Strategic Storage Trust IV Announces Initial NAV
June 25, 2019 | Luke Schmidt | Blue Vault
On June 21, 2019, Strategic Storage Trust IV, (“SST IV”), a public non-traded REIT sponsored by SmartStop Asset Management, LLC, announced the approval of an estimated net asset value per share of its Class A, Class T, and Class W common stock of $22.65, calculated as of March 31, 2019. The approved estimated NAV was approved by SST IV’s board of directors on June 20, 2019, based on the estimated value of SST IV’s assets less the estimated value of its liabilities divided by the number of shares outstanding on an adjusted fully diluted basis.
In connection with the determination of the estimated NAV, the board determined new per share offering prices of their three shares of classes. The new offering prices for Class A, Class T, and Class W shares are $24.89 (down from $25.00), $24.10 (down from $24.21), and $22.65 (down from $22.75), respectively, each of which took effect June 21, 2019. It was also determined that shares issued pursuant to the distribution reinvestment plan for each share class will be issued at the updated NAV per share of $22.65, effective for distribution payments being paid beginning in August, 2019.
“We are pleased to announce SST IV’s first estimated value per share of $22.65,” said H. Michael Schwartz, chairman, and chief executive officer of SST IV. “The value of our existing assets have increased, and we believe that continuing to invest in stabilized and growth self-storage assets will drive long-term value for our shareholders.”
Duff & Phelps, LLC (“Duff & Phelps”), an independent third-party real estate valuation and advisory firm, was engaged to provide valuation services of SST IV’s assets and liabilities, including its 16 self-storage properties. Upon the nominating and corporate governance committee’s receipt and review of the Duff & Phelps valuation report, the committee concluded that the range in estimated value per share of $21.40 to $24.02, with an approximate mid-range value per share of $22.65, was reasonable and recommended to the board that it adopt $22.65 as the estimated value per share for the SST IV’s Class A, Class T, and Class W shares.
The valuation was determined in compliance with Investment Program Association Practice Guideline 2013-01 regarding valuations of publicly registered non-listed REITs (“IPA guidelines”). Consistent with the IPA guidelines, the valuation does not include a portfolio premium that may reasonably be expected to accrue in a typical real estate valuation process conducted for transaction purposes, nor does it reflect an enterprise value.
SST IV focuses on the acquisition of stabilized and growth self-storage properties. It currently owns 16 self-storage facilities comprising approximately 11,000 units and 1.3 million net rentable square feet of storage, as well as two parcels of land under development. The Company acquired its properties for approximately $185.6 million. The total estimated value of its properties is approximately $202.6 million, representing an approximate 9.2% increase in the total value over the aggregate purchase price.
Sources: SmartStop, SEC, Blue Vault
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