Strategic Storage Growth Trust Announces $11.58 NAV
April 25, 2018 | James Sprow | Blue Vault
On April 19, 2018, the board of directors of SSGT (the “Board”) approved an estimated value per share for Class A shares and Class T shares of $11.58 based on the estimated value of assets less the estimated value of liabilities, or net asset value, divided by the number of shares outstanding on an adjusted fully diluted basis, calculated as of December 31, 2017. This valuation was performed in accordance with the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association (“IPA”) in April 2013 (the “IPA Guidelines”). The Board previously approved estimated values per share of Class A shares and Class T shares of $11.56 as of December 31, 2016.
The Nominating and Corporate Governance Committee (the “Committee”), comprised of two independent directors, was responsible for the oversight of the valuation process, including the review and approval of the valuation process and methodology used to determine the estimated value per share, the consistency of the valuation methodology with real estate standards and practices and the reasonableness of the assumptions used in the valuations and appraisals.
The Committee approved the engagement of Duff & Phelps, LLC (“Duff & Phelps”), an independent third party real estate valuation and advisory firm, to provide valuation services for the REIT’s assets and liabilities and a calculation of a range of the estimated value per share of our Class A shares and Class T shares as of December 31, 2017.
After considering all information provided, and based on the Committee’s extensive knowledge of the Company’s assets and liabilities, the Committee concluded that the range in estimated value per share of $11.22 to $11.97, with an approximate mid-range value per share of $11.58, as indicated in the valuation report provided by Duff & Phelps was reasonable and recommended to the Board that it adopt $11.58 as the estimated value per share for the REIT’s Class A shares and Class T shares. The Board unanimously agreed upon the estimated value per share of $11.58.
The current valuation of $11.58 was based upon an appraisal by Duff & Phelps, as of December 31, 2017, of the REIT’s 24 self storage properties that it owned as of December 31, 2017 (the “Appraised Properties”) on an individual property basis and was otherwise conducted in accordance with the IPA Guidelines.
The REIT acquired the Appraised Properties for an aggregate purchase price plus development costs incurred for the three development properties of approximately $187.9 million. As of December 31, 2017, the total midpoint appraised value of the Appraised Properties as provided by Duff & Phelps was approximately $261.2 million. This represents an approximate 39% increase in the total value of the Appraised Properties over the aggregate purchase price and development costs.
According to Blue Vault, Strategic Storage Growth Trust, Inc. began its initial offering in January 2015, issuing Class A shares at $10.00 per share. The distribution yield for Class A shares, based on the original $10.00 offering price was 4.00% as of December 31, 2017.
Source: Strategic Storage Growth Trust, Inc. Press Release April 20, 2018, Blue Vault
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