This US Self Storage Group Is Shaking Up The Toronto Market
California-based Strategic Storage Trust II has acquired a three-property GTA portfolio, and CEO H. Michael Schwartz tells us his group's aiming for No. 1 in a self-storage market that could use a shake-up.
The portfolio—totaling 2,570 units and 232k rentable SF—includes: 1207 Appleby Lane in Burlington (a 900-unit building built in 2011 on 3.5 acres); 530 Martin St in Milton (an 850-unit building built in 2006 on 1.96 acres); and 2055 Cornwall Rd in Oakville, an 820-unit three-storey building on 3.51 acres that was completed this year (below). And SSTII's sister REIT, Strategic Storage Growth Trust, has acquired a vacant site at 365 Fruitland Rd in Stoney Creek, where a 780-unit storage facility is planned. “They’re all retail-located assets, which is key,” says Michael. “They’re not buried in some industrial area.”
Michael’s group, operating as SmartStop Self Storage, came to the GTA in 2010 with the purchase of 4548 Dufferin St (below). With the most recent acquisitions it now has a portfolio of nine properties here. “You get economies of scale when you cluster assets in a geographic region,” he says, noting the dynamic GTA boasts a stable economy, dense urban centres, and a “tremendous amount” of immigration and population growth, “which is good for all sectors, including storage.” But the self-storage market here is fragmented and underserved, says Michael. “In a lot of areas, supply is behind where it should be.”
Strategic Storage—sponsored by SmartStop Asset Management, a firm Michael chairs—is aiming to build a portfolio of 100-plus self-storage properties here in the next decade, through acquisitions, development or redevelopment (its 3136 Mavis Rd location is seen below). The largest of the GTA’s incumbents, Public Storage of Canada, owns 25 facilities in the region.
SmartStop has invested heavily in tech and offers its services online just like an airline or hotel, with dynamic pricing that changes according to supply and demand. “You take the human element out of it,” says Michael, noting that his GTA self-storage competitors have been reluctant to post pricing (when his company first did so, “we had local people calling us asking us what we were doing”). He sees it as another way his firm can differentiate its brand as it builds its GTA presence. Toronto’s a major metropolitan market, but self-storage here is an emerging asset class. “And that’s exactly the kind of opportunity we look for.”
