SmartStop Self Storage REIT, Inc.

Ladies and gentlemen, thank you for standing by. My name is Colby, and I'll be your conference operator today. At this time, I would like to welcome you to the Smart Stop Self-Storage REIT third quarter earnings call. All lines have been placed on mute to prevent any background noise. And after the speaker's remarks, there will be a question and answer session. If you'd like to ask a question at that time, please press star, then the number one on your telephone keypad. If you'd like to withdraw your question at any time, please press star 1 again. I would now like to turn the call over to David Korak. Please go ahead.

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

Thank you, David, and thank you for joining us today for our third quarter earnings call to discuss our first full quarter as a New York Stock Exchange listed company. I'll start with some introductory remarks on SmartStop, the Argus transaction, and the industry before I hand it over to James to discuss the quarter. After that, we'll open it up to Q&A with James, David, and myself. Before we dive into the high-level remarks, a few highlights of our third quarter results. We posted a strong third quarter with sector-leading same-store revenue growth of 2.5% and average occupancy of 92.6%, both largely in line with our expectations. We reported FFO is adjusted per share of 47 cents, which was about 2 cents below our expectations for the quarter. This was entirely driven by two events that we noted in last night's earnings release. An unexpected vacate of our only notable industrial tenant and the recognition of a one-time equity-based compensation expense related to performance units issued in 2023. James will elaborate on these items later in the call. With these pieces in mind and our 3Q strong operating results, we maintained the midpoint of our full year 2025 FFO as adjusted per share guidance. We had another robust quarter, both in terms of performance and activity. First, we opportunistically returned to the Canadian maple bond market, raising $200 million Canadian at a 3.89% coupon, this time with a five-year maturity. During the quarter, we acquired approximately 86 million of Class A storage properties on balance sheet in both the U.S. and Canada. We also acquired one property subsequent to the quarter end for 15.3 million. These on-balance sheet acquisitions are primarily Class A properties located in top markets consistent with our communicated acquisition strategies. We also increased our loans and preferred investments to the managed REITs by approximately $20 million. Between these loans and our on-balance sheet acquisitions, we deployed about $106 million of accretive capital during the quarter. Additionally, we are proud of SmartStop's inclusion as a member of the MSCIUS REIT Index, more commonly known as the RMZ. Lastly, but certainly not least, we entered into a contribution agreement with Argus Professional Storage Management. Needless to say, it was another very active quarter. Before turning to the industry, I just want to spend a minute on the Argus transaction, which we closed on October 1st. Since the IPO Roadshow, we have been communicating to the street that we intended to enter the third-party management business, and we're actively exploring either developing a platform of our own or acquiring an existing pure play platform. After thoroughly studying the merits of both paths, we decided that if we could find the right partner, the latter would be the most beneficial to our shareholders. We've known the principles of Argus for almost two decades and have the utmost respect for what they've built. So we had tremendous confidence that we'd identified the right partner. one with a robust third-party management platform, a top-notch team of professionals, strong relationships across the United States, and a managed portfolio that strongly overlapped with ours. With approximately 230 stores under management across 26 states, Argus was the second-largest independent third-party storage manager in the U.S. Together, we now operate more than 460 self-storage properties in North America, nearly doubling our store count. and increasing our overall owned and managed net rental square feet to over $35 million. This deal immediately jumpstarts our third-party management strategy in a creative manner rather than a dilutive and lengthy process of developing one ourselves. A few highlights of the deal. Given the size of the managed portfolio, this essentially doubles our data sets, enabling better revenue management across both existing and new geographies. We get immediate property clustering in 12 current Smart Stop markets, which in time should lead to margin expansion for both managed and owned properties. This provides Smart Stop with direct access to a captive pipeline of potential acquisition targets, including off-market deals. It also opens the door to bridge lending to current or potential owners, which is something that no other independent third-party manager can provide. And lastly, this deal paves the way for SmartStop to expand third-party management in Canada, a vastly underserved management market. As for an update, as of today, we have not experienced any attrition or indications of attrition beyond what we had already known in our underwriting. The integration is going very well, and we've had no turnover of Argus employees. Finally, I'll note that we've closed our first lending opportunity with a $4.8 million preferred investment related to a five-property portfolio that just onboarded onto our platform last week. Turning to the industry, on the operations front, we continue to believe that 2025 will be an incrementally better year than 2024, but not as strong as a more normalized year in storage. Accordingly, we saw a more normalized rental season as compared to the past two years, but again, still not quite a typical rental season. The recovery in storage is happening, but the choppiness in customer demand continues. During the quarter, we saw a healthy July and August to close out busy season, but a weaker than anticipated September. Industry move-in rates continue to stabilize, but are still negative year over year, though significantly less negative than the previous two years. Our strategy is working. Website visits are up significantly. Reservations remain strong. In the third quarter, we posted the highest ever lead conversion statistics in our company's history. We also posted the highest hit rate on tenant protection in our company's history. Our customers' health remains strong. Delinquencies remain at below average levels and, in fact, are down year over year. 25% of our new rentals utilize our SmartPay feature for payment, and nearly 50,000 customers have downloaded our mobile app. ECRIs remain healthy without any change in attrition. Customers citing their rental rates as a reason for leaving our properties is down year over year on our exit surveys. With our year-to-date results through busy season paired with an improved supply picture, we remain optimistic on the sector's slow, and steady recovery, creating momentum as we head into 2026. I do want to quickly touch on the retail shareholder lockup expiration. On October 1st, our six-month post-lockup of our existing retail shareholders expired. Over the course of the next two weeks, as expected, we saw elevated volume and volatility in our stock price. Since then, both volume and volatility have normalized. While we aren't able to calculate the exact turnover of our retail shareholder base, we want to once again thank our retail shareholders who have been such an important part of SmartStop. Taking a step back, we have accomplished a tremendous amount in a short period of time as a publicly traded company. We believe we're off to a strong start and are executing on the story that we laid out on our IPO Roadshow in March. 2025 will certainly be known as a transformational year for SmartStop. We had a successful IPO raising $931.5 million in some of the most difficult capital markets and tariff concerns, aka Liberation Day. We raised $700 million in maple bonds at a sub-4% rate. We had more than $500 million in accretive acquisitions over the past 12 months, including the acquisitions of Argus professional storage management. Factor leading same store revenue growth, even with the backdrop of the single largest self-storage supply wave in our sector's history. And expected strong FFO growth that should further accelerate in the fourth quarter. Without a doubt, we're in a choppy self-storage market with volatile capital markets and plenty of uncertainty in the broader economic environment. However, through all this choppiness, SmartStop's accomplishments over the past seven months have positioned this company to achieve solid board growth and take advantage of the better days ahead in self-storage. We are a small cap company with a large cap platform built for continued growth in the US and Canada. With that, I'll turn it over to James to discuss the quarter.