Strategic Storage Holdings LLC, an affiliate of self-storage operator Strategic Storage Trust Inc., has expanded into the Canadian market by entering into a term sheet for a joint venture with Toronto-based Budget Development Partners, a developer and manager of self-storage properties.
The venture will involve actively acquiring operational self-storage properties, as well as building new facilities or redeveloping existing industrial buildings throughout Canada. The sites will be rebranded under of the Strategic Storage Trust SmartStop SM Self Storage trade name.
“The Canadian market is underserved in self-storage and will provide nice diversification in our aggregate portfolio,” said CEO H. Michael Schwartz. “This market has the same self-storage needs as the United States but is 10-plus years behind as far as supply. Their economy has been more stable in growth and commercial lending, which is definite advantage for us. So it’s natural our first international expansion would be into Canada.”
Budget Development Partners will be the exclusive developer and onsite sub-property managers for Strategic Storage Holdings in Canada, specializing in identifying self-storage opportunities for acquisitions, and handling any site development and management, with Strategic Storage Holdings serving as the capital provider.
“The opportunities for self-storage in Canada are enormous, but until now there has been a lack of interest or initiative on the part of many U.S. self-storage companies to cross the border,” said Jamie Bennett, a Canadian native and senior partner with Budget Development. “Canadian operators don’t have enough capital and American chains don’t have a local presence to get things done. This venture fits right in the middle, poised to take advantage of this untapped market.”
Strategic Storage Holdings will carry out the same successful business model in Canada as it has in the United States. Loans are expected to be arranged through Canadian banks, with the Canadian dollar debt hedging some currency risk.
Budget Development has been active in the Canadian self-storage market for more than a decade. “We've been structuring our company to take advantage of this underserved market for a long time. At the same time, we needed a relationship with a company that not only shared our vision but had the financial resources to create a large self-storage presence here,” said Reade DeCurtins, a senior partner with Budget Development, who will be spearheading real estate acquisitions in Canada.
Strategic Storage Trust Inc. is a publicly registered non-traded real estate investment trust. The company currently owns 40 self-storage properties in 15 U.S. states.