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SmartStop Files $1 Billion Student and Senior Housing Nontraded REIT Offering

October 5, 2017

SmartStop Files $1 Billion Student and Senior Housing Nontraded REIT Offering

October 5, 2017 | James Sprow | Blue Vault

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SmartStop Asset Management LLC, a sponsor of nontraded REITs and other direct investment offerings previously focused on self-storage assets, has filed an offering for a $1 billion nontraded REIT called Strategic Student & Senior Housing Trust Inc., according to an S-11 registration statement filed with the Securities and Exchange Commission.

Strategic Student & Senior Housing Trust plans to invest in student housing and senior housing properties and related real estate investments. The company will be externally managed by affiliate SSSHT Advisor LLC, and SSSHT Property Management LLC will serve as the affiliated property manager.

The primary offering will consist of three share classes: Class A, Class T and Class W shares. All investors can choose to purchase Class A shares or Class T shares in the offering, while Class W shares are only available to investors purchasing through certain fee-based programs or registered investment advisers. The minimum purchase is generally $5,000.

Class A shares are priced at $10.33 each and include a 6 percent sales commission and a 3 percent dealer manager fee paid to Select Capital Corporation.

Class T shares are priced at $10.00 each and include a 3 percent sales commission, a 3 percent dealer manager fee, and an annual 1.0 percent shareholder servicing fee.

Class W shares are priced at $9.40 each and include an annual 0.5 percent dealer manager servicing fee, and no sales commission or dealer manager fee.

The REIT also plans to offer $95 million in distribution reinvestment shares priced at $9.81 each for Class A shares, $9.50 each for Class T shares, and $9.40 Class W shares.

On June 28, 2017, the REIT acquired a student housing property in Fayetteville, Arkansas for $57 million. The Fayetteville property contains 198 units and 592 beds, with one-, two-, three- and four-bedroom, fully-furnished floor plans. The property sits on 2.3 acres of land adjacent to the University of Arkansas, and is approximately 95% leased for the 2017-2018 academic year. The units are fully furnished including beds, desks, chairs, tables, televisions, energy efficient appliances, interior washer/dryers, and condominium finishes with granite countertops, pendant lighting, espresso finish cabinets and vinyl plank flooring. All floor plans offer 1 bed / 1 bath parity. The property contains fiber optic cable with 1 Gigabit of bandwidth capacity. The property also features a pool, spa, and courtyard; fitness facility with separate yoga room; computer lab and business center; and study rooms. Parking for the Fayetteville Property is located in a six-story controlled access parking garage. The Fayetteville Property is managed by Asset Campus Housing (“ACH”), a third party student housing manager. ACH currently manages in excess of 210 properties and 118,500 beds.

SmartStop Asset Management sponsors three nontraded REITs focused on self storage properties, including Strategic Storage Trust II Inc., Strategic Storage Growth Trust Inc., and Strategic Storage Trust IV Inc. In 2015, SmartStop Self Storage, Inc. merged with Extra Space (EXR) in a full-liquidity event that resulted in an annualized rate of return for early investors in the nontraded REIT of 10.96% according to Blue Vault’s 4th Edition Nontraded REIT Full-Cycle Performance Study.

 

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