SmartStop Self Storage REIT’s Kelowna Play Signals Strategic Canadian Growth

SmartStop Self Storage REIT, Inc. (NYSE:SMA) has taken a bold step in its Canadian expansion strategy with the acquisition of a 74,000-square-foot self-storage facility in Kelowna, British Columbia. This marks the company’s first entry into the rapidly growing Okanagan region and highlights its commitment to capitalizing on demographic trends and lifestyle-driven demand. The facility, positioned in an affluent area with easy access to key neighborhoods, underscores SmartStop’s ability to identify and capitalize on underserved markets.

Kelowna’s Growth Potential: A Demographic Tailwind

Kelowna’s projected 10% population growth over the next five years, driven by its reputation as a hub for outdoor recreation and tech innovation, positions it as a prime market for self-storage. The Ellis Street facility’s 800 climate-controlled units—designed with two elevator access points and a high-visibility location—target both residential and commercial tenants, from seasonal tourists to tech startups needing flexible workspace.

“The Okanagan Valley’s blend of economic dynamism and lifestyle appeal creates a perfect storm for self-storage demand,” said H. Michael Schwartz, SmartStop’s Chairman and CEO. “This acquisition aligns with our focus on markets where growth outpaces supply.”

Portfolio Momentum and Operational Strength

SmartStop’s Canadian portfolio now spans 40 facilities, representing 34,400 units and 3.5 million rentable square feet—a 12% increase in units compared to its U.S. portfolio’s 122,800 units. Nationally, the REIT operates 219 properties across 23 states and Canada, leveraging a 590-person operations team to ensure consistent performance.

The Kelowna facility also reflects SmartStop’s shift toward premium developments. Its five-story design and climate-controlled units set it apart from older, less sophisticated storage options, appealing to discerning renters and businesses. This strategic differentiation could bolster occupancy rates and rental premiums, critical in a sector where quality and convenience increasingly drive demand.

Navigating Canadian Market Competition

While Canada’s self-storage market is less saturated than the U.S., competition is intensifying. Industry giants like Public Storage and Extra Space have expanded aggressively, but SmartStop’s focus on high-growth submarkets like Kelowna offers a niche advantage. The Okanagan’s limited existing supply of Class A facilities—only three competitors within a 10-mile radius, according to industry data—supports SmartStop’s pricing power.

Data-Driven Outlook for Investors

SmartStop’s Canadian expansion aligns with broader trends in the self-storage sector. The North American market is projected to grow at a 6.8% CAGR through 2030, driven by urbanization, e-commerce, and housing affordability challenges. In Canada alone, the sector is expected to add 15 million square feet of space by 2027.

SmartStop’s financial metrics also signal resilience. With a 5.2% dividend yield and a occupancy rate of 92% across its portfolio, the REIT offers defensive income potential. Its balance sheet, strengthened by $1.2 billion in total assets as of Q1 2025, provides flexibility for further acquisitions.

Conclusion: A Strategic Bet on Lifestyle-Driven Growth

SmartStop’s Kelowna facility is more than a single acquisition—it’s a blueprint for geographic diversification and premium asset targeting. By entering a market with robust demographic tailwinds and limited competition, the REIT positions itself to capture above-average rent growth.

With Canada now contributing 16% of its total units, SmartStop is reducing reliance on U.S. markets while capitalizing on cross-border demand. Analysts note that the Okanagan’s projected population growth and the facility’s premium features could deliver occupancy rates exceeding 95%, potentially boosting net operating income by 8-10% annually.

For investors, the acquisition underscores SmartStop’s disciplined growth strategy. As the self-storage sector matures, those prioritizing quality over quantity—and markets where demand outpaces supply—will likely thrive. The Ellis Street facility is a clear example of that philosophy in action.