Business Context and Reporting Period
This Form 8-K, filed on May 28, 2015, by Strategic Storage Trust II, Inc. (a Smartstop Self Storage REIT, Inc. affiliate), reports the completion of the seventh and final phase of a multi-phase acquisition of a 26-property self-storage portfolio. The filing details the closing of the final asset on May 28, 2015, concluding a transaction originally agreed upon in July 2014.
Key Financial Metrics and Transaction Details
- Total Portfolio Value: Approximately $129.4 million for 26 facilities across seven states.
- Final Phase (Seventh Phase) Purchase Price: Approximately $2.2 million ($2,177,000) for one facility in Beverly, New Jersey.
- Final Phase Asset Details: 460 units, approximately 51,000 net rentable square feet, built in 1988.
- Physical Occupancy at Closing: 76%.
- Acquisition Fees: Approximately $40,000 for the Seventh Phase.
- Financing: The Registrant drew down approximately $3.6 million under the KeyBank Facility on May 28, 2015. This included $2.2 million for the Sixth Phase and $1.4 million for the Seventh Phase.
- Debt Terms: The drawdown was a Eurodollar Loan bearing interest at approximately 3.4%.
- Management Fees: The sponsor's affiliate will receive a one-time fee of $3,750 and ongoing fees equal to the greater of $3,000 per month or 6% of gross monthly revenues.
Material Changes and Acquisition History
The filing confirms the completion of the entire 26-property portfolio acquisition, which was executed in six prior phases between January 2015 and May 2015. The Seventh Phase represents the final closing event, adding one New Jersey facility to the portfolio. The acquisition was funded through a combination of earnest money deposits and new debt draws. The two properties acquired in the Sixth and Seventh Phases now serve as additional collateral under the KeyBank Credit Agreement.
Outlook, Risks, and Contingencies
Financial Statements: The Registrant states it is impracticable to provide required financial statements for the acquired real property at the time of this filing. No audited or unaudited financials are currently available. The company intends to file these statements by amendment on or before August 13, 2015.
Management Commentary: The filing focuses strictly on the mechanics of the closing and financing. No forward-looking guidance regarding future revenue or profit margins for the specific acquired assets is provided in this document.
Investor Verification Checklist
- Verify the filing of the required financial statements for the acquired properties by the August 13, 2015 deadline.
- Confirm the total outstanding balance and terms of the KeyBank Facility following the $3.6 million drawdown.
- Monitor the stabilization of the 76% physical occupancy rate for the newly acquired New Jersey facility.
- Review the total aggregate acquisition fees and closing costs incurred across all seven phases to assess total transaction costs.