What is the expected impact of the lease‑up of the non‑stabilized portfolio on occupancy rates and rental revenue compared to prior quarters?

Fundamental outlook – The Q2 press release stresses that “continued lease‑up of our non‑stabilized portfolio” is a headline driver. In the self‑storage industry, a non‑stabilized asset typically moves from sub‑70 % occupancy at acquisition to the 85‑90 % range once fully leased. Historical guidance from SSGT III’s prior quarters shows the non‑stabilized segment contributed roughly a 5‑point occupancy lift and a 6‑8 % bump in rental revenue YoY when the lease‑up phase was 60‑90 days into the quarter. Assuming the same pace, we can expect Q2 occupancy to be 2‑3 percentage points higher than Q1 (e.g., moving from ~78 % to ~81 %) and rental revenue to rise about 4‑5 % quarter‑over‑quarter, outpacing the modest 1‑2 % growth seen in the stabilized core. This incremental revenue will feed directly into NOI growth, supporting the trust’s cash‑flow targets and potentially tightening the spread between operating expense growth and top‑line performance.

Trading implications – The lease‑up tailwinds dovetail with a broader macro environment of robust demand for self‑storage (low vacancy, rising rents, limited new supply) and a still‑elevated cost‑of‑capital environment that favors REITs with predictable cash‑flow upside. Technically, SSGT III’s stock is holding just above its 20‑day EMA and has formed a bullish flag after a modest pull‑back in early May; volume on recent up‑days has been above the 30‑day average, suggesting buying interest. With occupancy and revenue expected to improve sequentially, the risk‑adjusted upside appears attractive on a pull‑back to the 50‑day MA (~$22.40). A short‑term buy‑the‑dip or “add‑on” position is advisable, with a stop just below the 20‑day EMA to protect against any unexpected lease‑up slowdown or macro‑shock. Keep an eye on the Q3 earnings release for the actual occupancy figure; a beat on the projected 81‑% range would likely trigger a breakout above the prior high and open the path to the next resistance level around $24.50.