스마트스톱 셀프 스토리지(SMA) 2026년 3분기 실적 발표 콘퍼런스콜: FFO 9.4% 증가, 가이던스 상향

핵심 요약

• 스마트스톱 셀프 스토리지(SmartStop Self Storage)는 2026년 3분기 희석주 및 유닛당 조정 FFO가 0.51달러를 기록해 전년 동기의 0.47달러 대비 9.4% 증가했다고 발표했다.
• 동일 매장 매출은 2.0% 증가한 반면 영업비용은 3.8% 감소해 4.9%의 순영업소득(NOI) 성장을 견인했다. 불변 통화 기준 NOI는 5.1% 증가했다.
• 동일 매장 영업이익률은 전년 동기 대비 190bp 확대된 68.0%에 달해 2023년 이후 회사 기준 3분기 최고치를 기록했다.
• 분기 말 점유율은 92.1%를 기록했으며, 점유 평방피트당 계약 임대료는 2.6% 상승했다. 10월 점유율은 92.2%로 개선됐다.
• 경영진은 동일 매장 매출, NOI 성장률, 주당 조정 FFO에 대한 2026년 연간 가이던스를 상향 조정했다. 주당 조정 FFO 전망치 범위는 이제 2.01~2.05달러다.
• 회사는 2026년에 2억~2억 2,000만 달러 규모의 자본을 집행할 것으로 예상하며, 2027년 상반기부터 7,500만~1억 2,500만 달러 규모의 비핵심 자산 매각을 진행할 계획이다.

주요 재무 데이터

사업 및 운영 실적

비용 통제와 포트폴리오 규모 확대가 3분기 이익률 개선의 주된 요인이었다. 스마트스톱은 재산세, 보험료, 수선유지비, 유틸리티 비용 감소를 기록했다. 경영진은 일부 보험료 및 재산세 절감 효과가 순환적 성격을 띠지만, 인건비 효율화와 군집화(클러스터링) 혜택은 지속될 것으로 내다봤다.

회사는 신규 입주 요율을 낮추며 이번 분기 동안 점유율 확보를 우선시했다. 신규 입주 건수는 전년 동기 대비 5.6% 증가한 반면, 8월부터 9월까지의 점유율 하락폭은 30bp에 그쳤다. 할인 및 프로모션(컨세션) 제공은 줄어들었으며, 콘퍼런스콜 시점 기준 4분기 누적 컨세션은 전년 동기 대비 약 25%~30% 감소했다.

캐나다에서는 13개 자산으로 구성된 동일 매장 자산군이 불변 통화 기준 소폭의 플러스 매출 성장을 달성하며 2분기의 1% 감소에서 개선됐다. 광역 토론토 지역(GTA)의 점유율은 전년 동기 대비 10bp 상승한 92.6%를 기록했다. 10개 자산으로 구성된 GTA 합작회사(JV)는 2.8%의 매출 성장률과 약 93%의 점유율을 기록했다.

100% 지분을 보유한 앨버타 포트폴리오는 2025년 8월 인수 이후 점유율이 약 1,700bp 상승했으며, 3분기에 전년 동기 대비 9.2%의 매출 성장을 달성했다. 경영진은 해당 포트폴리오의 실적이 기대치를 웃돌았다고 밝혔다.

스마트스톱은 스트래티직 스토리지 캐나다(Strategic Storage Canada LP)에 약 5,300만 달러를 투자해 캐나다 내 운영 규모를 30% 이상 확대하고 매장 수를 70개로 늘린다고 발표했다. 또한 약 3,230만 달러의 브릿지 자금을 투입했으며, 약 3,700만 달러 규모의 직접 인수 자산 2건에 대한 계약을 체결했다.

자금 조달 활동에는 4.32% 금리로 발행된 2억 캐나다 달러 규모의 메이플 본드와 ATM 프로그램을 통해 주당 평균 32.01달러에 발행된 약 240만 주의 선도 주식이 포함됐다.

경영진 가이던스

경영진은 조정 FFO 전망치 상향의 주된 배경으로 동일 매장 실적 호조를 꼽았다. 또한 수정된 자본 집행 목표치는 회사가 초기에 제시했던 2026년 목표 범위인 4,500만~6,500만 달러를 크게 웃도는 수준이다.

리스크 및 주요 점검 사항

• 회사가 점유율 확보를 우선시하면서 3분기 평방피트당 신규 입주 요율은 5.7% 하락했다. 경영진은 월말에 일부 시장이 개선되기는 했으나, 10월 신규 입주 요율 역시 한 자릿수 후반에서 두 자릿수 초반대의 하락세를 지속했다고 전했다.
• 경영진은 주로 2025년 실적 호조에 따른 역기저 효과로 인해 2026년 연간 GTA 포트폴리오의 실적이 미국 포트폴리오를 소폭 밑돌 것으로 예상하고 있다.
• 경영진에 따르면 관세 관련 거시경제 불확실성으로 인해 GTA 일부 지역에서 임대 결정에 다소 주저하는 모습이 나타났다.
• 유리한 재산보험 갱신 및 재산세 절감 등 3분기 일부 비용 혜택은 순환적인 성격을 띠고 있어 향후 비교 기준이 높아지는 부담에 직면할 수 있다.
• 경영진은 일부 인수 대상 자산의 가격이 여전히 높은 수준이라고 언급하며, 거래는 반드시 주당 가치를 증대(accretive)시키는 방향이어야 한다는 점을 재차 강조했다.

애널리스트 Q&A 주요 내용

비핵심 자산 매각: 스마트스톱은 충분한 규모를 갖추지 못한 시장에서 7,500만~1억 2,500만 달러 규모의 부동산을 우선 매각할 계획이며, 거래 완료 시점은 2027년 상반기로 예상된다. 경영진은 인수 및 매각의 자본환원율(캡레이트)이 대체로 유사할 것으로 보고 있다. 아울러 운영 효율화, 1031 조세 이연 교환 혜택, 위탁 운용 계약 유지 가능성 등이 단기 및 중기적인 주당 가치 증대를 뒷받침할 수 있다고 밝혔다.

점유율 및 가격 책정 전략: 경영진은 수익 관리 시스템이 예상 NOI 수익률을 기반으로 요율과 점유율 간의 비중을 조절한다고 설명했다. 3분기와 10월에는 점유율에 중점을 두었으나, 콘퍼런스콜 시점에는 토론토의 웹 요율이 전년 동기 대비 한 자릿수 중반대의 성장세로 전환됐다.

2027년 투자 환경: 경영진은 안정화 단계에 접어든 미국 및 캐나다 스토리지 자산에서 매력적인 기회가 있다고 설명하면서도, 스마트스톱이 단순히 양적 확대나 규모만을 위해 투자를 추진하지는 않을 것이라고 밝혔다. 합작투자(JV)와 구조화 투자는 특히 대차대조표에 온전히 부담을 주지 않으면서 시장 군집(클러스터)을 확장할 수 있는 방안으로서 자본 배분 전략의 일부로 유지된다.

이익률 개선의 지속 가능성: 경영진은 이익률 개선의 상당 부분이 구조적인 군집화(클러스터링) 혜택에 기인한다고 설명했다. 10개 이상의 자산을 보유한 시장은 역사적으로 약 300bp의 이익률 개선을 이끌어냈으며, 마이애미, 덴버, 시카고는 연초 이후 250~300bp의 이익률 확대를 기록했다.

임차인 유지: 고객 체류 기간은 32개월로 늘어났으며, 임차인의 36%가 24개월 이상 머물고 있다. 경영진은 기존 고객 대상 요율 인상에 따른 고객 이탈률이 미국과 캐나다 모두에서 안정적인 수준을 유지했다고 밝혔다.

실적 발표 콘퍼런스콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Hello, everyone. Thank you for joining us, and welcome to SmartStop Self Storage's Third Quarter 2026 Earnings Call.

[Operator Instructions]

I will now hand the conference over to David Corak, Senior Vice President of Corporate Finance and Strategy. David, please go ahead.

David Corak

Thank you, operator.

Before we begin, I would like to remind everyone that certain statements made during today's call, including statements about our future plans, prospects and expectations may be considered forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act.

These forward-looking statements are subject to numerous risks and uncertainties as described in our filings with the Securities and Exchange Commission, and these risks could cause our actual results to differ materially from those expressed in or implied by our comments.

Forward-looking statements in our earnings release that we issued last night, along with the comments on this call, are made only as of today. The company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

In addition, we will also refer to certain non-GAAP financial measures. Information regarding our use of these measures and reconciliation of these measures to GAAP measures can be found in our earnings release and supplemental disclosure that we issued last night and are available for download on our website at investors.smartstopselfstorage.com.

In addition to myself, today, we have H. Michael Schwartz, Founder, Chairman and CEO; as well as James Barry, our CFO.

Now I'll turn it over to Michael.

H. Schwartz

Thank you, David, and thank you for joining us today for our third quarter earnings call.

SmartStop Self Storage had a strong quarter of results, and we further reinforced our vision by executing on the pillars of our long-term strategy for shareholder value creation through the DECA initiative, which we introduced in July.

Let me first touch on our results for the third quarter. We posted strong same-store revenue growth of 2%, and operating expense decrease of 3.8% and sector-leading NOI growth of 4.9%. Even with a modest currency headwind on a constant currency basis, same-store NOI grew 5.1%. Operationally, 11 of our top 15 markets achieved positive same-store NOI growth.

Our strong focus on expense control led to 190 basis points year-over-year growth in our same-store operating margins. This is our third quarter in a row of improved margins and the highest 3Q operating margin since 2023. This operational performance, coupled with overall efficiencies resulted in an FFO as adjusted per share of $0.51, up approximately 9.4% year-over-year.

With these results and good momentum into the fourth quarter, we once again raised the midpoint of our same-store revenue as well as our same-store NOI guidance, the fourth time this year.

Lastly, we raised the midpoint of our FFO as adjusted per share guidance. The DECA initiative is our multiyear strategic framework that stands for disciplined execution, compounding appreciation through 6 defined pillars for outsized long-term value creation.

As a brief reminder, the 6 pillars comprise disciplined capital allocation as an NAV creation engine, operational focus through clustering and margin expansion, investment in technology led by SmartStop.AI, leveraging third-party management to achieve capital-light scaling, our managed REIT platform and targeting joint ventures that advance our clustering strategy by acquiring operating assets at scale.

With this clear strategic focus, we are confident in our ability to create value through relative outperformance, margin expansion and outsized FFO per share growth, all of which we've demonstrated with our 3Q results and announcements.

To that end, on the transaction side, we announced an estimated $53 million investment in Strategic Storage Canada LP, a Canadian growth-oriented acquisition joint venture, which expands our Canadian operating presence by over 30% to 70 stores, a new programmatic investment partnership with an institutional sponsor who is an accomplished developer in the U.S.

Our preferred and mezzanine investments carry blended in-place yields in the mid-teens, and we also receive property management, rights of first offers and a pipeline of future deals for investment and acquisitions from the sponsor's platform.

During the quarter, we deployed approximately $32.3 million of bridge capital, the majority of which was to the sponsor. We also announced that we're under contract to acquire 2 on-balance sheet acquisitions for approximately $37 million, both in core SMA markets.

From a funding standpoint, we priced $200 million CAD Maple Bond at 4.32% and approximately 2.4 million forward shares through our ATM program at an average price of $32.01. On the third-party management side, we officially rebranded Argus to SmartStop 3PM.

Lastly, we announced a strategic asset management program aimed at the disposition of properties in select noncore markets to redeploy capital into core markets to further reinforce our efficiencies and clustering.

On the performance side, our sector-leading same-store NOI growth of 4.9% was driven by our strong revenue management and growing expense efficiencies as we scale. This led to same-store operating margins of 68%, up 190 basis points year-over-year. We also posted year-over-year NOI growth of 4.9% on a constant currency basis in our 10 GTA SmartCentres joint venture properties.

Our managed REIT platform posted 16.3% year-over-year growth of recurring revenues. The stellar performance paired with a busy quarter on the transaction front actually led to a reduction of normalized cash flow leverage to 6x or 5.6x, assuming the full settlement of our forward ATM shares. The DECA initiative was in full swing in the third quarter, and we're excited about what lies ahead for our company.

Now I'll turn it over to James.

James Barry

Thank you, Michael.

Starting with our operating performance. Our same-store pool posted year-over-year revenue growth of 2% with a 3.8% decrease in operating expenses leading to an NOI increase of 4.9% with quarter ending occupancy of 92.1% and in-place rent per occupied square foot up 2.6%.

On a constant currency basis, same-store revenue grew 2.1% and NOI grew 5.1%. We were very pleased with our operating expenses with a year-over-year same-store decrease of 3.8% in the quarter as the benefits of scale continue to manifest themselves in margin expansion. We saw a decrease in property taxes, property insurance, repairs and maintenance and utilities in the quarter.

Our move-in rates per square foot were down 5.7% on average for the quarter year-over-year as we prioritize occupancy. This strategy was successful as our occupancy was only down about 30 basis points month-over-month from August to September, and our move-ins were up 5.6% year-over-year for the quarter. In October, we gained occupancy from the end of September at 92.2% as of the end of that month.

The result of all of this is that for the third quarter of 2026, we posted fully diluted FFO as adjusted per share in unit of $0.51, up approximately 9.4% from $0.47 in the third quarter of 2025.

Turning to guidance. At the end of September, we adjusted our full year 2026 guidance upward to reflect year-to-date results as well as the impact of announced transactions. The highlights of those adjustments were a raise in the same-store revenue, same-store NOI and FFO as adjusted per share ranges.

Last night, we once again adjusted our full year guidance. We raised our same-store revenue guidance from a range of 0.75% to 1.75%, up to a range of 1.25% to 1.75%. Additionally, we reduced our overall operating expense growth range from 0% to 1%, down to a range of negative 25 basis points to positive 25 basis points. This results in an increase of our NOI growth midpoint from 1.65% up to 2.25%.

We are now expecting capital deployment of $200 million to $220 million compared to our prior range of $190 million to $210 million and notably above our initial guidance range at the beginning of the year of $45 million to $65 million.

Lastly, we are adjusting our FFO as adjusted per share guidance range from a range of $1.99 to $2.05, up to a range of $2.01 to $2.05, increasing the midpoint to $2.03, primarily driven by stronger same-store performance.

As Michael said, we have a clear plan to continue executing on our growth strategy to drive value for shareholders. The results are beginning to demonstrate the potential of the DECA initiative.

And with that, operator, we will open it up to questions.

Operator

[Operator Instructions] Your first question comes from the line of Viktor Fediv with Scotiabank.

질의응답

Viktor Fediv

So my question is about your disposition plan. So you plan around $75 million to $125 million of noncore sales beginning in early 2027. So how advanced is the process? And do you expect the sales to be actually initially dilutive to 2027 FFO per share? And how quickly can proceeds be redeployed and probably some details on yield spreads as well would be helpful.

H. Schwartz

Great. Thanks, Viktor. This is Michael. Our strategic asset management program plays into the deck initiative in terms of the scale and clustering. This is all about clustering in MSAs where we have 10 properties or more, we've been very clear our operating margins improved by over 300 basis points.

Where we lack scale and do not see a path to scale, we'd rather recycle that capital into core markets where we can grow our clusters and efficiencies. So we've initially targeted $75 million to $125 million. We expect those to close in the first half of 2027. There could be more after that, but this is kind of our initial plan.

We have several properties being marketed right now. One that I would point out would be that we have 2 properties on the island of Nantucket. That's a tough market to scale since there's probably not 10 properties on the island. So those fit the bill, I think, quite well.

Now with that, with pricing expectations, David?

David Corak

Viktor, it's Corak. So in terms of the pricing and how I think about accretion dilution, we expect the cap rates on these deals that we're buying to be fairly similar to the ones that we're selling.

Remember, this is not a strategy that is divesting sort of the bottom of the barrel of the portfolio, as you see in a lot of the asset management programs out there in REIT land. Some of the markets like Nantucket, like Michael mentioned, are actually fairly low cap rate markets.

So for a pure sort of NOI -- for NOI standpoint, I don't think there's a ton of accretion or dilution but when you factor in the potential efficiencies here, right, I'd probably lean more towards the accretion in the short to medium term. And just to say that these will all be 1031 exchanges, so there won't be any tax implications.

And then lastly, just something to think about, we're hoping that on potentially some of these dispositions, we can actually retain management of some of the assets. So that could lend itself again to the accretion side.

Viktor Fediv

Got it. That's helpful. And then as a follow-up on move-in rates trajectory. So currently, your move-in versus move-out spread is one of the widest within the public peers. So is your strategy still focusing on occupancy, for example, in October and now in the beginning of November? And do you see that spread between move-in and move-out being narrower in 2027 as move-in rates are going up?

David Corak

Viktor, I'll allow me to give you a little bit of color on the strategy that happened in the third quarter, and then I'll kind of transition on how that plays into October and I'll probably star 2027, but maybe a little bit of thoughts into there. So to your point, our strategy this quarter was representative of what we said on the call 3 months ago that we were going to drive rate while at 92-plus percent occupancy during the busy season. And then coming out of the busy season, we wanted to maintain a good base of that occupancy heading into the slower months.

And that's basically what 3Q looked like, right? You can see it in the move-in volumes during the quarter. Move-ins were up 5.6% year-over-year and occupancy was down only 30 bps from August to September. That's a much shallower seasonal step down than typical. We ended the quarter at 92.1%, which is actually flat with where we were in July.

And obviously, that -- none of that came at the expense of revenue, right? Rents were up 2.6% and same-store revenue actually accelerated from 3Q -- into 3Q from 2Q. The web rates were down 3.5% for the quarter, but we used significantly less concessions. And going into the fourth quarter, the current run rate on concessions is even less. We're down 25% or 30% year-over-year, and that's a meaningful number.

The reality is that we have several levers to drive occupancy, right? We found that customers have had a better response to rate than some of the other levers that we utilize. So we're using less concessions. We haven't pulled on the marketing lever as hard as we could have. Every customer that we move in, there's a rate that we can grow over a length of stay that continues to elongate. We're now at 32 months and 36% of our tenants stay for over 24 months.

Our revenue management system flexes between the rate and the occupancy wherever it sees a better return and 2Q leaned on rate and 3Q lean towards occupancy. It's the same playbook. It's just to maximize NOI. Our strategy was very much the same in October, right? Our occupancy in October was actually up 10 basis points from the end of September at 92.2%.

That doesn't happen quite often. For reference, again, higher than some of our occupancies during the busy season. Our concessions were down, as I mentioned, 25%, 30% quarter-to-date in the fourth quarter. But our move-in rates continue to be down as well, right, high single digits, low double digits.

However, towards the end of October, we actually started to see a benefit from both move-in rates and concessions. So we shifted the strategies in certain markets, namely Toronto, where our web rates today are actually higher than they were last year in the mid-single-digit range.

So in terms of that spread, I think we are going to start seeing some compression, but the strategy in the third quarter and into October wouldn't reflect that, right? We're just pulling different levers.

Operator

Your next question comes from the line of Spenser Glimcher with Green Street.

Spenser Allaway

Yes. Maybe just a follow-up on some of your comments, David, a second ago around some of what you're seeing from an operational standpoint in the GTA. Just curious, has the Alberta 5 pack, I mean, has that performed in line with your expectations in terms of like the operations? And have there been any surprises there?

H. Schwartz

Actually, this is Michael. It's actually exceeded our expectations. So let me just kind of step back and kind of give you kind of the overview from the Canadian operating environment.

Our same-store pool in Canada consists of 13 properties. And so same-store revenue in this pool was slightly positive on a constant currency basis in the third quarter, which was an acceleration from the second quarter, which was down 1%. That's a little bit bigger acceleration in the third quarter than our U.S. portfolio. Our occupancy in the GTA is 92.6%. So it's up 10 basis points year-over-year.

For the full year, we do continue to expect the GTA to run modestly below the U.S. portfolio, primarily a function of tougher 2025 comps. The GTA did deliver 2.7% same-store revenue growth last year, and that was about 100 basis points ahead of the U.S.

Now the revenue growth in our GTA portfolio has been, and we've kind of emphasized this 3x the U.S. over the past 36 months. In concert with that, our 10-property joint ventures has a high occupancy of 93%, 2.8% year-over-year revenue growth. Our ECRIs within the GTA have been in the low 20s and with consistent attrition levels and the length of stay has been approximately 26 months year-over-year.

So the other aspect is kind of the question you asked was with respect to kind of the other Canadian markets other than the GTA. Our wholly owned Alberta portfolio has gained about 1,700 basis points of occupancy since we've acquired it in August of last year. And in the third quarter, it posted year-over-year revenue growth of about 9.2%.

In concert with that, if you take a look at our entire 29 owned properties within SMA, it posted revenue growth of 8.5% year-over-year with occupancy of 92.3%. And so we continue to see strong lease-up in our recently opened managed assets in Montreal and our late-stage lease-up assets in Vancouver.

So overall, the Canadian consumer remains healthy. I mean bad debt is less than half of U.S. levels. It's about 1%, which is incredibly low. The macro uncertainty tied to tariffs has caused probably some hesitation in rental decisions in certain pocket books, I think, in the GTA. But it's interesting, other markets like Alberta have been showing much steadier trends.

And so I want to also emphasize that the structural demand drivers remain the same and an aging downsizing population, the shrinking home sizes, continued urban densification. And so our GTA portfolio is truly an irreplaceable real estate, given the barriers to entry are significant, the cost to develop, development charges, and we now stand at 41 properties that are owned and managed in the GTA.

James Barry

Yes. Michael, if I can just add to that as well. In addition to the performance we've seen in the Alberta 5, which, as a reminder, was acquired at about 75% occupancy about a year ago in August. We've seen the full lease-up of that particular portfolio, which was, as Michael mentioned, above our expectations. But again, with some of our other announcements and our other transactions, we're adding to the clusters in those particular markets in Alberta, most notably in Calgary, which is going to really help with the efficiencies and economies of scale there as well.

Operator

Your next question comes from the line of Todd Thomas with KeyBanc Capital Markets.

Todd Thomas

In terms of the investment outlook and thinking about 2027 a little bit, there's been quite a bit of volatility in the equity markets and capital markets more broadly. But just curious how you're thinking about the outlook for investments just given the recent improvement in your cost of capital. Can you speak about whether that changes the outlook as we think about '27? And does the composition of capital deployment change at all toward wholly owned acquisitions versus joint ventures and structured investments at the margin?

H. Schwartz

That's a great question. I think from -- just let me discuss the acquisition environment. We continue to believe this is pretty amazing, I think, opportunity to transact in the storage market since the Great Recession. And I think it's been primarily driven by a lot of developments and acquisitions that were either built on COVID numbers or bought on COVID numbers.

And so as storage has kind of settled down and kind of bottomed and started to kind of move forward, some of these owners are kind of over their skis, and they may need to contribute additional capital to their properties for refinancing and some of them there is resulting in a wave of high-quality assets coming to the market.

And so we're seeing a lot of attractive opportunities on the stabilized front, both in U.S. and Canada. We do think from a pricing perspective, there are some maybe properties that are probably a little high. But overall, off-market deals have been pretty attractive, and we've kind of announced 2 of them recently, one in Las Vegas and one in Asheville.

Look, we're not going to just chase volume or size for its own sake. I mean, everything has to be accretive on a per share bar. And we like to emphasize that a $300 million transaction would move our market cap by 10%, and that's effectively meaningful growth for us.

With respect to that, that kind of folds into the strategic investment that we made in Strategic Storage Canada. That investment is a prime example of kind of the opportunities that we're seeing in Canada. We have a growth-oriented acquisition joint venture, which expanded our overall presence in Canada by 30%. It hits on 3 of our DECA pillars, targeting joint ventures that advance clustering, acquiring operating assets at scale, third-party management and disciplined capital allocation.

And so this lets us deal with our Canadian platform without fully burdening our balance sheet. But it also, as James has discussed, it had a meaningful presence in Calgary. Now we have 9 stores in Calgary, and we've done that in kind of a derisked manner. And so this also creates a really nice pipeline of growth in Canada, which is certainly a big target for us.

Now having said that, look, it is great to see that our recent stock performance for SmartStop and the sector. We think it reflects the momentum that we're seeing in our business. Our balance sheet is in a good place. We continue to stay disciplined in how we allocate capital. And as we've done today, we'll evaluate the right source of capital against the opportunities that we see to create long-term value for our shareholders.

Todd Thomas

Okay. That's helpful. And then shifting over to operating expenses down again this year, roughly 2% lower year-to-date. How should we think about the expense backdrop heading into 2027? I guess how much of this year's improvement is sort of structural or sustainable and/or should we expect some normalization in expense growth next year against tougher comps?

James Barry

Yes, Todd, thanks. It's certainly a pertinent question based on the expense decrease that we saw in the third quarter, which we're very pleased with. And again, just as we mentioned in our opening remarks, it is the third consecutive quarter of year-over-year margin expansion for us, and it widened. It actually got larger sequentially from the second quarter.

This is the highest third quarter operating margin we've had since 2023. And we think a big portion of that is structural, right? And as we've mentioned over our lifetime as a public company, in MSAs where we have 10 or more properties, we see roughly 300 basis points of margin improvement, right? And that really -- we saw more of those markets fall into that category once we had the SmartStop 3PM platform, it hits more of those markets, most notably Denver.

So markets like Miami, Denver, Chicago, we are seeing 250 to 300 basis points year-over-year margin expansion on a year-to-date basis. Some of the expense print that we've seen thus far this quarter and year-to-date is cyclical. So we had stronger property insurance renewals in terms of a softer property insurance market. We have seen some property tax benefits as well.

But the things like payroll efficiencies are real and are going to continue to benefit us as we move forward and continue the clustering through whether it be acquisitions, joint ventures, third-party management, all of the above really help with that story.

And then just to echo again, as we mentioned on one of the previous questions, that's another part of that strategic asset management program by migrating away from noncore markets, we're going to continue to reinforce those efficiencies.

Operator

Your last question comes from the line of Michael Mueller with JPMorgan.

Michael Mueller

Out of curiosity, do you have any expectations about the broader Canadian operating environment changing really in any way once PFA takes over operation for the portfolio that it bought?

H. Schwartz

Great question. To date, we have not experienced any notable difference in the operating environment thus far. So it's hard to say. But as I said on previous calls, I think the good news is we compete with a lot of larger operators and regional operators and smaller operators on a daily basis in the U.S. and markets that markets like Las Vegas and some other markets that have a lot of exposure from companies like that. And we feel pretty comfortable that we'll be able to compete at a pretty high level.

Michael Mueller

Got it. Okay. And maybe just one other quick one. When you look at the relatively muted move-outs compared to your move-in volumes, is that dynamic in the GTA similar to what you're seeing more broadly in the U.S.

James Barry

Yes. This is James. I'll just jump in and say we're seeing more limited vacates overall and more muted. I think we saw elevated vacates through most of 2025. What's been notable is in terms of our ECRI strategy, which has been consistent, right, over the course of this year, both in the U.S. and in Canada, we've really not seen any sort of a material change in customer attrition as it relates to ECRIs.

And that even accounts for L.A. County as those ECRI restrictions faded at the end of the second quarter, we actually saw less attrition than we expected in that those customers stayed longer. And we're seeing it in our overall customer length of stay is lengthening over the course of 2026. That's both in the U.S. and in Canada.

David Corak

Yes. And just to give you some numbers, Mike, our move-outs were actually down year-over-year in our DTA portfolio.

Operator

Okay. There are no further questions at this time. I will now turn the call back to Michael Schwartz for closing remarks.

H. Schwartz

Thank you, operator, and thanks for your time and interest in SmartStop Self Storage, the smarter way to store. I'd also like to thank our SmartStop team members in 41 states and provinces across North America. Have a great day.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.