Business Context and Reporting Period
Company: Strategic Storage Trust II, Inc. (Sponsor: Smartstop Self Storage REIT, Inc.)
Filing Type: Form 8-K (Current Report)
Date of Report: May 21, 2015
Event: Completion of the sixth and final phase of a multi-phase acquisition of a 26-property self-storage portfolio.
Key Financial Metrics and Transaction Details
Transaction Overview: The Registrant acquired a portfolio of 26 self-storage facilities for an aggregate purchase price of approximately $129.4 million. This filing reports the closing of the final phase (Sixth Phase).
- Sixth Phase Purchase Price: Approximately $3.9 million (specifically $3,857,000).
- Acquisition Fees (Sixth Phase): Approximately $70,000.
- Property Details (Sixth Phase): One facility in Sterling Heights, Michigan; 460 units; 57,900 net rentable square feet; built in 1977.
- Occupancy: 84% physical occupancy as of the acquisition date.
- Funding Source: Application of a portion of the earnest money deposit.
Management Fees: Strategic Storage Property Management II, LLC will receive a one-time fee of $3,750 and ongoing monthly fees equal to the greater of $3,000 or 6% of gross monthly revenues.
Material Changes and Prior Period Activity
This filing represents the completion of a transaction initiated on July 9, 2014, and executed in six phases between January 2015 and May 2015. Prior phases closed as follows:
- First Phase (Jan 23, 2015): 7 facilities for ~$26.3 million.
- Second Phase (Jan 29, 2015): 5 facilities for ~$28.6 million.
- Third Phase (Feb 5, 2015): 7 facilities for ~$45.8 million.
- Fourth Phase (Feb 19, 2015): 2 facilities for ~$10.9 million.
- Fifth Phase (May 8, 2015): 3 facilities for ~$11.9 million.
The filing confirms the full acquisition of the 26-property portfolio is now complete.
Outlook, Risks, and Contingencies
Financial Statements: The filing states it is impracticable to provide financial statements for the acquired real property at this time. The Registrant intends to file required financial statements by amendment on or before August 7, 2015.
Funding Outlook: The Registrant expects to fund the final phase (which has now closed) using the remaining earnest money deposit and a draw under the KeyBank Facility.
Risks: No specific new risks were disclosed in this filing beyond the standard contingencies associated with real estate acquisitions and the pending filing of audited financials.
Investor Verification Checklist
- Verify the total aggregate purchase price of $129.4 million against the sum of the six individual phase closings.
- Confirm the filing of the required financial statements for the acquired properties by the August 7, 2015 deadline.
- Review the terms of the KeyBank Facility to understand the remaining debt capacity and interest obligations.
- Monitor the stabilization period for the newly acquired 26 facilities to assess actual vs. projected occupancy and revenue.