Morningstar DBRS is predicting an uptick in American real estate companies entering the Canadian debt market. The credit rating agency’s newly released midyear assessment of North American commercial real estate trends highlights diverging interest rate trajectories on either side of the Canada-United States border and a strong appetite for unsecured notes among Canadian investors.

“With the level of interest by existing and potential new issuers, we believe there is the potential for 2025 to be an all-time high for Morningstar DBRS-rated issuance,” the analysis states. “Canada is an attractive market for both Canadian and U.S. issuers to borrow.”

Morningstar DBRS rated roughly USD $6.8 billion in senior unsecured debt for real estate in the North American market during the first six months of 2025, which was the highest level of borrowing for a first half thus far this decade. However, it notes “very modest” activity in its U.S. rated universe.

SmartStop OP, the operating partnership of SmartStop Self Storage REIT, is flagged as the leading edge of the potential influx of U.S. issuers of notes in Canadian-denominated currency, known as maple bonds. The NYSE-listed company closed an inaugural CAD $500 million bond offering in mid-June, also representing the first self storage company to issue a maple bond. The offering was 4.5 times oversubscribed for the four-year notes bearing a 3.85 per cent effective interest rate.

“Executing this transaction speaks to SmartStop’s ability to be opportunistic in its capital stack at favorable interest rates while expanding our reach across different capital sources,” observes James Barry, the company’s chief financial officer.

“We are expecting there will be other maple bond issuers for the remainder of 2025 given the favourable economics,” Morningstar DBRS analysts assert.