Q1 2026 SmartStop Self Storage REIT Inc Earnings Call

May 7, 2026

Speaker #1: Greetings and welcome to SmartStop Self Storage Q1, 2026 earnings call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation.

Operator: Greetings, welcome to SmartStop Self Storage Q1 2026 Earnings Call. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to David Corak, Senior Vice President of Corporate Finance and Strategy. Thank you. You may now begin.

Operator: Greetings, welcome to SmartStop Self Storage Q1 2026 Earnings Call. At this time all participants are on a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to David Corak, Senior Vice President of Corporate Finance and Strategy. Thank you. You may now begin.

Speaker #1: As a reminder, this conference is being recorded. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again.

Speaker #1: I would now like to turn the conference over to David Korac, Senior Vice President of Corporate Finance and Strategy. Thank you. You may now begin.

Speaker #2: Thank you, Operator. Before we begin, I would like to remind everyone that certain statements made during today's call, including statements about our future plans, prospects, and expectations, may be considered forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act.

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

Speaker #2: These forward-looking statements are subject to numerous risks and uncertainties, as described in our filings with the Securities and Exchange Commission, and these risks could cause our actual results to differ materially from those expressed in or implied by our comments.

David Corak: These forward-looking statements are subject to numerous risks and uncertainties as described in our filings with the Securities and Exchange Commission, and these risks could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in our earnings release that we issued last night, along with the comments on this call, are made only as of today.

Speaker #2: Forward-looking statements in our earnings release that we issued last night, along with the comments on this call, are made only as of today. The company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

David Corak: The company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. In addition, we will also refer to certain non-GAAP financial measures.

Speaker #2: In addition, we will also refer to certain non-GAAP financial measures, information regarding our use of these measures and a reconciliation of these measures to GAAP measures can be found on our earnings release and supplemental disclosure that we issued last night and are available for download on our website at investors.smartstopselfstorage.com.

David Corak: Information regarding our use of these measures and a reconciliation of these measures to GAAP measures can be found on our earnings release and supplemental disclosure that we issued last night and are available for download on our website at investors.smartstopselfstorage.com. In addition to myself, today we have H. Michael Schwartz, Founder, Chairman, and CEO, as well as James Barry, our CFO. Now, I'll turn it over to Michael.

Speaker #2: In addition to myself, today we have H. Michael Schwartz, founder, chairman, and CEO, as well as James Barry, our CFO. Now I'll turn it over to Michael.

Speaker #3: Thank you, David, and thank you for joining us today for our first quarter earnings call. I'll start with a few highlights of our first quarter results.

H. Michael Schwartz: Thank you, David, and thank you for joining us today for our Q1 earnings call. I'll start with a few highlights of our Q1 results. We posted strong same-store revenue growth of 1.5%, NOI growth of 2%, and maintained average occupancy of 92.5% while facing our toughest quarterly comp of the year. Operationally, we posted very strong results despite recent geopolitical news. With that said, 10 of our top 15 markets posted positive same-store NOI growth and good expense control led to a 30 basis point growth in our same-store operating margins. Likewise, other areas of our business outperformed expectations. We reported FFO as adjusted per share of $0.49, up 19.3% year-over-year.

Speaker #3: We posted strong same-store revenue growth of 1.5%. NOI growth of 2% and maintained average occupancy of 92.5%, while facing our toughest quarterly comp of the year.

Speaker #3: Operationally, we posted very strong results despite recent geopolitical news. With that said, 10 of our top 15 markets posted positive same-store NOI growth and good expense control led to a 30 basis point growth in our same-store operating margins.

H. Michael Schwartz: With that said, 10 of our top 15 markets posted positive same-store NOI growth and good expense control led to a 30 basis point growth in our same-store operating margins. Likewise, other areas of our business outperformed expectations. We reported FFO as adjusted per share of $0.49, up 19.3% year-over-year.

Speaker #3: Likewise, other areas of our business outperformed expectations. We reported FFO as adjusted per share of 49 cents, up 19.3% year over year. In February, we completed the recast of our 500 million dollar syndicated bank facility at an all-in cost of about 30 basis points below the previous facility.

H. Michael Schwartz: In February, we completed the recast of our $500 million syndicated bank facility at an all-in cost of about 30 basis points below the previous facility. Additionally, we acquired a parcel of land in Canada that we intend to develop into Class A storage in our SmartCentres REIT joint venture. Lastly, in March, we entered into a strategic joint venture with Axis Capital focused on providing bridge capital to self-storage sponsors across the United States. In terms of guidance, we are now narrowing our same-store revenue growth from a range of -0.5% to 2% to a range of -0.25% to 1.75%. Additionally, we're reducing our overall OpEx growth range from 2% to 4% to 1.75% to 3.75%.

Speaker #3: Additionally, we acquired a parcel of land in Canada that we intend to develop into Class A storage in our smart centers joint venture. Lastly, in March, we entered into a strategic joint venture with Access Capital, focused on providing bridge capital to self-storage sponsors across the United States.

H. Michael Schwartz: Lastly, in March, we entered into a strategic joint venture with Axis Capital focused on providing bridge capital to self-storage sponsors across the United States. In terms of guidance, we are now narrowing our same-store revenue growth from a range of -0.5% to 2% to a range of -0.25% to 1.75%. Additionally, we're reducing our overall OpEx growth range from 2% to 4% to 1.75% to 3.75%.

Speaker #3: In terms of guidance, we are now narrowing our same-store revenue growth from a range of negative 0.5% to 2% to a range of negative 0.25% to 1.75%.

Speaker #3: Additionally, we're reducing our overall OPEX growth range from 2 to 4% to 1.75 to 3.75%. The result is an increase of our NOI growth midpoint from a negative 40 basis points to a negative 25 basis points.

H. Michael Schwartz: The result is an increase of our NOI growth midpoint from -40 basis points to -25 basis points. Additionally, we are narrowing our FFO as adjusted per share of $1.93 to $1.94 to $2.04. Turning to operations, January and February were strong months for us, slightly above our initial expectations. In March, we saw a pullback in demand that directly coincided with the geopolitical news. This played through from the second week of March until about the second week of April when things really started to turn for the better. Demand has returned, and it appears rental season is upon us. We are still very early in the year, and in the self-storage business, rental season can end up impacting annual results.

Speaker #3: Additionally, we are narrowing our FFO as adjusted per share of $1.93 to 205 to $1.94 to $2.04. Turning to operations, January and February were strong months for us, slightly above our initial expectations.

Speaker #3: In March, we saw a pullback in demand that directly coincided with the geopolitical news. This played through from the second week of March until about the second week of April when things really started to turn for the better.

H. Michael Schwartz: This played through from the second week of March until about the second week of April when things really started to turn for the better. Demand has returned, and it appears rental season is upon us. We are still very early in the year, and in the self-storage business, rental season can end up impacting annual results. That said, we are certainly encouraged going into the rental season. With that, I'll turn it over to James to discuss the quarter.

Speaker #3: Demand has returned and it appears rental season is upon us. We are still very early in the year and in the self-storage business, rental season can end up impacting annual results.

Speaker #3: That said, we are certainly encouraged going into the rental season. With that, I'll turn it over to James to discuss the quarter.

H. Michael Schwartz: That said, we are certainly encouraged going into the rental season. With that, I'll turn it over to James to discuss the quarter.

Speaker #2: Thank you, Michael. Starting with our operating performance, our same-store pool posted year-over-year revenue growth of 1.5%. With operating expense growth of 60 basis points, leading to an NOI increase of 2%, with quarter-ending occupancy of 92.3%.

James Barry: Thank you, Michael. Starting with our operating performance, our same-store pool posted year-over-year revenue growth of 1.5%, with operating expense growth of 60 basis points, leading to an NOI increase of 2% with quarter-ending occupancy of 92.3%. While we did increase promotional utilization during the quarter, we were able to hold a solid average occupancy level of 92.5% with limited increases in marketing spend in Q1. Our achieved move-in rates per square foot were down 7% on average, while our move-in rates per unit were actually up 2% year over year during the quarter. As we moved into April, we grew our occupancy, ending April at 92.6%, only down 45 basis points year over year, and notably up 30 basis points from the end of March.

Speaker #2: While we did increase promotional utilization during the quarter, we were able to hold a solid average occupancy level of 92.5% with limited increases in marketing spend in the first quarter.

Speaker #2: Our achieved move-in rates per square foot were down 7% on average, while our move-in rates per unit were actually up 2% year over year during the quarter.

James Barry: Our achieved move-in rates per square foot were down 7% on average, while our move-in rates per unit were actually up 2% year over year during the quarter. As we moved into April, we grew our occupancy, ending April at 92.6%, only down 45 basis points year over year, and notably up 30 basis points from the end of March.

Speaker #2: As we moved into April, we grew our occupancy ending April at 92.6%, only down 45 basis points year over year and notably up 30 basis points from the end of March.

Speaker #2: We were pleased with our operating expenses as well, with year-over-year growth of only 60 basis points in the same-store pool. This expense control led to an increase in our same-store margins of 30 basis points, the first year-over-year margin increase since 2023.

James Barry: We were pleased with our operating expenses as well, with year-over-year growth of only 60 basis points in the same-store pool. This expense control led to an increase in our same-store margins of 30 basis points, the first year-over-year margin increase since 2023. We experienced a tailwind from FX during the quarter for the first time in a long time. Our 13 Canadian same-store assets post same-store revenue growth of 4.1% and negative 50 basis points on a constant currency basis. These results were in line with our expectations as the GTA had a 7% constant currency revenue comp in the Q1 2025, far and away our toughest comp of the year. In terms of our Asheville portfolio, our occupancy gap has narrowed dramatically since December, averaging down 260 basis points year over year in the Q1.

Speaker #2: We experienced a tailwind from FX during the quarter for the first time in a long time. Our 13 Canadian same-store assets posted same-store revenue growth of 4.1% and negative 50 basis points on a constant currency basis.

Speaker #2: These results were in line with our expectations as the GTA had a 7% constant currency revenue comp in the first quarter of 2025, far and away our toughest comp of the year.

James Barry: These results were in line with our expectations as the GTA had a 7% constant currency revenue comp in the Q1 2025, far and away our toughest comp of the year. In terms of our Asheville portfolio, our occupancy gap has narrowed dramatically since December, averaging down 260 basis points year over year in the Q1.

Speaker #2: In terms of our Asheville portfolio, our occupancy gap has narrowed dramatically since December, averaging down of April, we are only down 130 basis points year over year at 92.2% occupancy.

James Barry: As of the end of April, we are only down 130 basis points year over year at 92.2% occupancy. That's notably up 220 basis points from the end of December 2025. On the external growth front, we acquired one parcel of land in Toronto within our SmartCentres joint venture that we intend to develop into Class A storage. Turning to our third-party management platform, we ended the quarter with 227 properties under management, in line with our expectations. The result of all of this is that for Q1 2026, we posted fully diluted FFO as adjusted per share and unit of $0.49. Lastly, turning to the balance sheet. During the quarter, we completed the recast of our $500 million syndicated bank facility, as Michael mentioned earlier.

Speaker #2: That's notably up 220 basis points from the end of December 2025. On the external growth front, we acquired one parcel of land in Toronto within our smart centers joint venture that we intend to develop into Class A storage.

Speaker #2: Turning to our third-party management platform, we ended the quarter with 227 properties under management, in line with our expectations. The result of all of this is that for the first quarter of 2026, we posted fully diluted FFO, as adjusted per share and unit, of $0.49.

James Barry: The result of all of this is that for Q1 2026, we posted fully diluted FFO as adjusted per share and unit of $0.49. Lastly, turning to the balance sheet. During the quarter, we completed the recast of our $500 million syndicated bank facility, as Michael mentioned earlier.

Speaker #2: Lastly, turning to the balance sheet, during the quarter, we completed the recast of our 500 million dollar syndicated bank facility as Michael mentioned earlier.

Speaker #2: That facility matures in February 2030 and has a one-year extension option. And the credit agreement has built-in language that would allow for a further pricing step down upon reaching an investment-grade rating from S&P or Moody's Rating Services.

James Barry: That facility matures in February 2030 and has a 1-year extension option, and the credit agreement has built-in language that would allow for a further pricing step down upon reaching an investment-grade rating from S&P or Moody's Ratings. At quarter end, our Canadian FX exposure is fully hedged naturally from a cash flow standpoint, and 94% of our outstanding debt was fixed as of the quarter end. SmartStop's balance sheet is positioned to access a wide variety of attractive capital sources, both in terms of debt and equity, to execute on future growth opportunities. With that, operator, we will open it up to questions.

Speaker #2: At quarter end, our Canadian FX exposure is fully hedged naturally from a cash flow standpoint and 94% of our outstanding debt was fixed as of quarter end.

Speaker #2: SmartStop's balance sheet is positioned to access a wide variety of attractive capital sources, both in terms of debt and equity, to execute on future growth opportunities.

James Barry: SmartStop's balance sheet is positioned to access a wide variety of attractive capital sources, both in terms of debt and equity, to execute on future growth opportunities. With that, operator, we will open it up to questions.

Speaker #2: And with that operator, we will open it up to questions.

Speaker #1: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad.

Operator: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from the line of Todd Thomas with KeyBanc Capital Markets. Your line is open. Please go ahead.

Speaker #1: To withdraw your question, press star one again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device.

Speaker #1: Please stand by while we compile the Q&A roster. Our first question comes from the line of Todd Thomas with KeyBank Capital Markets. Your line is open.

Speaker #1: Please go ahead.

Speaker #4: All right. Hi. Thanks, good afternoon. Appreciate some of the details on April. I was wondering if you could just provide a little bit more detail on the move-in rent trends that you saw in April and how the promotional activity trended.

Todd Thomas: All right. Hi, thanks. Good afternoon. Appreciate some of the details on April. Was wondering if you could just provide a little bit more detail on the move-in rent trends that you saw in April and how the promotional activity trended.

Todd Thomas (KeyBanc Capital Ma: All right. Hi, thanks. Good afternoon. Appreciate some of the details on April. Was wondering if you could just provide a little bit more detail on the move-in rent trends that you saw in April and how the promotional activity trended.

Speaker #2: Hey, Todd. It's Korak. So as James mentioned at the end of April, our occupancy was at 92.6%, down 50 bips year over year. Our move-in rates on a unit basis were up about 1% year over year in April, while the move-in rents on a per square foot basis were down about 6.5% on a year-over-year basis.

David Corak: Hey, Todd. It's David Corak. As James mentioned, at the end of April, our occupancy was at 92.6%, down 50 bips year over year. Our move-in rates on a unit basis were up about 1% year over year in April, while the move-in rents on a per square foot basis were down about 6.5% on a year-over-year basis. April ended up being a pretty good month overall, even with a sort of a slower start. We had a record number of web reservations, over 10,000 for April. Our call center broke an all-time high for rentals, which was kind of up 25% over last year with a really nice low abandonment rate, something that we take a lot of pride in.

Speaker #2: April ended up being a pretty good month overall, even with sort of a slower start. We had a record number of web reservations—over 10,000 for April.

David Corak: We had a record number of web reservations, over 10,000 for April. Our call center broke an all-time high for rentals, which was kind of up 25% over last year with a really nice low abandonment rate, something that we take a lot of pride in.

Speaker #2: Our call center broke an all-time high for rentals which was kind of up 25% over last year, with a really nice low abandonment rate, something that we take a lot of pride in.

Speaker #2: The team has done a really good job of managing receivables. Which is just a really good overall practice, but also creates more unit availability for rental season, which is a nice positive for us.

David Corak: The team has done a really good job of managing receivables, which is just a really good overall practice, but also creates, you know, more unit availability for rental season, which is a nice, you know, positive for us. I think we are really encouraged as we're getting into rental season here. Michael, do you wanna talk a little bit about Canada?

Speaker #2: So I think we were really encouraged as we're getting into rental season here. Michael, do you want to talk a little bit about Canada?

Speaker #3: Yeah, absolutely. Thank you, David. From a Canadian perspective, on a constant currency basis, the same-store revenue was down about 50 basis points in Q1.

H. Michael Schwartz: Yeah, absolutely. Thank you, David. You know, from a Canadian perspective, on a constant currency basis, the same-store revenue was down about 50 basis points in Q1. The comp that we had for Q1 2025 was 7%. We had a much tougher comp than in the US. However, that's still 6.5% growth over a 2-year period. I think in this environment, we think that's an excellent result. If you look at our joint venture properties that would meet our same-store definition, they actually did even better at around 10% year-over-year revenue growth on a constant currency basis. At the end of April, our GTA same-store occupancy was 93.1%.

Speaker #3: The comp that we had for one Q2025 was 7%. So we had a much tougher comp than in the US. However, that still 6.5% growth over a two-year period.

Speaker #3: And so I think in this environment, we think that's an excellent result. If you look at our joint venture properties, that would meet our same-store definition.

H. Michael Schwartz: If you look at our joint venture properties that would meet our same-store definition, they actually did even better at around 10% year-over-year revenue growth on a constant currency basis. At the end of April, our GTA same-store occupancy was 93.1%. That was flat year-over-year, but slightly higher than the States. Meanwhile, our in-place rates were actually up 1.5% year-over-year in April. Our outlook for the full year, in our GTA portfolio, it'll perform slightly better than our US portfolio in 2026, even with the tougher comps.

Speaker #3: They actually did even better. At around 10% year-over-year revenue growth on a constant currency basis. At the end of April, our GTA same-store occupancy was 93.1%.

Speaker #3: That was flat year-over-year, but slightly higher than the States. And meanwhile, our in-place rates were actually up 1.5% year-over-year in April. So our outlook for the full year in our GTA portfolio, it'll perform slightly better than our US portfolio in 2026, even with the tougher comps.

H. Michael Schwartz: That was flat year-over-year, but slightly higher than the States. Meanwhile, our in-place rates were actually up 1.5% year-over-year in April. Our outlook for the full year, in our GTA portfolio, it'll perform slightly better than our US portfolio in 2026, even with the tougher comps.

Speaker #2: Okay. And in the quarter, can you speak to the increase in vacate activity that you experienced? What was that attributable to? Was there anything notable that occurred on the move-out side during the period?

Todd Thomas: Okay. In the quarter, can you speak to the increase in vacate activity that you experienced? You know, what was that attributable to? Was there anything notable that occurred on the move outside during the period?

Todd Thomas (KeyBanc Capital Ma: Okay. In the quarter, can you speak to the increase in vacate activity that you experienced? You know, what was that attributable to? Was there anything notable that occurred on the move outside during the period?

Speaker #3: Yeah, Todd, this is James. I'll jump in and just say, first of all, there's a couple of things going on with the increase in vacates.

James Barry: Todd, this is James. I'll jump in and just say, first of all, there's a couple of things going on with the increase in vacates. First and foremost, we were coming off a tougher comp. Q1 of 2025 was down year over year in vacates. There is a cycling of that comp. In addition, as we mentioned in our prepared remarks, we did see an uptick in vacates really starting at the beginning of March with some of the geopolitical uncertainty and some consumer decisions. You know, that's abated since, you know, since the first 2 weeks of March, but that's what's driving the Q1 increase in vacates.

Speaker #3: First and foremost, we were coming off a tougher comp. Q1 of '25 was down year-over-year in vacates. And so there is a cycling of that comp.

James Barry: There is a cycling of that comp. In addition, as we mentioned in our prepared remarks, we did see an uptick in vacates really starting at the beginning of March with some of the geopolitical uncertainty and some consumer decisions. You know, that's abated since, you know, since the first 2 weeks of March, but that's what's driving the Q1 increase in vacates.

Speaker #3: In addition, as we mentioned in our prepared remarks, we did see an uptick in vacates really starting at the beginning of March with some of the geopolitical uncertainty and some consumer decisions.

Speaker #3: That's abated since the first two weeks of March. But that's what's driving the first quarter increase in vacates.

Speaker #2: Okay. All right. Thank you.

Todd Thomas: Okay. All right. Thank you.

Todd Thomas (KeyBanc Capital Ma: Okay. All right. Thank you.

Speaker #4: Thanks, Todd.

H. Michael Schwartz: Thanks, Todd.

Speaker #1: Your next question comes from the line of Victor Fedev. With Scotiabank, your line is open. Please go ahead.

Operator: Your next question comes from the line of Viktor Fediv with Scotiabank.

David Corak: Yeah.

Viktor Fediv: Yeah.

Operator: Your line is open. Please go ahead.

Speaker #2: Thank you. Good afternoon, everyone. I have a question on August Professional Storage Management platform. So you have a full quarter—Q1—now. How has the operational integration gone?

Viktor Fediv: Thank you. Good afternoon, everyone. I have a question on Argus Professional Storage Management platform. You have full quarter, Q1 now. How has the operational integration gone? Were you able to identify potential synergies for SMA as a whole? What is the expected timing for those?

Speaker #2: And were you able to identify potential synergies for SMA as a whole, and what is the expected timing for those?

Speaker #3: Yeah, I'll jump in first, as James, on the expense side and integrations. And clearly, it's been six months since the close, and we've been doing a lot of processes in terms of migrating employees over into the SmartStop platform.

James Barry: I'll jump in first. This is James. On the expense side and integrations, you know, clearly it's been 6 months since the close. You know, we've been doing a lot of processes in terms of migrating employees over into the SmartStop platform. In addition, as it relates to the Q1 results and our expenses there's a lot of seasonal effect, right? We had multiple conferences that all take place in the Q1, including our owners conference, which we talked about on our last earnings call. That doesn't happen, you know, over the course of over the next couple of quarters. That's an annual event. We would expect the margins to increase from here.

Speaker #3: In addition, as it relates to the first quarter results and our expenses there, there's a lot of seasonal effect, right? We had multiple conferences that all take place in the first quarter.

James Barry: We had multiple conferences that all take place in the Q1, including our owners conference, which we talked about on our last earnings call. That doesn't happen, you know, over the course of over the next couple of quarters. That's an annual event. We would expect the margins to increase from here.

Speaker #3: Including our owners' conference, which we talked about on our last earnings call. That doesn't happen over the course of over the next couple of quarters.

Speaker #3: That's an annual event. And so we would expect the margins to increase from here. And I think it's still going to take a handful of quarters and even in the 2027 before we start to really see the operating margin synergies, although we're starting to see them in smaller pockets, such as Denver, where we've quadrupled our overall store count between SmartStop managed, SmartStop legacy, as well as the private label properties under the Argus platform.

James Barry: I think it's still going to take a handful of quarters and even into 2027 before we start to really see the operating margin synergies. Although we're starting to see them in smaller pockets such as Denver, where, you know, we've quadrupled our overall store count between SmartStop Managed, SmartStop Legacy, as well as the private label properties under the Argus platform.

Speaker #2: Got it. And then here's a follow-up on oh, sorry.

Viktor Fediv: Good. Just to follow up on. Go ahead. Sorry.

Speaker #3: You know, this is Michael. I was going to the integration is been going well. There's been a significant amount of technology upgrade for our third-party owners.

H. Michael Schwartz: You know, this is Michael. I was gonna jump in there and just say that, you know, I think the integration has been going well. There's been a significant amount of technology upgrade for our third-party owners, which has been incredibly positive. We actually have signed up our first Canadian property in the Greater Toronto area, and we have a nice pipeline of existing private label owners who now see the power of SmartStop Self Storage with respect to the top of the funnel. Those properties that we ported over, those owners are incredibly successful. Some of them are generating more leads than they ever have on a private label basis.

Speaker #3: Which has been incredibly positive. We actually have signed up our first Canadian property in the greater Toronto area. And we have a nice pipeline of existing private label owners who now see the power of SmartStop self-storage with respect to the top of the funnel.

H. Michael Schwartz: We actually have signed up our first Canadian property in the Greater Toronto area, and we have a nice pipeline of existing private label owners who now see the power of SmartStop Self Storage with respect to the top of the funnel. Those properties that we ported over, those owners are incredibly successful. Some of them are generating more leads than they ever have on a private label basis.

Speaker #3: And so those properties that we ported over, those owners are incredibly successful. Some of them are generating more leads than they ever have, on a private label basis.

Speaker #3: And so we think over the next 12 months, we will start to see a strong migration from our private label platform to either the legacy or the full-blown SmartStop platform.

H. Michael Schwartz: We think, you know, over the next 12 months, we will start to see, you know, a strong migration from our private label platform to either the legacy or the full-blown SmartStop platform. You know, we're really, I think, pretty excited about the integration, the people, and the ability to keep growing this in the future.

Speaker #3: And so we're really I think pretty excited about the integration, the people, and the ability to keep growing this in the future.

Speaker #2: Thank you for additional color. And I have a follow-up on move out trends. I appreciate the details on moving side in terms of the sizes of units.

Viktor Fediv: Thank you. Thank you for additional color. I have a follow-up on move-out trends. I appreciate the details on move-in side in terms of the sizes of units that are involved there. Can you provide some additional details on move-outs in terms of what sizes were more heavily impacted in Q1?

Speaker #2: They're involved there. And can you provide some additional details on move out in terms of what sizes were more heavily impacted in Q1?

Speaker #3: Yeah. When we look at the move outs in terms of the average size, it's really in line with our portfolio average. What's unique is that the move-ins were renting more of the larger units.

James Barry: Yeah, I when we look at the move-outs in terms of the average size, it's really in line with our portfolio average. What's unique is that the move-ins, we're renting more of the larger units, but the move-outs are not matching that same disconnect, right? On a year-over-year basis, it's pretty consistent on a year, you know, move-outs Q1 2026 versus Q1 2025 in terms of the size of the units.

Speaker #3: But the move outs are not matching that same disconnect, right? And on a year-over-year basis, it's pretty consistent on a year move outs Q1, '26 versus Q1, '25 in terms of the size of the units.

Speaker #2: Understood. Thank you.

Viktor Fediv: Understood. Thank you.

Speaker #4: Thanks, Richard.

H. Michael Schwartz: Thanks, Viktor.

Speaker #1: Your next question comes from the line of Eric Lubchow with Wells Fargo. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Eric Luebchow with Wells Fargo. Your line is open. Please go ahead.

Eric Luebchow: Great. Thanks for taking the question. Maybe you could talk a little bit just about the acquisition environment. I know you're a little more restricted in what you can do, wholly owned on balance sheet this year, but maybe update us on the discussions around an institutional JV partnership, and how those conversations are trending.

Speaker #4: Great, thanks for taking the question. Maybe you could talk a little bit just about the acquisition environment. I know you're a little more restricted in what you can do wholly owned on balance sheet this year.

Speaker #4: But maybe update us on the discussions around an institutional JV partnership and how those conversations are trending.

H. Michael Schwartz: Okay. You know, I'll jump in here. Well, let me just start by saying that, you know, I've been doing this a very long time. From an acquisition perspective, I think this is one of the, I think, single greatest opportunities to transact in self-storage since the Great Recession on a risk-adjusted basis. You have a lot of markets that have readjusted from a rate perspective down, you know, 25%, you know, 35%. We think that there's a really nice, you know, recovery of acquiring at really solid cap rates with either management upside and/or, you know, rate upside.

Speaker #3: Okay. I'll jump in here. Well, let me just start by saying that I've been doing this a very long time. And from an acquisition perspective, I think this is one of the, I think, single greatest opportunities that transact in self-storage.

Speaker #3: And it's a great recession on a risk-adjusted basis. You have a lot of markets that have readjusted from a rate perspective, down 25 to 35 percent.

H. Michael Schwartz: You have a lot of markets that have readjusted from a rate perspective down, you know, 25%, you know, 35%. We think that there's a really nice, you know, recovery of acquiring at really solid cap rates with either management upside and/or, you know, rate upside.

Speaker #3: And so we think that there's a really nice recovery of acquiring it, really solid cap rates, with either management upside and/or rate upside. There's a lot of groups out there that acquired at very aggressive cap rates in 2021, 2022, and probably half of 2023 at 4%.

H. Michael Schwartz: There's a lot of groups out there that acquired at very aggressive cap rates in 2021, 2022, and probably half of 2023 at 4%. They had short-term debt, and some of them even had bridge loans, and they've had to extend those loans. Now you're facing an environment where these lenders are willing to extend and pretend. This is a result of creating a really nice wave of high-quality pro-properties that are coming to sale because the owners are currently out of options. We're seeing a lot of attractive opportunities on the stabilized front in the US and also Canada.

Speaker #3: They had short-term debt and some of them even had bridge loans. And they've had to extend those loans. And so now you're facing an environment where they're no longer willing these lenders are willing to extend and pretend.

Speaker #3: And so this is a result of creating a really nice wave of high-quality properties that are coming to sale. Because the owners are currently out of options.

H. Michael Schwartz: This is a result of creating a really nice wave of high-quality pro-properties that are coming to sale because the owners are currently out of options. We're seeing a lot of attractive opportunities on the stabilized front in the US and also Canada.

Speaker #3: And so we're seeing a lot of attractive opportunities on the stabilized front. In the US and also Canada, the deals that we've closed, I think, are great examples of this.

H. Michael Schwartz: The deals that we've closed, I think are great examples of this, and I think, we are continually encouraged about the current pipeline, you know, deal flow, you know, out there. There are some, you know, larger portfolios out there, but there's also, you know, enough onesies and twosies. I just wanna emphasize that a lot to us may not be a lot to others. For every $300 million that we can acquire, it increases our market cap by approximately, you know, 10%. As, you guys are probably well aware that we acquired about $370 million in 2025, about a half a billion since 2024. That's meaningful, I think, growth for us, and it's enough for us to move the needle.

Speaker #3: And I think we are continually encouraged about the current pipeline deal flow out there. There are some larger portfolios out there, but there's also enough onesies and twosies.

Speaker #3: And so I just want to emphasize that a lot to us may not be a lot to others. And so for every 300 million dollars that we can acquire, it increases our market cap by approximately 10%.

H. Michael Schwartz: For every $300 million that we can acquire, it increases our market cap by approximately, you know, 10%. As, you guys are probably well aware that we acquired about $370 million in 2025, about a half a billion since 2024. That's meaningful, I think, growth for us, and it's enough for us to move the needle.

Speaker #3: And so as you guys are probably well aware, that we acquired about 370 million in 2025, about a half a billion since 2024. And that's meaningful, I think, growth for us.

Speaker #3: And it's enough for us to move the needle. And so and it obviously benefits our size. And so we are still seeing a healthy amount of aggregate opportunity.

H. Michael Schwartz: You know, and it obviously benefits our size. We are still seeing, you know, a healthy amount of aggregate, you know, opportunity. I think from that perspective, you know, we feel pretty good. The second part of your question was?

Speaker #3: So I think from that perspective, we feel pretty good. The second part of your question was?

Speaker #4: Yeah, just around institutional JV and how those discussions are coming along.

Eric Luebchow: Yeah, just around institutional JV and how those discussions are coming along.

Speaker #3: No, those discussions are happening as we speak, and I think they're coming along nicely. Obviously, as you know, we have a very solid institutional joint venture with SmartCentres on the development of self-storage in Canada.

H. Michael Schwartz: You know, those discussions are having, you know, as we speak, and I think they're coming along nicely. Obviously, as you know, we have a very solid institutional joint venture with SmartCentres REIT on the development of self-storage in Canada. Obviously, we're looking to kind of expand that for existing, either lease up or stabilized properties. We're out there trying to find the right partner. As you can imagine, we currently have, you know, a lot that we are doing on a daily basis. We're gonna take our time to find the right capital partner that for the long term.

Speaker #3: And obviously, we're looking to kind of expand that for existing either lease-up up or stabilized properties. And so we're out there trying to find the right partner but as you can imagine, we currently have a lot that we are doing on a daily basis.

H. Michael Schwartz: We're out there trying to find the right partner. As you can imagine, we currently have, you know, a lot that we are doing on a daily basis. We're gonna take our time to find the right capital partner that for the long term.

Speaker #3: And so we're going to take our time to find the right capital partner for the long term.

Speaker #4: Great. And just one follow-up on the shaping of same-store revenue growth this year. I know you have some tough comps in Asheville, although it sounds like you've gotten a lot of that occupancy back.

Eric Luebchow: Great. Just 1 follow-up on the shaping of same-store revenue growth this year. I know you have some tough comps in Asheville, although it sounds like you've gotten a lot of that occupancy back. Some hurricane comps in markets like Tampa, and then the LA rent restrictions. Maybe kind of putting it all together, you could kind of talk about the shaping of same-store revenue growth the next couple quarters that's embedded in your guide and some of the call-outs on those items. Thank you.

Speaker #4: Some hurricane comps and markets like Tampa and then the LA rent restrictions. So maybe kind of putting it all together, you could kind of talk about the shaping of same-store revenue growth the next couple of quarters that's embedded in your guide and some of the callouts on those items.

Speaker #4: Thank you.

Speaker #5: Yeah. Thanks for the question, Eric. It's Korak. So when you look at the comps last year, obviously, the first quarter was our toughest comp at 3.2%.

David Corak: Yeah. Thanks for the question, Eric. It's correct. You know, when you look at the comps last year, obviously the Q1 was our toughest comp at 3.2%. The comps are significantly easier in the Q2 and Q3, and then gets a little bit harder in the Q4. Just on that alone, one would think that, you know, Q2 and Q3 will probably be our best quarters of revenue growth year over year. Obviously, that's not exactly what the guidance would imply at this point on the midpoint. The other two things that are impacting the cadence of same-store revenue growth are, as you pointed out, Asheville and the ECRI restrictions in LA.

Speaker #5: The comps are significantly easier in the second quarter and third quarter and then gets a little bit harder in the fourth quarter. So just on that alone, one would think that second and third quarter will probably be our best quarters of revenue growth year over year.

Speaker #5: But obviously, that's not exactly what the guidance would imply. At this point on the midpoint. The other two things that are impacting the cadence of same-store revenue growth are, as you pointed out, Asheville and the ECRI restrictions in LA.

David Corak: Obviously, that's not exactly what the guidance would imply at this point on the midpoint. The other two things that are impacting the cadence of same-store revenue growth are, as you pointed out, Asheville and the ECRI restrictions in LA.

David Corak: Obviously in Asheville, we were coming off of a, you know, a really strong year, right? We lapped that comp. As you get into Q1, we were still positive in terms of rates, but negative in terms of occupancy. However, as you get into Q2, you know, The rates will turn negative on a year-over-year basis and will continue to be negative through, you know, Q2 and Q3, again, on a year-over-year basis. The comp gets a lot easier in Q4 as you sort of lap that. The other element is, of course, on the LA restrictions.

Speaker #5: Obviously, in Asheville, we were coming off of a really strong year, right? And we lapped that comp. And so as you get into the first quarter, we were still positive in terms of rates.

Speaker #5: But negative in terms of occupancy. However, as you get into the second quarter, that rate the rates will turn negative on a year-over-year basis and will continue to be negative through the second and third quarter, again, on a year-over-year basis.

Speaker #5: And then the comp gets a lot easier in the fourth quarter as you sort of lap that. The other element is, of course, on the LA restrictions, we are not assuming that the restrictions will be lifted for 2026.

David Corak: We are not assuming that the restrictions will be lifted for 2026. There's a compounding effect that happens there, where, you know, the Q2 the impact is worse than the Q1, the Q3 is worse than the Q4, and so on. Those are the other kinds of things that are impacting the shape of the curve overall. You know, Asheville is in an interesting spot. Michael, do you want to talk a little bit about where Asheville stands today?

Speaker #5: So there’s a compounding effect that happens there, where the second quarter, the impact is worse than the first quarter. And then the third quarter is worse than the fourth quarter.

Speaker #5: And so on. So those are the other kinds of things that are impacting the shape of the curve overall. So Asheville is in an interesting spot.

Speaker #5: Michael, do you want to talk a little bit about where Asheville stands today?

Speaker #3: Yeah, absolutely. Obviously, in the fourth quarter, we talked about Asheville. And I think as we position and where we're at today, Asheville was our best-performing market in 2025.

H. Michael Schwartz: Yeah, absolutely. You know, obviously in the Q4, you know, we talked about Asheville. You know, as we position and where we're at today, you know, Asheville was our best performing market in 2025. We had 6% same-store revenue growth year over year. We are obviously facing, you know, some tough occupancy comps in 2026. The year-over-year occupancy gap has narrowed dramatically. I think James, you know, discussed this a little bit. Since December, our average is down only 260 basis points year over year. In the Q1, our occupancy was at 91.6%. At the end of April, we were only down 130 basis points, and we're settling at 92.2%.

Speaker #3: We had 6% same-store revenue growth year over year. And so we were obviously facing some tough occupancy comps in 2026. But the year-over-year occupancy gap has narrowed dramatically.

Speaker #3: And I think James, discussed this a little bit. Since December, our average is down only 260 basis points year over year. And in the first quarter, our occupancy was at 91.6%.

H. Michael Schwartz: I think James, you know, discussed this a little bit. Since December, our average is down only 260 basis points year over year. In the Q1, our occupancy was at 91.6%. At the end of April, we were only down 130 basis points, and we're settling at 92.2%.

Speaker #3: And so at the end of April, we were only down 130 basis points. And we're settling at 92.2%. That's a great position to be in as we move into the busy season.

H. Michael Schwartz: That's a great position to be in as we move into the busy season. That's notably up 200 basis points from the end of December, generally in line with the rest of our US portfolio, which is, you know, positioned nicely also. This is a fairly traditional cadence of occupancy for a natural disaster of this kind, and we are now at a post-natural disaster stabilized occupancy level. Overall, we still expect Asheville to be a relative underperform in 2026, specifically through the end of Q3. That being said, the portfolio is performing slightly better than expected through April. I think that says a lot about our technology, our process. You know, we were able to capture that upside with respect to occupancy and rate.

Speaker #3: And so that's notably up. 200 basis points from the end of December. And generally, in line with the rest of our US portfolio, which is positioned nicely also.

Speaker #3: And so this is a fairly traditional cadence of occupancy for a natural disaster of this kind. And we are now at a post-natural disaster stabilized occupancy level.

Speaker #3: And so overall, we still expect Asheville to be a relative underperformer in 2026, specifically through the end of the third quarter. But that being said, the portfolio is performing slightly better than expected through April.

H. Michael Schwartz: That being said, the portfolio is performing slightly better than expected through April. I think that says a lot about our technology, our process. You know, we were able to capture that upside with respect to occupancy and rate. As occupancy pulled back, we were able to refill that funnel, stabilize the physical occupancy, and get it prepared for the busy season.

Speaker #3: And so I think that's it. . That says a lot about our technology, our process. We were able to capture that upside with respect to occupancy and rate.

Speaker #3: And then as occupancy pulled back, we were able to refill that funnel, stabilize the physical occupancy, and get it prepared for the busy season.

H. Michael Schwartz: As occupancy pulled back, we were able to refill that funnel, stabilize the physical occupancy, and get it prepared for the busy season.

Speaker #4: All right. Thank you, guys.

Eric Luebchow: All right. Thank you, guys.

Speaker #6: Your next question comes from the line of Mike Muller with JPMorgan. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Michael Mueller with JP Morgan. Your line is open. Please go ahead.

Speaker #7: Yeah. Hi. So two questions. I guess on the first one, I apologize if I missed this. But can you talk about the move-in rate expectations for the bounce of the year compared to I think it was about 6 and a half down.

Michael Mueller: Yeah. Hi. Two questions. I guess, on the first one, I apologize if I missed this, but can you talk about the move-in rate expectations for the balance of the year compared to, I think it was about 6.5% down, you said in April? You know, from higher level perspective, how should we be thinking about a bridge loan program? You know, how it fits into the business, can it be a needle mover going forward, et cetera. Thanks.

Speaker #7: You said in April. And then just from higher-level perspective, how should we be thinking about the bridge loan prep program? How it fits into the business?

Speaker #7: Can it be a needle mover going forward, etc.? Thanks.

Speaker #4: Hey, Mike. So I'll give you kind of the operating assumptions. We went over these slightly last quarter, but I'll review them. They really haven't changed.

David Corak: Mike, I'll give you kind of the operating assumptions. We went over these slightly last quarter, but I'll review them. They really haven't changed. From a move-in rent standpoint, obviously we have a handful of markets, some markets that have already turned positive this year, other supply markets still sort of negative. Our assumption is that by the end of rental season, call it end of August, September, we'll on the whole be largely back to a neutral kind of inflection point. If we don't get back there, right, it doesn't have a material impact on the rest of the year, but will have some impact on obviously Q3 and Q4.

Speaker #4: So from a move-in rent standpoint, obviously, we have a handful of markets, some markets that have already turned positive this year. Other supply markets still sort of negative.

Speaker #4: But our assumption is that by the end of rental season, so call it end of August, September, we'll, on the whole, be largely back to a neutral kind of inflection point.

David Corak: Our assumption is that by the end of rental season, call it end of August, September, we'll on the whole be largely back to a neutral kind of inflection point. If we don't get back there, right, it doesn't have a material impact on the rest of the year, but will have some impact on obviously Q3 and Q4.

Speaker #4: If we don't get back there, right, it doesn't have a material impact on the rest of the year. But we'll have some impact on, obviously, the third and fourth quarter.

Speaker #4: From an occupancy standpoint, we are modeling kind of fairly flat to slightly positive relative to 2025 with the exception of Asheville, obviously. But for the rest of the portfolio, think about sort of a fairly flat to maybe slightly positive.

David Corak: From an occupancy standpoint, we are modeling, you know, kind of fairly flat to slightly positive relative to 2025, with the exception of Asheville, obviously. For the rest of the portfolio, you know, think about sort of, you know, fairly flat to maybe slightly positive. ECRIs we're, you know, modeling at or better than levels in 2025, which is basically what we've been doing given the strength and the health of the existing customer. The exception, of course, being the, you know, the California wildfire impacted properties, which we assume are gonna be impacted for the full year. I'll remind you our length of stay is actually up year over year, which is a trend that us and some of our peers are seeing, which is really good from that perspective.

Speaker #4: ECRIs, we're modeling at or better than levels in 2025 because it's basically what we've been doing given the strength and the health of the existing customer, the exception, of course, being the California wildfire impacted properties, which we assume are going to be impacted for the full year.

David Corak: The exception, of course, being the, you know, the California wildfire impacted properties, which we assume are gonna be impacted for the full year. I'll remind you our length of stay is actually up year over year, which is a trend that us and some of our peers are seeing, which is really good from that perspective.

Speaker #4: And I'll remind you, our length of stay is actually up year over year, which is a trend that us and some of our peers are seeing, which is really good.

Speaker #4: From that perspective, and then on the supply front, we're obviously, like everyone else, assuming that the supply impact decreases throughout the year. In terms of your second question, Mike, on access and the bridge lending.

David Corak: On the supply front, we're obviously, you know, like everyone else, assuming that the supply impact, you know, decreases throughout the year. In terms of your second question, Michael Mueller, on Access and the bridge lending. Let me give a little bit of background on the relationship then talk about sort of the pipeline and how we're looking at deals and what we're looking at. Access is a portfolio company of Conversant Capital. For some background, they run an institutional commercial real estate finance platform. H. Michael Schwartz and the principal of Access have a very long-standing relationship, this is not something that was just sort of thrown together overnight. This was, you know, well thought out for a long time.

Speaker #4: So let me give you a little bit of background on the relationship, and then talk about the pipeline and how we're looking at deals and what we're looking at.

Speaker #4: So access is a portfolio company of Conversant Capital, for some background. They run an institutional commercial real estate finance platform. Michael and the principal of Access have a very longstanding relationship.

David Corak: H. Michael Schwartz and the principal of Access have a very long-standing relationship, this is not something that was just sort of thrown together overnight. This was, you know, well thought out for a long time.

Speaker #4: So this is not something that was just sort of thrown together overnight. This was well thought out for a long time. So Access, their role in this relationship will help us source structure and service bridge loans investments, etc.

David Corak: Access, their role in this relationship, you know, will help us source, structure, and service bridge loans, investments, et cetera, and they will be a 5% participant in the JV's investments. The partnership, you know, for us, gives us the horsepower to grow our bridge lending business efficiently without burdening our G&A, essentially, right? We're really excited at this, right? We're excited at the potential of the partnership and sort of the synergistic relationship that the program will have on third-party management and our overall external growth trajectory. When you think about the pipeline overall, it's very strong. We're very pleased with it in where it stands today. We're actively looking at over $100 million of deals with average yields of 10% to 14%.

Speaker #4: And they will be a 5% participant in the JVs investments. The partnership for us gives us the horsepower to grow our bridge lending business efficiently without burdening our G&A, essentially, right?

Speaker #4: We're really excited at this, right? We're excited at the potential of the partnership and sort of the synergistic relationship with the program we'll have on third-party management and our overall external growth trajectory.

David Corak: We're excited at the potential of the partnership and sort of the synergistic relationship that the program will have on third-party management and our overall external growth trajectory. When you think about the pipeline overall, it's very strong. We're very pleased with it in where it stands today. We're actively looking at over $100 million of deals with average yields of 10% to 14%.

Speaker #4: When you think about the pipeline overall, it's very strong. We're very pleased with it in where it stands today. We're actively looking at over $100 million of deals.

Speaker #4: With average yields of 10 to 14 percent. Obviously, just like an acquisition pipeline, we're not going to close on those $100 million deals. But our pipeline is filled with really strong deals and markets that we like.

David Corak: Obviously, just like an acquisitions pipeline, we're not going to close on those $100 million deals, our pipeline is filled with really strong deals and markets that we like, with sponsors that we, you know, we generally like. We're typically looking at some sort of mezz or pref position on a deal that already has senior debt on it or is in market with senior debt. We would also do sort of the A note, B note approach, but the pipeline is really dictating the former strategy. The pipeline is a mix of recaps, acquisition financing, development deals, though I'll note our You know, we're particularly selective on any new development deals. A ton of potential on this front, obviously working off of a very small denominator.

Speaker #4: With sponsors that we generally like. We're typically looking at some sort of mez or prep position on a deal that already has senior debt on it or is in market with senior debt.

Speaker #4: We would also do sort of the ANO/BNO approach, but the pipeline is really dictating the former strategy. The pipeline is a mix of recaps, acquisition financing, and development deals.

David Corak: The pipeline is a mix of recaps, acquisition financing, development deals, though I'll note our You know, we're particularly selective on any new development deals. A ton of potential on this front, obviously working off of a very small denominator.

Speaker #4: And though I'll note our we're particularly selective on any new development deals. So a ton of potential on this front. Obviously, working off of a very small denominator.

David Corak: We really like the risk-adjusted returns on a lot of these deals that we're going after, but are certainly sensitive to the, you know, the quality of the property, the quality of the sponsor, the impact on our leverage, and then obviously, you know, the overall, you know, quality of our earnings.

Speaker #4: We really like the risk-adjusted returns on a lot of these deals that we're going after, but are certainly sensitive to the quality of the property, the quality of the sponsor, the impact on our leverage, and then, obviously, the overall quality of our earnings.

Speaker #5: And I'd just add that it's also opening up additional third-party property management assignments.

James Barry: I would just add that also it's opening up additional, third-party property management assignments.

Speaker #7: Got it. Okay. Thank you.

Michael Mueller: Got it. Okay. Thank you.

Speaker #4: Thanks, Mike.

David Corak: Thanks, Mike.

Speaker #6: Your next question comes from the line of Mason Guell with Baird. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Mason Gwyn with Baird. Your line is open. Please go ahead.

Speaker #8: Hey. Thanks for taking my question. On the expense side, what drove some of the favorable expense growth? And then kind of what is driving the higher expected growth for the remainder of the year kind of compared to the first quarter?

Mason Gwyn: Hey, thanks for taking my question. On the expense side, what drove some of the favorable expense growth? kind of what is driving the higher expected growth for the remainder of the year, kind of compared to Q1?

Mason Guell: Hey, thanks for taking my question. On the expense side, what drove some of the favorable expense growth? kind of what is driving the higher expected growth for the remainder of the year, kind of compared to Q1?

Speaker #7: Yeah. I'll jump in there. In terms of the first quarter and some of the favorable comps there is we had a good number on our property tax line item, which is obviously our single largest expense line item.

James Barry: Yeah. I'll jump in there. you know, in terms of the Q1 and some of the favorable comps there is, we had a good number on our property taxes, line item, which is obviously our single largest expense line item. That came in at a pretty nominal level. We also had, as we've talked about on the insurance front, we have not only realized the benefits of a strong general liability renewal that took place in November 2025, and that's carrying forward for a full year. In addition, we also had a very strong property renewal that took place at the beginning of April.

Speaker #7: That came in at a pretty nominal level. We also had, as we've talked about on the insurance front, we have not only realized the benefits of a strong general liability renewal that took place in November of 2025.

Speaker #7: And that's carrying forward for a full year. In addition, we also had a very strong property renewal that took place at the beginning of April.

Speaker #7: So it's not in our Q1 numbers, but it is part of that. And it's the main reason behind our OPEX guide down is those savings on that property insurance renewal.

James Barry: It's not in our Q1 numbers, but it is part of that, and it's the main reason behind our OpEx guide down, is those savings on that property insurance renewal. Part of the offset and part of the reason we were still positive is we had some weather-related expenses with both in utilities and R&M. Our payroll is at a nominal level, call it, you know, in the low to mid-single digits. I'll also note that advertising was up about, call it 1.9% for the quarter on a year-over-year basis, but that's a lever that we wanna, you know, potentially be strategic with in terms of the trade-off, in terms of getting new rentals between concessions, pricing, and marketing.

Speaker #7: Part of the offset, and part of the reason we were still positive, is we had some weather-related expenses, both in utilities and R&M. And our payroll is at a nominal level—call it in the low- to mid-single digits.

Speaker #7: I'll also note that advertising was up about, call it 1.9% for the quarter on a year-over-year basis. But that's a lever that we want to potentially be strategic with in terms of the trade-off, in terms of getting new rentals between concessions, pricing, and marketing that's something we want to keep that flexibility on.

James Barry: I'll also note that advertising was up about, call it 1.9% for the quarter on a year-over-year basis, but that's a lever that we wanna, you know, potentially be strategic with in terms of the trade-off, in terms of getting new rentals between concessions, pricing, and marketing.

James Barry: You know, that's something we wanna keep that flexibility on. You know, that's the overall shape of the OpEx, but we felt really good about that property insurance renewal, and that allowed us to reduce the OpEx guide.

Speaker #7: So that's the overall shape of the OPEX. But we felt really good about that property insurance renewal. And that allowed us to reduce the OPEX guide.

Speaker #8: Great. And then, can you talk about what drove the higher managed fleet EBITDA guide and how that segment has been performing?

Mason Gwyn: Great. Could you talk about what drove the higher managed REIT EBITDA guide and how that segment has been performing?

Mason Guell: Great. Could you talk about what drove the higher managed REIT EBITDA guide and how that segment has been performing?

Speaker #7: Yeah, I'll also jump in there. And so, overall, the recurring revenues from that overall portfolio in the managed fleet platform—as a reminder, those assets are largely unstabilized, right?

James Barry: Yeah. I'll also jump in there. Overall, the recurring revenues from that overall portfolio in the managed REIT platform, as a reminder, those assets are largely unstabilized, right? They grew at an outsized pace relative to, for example, our same store portfolio growth rate. Those revenues came in higher than our expectations. And cumulatively, we're talking about an annualized run rate in the Q1 on revenues in the managed REIT platform of, you know, just over $16 million on an annualized basis. Right. That's a really powerful base of recurring revenues for SmartStop.

Speaker #7: And so they grew at an outsized pace relative to, for example, our same-store portfolio growth rate. And so those revenues came in higher than our expectations.

Speaker #7: And cumulatively, we're talking about an annualized run rate in the first quarter on revenues in the managed fleet platform of just over $16 million on an annualized basis.

James Barry: And cumulatively, we're talking about an annualized run rate in the Q1 on revenues in the managed REIT platform of, you know, just over $16 million on an annualized basis. Right. That's a really powerful base of recurring revenues for SmartStop.

Speaker #7: Right? So that's a really powerful base of recurring revenues for SmartStop.

Speaker #8: Got it. Thank you.

Mason Gwyn: Got it. Thank you.

Mason Guell: Got it. Thank you.

Speaker #4: Thanks, Mason.

David Corak: Thanks, Mason.

Speaker #6: There are no further questions at this time. I would now like to pass the call over to Michael Schwartz, chairman and CEO for closing remarks.

Operator: There are no further questions at this time. I would now like to pass the call over to Michael Schwartz, Chairman and CEO, for closing remarks. Please go ahead.

Speaker #6: Please go ahead.

Speaker #5: Thank you. It's been a solid first quarter for us. And I want to thank you for your time and interest in SmartStop Sales Storage the smarter way to store.

H. Michael Schwartz: Thank you. It's been a solid Q1 for us, and I wanna thank you for your time and interest in SmartStop Self Storage, the smarter way to store. Have a great day.

Speaker #5: Have a great day.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.