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Non-Traded Self Storage REIT Inching Closer to a Liquidity Event

Non-traded REIT, SmartStop Self Storage, Inc. (SmartStop), once known as Strategic Storage Trust, Inc., revealed its operating results for the third quarter. SmartStop took a number of steps recently to ready itself for a possible liquidity event in the future.

As previously reported in September, the company changed its name to SmartStop Self Storage and took over the self storage advisory, asset management, property management, and investment management businesses of Strategic Storage Holdings and its former advisor, Self Storage Advisor.

As a result of the transaction, SmartStop is now responsible for Strategic Storage Trust II, a public non-traded REIT that focuses on stabilized self storage properties, and Strategic Storage Growth Trust, Inc., a private REIT that focuses on growth-oriented self storage properties.

“We ended the third quarter with strong results, driven by continued increases in same-store revenues and net operating income” commented H. Michael Schwartz, CEO of SmartStop Self Storage, Inc. He continued, “In addition, we recently completed our self administration and investment management transaction and changed our name. These changes have reduced our cost structure, aligned management more closely with our shareholders and we are now self-administered with more than 300 self storage employees and other professionals. In addition, we have created a unique self storage platform for continued growth through our sponsorship of two non traded self storage REITs.”

For the three months ended September 30, 2014 the company increased same-store revenues by 7.8% and increased net operating income by 14.9%. Same-store occupancy increased by 3.3%, bringing the average occupancy to 87.8% and annualized rent per square foot increased by 4.5% bringing the average to $10.30. In addition, the company decreased property operating expenses.

Furthermore, Hawthorne Property, a property in California that SmartStop Self Storage had a 12% interest in, was sold during the third quarter, resulting in $10.3 million net proceeds for the REIT.

SmartStop’s board of directors also declared a distribution for the fourth quarter of 2014 of $0.001917808 per day per share on the outstanding shares of common stock, which is equivalent to an annual distribution rate of 7% if the share was purchased for $10, or approximately 6.5% if the share was purchased for $10.79.

Founded in 2008, the company’s portfolio consists of 36 self storage properties in 17 states and Canada. It closed to new investors in September 2013 and is now positioned for a future listing on a national securities exchange or other strategic event that will provide liquidity.