8-K
Strategic Storage Trust VI, Inc. (SGST)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 17, 2022
Strategic Storage Trust VI, Inc.
(Exact name of registrant as specified in its charter)
| Maryland | 333-256598 | 85-3494431 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
10 Terrace Road, Ladera Ranch, California 92694
(Address of principal executive offices, including zip code)
(877) 327-3485
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered |
|---|---|---|
| None | None | None |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Item 1.01. Entry into a Material Definitive Agreement.
The information included in Item 2.03 of this Current Report on Form 8-K is incorporated in this Item 1.01 by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On May 17, 2022, a subsidiary of Strategic Storage Trust VI, Inc. (the “Company”) closed on the purchase of a self storage facility located in Chandler, Arizona (the “Chandler Property”). The Chandler Property is a self storage facility that contains approximately 81,400 net rentable square feet of storage space and 590 self storage units. The purchase price for the Chandler Property was approximately $25.5 million, plus closing costs and acquisition fees. The Company funded the acquisition with a combination of net proceeds from the Company’s private and public offerings and the indebtedness described in Item 2.03, below.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
As previously disclosed, the Company, through certain special purpose entities wholly owned by its operating partnership, is party to a credit agreement (the “Credit Agreement”) with Huntington National Bank (“HNB”), as administrative agent and sole lead arranger. Under the terms of the Credit Agreement, the Company, through its subsidiaries, had a maximum borrowing capacity of $50 million (the “HNB Credit Facility”).
On May 17, 2022, the Company and HNB amended the HNB Credit Facility to increase the borrowing capacity up to $100 million (the “HNB Amendment”). In connection with the HNB Amendment, the Company, through the subsidiary that owns the Chandler Property, added the Chandler Property to the HNB Credit Facility (the “Chandler Joinder”) and drew approximately $14.5 million of capacity. The proceeds were used to finance a portion of the acquisition of the Chandler Property.
The information in this Item 2.03 with respect to the HNB Amendment and the Chandler Joinder is qualified in its entirety by the HNB Amendment, which is attached as Exhibit 10.1 hereto.
Item 7.01. Regulation FD Disclosure.
On May 17, 2022, the Company issued a press release announcing the acquisition of the Chandler Property. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8 K and are incorporated herein solely for purposes of this Item 7.01 disclosure.
On May 17, 2022, the Company held a webinar for registered representatives and stockholders to review the Company’s financial results for the year ended December 31, 2021 and the three months ended March 31, 2022, as well as to provide a portfolio update. A copy of the presentation materials used during the webinar is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein solely for purposes of this Item 7.01 disclosure.
Pursuant to the rules and regulations of the Securities and Exchange Commission, the information in this Item 7.01 disclosure, including each of Exhibit 99.1 and 99.2 and information set forth therein, is deemed to have been furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
10.1 Joinder Agreement and Second Amendment to Loan Documents, dated May 17, 2022
99.1 Press Release, dated May 17, 2022
99.2 Presentation Materials of Strategic Storage Trust VI, Inc. dated May 17, 2022
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| STRATEGIC STORAGE TRUST VI, INC. | |
|---|---|
| Date: May 17, 2022 | By: /s/ Matt F. Lopez |
| Matt F. Lopez | |
| Chief Financial Officer and Treasurer |
EX-10.1
JOINDER AGREEMENT AND SECOND AMENDMENT TO LOAN DOCUMENTS
This JOINDER AGREEMENT AND SECOND AMENDMENT TO LOAN DOCUMENTS (this “Agreement”), dated as of May 17, 2022 (the “Effective Date”), is entered into among SST VI 12220 E RIGGS RD, LLC, a Delaware limited liability company (“New Borrower”), SST VI 16600 SE 18TH ST, LLC, SST VI 6424 14TH ST W, LLC, SST VI 2200 CORAL HILLS RD, LLC, SST VI 4715 E BASELINE RD, LLC, SST VI 4730 E BASELINE RD, LLC, and SST VI 11658 W BELL RD, LLC, each a Delaware limited liability company (collectively, “Existing Borrowers”, and together with New Borrower, “Borrowers”), STRATEGIC STORAGE TRUST VI, INC., a Maryland corporation (“SST VI”), STRATEGIC STORAGE OPERATING PARTNERSHIP VI, L.P., a Delaware limited partnership (“OP VI”), (SST VI and OP VI are collectively, “Guarantors”), THE HUNTINGTON NATIONAL BANK, in its capacity as lead arranger and administrative agent acting for itself and the Banks (“Administrative Agent”), and FLAGSTAR BANK, N.A., a national banking association (“Flagstar”).
RECITALS
A. Existing Borrowers obtained a loan from Administrative Agent and Flagstar (the “Loan”) pursuant to the terms of a Syndicated Term Loan Agreement dated November 30, 2021, as amended by a Joinder Agreement and First Amendment dated December 30, 2021 (the “Loan Agreement”). The Loan is evidenced by a Term Loan Promissory Note dated November 30, 2021, in the maximum principal amount of $25,000,000.00, and a Term Loan Promissory Note dated December 30, 2021, in the maximum principal amount of $25,000,000.00 (the “Existing Notes”) and secured by certain Security Instruments, each encumbering the respective Parcel legally described therein (collectively, the “Property”).
B. Certain of Existing Borrowers’ obligations under the Loan Documents are guaranteed by Guarantor pursuant to a Guaranty of Payment and Recourse Carve-Outs dated November 30, 2021 (the “Guaranty”).
C. Existing Borrowers and Guarantors are also parties to an Environmental Indemnity Agreement dated November 30, 2021 with respect to certain Parcels and an Environmental Indemnity Agreement dated December 30, 2021 with respect to certain Parcels (the “Environmental Indemnities”).
D. The Loan Agreement, the Existing Notes, the Security Instruments, the Guaranty, the Environmental Indemnities, and all other documents evidencing, securing, or otherwise governing the Loan, as they may have been amended or modified, are referred to herein collectively as the “Loan Documents.”
E. Prior to the Effective Date, the Principal Balance of the Loan equals $50,000,000.00, and $0.00 of the Loan remains available for disbursement.
F. As of the Effective Date, Administrative Agent and Flagstar are the sole Banks under the Loan Agreement.
G. Existing Borrowers and Guarantors have requested that Administrative Agent increase the maximum principal amount of the Loan to $100,000,000.00.
H. Concurrently with such increase, Existing Borrowers have requested a New Parcel Advance to be secured by certain real property located in Chandler, Arizona as contemplated by Section 5.3 of the Loan Agreement.
I. To accommodate such requests, Existing Borrowers, New Borrower, Guarantors, Administrative Agent, and the Banks desire to modify the Loan on the terms and conditions set forth in this Agreement.
AGREEMENTS
In consideration of the mutual promises, covenants, and conditions set forth herein, the parties hereto hereby agree as follows:
1. Terminology. The terms used in this Agreement shall have the same meanings as in the Loan Agreement, unless a different meaning is assigned herein or is required by the context hereof.
2. Amendments to Loan Documents. Upon satisfaction of all of the Conditions of Effectiveness (defined below), the following amendments to the Loan Documents shall take effect:
2.1 Defined Terms. The following definitions contained in Section 1.2 of the Loan Agreement, and all references to such terms in the other Loan Documents, are hereby deleted in their entirety and replaced with the following:
“Commitment Amount” means Loan Proceeds in the amount of $100,000,000.00.
“Liquid Assets” means, without duplication, unrestricted and unencumbered, (a) 100% of the cash held in the United States deposit accounts, (b) 50% of the value of readily marketable securities (excluding “margin stock” that is pledged as collateral under a borrowing agreement (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and (c) any amounts in the Interest Reserve held by Administrative Agent.
“Note” means, collectively, (a) that certain Term Loan Promissory Note dated November 30, 2021, executed by Borrower and made payable to the order of Huntington in the original principal amount of $25,000,000.00 and (b) that certain Term Loan Promissory Note dated as of December 30, 2021, executed by Borrower and made payable to the order of Huntington in the original principal amount of $25,000,000.00, as assigned to Flagstar Bank, N.A., by that certain Allonge dated December 30, 2021, (c) that certain Term Loan Promissory Note dated May 17, 2022, executed by Borrower and made payable to the order of Huntington in the original principal amount of $35,000,000.00, and (d) that certain Term Loan Promissory Note dated as of May 17, 2022, executed by Borrower and made payable to the order of Flagstar Bank, N.A. in the original principal amount of $15,000,000.00.
2.2 Maximum Principal Amount. Any and all references in the Loan Documents to the maximum principal amount of the Loan are hereby amended to mean $100,000,000.00.
2.3 Schedule 1.2. Schedule 1.2 of the Loan Agreement is hereby deleted in its entirety and replaced with Replacement Schedule 1.2 attached to this Agreement.
2.4 Schedule 2.1. Schedule 2.1 of the Loan Agreement is hereby deleted in its entirety and replaced with Replacement Schedule 2.1 attached to this Agreement.
2.5 Schedule 8.13. Schedule 8.13 of the Loan Agreement is hereby deleted in its entirety and replaced with Replacement Schedule 8.13 attached to this Agreement.
2.6 Interest Rate. In order to transition the Interest Rate from a Daily Simple SOFR index to a Term SOFR index, the changes set forth in Exhibit B attached hereto are hereby made to the Loan Agreement.
2.7 Vancouver Parcel. Pursuant to that certain Joinder Agreement dated April 26, 2022 Banks made a New Parcel Advance in the amount of $12,937,500.00, which was the remaining available portion of the Commitment at such time. Given the increase to the Commitment Amount as described in this Agreement, Banks wish to make an additional Disbursement equal to $812,500.00 in order to increase the total of such New Parcel Advance to $13,750,000.00.
2.8 Additional New Parcel Advances. Borrower shall not be entitled to any additional New Parcel Advance until that certain bridge loan in the principal amount of $30,608,850.80 from Huntington to certain Affiliates of Borrower and guaranteed in part by Guarantor is repaid in full, which shall be on or before July 25, 2022.
3. Joinder. New Borrower hereby acknowledges, agrees, and confirms that, by its execution of this Agreement, New Borrower will be deemed to be a “Borrower” under the Loan Agreement and shall have all of the obligations of a Borrower thereunder as if they had executed the Loan Agreement. New Borrower hereby assumes, ratifies, confirms, and agrees to be bound by all of the terms, provisions and conditions contained in the Loan Agreement, as amended hereby, including without limitation (a) all of the representations and warranties set forth in Section 6 of the Loan Agreement, and (b) all of the covenants set forth in Sections 6, 7, 8, 9 and 12 of the Loan Agreement. Without limiting the generality of the foregoing terms of this Section, New Borrower, hereby promises to pay and perform, jointly and severally with Existing Borrowers, to Administrative Agent, the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of the Obligations are not paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), New Borrower, will, jointly and severally together with Existing Borrowers, promptly pay and perform the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension or renewal.
4. Conditions of Effectiveness.
4.1 Notwithstanding its execution by all parties, the foregoing amendments and joinder shall become effective only upon satisfaction of all of the following “Conditions of Effectiveness”:
(a) No Defaults. Borrowers are in full compliance with all of its covenants and agreements under the Loan Documents, and there is no Default or Event of Default under the Loan Documents.
(b) Resolutions. Borrowers and Guarantors shall have delivered to Administrative Agent resolutions certified by an appropriate representative authorizing the execution and delivery of this Agreement and any and all documents necessary to effectuate this Agreement or otherwise required by Administrative Agent.
(c) Beneficial Ownership. New Borrower shall have delivered to Administrative Agent a Certificate of Beneficial Ownership.
(d) Execution and Recording of Documents. Borrowers and Guarantors, as applicable, have executed any and all documents necessary to effectuate this Agreement or otherwise reasonably required by Administrative Agent, including, without limitation, the documents described on Exhibit A attached hereto, which documents shall be considered part of the Loan Documents.
(e) Interest Reserve. Borrower shall deposit its own funds into the Interest Reserve so that the balance of the Interest Reserve equals $1,000,000.00.
4.2 The Conditions of Effectiveness are intended solely for Administrative Agent’s benefit and may, at Administrative Agent’s election and in its sole discretion be enforced, fully or partially waived, or transformed into covenants of Borrowers or Guarantor to be performed following effectiveness of the foregoing amendments upon Administrative Agent’s subsequent written notice and demand.
4.3 Notwithstanding the foregoing, Administrative Agent’s execution and delivery of this Agreement shall constitute Administrative Agent’s acknowledgement that all the Conditions of Effectiveness have been satisfied or waived by Administrative Agent.
5. Lien Priority. The Property shall remain and continue in all respects subject to the Security Instruments and nothing in this Agreement or done pursuant to this Agreement or the Amendment to Security Instruments shall affect or be construed to affect Administrative Agent’s first-lien priority with respect to the Property.
6. Representations and Warranties. Borrowers and Guarantor hereby acknowledge, represent, warrant, and agree as follows:
6.1 The Recitals set forth above are true and accurate.
6.2 There is no Default or Event of Default under the Loan Documents.
6.3 All necessary steps have been taken to perfect Administrative Agent’s interest in the Property as security for the Loan, and the Security Instruments are, and shall continue to be, a first and paramount lien against the Property securing Borrowers’ obligations under the Loan Documents, as amended hereby and by any related documents executed by Borrowers in connection herewith. There are no liens, charges, or encumbrances against the Property that are now or may hereafter become prior to the Security Instruments.
6.4 All information provided in Borrowers’ most recent beneficial ownership certification is true, complete, and correct in all material respects as of the date thereof.
6.5 All documents and other information requested by Administrative Agent from Borrowers and Guarantor as a condition to entering into this Agreement are, to the providing party’s actual knowledge, true, complete, and accurate in all material respects.
6.6 Guarantors understand that the Principal Balance referred to in Section 5 of the Guaranty could be higher as a result of the increase of the Commitment Amount as described in this Agreement.
6.7 Borrowers and Guarantors acknowledge that Administrative Agent is relying on the warranties, representations, releases, and agreements of such parties in this Agreement, and would not enter into this Agreement without such warranties, representations, releases, and agreements.
7. Release. Borrowers and Guarantors agree that Administrative Agent have not breached any of their obligations under the Loan Documents, and Borrowers and Guarantors have no claims against Administrative Agent, any Bank, or their respective predecessors, successors, assigns, or participants, or any of their officers, directors, agents, employees, and other affiliates (collectively, the “Released Parties”) for fraud, misrepresentation, lender misconduct, lender liability, breach of alleged fiduciary duty, or other tort or wrongdoing. Borrowers and Guarantors hereby release and forever discharge the Released Parties of and from any and all claims, causes of action, rights of offset, and rights to damages that Borrowers or Guarantors have or may have, or may be entitled to assert, against the Released Parties for any reason whatsoever by reason of any actions, events, or occurrences prior to the date of this Agreement, except for Borrowers’ rights to enforce Administrative Agent’s and Bank’s further obligations under the Loan Documents, as amended hereby. The provisions, waivers, and releases set forth in this section are binding upon Borrowers and Guarantors and their respective agents, employees, representatives, officers, directors, partners, members, joint venturers, affiliates, assigns, heirs, successors-in-interest and shareholders. Neither Borrowers nor Guarantors have any claims, defenses, counterclaims, or rights of offset against any of the Released Parties arising out of or in any way connected with the Loan.
8. Payment of Administrative Agent’s Expenses. Borrowers agree to reimburse Administrative Agent for all reasonable out-of-pocket expenses incurred by Administrative Agent in connection with the drafting, negotiation, execution, and delivery of this Agreement and all related documents, including, without limitation, reasonable attorneys’ fees and costs incurred by Administrative Agent and all fees described in a supplemental fee letter executed by Borrowers and Administrative Agent in connection herewith.
9. Effect on Loan Documents. This Agreement shall be sufficient to serve as an amendment to all of the Loan Documents, as appropriate. This Agreement supersedes and shall control over any inconsistent provisions of the Loan Documents, or any previous extensions or other amendments of the Loan Documents. Except as amended herein, the Loan Documents shall remain in full force and effect as written, and the provisions of the Loan Documents shall remain unaffected, unchanged, and unimpaired hereby.
10. Authorization/Binding Effect. Borrowers and Guarantors warrant and represent that the execution and delivery of this Agreement by such party was duly authorized by all individuals or entities whose authorization was required for this Agreement to be effective. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, and assigns.
11. Applicable Law. This Agreement shall be construed in all respects and enforced according to the laws of the State of Illinois, without regard to that state’s choice of law rules.
12. Counterparts. The parties may execute this Agreement in any number of counterparts, each of which shall be deemed an original instrument but all of which together shall constitute one and the same instrument.
(Remainder of page intentionally left blank; signature pages follow)
IN WITNESS WHEREOF, New Borrower, Existing Borrowers, Guarantors, Administrative Agent, and the Banks have caused this Agreement to be duly executed and delivered as of the date first above written.
NEW BORROWER:
SST VI 12220 E RIGGS RD, LLC, a Delaware limited liability company
By: Strategic Storage Trust VI, Inc., a Maryland corporation, its Manager
By: /s/ H. Michael Schwartz H. Michael Schwartz, Chief Executive Officer
EXISTING BORROWERS:
SST VI 16600 SE 18TH ST, LLC, a Delaware limited liability company
By: Strategic Storage Trust VI, Inc., a Maryland corporation, its Manager
By: /s/ H. Michael Schwartz H. Michael Schwartz, Chief Executive Officer
SST VI 6424 14TH ST W, LLC, a Delaware limited liability company
By: Strategic Storage Trust VI, Inc., a Maryland corporation, its Manager
By: /s/ H. Michael Schwartz H. Michael Schwartz, Chief Executive Officer
SST VI 2200 CORAL HILLS RD, LLC a Delaware limited liability company
By: Strategic Storage Trust VI, Inc., a Maryland corporation, its Manager
By: /s/ H. Michael Schwartz H. Michael Schwartz, Chief Executive Officer
SST VI 4715 E BASELINE RD, LLC, a Delaware limited liability company
By: Strategic Storage Trust VI, Inc., a Maryland corporation, its Manager
By: /s/ H. Michael Schwartz H. Michael Schwartz, Chief Executive Officer
SST VI 4730 E BASELINE RD, LLC, a Delaware limited liability company
By: Strategic Storage Trust VI, Inc., a Maryland corporation, its Manager
By: /s/ H. Michael Schwartz H. Michael Schwartz, Chief Executive Officer
SST VI 11658 W BELL RD, LLC, a Delaware limited liability company
By: Strategic Storage Trust VI, Inc., a Maryland corporation, its Manager
By: /s/ H. Michael Schwartz H. Michael Schwartz, Chief Executive Officer
GUARANTORS:
STRATEGIC STORAGE TRUST VI, INC., a Maryland corporation
By: /s/ H. Michael Schwartz H. Michael Schwartz, Chief Executive Officer
STRATEGIC STORAGE OPERATING PARTNERSHIP VI, L.P., a Delaware limited partnership
By: Strategic Storage Trust VI, Inc., a Maryland corporation, its General Partner
By: /s/ H. Michael Schwartz H. Michael Schwartz, Chief Executive Officer
(signatures continue on next page)
ADMINISTRATIVE AGENT:
THE HUNTINGTON NATIONAL BANK
By: /s/ Mikal Christopherson Mikal Christopherson Senior Vice President
BANKS:
THE HUNTINGTON NATIONAL BANK
By: /s/ Mikal Christopherson Mikal Christopherson Senior Vice President
(signatures continue on next page)
FLAGSTAR BANK, N.A., a national banking association
By: /s/ Mark A. Monstwil Mark A. Monstwil Vice President
(End of signatures)
EX-99.1
Exhibit 99.1
Strategic Storage Trust VI, Inc. Acquires Storage Facility in the Phoenix MSA
LADERA RANCH, CALIF – May 17, 2022 – Strategic Storage Trust VI, Inc. (“SST VI”), a publicly-registered real estate investment trust sponsored by an affiliate of SmartStop Self Storage REIT, Inc. (“SmartStop”), announced today the acquisition of an approximately 590-unit self storage facility in Chandler, Arizona. The property was originally built in 1999 and expanded in 2020. This is the 13th acquisition in SST IV and fourth acquisition in in the Phoenix Market. Since SST VI launched as a private REIT in the first quarter of 2021, the REIT has purchased approximately $190 million of self storage facilities and land parcels to be developed into self storage.
Located at 12220 E. Riggs Road, the facility is comprised of approximately 81,400 square feet of rental space across a mix of 590 climate-controlled and non-climate-controlled units. This location is located near Bear Creek Golf Complex, Springfield Golf Resort & Sunbird Golf Club and is well-positioned to serve the areas of Chandler, Sun Lakes, Goodyear Village, Queen Creek, and Gilbert. It is easily accessible from Hwy 87, with good visibility from E. Riggs Rd. The new SmartStop® Self Storage location has desirable amenities including a sophisticated security system, secured and alarmed doors, gated entry, ground floor drive-up units, and interior climate-controlled units.
“We are extremely pleased to add this high quality property to our portfolio at SST VI, and expand SST VI’s footprint in Phoenix,” Said Wayne Johnson, Chief Investment Officer of SST VI. “With our 11th operating property in the program, we believe we are amassing a very high quality portfolio that we expect will create strong value for stockholders.”
About Strategic Storage Trust VI, Inc. (SST VI):
SST VI is a Maryland corporation that intends to qualify as a REIT for federal income tax purposes. SST VI’s primary investment strategy is to invest in income-producing and growth self storage facilities and related self storage real estate investments in the Unites States and Canada. As of May 17, 2022, SST VI has a portfolio of 11 operating properties in the United States comprising approximately 7,500 units and 785,000 rentable square feet and joint venture interests in two development properties in Toronto, Ontario.
About SmartStop Self Storage REIT, Inc. (SmartStop):
SmartStop is a self-managed REIT with a fully integrated operations team of approximately 420 self storage professionals focused on growing the SmartStop® Self Storage brand. SmartStop, through its indirect subsidiary SmartStop REIT Advisors, LLC, also sponsors other self storage programs. As of May 17, 2022, SmartStop has an owned and managed portfolio of 170 properties in 22 states and Ontario, Canada, comprising approximately 115,900 units and 13.2 million rentable square feet. SmartStop and its affiliates own or manage 19 operating self storage properties in the Greater Toronto Area, which total approximately 16,200 units and 1.7 million rentable square feet. Additional information regarding SmartStop is available at www.smartstopselfstorage.com.
Contact:
David Corak
VP of Corporate Finance
SmartStop Self Storage REIT, Inc.
949-429-3331
IR@smartstop.com
2021 Year End & 2022 First Quarter Update H. Michael Schwartz – Chairman and CEO This property is owned by Strategic Storage Trust VI, Inc. This is neither an offer to sell nor a solicitation of an offer to buy the securities described herein. Only the prospectus makes such an offer. The literature must be read in conjunction with the Prospectus in order to fully understand all of the implications and risks of the offering of securities to which it relates. Please read the Prospectus in its entirety before investing for complete information and to learn more about the risk associated with this offering. No offering is made to New York residents except by a Prospectus filled with the Department of Law of the State of New York. The Attorney General of the State of New York has not passed on or endorsed the merits of this offering. Shares Offered through Pacific Oak Capital Markets, LLC (Member of FINRA and SIPC).
Risk Factors & Other Information OTHER INFORMATION We encourage you to review our SEC filings at www.sec.gov. An investment in our shares is not suitable for all investors. An investment in our shares involves significant risks and is only suitable for persons who have adequate financial means, desire a relatively long-term investment and will not need immediate liquidity from their investment. Investors should only purchase shares if they can afford a complete loss of their investment. Generally, a purchaser of shares must have, excluding the value of a purchaser’s home, furnishings and automobiles, either: a net worth of at least $250,000: or a gross annual income of at least $70,000 and a net worth of at least $70,000. Please see the prospectus for a full description of suitability standards. Residents of Alabama, California, Idaho, Kansas, Kentucky, Maine, Massachusetts, Missouri, Nebraska, New Jersey, New Mexico, North Dakota, Ohio, Oregon, Pennsylvania, Tennessee and Vermont should consult the prospectus for details regarding the more stringent suitability standards that apply to them based on their states of residence. We are an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements. Investing in our common stock involves a high degree of risk. You should purchase these securities only if you can afford a complete loss of your investment. See “Restrictions on Ownership and Transfer” beginning on page 172 of our prospectus to read about limitations on transferability. See “Risk Factors” beginning on page 24 of our prospectus to read about the risks you should consider before buying shares of our common stock. The most significant risks include the following: An investment in this offering is speculative, illiquid and involves a high degree of risk, including loss of the entire investment. No public market currently exists for shares of our common stock and we may not list our shares on a national securities exchange before three to five years after completion of this offering, if at all; therefore, it may be difficult to sell your shares. If you sell your shares, it will likely be at a substantial discount. Our charter does not require us to pursue a liquidity transaction at any time. Until we generate operating cash flows sufficient to pay distributions to you, we may pay distributions from financing activities, which may include borrowings in anticipation of future cash flows or the net proceeds of this offering (which may constitute a return of capital). Therefore, it is likely that some or all of the distributions that we make will represent a return of capital to you, at least in the first few years of operation. We are not prohibited from undertaking such activities by our charter, bylaws or investment policies, and we may use an unlimited amount from any source to pay our distributions, and it is likely that we will use offering proceeds to fund a majority of our initial distributions. This is an initial public offering; we have little operating history, and the prior performance of real estate programs sponsored by our sponsor or its affiliates may not be indicative of our future results. This is a “best efforts” offering. If we are unable to raise substantial funds in this offering, we may not be able to invest in a diverse portfolio of real estate and real estate-related investments, and the value of your investment may fluctuate more widely with the performance of specific investments. We are a “blind pool” because we have not identified any properties to acquire with the net proceeds from this offering. As a result, you will not be able to evaluate the economic merits of our future investments prior to their purchase. We may be unable to invest the net proceeds from this offering on acceptable terms to investors, or at all. Investors in this offering will experience immediate dilution in their investment primarily because (i) we pay upfront fees in connection with the sale of our shares that reduce the proceeds to us, (ii) pursuant to our private offering, as of March 31, 2022, we have sold approximately 10.5 million shares of our common stock at a weighted average purchase price of approximately $9.53 per share and received weighted average net proceeds of approximately $8.76 per share, and (iii) we paid organization and other offering expenses in connection with our private offering. There are substantial conflicts of interest among us and our sponsor, advisor, property manager, and transfer agent. Our advisor will face conflicts of interest relating to the purchase of properties, including conflicts with SmartStop Self Storage REIT, Inc., the parent company of our sponsor, and Strategic Storage Growth Trust II, Inc., and such conflicts may not be resolved in our favor, which could adversely affect our investment opportunities. We have no employees and must depend on our advisor to select investments and conduct our operations, and there is no guarantee that our advisor will devote adequate time or resources to us. We will pay substantial fees and expenses to our advisor, its affiliates and participating broker-dealers, which will reduce cash available for investment and distribution. We may incur substantial debt, which could hinder our ability to pay distributions to our stockholders or could decrease the value of your investment. We may fail to qualify as a REIT, which could adversely affect our operations and our ability to make distributions. Our board of directors may change any of our investment objectives without your consent.
Agenda SmartStop REIT Advisors, LLC Why Self Storage? Strategic Storage Trust VI, Inc.
SmartStop REIT Advisors, LLC
SmartStop at a Glance 168(1) Owned and Managed Self Storage Facilities 13 Million(1) Owned and Managed Rentable Square Feet 11th Largest Self Storage Company in the U.S. $2.5 Billion Total Capitalization(2) >$4.8 Billion Historical Self Storage Transaction Activity(3) 420+ Employees SmartStop REIT Advisors is owned by SmartStop Self Storage REIT, Inc., a fully-integrated public self storage company and one of the fastest growing companies in the sector. Initially started raising equity capital in 2014 through the broker dealer network as a public non-traded REIT These properties are not owned by Strategic Storage Trust VI, Inc. These properties were acquired by another program sponsored by our sponsor. The SmartStop Self Storage brand and its associated trademarks are owned by an affiliate our sponsor. As of 5/11/2022 Total capitalization includes debt, preferred equity and equity market cap based on approx. 95 million shares and OP Units at 3/30/2022 valued at the most recently published Net Asset Value. Debt and preferred equity are measured at face value. Includes affiliated companies BBB- Investment Grade Credit Rating from KBRA 19(1) Operating Properties in Greater Toronto Area
SmartStop REIT Advisors, LLC H. Michael Schwartz Chief Executive Officer 18 Years Experience Wayne Johnson President & CIO 36 Years Experience Gerald Valle SVP Storage Operations 33 Years Experience Mike Terjung Chief Accounting Officer 13 Years Experience Wayne Johnson Chief Investment Officer 36 Years Experience H. Michael Schwartz Chairman, Chief Executive Officer & President 18 Years Experience James Barry CFO & Treasurer 10 Years Experience Nicholas Look General Counsel & Secretary 5 Years Experience SmartStop REIT Advisors Matt Lopez CFO & Treasurer 8 Years Experience Strategic Storage Trust VI, Inc. Officers Bliss Edwards Executive Vice President - Canada 8 Years Experience Joe Robinson Chief Operations Officer 13 Years Experience Bliss Edwards Executive Vice President - Canada 8 Years Experience Nicholas Look Secretary 5 Years Experience
Why Self Storage?
Self Storage Industry Data Self Storage Industry Data Total Self Storage Rentable Space in the U.S. is approx. 2.01 Billion Square Feet(2) Ability to Add Value as an Operating Business Low Capital Expenditure Requirements No Leasing Commissions(3) No Tenant Improvements Hedge Against Inflation & Increasing Interest Rates (Due to month-to-month Rent) "The self storage industry has the lowest loan default rate of any commercial property type.(1)" Wells Fargo Securities, LLC 2019 CMBS Default and Loss Study 2022 Self-Storage Almanac We will not pay commissions in connection with the leasing of our self storage units; however, we will pay certain fees associated with the day-to-day management.
Self Storage Sector Is Highly Attractive Fragmented market with opportunity to consolidate US market share by total number of facilities(2) Source: Nareit The FTSE Nareit U.S. Real Estate Index Series tracks the performance of the U.S. REIT industry at both an industry-wide level and on a sector-by-sector basis. The performance of REITs sponsored by SRA do not share all of the same characteristics as those included in the data provided by NAREIT and, therefore, the total returns of such REITs will likely differ from the REITs included in the NAREIT data. Such differences of the REITs sponsored by SRA include, but are not limited to: (1) the REITs are not listed on the New York Stock Exchange or NASDAQ nor is there a public market for shares of their common stock, nor may there ever be one, (2) the REITs may be smaller in size, (3) there is a lack of liquidity, and (4) the REITs do not have a free float. In addition, the REITs pay substantial fees and expenses to their advisor, its affiliates and participating broker-dealers, which reduces cash available for investment and distribution. Total U.S number of storage facilities of 50,523 per 2022 Self-Storage Almanac.. SmartStop data per company filings and available information. Trailing compound annual total returns through 2021(1) Top 10 Owners 22.5% Remaining Market 77.5% 50,523 Facilities 11,369 Facilities % of Total Market % of Top 12 Owners
Drivers of Self Storage Use SELF STORAGE FACT “The self storage industry has the lowest loan default rate of any commercial property type.(1)” Demand Generators of Self Storage2 Population Percentage of renters Average household size Average household income Who Uses Self Storage?2 79% 14% 4% 3% Residential Commercial Military Student Wells Fargo Securities, LLC 2019 CMBS Default and Loss Study 2022 Self-Storage Almanac
Driven by People in Transition Driven by People in Transition Change in marital status Birth Inheritance Military enlistment Baby boomers Downsizing Job relocation Business expansion or contraction Micro business Natural disasters
Above The Line | Below The Line We will not pay commissions in connection with the leasing of our self storage units; however, we will pay certain fees associated with the day-to-day management. Above The Line + Income - Expense Net Operating Income Look Below The Line - NO Leasing Commissions1 - NO Tenant Improvements Cash Flow Before Debt Service This property is owned by Strategic Storage Trust VI, Inc.
U.S. and Canadian Markets Canadian Market National Data(2) Total # of Facilities: Approx. 3,050 Total Sq. Ft.: 60 Million Market Share By Number of Facilities (2) Largest Self Storage Company 2.9% Top 7 Companies 13% Remaining Operators 87% 2.9% Storage Vault 2.8% U Haul 2.2% Storage Mart 1.9% Public Storage 1.4% Access Self Storage 0.9% Apple Storage 0.9% SmartStop Market Share of Top 7 Companies by Percentage (2) National Data(1) Total # of Facilities: Approx. 50,523 Total Sq. Ft.: 2.01 Billion Avg. National Occupancy: 94.5% Market Share By Number of Facilities(1) Largest Self Storage Company 5.5% Top 100 Companies 29.4% Smaller Operators 70.6% 2022 Self-Storage Almanac Colliers International - 2017 Industry Ownership(1) (by Number of Facilities) 9.8% Other Top Operators 19.6% Public Companies 70.6% Rest of the Industry U.S. Market
Strategic Storage Trust VI, Inc.
Strategic Storage Trust VI, Inc. Goal: Income + Growth Strong Market Demographics Institutional Management Sponsor Contributed $5.0 Million This property is owned by Strategic Storage Trust VI, Inc..
SST VI Current Portfolio as of 4/30/2022 $156,150,000 Portfolio* Since the launch of SST VI in 2021, the REIT has acquired ten self storage properties in seven states and two properties through a joint venture to be developed in the Greater Toronto Area. The portfolio includes approximately 701,850 rentable square feet and approximately 6,830 storage units. The portfolio’s current occupancy is approximately 71%.** NRSF 701,850 Units 6,830 **Occupancy number as of 4/30/22 Includes lease up and Certificate of Occupancy properties acquired during 2021 and 2022. *Based on purchase price. Does not include two JV development properties
SST VI U.S. & Canada Portfolio Locations
Equity Update Equity Update Approx. $101 Million as of 4/30/22 50% Loan to value Approximately $30 Million in acquisition pipeline Distributions(1) SST VI pays a distribution rate of approximately $0.001643 per day per share (equivalent to $0.60 per share annually) to Class A, Class T and Class W stockholders of record. The T share distribution is reduced by an ongoing stockholder servicing fee equal to an annual rate of 1% of the T share purchase price. The W share distribution is reduced by an ongoing dealer manager servicing fee equal to an annual rate of 0.50% of the W share purchase price. (1) We have paid and may continue to pay, distributions from sources other than cash flow from operations, therefore, we will have fewer funds available for acquisitions of properties and our stockholders overall return may be reduced. Future distributions are at the sole discretion of our board of directors and are not guaranteed. This property is owned by Strategic Storage Trust VI, Inc.
SST VI Financial Update Revenues Net Operating Income* Property Operating Expenses as a Percentage of Revenue Number of Facilities Average Physical Occupancy Three Months Ended Mar. 30, 2022 $952,960 $395,637 58% 8 77% (1) Three Months Ended Dec. 31, 2021 $673,746 $312,586 50% 6 53%(1) *Net Operating Income (“NOI”) is a non-GAAP measure, please see Appendix for a reconciliation of these measures. We believe that NOI is useful for investors as it provides a measure of the operating performance of our operating assets because NOI excludes certain items that are not associated with the operation of the properties. Additionally, we believe that NOI (also referred to as property operating income) is a widely accepted measure of comparative operating performance in the real estate community. However, our use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount. (1) Includes lease up and Certificate of Occupancy properties acquired during 2021 and 2022. Three Months Ended March 30, 2022 vs. December 31, 2021
Current Portfolio 8570 S. Durango Dr. Las Vegas, Nevada 335 Units 52,300 NRSF Approx. 20% Occupied at Acquisition (June 1, 2021) Approx. 94% Occupied (as of April 2022) Purchase Price: $8,000,000 This property is owned by Strategic Storage Trust VI, Inc.
Durango Case Study Durango – Las Vegas, NV Past performance not indicative of future results
Current Portfolio 4715 E Baseline Rd Phoenix, Arizona 810 Units 84,200 NRSF Approx. 44% Occupied at Acquisition (March 2021) Approx. 92% Occupied (as of April 2022) Purchase Price: $16,000,000 This property is owned by Strategic Storage Trust VI, Inc.
Baseline II Case Study Baseline II – Phoenix, AZ Past performance not indicative of future results
Current Portfolio 1480 Jane St. Toronto, Ontario Jane Street Development 1,200 Units (estimated) 98,500 NRSF (estimated) Purchase Price: $8,500,000 CAD* Split 50/50 with JV Partner This image is a conceptual rendering of the property and is presented for illustrative purposes only. The SmartStop Self Storage brand and its associated trademarks are owned by an affiliate our sponsor. *Canadian Dollars
Current Portfolio 11658 W. Bell Rd. Surprise, Arizona 665 Units 72,800 NRSF Purchase Price: $13,500,000 Approx. 87% Occupied at Acquisition (August 26, 2021) Approx. 88% Occupied (as of April 2022) This property is owned by Strategic Storage Trust VI, Inc.
Current Portfolio 4730 E. Baseline Rd. Phoenix, Arizona 650 Units 68,500 NRSF Purchase Price: $11,000,000 Acquired at Certificate of Occupancy (November 30, 2021) Approx. 79.4% Occupied (as of April 2022) This property is owned by Strategic Storage Trust VI, Inc.
Current Portfolio 494-498 Gilbert Ave. Toronto, ON The image shown is a property acquired by the offering. Gilbert Ave. Development 1,500 Units (estimated) 121,500 NRSF (estimated) Purchase Price: $13,200,000 CAD* Split 50/50 with JV Partner These images are a conceptual rendering of the property and are presented for illustrative purposes only. The SmartStop Self Storage brand and its associated trademarks are owned by an affiliate our sponsor. *Canadian Dollars
Current Portfolio 2200 Coral Hills Rd. Apopka, Florida 320 Units 45,300 NRSF Purchase Price: $11,350,000 Acquired at Certificate of Occupancy (December 30, 2021) Approx. 82.9% Occupied (as of April 2022) The image shown is a property acquired by the offering. This property is owned by Strategic Storage Trust VI, Inc.
Current Portfolio 6424 14th St. West Bradenton, Florida 800 Units 64,400 NRSF Purchase Price: $15,650,000 Acquired at 1.2% Occupancy (November 30, 2021) Approx. 79.9% Occupied (as of April 2022) The image shown is a property acquired by the offering. This property is owned by Strategic Storage Trust VI, Inc.
Current Portfolio 4836 SE Powell Blvd. Portland, Oregon 520 Units 56,500 NRSF Purchase Price: $15,000,000 Acquired at 51.1% Occupancy (March 28, 2022) Approx. 53.5% Occupied (as of April 2022) The image shown is a property acquired by the offering. This property is owned by Strategic Storage Trust VI, Inc.
Current Portfolio 16600 SE 18th Street Vancouver, Washington 1,090 Units 99,200 NRSF Purchase Price: $25,000,000 Acquired at 85.7% Occupancy (March 28, 2022) Approx. 84.4% Occupied (as of April 2022) The image shown is a property acquired by the offering. This property is owned by Strategic Storage Trust VI, Inc.
Current Portfolio 401 Bellevue Road Newark, Delaware 830 units 80,650 RSF Approx. $19.6M purchase price Opened August 2021 Acquired at 24% Occupancy (4/26/22) The image shown is a property acquired by the offering. This property is owned by Strategic Storage Trust VI, Inc.
Current Portfolio 1723 Woodbourne Road Levittown, Pennsylvania 810 units (all climate controlled) 78,000 RSF Approx. $21M purchase price Opened October 2021 Acquired at 25% Occupancy (4/26/22) The image shown is a property acquired by the offering. This property is owned by Strategic Storage Trust VI, Inc.
Strategic Storage Trust VI, Inc. Goals Monthly Distributions(1) Seek to Achieve Appreciation in the Value of our Properties Hedge Against Inflation & Increasing Interest Rates (Due to month-to-month rents) No Tenant Improvements / Leasing Commissions(2) Goal of Meeting Current & Future Income Needs 3-5 Year Anticipated Hold After Completion of Offering(3) We have paid, and may continue to pay distributions from sources other than cash flow from operations. Therefore, we will have fewer funds available for acquisitions of properties and our stockholders overall return may be reduced. Future distributions are at the sole discretion of our Board of Directors and are not guaranteed. We will not pay commissions in connection with the leasing of our self storage units; however, we will pay certain fees associated with the day – to day management and operations of our self storage facilities. The timing of our exit strategy is subject to market conditions and the discretion of our Board of Directors. There is no assurance that we will achieve one or more of the liquidity events we intend to seek within this time frame or at all. Sponsor Contributed $5.0 Million
Strategic Storage Trust VI, Inc. Offering Terms Suitability(1): Please see the prospectus for a full description of suitability standards. Residents of Alabama, California, Idaho, Kansas, Kentucky, Maine, Massachusetts, Missouri, Nebraska, New Jersey, New Mexico, North Dakota, Ohio, Oregon, Pennsylvania, Tennessee and Vermont should consult the prospectus for details regarding the more stringent suitability standards that apply to them based on their states of residence. There are several restrictions on your ability to sell your Shares to us under our Share Redemption Program. You generally have to hold your Shares for one year before submitting your Shares for redemption under the program; however, we may waive the one-year holding period in the event of the death, disability or bankruptcy of a stockholder. In addition, we will limit the number of Shares redeemed pursuant to our Share Redemption Program as follows: (1) during any calendar year, we will not redeem in excess of 5% of the weighted average number of Shares outstanding during the prior calendar year; and (2) funding for the redemption of Shares will be limited to the amount of net proceeds we receive from the sale of Shares under our Distribution Reinvestment Plan. These limits may prevent us from accommodating all requests made in any year. Our Board of Directors may choose to amend, suspend or terminate our share redemption program upon 30 days’ notice at any time. Please refer to page 181 of the Prospectus for details of the Share Redemption Program. We may amend or terminate the distribution reinvestment plan at our discretion at any time upon 10 days’ prior written notice to you. See the “Description of Shares — Distribution Reinvestment Plan” section of the Prospectus. An individual net worth of at least $250,000; or An individual gross annual income of at least $70,000 or joint income of at least $70,000 Available for IRAs $5,000 Minimum Investment A purchaser of shares must have, excluding the value of purchaser’s home, furnishings, and automobiles, either: 1099 Reporting Share Redemption Program(2) Distribution Reinvestment Plan(3) Multiple Share Classes (A,T,W) ($1,500 for IRAs)
Publicly Traded Self Storage Competitors Publicly Traded Self Storage Competitors* NYSE: EXR NYSE: PSA NYSE: CUBE NYSE: LSI NYSE: UHAL NYSE: NSA Public Non-Traded Self Storage REITs - OFFERING CLOSED - *These companies represent our publicly traded competitors in the self storage industry, and their inclusion herein is not intended to indicate any relationship or partnership with such companies; however, Extra Space Storage has a preferred equity investment in an affiliate of our sponsor. - OFFERING OPEN -
Next Steps Main Office 10 Terrace Road Ladera Ranch, CA 92694 Sales Desk 866.412.5161 info@strategicreit.com Investor Services 866.418.5144 investorrelations@sam.com Shares Offered Through Pacific Oak Capital Markets, LLC Member FINRA | SIPC
QUESTIONS?
Appendix
Reconciliation: Net Loss to Net Operating Income (1) Asset management fees are included in Property operating expenses – affiliates in the consolidated statements of operations.