SmartStop Self Storage REIT Inc., a publicly registered non-traded real estate investment trust formerly known as Strategic Storage Trust II Inc., has released its overall results for the second quarter of 2020.
Second Quarter 2020 Highlights:
- Increased total self-storage-related revenues by approximately $0.2 million, or 0.9 percent, when compared to the same period in 2019.
- Funds from operations, or FFO, increased by approximately $0.7 million, or 131 percent, when compared to the same period in 2019.
- Decreased same-store revenues by 0.3 percent compared to the same period in 2019, primarily due to the impact of the COVID-19 pandemic.
- Increased same-store NOI by 7.2 percent compared to the same period in 2019, which the company said is primarily attributable to cost savings associated with the self administration transaction which closed on June 28, 2019.
- Increased same-store average physical occupancy by 20 basis points to 89.7 percent for the three months ended June 30, 2020, compared to 89.5 percent during the same period in 2019.
- Same-store annualized revenue per occupied square foot was approximately $15.30 for the second quarter of 2020, which represented a decrease of approximately 0.7 percent when compared to the same period in 2019.
- Generated managed REIT platform revenue of approximately $1.9 million for the second quarter of 2020.
COVID-19 Pandemic Update
The company noted that the spread of the COVID-19 pandemic has affected self-storage operations and its second quarter results. Operationally, SmartStop has instituted the use of masks, plastic dividers, additional cleaning measures and social distancing at all of its self-storage facilities, as well as instituted remote working measures at its corporate headquarters and call center.
- No rate increases for existing customers during second quarter 2020
- A reduction in late fees during second quarter 2020, which amounted to a reduction of approximately 35 percent on a same-store basis as compared to second quarter 2019
- Same-store move-ins declined approximately 5 percent during the second quarter 2020 as compared to second quarter 2019, after declining approximately 22 percent on a same-store basis for the month of April 2020 vs. April 2019
- Same-store move-outs declined approximately 12 percent for the second quarter 2020 as compared to second quarter 2019
- Same-store asking rates for new customers declined during the second quarter 2020 as compared to second quarter 2019
- Rents billed and collected within the same month, were effectively unchanged on a year-over-year basis at approximately 96 percent during the second quarter 2020.
Acquisition and Development Activity
On June 16, 2020, SmartStop announced the opening of its 12th location in the Greater Toronto Area. The property includes 840 units of drive up and climate-controlled units with 85,000 rentable square feet.
On July 21, 2020, SmartStop purchased an undeveloped parcel of land adjacent to its existing Riverview, Florida self-storage facility for $800,000, plus closing costs. SmartStop intends on expanding the existing facility by adding approximately 170 units and 25,000 rentable square feet, which is expected to be completed in the second or third quarter of 2021.
Recent Valuation and NAV Calculation
On April 20, 2020 SmartStop’s board approved an updated net asset value per share of $10.40, as of December 31, 2019. The updated NAV represented a decrease of approximately 2.4 percent from the previously approved value as of March 31, 2019 of $10.66.
On July 22, 2020, SmartStop’s board declared a distribution rate for August 2020 of approximately $0.00164 per day per share ($0.60 per share annualized) on the outstanding shares of common stock payable to both Class A and Class T stockholders the following month.
SmartStop launched its initial public offering in January 2014 and raised $566 million in investor equity prior to closing in January 2017. As of the first quarter of 2020, the company raised $52.1 in distribution reinvestment plan proceeds, and has approximately $1.6 billion of real estate assets under management, including 144 properties in 19 states and Toronto.