Ladera Ranch-based Strategic Storage Holdings, an affiliate of Strategic Storage Trust Inc., is expanding its business into the Canadian market by partnering with Toronto-based Budget Development Partners, a developer and manager of self-storage properties.
As part of the joint venture, the two companies will seek to acquire operational self-storage properties, build new facilities and redevelop existing industrial buildings throughout Canada, and will rebrand the sites under the SmartStop Self Storage trademark.
Jamie Bennett, senior partner with Budget Development, described the partnership as a perfect fit for the market.
“The opportunities for self-storage in Canada are enormous, but until now there has been a lack of interest or initiative on the part of many U.S. self-storage companies to cross the border,” Bennett said. “Canadian operators don’t have enough capital, and American chains don’t have a local presence to get things done. This venture fits right in the middle, poised to take advantage of this untapped market.”
Budget Development Partners will act as the exclusive developer and onsite sub-property managers in Canada. As the local partner, the company will specialize in identifying self-storage opportunities for acquisitions and direct any site development and management. Strategic Storage Holdings will provide capital for the collaboration’s endeavors.
“The Canadian market is underserved in self-storage and will provide nice diversification in our aggregate portfolio,” said H. Michael Schwartz, Strategic’s chairman and CEO. “This market has the same self-storage needs as the United States but is 10-plus years behind as far as supply. Their economy has been more stable in growth and commercial lending, which is a definite advantage for us. So it is natural that our first international expansion would be into Canada.”
The Canadian business model for Strategic Storage Holdings will be the same as in the U.S. The companies expect to arrange business loans for the acquisition of new assets through Canadian banks, with the Canadian dollar debt hedging some currency risk.