SmartStop Expands Credit Facility

The self-storage REIT increased its revolving credit line to $700 million while freeing up encumbered properties.

February 06, 2025

SmartStop Enhances Financial Flexibility with KeyBank Loan Transactions

SmartStop Self Storage REIT, Inc. has taken significant steps to optimize its capital structure through a series of financial maneuvers involving its KeyBank credit facility. The company expanded its credit line, refinanced existing obligations, and improved liquidity by adding previously encumbered properties to its borrowing base.

The company originally entered into an amended and restated revolving credit facility in February 2024, securing $650 million in financing from KeyBank and other lending institutions. In early February 2025, SmartStop executed transactions to fully pay off its KeyBank Florida CMBS Loan, which had an outstanding principal of approximately $49.9 million as of year-end 2024. Concurrently, the company increased commitments under its revolving credit facility by an additional $50 million, bringing the total available capacity to $700 million.

As part of the restructuring, SmartStop exercised its accordion feature, drawing $51 million from the expanded facility. Additionally, it added five properties that were previously pledged under the Florida CMBS Loan to the borrowing base of the credit facility. These moves increased the company’s available borrowing power after accounting for the recent transactions.

Strengthening the Balance Sheet

By refinancing through its expanded credit facility, SmartStop has not only retired a major debt obligation but also increased financial flexibility for future growth. The full repayment of the Florida CMBS Loan eliminates the restrictions associated with that specific financing, allowing SmartStop to leverage these assets more efficiently under the broader revolving credit arrangement.

The newly structured financing provides greater strategic optionality, giving SmartStop more room to maneuver in response to market conditions. Self-storage demand has remained relatively resilient, but higher interest rates and shifting consumer trends continue to influence capital allocation decisions across the real estate sector.

Outlook and Strategic Implications

SmartStop’s proactive debt management demonstrates a commitment to optimizing its capital structure. The increased borrowing capacity may support further portfolio expansion or improvements to existing assets. Meanwhile, the shift away from the Florida CMBS Loan to a more flexible credit facility arrangement suggests a preference for liquidity and adaptability.

As the self-storage industry continues to evolve, SmartStop’s financial strategy positions it well to navigate market fluctuations while maintaining access to capital for potential acquisitions or operational enhancements. Investors and stakeholders will likely monitor how the REIT utilizes its expanded credit capacity in the months ahead.