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Investors Favor the NYSE’s Newest Self Storage Company Despite Debt Load

April 03, 2025

Thursday, April 3, 2025

On Tap Today

  • Debt packed: SmartStop’s strong IPO shows investors still believe in self-storage—especially when growth and tech outweigh sector slowdown.

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The New York Stock Exchange has a new self-storage stock to offer investors: SmartStop Self Storage, which IPOed this week, raising $810 million at a $1.54 billion valuation. The company is small compared to other storage REITs—Public Storage, for example, has a market cap of over $50 billion. But the success of the IPO, in an era when IPOs have struggled, shows that investors are eager to back a growing self-storage company—even if that growth is fueled largely by debt.

SmartStop is small as far as REITs go, but it does seem to have a solid portfolio. Founded in 2009, the company owns or manages more than 200 storage facilities across the U.S. and Canada, totaling over 16.7 million rentable square feet. According to its fourth-quarter 2024 earnings report, the company has maintained 92.4 percent occupancy at a time when many other storage portfolios have seen declining numbers.

Due to its aggressive acquisition strategy, SmartStop is not currently profitable. It has been acquiring high-quality properties using debt, including a $175 million credit facility with KeyBank. SmartStop has a debt-to-equity ratio of 1.7—much higher than its competitors. By comparison, Public Storage has a debt-to-equity ratio of just 0.33.

Despite the lack of profit and heavy reliance on debt, investors weren’t scared off. SmartStop’s stock is already up nearly 10 percent from its IPO price, even as most of the market dipped following Trump’s tariff announcements. Self-storage has long been favored by investors for its steady returns and recession-resistant business model. Now, investors may be seeking up-and-coming self-storage companies that offer both growth and dividends. SmartStop has positioned itself well as an innovator, touting its “robust data science platform” as a driver of its profitable third-party management business.

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