管理層發言
Everyone. Thank you for joining us. Welcome to SmartStop Self Storage's second quarter 2026 Earnings Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press 1 to raise your hand. To withdraw your question, press 1 again. I will now hand the conference over to David Steven Corak, Senior Vice President of Corporate Finance and Strategy. David? 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 meaning 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 a reconciliation of these measures to GAAP measures can be found in our earnings release and supplemental disclosure that we 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 R. Barry, our CFO. Now I will turn it over to Michael.
Thank you, David. Thank you for joining us today for our second quarter earnings call. SmartStop Self Storage had a strong quarter of results, and we further reinforced our vision by communicating our long-term strategy for shareholder value creation with the announcement of our DECA initiative in July. Let me first touch on our results for the second quarter. We posted strong same store revenue growth of 1.3%, an operating expense decrease of 3.4%, and an NOI growth of a positive 3.7%, and maintained average occupancy of 92.5%. Operationally, 10 of our top 15 markets posted positive same store NOI growth. Our strong focus on expense control led to a 150 basis point year-over-year growth in our same store operating margin. This is our second quarter in a row of improved margins. This operational performance, coupled with overall efficiencies, resulted in reported FFO as adjusted per share of $0.49, up 17.6% year over year. With these results and better-than-expected momentum into the second half of the year, we raised the midpoint of our same store revenue and same store NOI guidance as well as our FFO as adjusted per share guidance. In July, we introduced the DECA initiative, which is our multiyear strategic framework that guides our decision making as a management team. The DECA initiative stands for disciplined execution, compounding appreciation, through 6 defined pillars for outsized long-term value creation. This value creation is driven by relative outperformance, margin expansion, and outsized FFO as adjusted per share growth. This is the true goal of our DECA initiative. I communicated a $10 billion capitalization level, which will be the output of executing in a disciplined fashion on those goals. That level is also the size that we think SmartStop's platform can begin to recognize its full potential. Our results and activity this quarter are a perfect reflection of this initiative: strong same store results driven by our revenue management platform, talented operations and store-level teams, growing efficiencies as we scale, and deliberate expense control. Same store operating margins of 67.3%, up 150 basis points year over year. NOI growth of 9.4% in our Canadian joint venture properties year over year. Fourteen percent growth of the recurring revenue stream for our managed REIT platform, the acquisition of a three-property portfolio of high-quality self storage properties at a high single-digit 5% cap rate, the deployment of $16.3 million of bridge capital at a double-digit yield, an organic reduction to our cash flow leverage to 6.2x, and finally, sector-leading FFO as adjusted per share growth of 17.6% year over year. Sitting here, 16 months post-IPO, we are encouraged by the sector's momentum and our successful execution of the plans we laid out at the IPO. We are excited to communicate the DECA initiative with all of you. While the pillars we outlined were on display in the second quarter, we have just begun to scratch the surface of this company's full potential. As I wrote in the letter, the DECA initiative is the future. The foundation is laid. Progress has been made. And the work is underway. Now I am going to turn it over to James.
Thank you, Michael. Starting with our operating performance, our same store pool posted year-over-year revenue growth of 1.3% with a 3.4% decrease in operating expenses, leading to an NOI increase of 3.7% with quarter-ending occupancy of 92.4%. These results were slightly better on a constant currency basis. We were very pleased with our operating expenses with a year-over-year decrease of 3.4% in the same store pool in the second quarter. This expense control led to an increase in our same store margins of 150 basis points. We saw a decrease in payroll, property insurance, repairs and maintenance, and utilities with relatively flat growth in property taxes. Our web rates were down 3.8% during the quarter. Our achieved move-in rates per square foot were down 4.4% on average. Occupancy in July was 92.1%, down 65 basis points year over year. We felt more comfortable holding our asking rates heading into Q3 as our web rates were actually up 1.2% year over year for the month of July, slightly better than we anticipated. Our seven properties that were impacted by LA County fire ECRI restrictions posted negative 2% same store revenue growth in the second quarter. However, with the lift of these restrictions, we are anticipating those returning to positive same store revenue growth for the remainder of the year. On the external growth front, we acquired three properties on balance sheet in Spartanburg, South Carolina, approximately $30 million. We also closed on a preferred investment on a property in Calexico, California for $16.3 million, and we assumed property management of that asset at the end of June. The result of all of this for the second quarter of 2026 is that we posted fully diluted FFO as adjusted per share and unit of $0.49. Turning to guidance: we raised our same store revenue guidance from a range of -0.25% to 1.75% to a range of 0.5% to 1.5%. The lift of the LA fire restrictions accounts for about a quarter of that raise, or 5 to 7 basis points. The remainder comes from a combination of better-than-expected second quarter performance paired with better-than-expected momentum into the second half. Additionally, we are reducing our overall operating expense growth range from 1.75% to 3.75% to a range of 0.25% to 1.25%, driven by a combination of controllable expenses and property insurance. The result is an increase of our NOI growth midpoint from -0.25% to a positive 1.15%. Lastly, we raised our guidance on FFO as adjusted per share from $1.94 to $2.04 to $1.98 to $2.04. And with that, operator, we will open it up to questions.
分析師問答
We will now begin the question-and-answer session. If you would like to ask a question, please press 1 to raise your hand. To withdraw your question, press 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Wesley Golladay with Baird. Wesley, please go ahead.
Hey, everyone. Just a question on the acquisition pipeline that you are seeing. Are you expecting to transact around a similar cap rate of 5.9% that you did in the quarter?
Well, the answer, I think, is yes. I think that is kind of what our target is. If I step back, I want to reinforce that we do believe this is a solid acquisition cycle. It is here, and it is driven primarily by individuals that built or bought during the COVID heyday and now a lot of them are, quite frankly, over their skis. As a result, a wave of high-quality properties is coming up for sale because some owners are effectively out of options. Today, we are seeing a lot of attractive opportunities on the stabilized front in the U.S. and Canada. U.S. kind of at that mid, you know, 5.5% area, and it is more between 4% to 5% in many Canadian markets. Pricing in broker-market acquisitions is still a little high; a lot of off-market deals seem to be the most attractive right now if you can find those. Given where we sit in leverage, which I think is incredibly important to address with respect to that question, we did reduce our cash flow leverage again this quarter even while deploying capital. We have raised our full-year capital deployment guidance to a $55 million to $75 million range, and we definitely have room to be more active if the right opportunities present themselves. I do want to be clear that we are not going to just chase volume or size for its sake. We are focusing on acquisitions that can be accretive to the platform. As we have said before, $300 million of acquisitions can move our market cap by about 10%. That is meaningful growth for SmartStop, which is much different than our peers who have to chase much larger asset sizes. So overall, I think it is a very solid acquisition environment.
Okay. And just one housekeeping question. You do have a $2 million one-time fee that you are going to earn from the funds consolidating. Would that be included in your third-party management guidance?
Hey, Wesley. This is Corak. Yeah. So that will be included in the managed REIT guidance, which falls under the managed platform. I would expect that to hit in the fourth quarter, and that was a consideration in the initial guidance as well.
All right. Appreciate it. Thanks, Wes.
Your next question comes from the line of Viktor Fediv with Scotiabank. Viktor, please go ahead.
Thank you, and hello, everyone. So your same store NOI margin expanded 150 basis points year over year, up from 30 basis points last quarter. How much of that improvement is actually sustainable operating leverage from increased market density versus more temporary benefits such as insurance and repair and maintenance savings? And where do you see the biggest opportunity for further margin expansion going forward?
Yeah. Thanks, Viktor. I will jump in there. So just to touch on some of the savings we saw from an operating expense perspective in the second quarter: as we mentioned, it was spread across a number of line items—payroll, repairs and maintenance, property insurance, and utilities. In terms of what's structurally happening, the property insurance renewal that occurred in April is part of a general softening in that market, and that will carry forward through the rest of this year. Repairs and maintenance savings were largely a comp consideration, although we are doing a good job of inspecting and expecting those dollars. I think the larger story is in payroll, where we were down about 2.3% for the quarter, and we believe that is part of the overall clustering story we've been talking about—margins improving as we add scale. One example is the Denver market in particular: our operating expenses were down substantially and almost entirely attributable to payroll. When we took over the Argus platform in October of last year, we increased our presence in that market about fourfold, going from nine properties to over 50 between owned and managed, and that is really helping drive the economies of scale and clustering we originally talked about.
James. And then my second question is on your assumptions for move-in rates and occupancy for the remainder of the year. How can you end up being on the upper end of your AFFO per share range?
Hey, Viktor. It is Corak. I will just talk through some of the operating assumptions, not too dissimilar from what we talked about last quarter. In terms of the move-in rent trends and web trends, some markets have already turned positive; other supply markets are still a little negative. We still think by the end of the year, by the end of rental season and into the fourth quarter, we will start to see a broader inflection. From an occupancy standpoint, slightly negative relative to 2025 based on where we are sitting today, and ECRIs at or better than 2025 levels, given the strength and health of the existing customers. Our length of stay continues to increase, and our bad debts are relatively muted. From a supply perspective, the supply impact continues to decrease through the rest of the year and into 2027 and 2028. In terms of hitting the top end of our guidance, I will start on the revenue growth side because that is the most material piece to overall AFFO. If you look back to 2025, our third-quarter revenue growth was 2.5% while April was only up about 40 basis points—a fairly lumpy year-over-year comp that we have in the second half of the year, which would dictate that fourth-quarter growth could be higher than third quarter. Other pieces that work there include the Asheville occupancy comp, which lapsed on October 1, and the California ECRI restriction lift, which will have a more positive impact on the fourth quarter than the third quarter. Those data points support a higher growth rate in the fourth quarter versus the third quarter. When you think about the deceleration baked into the midpoint of guidance in terms of same store revenue growth, one of the lessons we've learned over the past 24 to 36 months in storage is that periods of volatility or choppiness can pop up. It happened a few times in 2025; it happened in March and April of this year with some geopolitical noise. This summer, we have been relatively unscathed. If we do not get that volatility and we see a more normal offseason, we feel pretty good about hitting the top end of that revenue range. That is the biggest piece of the overall FFO story. If we get some acquisitions in the managed REITs, that can help as well. But right now we are pretty comfortable with the midpoint of the guidance.
Your next question comes from the line of Eric Luebchow with Wells Fargo. Eric, please go ahead.
Great. Thanks for taking the question. I wanted to ask a little bit more about Asheville. A couple properties contributed as part of the eminent domain proceeding and the occupancy falloff, as you alluded to, is improving. Could you talk about what you are seeing on the ground in Asheville? Obviously, comps get easier in Q4, but what are your plans there perhaps to grow your presence over time? I know it was your best performing market, I believe, in 2025.
Absolutely. Let me talk a little about the Asheville market and then I will flip it over to James to talk about eminent domain and new development. Many of you know we have been in the Asheville market for a pretty long time—about 10 years—so we know that market incredibly well. As you said, Asheville was our best performing market in 2025 with a 6% same store revenue growth. We are obviously facing some tough occupancy comps in 2026, but the year-over-year occupancy gap has narrowed dramatically since December and is averaging down, about 230 basis points year over year in the second quarter. Occupancy currently is solid at 91.8%. The web rates in the market have been stronger than we anticipated at the beginning of the year, and they are actually now positive year over year as we moved into July. What we are seeing is a fairly traditional cadence of occupancy after a natural disaster of this kind; we have moved into the post-disaster stabilized occupancy level. Overall, we still expect Asheville to be a relative underperformer in 2026, specifically through the end of the third quarter. That said, the portfolio's performing slightly better than expected as of July.
Eric, as you mentioned, we did have two properties subject to eminent domain proceedings. We disclosed this in our earnings release. A large portion of one property—about 80% of that asset—was taken in the second quarter, and a small portion of a second property was taken subsequent to quarter end—about 20% of that property. The way these proceedings work is you receive an initial payment and then there is a legal process to determine the final value for the pieces of land that are taken. In addition, the North Carolina Department of Transportation is coordinating with us to relocate existing customers in the affected buildings, and so some of that supply is coming offline. We also wanted to note that we did have a loss of a property as a result of flooding, and we are excited to announce that in early 2027 we will be breaking ground to rebuild that asset. This property will be about 83% larger than the original property that was destroyed, and it is likely a late 2027, early 2028 delivery. So we are reinvesting back into this market with some of the supply that is coming offline as a result of the flood and these eminent domain proceedings.
Thanks, guys, for that. And just one follow-up. If we could chat a little bit about Canada and the GTA market: I know that is going through some tough comps versus last year, but could you talk about the fundamentals in Canada and once we get past these tougher comps, how do you think growth will trend? Related to that, one of your largest competitors is moving into the Canadian market through a pending acquisition. Does that change competitive dynamics at all, or do you feel pretty confident in your trajectory there? Thank you.
Great question—we get a lot of those. First, our Canadian same store self storage portfolio consists of 13 seasoned stabilized properties, all in the Greater Toronto Area (GTA), representing about 1.1 million square feet. Same store revenue for this pool was down 1% on a constant currency basis in the second quarter, but we had a tough comp of 2% last year, which was tougher than the U.S. When you look at our joint venture properties with SmartCentres, we have 10 properties, 900 thousand square feet, skewed toward more recently stabilized assets. We were able to grow revenues at 6.7% and NOI by 9.4% in the quarter. At the end of July, the GTA same store occupancy was 92.2%—down 60 basis points year over year but comparing favorably to the U.S. For the full year, we expect the GTA will run modestly below the U.S. portfolio, primarily a function of tougher comps from 2025. The GTA delivered approximately 2.7% same store revenue growth last year and about 100 basis points ahead of the U.S.; part of the relative softness this year is the flip side of that outperformance last year. Over the last 36 months, revenue growth in our GTA portfolio has been about three times that of the U.S. portfolio. We believe new supply in the GTA has peaked and will moderate over the next two plus years. We know that well because SmartStop is the single largest developer in the market, which will strengthen our foothold in the GTA. Demand-wise, the Canadian consumer remains relatively healthy; our Canadian bad debt is currently less than half of U.S. levels and improving year over year. Macro uncertainty tied to events like the war and tariffs has caused some hesitation and delays in rental decisions in certain pockets, but other Canadian markets are showing steadier trends. For instance, our Alberta portfolio has grown occupancy by 15% in the past two quarters. Structural demand drivers—aging and downsizing population, shrinking home sizes, continued urban densification—remain intact. Population growth should resume as immigration policy normalizes. We also see a unique window for disciplined external growth; we are evaluating numerous acquisitions and joint venture opportunities in this market. We remain absolutely committed to the GTA and our growing Canadian portfolio. Regarding the competitor moving into Canada, I would say that having another competitor like Public Storage in Canada underscores and validates our Canadian vision and strategy and why we entered this market 16 years ago. We have competed with them in the U.S. for the last 22 years. There is no question it will be a more competitive environment, but we welcome it. SmartStop is a competitive organization and we will rise to the occasion. Thank you.
Your next question comes from the line of R.J. Milligan with Raymond James. R.J., please go ahead.
Yeah. Good morning to you guys, good afternoon. I wanted to follow up on the question about the margin opportunity. I'm curious how much more margin expansion is available by pulling internal levers versus how much more margin expansion you think you can get through expanding scale?
Yeah. R.J., I will jump in. As we've consistently said since our IPO, in pockets and MSAs where we have 10 or more properties we tend to see margin improvement of about 300 basis points. For example, with the Argus transaction and the Denver expansion, there were three markets where we tipped over that 10-property mark when we onboarded on October 1. We still believe there is a lot of margin expansion to be realized as those programs and platforms continue to integrate and as we continue to grow on balance sheet, within joint ventures, and within third-party management. Coupled with favorable property insurance renewals and our ongoing solar initiative producing utility reductions, we continue to drive on all aspects of margin expansion.
And I would just add if we continue to perform and outperform on our same store pool, that will naturally contribute to additional margin expansion.
Thanks for that. You talked a little bit about acquisition opportunities, but thinking about other external growth areas, can you give an update on the bridge lending joint venture?
Hey, R.J., it's Corak. Great to have you back in the world of self storage. The lending-access pipeline remains very attractive. We have previously talked about a pipeline in excess of $100 million with target yields in the 10% to 14% range, typically structured as mezzanine or preferred. That pipeline remains. As of June 30, we have a book of about $20 million, all preferred at this point, on six properties, all of which we manage. We closed another $3 million of preferred after the quarter end, and the blended yield of everything we have today is just under 11%. We are actively working on an A-note/B-note approach or a stretched senior approach where we would sell off an A note (50% to 60% LTV) to another party. So there are a broad array of approaches for us as the pipeline is dictating both. As we saw this quarter, the platform tends to generate third-party management assignments on the underlying property, creating a symbiotic relationship and attractive returns on a capital-light basis. Additionally, the program should inherently create a natural pipeline for future acquisitions. We like the risk-adjusted returns on these deals, but we are sensitive to the quality of the underlying properties, the sponsor, the impact on leverage, and overall earnings quality. You will see us take a balanced approach to building out this program.
That is great. Thank you, guys.
Your next question comes from the line of Spenser Allaway with Green Street. Spenser Allaway, please go ahead.
Thank you. So pricing regulations, specifically as it relates to surveillance pricing, has become a real theme for the sector this year. We've seen some regulation passed in New York. How are you thinking about that to your revenue management systems? And separately, given your larger Toronto footprint, are you seeing any similar regulatory moves in Canada at all? Also, is there anything achieved on the AI side that is helping with cost savings?
I will touch on the U.S. in particular. We don't have direct exposure to the New York City areas affected by some recent political movements. It's a topic we consistently monitor; we work with local self storage association groups and task forces to stay abreast of everything. Everyone has their own proprietary pricing systems, and our algorithms differ from other publicly traded peers and private operators. We make decisions with our own systems that are constantly evolving. At the end of the day, this is still a month-to-month business structurally.
I'd add that there is probably more risk with organizations using off-the-shelf pricing software that aggregates across many owners; that was an issue in multifamily. Our pricing takes into account supply and demand factors, not personal data from individuals, which can be highly sensitive. We've seen in areas like Montreal where regulatory concerns surfaced around how rentals were offered and discounts and promotions, and the resolution there was about transparency—making sure customers understand the price presented, that the price can go up, and being clear on any additional fees in the first month and ongoing costs. The industry is adapting to be as transparent as possible and to provide proper customer support. On AI, it is one of our pillars within the DECA initiative and is continually evolving within our organization. There are areas where AI can enhance revenue and reduce costs, but we are in the early stages of developing and implementing the technology. I can't say we've implemented AI strategies that have driven meaningful cost savings yet. Some low-hanging fruit would be in accounting and call centers, and optimizing staff hours using AI-driven scheduling. Those cost savings are more of a mid-term story rather than short-term. We want to be thoughtful and ensure every dollar spent can be tied to ultimate savings or revenue enhancements. Too often companies sell AI tools without a clear path to value; we intend to be disciplined.
Your next question comes from the line of Todd Thomas with KeyBanc Capital Markets. Todd, please go ahead.
Yeah. Hi. A couple of follow-ups. First, on the PS Canada and Public Storage transaction: curious what the overlap is like with SmartStop's Canada portfolio, and do you think PSA's ownership could lead to a different operating or revenue management strategy than you have historically seen in those markets? Second, regarding July updates: I heard occupancy and web rates, but it looked like move-in rents improved throughout the quarter with June stronger than April and May. Could you talk about that and what move-in rents looked like in July?
Todd, it's Corak. On overlap, it's primarily across our GTA portfolio—both same store and joint venture pools—so there is a decent amount of overlap, less so in the Alberta pools. Regarding strategy, it's tough for us to comment on another company's strategy. We can learn from history, but PS is entering a new market in Canada, so we cannot confidently call out what they will do or what the impact will be. On move-in rates and July: for the second quarter we were able to hold web rates fairly steady—we were down about 3.5% year over year for the quarter. We disclosed that move-in rates per square foot for the quarter were down 4.4% year over year, an improvement from the first quarter. Concession usage was modestly up in the second quarter versus the first quarter, so we continued to use concessions as a tactical tool. Moving into July, July ended up being a pretty good overall month. We ran a successful Fourth of July and Canada Day sale. Web reservations were up 0.7%, rentals were up 7.2% across both the U.S. and Canada. Concession usage actually declined year over year, web rates were up about 1% year over year in July. Move-in rents were down a bit—about 5% year over year—but at the end of July we were at 92.1% occupancy, down roughly 65 basis points year over year, and our in-place rates were up over 2% year over year.
Todd, an observation: our occupancy has been pretty steady and we target roughly 92% physical occupancy. Into the second quarter, there was a shift in our pricing systems toward rate, with web rate improvements and reduced promotions. Our annualized rent per occupied square foot was up 1.9%. If you strip out Asheville from our same store pool for the second quarter, we were only down 45 basis points in occupancy. There are market dynamics at play, but overall we feel good about our approach into the busy season. We aim to be highly occupied—92% plus—so we can drive rate during the busy season and maintain a good base of occupancy thereafter. We expect some seasonal effects but will respond dynamically with our systems if opportunities arise.
So it sounds like a more gradual return to seasonality but perhaps still a little more muted in the back half of the year than historically. Does that sound about right?
Yes. That's how we are approaching the tail-off of the business. Our systems are dynamic and will respond to opportunities, but that's our current view.
Your next question comes from the line of Mike Mueller with JPMorgan. Mike, please go ahead.
Hi. A couple more revenue questions. First, when you are thinking about the move-in rate comps, when do you think you cross into positive territory?
Hey, Mike. When we laid out the building blocks to the guidance as it stands today, we are looking at move-in rate inflection later this year—between the end of rental season and the end of the year.
Okay. Got it. And then on ECRI, can you give a sense of what portion of your units get at least one increase per year?
I would say the majority of our customers get a rate increase at least one time during the bid season. Our most valuable customers—those staying the longest—are less likely to receive an ECRI. We are always testing and monitoring our ECRI approach; on average we are in the low-20% range on a blended basis over 2026.
Got it. Okay. Thank you.
Your next question comes from the line of Juan Sanabria with BMO Capital Markets. Juan, please go ahead.
Hi. This is Robin Haneland sitting here for Juan. Can you provide an update on the potential timing of a JV partner and transaction, and can you share any hurdles you've overcome to date?
Yeah. Thank you. We've been consistent in our communication: we are having numerous ongoing conversations and feel pretty good about the direction. We don't have anything definitive to announce today, but if and when we have something we will announce it. It will represent incremental capacity on top of what's already embedded in the updated guidance. Many organizations in the U.S. and Canada are interested in allocating to storage, so it's a matter of timing and execution rather than lack of interest.
Thank you. On momentum building in your third-party platform: one store added now in Canada, but down on a net basis—can you elaborate and provide color?
Absolutely. We're very happy with the Argus third-party management platform. Receptivity to SmartStop among current owners and potential owners remains strong. Integration has phases: Phase 1 was understanding Argus owners; Phase 2 was introducing SmartStop people and culture; Phase 3 was onboarding entrepreneurial individuals onto SmartStop; Phase 4 is broader migration onto the SmartStop platform. September should begin to kick off Phase 4 as rental season winds down and industry events, like the SSA Las Vegas meeting, occur. Private-label owners see stronger lead flow once on the SmartStop platform and gradually migrate toward the legacy or full SmartStop brand. We've started to see property performance materially improve for owners who move onto our platform. We had some offboards on the private-label platform, but the quality of onboards is higher: the average square feet for each onboarded store was approximately 73% larger than our offboards. We had 90 thousand net rentable square feet of onboards versus 52 thousand for offboards. Larger stores with stronger demographics should have higher overall revenues. We onboarded our first third-party management property in Canada in Q2—a small but important step toward expansion there. Interesting note: some Canadian owners of U.S. properties are pleased with what we're doing in the U.S. and are discussing their Canadian properties with us. Six of the properties we've onboarded were current bridge lending customers, showing the symbiotic relationship between our bridge program and third-party management. One of the biggest benefits from Argus is scale-driven margin improvement—Denver margins are up 430 basis points year-to-date. We're far along in integration but still have work to do; we expect full margin synergies more into 2027 as technology migration and rebranding progress. Early signs are positive, and owner satisfaction and lead generation give us confidence in Argus 3PM's longer-term payoff.
Thanks.
There are no further questions at this time. I will now turn the call back to Michael Schwartz for closing remarks. Michael, please go ahead.
Thank you, operator. SmartStop Self Storage had a phenomenal second quarter. I want to thank you for your time and interest in SmartStop Self Storage, a smarter way to store. Have a great day.
This concludes today's call. Thank you for attending. You may now disconnect.