Q&A With Stefan Kulas: SmartStop's New Canadian Director

California-based SmartStop Asset Management, gunning to be the GTA’s No. 1 self-storage player, has hired ex-Cushman & Wakefield broker Stefan Kulas to oversee its Canadian expansion. He tells us what’s planned.

Bisnow: Congrats on the new gig. So what’s the backstory to your joining SmartStop?

Stefan Kulas: When I was with Cushman I was involved in business development. Last summer, Apple Self Storage bought a site around the corner from SmartStop’s 3136 Mavis Road location (seen above behind Stefan), and I called up (SmartStop CEO) H. Michael Schwartz to let him know about the transaction, that a competitor was looking to open up a couple blocks from one of their existing locations. I thought it would be a good way to introduce myself to him—a warm call. He got back to me and said they knew about the transaction but were appreciative of the call, and we started building the conversation from there. 

He told me they’re looking to buy more sites in the GTA, what they were looking for, and that if anything comes across my desk that might fit this profile, to let him know. I didn’t really know who SmartStop was, but I started doing research and saw they were pretty active and had a lot of capital backing them. It was a good opportunity for me as a broker to try and accumulate some business from them here in the GTA. So I kept building on my site selection for them, and began understanding the business model a little better—what will work as a site and what won’t—and the relationship grew from that point on. 

Then a few months ago, on a routine call about sites we’re looking at, Michael approached me with the idea: he said we’re looking for boots-on-the-ground up there, a head man who has relationships with brokers, lenders and developers, and can align SmartStop with future opportunities. They’re based in California and working on deals throughout the US (with about $1B in assets under management, a portfolio of 59,400 self-storage units and 6.7M RSF in 89 facilities). Michael’s extremely familiar with the Canadian market, but they needed someone to manage relationships and business on a day-to-day basis up here.

Above: 1207 Appleby Line in Burlington, a recent addition to SmartStop’s rapidly expanding GTA self-storage portfolio, which includes 9,600 units and 1M RSF. 

Bisnow: What’s the growth plan for the GTA? 

Stefan: Our end-of-the-year goal is to have 10 more facilities under contract, bringing our total facility count to 22. Longer-term, we’d like to be around 40 or 50 properties in the GTA over the next three to four years, and 100-plus in the next decade (through acquisitions, development or redevelopment). The GTA is a strong market, and the industry’s growth here is accelerating. We want to achieve economies of scale by clustering properties together, allowing us to run leaner. I’ve built a strong network in the brokerage community, and now that I’ve moved over to the buy side of the business, I’ve got a lot of existing relationships to leverage. 

The Canadian self-storage market is somewhat fledgling, and not as sophisticated as it is in the US. The US has seen consolidation and expansion of companies over the last 15 years, so they’re ahead of us in that sense. But that’s starting to happen here; we’ve got a lot of mom-and-pop, family-run businesses, which do well and produce good income but they’ve got lower-class product for the most part. Not a lot of money goes into marketing, and they probably ballpark their rates, and whatever they can fill their spaces at they’ll fill them at. 

So there’s an opportunity for an institutional player like us to come in and say there are some operational efficiencies here we can improve on; we’d like to take advantage of the success you’ve put in place to date—this might be a great exit strategy for you because competition is going to increase here. The game is really changing. It’s getting smarter and quicker. If anything, it’s an opportunity for them to have their exit strategy before the market starts changing to the point where they can’t keep up with it. 

Bisnow: How does SmartStop set itself apart in this market? 

Stefan: We’re very transparent in how we operate, which consumers like. They want to know what they’re getting, the prices, and when they can have a unit, and I think the ease at which we provide that information differentiates us from our competitors, because it’s a pretty straightforward process when you’re trying to rent a unit from us. With those mom-and-pop competitors, you have to drive to their facilities to see what the rates are or what availability they have. We post our availability and prices online, and it’s dynamic, so our prices change according to supply and demand.

Pictured above is 4548 Dufferin St, purchased in 2010, marking SmartStop’s entry into the GTA.

Bisnow: How did you get involved in real estate?

Stefan: I went to McMaster University and a couple of my classmates went on to work in commercial real estate, and it sounded interesting. So when I graduated, I called a bunch of brokerages asking for meetings and one thing led to another and I was introduced to my former managing director at Cushman, who was hiring at the time. So in 2014 I ended up hopping into research where I was able to build my skills and get to know the market, what makes a deal happen, what the requirements are, what kind of product demands, what kind of asking price. (Before this Stefan was a private banking associate at Royal Bank of Canada.) 

I was in research for a year and got my real estate licence halfway through that and started to branch out on my own at Cushman as a junior, then just started hitting the phones and calling people, and that’s what led me to Michael. I focused on industrial at Cushman, so it’s a pretty natural movement over to the self-storage business, because a lot of the work we’re doing now is development-based, whether it’s new build or industrial conversion. Self-storage itself was traditionally an industrial business but now we’re becoming more of a retail-based business. That’s the way the market is moving. 

Bisnow: Have you ever used self-storage?

Stefan: No, but there probably will come a time—I live in a 600 SF condo in downtown Toronto. Millennials are more dynamic in how they live; they don’t want to stay in one place for too long, and they want to be in urban cores, where everyone is in smaller spaces because of the high cost of housing. Self-storage gives you the flexibility to live that lifestyle. I grew up in a house and the basement was the storage, which is not necessarily the case now for many people. Self-storage is replacing that, and this presents even more opportunity for SmartStop.

Fast Facts About Stefan Kulas

Pictured: With Brendan Clark at their cousin's wedding last year in the Distillery District.

Born/raised: Mississauga

Post-secondary education: McMaster University, BA Commerce

Hobbies: Guitar, hockey

Bucket list travel destination: “Need to go to Croatia.”

Favourite music: Rock

Best professional advice you've received: “We’re entrepreneurs, we just gotta keep farming.”