SmartStop Good Expense Trends Help Drive 2Q FFO Upside and Guidance Increase

Research evidence excerpt

J P M O R G A N

North America Equity Research

05 August 2026

SmartStop

Good Expense Trends Help Drive 2Q FFO Upside and

Guidance Increase

Underweight

SMA, SMA US

Price (05 Aug 26):$33.85

REITs

After Wednesday’s close, SmartStop reported 2Q operating results and raised the

FFO and SS NOI outlooks. The quarter’s FFO upside compared to our forecast was

NOI driven, with a hefty contribution from significantly lower YoY expenses. The

lower expense trends carried over to the FY outlook as well, with notably lower

expectations (more below). Revenue trends were also a bit ahead as well, which

pushed higher the low-end of the SS revenue guide. On the investment front, there

was some on balance sheet investment activity as well. On tomorrow’s call, we

expect management’s tone to be fairly positive about its SS revenue and expense

trends and the margin improvement it is seeing, and how it is finding some

opportunities with the loan/structured program.

2Q FFO/share print $0.01 ahead on NOI…particularly lower expenses. SMA

reported 2Q FFO/share (as adj.) of $0.49, which was slightly higher than our $0.48

estimate and ~$0.02 ahead of the Bloomberg consensus ($0.47). Relative to our

model, NOI and ancillary income came in ~$0.02 higher than our forecast, with

lower storage operating expenses driving the majority of the upside. That NOI

upside was partially offset by higher G&A.

Michael W. Mueller, CFA AC

(1-212) 622-6689

Anthony Paolone, CFA

(1-212) 622-6682

Nahom Tesfazghi

(1-212) 622 4884

Daniella De Armas Rosales

(1-212) 622-0050

J.P. Morgan Securities LLC

Increases the 2026 outlook. Similar to its peers, SMA increased its 2026 guidance

outlook at the margin. Specifically, it raised the low end of its 2026 FFO/share as

adjusted range to $1.98–2.04 from $1.94–2.04. With respect to the drivers, the SS

NOI growth outlook improved to +0.65% to +1.65% compared to the prior -1.25%

to +0.75%. That increase was driven by a marginally better SS revenue outlook,

which moved to +0.50% to +1.50% from the prior -0.25% to +1.75%, and by a

meaningful cut in the SS operating expense outlook (down to +0.25% to +1.25%

from the prior +1.75% to +3.75%).…