KBRA has upgraded its issuer and senior unsecured note ratings for SmartStop OP, L.P. to BBB with a Stable Outlook from BBB- Watch Upgrade. The rating action follows parent company SmartStop Self Storage REIT, Inc.'s (NYSE: SMA) completion in April of an initial public offering (IPO), which raised approximately $874 million of net equity. KBRA has also assigned a BBB/Stable rating to SmartStop OP's recent issuance of CAD$500 million senior unsecured notes due 2028.

The ratings upgrade is based on a number of factors including an expected sustained improvement in SmartStop’s leverage metrics and coverage ratios following use of IPO proceeds to reduce debt and redeem a $200 million preferred stock issue. KBRA also notes that the recent repayment of several secured debt facilities combined with financing forward portfolio growth on an unsecured basis should contribute to a larger unencumbered asset base. Lastly, the ability to source incremental equity capital should help sustain SMA's external growth strategy as it seeks to increase scale in target markets.

SmartStop's financial metrics will likely remain above average for the BBB rating, tempered by an expectation that acquisitions over the balance of 2025 will be primarily debt-funded. Full-year 2025 acquisition guidance of $375 million (midpoint) is expected to bring SMA close to the top end of its 5x-6x range of net debt/EBITDA. Liquidity factors should also remain strong as a recently completed CAD$500 million senior note offering has reduced revolving credit facility balances, leaving ample capacity to fund acquisitions and address a modest $93 million of 2025-26 debt maturities.

Headquartered in Ladera Ranch, California, SmartStop Self Storage REIT, Inc. is a $3 billion equity REIT specializing in the ownership and management of over 225 self storage properties in 23 U.S. states and Canada. The company is the 10th largest operator of storage facilities in the U.S. according to published sources and is among the largest operators in Canada.

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Methodologies

• Corporates: Global Equity REIT & REOC Rating Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1010252

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