The board of SmartStop Self Storage REIT Inc., a publicly registered non-traded real estate investment trust, has sent a letter to shareholders recommending that they reject an unsolicited tender offer made by Comrit Investments 1 LP.
Comrit is offering to purchase up to 373,961 shares of Class A shares and 41,551 Class T shares for $7.22 per share. The REIT’s most recent net asset value per share is $10.40, approximately 44 percent higher than Comrit’s offer.
“Comrit is a for profit business that, among other things, capitalizes on the illiquidity of shares by buying shares at what Comrit believes is a discounted price in order to make a profit,” the letter stated. “The Comrit tender offer indicates that Comrit believes that our shares will be worth more than its offer price in the future.”
SmartStop also believes that Comrit is attempting to capitalize on the partial suspension of its share redemption program.
The REIT suspended the SRP in September 2019, citing the need to “maintain operating flexibility, continue to invest in future business initiatives, and prepare for strategic alternatives.” It was partially reinstated in August 2020 for cases of death, disability, confinement to a long-term care facility, or other exigent circumstances.
SmartStop Self Storage REIT recently announced plans to merge with an affiliated REIT, Strategic Storage Trust IV Inc., in an all-stock transaction valued at $370 million. Shareholders will vote on the proposal on March 10, 2021.
SmartStop Self Storage REIT Inc., formerly known as Strategic Storage Trust II Inc., is a self-managed REIT that sponsors self-storage programs, including Strategic Storage Trust IV and other private programs. SmartStop has approximately $1.7 billion of real estate assets under management. SmartStop launched its initial public offering in January 2014 and raised $566 million in investor equity prior to closing in January 2017.