SmartStop Self Storage REIT (SMA US) looked like an IPO that might not draw much interest but the company’s story resonated during the roadshow and they “packed” in a big win in their first week.
The premier owner and operator of self storage facilities in the United States and Canada priced a full-size deal of 27.0mm shares at $30.00 and opened for trading (after a lengthy paring process) at $32.40 for a gain of 8% at first trade. The stock hit a first day high of $33.92 for a 13.1% return at its top. The stock closed its first session at $32.75 (Wednesday) and traded in a relatively tight range on Thursday and Friday despite some severe market volatility. SmartStop closed the week at $32.89 marking a major win for this REIT IPO.
Final Deal Message
The offering finished five-times oversubscribed with the underwriter stating that the deal had sizable participation from long-only and REIT-dedicated accounts. The top 10 accounts took 50% of the deal and top 25 accounts were allocated 70% of the transaction.
REIT Timing is Right
There are many companies “waiting and primed” to go public in the current IPO pipeline. This includes Hinge Health (HNGE US) , StubHub Holdings (STUB US) , Etoro Group (ETOR US), Klarna (KLAR US) among others. Many of those transactions are currently “waiting out” the current turbulent market environment. In fact, CNBC is reporting that both Klarna and StubHub are “delaying” IPO plans with no clear timeline for when it will pursue an offering.
While those companies can be swayed by the winds of the market, a low-risk storage unit company which pays a monthly dividend (5% annually), like SmartStop, attracted the longer-term investor needed to produce a winning deal.
English
Arabic
Chinese (Simplified)
Dutch
French
German
Italian
Portuguese
Russian
Spanish