Two SmartStop Self Storage REIT-sponsored self-storage trusts are combining in an all-stock merger to create a $1.2bn (€1.1bn) entity designed to strengthen the combined company’s position in the self-storage market and drive future growth in the US and Canada.
Strategic Storage Trust VI (SST VI) has agreed to acquire all the real estate owned by Strategic Storage Growth Trust III (SSGT III), consisting of 12 facilities located across four US states and three Canadian provinces.
The portfolio comprises approximately 9,215 self-storage units and 1m net rentable sqft.
The deal also involves SST VI acquiring SSGT III’s 50% equity interest in three unconsolidated real estate ventures in British Columbia and Québec, held with subsidiaries of SmartCentres Real Estate Investment Trust.
In addition, SST VI will acquire SSGT III’s beneficial interests in three Delaware Statutory Trust (DST) sponsored programmes comprising eight self-storage facilities across five states, representing approximately 5,370 units and 694,800 net rentable sqft.
The merged company will have a portfolio of 37 wholly owned self-storage facilities, representing approximately 29,415 units and 3.2m net rentable sqft, along with joint venture interests and beneficial interests in DST-sponsored programmes.
Once the deal completes, existing SST VI stockholders will own around 59% of the combined company, with SSGT III stockholders holding roughly 38%, and the remaining 3% held by other SST VI operating partnership unitholders.
The firms said the proposed merger is expected to maintain diversified exposure to the self-storage sector, deliver operational efficiencies and secure additional economies of scale and improved borrowing terms through the combined company’s larger size.
H Michael Schwartz, president and CEO of SST VI and SSGT III, said: “By bringing SSGT III’s high-quality, growth-oriented portfolio together with SST VI’s existing assets, we are creating a combined company with a fair market value of over $1bn. That scale meaningfully strengthens our competitive position, sharpens our operating efficiencies, and gives us a stronger platform from which to pursue future growth.
“We believe this combination also enhances our strategic flexibility and the potential long-term value of the portfolio as we continue to evaluate the best path forward for our stockholders. Because the SSGT III portfolio is already managed within the SmartStop platform, stockholders and customers can expect total continuity of operations throughout the process.”
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