Unlocking the Self-Storage Boom: How SmartStop's Retail Push Positions SMA as a Top Alternative Bet

The self-storage sector has long been a quiet giant in real estate, thriving even as economic headwinds test other asset classes. Now, SmartStop Self Storage REIT (NYSE: SMA) is aiming to turn this niche into a mainstream investment vehicle for retail investors through its partnership with Orchard Securities. The strategic alliance, announced on July 10, 2025, could redefine access to institutional-quality self-storage assets—and position SMA as a rare equity play in a resilient sector.

The Retail Investor's New Frontier: Democratizing Self-Storage Exposure

Until now, investing in self-storage has largely been the domain of institutional players, high-net-worth individuals, or those with the means to participate in private placements. SmartStop and Orchard's collaboration seeks to change that. By leveraging Orchard's distribution network—reaching over 50 sponsors and 300+ offerings—the partnership opens the door for individual investors to tap into a $60 billion U.S. self-storage market.

The focus on Delaware Statutory Trust (DST) offerings and managed REIT products is particularly significant. DSTs allow accredited investors to pool capital for fractional ownership of institutional assets, while managed REITs provide liquidity and diversification. This structure aligns with SmartStop's operational scale: the REIT owns or manages 229 properties across 23 U.S. states and Canada, totaling 18.4 million rentable square feet.

A Capital Raising Masterstroke, Backed by Acquisitions

The partnership's timing is no accident. It follows a $875 million underwritten public offering in April 2025, which SMA used to deleverage its balance sheet and fuel aggressive acquisitions. Post-offering, the company acquired a 74,000-square-foot facility in Kelowna, British Columbia, and secured contracts for $157.8 million in future deals. These moves underscore a clear strategy: deploy capital to expand its portfolio while reducing reliance on debt.

The financial discipline is striking. SMA slashed its leverage ratio by repaying $472 million in credit facility debt and redeeming all Series A Preferred Stock. Meanwhile, same-store revenue grew 3.2% in Q1 2025, driven by occupancy rising to 93% and rental rate increases. With 10.5 million shares outstanding post-IPO, the company is now poised to scale further through retail investor capital.

Why the Self-Storage Sector's Resilience Matters

Self-storage has historically outperformed broader real estate cycles, a trend that SmartStop's data reinforces. Even as office vacancy rates spike and retail spaces struggle, self-storage occupancy has held firm. The sector's recession-resistant profile—rooted in demand for affordable storage solutions—aligns with shifting consumer needs.

SmartStop's Canadian expansion is a case in point. Its 43 Canadian properties (3.7 million sq ft) saw revenue grow 3.9% in Q1 2025 on a constant currency basis, with net operating income rising 3.0%. This geographic diversification buffers against regional economic volatility.

Risks and the Case for Immediate Consideration

No investment is without risk. SMA's leverage, while reduced, remains material, and rising interest rates could pressure occupancy if economic conditions worsen. However, the partnership with Orchard mitigates execution risk by broadening the investor base—retail participation could stabilize demand even in downturns.

The thesis here is clear: SMA combines a robust operational footprint, a capital-light distribution strategy, and a sector primed for long-term growth. With a 2025 FFO guidance of $1.84–$1.92 per share and a dividend yield of ~5%, the stock offers both income and growth potential.

Final Take: SMA as the Gateway to a Thriving Niche

SmartStop's move with Orchard is not just about retail access—it's about transforming the self-storage sector into an investable asset class for the masses. By marrying its operational scale with Orchard's distribution reach, SMA is positioning itself as the go-to vehicle for investors seeking alternative real estate exposure.

For those eyeing the equity markets, SMA offers a compelling entry point into a sector that has defied economic cycles. With acquisitions humming and a balance sheet strengthened by its April offering, now is the time to consider this under-the-radar REIT. The self-storage boom isn't going anywhere—and neither will SMA, if it executes this strategy with the rigor it has shown so far.

Investor Consideration: SMA's blend of yield, growth, and sector resilience makes it a standout alternative investment. Monitor near-term capital raises and acquisition execution for further upside.