Strategic Entry Into Canada

Research evidence excerpt

Strategic Entry Into Canada

June 22, 2026 | 18:46 ET~

Public Storage Self Storage REITs

Juan C. Sanabria Analyst

juan.sanabria@bmo.com (312) 845-4074

PSA-NYSE Rating Price: Jun-22 Target Total Rtn

Market Perform $320.22 $340.00 10% John P. Kim Analyst

JohnP.Kim@bmo.com (212) 885-4115

Robin Haneland Senior Associate

robin.haneland@bmo.com (646) 901-2282

Legal Entity: BMO Capital Markets Corp.Strategic Entry Into Canada

Bottom Line:

PSA agreed to acquire Public Storage Canada from the Hughes family for US$1.2B. PSA's 2YR Price Volume Chart

expects an initial 5% cap rate (net of taxes/G&A), which it expects to grow to high-5%. 380

Helped by ROFO/ROFRs, pricing is attractive with market cap rates at low-to-mid 4%. 360

We see attractive NOI growth potential from PSA's leading tech/platform and low 340

320 5

starting occupancy (83%). The transaction also allows for higher NSA accretion given 300 4

lower cost CAD debt to hedge Canadian equity exposure. 280 2

260 1

240 0

Key Points Dec Jun Dec Jun

LHS: Price ($) / RHS: Volume (mm) Source: FactSet

Acquiring 3rd Largest Canadian Operator funded 75% in OP units ($889M; $321.98/

sh) and 25% in cash ($310M) for ~US$1.2B. PSA expects a high-5% yield pre-taxes/

G&A and a double-digit IRR. The Hughes family has an earn-out up to $288M in OP

units priced at $375/sh (+17% premium), contingent on NOI targets over 5-yrs. The

transaction is expected to close in 2H26. Canada will make-up 1.5% of pro-forma PSA.

Bull/Bear. Canadian NOI margins are 65% vs PSA's 77.1% with Canadian occupancy at

83% (PSA 91.5%; SMA Toronto 92.4%). Canada represents a new avenue for growth

(acquisitions, redevelopment, 3PM etc). PSA doesn't plan to touch Canadian operations

for 6-mos, given its initial focus on the NSA integration. The portfolio is already Public