SmartStop Self Storage REIT, Inc. Reports Strong Second Quarter 2021 Results With Record Same-Store Revenue and NOI Growth

LADERA RANCH, Calif.--(BUSINESS WIRE)--SmartStop Self Storage REIT, Inc. (“SmartStop”), a self-managed and fully-integrated self storage company with approximately $1.8 billion of self storage assets under management, announced its overall results for the three and six months ended June 30, 2021.

“SmartStop had an exceptionally strong second quarter, with our highest ever recorded same-store occupancy of 96.3% at quarter end and strong rental rate growth. This resulted in same-store revenue and NOI growth of 21.5% and 28.7% for the quarter, respectively, both higher than all of our publicly-traded peers,” said H. Michael Schwartz, Chairman and Chief Executive Officer of SmartStop. “Our best-in-class portfolio posted strong results in all of our markets throughout North America. Specifically, the Greater Toronto Area (“the GTA”) was our best performing market this quarter with same-store revenue and NOI growth of 33.6% and 45.0%, respectively. The GTA continues to be a high performing market, a key differentiator between SmartStop and our peer group and a primary piece of our Company’s growth initiatives. On the external growth front, we continue to find accretive acquisitions, acquiring two wholly-owned properties for $31 million during the quarter and our acquisition pipeline remains healthy. With ample attractively priced capital, a strong acquisitions pipeline and a robust operating environment, we believe the company is well positioned to execute both our internal and external growth initiatives, driving stockholder value in 2021 and beyond.”

Three Months Ended June 30, 2021 Financial Highlights:

• Net loss attributable to common stockholders decreased by approximately $4.6 million when compared to the same period in 2020. Net loss per Class A and Class T shares (basic and diluted) decreased $0.09 when compared to the same period in 2020.
• Total self storage-related revenues increased by approximately $14.0 million, or 53.6%, when compared to the same period in 2020.
• FFO, as adjusted (attributable to common stockholders and Operating Partnership (“OP”) unit holders), increased by approximately $7.7 million, or 445%, when compared to the same period in 2020.
• FFO, as adjusted per share and OP unit outstanding - diluted was $0.10, an increase of $0.07, or 233%, when compared to the same period in 2020.
• Same-store revenues increased by 21.5% compared to the same period in 2020.
• Same-store expenses increased by 7.2% compared to the same period in 2020.
• Same-store NOI increased by 28.7% compared to the same period in 2020.
• Same-store average physical occupancy increased by 6.1% to 95.8% for the three months ended June 30, 2021, compared to 89.7% during the same period in 2020.
• Same-store annualized rent per occupied square foot was approximately $16.50 for the three months ended June 30, 2021, which represented an increase of approximately 14.7% when compared to the same period in 2020.

Six Months Ended June 30, 2021 Financial Highlights:

• Net loss attributable to common stockholders decreased by approximately $25.8 million when compared to the same period in 2020. Net loss per Class A and Class T shares (basic and diluted) decreased $0.50 when compared to the same period in 2020.
• Total self storage-related revenues increased by approximately $18.3 million, or 34.7%, when compared to the same period in 2020.
• Same-store revenues increased by 15.5% compared to the same period in 2020.
• Same-store expenses increased by 4.1% compared to the same period in 2020.
• Same-store NOI increased by 21.4% compared to the same period in 2020.
• Same-store average physical occupancy increased by 5.3% to 94.5% for the six months ended June 30, 2021, compared to 89.2% during the same period in 2020.
• Same-store annualized rent per occupied square foot was approximately $15.93 for the six months ended June 30, 2021, which represented an increase of approximately 8.9% when compared to the same period in 2020.

External Growth

In April, SmartStop acquired a recently built, six-story self storage facility in Oakville, Ontario, Canada. The property was completed in April 2020 and was approximately 40% occupied at acquisition. The property’s 1,070 units are 100% climate-controlled across approximately 81,500 square feet. The property offers customers a variety of amenities including state-of-the-art security systems, elevators, keypad access, a gated drive-in loading area and more. The facility is our third in Oakville, establishing SmartStop as a dominant player in the submarket. This was SmartStop’s 17th owned or managed operating property in the GTA.

In May, SmartStop acquired a self storage facility in Riverside, CA, the most populous city in Southern California’s “Inland Empire.” This prime location has great visibility from Van Buren Boulevard and provides easy access from the Riverside Freeway. The facility serves the communities of La Sierra, Corona, East Vale, Ramona, and Jurupa Valley and is located next to Riverside Municipal Airport. The property’s 379 units and 71 RV parking spaces span across approximately 68,700 square feet. The property offers customers a variety of amenities including a gated drive-in loading area, state-of-the-art security systems, keypad access and large truck accessibility. With an RV parking component, this new facility offers customers a complimentary product type from our two neighboring SmartStop facilities, one of which is directly adjacent. The facility is the Company’s third in the submarket and 29th owned or managed location in California.

Declared Distributions

On June 23, 2021, SmartStop’s board of directors declared a distribution rate for the third quarter of 2021, of approximately $0.00164 per day per share on the outstanding shares of common stock payable to both Class A and Class T stockholders. In connection with these distributions, after the stockholder servicing fee is paid, approximately $0.0014 per day will be paid per Class T share. Such distributions payable to each stockholder of record during a month will be paid the following month.

SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
	June 30, 2021 (Unaudited)			December 31, 2020
ASSETS
Real estate facilities:
Land	$	396,430,618		$	335,800,354
Buildings		1,101,336,919			810,480,845
Site improvements		77,553,126			63,821,383
		1,575,320,663			1,210,102,582
Accumulated depreciation		(135,187,165	)		(115,903,045	)
		1,440,133,498			1,094,199,537
Construction in process		1,857,047			1,761,303
Real estate facilities, net		1,441,990,545			1,095,960,840
Cash and cash equivalents		26,580,765			72,705,624
Restricted cash		7,276,448			7,952,052
Investments in unconsolidated real estate ventures		20,682,690			—
Investments in and advances to Managed REITs		12,033,750			15,624,389
Other assets, net		14,087,618			7,734,276
Intangible assets, net of accumulated amortization		21,190,218			12,406,427
Trademarks, net of accumulated amortization		16,123,529			16,194,118
Goodwill		53,643,331			53,643,331
Debt issuance costs, net of accumulated amortization		2,258,004			—
Total assets	$	1,615,866,898		$	1,282,221,057
LIABILITIES AND EQUITY
Debt, net	$	849,209,991		$	717,952,233
Accounts payable and accrued liabilities		24,971,528			23,038,976
Due to affiliates		694,739			667,429
Distributions payable		8,088,854			6,650,317
Contingent earnout		19,900,000			28,600,000
Deferred tax liabilities		7,704,673			8,380,215
Total liabilities		910,569,785			785,289,170
Commitments and contingencies
Redeemable common stock		64,028,104			57,335,575
Preferred stock, $0.001 par value; 200,000,000 shares authorized:
Series A Convertible Preferred Stock, $0.001 par value; 200,000 shares authorized; 200,000 and 200,000 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively, with aggregate liquidation preferences of $203,116,438 and $202,928,620 at June 30, 2021 and December 31, 2020, respectively		196,356,107			196,356,107
Equity:
SmartStop Self Storage REIT, Inc. equity:
Class A common stock, $0.001 par value; 350,000,000 shares authorized; 76,516,281 and 52,660,402 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		76,517			52,661
Class T common stock, $0.001 par value; 350,000,000 shares authorized; 7,978,951 and 7,903,911 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		7,979			7,904
Additional paid-in capital		724,292,971			492,408,006
Distributions		(185,799,706	)		(163,953,169	)
Accumulated deficit		(159,234,728	)		(141,444,880	)
Accumulated other comprehensive loss		(1,882,006	)		(3,834,228	)
Total SmartStop Self Storage REIT, Inc. equity		377,461,027			183,236,294
Noncontrolling interests in our Operating Partnership		67,440,975			59,982,111
Other noncontrolling interests		10,900			21,800
Total noncontrolling interests		67,451,875			60,003,911
Total equity		444,912,902			243,240,205
Total liabilities and equity	$	1,615,866,898		$	1,282,221,057

SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenues:
Self storage rental revenue	$	38,104,699		$	24,946,793		$	67,608,141		$	50,514,812
Ancillary operating revenue		2,027,041			1,183,418			3,584,471			2,336,261
Managed REIT Platform revenue		1,058,291			1,852,893			3,346,031			3,636,680
Reimbursable costs from Managed REITs		1,061,619			1,486,441			2,277,662			3,279,915
Total revenues		42,251,650			29,469,545			76,816,305			59,767,668
Operating expenses:
Property operating expenses		12,479,969			9,195,043			22,823,250			18,870,069
Managed REIT Platform expenses		316,142			1,008,014			636,032			2,182,823
Reimbursable costs from Managed REITs		1,061,619			1,486,441			2,277,662			3,279,915
General and administrative		6,811,313			4,149,713			11,564,302			7,817,660
Depreciation		10,742,801			7,842,443			19,286,728			15,559,114
Intangible amortization expense		3,653,681			3,218,152			4,913,228			6,887,783
Acquisition expenses		30,448			97,221			336,098			125,326
Contingent earnout adjustment		400,000			500,000			2,519,744			(6,700,000	)
Impairment of goodwill and intangible assets		—			—			—			36,465,732
Impairment of investments in Managed REITs		—			—			—			4,376,879
Write-off of equity interest and preexisting relationships in SST IV upon acquisition of control		—			—			8,389,573			—
Total operating expenses		35,495,973			27,497,027			72,746,617			88,865,301
Gain on sale of real estate		178,631			—			178,631			—
Operating income (loss)		6,934,308			1,972,518			4,248,319			(29,097,633	)
Other income (expense):
Interest expense		(7,950,702	)		(8,284,429	)		(15,926,166	)		(16,623,732	)
Interest expense – accretion of fair market value of secured debt		31,250			32,892			63,116			65,549
Interest expense – debt issuance costs		(496,897	)		(936,278	)		(1,169,370	)		(1,879,761	)
Net loss on extinguishment of debt		—			—			(2,444,788	)		—
Other		171,203			152,456			1,614,585			2,729,155
Net loss		(1,310,838	)		(7,062,841	)		(13,614,304	)		(44,806,422	)
Net loss attributable to the noncontrolling interests in our Operating Partnership		546,092			933,443			2,023,086			5,965,095
Less: Distributions to preferred stockholders		(3,116,438	)		(2,362,023	)		(6,198,630	)		(4,724,045	)
Net loss attributable to SmartStop Self Storage REIT, Inc. common stockholders	$	(3,881,184	)	$	(8,491,421	)	$	(17,789,848	)	$	(43,565,372	)
Net loss per Class A share – basic and diluted	$	(0.05	)	$	(0.14	)	$	(0.24	)	$	(0.74	)
Net loss per Class T share – basic and diluted	$	(0.05	)	$	(0.14	)	$	(0.24	)	$	(0.74	)
Weighted average Class A shares outstanding – basic and diluted		75,994,754			51,622,509			66,252,067			51,469,807
Weighted average Class T shares outstanding – basic and diluted		7,960,999			7,776,128			7,944,502			7,764,393

SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NON-GAAP MEASURE – COMPUTATION OF ADJUSTED FUNDS FROM OPERATIONS
(Unaudited)
	Three Months Ended June 30, 2021			Three Months Ended June 30, 2020			Six Months Ended June 30, 2021			Six Months Ended June 30, 2020
Net loss (attributable to common stockholders)	$	(3,881,184	)	$	(8,491,421	)	$	(17,789,848	)	$	(43,565,372	)
Add:
Depreciation of real estate		10,521,283			7,705,792			18,898,768			15,293,130
Depreciation and amortization of real estate and intangible assets from unconsolidated entities		213,959			—			230,996			—
Amortization of real estate related intangible assets		3,441,144			2,170,465			4,003,229			4,343,030
Gain on deconsolidation		(169,533	)		—			(169,533	)		—
Gain on sale of real estate		(178,631	)		—			(178,631	)		—
Deduct:
Adjustment for noncontrolling interests		(1,500,869	)		(1,305,577	)		(2,616,924	)		(2,603,208	)
FFO (attributable to common stockholders)		8,446,169			79,259			2,378,057			(26,532,420	)
Other Adjustments:
Intangible amortization expense - contracts^(1)		212,537			1,047,687			909,999			2,544,753
Acquisition expenses^(2)		30,448			97,221			336,098			125,326
Acquisition expenses and foreign currency (gains) losses, net from unconsolidated entities		107,388			—			107,388			—
Contingent earnout adjustment^(3)		400,000			500,000			2,519,744			(6,700,000	)
Impairment of goodwill and intangible assets^(4)		—			—			—			36,465,732
Impairment of investments in Managed REITs^(4)		—			—			—			4,376,879
Write-off of equity interest and preexisting relationships in SST IV upon acquisition of control		—			—			8,389,573			—
Accretion of fair market value of secured debt^(5)		(31,250	)		(32,892	)		(63,116	)		(65,549	)
Net loss on extinguishment of debt^(6)		—			—			2,444,788			—
Foreign currency and interest rate derivative (gains) losses, net^(7)		(643,547	)		(57,676	)		(425,549	)		109,843
Adjustment of deferred tax liabilities^(1)		(56,880	)		(276,216	)		(1,929,746	)		(3,023,113	)
Adjustment for noncontrolling interests		(1,784	)		(168,680	)		(1,435,079	)		(4,488,613	)
FFO, as adjusted (attributable to common stockholders)		8,463,081			1,188,703			13,232,157			2,812,838
Net loss attributable to the noncontrolling interests in our Operating Partnership		(546,092	)		(933,443	)		(2,023,086	)		(5,965,095	)
Adjustment for noncontrolling interests		1,502,653			1,474,257			4,052,003			7,091,820
FFO, as adjusted (attributable to common Stockholders and OP unit holders)	$	9,419,642		$	1,729,517		$	15,261,074		$	3,939,563

^(1)	These items represent the amortization, accretion, or adjustment of intangible assets or deferred tax liabilities. As these items are non-cash and not primary drivers in SmartStop’s decision-making process, FFO is adjusted for their effect to arrive at FFO, as adjusted, as a means of determining a comparable sustainable operating performance metric to other real estate companies.
^(2)	In evaluating investments in real estate, SmartStop differentiates the costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for publicly registered, non-traded REITs that have generally completed their acquisition activity and have other similar operating characteristics.
^(3)	The contingent earnout adjustment represents the adjustment to the fair value of the Class A-2 Units issued in connection with the Self Administration Transaction. FFO is adjusted to arrive at FFO, as adjusted, as this acquisition related item is not a primary driver in SmartStop’s decision-making process and excluding this provides investors a view of SmartStop’s continuing operating portfolio performance over time.
^(4)	The impairment charges relate to SmartStop’s goodwill, intangible assets and investments in the Managed REIT Platform acquired in the Self Administration Transaction. SmartStop believes that adjusting for such non-recurring items provides useful supplemental information because such expenses may not be reflective of on-going operations and is consistent with management’s analysis of SmartStop’s operating performance and provides for a means of determining a comparable sustainable operating performance metric.
^(5)	This represents the difference between the stated interest rate and the estimated market interest rate on assumed notes as of the date of acquisition. Such amounts have been excluded from FFO, as adjusted, because SmartStop believes FFO, as adjusted, provides useful supplementary information by focusing on operating fundamentals, rather than events not related to SmartStop’s normal operations. SmartStop is responsible for managing interest rate risk and do not rely on another party to manage such risk.
^(6)	The net loss associated with the extinguishment of debt includes prepayment penalties, the write-off of unamortized deferred financing fees, and other fees incurred. SmartStop believes that adjusting for such non-recurring items provides useful supplemental information because such losses may not be reflective of on-going transactions and operations and is consistent with management’s analysis of SmartStop’s operating performance.
^(7)	This represents the mark-to-market adjustment for SmartStop’s derivative instruments not designated for hedge accounting and the ineffective portion of the change in fair value of derivatives recognized in earnings, as well as changes in foreign currency related to SmartStop’s foreign equity investments not classified as long term. These derivative contracts are intended to manage the Company’s exposure to interest rate and foreign currency risk which may not be reflective of SmartStop’s ongoing performance and may reflect unrealized impacts on SmartStop’s operating performance. Such amounts are recorded in “Other” within SmartStop’s consolidated statements of operations.

SMARTSTOP SELF STORAGE REIT, INC. AND SUBSIDIARIES
NON-GAAP MEASURE – COMPUTATION OF SAME-STORE OPERATING RESULTS
(Unaudited)

The following table sets forth operating data for SmartStop’s same-store facilities (those properties included in the consolidated results of operations since January 1, 2020, excluding nine lease-up properties SmartStop owned as of January 1, 2020) for the three months ended June 30, 2021 and 2020. SmartStop considers the following data to be meaningful as this allows for the comparison of results without the effects of acquisition, lease up, or development activity.

	Same-Store Facilities									Non Same-Store Facilities						Total
	2021			2020			% Change			2021			2020		% Change	2021				2020			% Change
Revenue ^(1)	$	30,011,041		$	24,702,072			21.5	%	$	10,120,699		$	1,428,139	N/M	$	40,131,740			$	26,130,211			53.6	%
Property operating expenses ^(2)		8,878,839			8,279,464			7.2	%		3,601,130			915,579	N/M		12,479,969				9,195,043			35.7	%
Property operating income	$	21,132,202		$	16,422,608			28.7	%	$	6,519,569		$	512,560	N/M	$	27,651,771			$	16,935,168			63.3	%
Number of facilities		103			103						36	^(6)		9			139		^(6)		112
Rentable square feet ^(3)		7,595,600			7,557,300						2,982,400			680,300			10,578,000		^(6)		8,237,600
Average physical occupancy ^(4)		95.8	%		89.7	%				N/M			N/M				94.6	%			88.1	%
Annualized rent per occupied square foot ^(5)	$	16.50		$	14.38					N/M			N/M			$	16.18			$	14.12

N/M Not meaningful

^(1)	Revenue includes rental revenue, Tenant Programs revenue, ancillary revenue, and administrative and late fees.
^(2)	Property operating expenses excludes corporate general and administrative expenses, interest expense, depreciation, amortization expense, and acquisition expenses.
^(3)	Of the total rentable square feet, parking represented approximately 937,000 square feet and 678,000 square feet as of June 30, 2021 and 2020, respectively. On a same-store basis, for the same periods, parking represented approximately 678,000 square feet.
^(4)	Determined by dividing the sum of the month-end occupied square feet for the applicable group of facilities for each applicable period by the sum of their month-end rentable square feet for the period.
^(5)	Determined by dividing the aggregate realized rental income for each applicable period by the aggregate of the month-end occupied square feet for the period. Properties are included in the respective calculations in their first full month of operations, as appropriate. SmartStop has excluded the realized rental revenue and occupied square feet related to parking herein for the purpose of calculating annualized rent per occupied square foot.
^(6)	Included in the non same-store data is a self storage facility consisting of approximately 84,000 square feet owned by SST VI OP for the period during which SmartStop consolidated their financial statements. As of June 30, 2021, SmartStop was no longer required to consolidate their financial statements.

SmartStop’s same-store revenue increased by approximately $5.3 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 due to higher annualized rent per occupied square foot and increased occupancy.

The following table presents a reconciliation of net loss as presented on SmartStop’s consolidated statements of operations to property operating income, as stated above, for the periods indicated:

	For the Three Months Ended June 30,
	2021			2020
Net loss	$	(1,310,838	)	$	(7,062,841	)
Adjusted to exclude:
Managed REIT Platform revenue		(1,058,291	)		(1,852,893	)
Managed REIT Platform expenses		316,142			1,008,014
General and administrative		6,811,313			4,149,713
Depreciation		10,742,801			7,842,443
Intangible amortization expense		3,653,681			3,218,152
Acquisition expenses		30,448			97,221
Contingent earnout adjustment		400,000			500,000
Gain on sale of real estate		(178,631	)		—
Interest expense		7,950,702			8,284,429
Interest expense – accretion of fair market value of secured debt		(31,250	)		(32,892	)
Interest expense – debt issuance costs		496,897			936,278
Other		(171,203	)		(152,456	)
Total property operating income	$	27,651,771		$	16,935,168

The following table presents a reconciliation of same-store metrics by Metropolitan Statistical Area (“MSA”) or Census Metropolitan Areas (“CMA”), for the periods indicated:

	% of		# of	Net Rentable			Net Rent per Occupied Sq. Ft. for the Three Months Ended June 30,^(1)			Avg. Occupancy for the Three Months Ended June 30,				%			Revenue for the Three Months Ended June 30,^(3)			%			Expenses for the Three Months Ended June 30,^(3)			%			NOI for the Three Months Ended June 30,^(3)			%
MSA/CMA	NOI		Stores	Sq. Ft.	Units		2021		2020	2021		2020		Change			2021		2020	Change			2021		2020	Change			2021		2020	Change
Miami – Fort Lauderdale	15.8	%	9	941,400	7,750	$	20.65	$	18.70	94.8	%	88.8	%	6.0	%	$	4,429,592	$	3,790,280	16.9	%	$	1,087,089	$	1,009,228	7.7	%	$	3,342,503	$	2,781,052	20.2	%
Toronto^(2)	14.7	%	10	849,600	7,800		20.20		15.13	95.5	%	92.5	%	3.0	%		4,222,800		3,159,757	33.6	%		1,107,797		1,011,978	9.5	%		3,115,003		2,147,779	45.0	%
Los Angeles	11.4	%	10	660,400	6,200		19.78		17.75	96.8	%	90.8	%	5.9	%		3,201,084		2,640,544	21.2	%		794,447		750,095	5.9	%		2,406,637		1,890,449	27.3	%
Asheville	7.6	%	13	780,200	5,530		12.79		11.35	95.4	%	89.3	%	6.1	%		2,243,269		1,941,617	15.5	%		645,575		579,851	11.3	%		1,597,694		1,361,766	17.3	%
Las Vegas	7.2	%	5	552,500	4,380		15.30		13.35	96.3	%	91.3	%	5.0	%		1,871,000		1,523,832	22.8	%		355,546		344,191	3.3	%		1,515,454		1,179,641	28.5	%
San Francisco – Oakland	6.2	%	4	322,600	2,920		21.93		19.66	95.5	%	88.5	%	7.1	%		1,748,144		1,436,514	21.7	%		445,084		421,353	5.6	%		1,303,060		1,015,161	28.4	%
Detroit	3.1	%	4	266,100	2,220		13.05		11.93	96.8	%	87.8	%	8.9	%		874,187		724,116	20.7	%		212,137		200,405	5.9	%		662,050		523,711	26.4	%
Riverside - SB	3.0	%	3	180,700	1,770		17.58		14.50	98.8	%	92.8	%	6.0	%		828,481		643,495	28.7	%		192,051		186,064	3.2	%		636,430		457,431	39.1	%
Dayton	2.8	%	7	392,400	3,340		10.58		8.89	95.5	%	92.9	%	2.6	%		1,035,962		857,345	20.8	%		441,251		361,157	22.2	%		594,711		496,188	19.9	%
Port St. Lucie	2.7	%	3	251,600	2,010		15.46		13.49	96.6	%	86.9	%	9.7	%		896,173		707,321	26.7	%		333,659		344,826	-3.2	%		562,514		362,495	55.2	%
Denver	2.6	%	5	290,700	2,550		12.73		11.66	96.3	%	86.7	%	9.6	%		945,909		779,657	21.3	%		401,721		375,148	7.1	%		544,188		404,509	34.5	%
Chicago	2.4	%	5	315,600	2,880		11.97		10.82	95.8	%	87.7	%	8.1	%		959,511		785,361	22.2	%		459,223		416,239	10.3	%		500,288		369,122	35.5	%
Myrtle Beach	2.1	%	2	197,800	1,450		12.51		11.86	93.7	%	88.0	%	5.8	%		572,286		501,239	14.2	%		133,829		127,569	4.9	%		438,457		373,670	17.3	%
Raleigh - Cary	1.4	%	3	163,800	1,090		11.02		10.17	96.6	%	89.6	%	7.0	%		436,942		369,200	18.3	%		151,057		159,630	-5.4	%		285,885		209,570	36.4	%
Other	17.2	%	20	1,430,200	12,780		16.42		14.53	95.9	%	89.1	%	6.7	%		5,745,701		4,841,794	18.7	%		2,118,373		1,991,730	6.4	%		3,627,328		2,850,064	27.3	%
Total Same-Store	100.0	%	103	7,595,600	64,670	$	16.50	$	14.38	95.8	%	89.7	%	6.1	%	$	30,011,041	$	24,702,072	21.5	%	$	8,878,839	$	8,279,464	7.2	%	$	21,132,202	$	16,422,608	28.7	%

^(1)	RentPOF defined as rental revenue net of discounts & concessions, excluding late fees, admin fees and parking income, divided by occupied square feet of storage..
^(2)	Presented in US Dollars (USD) as translated on average for the quarter.
^(3)	Same-store revenue, expense and NOI are non-GAAP measures. See Computation of Same-Store Operating Results for a reconciliation of these measures to the most directly comparable GAAP financial measures.

The following table sets forth operating data for SmartStop’s same-store facilities (those properties included in the consolidated results of operations since January 1, 2020, excluding nine lease-up properties SmartStop owned as of January 1, 2020) for the six months ended June 30, 2021 and 2020. SmartStop considers the following data to be meaningful as this allows for the comparison of results without the effects of acquisition, lease up, or development activity.

	Same-Store Facilities									Non Same-Store Facilities						Total
	2021			2020			% Change			2021			2020		% Change	2021				2020			% Change
Revenue ^(1)	$	57,882,936		$	50,107,107			15.5	%	$	13,309,676		$	2,743,966	N/M	$	71,192,612			$	52,851,073			34.7	%
Property operating expenses ^(2)		17,696,351			16,996,158			4.1	%		5,126,899			1,873,911	N/M		22,823,250				18,870,069			20.9	%
Property operating income	$	40,186,585		$	33,110,949			21.4	%	$	8,182,777		$	870,055	N/M	$	48,369,362			$	33,981,004			42.3	%
Number of facilities		103			103						36	^(6)		9			139		^(6)		112
Rentable square feet ^(3)		7,595,600			7,557,300						2,982,400			680,300			10,578,000		^(6)		8,237,600
Average physical occupancy ^(4)		94.5	%		89.2	%				N/M			N/M				93.5	%			87.4	%
Annualized rent per occupied square foot ^(5)	$	15.93		$	14.63					N/M			N/M			$	15.72			$	14.40

N/M Not meaningful

^(1)	Revenue includes rental revenue, Tenant Programs revenue, ancillary revenue, and administrative and late fees.
^(2)	Property operating expenses excludes corporate general and administrative expenses, interest expense, depreciation, amortization expense, and acquisition expenses. Property operating expenses for the six months ended June 30, 2020 also includes COVID-19 related costs, including specialized cleaning costs, the purchase of personal protective equipment, and bonuses to SmartStop’s store personnel, totaling approximately $0.5 million. On a same-store basis, COVID-19 related costs represented approximately $0.5 million of the total property operating expenses for the six months ended June 30, 2020.
^(3)	Of the total rentable square feet, parking represented approximately 937,000 square feet and 678,000 square feet as of June 30, 2021 and 2020, respectively. On a same-store basis, for the same periods, parking represented approximately 678,000 square feet.
^(4)	Determined by dividing the sum of the month-end occupied square feet for the applicable group of facilities for each applicable period by the sum of their month-end rentable square feet for the period.
^(5)	Determined by dividing the aggregate realized rental income for each applicable period by the aggregate of the month-end occupied square feet for the period. Properties are included in the respective calculations in their first full month of operations, as appropriate. SmartStop has excluded the realized rental revenue and occupied square feet related to parking herein for the purpose of calculating annualized rent per occupied square foot.
^(6)	Included in the non same-store data is a self storage facility consisting of approximately 84,000 square feet owned by SST VI OP for the period during which SmartStop consolidated their financial statements. As of June 30, 2021, SmartStop was no longer required to consolidate their financial statements.

SmartStop’s same-store revenue increased by approximately $7.8 million for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 due to higher annualized rent per occupied square foot and increased occupancy.

The following table presents a reconciliation of net loss as presented on SmartStop’s consolidated statements of operations to property operating income, as stated above, for the periods indicated:

	For the Six Months Ended June 30,
	2021			2020
Net loss	$	(13,614,304	)	$	(44,806,422	)
Adjusted to exclude:
Managed REIT Platform revenue		(3,346,031	)		(3,636,680	)
Managed REIT Platform expenses		636,032			2,182,823
General and administrative		11,564,302			7,817,660
Depreciation		19,286,728			15,559,114
Intangible amortization expense		4,913,228			6,887,783
Acquisition expenses		336,098			125,326
Contingent earnout adjustment		2,519,744			(6,700,000	)
Impairment of goodwill and intangible assets		—			36,465,732
Impairment of investments in Managed REITs		—			4,376,879
Write-off of equity interest and preexisting relationships in SST IV upon acquisition of control		8,389,573			—
Gain on sale of real estate		(178,631	)		—
Interest expense		15,926,166			16,623,732
Interest expense – accretion of fair market value of secured debt		(63,116	)		(65,549	)
Interest expense – debt issuance costs		1,169,370			1,879,761
Net loss on extinguishment of debt		2,444,788			—
Other		(1,614,585	)		(2,729,155	)
Total property operating income	$	48,369,362		$	33,981,004

ADDITIONAL INFORMATION REGARDING NOI, FFO, and FFO, as adjusted

Net Operating Income (“NOI”)

NOI is a non-GAAP measure that SmartStop defines as net income (loss), computed in accordance with GAAP, generated from properties before corporate general and administrative expenses, asset management fees, interest expense, depreciation, amortization, acquisition expenses and other non-property related expenses. SmartStop believes that NOI is useful for investors as it provides a measure of the operating performance of its operating assets because NOI excludes certain items that are not associated with the ongoing operation of the properties. Additionally, SmartStop believes that NOI (also referred to as property operating income) is a widely accepted measure of comparative operating performance in the real estate community. However, SmartStop’s use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount.

Funds from Operations (“FFO”) and FFO, as Adjusted

Funds from Operations

Funds from operations (“FFO”) is an industry wide metric promulgated by the National Association of Real Estate Investment Trusts, or NAREIT, which SmartStop believes to be an appropriate supplemental measure to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure.

SmartStop defines FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, or the White Paper. The White Paper defines FFO as net income (loss) computed in accordance with GAAP, excluding gains or losses from sales of property and asset impairment write downs, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Additionally, gains and losses from change in control are excluded from the determination of FFO. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. SmartStop’s FFO calculation complies with NAREIT’s policy described above.

FFO, as Adjusted

SmartStop uses FFO, as adjusted, as an additional non-GAAP financial measure to evaluate its operating performance. SmartStop previously used Modified Funds from Operations (“MFFO”) (as defined by the Institute for Portfolio Alternatives) as a non-GAAP measure of operating performance. Management replaced the MFFO measure with FFO, as adjusted, because FFO, as adjusted, provides investors with supplemental performance information that is consistent with the performance models and analysis used by management. In addition, FFO, as adjusted, is a measure used among SmartStop’s peer group, which includes publicly traded REITs. Further, SmartStop believes FFO, as adjusted, is useful in comparing the sustainability of its operating performance with the sustainability of the operating performance of other real estate companies.

In determining FFO, as adjusted, SmartStop makes further adjustments to the NAREIT computation of FFO to exclude the effects of non-real estate related asset impairments and intangible amortization, acquisition related costs, other write-offs incurred in connection with acquisitions, contingent earnout expenses, adjustments of fair value of debt adjustments, gains or losses from extinguishment of debt, accretion of deferred tax liabilities, realized and unrealized gains/losses on foreign exchange transactions, and gains/losses on foreign exchange and interest rate derivatives not designated for hedge accounting, which SmartStop believes are not indicative of the Company’s overall long-term operating performance. SmartStop excludes these items from GAAP net income to arrive at FFO, as adjusted, as they are not the primary drivers in its decision-making process and excluding these items provides investors a view of its continuing operating portfolio performance over time and makes its results more comparable period to period and to other REITs, which in any respective period may experience fluctuations in such acquisition, merger or other similar activities that are not of a long-term operating performance nature. FFO, as adjusted, also reflects adjustments for unconsolidated partnerships and jointly owned investments. SmartStop uses FFO, as adjusted, as one measure of operating performance when SmartStop formulates corporate goals and evaluate the effectiveness of its strategies.

Presentation of FFO and FFO, as adjusted, is intended to provide useful information to investors as they compare the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and FFO, as adjusted, the same way, so comparisons with other REITs may not be meaningful. Furthermore, FFO and FFO, as adjusted, are not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income (loss) or income (loss) from continuing operations as an indication of SmartStop’s performance, as an alternative to cash flows from operations, which is an indication of liquidity, or indicative of funds available to fund SmartStop’s cash needs including SmartStop’s ability to make distributions to its stockholders. FFO and FFO, as adjusted, should not be considered as an alternative to net income (determined in accordance with GAAP) and should be reviewed in conjunction with other measurements as an indication of SmartStop’s performance.

Neither the SEC, NAREIT, nor any other regulatory body has passed judgment on the acceptability of the adjustments that SmartStop uses to calculate FFO or FFO, as adjusted. In the future, the SEC, NAREIT or another regulatory body may decide to standardize the allowable adjustments across the publicly registered, non-traded REIT industry and SmartStop would have to adjust its calculation and characterization of FFO or FFO, as adjusted.

About SmartStop Self Storage REIT, Inc. (“SmartStop”):

SmartStop is a self-managed REIT with a fully integrated operations team of approximately 400 self storage professionals focused on growing the SmartStop® Self Storage brand. SmartStop, through its indirect subsidiary SmartStop REIT Advisors, LLC, also sponsors other self storage programs. SmartStop is the tenth-largest self storage company in the U.S., with approximately $1.8 billion of real estate assets under management, including an owned and managed portfolio of 155 properties in 19 states and Toronto, Canada and comprising approximately 105,000 units and 11.9 million rentable square feet. SmartStop and its affiliates own or manage 17 operating self storage properties in the Greater Toronto Area, which total approximately 14,300 units and 1.5 million rentable square feet. Additional information regarding SmartStop is available at www.smartstopselfstorage.com.

Certain of the matters discussed in this communication constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements.

All forward-looking statements speak only as of the date hereof and are based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the expected effects and benefits of the SST IV merger, the SSGT merger, the self administration transaction and the Series A Preferred equity investment, including anticipated future financial and operating results and synergies, as well as all other statements in this press release, other than historical facts. There are several factors which could cause actual plans and results to differ materially from those expressed or implied in forward-looking statements, including, without limitation, the following: (i) risks related to disruption of management’s attention from SmartStop’s ongoing business operations due to the SST IV merger, the self administration transaction, or other business matters; (ii) significant transaction costs, including financing costs, and unknown liabilities; (iii) failure to realize the expected benefits and synergies of either of the SST IV merger, the SSGT merger or the self administration transaction in the expected timeframes or at all; (iv) costs or difficulties related to the integration of acquired self storage facilities and operations, including facilities acquired through the SST IV merger, the SSGT merger and operations acquired through the self administration transaction; (v) changes in the political and economic climate, economic conditions and fiscal imbalances in the United States, and other major developments, including wars, natural disasters, epidemics and pandemics, including the outbreak of novel coronavirus (COVID-19), military actions, and terrorist attacks; (vi) changes in tax and other laws and regulations; or (vii) difficulties in SmartStop’s ability to attract and retain qualified personnel and management.

Actual results may differ materially from those indicated by such forward-looking statements. In addition, the forward-looking statements represent SmartStop’s views as of the date on which such statements were made. SmartStop anticipates that subsequent events and developments may cause its views to change. These forward-looking statements should not be relied upon as representing SmartStop’s views as of any date subsequent to the date hereof. Additional factors that may affect the business or financial results of SmartStop are described in the risk factors included in SmartStop’s filings with the SEC, including SmartStop’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, which factors are incorporated herein by reference, all of which are filed with the SEC and available at www.sec.gov. SmartStop expressly disclaims a duty to provide updates to forward-looking statements, whether as a result of new information, future events or other occurrences.