SmartStop Self Storage REIT Suspends Share Redemption Program
August 28, 2019 | James Sprow | Blue Vault
In an 8-K SEC filing dated August 28, 2019, SmartStop Self Storage REIT announced the suspension of the share redemption program (“SRP”). The board of directors announced that in order to maintain operating flexibility, continue to invest in future business initiatives, and prepare for strategic alternatives, on August 26, 2019, SmartStop Self Storage REIT, Inc. (the “Registrant”) approved the suspension of the Registrant’s share redemption program effective as of September 27, 2019, except with respect to redemption requests made in connection with the death or disability of a stockholder, including redemption due to confinement to a long-term care facility, as outlined in the Registrant’s SRP. Since the effective date of the suspension of the SRP is prior to the Registrant’s next redemption date, all pending redemption requests that were not made in connection with the death or disability of a stockholder will not be redeemed, nor will any such additional requests received hereafter be redeemed, until further notice. The SRP shall remain suspended as discussed above until such time, if any, as the Registrant’s board of directors may approve the resumption of the SRP.
According to Blue Vault, share redemptions by the REIT were 210,124 shares for Q2 2019, equal to 0.36% of the weighted average shares outstanding during the quarter. Redemptions reached a high of 0.81% of weighted average shares outstanding in Q4 2018. The REIT’s most recent estimated NAV per share was $10.66 as of March 31, 2019. The REIT is distributing at the rate of 6.00% and 5.34% annualized to its Class A and Class T shareholders, respectively, based upon the initial offering prices and adjusted for the trailing fee for Class T shares.
Related: SmartStop Self Storage REIT Proposes Charter Changes to Align with Publicly Listed Companies
SmartStop Self Storage REIT reported a portfolio consisting of 112 properties with a total of 71,170 storage units as of June 30, 2019. In January the REIT completed its merger with Strategic Storage Growth Trust, Inc. (“SSGT”) As a result of the merger, the REIT acquired all of the real estate owned by SSGT, consisting of 28 operating self storage facilities located in 10 states and in the Greater Toronto, Canada area, and one development property in the Greater Toronto Area, together comprising approximately 19,800 self storage units and approximately 2.2 million net rentable square feet of storage space. Each share of SSGT common stock was automatically converted into the right to receive an amount in cash equal to $12.00 which represents a total purchase price of approximately $358 million, including SSGT outstanding debt to be assumed or repaid, excluding transaction costs. The REIT capitalized approximately $1.4 million of acquisition-related transaction costs.
On June 28, 2019, the Company and its Sponsor, SmartStop Asset Management, LLC, entered into a series of transactions, agreements, and amendments where the Company acquired the self storage advisory, asset management, property management, and tenant insurance joint venture interests of the Sponsor. As a result of this transaction, SmartStop Asset Management is no longer the sponsor of the Company, and the Company is now self-managed. The Company also took over the advisory, asset management, property management, and tenant insurance joint ventures, which were previously the responsibility of their former Sponsor, as they relate to Strategic Storage Trust IV and Strategic Storage Growth Trust II.
Sources: SEC, Blue Vault
