The board of Strategic Storage Growth Trust Inc., a publicly registered non-traded real estate investment trust sponsored by SmartStop Asset Management, has approved an $11.58 estimated per share net asset value of the company’s Class A and Class T common stock, as of December 31, 2017. The updated NAV represents a $0.02 increase above the previous NAV as of December 31, 2016.
Additionally, the board approved the equivalent of a $0.10 per share increase to the REIT’s annual distribution, which will now total $0.50 per share. Stockholders will begin earning the increased distribution beginning July 1, 2018.
“Strategic Storage Growth Trust continues to perform well, and has efficiently deployed its capital into attractive assets that have strengthened our portfolio,” said chairman and chief executive officer H. Michael Schwartz. “As such, we are very pleased to grow our annual distribution rate per share by $0.10 to $0.50, an increase of 25 percent.”
The updated per share NAV of $11.58 is based on the estimated value of the company’s assets less the estimated value of its liabilities, or net asset value, divided by the number of shares outstanding on an adjusted fully diluted basis, calculated as of December 31, 2017.
Duff & Phelps LLC, an independent third party real estate valuation and advisory firm, was engaged to provide valuation services for the company’s assets and liabilities.
After reviewing the Duff & Phelps valuation report, the nominating and corporate governance committees concluded that the range in estimated value per share of $11.22 to $11.97, with an approximate midpoint value per share of $11.58, was reasonable and recommended to the board that it adopt $11.58 as the estimated value per share.
The valuation included 24 self storage properties that were originally purchased for $187.9 million, inclusive of development costs incurred for three development properties. The appraised value of the properties at the midpoint was roughly $261.2 million, representing an approximate 39 percent increase in the total value over the aggregate purchase price and development costs.
The appraisals were performed in accordance with the Uniform Standards of Professional Appraisal Practice, the real estate appraisal industry standards created by The Appraisal Institute, as well as the requirements of the state where each real property is located.
The valuation was performed in accordance with practice guidelines set by the Institute for Portfolio Alternatives (formerly the Investment Program Association).
Strategic Storage Growth Trust focuses on the acquisition, development, redevelopment, and lease-up of self storage properties. The company’s portfolio currently consists of 25 operating self storage facilities and two development properties. The offering launched in January 2015 and raised more than $279 million in investor equity before closing in March 2017.