Strategic Storage Trust IV Obtains $40.5 Million in Fixed-Rate Financing
February 3, 2020
On January 31, 2020, Strategic Storage Trust IV, Inc. through seven wholly-owned special purposes entities, entered into a $40.5 million CMBS financing with KeyBank National Association as lender pursuant to a mortgage loan. The proceeds of the CMBS Loan were used to pay down a portion of the Company’s existing revolving credit facility with KeyBank.
The CMBS Loan is secured by a first mortgage or deed of trust on each of seven properties owned by the REIT. The loan has a maturity date of February 1, 2030. Monthly payments due under the loan agreement are interest-only, with the full principal amount becoming due and payable on the maturity date.
The amounts outstanding under the CMBS Loan bear interest at an annual fixed rate equal to 3.56%. Commencing two years after securitization, the CMBS Loan may be defeased in whole, but not in part, subject to certain conditions as set forth in the CMBS Loan Agreement.
According to the Company’s Q3 2019 10-Q, the Revolving KeyBank Credit Facility had a balance as of September 30, 2019, of $42.0 million, at an interest rate of 3.5% and a maturity of June 27, 2022, with two one-year extension options subject to certain conditions. As of September 30, 2019, the total interest rate was approximately 3.5% which was based on LIBOR plus 150 basis points. The REIT’s operating partnership had purchased an interest rate cap with a notional amount of $50 million, such that in no event would LIBOR exceed 3.00% thereon through July 1, 2021.
The one-month LIBOR rate as of January 28, 2020, was 1.65%.
Sources: SEC, www.bankrate.com
