sold on a private placement basis in Canada, an aggregate principal amount of $
The 2028 Canadian Notes were offered pursuant to an agency agreement entered into among us, our Operating Partnership, the Subsidiary Guarantors (defined below), BMO Nesbitt Burns Inc., National Bank Financial Inc., Scotia Capital Inc. and RBC Dominion Securities Inc. The sale and purchase of the 2028 Canadian Notes occurred on June 16, 2025.
The 2028 Canadian Notes were issued pursuant to an indenture (the “Base Indenture”) among us, our Operating Partnership and Computershare Trust Company of Canada (the “Trustee”), as amended and supplemented by a first supplemental indenture to the Base Indenture among us, our Operating Partnership and the Subsidiary Guarantors (the “First Supplemental Indenture” and together with the Base Indenture, the “First Indenture”).
The 2028 Canadian Notes bear interest at a rate of approximately
Our Operating Partnership will be permitted to redeem at any time all, or from time to time any part of, the 2028 Canadian Notes then outstanding at a redemption price equal to the greater of (i) 100% of the principal amount so prepaid and (ii) the Canada Yield Price, together in each case, with accrued and unpaid interest, if any, to the date fixed for redemption. The “Canada Yield Price” means a price equal to the price of a note calculated to provide a yield to the maturity date, compounded semi-annually and calculated in accordance with generally accepted financial practice, equal to the government of Canada yield plus
41
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The First Indenture contains certain customary representations and warranties, affirmative, negative and financial covenants, and events of default. In addition, if an event of default occurs and is continuing, the trustee may, in its discretion, and will, upon receiving instruction from the holders of
The 2028 Canadian Notes were issued on a pari passu basis with our 2024 Credit Facility (as defined below) with KeyBank, our 2030 Canadian Notes, the 2032 Private Placement Notes (as defined below), and as such, we and each of our subsidiaries that have incurred or guaranteed indebtedness (the “Subsidiary Guarantors”) under such loans have fully and unconditionally guaranteed our Operating Partnership’s obligations under the 2028 Canadian Notes. The First Indenture requires any of our subsidiaries that incurs or guarantees indebtedness under the other pari passu loans in the future to also provide a note guarantee in favor of the holders of the 2028 Canadian Notes.
Kelowna Property Loan
In connection with the acquisition of the Kelowna Property on April 15, 2025, we assumed a loan from the seller in the amount of approximately $
2027 Ladera Ranch Loan
On December 20, 2024, in connection with our acquisition of our property located in Ladera Ranch, CA (the “Ladera Ranch Property”) from Extra Space Storage LP, we, through a wholly owned subsidiary, entered into a loan with Extra Space Storage LP, as lender, with a loan amount of $
See Note 8 – Preferred Equity for additional information regarding our other pre-existing relationship we had with this seller/lender.
Houston Property Loan
In connection with the acquisition of the Holzwarth, Houston Property on June 17, 2025, we assumed a loan from the seller in the amount of approximately $
42
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
2032 Private Placement Notes
On April 19, 2022, we as guarantor, and our Operating Partnership as issuer, entered into a note purchase agreement (the “Note Purchase Agreement”), which provides for the private placement of $
Interest payable on the 2032 Private Placement Notes were originally subject to a prospective 75 basis points increase, if, as of March 31, 2023, the ratio of total indebtedness to earnings before interest, taxes, depreciation, and amortization (the “Total Leverage Ratio”) of the Company and its subsidiaries, on a consolidated basis, was greater than
As of March 31, 2023, such Total Leverage Ratio Event occurred, and our 2032 Private Placement Notes began accruing interest at a rate of
We are permitted to prepay at any time all, or from time to time, any part of the 2032 Private Placement Notes in amounts not less than
The Note Purchase Agreement contains certain customary representations and warranties, affirmative, negative and financial covenants, and events of default that were substantially similar to the 2024 Credit Facility (as defined below). The 2032 Private Placement Notes were issued on a pari passu basis with the previously existing Credit Facility, and are pari passu with the Credit Facility. As described above, as a result of the Security Interest Termination Event, on April 17, 2025, KeyBank released the pledges of the Subsidiary Guarantors pursuant to the Debt Agreements, and each of the Credit Facility and the 2032 Private Placement Notes, respectively, became unsecured. Prior to such event, the Company and Subsidiary Guarantors fully and unconditionally guaranteed our Operating Partnership’s obligations under the 2032 Private Placement Notes.
On April 26, 2024, we amended the Note Purchase Agreement dated April 19, 2022 (the “NPA Amendment”). The primary purpose of the NPA Amendment was to make certain conforming changes between the Note Purchase Agreement and our then recently amended and restated revolving credit facility, the 2024 Credit Facility (as defined below). In particular, the NPA Amendment conformed certain of the definitions related to the financial tests that we are required to maintain, as well as certain of the property pool covenants we are required to satisfy, in the Note Purchase Agreement during the term thereof to those in the 2024 Credit Facility (as defined below).
Former Credit Facility
On February 22, 2024, we, through the Borrower, entered into an amended and restated revolving credit facility with KeyBank, National Association, as administrative agent and collateral agent, certain others listed as joint book runners, joint lead arrangers, syndication agents and documentation agents, and certain other lenders party thereto, (the “2024 Credit Facility”). The 2024 Credit Facility had a maturity date of February 22, 2027.
43
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The aggregate commitment of the 2024 Credit Facility was originally $
The maturity date of the 2024 Credit Facility was
As of December 31, 2025, borrowings under the 2024 Credit Facility only bore interest based on Daily Simple SOFR. The rate spread above Daily Simple SOFR at which the 2024 Credit Facility incurred interest was subject to increase based on the consolidated leverage ratio. There were six leverage tiers under the 2024 Credit Facility in effect, with the highest tier in effect when leverage is above
The 2024 Credit Facility contained certain customary representations and warranties, affirmative, negative and financial covenants, borrowing conditions, and events of default.
On April 11, 2025, we reduced the total commitment available to us under the 2024 Credit Facility from $
On February 18, 2026, the 2024 Credit Facility was recast (as discussed above). The Borrower’s outstanding balance under the 2024 Credit Facility of approximately $
Note 8. Preferred Equity
Series A Convertible Preferred Stock
On October 29, 2019 (the “Commitment Date”), we entered into a preferred stock purchase agreement (the “Purchase Agreement”) with Extra Space Storage LP (the “Investor”), a subsidiary of Extra Space Storage Inc. (NYSE: EXR), pursuant to which the Investor committed to purchase up to $
The shares of Series A Convertible Preferred Stock ranked senior to all other shares of our capital stock, including our common stock, with respect to rights to receive dividends and to participate in distributions or payments upon any voluntary or involuntary liquidation, dissolution or winding up of the Company. Dividends payable on each share of Series A Convertible Preferred Stock were initially equal to a rate of
44
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
In connection with the Underwritten Public Offering, discussed in Note 1 – Organization, all issued and outstanding shares of our Series A Convertible Preferred Stock were redeemed on April 4, 2025, using net proceeds from our Underwritten Public Offering which closed on April 3, 2025. We paid the Liquidation Amount of approximately $
Note 9. Derivative Instruments
Interest Rate Derivatives
Our objectives in using interest rate derivatives are to add stability to our net income (loss) and to manage our exposure to interest rate movements. To accomplish this objective, we have used interest rate swaps and caps as part of our interest rate risk management strategy.
For interest rate derivatives designated and qualified as a hedge for GAAP purposes, the change in the fair value of the effective portion of the derivative is recorded in accumulated other comprehensive income (loss) (“AOCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in AOCI related to such derivatives will be reclassified to interest expense as interest payments are made on our variable rate debt. In addition, we classify cash flows from qualifying cash flow hedging relationships in the same category as the cash flows from the hedged items in our consolidated statements of cash flows. We do not use interest rate derivatives for trading or speculative purposes.
Interest rate derivatives not designated as hedges for GAAP are not speculative and are used to manage our exposure to interest rate movements and other identified risks, but we have elected not to apply hedge accounting. Changes in the fair value of interest rate derivatives not designated in hedging relationships are recorded in other income (expense) in our consolidated statements of operations.
In connection with the 2027 NBC loan borrowing, on March 12, 2024, we entered into a CORRA Swap with National Bank of Canada with an initial notional amount of CAD $
On May 1, 2024, to hedge our exposure to potentially rising interest rates, we entered into three SOFR interest rate caps for a total of approximately $
On December 30, 2024, in relation to the outstanding balance on a loan with KeyBank (the “2025 KeyBank Acquisition Facility”), we entered into a SOFR interest rate cap, which capped SOFR at
On March 4, 2025, in relation to the outstanding balance on our 2025 KeyBank Acquisition Facility, we entered into a SOFR interest rate cap, which capped SOFR at
45
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
On June 16, 2025, we terminated a $
In connection with our 2028 Canadian Notes issuance, on May 29, 2025 we entered into a government of Canada treasury rate forward with a notional amount of $
As of June 30, 2026 and December 31, 2025, we held no interest rate derivatives.
Foreign Currency Hedges
Our objectives in using foreign currency derivatives are to add stability to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar and to manage our exposure to exchange rate movements. To accomplish this objective, we have used foreign currency forwards and foreign currency options as part of our exchange rate risk management strategy. A foreign currency forward contract is a commitment to deliver a certain amount of currency at a certain price on a specific date in the future. By entering into the forward contract and holding it to maturity, we are locked into a future currency exchange rate in an amount equal to and for the term of the forward contract. A foreign currency option contract is a commitment by the seller of the option to deliver, solely at the option of the buyer, a certain amount of currency at a certain price on a specific date.
For derivatives designated as net investment hedges for GAAP purposes, the changes in the fair value of the derivatives are reported in AOCI. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated. The change in the value of the designated portion of our settled and unsettled foreign currency hedges is recorded net in foreign currency hedge contract gain (loss) in our consolidated statements of comprehensive income (loss) in the related period.
On December 30, 2024, in an effort to hedge the cash generated at our Canadian properties, we entered into four new foreign currency forwards: (i) one such hedge had a notional amount of $
On February 28, 2025, we entered into a similar hedge with a notional amount of $
On May 29, 2025, we entered into a similar hedge with a notional amount of $
On April 11, 2025, we settled a net investment hedge FX Forward, receiving approximately $
As of June 30, 2026 and December 31, 2025, we held no foreign currency hedges.
The change in the value of the portion of our settled and unsettled foreign currency forwards that are not designated for hedge accounting for GAAP was recorded in other income (expense) in our consolidated statements of operations and represented a loss of approximately $
46
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The following table presents the effect of our derivative financial instruments designated as a hedge for GAAP purposes on our consolidated statements of operations for the periods presented (in thousands):
|
|
Gain (loss) recognized in OCI for the three months ended June 30, |
|
|
Location of amounts |
|
Loss reclassified from OCI for the three months ended June 30, |
|
|
Location of gain/(loss) associated with missed forecast |
|
Amount of loss recognized in income on derivative (reclassifications of missed forecasted transactions) for the three months ended June 30, |
|
|||||||||||||||
Type |
|
2026 |
|
|
2025 |
|
|
into income |
|
2026 |
|
|
2025 |
|
|
transaction |
|
2026 |
|
|
2025 |
|
||||||
Interest Rate Swaps |
|
$ |
— |
|
|
$ |
|
|
Interest expense |
|
$ |
— |
|
|
$ |
( |
) |
|
Other, net |
|
$ |
— |
|
|
$ |
( |
) |
|
Interest Rate Caps |
|
|
— |
|
|
|
( |
) |
|
Interest expense |
|
|
— |
|
|
|
( |
) |
|
Other, net |
|
|
— |
|
|
|
( |
) |
Foreign Currency Forwards |
|
|
— |
|
|
|
( |
) |
|
N/A |
|
|
— |
|
|
|
— |
|
|
N/A |
|
|
— |
|
|
|
— |
|
|
|
$ |
— |
|
|
$ |
( |
) |
|
|
|
$ |
— |
|
|
$ |
( |
) |
|
|
|
$ |
— |
|
|
$ |
( |
) |
|
|
Loss recognized in OCI for the six months ended June 30, |
|
|
Location of amounts |
|
Loss reclassified from OCI for the six months ended June 30, |
|
|
Location of gain/(loss) associated with missed forecast transaction |
|
Amount of loss recognized in income on derivative (reclassifications of missed forecasted transactions) for the six months ended June 30, |
|
|||||||||||||||
Type |
|
2026 |
|
|
2025 |
|
|
into income |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
||||||
Interest Rate Swaps |
|
$ |
— |
|
|
$ |
( |
) |
|
Interest expense |
|
$ |
— |
|
|
$ |
( |
) |
|
Other, net |
|
$ |
— |
|
|
$ |
( |
) |
Interest Rate Caps |
|
|
— |
|
|
|
( |
) |
|
Interest expense |
|
|
— |
|
|
|
( |
) |
|
Other, net |
|
|
— |
|
|
|
( |
) |
Foreign Currency Forwards |
|
|
— |
|
|
|
( |
) |
|
N/A |
|
|
— |
|
|
|
— |
|
|
N/A |
|
|
— |
|
|
|
— |
|
|
|
$ |
— |
|
|
$ |
( |
) |
|
|
|
$ |
— |
|
|
$ |
( |
) |
|
|
|
$ |
— |
|
|
$ |
( |
) |
Note 10. Income Taxes
As a REIT, we generally will not be subject to U.S. federal income tax on taxable income that we distribute to our stockholders. However, certain of our consolidated subsidiaries are taxable REIT subsidiaries, which are subject to federal, state and foreign income taxes. We have filed an election to treat our primary TRS as a taxable REIT subsidiary effective January 1, 2014. In general, our TRS performs additional services for our customers and provides advisory and property management services to the Managed REITs and otherwise generally engages in non-real estate related business. The TRS is subject to corporate U.S. federal and state income tax. Additionally, we own and operate a number of self storage properties located throughout Canada, the income of which is generally subject to income taxes under the laws of Canada.
47
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The following is a summary of our income tax expense (benefit) for the periods presented (in thousands):
|
|
Three Months Ended June 30, 2026 |
|
|||||||||||||
|
|
Federal |
|
|
State |
|
|
Canadian |
|
|
Total |
|
||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended June 30, 2025 |
|
|||||||||||||
|
|
Federal |
|
|
State |
|
|
Canadian |
|
|
Total |
|
||||
Current |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
Deferred |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Six Months Ended June 30, 2026 |
|
|||||||||||||
|
|
Federal |
|
|
State |
|
|
Canadian |
|
|
Total |
|
||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Six Months Ended June 30, 2025 |
|
|||||||||||||
|
|
Federal |
|
|
State |
|
|
Canadian |
|
|
Total |
|
||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The major sources of temporary differences that give rise to the deferred tax effects are shown below (in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Deferred tax liabilities: |
|
|
|
|
|
|
||
Canadian real estate |
|
$ |
( |
) |
|
$ |
( |
) |
Intangible contract assets |
|
|
( |
) |
|
|
( |
) |
Total deferred tax liability |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Deferred tax assets: |
|
|
|
|
|
|
||
Canadian real estate and non-capital losses (1) |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total deferred tax assets |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Valuation allowance |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Net deferred tax liabilities |
|
$ |
( |
) |
|
$ |
( |
) |
48
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The Canadian non-capital losses expire between
As of June 30, 2026 and December 31, 2025, we had
Note 11. Segment Disclosures
We operate in
The chief operating decision maker (“CODM”) is our Chief Executive Officer.
49
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The following tables summarize information for the reportable segments for the periods presented (in thousands):
|
|
Three Months Ended June 30, 2026 |
|
|||||||||||||
|
|
|
|
|
Managed |
|
|
Corporate |
|
|
|
|
||||
|
|
Self Storage |
|
|
Platform |
|
|
and Other |
|
|
Total |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Self storage rental revenue |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Ancillary operating revenue |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Managed Platform revenue (1) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Reimbursable costs from Managed Platform (2) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total revenues |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property taxes |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Payroll |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Advertising and other |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Repairs & maintenance |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Utilities |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Property insurance |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Administrative and professional |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Total property operating expenses |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Managed Platform expenses (3) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Reimbursable costs from Managed Platform (2) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Segment operating income (4) |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Other operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative (5) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Depreciation |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Intangible amortization expense |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Acquisition expenses |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Contingent earnout adjustment |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on disposition of real estate |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Income (loss) from operations |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity in losses from investments in unconsolidated real estate ventures |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Equity in losses from investments in Managed REITs |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Investment income, net |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Other, net |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income tax (expense) benefit |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Net income (loss) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
50
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
|
|
Three Months Ended June 30, 2025 |
|
|||||||||||||
|
|
|
|
|
Managed |
|
|
Corporate |
|
|
|
|
||||
|
|
Self Storage |
|
|
Platform |
|
|
and Other |
|
|
Total |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Self storage rental revenue |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Ancillary operating revenue |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Managed Platform revenue |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Reimbursable costs from Managed Platform |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total revenues |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property taxes |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Payroll (1) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Advertising and other |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Repairs & maintenance |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Utilities |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Property insurance |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Administrative and professional |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Total property operating expenses |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Managed Platform expenses (1) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Reimbursable costs from Managed Platform |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Segment operating income |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Other operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative (1) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Depreciation |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Intangible amortization expense |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Acquisition expenses |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Total other operating expenses |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Income (loss) from operations |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity in losses from investments in unconsolidated real estate ventures |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Equity in losses from investments in Managed REITs |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Other, net |
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Investment income, net |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Interest expense |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Loss on debt extinguishment |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Income tax (expense) benefit |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Net income (loss) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
||
51
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
|
|
Six Months Ended June 30, 2026 |
|
|||||||||||||
|
|
|
|
|
Managed |
|
|
Corporate |
|
|
|
|
||||
|
|
Self Storage |
|
|
Platform |
|
|
and Other |
|
|
Total |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Self storage rental revenue |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Ancillary operating revenue |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Managed Platform revenue (1) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Reimbursable costs from Managed Platform (2) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total revenues |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property taxes |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Payroll |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Advertising and other |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Repairs & maintenance |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Utilities |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Property insurance |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Administrative and professional |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Total property operating expenses |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Managed Platform expenses (3) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Reimbursable costs from Managed Platform (2) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Segment operating income (4) |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Other operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative (5) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Depreciation |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Intangible amortization expense |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Acquisition expenses |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Contingent earnout adjustment |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on disposition of real estate |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Income (loss) from operations |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity in losses from investments in unconsolidated real estate ventures |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Equity in losses from investments in Managed REITs |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Investment income, net |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Other, net |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Loss on debt extinguishment |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Income tax (expense) benefit |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Net income (loss) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
52
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
|
|
Six Months Ended June 30, 2025 |
|
|||||||||||||
|
|
|
|
|
Managed |
|
|
Corporate |
|
|
|
|
||||
|
|
Self Storage |
|
|
Platform |
|
|
and Other |
|
|
Total |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Self storage rental revenue |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Ancillary operating revenue |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Managed Platform revenue |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Reimbursable costs from Managed Platform |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total revenues |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property taxes |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Payroll (1) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Advertising and other |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Repairs & maintenance |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Utilities |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Property insurance |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Administrative and professional |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Total property operating expenses |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Managed Platform expenses (1) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Reimbursable costs from Managed Platform |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Segment operating income |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Other operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative (1) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Depreciation |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Intangible amortization expense |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Acquisition expenses |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Total other operating expenses |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Income (loss) from operations |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity in losses from investments in unconsolidated real estate ventures |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Equity in losses from investments in Managed REITs |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Other, net |
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Investment income, net |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Interest expense |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Loss on debt extinguishment |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Income tax expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net (loss) income |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
||
53
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The following table summarizes our total assets by segment (in thousands):
Segments |
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Self Storage (1) |
|
$ |
|
|
$ |
|
||
Managed Platform (2) |
|
|
|
|
|
|
||
Corporate and Other |
|
|
|
|
|
|
||
Total assets (3) |
|
$ |
|
|
$ |
|
||
As of June 30, 2026 and December 31, 2025, approximately $
As of June 30, 2026 and December 31, 2025, approximately $
For the three months ended June 30, 2026 and 2025, we recorded net aggregate income of approximately $
54
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Note 12. Related Party Transactions
Self Administration Transaction
On June 28, 2019, we, our Operating Partnership and our TRS entered into a series of transactions, agreements, and amendments to our existing agreements and arrangements with our then-sponsor, SAM, and SmartStop OP Holdings, LLC (“SS OP Holdings”), a subsidiary of SAM, pursuant to which, effective June 28, 2019, we acquired the self storage advisory, asset management and property management businesses and certain joint venture interests of SAM, along with certain other assets of SAM (collectively, the “Self Administration Transaction”).
As a result of the Self Administration Transaction, we became self-managed and succeeded to the advisory, asset management and property management businesses and certain joint ventures previously in place for us, and we acquired the internal capability to originate, structure and manage additional future self storage investment products which would be sponsored by SmartStop REIT Advisors, LLC (“SRA”), our indirect subsidiary.
Our Chief Executive Officer, who is also the Chairman of our board of directors, holds ownership interests in and is an officer of SAM, and other affiliated entities. Previously, certain of our executive officers held ownership interests in and/or were officers of SAM, and other affiliated entities. Accordingly, any agreements or transactions we have entered into with such entities may present a conflict of interest. None of SAM and its affiliates or our directors or executive officers receive any compensation, fees or reimbursements from our Managed REITs, other than with respect to fees and reimbursements in accordance with the Administrative Services Agreement (defined below) and the now-terminated transfer agent agreement, which agreement was terminated effective April 20, 2024, or as otherwise described in this section.
Advisory Agreement Fees
Our Managed REIT advisor subsidiaries are or were entitled to receive various fees and expense reimbursements under the terms of the SST VI, SST X, and SSGT III advisory agreements, each of which are described below.
SST VI Advisory Agreement
The SST VI advisor provides acquisition and advisory services to SST VI pursuant to an advisory agreement, as amended (the “SST VI Advisory Agreement”).
Pursuant to the SST VI Advisory Agreement, the SST VI advisor receives acquisition fees equal to
A subsidiary of our Operating Partnership may also be potentially entitled to a subordinated distribution through its ownership of a special limited partnership in SST VI OP if SST VI (1) lists its shares of common stock on a national exchange, (2) terminates the SST VI Advisory Agreement, (3) liquidates its portfolio, or (4) merges with another entity or enters into an Extraordinary Transaction, as defined in SST VI OP’s limited partnership agreement.
The SST VI Advisory Agreement provides for reimbursement of the SST VI advisor’s direct and indirect costs of providing administrative and management services to SST VI. Beginning four fiscal quarters after commencement of SST VI's public offering, which was declared effective March 17, 2022, the SST VI advisor is required to pay or reimburse SST VI the amount by which SST VI’s aggregate annual operating expenses, as defined, exceed the greater of 2% of SST VI’s average invested assets or 25% of SST VI’s net income, as defined, unless a majority of SST VI’s independent directors determine that such excess expenses were justified based on unusual and non-recurring factors.
55
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
On June 18, 2025, we and various affiliated entities, entered into a Separation and Settlement Agreement (the “Separation Agreement”) with Pacific Oak Holding Group, LLC (“POHG”) and its subsidiary Pacific Oak Capital Markets, LLC, the former dealer manager for SST VI, SSGT III and other affiliated programs (the “Former Dealer Manager”), resulting in (1) the repurchase of the
The $
Subsequent to and as a result of the POHG termination, on June 12, 2025, we, through a subsidiary of our TRS, entered into a new retail distribution agreement with Orchard Securities, LLC (“Orchard”). Through this relationship, Orchard will distribute certain of our Managed REIT investment programs, including DST offerings and other Managed REIT offerings. We pay Orchard certain fees and expenses as part of the engagement. On September 30, 2025, SST VI commenced a private offering of up to $
SSGT III Advisory Agreement
The SSGT III advisor provides acquisition and advisory services to SSGT III pursuant to an advisory agreement, as amended (the “SSGT III Advisory Agreement”).
Pursuant to the SSGT III Advisory Agreement, the SSGT III advisor will receive acquisition fees equal to
A subsidiary of SSGT III is the sponsor of DSTs and a wholly owned SSGT III entity also operates the related properties pursuant to a master lease with the respective DST. For certain of such DSTs, upon the successful syndication of the DST offering we will receive an additional
Pursuant to the Separation Agreement, POHG is no longer entitled to receive
A subsidiary of our Operating Partnership may also be potentially entitled to various subordinated distributions through its ownership of a special limited partnership in SSGT III’s operating partnership agreement if SSGT III (1) lists its shares of common stock on a national exchange, (2) terminates the SSGT III Advisory Agreement, (3) liquidates its portfolio, or (4) merges with another entity or enters into an Extraordinary Transaction, as defined in the SSGT III operating partnership agreement.
56
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
SST X Advisory Agreement
The SST X advisor provides acquisition and advisory services to SST X pursuant to an advisory agreement initially dated January 31, 2025 (as amended to date, the “SST X Advisory Agreement”). In connection with the SST X private placement offering, which initially commenced on January 31, 2025, the SST X advisor has and will continue to pay for certain organization and offering expenses (other than selling commissions and shareholder servicing fees) and the SST X advisor may pay for certain other operating expenses incurred by SST X through June 30, 2027. SST X is not required to begin to repay such costs until July 1, 2027, at which point SST X must reimburse these costs over 60 months.
Pursuant to the SST X Advisory Agreement, the SST X advisor will not receive acquisition fees, but is entitled to reimbursement of acquisition expenses that the SST X advisor incurs. The SST X advisor is not entitled to receive any disposition fees. The SST X advisor is entitled to a management fee equal to (i)
In addition, a subsidiary of our Operating Partnership holds a special performance participation interest in the SST X Operating Partnership that entitles it to receive an allocation from the SST X Operating Partnership equal to
As of June 30, 2026 and December 31, 2025, SST X had sold approximately $
On January 23, 2026, SST X relaunched a private offering of up to $
Managed REIT Property Management Agreements
Our indirect subsidiaries, SS Growth Property Management III, LLC, Strategic Storage Property Management VI, LLC, and Strategic Storage Property Management X, LLC, (collectively the “Managed REITs’ Property Managers”), are entitled to receive fees for their services in managing the properties wholly or partially owned by the Managed REITs pursuant to property management agreements entered into between the owner of the property and the applicable Managed REIT’s Property Manager.
57
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The Managed REITs’ Property Managers receive a property management fee equal to
The Managed REITs’ Property Managers are entitled to a construction management fee equal to
Summary of Fees and Revenue Related to the Managed REITs
Pursuant to the terms of the various agreements described above for the Managed REITs, the following summarizes the related party fees for the periods presented (in thousands):
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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Managed Platform Revenues |
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2026 |
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2025 |
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2026 |
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2025 |
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Asset Management Fees: |
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SST VI |
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$ |
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$ |
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$ |
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$ |
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SSGT III |
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SST X |
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Total Asset Management Fees |
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Property Management Fees: |
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SST VI |
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SSGT III |
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SST X |
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JV Properties |
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Third Party Platform (1) |
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Total Property Management Fees |
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Tenant Protection Program Fees: |
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SST VI |
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SSGT III |
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SST X |
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JV Properties |
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Third Party Platform (1) |
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Total Tenant Protection Program Fees |
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Acquisition Fees: |
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SSGT III |
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Total Acquisition Fees |
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Other Managed REIT Fees (2) |
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Other Third Party Platform Fees (1) (4) |
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Managed Platform Fees |
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Sponsor funding reduction (3) |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Total Managed Platform Revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
58
SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
We offer tenant insurance or tenant protection programs to customers at our Managed REITs’ properties pursuant to which we, as the property manager and majority owner of the Tenant Protection Program joint ventures, are entitled to substantially all of the net revenue attributable to the sale of such tenant programs.
In order to protect our interest in receiving these revenues in light of the fact that the Managed REITs control the properties, we and the Managed REITs transferred our respective rights in such arrangements to a joint venture entity owned
Reimbursable costs from Managed REITs includes reimbursement of the advisors of SST VI, SST X and SSGT III for certain direct and indirect costs of providing administrative and management services to the Managed REITs. Additionally, reimbursable costs includes reimbursement pursuant to the property management agreements for reimbursement of certain costs of managing the Managed REITs’ properties, including wages and salaries and other expenses of employees engaged in operating, managing and maintaining such properties.
As of June 30, 2026 and December 31, 2025, we had receivables and advances due from the Managed REITs totaling approximately $
Investments in and advances to SST VI OP
Equity Investments
On March 10, 2021, SmartStop OP made an investment of $
For the three months ended June 30, 2026 and 2025, we recorded a net loss from our equity in earnings related to our common equity interests, excluding our preferred investment discussed below, in SST VI OP of approximately