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What changed in SmartStop Self Storage REIT, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of SmartStop Self Storage REIT, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+389 added−371 removedSource: 10-K (2025-03-12) vs 10-K (2024-03-18)

Top changes in SmartStop Self Storage REIT, Inc.'s 2024 10-K

389 paragraphs added · 371 removed · 299 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeRental rates can vary and are determined by the location and size of the rental space, the level of security, and whether the unit is climate controlled. The short-term nature of self storage leases creates the opportunity for real-time rate increases, which has led well-positioned facilities to achieve substantial rate growth in a rising cost environment.
Biggest changeThe short-term nature of self storage leases creates the opportunity for real-time rate increases, which has led well-positioned facilities to achieve substantial rate growth in a rising cost environment. In addition to primary self storage operations, facilities also tend to have a number of other ancillary products that provide incremental revenues.
At the termination of our Offering in January 2017, we had sold approximately 48 million Class A Shares and approximately 7 million shares of Class T common stock ("Class T Shares") for approximately $493 million and $73 million respectively.
At the termination of our Offering in January 2017, we had sold approximately 48 million shares of our class A common stock ("Class A Shares"), and approximately 7 million shares of class T common stock ("Class T Shares") for approximately $493 million and $73 million respectively.
Available Information We make available on the “Information – SEC Filings” subpage of our website (www.investors.smartstopselfstorage.com) free of charge our annual reports on Form 10-K, including this report, quarterly 8 reports on Form 10-Q, current reports on Form 8-K, ownership reports on Forms 3, 4 and 5 and any amendments to those reports as soon as practicable after we electronically file such reports with the SEC.
Available Information We make available on the “Information – SEC Filings” subpage of our website (www.investors.smartstopselfstorage.com) free of charge our annual reports on Form 10-K, including this report, quarterly reports on Form 10-Q, current reports on Form 8-K, ownership reports on Forms 3, 4 and 5 and any amendments to those reports as soon as practicable after we electronically file such reports with the SEC.
We seek to acquire undermanaged facilities that are not operated by institutional operators, where we can implement our proprietary management and technology to maximize net operating income. As an operating business, self storage requires a much greater focus on strategic planning and tactical operation plans.
We seek to primarily acquire undermanaged facilities that are not operated by institutional operators, where we can implement our proprietary management and technology to maximize net operating income. As an operating business, self storage requires a much greater focus on strategic planning and tactical operation plans.
We also appreciate the importance of retention, growth and development of our employees and we believe we offer competitive compensation (including salary and bonuses) and benefits packages to our employees. Further, from professional development opportunities to leadership training, we have development programs and on-demand opportunities to cultivate talent throughout our organization.
We also appreciate the importance of retention, growth and development of our employees and we believe we offer competitive compensation (including salary and bonuses) and benefits packages to our employees. Further, from professional 7 development opportunities to leadership training, we have development programs and on-demand opportunities to cultivate talent throughout our organization.
Based on the Inside Self Storage Top-Operators List ranking for 2023, and after accounting for recent market transactions, we are the 10th largest owner and operator of self storage properties in the United States based on rentable square footage.
Based on the Inside Self Storage Top-Operators List ranking for 2024, and after accounting for recent market transactions, we are the 10th largest owner and operator of self storage properties in the United States based on rentable square footage.
Additionally, on May 25, 2022, we, as 50% owner and SmartCentres as the other 50% owner of a joint venture subsidiary, purchased a single tenant industrial building located in the city of Burnaby, British Columbia (the “Regent Property”), that we and SmartCentres intend to develop into a self storage facility in the future.
Additionally, on May 25, 2022, we, as 50% owner and SmartCentres as the other 50% owner of a joint venture subsidiary, purchased a single tenant industrial building located in the city of Burnaby, British Columbia (the “Regent Property”), that we and SmartCentres plan to develop into a self storage facility in the near future.
On January 12, 2023 we as 50% owner and SmartCentres as the other 50% owner of a joint venture subsidiary, acquired a parcel of land in Whitby, Ontario (the "Whitby Property"), that we and SmartCentres intend to develop into a self storage facility in the future.
On January 12, 2023 we as 50% owner and SmartCentres as the other 50% owner of a joint venture subsidiary, acquired a parcel of land in Whitby, Ontario (the "Whitby Property"), that we and SmartCentres plan to develop into a self storage facility in the near future.
The largest 100 operators manage approximately 59% of net rentable square footage, but only 35% of all U.S.-based self storage properties. The five publicly listed self storage companies are Public Storage, Extra Space Storage Inc., AMERCO (the parent company of U-Haul), CubeSmart, and National Storage Affiliates Trust, which collectively operate approximately 22% of all U.S.-based self storage properties.
The largest 100 operators manage approximately 60% of net rentable square footage, but only 35% of all U.S.-based self storage properties. The five publicly listed self storage companies are Public Storage, Extra Space Storage Inc., AMERCO (the parent company of U-Haul), CubeSmart, and National Storage Affiliates Trust, which collectively operate approximately 23% of all U.S.-based self storage properties.
According to the 2023 Self Storage Almanac, self storage facilities generally have a customer mix of approximately 79% residential, 14% commercial, 4% military and 3% students. • Residential customers generally store items ranging from furniture, household items and appliances to cars, boats and recreational vehicles. • Commercial customers tend to include small business owners who require easy and frequent access to their goods, records, extra inventory or storage for seasonal goods.
According to the 2024 Self Storage Almanac, self storage facilities generally have a customer mix of approximately 80% residential, 13% commercial, 4% military and 3% students. • Residential customers generally store items ranging from furniture, household items and appliances to cars, boats and recreational vehicles. • Commercial customers tend to include small business owners who require easy and frequent access to their goods, records, extra inventory or storage for seasonal goods.
The self storage industry is highly fragmented, with owners and operators ranging from individual property owners to institutional investors and large, publicly traded REITs. According to the 2023 Self Storage Almanac, there are approximately 51,000 primary self storage facilities in the U.S. representing a total of 2.0 billion rentable square feet.
The self storage industry is highly fragmented, with owners and operators ranging from individual property owners to institutional investors and large, publicly traded REITs. According to the 2024 Self Storage Almanac, there are approximately 52,000 primary self storage facilities in the U.S. representing a total of 2.1 billion rentable square feet.
Employees and Human Capital As of December 31, 2023, we had approximately 500 employees, none of which are represented by a collective bargaining agreement. We continually assess and strive to enhance employee satisfaction and engagement. We believe our relationship with our employees is good and that we provide them with adequate flexibility to meet personal and family needs.
Employees and Human Capital As of December 31, 2024, we had approximately 560 employees, none of which were represented by a collective bargaining agreement. We continually assess and strive to enhance employee satisfaction and engagement. We believe our relationship with our employees is good and that we provide them with adequate flexibility to meet personal and family needs.
Changes in these laws and regulations, or their interpretation by agencies and courts, occur frequently. 7 Accommodations for Persons with Disabilities We are subject to various rules, regulations and standards with respect to accommodations we must make for individuals with disabilities.
Government Regulations Our business is subject to many laws and governmental regulations. Changes in these laws and regulations, or their interpretation by agencies and courts, occur frequently. Accommodations for Persons with Disabilities We are subject to various rules, regulations and standards with respect to accommodations we must make for individuals with disabilities.
The initial closing (the “Initial Closing”) in the amount of $150 million occurred on the Commitment Date, and the second and final closing in the amount of $50 million occurred on October 26, 2020.
The initial closing in the amount of $150 million occurred on October 29, 2019, and the second and final closing in the amount of $50 million occurred on October 26, 2020.
For more information, please see Note 4 – Investments in Unconsolidated Real Estate Ventures of the Notes to the Consolidated Financial Statements. 4 Completed Transactions SST IV Merger On March 17, 2021, we closed on an all-stock merger with SST IV (the “SST IV Merger”).
Upon completion of development, we expect to serve as property manager of the self storage property. For more information, please see Note 4 – Investments in Unconsolidated Real Estate Ventures of the Notes to the Consolidated Financial Statements. 4 Completed Transactions SST IV Merger On March 17, 2021, we closed on our merger with SST IV (the “SST IV Merger”).
As of December 31, 2023, our wholly-owned portfolio consisted of 154 operating self storage properties diversified across 19 states and Canada comprising approximately 104,000 units and 11.9 million net rentable square feet.
As of December 31, 2024, our wholly-owned portfolio consisted of 161 operating self storage properties diversified across 19 states, the District of Columbia, and Canada comprising approximately 110,000 units and 12.6 million net rentable square feet.
In addition, we have the internal capability to originate, structure and manage additional self storage investment programs (the “Managed REIT Platform”) which would be sponsored by SmartStop REIT Advisors, LLC (“SRA”), our indirect subsidiary.
In addition, we have the internal capability to originate, structure and manage additional self storage investment programs (the “Managed REIT Platform”) which would be sponsored by SmartStop REIT Advisors, LLC (“SRA”), our indirect subsidiary. We acquired the Managed REIT Platform in 2019 from Strategic Asset Management I, LLC (f/k/a SmartStop Asset Management, LLC), our former sponsor ("SAM").
In addition to primary self storage operations, facilities also tend to have a number of other ancillary products that provide incremental revenues. This includes, but is not limited to, tenant insurance, protection or insurance plans, moving and packing supplies, locks and boxes, and other services. Sophisticated operators have the opportunity to substantially increase profitability of under-managed facilities post acquisition.
This includes, but is not limited to, tenant insurance, protection or insurance plans, moving and packing supplies, locks and boxes, and other services. Sophisticated operators have the opportunity to substantially increase profitability of under-managed facilities post acquisition.
With the majority of the existing supply operated locally by non-institutional groups in the U.S and Canada, there is a significant market opportunity to acquire existing facilities and increase revenue and profitability through professional management, digitalization and physical expansion projects.
With the majority of the existing supply operated locally by non-institutional groups in the U.S and Canada, there is a significant market opportunity to acquire existing facilities and increase revenue and profitability through professional management, digitalization and physical expansion projects. 6 Industry Segments We operate in two reportable business segments: (i) self storage operations and (ii) our Managed REIT Platform business.
In November 2016, we filed with the SEC a Registration Statement on Form S-3, which registered up to an additional $100.9 million in shares under our distribution reinvestment plan (our “DRP Offering”). The DRP Offering may be terminated at any time upon 10 days’ prior written notice to stockholders.
In November 2016, we filed with the SEC a Registration Statement on Form S-3, which registered up to an additional $100.9 million in shares under our distribution reinvestment plan.
Further, through our Managed REIT Platform (as defined below), we serve as the sponsor of Strategic Storage Trust VI, Inc., a publicly-registered non-traded REIT ("SST VI"), and Strategic Storage Growth Trust III, Inc., a private REIT ("SSGT III" and together with SST VI, the "Managed REITs"), and manage one additional self storage property, all of which pay us fees to manage these programs and manage their 32 operating self storage properties (as of December 31, 2023).
Further, through our Managed REIT Platform (as defined below), we served as the sponsor of Strategic Storage Trust VI, Inc., a publicly-registered non-traded REIT ("SST VI"), and Strategic Storage Growth Trust III, Inc., a private REIT ("SSGT III" and together with SST VI, the "Managed REITs"); additionally, we manage one other self storage property for an affiliated entity, which pays us fees, as applicable, to manage such property.
As a result of the SST IV Merger, approximately 23.1 million shares of SmartStop class A common stock ("Class A Shares") were issued in exchange for approximately 10.6 million shares of SST IV common stock. SSGT II Merger On June 1, 2022, we closed on our merger with SSGT II (the "SSGT II Merger").
As a result of the SST IV Merger, we issued approximately 23.1 million Class A Shares to the former SST IV stockholders. SSGT II Merger On June 1, 2022, we closed on our merger with SSGT II (the “SSGT II Merger”).
Prior to March 17, 2021 and June 1, 2022, SST IV and SSGT II, respectively, were also included in the “Managed REITs.” We operate the properties owned by the Managed REITs, which together with one other self storage property we manage consist of, as of December 31, 2023, 32 operating properties and approximately 25,400 units and approximately 2.8 million rentable square feet.
Prior to June 1, 2022, SSGT II was also included in the “Managed REITs” for purposes of this Annual Report. We operate the properties owned by the Managed REITs, which together with one other self storage property we manage consist of, as of December 31, 2024, 37 operating properties and approximately 29,000 units and approximately 3.2 million rentable square feet.
Additionally, we owned a 50% equity interest in eleven unconsolidated real estate ventures located in Canada, which consisted of eight operating self storage properties, two parcels of land currently under development into self storage facilities, and one single tenant industrial building, which we plan to convert into a self storage property over the long term.
Additionally, we owned a 50% equity interest in eleven unconsolidated real estate ventures located in Canada, which consisted of ten operating self storage properties, and one other property, which we plan to convert into a self storage property.
Our primary business model is focused on owning and operating high quality self storage properties in high growth markets in the United States and Canada. We finance our portfolio through a diverse capital strategy which includes cash generated from operations, borrowings under our syndicated revolving line of credit, secured debt financing, equity offerings and joint ventures.
We finance our portfolio through a diverse capital strategy which includes cash generated from operations, borrowings under our syndicated revolving line of credit, secured debt financing, equity offerings and joint ventures.
(NYSE: EXR), pursuant to which the Investor committed to purchase up to $200 million in shares (the aggregate shares to be purchased, the “Preferred Shares”) of our newly-created Series A Convertible Preferred Stock (the “Series A Convertible Preferred Stock”), in one or more closings (each, a “Closing,” and collectively, the “Closings”).
(NYSE: EXR), pursuant to which Extra Space Storage LP committed to purchase up to $200 million in shares of our newly-created Series A Convertible Preferred Stock (the "Series A Convertible Preferred Stock"), in one or more closings.
As a result, we acquired all of the real estate owned by SSGT II, consisting of (i) 10 wholly-owned self storage facilities located in seven states comprising approximately 7,740 self storage units and approximately 853,900 net rentable square feet, and (ii) SSGT II’s 50% equity interest in three unconsolidated real estate ventures located in the Greater Toronto Area of Ontario, Canada.
On such date, (the “SSGT II Merger Date”), we acquired all of the real estate owned by SSGT II, consisting primarily of (i) 10 wholly-owned self storage facilities, and (ii) SSGT II’s 50% equity interest in three unconsolidated real estate ventures located in the Greater Toronto Area of Ontario, Canada.
As a result, we acquired all of the real estate owned by SST IV, consisting of (i) 24 self storage facilities located in 9 states comprising approximately 18,000 self storage units and approximately 2.0 million net rentable square feet, and (ii) SST IV’s 50% equity interest in six unconsolidated real estate ventures located in the Greater Toronto Area of Ontario, Canada (the “SST IV JV Properties”).
On such date, (the “SST IV Merger Date”), we acquired all of the real estate owned by SST IV, consisting primarily of (i) 24 self storage facilities, and (ii) SST IV’s 50% equity interest in six unconsolidated real estate ventures located in the Greater Toronto Area of Ontario, Canada.
We also served as the sponsor of Strategic Storage Trust IV, Inc., a public non-traded REIT (“SST IV”) through March 17, 2021, and Strategic Storage Growth Trust II, Inc., a private REIT (“SSGT II”) through June 1, 2022.
As discussed herein, we, through our subsidiaries, currently serve as the sponsor of SST VI, SSGT III, and Strategic Storage Trust X, a private REIT ("SST X"). We also served as the sponsor of Strategic Storage Growth Trust II, Inc., a private REIT (“SSGT II”) through June 1, 2022.
However, the extent and duration to which our operations may be impacted is highly uncertain and cannot be predicted. 6 Industry and Competition Self storage refers to properties that offer month-to-month storage unit rental for personal or business use. Self storage facilities offer a cost-effective and flexible storage alternative in which customers rent fully enclosed and secure spaces.
Industry and Competition Self storage refers to properties that offer month-to-month storage unit rental for personal or business use. Self storage facilities offer a cost-effective and flexible storage alternative in which customers rent fully enclosed and secure spaces. Typical unit sizes range from 5x5 feet to 10x30 feet with facilities typically providing a variety of different sizes and configurations.
The 2024 Credit Facility replaces the Credit Facility we entered into on March 17, 2021, and has a maturity date of February 22, 2027. See Note 14 – Subsequent Events of the Notes to the Consolidated Financial Statements, for more information. See Note 5 – Debt of the Notes to the Consolidated Financial Statements, for more information.
See Note 5 – Debt of the Notes to the Consolidated Financial Statements, for more information. 2025 KeyBank Acquisition Facility On November 19, 2024, we entered into a credit agreement with KeyBank (the "2025 KeyBank Acquisition Facility").
See Note 10 – Related Party Transactions of the Notes to the Consolidated Financial Statements, for more information. Equity The Company was formed on January 8, 2013, under the Maryland General Corporation Law.
The total commitment amount as of December 31, 2024 under the 2025 KeyBank Acquisition Facility was $175 million, and the maturity date is November 19, 2025. See Note 5 – Debt of the Notes to the Consolidated Financial Statements, for more information. Equity The Company was formed on January 8, 2013, under the Maryland General Corporation Law.
As of December 31, 2023, we had sold approximately 7.2 million Class A Shares and approximately 1.0 million Class T Shares for approximately $77.8 million and $11.1 million, respectively, in our DRP Offering.
As of December 31, 2024, we had sold approximately 10.6 million Class A Shares and approximately 1.4 million Class T Shares through our distribution reinvestment plan, of which, approximately 0.5 million Class A Shares and approximately 0.1 million Class T Shares were sold under our current DRP Offering.
To the extent we acquired facilities in clusters within geographic regions, we see property management efficiencies resulting in reduction of personnel and other administrative costs. As discussed herein, we, through our subsidiaries, currently serve as the sponsor of SST VI and SSGT III.
We also utilize our digital marketing breadth and expertise which allows us to acquire customers efficiently by leveraging our portfolio size and technological proficiency. To the extent we acquired facilities in clusters within geographic regions, we see property management efficiencies resulting in reduction of personnel and other administrative costs.
Typical unit sizes range from 5x5 feet to 10x30 feet with facilities typically providing a variety of different sizes and configurations. Customers typically have access to their storage units 18 hours a day, with some facilities offering 24-hour access.
Customers typically have access to their storage units 18 hours a day, with some facilities offering 24-hour access. Rental rates can vary and are determined by the location and size of the rental space, the level of security, and whether the unit is climate controlled.
Generally, SmartCentres has been responsible for the development of the properties and we have been responsible for the operation of the facilities upon completion.
Generally, SmartCentres has been responsible for the development of the properties and we have been responsible for the operation of the facilities upon completion. On July 18, 2024, we entered into a joint venture arrangement with an unaffiliated third party to develop a self storage property in Nantucket, Massachusetts (the "Nantucket Joint Venture").
Removed
For example, we have implemented a blanket property and casualty insurance program over all properties owned or managed by us nationwide which, coupled with our size and geographic diversification, reduces our total insurance costs per property. We also utilize our digital marketing breadth and expertise which allows us to acquire customers efficiently by leveraging our portfolio size and technological proficiency.
Added
In total, as of December 31, 2024, we managed 37 operating self storage properties. Our primary business model is focused on owning and operating high quality self storage properties in high growth markets in the United States and Canada.
Removed
As of the merger date, the SST IV JV Properties consisted of three operating self storage properties and three parcels of land in various stages of development into self storage facilities, jointly owned with subsidiaries of SmartCentres. As of December 31, 2023, all of the development joint venture properties had been completed and had begun operations.
Added
We issued approximately 11.5 million Class A Shares to the former SSGT II stockholders in connection with the SSGT II Merger. Credit Facility On February 22, 2024, we entered into an amended and restated revolving credit facility with KeyBank (the "Credit Facility").
Removed
As of the merger date, the unconsolidated real estate ventures consisted of one operating self storage property and two parcels of land being developed into self storage facilities, with subsidiaries of SmartCentres owning the other 50% of such entities.
Added
The Credit Facility replaced our former credit facility entered into on March 17, 2021, and our current Credit Facility now has a maturity date of February 22, 2027.
Removed
Additionally, we obtained SSGT II's rights to acquire and subsequently closed on (i) one parcel of land being developed into a self storage facility in an unconsolidated joint venture with SmartCentres, and (ii) a self storage property located in Southern California. As of December 31, 2023, one of the development joint venture properties had been completed and had begun operations.
Added
On May 14, 2024, we filed a new Registration Statement on Form S-3 with the SEC which registered up to an additional 4,500,000 Class A Shares and 500,000 Class T Shares under our distribution reinvestment plan (our “DRP Offering”).
Removed
As a result of the SSGT II Merger, approximately 11.5 million shares of SmartStop Class A common stock ("Class A Shares") were issued in exchange for approximately 12.7 million shares of SSGT II common stock. 2032 Private Placement Notes On April 19, 2022, we as guarantor, and SmartStop OP, L.P.
Added
The DRP Offering may be terminated at any time upon 10 days' prior written notice to stockholders. On November 25, 2024, our board of directors approved the suspension of the DRP Offering, such that distributions for the month of November 2024 were paid in cash in December 2024.
Removed
(our "Operating Partnership") as issuer, entered into a note purchase agreement (the "Note Purchase Agreement"), pursuant to which we issued $150 million of Senior Notes due April 19, 2032 (the "2032 Private Placement Notes").
Added
On February 11, 2025, our board of directors reinstated the DRP Offering, such that distributions for the month of January 2025 as well as any distributions declared by our board of directors for any future months will be invested in shares of our common stock for those stockholders that previously elected into our distribution reinvestment plan in such states where our distribution reinvestment plan is able to be offered. 5 On October 29, 2019, we entered into a preferred stock purchase agreement with Extra Space Storage LP, a subsidiary of Extra Space Storage Inc.
Removed
The proceeds were used primarily to pay off existing debt and to pay off certain existing indebtedness of SSGT II in connection with the SSGT II Merger. See Note 5 – Debt of the Notes to the Consolidated Financial Statements, for more information.
Added
On March 12, 2025, our board of directors, upon recommendation of our nominating and corporate governance committee, approved an estimated net asset value per share of our common stock of $14.50 for our Class A Shares and Class T Shares based on the estimated value of our assets less the estimated value of our liabilities, or net asset value, divided by the number of shares outstanding on a fully diluted basis, calculated as of June 30, 2024.
Removed
Credit Facility On March 17, 2021, we, through our Operating Partnership, entered into a credit facility with KeyBank, National Association as administrative agent, with an initial aggregate commitment of $500 million (the “Credit Facility”), which consisted of a $250 million revolving credit facility and a $250 million term loan.
Added
Our self storage operations consist of our wholly-owned self storage facilities, primarily consisting of month-to month rental revenue and related ancillary revenue that these self storage facilities produce.
Removed
We used the initial draw proceeds of approximately $451 million primarily to pay off certain existing indebtedness as well as indebtedness of SST IV in connection with the SST IV Merger. On October 7, 2021, we amended the Credit Facility to increase the commitments on the revolving credit facility by $200 million, to $450 million.
Added
Our Managed REIT Platform business consists of the various management services we perform for the Managed REITs, including the services performed related to our property management, asset management, and construction and development management contracts. The reportable segments offer different products and services to different customers and are therefore managed separately.
Removed
As a result of this amendment, the aggregate commitment under the Credit Facility is now $700 million.
Removed
On April 19, 2022, we amended the Credit Facility to facilitate the issuance of the 2032 Private Placement Notes, make conforming changes between the Note Purchase Agreement and the Credit Facility, and to transition from London Interbank Offer Rate ("LIBOR") to secured overnight financing rate ("SOFR") for floating rate borrowings. 5 On February 22, 2024, we entered into an amended and restated revolving credit facility with KeyBank (the "2024 Credit Facility").
Removed
Self Administration Transaction On June 28, 2019, we acquired the self storage advisory, asset management and property management businesses and certain joint venture interests of Strategic Asset Management I, LLC (f/k/a SmartStop Asset Management, LLC), our former sponsor (“SAM”), along with certain other assets of SAM (collectively, the “Self Administration Transaction”).
Removed
As a result of the Self Administration Transaction, we became self-managed and now, through our subsidiaries, serve as the sponsor of the Managed REITs. In addition, we have the internal capability to originate, structure and manage additional investment products (the “Managed REIT Platform”) which would be sponsored by SRA, our indirect subsidiary.
Removed
On October 29, 2019 (the “Commitment Date”), we entered into a preferred stock purchase agreement (the “Purchase Agreement”) with Extra Space Storage LP (the “Investor”), a subsidiary of Extra Space Storage Inc.
Removed
Recent Economic Conditions Broad economic weakness, inflationary pressures, rising interest rates, geopolitical events, and other economic events could adversely impact our business, financial condition, liquidity and results of operations.
Removed
Industry Segments Prior to the Self Administration Transaction on June 28, 2019, we internally evaluated all of our properties and interests therein as one industry segment and, accordingly, did not report segment information. Subsequent to the Self Administration Transaction, we now operate in two reportable business segments: (i) self storage operations and (ii) our Managed REIT Platform business.
Removed
Management evaluates performance based upon net operating income (“NOI”). For our self storage operations, NOI is defined as leasing and related revenues, less property level operating expenses. NOI for the Company’s Managed REIT Platform business represents Managed REIT Platform revenues less Managed REIT Platform expenses. Government Regulations Our business is subject to many laws and governmental regulations.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeCertain of our officers and key personnel and their respective affiliates are officers, key personnel, advisors, managers, and sponsors of other real estate programs having investment objectives and legal and financial obligations similar to ours, including the Managed REITs.
Biggest changeCertain of our officers and key personnel and their respective affiliates are officers, key personnel, advisors and managers of the Managed REITs and other current and future real estate programs sponsored or managed by us, our officers, our key personnel, our subsidiaries or other affiliates, including but not limited to Strategic Storage Trust X, a new private net asset value, or NAV, REIT sponsored by a subsidiary of ours, and certain Delaware Statutory Trusts, or DSTs, sponsored by SSGT III (the “Other Programs”).
If we fail to pay distributions on the Series A Convertible Preferred Stock for four quarters (whether or not consecutive), the Preferred Investor is permitted to vote on any matter submitted to a vote of the common stockholders of the Company, upon which the Preferred Investor and common stockholders shall vote together as a single class.
If we fail to pay distributions on the Series A Convertible Preferred Stock for four quarters (whether or not consecutive), the Preferred Investor is permitted to vote on any matter submitted to a vote of the common stockholders of the Company, upon which the Preferred Investor and common stockholders shall vote together as a single class.
The following market and economic challenges may adversely affect our operating results: • changes in national, regional, and local economic climates or demographics; • poor economic times resulting in customer defaults under leases or bankruptcy; • competition from other available properties and the attractiveness of our properties to our customers; • re-leasing may require reduced rental rates under the new leases; • increased competition for real estate assets targeted by our investment strategy; • increased costs to repair, renovate, and re-lease our storage units; • increased insurance premiums may reduce funds available for distribution; • increased inflation above our ability to pass along comparable rent increases to our customers; and • changes in interest rates and the availability of financing, which may render the sale or refinance of a property or loan difficult or unattractive.
The following market and economic challenges may adversely affect our operating results: • changes in national, regional, and local economic climates or demographics; • poor economic times resulting in customer defaults under leases or bankruptcy; • competition from other available properties and the attractiveness of our properties to our customers; • re-leasing may require reduced rental rates under the new leases; • increased competition for real estate assets targeted by our investment strategy; • increased costs to repair, renovate, and re-lease our storage units; 22 • increased insurance premiums may reduce funds available for distribution; • increased inflation above our ability to pass along comparable rent increases to our customers; and • changes in interest rates and the availability of financing, which may render the sale or refinance of a property or loan difficult or unattractive.
In particular: 31 • part of the income and gain recognized by certain qualified employee pension trusts with respect to our common stock may be treated as UBTI if shares of our common stock are predominately held by qualified employee pension trusts, and we are required to rely on a special look-through rule for purposes of meeting one of the REIT share ownership tests, and we are not operated in a manner to avoid treatment of such income or gain as UBTI; • part of the income and gain recognized by a tax-exempt investor with respect to our common stock would constitute UBTI if the investor incurs debt in order to acquire the common stock; and • part or all of the income or gain recognized with respect to our common stock by social clubs, voluntary employee benefit associations and supplemental unemployment benefit trusts which are exempt from federal income taxation under Sections 501(c)(7), (9), or (17) of the Code may be treated as UBTI.
In particular: • part of the income and gain recognized by certain qualified employee pension trusts with respect to our common stock may be treated as UBTI if shares of our common stock are predominately held by qualified employee pension trusts, and we are required to rely on a special look-through rule for purposes of meeting one of the REIT share ownership tests, and we are not operated in a manner to avoid treatment of such income or gain as UBTI; • part of the income and gain recognized by a tax-exempt investor with respect to our common stock would constitute UBTI if the investor incurs debt in order to acquire the common stock; and • part or all of the income or gain recognized with respect to our common stock by social clubs, voluntary employee benefit associations and supplemental unemployment benefit trusts which are exempt from federal income taxation under Sections 501(c)(7), (9), or (17) of the Code may be treated as UBTI.
If our stockholders are investing the assets of a qualified pension, profit-sharing, 401(k), Keogh, or other qualified retirement plan or the assets of an IRA in our common stock, they should satisfy themselves that, among other things: • their investment is consistent with their fiduciary obligations under ERISA and the Code; • their investment is made in accordance with the documents and instruments governing their plan or IRA, including their plan’s investment policy; • their investment satisfies the prudence and diversification requirements of ERISA; • their investment will not impair the liquidity of the plan or IRA; • their investment will not produce UBTI for the plan or IRA; • they will be able to value the assets of the plan annually in accordance with ERISA requirements; and • their investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.
If our stockholders are investing the assets of a qualified pension, profit-sharing, 401(k), Keogh, or other qualified retirement plan or the assets of an IRA in our common stock, they should satisfy themselves that, among other things: • their investment is consistent with their fiduciary obligations under ERISA and the Code; • their investment is made in accordance with the documents and instruments governing their plan or IRA, including their plan’s investment policy; • their investment satisfies the prudence and diversification requirements of ERISA; • their investment will not impair the liquidity of the plan or IRA; 32 • their investment will not produce UBTI for the plan or IRA; • they will be able to value the assets of the plan annually in accordance with ERISA requirements; and • their investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.
See the risk factor captioned “We have issued Series A 16 Convertible Preferred Stock that ranks senior to all common stock and grants the holder superior rights compared to common stockholders, which may have the effect of diluting our stockholders’ interests in us and discouraging a takeover or other similar transaction.” in the section titled “Risks Related to an Investment in SmartStop Self Storage REIT, Inc.,” above.
See the risk factor captioned “We have issued Series A Convertible Preferred Stock that ranks senior to all common stock and grants the holder superior rights compared to common stockholders, which may have the effect of diluting our stockholders’ interests in us and discouraging a takeover or other similar transaction.” in the section titled “Risks Related to an Investment in SmartStop Self Storage REIT, Inc.,” above.
In addition, if any such acquired REIT, including SST IV or SSGT II, failed to qualify as a REIT for any taxable period prior to our acquisition, in the event of a taxable disposition of an asset formerly held by such acquired REIT during a period of up to five years following our acquisition, we would be subject to U.S. federal corporate income tax with respect to any built-in gain inherent in such asset as of the closing of our acquisition.
In addition, if any such acquired REIT, including SST IV or SSGT II, failed to qualify as a REIT for any taxable period prior to our acquisition, in the event of a taxable disposition of an asset formerly held by such acquired REIT during a period 29 of up to five years following our acquisition, we would be subject to U.S. federal corporate income tax with respect to any built-in gain inherent in such asset as of the closing of our acquisition.
The Series A Convertible Preferred Stock also imposes several negative covenants on us such as not permitting us to exceed a leverage ratio of 60% loan-to-value or prohibiting us from entering into a merger with another entity whose assets are not at least 80% self storage related, in each case without an affirmative vote by the Preferred Investor.
The Series A Convertible Preferred Stock also imposes several negative covenants on us such as not permitting us to exceed a leverage ratio of 60% loan-to-value or prohibiting us from entering into a merger with another entity whose assets 9 are not at least 80% self storage related, in each case without an affirmative vote by the Preferred Investor.
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, shall be the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders with respect to our Company, our directors, our officers, or our employees.
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Northern Division, shall be the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders with respect to our Company, our directors, our officers, or our employees.
When determining the estimated value per share there are currently no SEC, federal or state rules that establish requirements specifying the methodology to employ in determining an estimated value per share; provided, however, that the 10 determination of the estimated value per share must be conducted by, or with the material assistance or confirmation of, a third-party valuation expert or service and must be derived from a methodology that conforms to standard industry practice.
When determining the estimated value per share there are currently no SEC, federal or state rules that establish requirements specifying the methodology to employ in determining an estimated value per share; provided, however, that the determination of the estimated value per share must be conducted by, or with the material assistance or confirmation of, a third-party valuation expert or service and must be derived from a methodology that conforms to standard industry practice.
In addition, lower-than-expected rental rates and higher rental concessions upon re-letting could adversely affect our rental revenues and impede our growth. 21 We face risks related to an epidemic, pandemic or other health crisis, which could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.
In addition, lower-than-expected rental rates and higher rental concessions upon re-letting could adversely affect our rental revenues and impede our growth. We face risks related to an epidemic, pandemic or other health crisis, which could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.
The CCPA, as amended 13 by the CPRA, is intended to protect consumer privacy rights, and, among other things, provide California residents with the ability to know what information companies collect about them, to request, in certain circumstances, the deletion of such information, and to affirmatively opt out of the sale or “sharing” of their personal information.
The CCPA, as amended by the CPRA, is intended to protect consumer privacy rights, and, among other things, provide California residents with the ability to know what information companies collect about them, to request, in certain circumstances, the deletion of such information, and to affirmatively opt out of the sale or “sharing” of their personal information.
If debt financing is not available on terms and conditions we find acceptable, we may not be able to obtain financing 29 for investments. If these disruptions in the credit markets resurface, our ability to borrow monies to finance the purchase of, or other activities related to, real estate assets will be negatively impacted.
If debt financing is not available on terms and conditions we find acceptable, we may not be able to obtain financing for investments. If these disruptions in the credit markets resurface, our ability to borrow monies to finance the purchase of, or other activities related to, real estate assets will be negatively impacted.
If we are unable to successfully recruit, train, and retain qualified field personnel, our rental incomes may be adversely affected, which could have a material adverse impact on our business, financial condition, and results of operations. 19 Delays in development and lease-up of our properties would reduce our profitability.
If we are unable to successfully recruit, train, and retain qualified field personnel, our rental incomes may be adversely affected, which could have a material adverse impact on our business, financial condition, and results of operations. Delays in development and lease-up of our properties would reduce our profitability.
If any property is not fully occupied or if rents are being paid in an amount that is 22 insufficient to cover operating expenses, we could be required to expend funds for that property’s operating expenses. Our properties will be subject to increases in tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance and administrative expenses.
If any property is not fully occupied or if rents are being paid in an amount that is insufficient to cover operating expenses, we could be required to expend funds for that property’s operating expenses. Our properties will be subject to increases in tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance and administrative expenses.
Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and efforts on our business. Consequently, actions by or disputes with partners or co-venturers might 24 result in subjecting properties owned by the partnership or joint venture to additional risk.
Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and efforts on our business. Consequently, actions by or disputes with partners or co-venturers might result in subjecting properties owned by the partnership or joint venture to additional risk.
These requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties, or, in some cases, an award of damages. We will attempt to acquire properties that comply with such regulations or place the burden on the seller or other third party to ensure compliance with such regulations.
These requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties, or, in some cases, an award of damages. We will attempt to acquire properties that comply with such regulations or 25 place the burden on the seller or other third party to ensure compliance with such regulations.
The purchase of properties with limited warranties or from undercapitalized sellers increases the risk that we may lose some or all of our invested capital in the property as well as rental income from that property. We may acquire or finance properties with yield maintenance or defeasance provisions, which may restrict our operational and financial flexibility.
The purchase of properties with limited warranties or from undercapitalized sellers increases the risk that we may lose some or all of our invested capital in the property as well as rental income from that property. 21 We may acquire or finance properties with yield maintenance or defeasance provisions, which may restrict our operational and financial flexibility.
While we have adopted an Executive Severance and Change of Control Plan which is applicable to each of these officers, we do not have an employment agreement with any of these key personnel and we cannot guarantee that all, or any particular one, will remain employed by us.
While we have adopted an Executive Severance and Change of Control Plan which is applicable to each of these officers, we do not have an employment agreement with any of these key personnel and we cannot guarantee that all, or any particular one, will remain 10 employed by us.
Preferred stock could also have the effect of delaying, deferring, or preventing a change in control of our company, including an extraordinary transaction (such as a merger, tender offer, or sale of all or substantially all of our assets) that might provide a premium price for holders of our common stock.
Preferred stock could also have the effect of delaying, deferring, or preventing a change in control of our company, including 15 an extraordinary transaction (such as a merger, tender offer, or sale of all or substantially all of our assets) that might provide a premium price for holders of our common stock.
In addition, the Department of Labor (“DOL”) plan asset regulations provide that, subject to certain exceptions, the assets of an entity in which a plan holds an equity interest may be treated as assets of an investing plan, in which event the underlying assets of such entity (and transactions involving such 33 assets) would be subject to the prohibited transaction provisions.
In addition, the Department of Labor (“DOL”) plan asset regulations provide that, subject to certain exceptions, the assets of an entity in which a plan holds an equity interest may be treated as assets of an investing plan, in which event the underlying assets of such entity (and transactions involving such assets) would be subject to the prohibited transaction provisions.
In addition, competition for suitable investments may reduce the number of suitable investment opportunities available to us, may increase acquisition costs, and may reduce demand for self storage units in certain areas 18 where our facilities are located, all of which may adversely affect our operating results.
In addition, competition for suitable investments may reduce the number of suitable investment opportunities available to us, may increase acquisition costs, and may reduce demand for self storage units in certain areas where our facilities are located, all of which may adversely affect our operating results.
We own trademarks and other intellectual property rights, including but not limited to the “SmartStop®” and “Strategic Storage®” brands, which are important to our success and competitive position, and the loss of or our inability to enforce trademark and other proprietary intellectual property rights could harm our business.
Our trademarks are important, and the loss of or our inability to enforce trademark and other proprietary intellectual property rights could harm our business. 11 We own trademarks and other intellectual property rights, including but not limited to the “SmartStop®” and “Strategic Storage®” brands, which are important to our success and competitive position, and the loss of or our inability to enforce trademark and other proprietary intellectual property rights could harm our business.
We may be required to make 30 distributions to stockholders at times it would be more advantageous to reinvest cash in our business or when we do not have cash readily available for distribution, and we may be forced to liquidate assets on terms and at times unfavorable to us.
We may be required to make distributions to stockholders at times it would be more advantageous to reinvest cash in our business or when we do not have cash readily available for distribution, and we may be forced to liquidate assets on terms and at times unfavorable to us.
These insurance risks could sharply increase the premiums we pay for coverage against property and casualty claims. Additionally, mortgage lenders in some cases require that commercial property owners purchase specific coverage against terrorism as a condition for providing mortgage loans.
These insurance risks could sharply increase the premiums we pay for coverage against property and casualty claims. Additionally, mortgage lenders in some cases require that commercial property owners purchase specific coverage against terrorism as a 23 condition for providing mortgage loans.
In certain cases, we protect our customers’ goods pursuant to our tenant protection program or other arrangements that may, in some cases, be subject to governmental regulation, which may adversely affect our results. In certain cases, we provide a tenant protection program to customers at our properties, and in certain other cases, we protect our customers goods through other arrangements.
In certain cases, we protect our customers’ goods pursuant to our tenant protection program or other arrangements that may, in some cases, be subject to governmental regulation, which may adversely affect our results. 19 In certain cases, we provide a tenant protection program to customers at our properties, and in certain other cases, we protect our customers goods through other arrangements.
If we do 28 not have sufficient cash to repay the applicable loan or note at that time, such lenders or noteholder could foreclose on the property securing the applicable loan or note or take control of the pledged collateral, as the case may be.
If we do not have sufficient cash to repay the applicable loan or note at that time, such lenders or noteholder could foreclose on the property securing the applicable loan or note or take control of the pledged collateral, as the case may be.
The customer service, marketing skills, knowledge of local market demand and competitive dynamics of our facility managers are contributing factors to our ability to maximize our rental income and to achieve the highest sustainable rent levels at each of our facilities.
The customer service, marketing skills, knowledge of local market demand and competitive dynamics of our facility managers are contributing factors to our ability to maximize our rental income and to achieve the highest sustainable rent 18 levels at each of our facilities.
Similar laws may be implemented in other jurisdictions that we do business in and in ways that may be more restrictive than the CCPA or the CPRA, increasing the cost of compliance, as well as the risk of noncompliance, on our business.
Similar laws may be 12 implemented in other jurisdictions that we do business in and in ways that may be more restrictive than the CCPA or the CPRA, increasing the cost of compliance, as well as the risk of noncompliance, on our business.
As a result, we could be subject to any litigation that may arise by investors in those entities or the respective operations of those entities. In the course of their operations, the Managed REITs and the other future programs may be subject to lawsuits.
As a result, we could be subject to any litigation that may arise by investors in those entities or the respective operations of those entities. In the course of their operations, the Managed REITs and the Other Programs may be subject to lawsuits.
These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the generation, use, storage, treatment, transportation, release, and disposal of solid and hazardous materials and wastes, and the remediation of contamination.
These laws 24 and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the generation, use, storage, treatment, transportation, release, and disposal of solid and hazardous materials and wastes, and the remediation of contamination.
In addition, certain outstanding equity awards may be subject to accelerated vesting or may remain eligible for vesting, as specified further in the Executive Severance and Change of Control 11 Plan.
In addition, certain outstanding equity awards may be subject to accelerated vesting or may remain eligible for vesting, as specified further in the Executive Severance and Change of Control Plan.
In the ordinary course of business, we are the subject of various claims and legal proceedings and may become the subject of claims, litigation or investigations, including commercial disputes and employee claims, such as claims of age discrimination, sexual harassment, gender discrimination, immigration violations or other local, state and federal labor law violations, and from time to time may be involved in governmental or regulatory investigations or similar matters arising out of our current or future business.
In the ordinary course of business, we are the subject of various claims and legal proceedings and may become the subject of claims, litigation or investigations, including commercial disputes and employee claims, such as claims of age discrimination, sexual harassment, gender discrimination, wage and hour, immigration violations or other local, state and federal labor law violations, and from time to time may be involved in governmental or regulatory investigations or similar matters arising out of our current or future business.
We also cannot assure that the current 25 environmental condition of our properties will not be affected by neighbors and occupants, by the condition of nearby properties, or by other unrelated third parties.
We also cannot assure that the current environmental condition of our properties will not be affected by neighbors and occupants, by the condition of nearby properties, or by other unrelated third parties.
We are obligated under the Sponsor Funding Agreement to fund up to $70 million for the upfront sales load in the SST VI public offering, which may limit our ability to make investments and/or fund distributions to our stockholders or use for other working capital purposes, and there is no guarantee that we will receive a return on this investment.
We are obligated under the Sponsor Funding Agreement to fund up to $70 million for the upfront sales load in the SST VI public offering, which may limit our ability to make investments and/or fund distributions to our stockholders or use such funds for other working capital purposes, and there is no guarantee that we will receive a return on this investment.
These tax rates are generally not applicable to dividends paid by a REIT, unless such dividends represent earnings on which the REIT itself has been taxed.
These tax rates are generally not applicable to dividends paid by a REIT, unless such dividends represent earnings on which the REIT itself has 31 been taxed.
Moreover, revenue generated from asset management fees, property management fees, and other fees and distributions relating to the Managed REITs’ offerings and the investment and management of their respective assets may be affected by factors that include not only our ability to increase the Managed REITs’ portfolio of properties under management, but also changes in valuation of those properties, sales of the Managed REIT properties and assets and our ability to successfully operate the Managed REIT properties.
Moreover, revenue generated from asset management fees, property management fees, and other fees and distributions relating to the Managed REITs’ and Other Programs’ offerings and the investment and management of their respective assets may be affected by factors that include not only our ability to increase the Managed REITs’ and Other Programs’ portfolio of properties under management, but also changes in valuation of those properties, sales of the Managed REITs’ and Other Programs’ properties and assets and our ability to successfully operate the Managed REITs’ and Other Programs’ properties.
If our share redemption program is reinstated or a common stockholder is otherwise able to have their shares redeemed, such stockholders should be fully aware that our share redemption program contains significant restrictions and limitations. 9 Further, our board of directors may limit, suspend, terminate or amend any provision of the share redemption program upon 30 days’ notice.
If our share redemption program is reinstated and a common stockholder is able to have their shares redeemed, such stockholders should be fully aware that our share redemption program contains significant restrictions and limitations. Further, our board of directors may limit, suspend, terminate or amend any provision of the share redemption program upon 30 days’ notice.
We earn fees in connection with these arrangements. These 20 arrangements, including the payments associated with these arrangements, may be subject to state-specific or provincial-specific governmental regulation.
We earn fees in connection with these arrangements. These arrangements, including the payments associated with these arrangements, may be subject to state-specific or provincial-specific governmental regulation.
We will face conflicts of interest relating to the purchase of properties, including conflicts with the Managed REITs, and there can be no assurance that our investment allocation policy will adequately address all of the conflicts that may arise or that it will address such conflicts in a manner that is more favorable to us than to the Managed REITs.
We will face conflicts of interest relating to the purchase of properties, including conflicts with the Managed REITs and Other Programs, and there can be no assurance that our investment allocation policy will adequately address all of the conflicts that may arise or that it will address such conflicts in a manner that is more favorable to us than to the Managed REITs and Other Programs.
As described below, our share redemption program is partially suspended. If we lift the suspension of our share redemption program, stockholders will continue to be limited in terms of the amount of shares which may be redeemed. Therefore, it may be difficult for our stockholders to sell their shares promptly or at all.
As described below, our share redemption program is suspended. If we lift the suspension of our share redemption program, stockholders will continue to be limited in terms of the amount of shares 8 which may be redeemed. Therefore, it may be difficult for our stockholders to sell their shares promptly or at all.
The Managed REITs may not generate sufficient revenue or may incur significant debt, which either due to liquidity problems or restrictive covenants contained in their borrowing agreements could restrict their ability to pay or reimburse fees and expenses owed to us when due.
The Managed REITs and Other Programs may not generate sufficient revenue or may incur significant debt, which either due to liquidity problems or restrictive covenants contained in their borrowing agreements could restrict their ability to pay or reimburse fees and expenses owed to us when due.
If our stockholders participate in our distribution reinvestment plan, our stockholders will be deemed to have received, and for income tax purposes will be taxed on, the amount reinvested in common stock to the extent the amount reinvested was not a tax-free return of capital.
If our stockholders participate in our distribution reinvestment plan ("DRP"), if available, our stockholders will be deemed to have received, and for income tax purposes will be taxed on, the amount reinvested in common stock to the extent the amount reinvested was not a tax-free return of capital.
As of December 31, 2023, we had $200 million of Series A Convertible Preferred Stock outstanding, which would represent approximately 16% of our common stock on an as converted, fully diluted basis. See Note 6 – Preferred Equity, of the Notes to the Consolidated Financial Statements, for more information.
As of December 31, 2024, we had $200 million of Series A Convertible Preferred Stock outstanding, which would represent approximately 16.3% of our common stock on an as converted, fully diluted basis. See Note 6 – Preferred Equity, of the Notes to the Consolidated Financial Statements, for more information.
Several factors may affect the Canadian Dollar/USD exchange rate, including: • sovereign debt levels and trade deficits; • domestic and foreign inflation rates and interest rates and investors’ expectations concerning those rates; • other currency exchange rates; • changing supply and demand for a particular currency; • monetary policies of governments; • changes in balances of payments and trade; • trade restrictions; • direct sovereign intervention, such as currency devaluations and revaluations; • investment and trading activities of mutual funds, hedge funds, and currency funds; and • other global or regional political, economic, or financial events and situations.
Several factors may affect the Canadian Dollar/USD exchange rate, including: • sovereign debt levels and trade deficits; • domestic and foreign inflation rates and interest rates and investors’ expectations concerning those rates; • other currency exchange rates; • changing supply and demand for a particular currency; • monetary policies of governments; • changes in balances of payments and trade; • trade restrictions; • direct sovereign intervention, such as currency devaluations and revaluations; • investment and trading activities of mutual funds, hedge funds, and currency funds; and • other global or regional political, economic, or financial events and situations. 26 These events and actions are unpredictable.
Information security risks for our business have generally increased in recent years in part because of the proliferation of new technologies; the use of the Internet and telecommunications technologies to process, transmit and store electronic information, including the management and support of a variety of business processes, including financial transactions and records, personally identifiable information, and tenant and lease data; and the increased sophistication and activities of organized crime, hackers, and terrorists, activists, and other external parties.
Information security risks for our business have generally increased in recent years in part because of the proliferation of new technologies, such as generative artificial intelligence; the use of the Internet and telecommunications technologies to process, transmit and store electronic information, including the management and support of a variety of business processes, including financial transactions and records, personally identifiable information, and tenant and lease data; and the increased sophistication and activities of organized crime, hackers, and terrorists, activists, and other external parties.
In the event that we have a concentration of properties in any particular geographic area, any adverse situation that disproportionately affects that geographic area would have a magnified adverse effect on our portfolio. For 2023, approximately 23%, 20%, and 10% of our rental income was concentrated in Florida, California, and the Greater Toronto Area of Canada, respectively.
In the event that we have a concentration of properties in any particular geographic area, any adverse situation that disproportionately affects that geographic area would have a magnified adverse effect on our portfolio. For 2024, approximately 22%, 20%, and 10% of our rental income was concentrated in Florida, California, and the Greater Toronto Area of Canada, respectively.
As of December 31, 2023, our Chief Executive Officer had direct and indirect beneficial ownership in units of our Operating Partnership and shares of our common stock (including as a controlling person of SAM, our former sponsor) representing an approximately 9.4% interest in the Operating Partnership and 0.6% of our common stock, respectively.
As of December 31, 2024, our Chief Executive Officer had direct and indirect beneficial ownership in units of our Operating Partnership and shares of our common stock (including as a controlling person of SAM, our former sponsor) representing an approximately 9.7% interest in the Operating Partnership and 0.6% of our common stock, respectively.
We have encountered in the past, and we may also encounter in the future unforeseen cost increases associated with building materials or construction services resulting from trade tensions, disruptions, tariffs, duties or restrictions or an epidemic, pandemic or other health crisis, such as the COVID-19 outbreak.
We have encountered in the past, and we may also encounter in the future unforeseen cost increases associated with building materials or construction services resulting from trade tensions, disruptions, tariffs, duties or restrictions or an epidemic, pandemic or other health crisis.
For the purposes of calculating the estimated value per share, an independent third party appraiser valued our properties as of September 30, 2023. The valuation methodologies used to value our properties involved certain subjective judgments.
For the purposes of calculating the estimated value per share, an independent third party appraiser valued our properties as of June 30, 2024. The valuation methodologies used to value our properties involved certain subjective judgments.
Ownership and operation of foreign assets pose several risks, including, but not limited to the following: • the burden of complying with both Canadian and United States’ laws; • changing governmental rules and policies, including changes in land use and zoning laws, more stringent environmental laws or changes in such laws; • existing or new Canadian laws relating to the foreign ownership of real property or loans and laws restricting the ability of Canadian persons or companies to remove profits earned from activities within the country to the person’s or company’s country of origin; • the potential for expropriation; 27 • possible currency transfer restrictions; • imposition of adverse or confiscatory taxes; • changes in real estate and other tax rates or laws and changes in other operating expenses in Canada; • possible challenges to the anticipated tax treatment of our revenue and our properties; • adverse market conditions caused by terrorism, civil unrest and changes in national or local governmental or economic conditions; • the potential difficulty of enforcing obligations in other countries; • changes in the availability, cost, and terms of loan funds resulting from varying Canadian economic policies; and • our limited experience and expertise in foreign countries relative to our experience and expertise in the United States.
Ownership and operation of foreign assets pose several risks, including, but not limited to the following: • the burden of complying with both Canadian and United States’ laws; • changing governmental rules and policies, including changes in land use and zoning laws, more stringent environmental laws or changes in such laws; • existing or new Canadian laws relating to the foreign ownership of real property or loans and laws restricting the ability of Canadian persons or companies to remove profits earned from activities within the country to the person’s or company’s country of origin; • the potential for expropriation; • possible currency transfer restrictions; • imposition of adverse or confiscatory taxes; • changes in real estate and other tax rates or laws and changes in other operating expenses in Canada; • possible challenges to the anticipated tax treatment of our revenue and our properties; • adverse market conditions caused by terrorism, civil unrest and changes in national or local governmental or economic conditions; • the potential difficulty of enforcing obligations in other countries; • negative impacts on our property operations or development of properties in Canada and the increase of cost resulting from new, expanded or retaliatory tariffs, sanctions, quotas, trade barriers, or changes in trade relations between the United States and Canada. • changes in the availability, cost, and terms of loan funds resulting from varying Canadian economic policies; and • our limited experience and expertise in foreign countries relative to our experience and expertise in the United States.
Our share redemption program is partially suspended, and even if stockholders are able to have their shares redeemed, our stockholders may not be able to recover the amount of their investment in our shares.
Our share redemption program is suspended, and even if stockholders were able to have their shares redeemed, our stockholders may not be able to recover the amount of their investment in our shares. Presently, our share redemption program is suspended.
Climate change, including the impact of global warming, creates physical and financial risks. Physical risks from climate change include an increase in sea levels and changes in weather conditions, such as an increase in storm intensity and severity of weather (e.g., floods, tornadoes or hurricanes) and extreme temperatures.
Climate change creates physical and financial risks. Physical risks from climate change include an increase in sea levels and changes in weather conditions, such as an increase in storm intensity and severity of weather (e.g., floods, tornadoes or hurricanes) and extreme temperatures.
Our obligation to make balloon payments could increase the risk of default. Our debt may have balloon payments of up to 100% of the principal amount of such loans due on the respective maturity dates. Thus, such debt will have a substantial payment due at the scheduled maturity date, unless previously prepaid or refinanced.
Our debt may have balloon payments of up to 100% of the principal amount of such loans due on the respective maturity dates. Thus, such debt will have a substantial payment due at the scheduled maturity date, unless previously prepaid or refinanced.
If we were to fail to so qualify, gain realized by foreign investors on a sale of our shares would be subject to FIRPTA tax, unless our shares were traded on an established securities market and the foreign investor did not at any time during a specified testing period directly or indirectly own more than 10% of the value of our outstanding common stock. 32 Legislative or other actions affecting REITs materially and adversely affect our stockholders and us.
If we were to fail to so qualify, gain realized by foreign investors on a sale of our shares would be subject to FIRPTA tax, unless our shares were traded on an established securities market and the foreign investor did not at any time during a specified testing period directly or indirectly own more than 10% of the value of our outstanding common stock.
In determining our estimated value per share, we primarily relied upon a valuation of our portfolio of properties as of September 30, 2023.
In determining our estimated value per share, we primarily relied upon a valuation of our portfolio of properties as of June 30, 2024.
In addition, there is no guarantee that the Series C Units will convert into class A units or that we will receive a return on this investment. A subsidiary of ours is the sponsor of the Managed REITs and may sponsor additional future programs.
In addition, there is no guarantee that the Series C Units will convert into class A units or that we will receive a return on this investment. A subsidiary of ours is the sponsor of the Managed REITs and it or its affiliates sponsor Other Programs.
We cannot predict how changes in the tax laws might affect our investors or us. New legislation, Treasury Regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT or the federal income tax consequences of such qualification, or the federal income tax consequences of an investment in us.
New legislation, Treasury Regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT or the federal income tax consequences of such qualification, or the federal income tax consequences of an investment in us.
On November 1, 2023, we (through our indirect subsidiary, SmartStop REIT Advisors, LLC, or “SRA”) entered into a Sponsor Funding Agreement with SST VI and its operating partnership and we agreed to fund the payment of (i) the upfront 15 3% sales commission for the sale of shares of SST VI’s Class Y common stock (the “Class Y Shares”) sold in the SST VI public offering, (ii) the upfront 3% dealer manager fee for the Class Y Shares sold in the SST VI public offering, and (iii) the estimated 1% organization and offering expenses for the sale of Class Y Shares and shares of SST VI’s Class Z common stock (the “Class Z Shares”) sold in the SST VI public offering.
On November 1, 2023, we (through an indirect subsidiary) entered into a Sponsor Funding Agreement with SST VI and its operating partnership, pursuant to which we agreed to fund the payment of (i) the upfront sales commission and the upfront dealer manager fee for the sale of shares of SST VI’s Class Y common stock (the “Class Y Shares”) sold in the SST VI public offering and (ii) the estimated organization and offering expenses for the sale of Class Y Shares and shares of SST VI’s Class Z common stock (the “Class Z Shares”) sold in the SST VI public offering.
Furthermore, if such attacks are not detected immediately, their effect could be compounded. We may be unable to promptly re-let units within our facilities at satisfactory rental rates. Generally, our unit leases are on a month-to-month basis. Delays in re-letting units as vacancies arise would reduce our revenues and could adversely affect our operating performance.
We may be unable to promptly re-let units within our facilities at satisfactory rental rates. Generally, our unit leases are on a month-to-month basis. Delays in re-letting units as vacancies arise would reduce our revenues and could adversely affect our operating performance.
We may only calculate the estimated value per share for our shares annually and, therefore, our stockholders may not be able to determine the estimated net asset value of their shares on an ongoing basis. On January 15, 2024, our board of directors approved an estimated value per share for our Class A shares and Class T shares of $15.25.
We may only calculate the estimated value per share for our shares annually and, therefore, our stockholders may not be able to determine the estimated net asset value of their shares on an ongoing basis. On March 12, 2025, our board of directors approved an estimated value per share for our Class A shares and Class T shares of $14.50.
We recorded a net loss attributable to our common stockholders of approximately $2.7 million for the fiscal year ended December 31, 2023. We have historically incurred net losses attributable to our common stockholders and cannot guarantee that we will not incur future operating losses. Our accumulated deficit was approximately $167.3 million as of December 31, 2023.
We recorded a net loss attributable to our common stockholders of approximately $18.4 million for the fiscal year ended December 31, 2024. We have historically incurred net losses attributable to our common stockholders and cannot guarantee that we will not incur future operating losses. Our accumulated deficit was approximately $185.6 million as of December 31, 2024.
Our risk and exposure to these matters remain heightened because of the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of our controls, processes, and practices designed to protect our systems, computers, software, data, and networks from attack, damage or unauthorized access remain a focus for us.
As a result, cyber security and the continued development and enhancement of our controls, processes, and practices designed to protect our systems, computers, software, data, and networks from attack, damage or unauthorized access remain a focus for us.
We own the entities that serve as the sponsor and advisor to the Managed REITs, which have investment objectives similar to ours, and we may be buying properties at the same time as one or more of the Managed REITs, or other programs managed by us, our officers, our key personnel or our subsidiaries (the “Other Programs”).
We own the entities that serve as the sponsor and advisor to the Managed REITs, which have investment objectives similar to ours, and we may be buying properties at the same time as one or more of the Managed REITs or Other Programs.
We have provided and may continue to provide financial support to the Managed REITs in the form of mezzanine loans, preferred equity investments, and other strategic investments. As of March 13, 2024, we had an aggregate of approximately $17.0 million in outstanding loans to the Managed REITs.
We have provided and may continue to provide financial support to the Managed REITs in the form of outstanding payables, loans, preferred equity investments, or other strategic investments. As of December 31, 2024, we had an aggregate of approximately $33.0 million in outstanding loans to the Managed REITs.
We may also be subject to state and local taxes on our income or property, either directly, at the level of our Operating Partnership, or at the level of any other companies through which we indirectly own our assets. Any federal or state taxes we pay will reduce our cash available for distribution to our stockholders.
We may also be subject to state and local taxes on our income or property, either directly, at the level of our Operating Partnership, or at the level of any other companies through which we indirectly own our assets.
In determining FFO, as adjusted, we make further adjustments to FFO to exclude the effects of non-real estate related asset impairments and intangible amortization, acquisition related costs, other write-offs incurred in connection with acquisitions, contingent earnout expenses, accretion of fair value of debt adjustments, gains or losses from extinguishment of debt, accretion of deferred tax liabilities, realized and unrealized gains/losses on foreign exchange transactions, and gains/losses on foreign exchange and interest rate derivatives not designated for hedge accounting.
In determining FFO, as adjusted, we make further adjustments to FFO to exclude effects of non-real estate related asset impairments and intangible amortization, acquisition related costs, other write-offs incurred in connection with acquisitions, contingent earnout expenses, accretion of fair value of debt adjustments, amortization of debt issuance costs, gains or losses from extinguishment of debt, adjustments of deferred tax assets and liabilities, realized and unrealized gains/losses on foreign exchange transactions, gains/losses on foreign exchange and interest rate derivatives not designated for hedge accounting, and other select non-recurring income or expense items which we believe are not indicative of our overall long-term operating performance.
SST VI is a public non-traded Managed REIT which began operations in early 2021 that invests in self storage properties and has assets of approximately $560 million as of December 31, 2023, and SSGT III is a private Managed REIT which began operations in May 2022 that invests in self storage properties and had assets of approximately $180 million as of December 31, 2023.
SST VI is a public non-traded Managed REIT which began operations in early 2021 that invests in self storage properties and has assets of approximately $552 million as of September 30, 2024, and SSGT III is a private Managed REIT which began operations in May 2022 that invests in self storage properties and had assets of approximately $221 million as of September 30, 2024.
The notes will continue to accrue interest at a rate of 5.28% until certain leverage thresholds are met for two consecutive fiscal quarters, at which point, the rate will revert to 4.53% and remain at that interest rate through maturity. The credit facility and the notes are subject to a series of financial and other covenants.
The notes carried a fixed interest rate of 4.53%, which increased to 5.28% as a result of certain leverage thresholds. The notes will continue to accrue interest at a rate of 5.28% until certain leverage thresholds are met for two consecutive fiscal quarters, at which point, the rate will revert to 4.53% and remain at that interest rate through maturity.
We may also incur additional debt or issue preferred equity in the future which rely on variable interest rates.
We currently have outstanding debt payments which are indexed to variable interest rates. We may also incur additional debt or issue preferred equity in the future which rely on variable interest rates.
In consideration for SRA providing the funding for the front-end sales load and the cash to cover the dilution from the stock dividends described above, the SST VI operating partnership will issue a number of Series C Subordinated Convertible Units of limited partnership interest in the SST VI operating partnership (the “Series C Units”) to SRA equal to the dollar amount of such funding divided by the then-current offering price for the Class Y Shares and Class Z Shares sold in the SST VI public offering, which will initially be $9.30 per share.
In consideration for providing the funding for the front-end sales load described above, SST VI’s operating partnership will issue a number of Series C Subordinated Convertible Units of limited partnership interest in SST VI’s operating partnership (the “Series C Units”) to our indirect subsidiary equal to the dollar amount of such funding divided by the then-current offering price for the Class Y Shares and Class Z Shares sold in the SST VI public offering, which is currently $10.00 per share.
We have opted out of provisions of the MGCL relating to deterring or defending hostile takeovers. Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder (as defined in the statute) or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder.
Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder (as defined in the statute) or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder.
The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury. Changes to the tax laws, with or without retroactive application, could materially and adversely affect our stockholders and us.
Legislative or other actions affecting REITs materially and adversely affect our stockholders and us. The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury.
See Note 5 – Debt, for additional information. We may also incur mortgage debt and pledge all or some of our real properties as security for that debt to obtain funds to acquire real properties.
The credit facility and the notes are subject to a series of financial and other covenants. See Note 5 – Debt, for additional information. We may also incur mortgage debt and pledge all or some of our real properties as security for that debt to obtain funds to acquire real properties.
We may be required to pay some taxes due to actions of our taxable REIT subsidiaries, which would reduce our cash available for distribution to our stockholders. Any net taxable income earned by our taxable REIT subsidiaries, or TRSs, will be subject to federal and possibly state corporate income tax.
Any federal or state taxes we pay will reduce our cash available for distribution to our stockholders. 30 We may be required to pay some taxes due to actions of our taxable REIT subsidiaries, which would reduce our cash available for distribution to our stockholders.
Our 14 ability to provide such liquidity events, and to do so under circumstances that will satisfy the applicable subordination requirements, will depend on market conditions at the relevant time, which may vary considerably over a period of years. If we are unable to satisfy such subordination requirements, certain equity interests we hold in the Managed REITs may be impaired.
Our ability to provide such liquidity events, and to do so under circumstances that will satisfy the applicable subordination requirements, will depend on market conditions at the relevant time, which may vary considerably over a period of years.
We cannot yet predict the full impact of the CCPA, as amended by the CPRA, or any rules or regulations promulgated thereunder, nor can we predict the full impact of any interpretations thereof.
The CPPA is currently in the process of issuing guidance and interpreting the regulations, and as such we cannot yet predict the full impact of the CCPA, as amended by the CPRA, or any rules or regulations promulgated thereunder, nor can we predict the full impact of any interpretations thereof.
If the limits set forth in these covenants do not jeopardize our qualification for taxation as a REIT, but prevent us from distributing 100% of our REIT taxable income, we will be subject to U.S. federal income tax, and potentially a nondeductible excise tax, on the retained amounts.
If the limits set forth in these covenants do not jeopardize our qualification for taxation as a REIT, but prevent us from distributing 100% of our REIT taxable income, we will be subject to U.S. federal income tax, and potentially a nondeductible excise tax, on the retained amounts. 28 Increases in interest rates could increase the amount of our debt payments and adversely affect our ability to continue to pay distributions at the current rate to our stockholders.
We have elected to treat SmartStop TRS, Inc. as a TRS, and we may elect to treat other subsidiaries as TRSs in the future. In this regard, several provisions of the laws applicable to REITs and their subsidiaries ensure that a TRS will be subject to an appropriate level of federal income taxation.
In this regard, several provisions of the laws applicable to REITs and their subsidiaries ensure that a TRS will be subject to an appropriate level of federal income taxation.
Because the revenue streams from the advisory agreements with the Managed REITs are subject to limitation or cancellation, any such termination could adversely affect our financial condition, cash flow and the amount available for distributions to our common stockholders.
If we are unable to satisfy such subordination requirements, certain equity interests we hold in the Managed REITs and Other Programs may be impaired. 13 Because the revenue streams from the advisory agreements with the Managed REITs are subject to limitation or cancellation, any such termination could adversely affect our financial condition, cash flow and the amount available for distributions to our common stockholders.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThird-Party Risk Management 34 We have implemented processes designed to identify and mitigate cybersecurity threats associated with our use of third-party service providers. Such providers are subject to security risk assessments at the time of onboarding, contract renewal, and upon detection of an increase in risk profile.
Biggest changeSuch providers are subject to security risk assessments at the time of onboarding, contract renewal, and upon detection of an increase in risk profile. We use a variety of inputs in our risk assessments, including information supplied by providers and third parties .
Risk Management and Strategy Our policies, standards, processes and practices for assessing, identifying, and managing material risks from cybersecurity threats are integrated into our overall risk management process and are based on frameworks established by the National Institute of Standards and Technology (“NIST”), the International Organization for Standardization and other applicable industry standards and best practices.
Our policies, standards, processes and practices for assessing, identifying, and managing material risks from cybersecurity threats are integrated into our overall risk management process and are based on frameworks established by the National Institute of Standards and Technology (“NIST”), the International Organization for Standardization and other applicable industry standards and best practices.
Risk Assessment At least annually, we conduct a cybersecurity risk assessment that takes into account information from internal stakeholders, known security vulnerabilities, and other external sources (e.g., reported security incidents that have impacted other companies, industry trends, and evaluations by third parties and consultants).
Risk Assessment At least annually, we conduct a cybersecurity risk assessment that takes into account information from internal stakeholders, known security vulnerabilities, and other external sources (e.g., reported security incidents that have impacted 33 other companies, industry trends, and evaluations by third parties and consultants).
Such safeguards are regularly evaluated and improved based on vulnerability assessments, cybersecurity threat intelligence and other developing cybersecurity practices. Incident Response and Recovery Planning We have established comprehensive incident response and recovery plans and continue to evaluate the effectiveness of those plans. Our incident response and recovery plans address and guide our response to a cybersecurity incident.
Technical Safeguards We regularly assess and deploy technical safeguards designed to protect our information systems from cybersecurity threats. Such safeguards are regularly evaluated and improved based on vulnerability assessments, cybersecurity threat intelligence and other developing cybersecurity practices. Incident Response and Recovery Planning We have established comprehensive incident response and recovery plans and continue to evaluate the effectiveness of those plans.
The results of the assessment are used to drive alignment on, and prioritization of, initiatives to enhance our security controls, make recommendations to improve processes, and updates are presented to our board of directors and members of management, as appropriate. Technical Safeguards We regularly assess and deploy technical safeguards designed to protect our information systems from cybersecurity threats.
The results of the assessment are used to drive alignment on, and prioritization of, initiatives to enhance our security controls, and make recommendations to improve processes. Our board of directors and members of management, as appropriate, are presented with any updates we make due to our risk assessment.
We use a variety of inputs in our risk assessments, including information supplied by providers and third parties. In addition, we require our providers to meet appropriate security requirements, controls and responsibilities and investigate security incidents that have impacted our third-party providers, as appropriate.
In addition, we require our providers to meet appropriate security requirements, controls and responsibilities and investigate security incidents that have impacted our third-party providers, as appropriate.
Our cybersecurity program in particular focuses on the following key areas: Collaboration Our cybersecurity risks are identified and addressed through a comprehensive, cross-functional approach. Key security, risk, and compliance stakeholders meet regularly to develop strategies for preserving the confidentiality, integrity and availability of Company and customer information, identifying, preventing and mitigating cybersecurity threats.
Key security, risk, and compliance stakeholders meet regularly to develop strategies for preserving the confidentiality, integrity and availability of Company and customer information, identifying, preventing and mitigating cybersecurity threats.
Added
Our cybersecurity program in particular focuses on the following key areas:collaboration, risk assessment, technical safeguards, incident response and recovery planning, third-party risk management, education and awareness, and governance. Collaboration Our cybersecurity risks are identified and addressed through a comprehensive, cross-functional approach.
Added
Our incident response and recovery plans address and guide our response to a cybersecurity incident. Third-Party Risk Management We have implemented processes designed to identify and mitigate cybersecurity threats associated with our use of third-party service providers.
Added
Governance Our board of directors delegated to our audit committee oversight of cybersecurity and other information technology (“IT”) risks. Our audit committee receives quarterly reports from management on our cybersecurity risks. In addition, management updates the audit committee as necessary regarding any significant cybersecurity incidents.
Added
Our IT team, led by our Chief Information Officer, is responsible for assessing and managing our significant risks from cybersecurity threats and has primary responsibility for our risk management process and overall cybersecurity risk management program.
Added
This team includes in-house personnel devoted to these efforts, as well as a third-party IT firm, and they collectively have extensive knowledge of the technologies and applications we have adopted to address our cybersecurity risk.
Added
In addition, our Chief Information Officer supports our company by staying informed about and monitoring efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include: briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources; and alerts and reports produced by security tools deployed in the IT environment.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePhysical Occupancy % (3) Rental Income % (4) Alabama 1 1,090 163,300 1.4 % 90.7 % 0.7 % Arizona 4 3,130 329,100 2.8 % 91.3 % 2.6 % California 30 19,985 2,108,400 17.7 % 88.8 % 20.1 % Colorado 8 4,550 493,085 4.1 % 90.5 % 3.7 % Florida 26 19,870 2,363,100 19.9 % 92.5 % 22.7 % Illinois 6 3,785 429,500 3.6 % 91.9 % 3.0 % Indiana 2 1,030 112,700 0.9 % 92.5 % 0.6 % Massachusetts 1 840 93,200 0.8 % 91.3 % 1.9 % Maryland 2 1,610 169,500 1.4 % 91.8 % 1.4 % Michigan 4 2,220 266,100 2.2 % 94.2 % 1.8 % New Jersey 2 2,350 205,100 1.7 % 87.9 % 1.7 % Nevada 9 7,160 865,000 7.4 % 93.2 % 6.6 % North Carolina 19 9,190 1,204,900 10.1 % 91.6 % 8.2 % Ohio 5 2,310 279,700 2.3 % 91.3 % 1.5 % South Carolina 3 1,940 246,000 2.1 % 92.2 % 1.6 % Texas 12 6,960 919,300 7.7 % 93.3 % 6.9 % Virginia 1 830 71,100 0.6 % 88.6 % 0.9 % Washington 5 3,427 390,545 3.3 % 91.7 % 3.3 % Wisconsin 1 780 83,400 0.7 % 91.1 % 0.5 % Ontario, Canada 13 10,610 1,110,655 9.3 % 92.6 % 10.3 % Total 154 103,667 11,903,685 100 % 91.6 % 100 % (1) Includes all rentable units, consisting of storage units and parking (approximately 3,400 units).
Biggest changePhysical Occupancy % (3) Rental Income % (4) Alabama 1 1,090 163,300 1.3 % 90.3 % 0.7 % Arizona 4 3,130 329,100 2.6 % 93.3 % 2.5 % California 32 21,955 2,313,400 18.4 % 91.9 % 20.3 % Colorado 10 5,870 683,600 5.4 % 87.9 % 4.1 % Florida 27 20,920 2,462,700 19.6 % 92.8 % 22.1 % Illinois 6 3,785 432,450 3.4 % 92.0 % 3.0 % Indiana 2 1,030 112,700 0.9 % 93.3 % 0.6 % Massachusetts 2 1,045 111,800 0.9 % 90.7 % 1.8 % Maryland 2 1,610 169,500 1.4 % 92.9 % 1.4 % Michigan 4 2,220 266,100 2.1 % 93.5 % 1.8 % New Jersey 2 2,350 205,100 1.6 % 78.6 % 1.7 % Nevada 9 7,160 865,000 6.9 % 92.1 % 6.6 % North Carolina 18 8,800 1,144,000 9.1 % 93.8 % 7.9 % Ohio 5 2,540 288,900 2.4 % 87.9 % 1.6 % South Carolina 4 2,890 355,800 2.9 % 89.1 % 1.8 % Texas 12 6,960 919,300 7.3 % 94.1 % 6.9 % Virginia 1 830 71,100 0.6 % 91.2 % 0.9 % Washington 5 3,430 390,550 3.1 % 92.8 % 3.4 % Wisconsin 1 780 83,400 0.7 % 87.7 % 0.5 % District of Columbia 1 830 72,000 0.6 % 89.2 % 0.1 % Ontario, Canada 13 10,610 1,110,700 8.8 % 91.6 % 10.3 % Total (5) 161 109,835 12,550,500 100 % 91.8 % 100 % (1) Includes all rentable units, consisting of storage units and parking (approximately 3,400 units).
(2) Includes all rentable square feet, consisting of storage units and parking (approximately 1,017,000 square feet). (3) Represents the occupied square feet of all facilities we owned in a state or province divided by total rentable square feet of all the facilities we owned in such state or area as of December 31, 2023.
(2) Includes all rentable square feet, consisting of storage units and parking (approximately 1,017,000 square feet). (3) Represents the occupied square feet of all facilities we owned in a state or province divided by total rentable square feet of all the facilities we owned in such state or area as of December 31, 2024.
See Note 5 – Debt, of the Notes to the Consolidated Financial Statements contained in this report for more information about our indebtedness secured by our properties. As of December 31, 2023, our wholly-owned operating self storage portfolio was comprised as follows: State No. of Properties Units (1) Sq. Ft. (net) (2) % of Total Rentable Sq. Ft.
See Note 5 – Debt, of the Notes to the Consolidated Financial Statements contained in this report for more information about our indebtedness secured by our properties. 34 As of December 31, 2024, our wholly-owned operating self storage portfolio was comprised as follows: State No. of Properties Units (1) Sq. Ft. (net) (2) % of Total Rentable Sq. Ft.
On May 25, 2022, we, as 50% owner and SmartCentres as the other 50% owner of a joint venture subsidiary, purchased a single tenant industrial building located in the city of Burnaby, British Columbia (the “Regent Property”), that we and SmartCentres intend to develop into a self storage facility in the future.
On May 25, 2022, we, as 50% owner and SmartCentres as the other 50% owner of a joint venture subsidiary, purchased a single tenant industrial building located in the city of Burnaby, British Columbia (the “Regent Property”), that we and SmartCentres plan to develop into a self storage facility in the near future.
(2) These joint venture properties were acquired through the SST IV Merger, which closed on March 17, 2021. (3) This property is currently leased as a single tenant industrial lease. The joint venture plans to develop this property into a self storage facility in the future.
(2) These joint venture properties were acquired through the SST IV Merger, which closed on March 17, 2021. (3) This property was leased as a single tenant industrial lease through October 2024. The joint venture plans to develop this property into a self storage facility in the future.
ITEM 2. PR OPERTIES As of December 31, 2023, we owned 154 operating self storage facilities located in 19 states (Alabama, Arizona, California, Colorado, Florida, Illinois, Indiana, Maryland, Massachusetts, Michigan, New Jersey, Nevada, North Carolina, Ohio, South Carolina, Texas, Virginia, Washington and Wisconsin) and Canada, comprising approximately 104,000 units and approximately 11.9 million rentable square feet.
ITEM 2. PR OPERTIES As of December 31, 2024, we owned 161 operating self storage facilities located in 19 states (Alabama, Arizona, California, Colorado, Florida, Illinois, Indiana, Maryland, Massachusetts, Michigan, New Jersey, Nevada, North Carolina, Ohio, South Carolina, Texas, Virginia, Washington and Wisconsin), the District of Columbia, and Canada, comprising approximately 110,000 units and approximately 12.6 million rentable square feet.
(4) Represents rental income (excludes administrative fees, late fees, and other ancillary income) for all facilities we owned in a state or province divided by our total rental income for the month ended December 31, 2023.
(4) Represents rental income (excludes administrative fees, late fees, and other ancillary income) for all facilities we owned in a state or province divided by our total rental income for the month ended December 31, 2024. (5) In September 2024, Hurricane Helene caused severe flooding at one of our wholly-owned properties in Asheville, North Carolina.
We account for these investments using the equity method of accounting and they are stated at cost and adjusted for our share of net earnings or losses and reduced by distributions and increased for contributions. Equity in earnings (loss) will generally be recognized based on our ownership interest in the earnings (loss) of each of the unconsolidated investments.
Such amount represents an approximately 38% ownership in the property. 35 We account for these investments using the equity method of accounting and they are stated at cost and adjusted for our share of net earnings or losses and reduced by distributions and increased for contributions.
These joint venture agreements are with a subsidiary of SmartCentres, an unaffiliated third party, to acquire, develop, and operate self storage facilities. In accordance with such agreements, we intend to fund development costs of up to approximately $12.8 million as early as 2024 and 2025.
These joint venture agreements are with a subsidiary of SmartCentres, an unaffiliated third party, to acquire, develop, and operate self storage facilities. On July 18, 2024, we entered into a joint venture arrangement with an unaffiliated third party to develop a self storage property in Nantucket, Massachusetts (the "Nantucket Joint Venture").
The following table summarizes our 50% ownership interests in unconsolidated real estate ventures in the Greater Toronto Area, Canada as of December 31, 2023 and 2022: JV Property Date Real Estate Venture Became Operational Carrying Value of Investment as of December 31, 2023 Carrying Value of Investment as of December 31, 2022 Dupont (1) October 2019 $ 3,974,813 $ 4,245,434 East York (2) June 2020 5,662,757 6,039,951 Brampton (2) November 2020 1,974,811 2,166,186 Vaughan (2) January 2021 2,297,273 2,625,089 Oshawa (2) August 2021 1,274,680 1,506,798 Scarborough (2) November 2021 2,342,720 2,364,175 Aurora (1) December 2022 2,480,800 2,546,407 Kingspoint (2) March 2023 3,947,014 3,342,969 Markham (1) Under Development 2,063,919 1,038,541 Regent (3) Under Development 2,737,202 2,646,532 Whitby (4) Under Development 7,075,611 - $ 35,831,600 $ 28,522,082 (1) These joint venture properties were acquired through the SSGT II Merger, which closed on June 1, 2022.
The following table summarizes our 50% ownership interests in unconsolidated real estate ventures in Canada (the “Canadian JV Properties”) (in thousands): Canadian JV Property Date Real Estate Venture Became Operational Carrying Value of Investment as of December 31, 2024 Carrying Value of Investment as of December 31, 2023 Dupont (1)(6) October 2019 $ 3,358 $ 3,975 East York (2)(6) June 2020 4,945 5,663 Brampton (2)(6) November 2020 1,533 1,975 Vaughan (2)(6) January 2021 2,019 2,297 Oshawa (2)(6) August 2021 938 1,275 Scarborough (2)(5) November 2021 1,969 2,343 Aurora (1)(5) December 2022 1,935 2,481 Kingspoint (2)(5) March 2023 3,299 3,947 Whitby (4) January 2024 7,661 7,076 Markham (1)(7) May 2024 2,470 2,064 Regent (3) Under Development 2,655 2,736 $ 32,782 $ 35,832 (1) These joint venture properties were acquired through the SSGT II Merger, which closed on June 1, 2022.
(4) This property was acquired on January 12, 2023 in connection with a purchase agreement assumed in the SSGT II Merger.
(4) This property was acquired on January 12, 2023 in connection with a purchase agreement assumed in the SSGT II Merger. (5) As of December 31, 2024, these properties were encumbered by first mortgages pursuant to the RBC JV Term Loan II (defined below).
Additionally, we own our office located at 10 Terrace Rd, Ladera Ranch, California (the “Ladera Office”) which houses our corporate headquarters. 35 As a result of the SST IV Merger, we acquired six self storage real estate joint ventures located in the Greater Toronto Area of Ontario, Canada, all of which were operating properties as of December 31, 2023.
Please see Note 3 – Real Estate of the Notes to the Consolidated Financial Statements for additional detail. Additionally, we own our office located at 10 Terrace Rd, Ladera Ranch, California (the “Ladera Office”) which houses our corporate headquarters.
Removed
As a result of the SSGT II Merger, we ultimately acquired four self storage real estate joint ventures located in the Greater Toronto Area of Ontario, Canada, two of which were operational and two of which were under development as of December 31, 2023.
Added
As a result, this property was not operational as of December 31, 2024, but we expect to rebuild a self storage facility in its place. There is no assurance as to when this property will be rebuilt or the performance of this property upon completion or stabilization. The table above does not include the property statistics for this property.
Added
On January 12, 2023, we as 50% owner and SmartCentres as the other 50% owner of a joint venture subsidiary, purchased a parcel of land in Whitby, Ontario, (the “Whitby Property”), that we and SmartCentres developed into a self storage facility that became operational in January 2024.
Added
Upon completion of development, we expect to serve as property manager of the self storage property. As of December 31, 2024, the carrying value of this investment was approximately $6.0 million.
Added
Equity in earnings (loss) will generally be recognized based on our ownership interest in the earnings (loss) of each of the unconsolidated investments.
Added
(6) As of December 31, 2024, these properties were encumbered by first mortgages pursuant to the RBC JV Term Loan (defined below). (7) This property is encumbered by a first mortgage pursuant to the SmartCentres Financings (defined below).

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe table below sets forth the calculation of our Estimated Per Share NAV as of September 30, 2023 and our previous estimated value per share as of September 30, 2022: September 30, September 30, Assets 2023 2022 Real Estate Properties $ 2,726,668,843 $ 2,713,719,123 Additional assets Cash 34,239,378 41,193,848 Restricted Cash 9,572,290 8,673,253 Investments in Unconsolidated JV's 77,773,171 53,382,222 Other assets 53,380,943 68,191,538 Managed REIT Platform 146,800,000 124,780,000 Total Assets $ 3,048,434,625 $ 3,009,939,984 Liabilities Debt $ 1,059,001,412 $ 1,043,438,537 Mark-to-market on mortgage debt (38,510,001 ) (37,004,302 ) Accounts payable and accrued liabilities 40,711,053 29,981,882 Due to affiliates 84,000 409,730 Distributions payable 8,927,504 9,088,802 Total Liabilities $ 1,070,213,968 $ 1,045,914,649 Net Asset Value 1,978,220,657 1,964,025,335 Preferred Equity (1) - - Net Asset Value to Common $ 1,978,220,657 $ 1,964,025,335 Net Asset Value for Class A shares $ 1,854,366,321 $ 1,841,027,171 Number of Class A shares outstanding (1)(2) 121,589,335 121,023,898 Estimated value per Class A share $ 15.25 $ 15.21 Net Asset Value for Class T shares $ 123,854,336 $ 122,998,164 Number of Class T shares outstanding 8,121,031 8,085,550 Estimated value per Class T share $ 15.25 $ 15.21 (1) The outstanding shares of our Series A Convertible Preferred Stock (the “Series A Convertible Preferred Stock”) are convertible into shares of our Class A common stock on or after the second anniversary of the effective date (October 29, 2021) of that certain preferred stock purchase agreement by and between us and Extra Space Storage LP (the “Preferred Stock Purchase Agreement”).
Biggest changeJune 30, September 30, Assets 2024 2023 Real Estate Properties $ 2,683,909 $ 2,726,669 Additional assets Cash 34,677 34,239 Restricted Cash 7,368 9,573 Investments in Unconsolidated JV's 93,313 77,773 Other assets 50,918 53,381 Management Company 146,190 146,800 Total Assets $ 3,016,375 $ 3,048,435 Liabilities Debt $ 1,110,041 $ 1,059,001 Mark-to-market on mortgage debt (29,536 ) (38,510 ) Accounts payable and accrued liabilities 39,196 40,711 Due to affiliates 69 84 Distributions payable 8,736 8,928 Total Liabilities $ 1,128,506 $ 1,070,214 Net Asset Value 1,887,869 1,978,221 Preferred Equity (1) - - Net Asset Value to Common $ 1,887,869 $ 1,978,221 Net Asset Value for Class A shares $ 1,770,029 $ 1,854,366 Number of Class A shares outstanding (1)(2) 122,036,466 121,589,335 Estimated value per Class A share $ 14.50 $ 15.25 Net Asset Value for Class T shares $ 117,840 $ 123,854 Number of Class T shares outstanding 8,124,618 8,121,031 Estimated value per Class T share $ 14.50 $ 15.25 (1) The outstanding shares of our Series A Convertible Preferred Stock (the “Series A Convertible Preferred Stock”) are convertible into shares of our class A common stock on or after the second anniversary of the effective date (October 29, 2021) of that certain preferred stock purchase agreement by and between us and Extra Space Storage LP (the “Preferred Stock Purchase Agreement”).
Although Stanger reviewed information supplied or otherwise made available by us for reasonableness, Stanger assumed and relied upon the accuracy and completeness of all such information and of all information supplied or otherwise made available to Stanger by any other party and did not independently verify any such information.
Although Stanger reviewed information supplied or otherwise made available by us for reasonableness, Stanger assumed and relied upon the accuracy and completeness of all such information and of all information supplied or otherwise made available to Stanger by any other party and did not independently verify such information.
Accordingly, with respect to the Estimated Per Share NAV, the Company can give no assurance that: • a stockholder would be able to resell his or her Class A shares of common stock or Class T shares of common stock at the Estimated Per Share NAV; • a stockholder would ultimately realize distributions per share equal to the Estimated Per Share NAV upon liquidation of our assets and settlement of its liabilities or a sale of the Company; • our shares of Class A common stock and Class T common stock would trade at the Estimated Per Share NAV on a national securities exchange; • a different independent third-party appraiser or other third-party valuation firm would agree with the Estimated Per Share NAV; or • the Estimated Per Share NAV, or the methodology used to estimate the Estimated Per Share NAV, will be found by any regulatory authority to comply with the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code of 1986, as amended, or other regulatory requirements.
Accordingly, with respect to the Estimated Per Share NAV, the Company can give no assurance that: • a stockholder would be able to resell his or her Class A shares of common stock or Class T shares of common stock at the Estimated Per Share NAV; • a stockholder would ultimately realize distributions per share equal to the Estimated Per Share NAV upon liquidation of our assets and settlement of its liabilities or a sale of the Company; • our shares of class A common stock and class T common stock would trade at the Estimated Per Share NAV on a national securities exchange; • a different independent third-party appraiser or other third-party valuation firm would agree with the Estimated Per Share NAV; or 42 • the Estimated Per Share NAV, or the methodology used to estimate the Estimated Per Share NAV, will be found by any regulatory authority to comply with the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code of 1986, as amended, or other regulatory requirements.
Certain balances, such as intangible assets and liabilities and deferred financing costs, have been eliminated for the purpose of the valuation due to the fact that the value of those balances were already considered in the valuation of the respective investments Managed REIT Platform Value To derive the estimated value range of the Managed REIT Platform, Stanger estimated the market value associated with our asset management and property management contracts (the “Management Contracts”) with us, Strategic Storage Growth Trust III, Inc.
Certain balances, such as intangible assets and liabilities and deferred financing costs, have been eliminated for the purpose of the valuation due to the fact that the value of those balances were already considered in the valuation of the respective investments. 41 Managed REIT Platform Value To derive the estimated value range of the Managed REIT Platform, Stanger estimated the market value associated with our asset management and property management contracts (the “Management Contracts”) with us, Strategic Storage Growth Trust III, Inc.
Such OP Units are, or will be upon vesting (as applicable), exchangeable on a one-for-one basis into Class A shares of our common stock. Further, the value of our shares will fluctuate over time as a result of, among other things, developments related to individual assets and responses to the real estate and capital markets.
Such OP Units are, or will be upon vesting (as applicable), exchangeable on a one-for-one basis into Class A shares of Company’s common stock. Further, the value of our shares will fluctuate over time as a result of, among other things, developments related to individual assets and responses to the real estate and capital markets.
Our goal in calculating the Estimated Per Share NAV is to arrive at a value that is reasonable and supportable using what the Committee and the Board each deems to be appropriate valuation methodologies and assumptions. FINRA’s current rules provide no guidance on the methodology an issuer must use to determine its Estimated Per Share NAV.
Our goal in calculating the Estimated Per Share NAV is to arrive at a value that is reasonable and supportable using what the Committee and the Board each deems to be appropriate valuation methodologies and assumptions. 38 FINRA’s current rules provide no guidance on the methodology an issuer must use to determine its Estimated Per Share NAV.
The Estimated Per Share NAV is not audited 38 and does not represent the fair value of our assets less its liabilities according to U.S. generally accepted accounting principles (“GAAP”), nor does it represent a liquidation value of our assets and liabilities or the amount our shares of common stock would trade at on a national securities exchange.
The Estimated Per Share NAV is not audited and does not represent the fair value of our assets less its liabilities according to U.S. generally accepted accounting principles (“GAAP”), nor does it represent a liquidation value of our assets and liabilities or the amount our shares of common stock would trade at on a national securities exchange.
The Company does not believe that there are any material conflicts of interest between Stanger, on the one hand, and the Company, and their affiliates, on the other hand. We engaged Stanger, with approval from the Committee, to deliver its Reports to assist in the net asset value calculation and Stanger received compensation for those efforts.
The Company does not believe that there are any material conflicts of interest between Stanger, on the one hand, and the Company, and their affiliates, on the other hand. We engaged Stanger, with approval from the Committee, to deliver 39 its Reports to assist in the net asset value calculation and Stanger received compensation for those efforts.
Different parties using different assumptions and estimates could derive a different Estimated Per Share NAV, and these differences could be significant. The value of our shares will fluctuate over time in response to developments related to individual assets in our portfolio and the management of those assets and in response to the real estate and finance markets.
Different parties using different assumptions and estimates could derive a different Estimated Per Share NAV, and these differences could be significant. The value of the Company's shares will fluctuate over time in response to developments related to individual assets in our portfolio and the management of those assets and in response to the real estate and finance markets.
To derive the estimated value range of the Managed REIT Platform, Stanger also estimated the market value associated with the agreements between us, SSGT III and SST VI related to the tenant insurance, tenant protection plans or similar 41 programs (“Tenant Protection Programs”) using a direct capitalization approach.
To derive the estimated value range of the Managed REIT Platform, Stanger also estimated the market value associated with the agreements between us, SSGT III and SST VI related to the tenant insurance, tenant protection plans or similar programs (“Tenant Protection Programs”) using a direct capitalization approach.
The performance graph below is a comparison of the cumulative total return of our shares of Class A common stock, the Standard and Poor’s 500 Index (“S&P 500”), the FTSE NAREIT All Equity REITs Index and the Russell 2000 Index (“Russell 2000”), assuming a starting investment of $100 on December 31, 2018 and reinvestment of distributions.
The performance graph below is a comparison of the cumulative total return of our shares of class A common stock, the Standard and Poor’s 500 Index (“S&P 500”), the FTSE NAREIT All Equity REITs Index and the Russell 2000 Index (“Russell 2000”), assuming a starting investment of $100 on December 31, 2019 and reinvestment of distributions.
We currently anticipates publishing a new estimated share value on an annual basis. 43 Distributions We elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Code beginning with the taxable year ended December 31, 2014.
We currently anticipate publishing a new estimated share value on an annual basis. 43 Distributions We elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Code beginning with the taxable year ended December 31, 2014.
The weighted-average discount rate applied to the future estimated debt payments of the Outstanding Debt was approximately 6.72%. While we believe that Stanger’s assumptions and inputs are reasonable, a change in these assumptions and inputs would significantly impact the calculation of the estimated value of the Outstanding Debt and thus, the Estimated Per Share NAV.
The weighted-average discount rate applied to the future estimated debt payments of the Outstanding Debt was approximately 6.88%. While we believe that Stanger’s assumptions and inputs are reasonable, a change in these assumptions and inputs would significantly impact the calculation of the estimated value of the Outstanding Debt and thus, the Estimated Per Share NAV.
Stanger has assumed that any operating or financial forecasts and other information and data provided to or otherwise reviewed by or discussed with Stanger were reasonably prepared in good faith on the basis of reflecting the best currently available estimates and judgments of our management and/or the Board.
Stanger has assumed that any operating or financial forecasts and other information and data provided to or otherwise reviewed by or discussed with Stanger were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of our management and/or the Board.
The total aggregate purchase price of the wholly-owned appraised properties in the Stanger Appraisal Report was approximately $1.9 billion. In addition, through the Valuation Date, the Company had invested approximately $90 million in capital improvements on these real estate assets since inception.
The total aggregate purchase price of the wholly-owned appraised properties in the Stanger Appraisal Report was approximately $1.9 billion. In addition, through the Valuation Date, the Company had invested approximately $97 million in capital improvements on these real estate assets since inception.
In performing its analyses, Stanger made numerous assumptions using various points in time with respect to industry performance, general business, economic, and regulatory conditions, and other matters, many of which are beyond its control and our control. Stanger also made assumptions with respect to certain factual matters.
In performing its analyses, Stanger made numerous other assumptions as of various points in time with respect to industry performance, general business, economic, and regulatory conditions, and other matters, many of which are beyond its control and our control. Stanger also made assumptions with respect to certain factual matters.
Independent Valuation Firm Stanger was selected by the Committee to appraise and provide a value on the 164 Stanger Appraised Properties. Stanger is engaged in the business of appraising commercial real estate properties and is not affiliated with the Company.
Independent Valuation Firm Stanger was selected by the Committee to appraise and provide a value on the 167 Stanger Appraised Properties. Stanger is engaged in the business of appraising commercial real estate properties and is not affiliated with the Company.
In addition, Stanger was previously engaged by the Committee and performed a net asset value calculation for us for the periods ended 39 September 30, 2022, June 30, 2021 and December 31, 2019. In 2021, Stanger was also engaged to provide other financial advisory services to the Company.
In addition, Stanger was previously engaged by the Committee and performed a net asset value calculation for us for the periods ended September 30, 2023, September 30, 2022, June 30, 2021 and December 31, 2019. In 2021, Stanger was also engaged to provide other financial advisory services to us.
Stanger has in the past and may from time to time in the future perform other services for us or the managed REITs, so long as such other services do not adversely affect the independence of Stanger as certified in the applicable Stanger Appraisal Report.
Stanger may from time to time in the future perform other services for us or the managed REITs, so long as such other services do not adversely affect the independence of Stanger as certified in the applicable Stanger Appraisal Report.
The process for estimating the value of our assets and liabilities was performed in accordance with the provisions of the IPA Valuation Guidelines. 37 After considering all information provided, including the Committee’s receipt and review of the Stanger Appraisal Report and the Stanger NAV Report (the “Reports”), and based on the Committee’s extensive knowledge of our assets and liabilities, the Committee concluded that the range in estimated value per share of $14.14 to $16.46, with a mid-point estimated value per share of $15.25, as indicated in the Stanger NAV Report was reasonable and recommended to the Board that it adopt $15.25 as the Estimated Per Share NAV for our Class A shares and Class T shares.
The process for estimating the value of our assets and liabilities was performed in accordance with the provisions of the IPA Valuation Guidelines. 37 After considering all information provided, including the Committee’s receipt and review of the Stanger Appraisal Report and the Stanger NAV Report (the “Reports”), and based on the Committee’s extensive knowledge of our assets and liabilities, the Committee concluded that the range in estimated value per share of $13.43 to $15.67, with a mid-point estimated value per share of $14.50, as indicated in the Stanger NAV Report was reasonable and recommended to the Board that it adopt $14.50 as the Estimated Per Share NAV for our Class A shares and Class T shares.
The table below illustrates the impact on the Estimated Per Share NAV if the direct capitalization rates were adjusted by 25 basis points or 5%, assuming the mid-point value conclusion for each Stanger Appraised Property is based on the method being sensitized and all other factors remain unchanged: Estimated Per Share NAV due to: Increase 25 Basis Points Decrease 25 Basis Points Increase 5.0% Decrease 5.0% Direct Capitalization Rate $ 14.14 $ 16.46 $ 14.21 $ 16.40 Debt Values for our secured mortgage debt and other Company debt outstanding (the “Outstanding Debt”) were estimated by Stanger using a discounted cash flow analysis, which used inputs based on the remaining loan terms and estimated current market interest rates for debt with similar characteristics, including remaining loan term, loan-to-value ratios, debt-service-coverage ratios, customary affirmative and negative covenants, prepayment terms, and collateral attributes.
The table below illustrates the impact on the Estimated Per Share NAV if the direct capitalization rates were adjusted by 25 basis points or 5%, assuming the mid-point value conclusion for each Stanger Appraised Property is based on the method being sensitized and all other factors remain unchanged: Estimated Per Share NAV due to: Increase 25 Basis Points Decrease 25 Basis Points Increase 5.0% Decrease 5.0% Direct Capitalization Rate $ 13.43 $ 15.67 $ 13.47 $ 15.64 Debt Values for our secured mortgage debt and other Company debt outstanding (the “Outstanding Debt”) were estimated by Stanger using a discounted cash flow analysis, which used inputs based on the remaining loan terms and estimated current market interest rates for debt with similar characteristics, including remaining loan term, loan-to-value ratios, debt-service-coverage ratios, customary affirmative and negative covenants, prepayment terms, and collateral attributes.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information As of March 13, 2024, we had approximately 88.8 million Class A Shares outstanding and approximately 8.1 million Class T Shares outstanding, held by a total of approximately 19,000 stockholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information As of March 10, 2025, we had approximately 88.1 million Class A Shares outstanding and approximately 8.2 million Class T Shares outstanding, held by a total of approximately 19,000 stockholders of record.
The Estimated Per Share NAV is based on the estimated value of our assets less the estimated value of our liabilities, divided by the number of shares outstanding on a fully diluted basis, calculated as of September 30, 2023 (the “Valuation Date”).
The Estimated Per Share NAV is based on the estimated value of our assets less the estimated value of our liabilities, divided by the number of shares outstanding on a fully diluted basis, calculated as of June 30, 2024 (the “Valuation Date”).
Stanger also prepared a net asset value report (the “Stanger NAV Report”) which estimates the net asset value range per share of each of our Class A common stock and Class T common stock as of September 30, 2023.
Stanger also prepared a net asset value report (the “Stanger NAV Report”) which estimates the net asset value range per share of each of our class A common stock and class T common stock as of June 30, 2024.
The following summarizes the key assumptions that were used in the direct capitalization models to arrive at the mid-point appraised value of the Stanger Appraised Properties: Assumption Range Weighted Average Direct Capitalization rate 4.25% to 5.75% 4.95% 40 While we believe that Stanger’s assumptions and inputs are reasonable, a change in these assumptions and inputs would significantly impact the calculation of the appraised value of the Stanger Appraised Properties and thus, the Estimated Per Share NAV.
The following summarizes the key assumptions that were used in the direct capitalization models to arrive at the mid-point appraised value of the Stanger Appraised Properties: Assumption Range Weighted Average Direct Capitalization rate 4.50% to 6.00% 5.08% While we believe that Stanger’s assumptions and inputs are reasonable, a change in these assumptions and inputs would significantly impact the calculation of the appraised value of the Stanger Appraised Properties and thus, the Estimated Per Share NAV.
Stanger deducted estimated lease up costs for properties that were not considered stabilized and adjusted the value conclusion of properties for any identified deferred maintenance.
Stanger deducted estimated lease up costs for properties that were not considered stabilized and adjusted the value conclusion of properties that suffered from deferred maintenance.
As of the Valuation Date, the total value range of the wholly-owned appraised properties was approximately $2.6 billion to $2.9 billion. The mid-point appraised value of approximately $2.7 billion represents an approximately 35.5% increase in the total value of the real estate assets over the aggregate purchase price and aggregate improvements.
As of the Valuation Date, the total value range of the 40 wholly-owned appraised properties was approximately $2.6 billion to $2.8 billion. The mid-point appraised value of approximately $2.7 billion represents an approximately 32.3% increase in the total value of the real estate assets over the aggregate purchase price and aggregate improvements.
The Board’s Determination of the Estimated Per Share NAV Based upon a review of the Reports provided by Stanger, upon the recommendation of the Committee, the board of directors estimated the Estimated Per Share NAV for each of the Class A common stock and Class T common stock to be $15.25.
The Board’s Determination of the Estimated Per Share NAV Based upon a review of the Reports provided by Stanger, upon the recommendation of the Committee, the Board declared the Estimated Per Share NAV for each of the class A common stock and class T common stock to be $14.50.
During the three months ended December 31, 2023, we redeemed shares as follows: For the Month Ended Total Number of Shares Redeemed Average Price Paid per Share Total Number of Shares Redeemed as Part of Publicly Announced Plans or Programs Maximum Number of Shares (or Units) That May Yet to be Purchased Under the Plans or Programs October 31, 2023 460,196 $ 15.21 460,196 3,348,293 (1) November 30, 2023 — — — 3,348,293 (1) December 31, 2023 — — — 3,348,293 (1) (1) A description of the maximum number of shares that may be purchased under our SRP is included in Note 12 – Commitments and Contingencies, of the Notes to the Consolidated Financial Statements contained in this report.
During the three months ended December 31, 2024, we redeemed shares as follows: For the Month Ended Total Number of Shares Redeemed Average Price Paid per Share Total Number of Shares Redeemed as Part of Publicly Announced Plans or Programs Maximum Number of Shares (or Units) That May Yet to be Purchased Under the Plans or Programs October 31, 2024 826,738 $ 15.25 826,738 2,621,037 (1) November 30, 2024 — — — 2,621,037 (1) December 31, 2024 — — — 2,621,037 (1) (1) A description of the maximum number of shares that may be purchased under our SRP is included in Note 12 – Commitments and Contingencies, of the Notes to the Consolidated Financial Statements contained in this report.
Real Estate Valuation As described above, the Company engaged Stanger to provide an appraisal containing a range of market value of the Stanger Appraised Properties consisting of 156 wholly-owned properties and eight properties held in unconsolidated joint ventures in our portfolio as of September 30, 2023.
Real Estate Valuation As described above, the Company engaged Stanger to provide an appraisal containing a range of market value of the Stanger Appraised Properties consisting of 157 wholly-owned properties and 10 properties held in unconsolidated joint ventures in our portfolio as of June 30, 2024.
Stanger prepared an appraisal report (the “Stanger Appraisal Report”) summarizing key information and assumptions and providing an appraised value range on 156 wholly-owned properties and eight properties held in unconsolidated joint ventures in our portfolio as of September 30, 2023 (collectively, the “Stanger Appraised Properties”).
Stanger prepared an appraisal report (the “Stanger Appraisal Report”) summarizing key information and assumptions and providing an appraised value range on 157 wholly-owned properties and 10 properties held in unconsolidated joint ventures in our portfolio as of June 30, 2024 (collectively, the “Stanger Appraised Properties”).
Determination of Estimated Per Share Net Asset Value On January 15, 2024, our board of directors (the “Board”), at the recommendation of the Nominating and Corporate Governance Committee of the Board (the “Committee”), unanimously approved and established an estimated net asset value per share (“Estimated Per Share NAV”).
Determination of Estimated Per Share Net Asset Value On March 12, 2025, the board of directors (the “Board”), at the recommendation of the Nominating and Corporate Governance Committee of the Board (the “Committee”), unanimously approved and established an estimated net asset value per share (“Estimated Per Share NAV”).
Pursuant to the terms of our charter, certain restrictions are imposed on the ownership and transfer of shares. On March 7, 2022, our board of directors approved the suspension of our distribution reinvestment plan and share redemption program.
Pursuant to the terms of our charter, certain restrictions are imposed on the ownership and transfer of shares. On November 25, 2024, our board of directors approved the full suspension of our distribution reinvestment plan and share redemption program.
The table below illustrates the impact on the Estimated Per Share NAV if the market interest rate of the Outstanding Debt were adjusted by 25 basis points or 5%, and assuming all other factors remain unchanged: Estimated Per Share NAV due to: Decrease 25 Basis Points Increase 25 Basis Points Decrease 5.0% Increase 5.0% $ 15.21 $ 15.31 $ 15.20 $ 15.32 Cash, Other Assets, Other Liabilities and Preferred Equity The fair value of our cash, other assets, and other liabilities were estimated by us to approximate carrying value as of the Valuation Date.
The table below illustrates the impact on the Estimated Per Share NAV if the market interest rate of the Outstanding Debt were adjusted by 25 basis points or 5%, and assuming all other factors remain unchanged: Estimated Per Share NAV due to: Decrease 25 Basis Points Increase 25 Basis Points Decrease 5.0% Increase 5.0% $ 14.43 $ 14.57 $ 14.41 $ 14.60 Cash, Other Assets, Other Liabilities and Preferred Equity The fair value of our cash, other assets, other liabilities and investments in and advances to our Managed REITs were estimated by us to approximate carrying value as of the Valuation Date.
The current market interest rate was generally determined based on market rates for available comparable debt. The estimated current market interest rates ranged from 5.70% to 7.90% for the Outstanding Debt. As of September 30, 2023, Stanger’s estimated fair value of our consolidated Outstanding Debt was approximately $1.0 billion.
The current market interest rate was generally determined based on market rates for available comparable debt. The estimated current market interest rates ranged from 5.80% to 7.55% for the Outstanding Debt. As of June 30, 2024, Stanger’s estimated fair value of our consolidated Outstanding Debt was approximately $1.08 billion.
Approximately $36.7 million of the 2021 total distributions, composed of approximately 80% of our common stockholder distributions and none of our preferred stockholder distributions, constituted a non-taxable return of capital.
Approximately $54.4 million of the 2024 total distributions, composed of approximately 93.6% of our common stockholder distributions and none of our preferred stockholder distributions, constituted a non-taxable return of capital.
For 2021, we paid a total of approximately $64.1 million in distributions, which consisted of approximately $45.7 million to our common stockholders, approximately $6.1 million to our OP Unit holders, and approximately $12.3 million to our preferred stockholder.
For 2024, we paid a total of approximately $79.6 million in distributions, which consisted of approximately $58.0 million to our common stockholders, approximately $8.6 million to our OP Unit holders, and approximately $12.5 million to our preferred stockholder.
The Estimated Per Share NAV was based upon 129,710,366 shares of common equity or equivalent interests outstanding as of September 30, 2023, which was composed of (i) 88,835,383 Class A shares of our common stock, plus (ii) 8,121,031 outstanding Class T shares of our common stock, plus (iii) 18,761,726 shares related to the assumed conversion of the Series A Convertible Preferred Stock into common shares, plus (iv) 13,992,226 OP Units, of which 1,128,052 are unvested OP Units issued to our directors and management.
The Estimated Per Share NAV was based upon 130,161,084 shares of common equity or equivalent interests outstanding as of June 30, 2024, which was composed of (i) 88,696,458 Class A shares of our common stock, plus (ii) 8,124,618 outstanding Class T shares of our common stock, plus (iii) 18,761,726 shares related to the assumed conversion of the Series A Convertible Preferred Stock into common shares, plus (iv) 14,578,282 OP Units, of which 1,332,923 are unvested OP Units issued to our directors and executive management.
Similarly, the amount a stockholder may receive upon repurchase of their shares, if they participate in our share redemption program and such redemption program is available, may be greater than or less than the amount a stockholder paid for the shares, regardless of any increase in the underlying value of any assets owned by us. 42 The Estimated Per Share NAV is based on the estimated value of our assets less the estimated value of our liabilities divided by the number of shares outstanding on an adjusted fully diluted basis, calculated as of September 30, 2023.
Similarly, the amount a stockholder may receive upon repurchase of their shares, if they participate in our share redemption program and such redemption program is available, may be greater than or less than the amount a stockholder paid for the shares, regardless of any increase in the underlying value of any assets owned by the Company.
Share Redemption Program Our share redemption program enables our stockholders to have their shares redeemed by us, subject to the significant conditions and limitations described in our publicly filed documents.
Share Redemption Program Our share redemption program enables our stockholders to have their shares redeemed by us, subject to the significant conditions and limitations described in our publicly filed documents. As of December 31, 2024, approximately $62.0 million of common stock was available for redemption.
Our share redemption program is presently suspended, except with respect to redemption requests made in connection with the death or disability of a stockholder, redemption due to confinement to a long-term care facility, or other exigent circumstances. See Note 12 – Commitments and Contingencies, of the Notes to the Consolidated Financial Statements contained in this report for additional information.
Our share redemption program is presently suspended. See Note 12 – Commitments and Contingencies, of the Notes to the Consolidated Financial Statements contained in this report for additional information.
The following table shows the distributions we have paid in cash and through our distribution reinvestment plan for the years ended December 31, 2022 and 2023: Quarter OP Unit Holders (1) Preferred Stockholder (2) Common Stockholders (1) Distributions Declared per Common Share 1st Quarter 2022 $ 1,597,751 $ 3,150,685 $ 12,424,264 $ 0.15 2nd Quarter 2022 $ 1,763,224 $ 3,082,192 $ 13,020,126 $ 0.15 3rd Quarter 2022 $ 1,903,553 $ 3,116,438 $ 14,710,548 $ 0.15 4th Quarter 2022 $ 2,036,687 $ 3,150,685 $ 14,480,242 $ 0.15 1st Quarter 2023 $ 2,005,649 $ 3,150,685 $ 14,684,560 $ 0.15 2nd Quarter 2023 $ 2,138,485 $ 3,082,192 $ 14,746,039 $ 0.15 3rd Quarter 2023 $ 2,106,602 $ 3,116,438 $ 14,339,518 $ 0.15 4th Quarter 2023 $ 2,022,160 $ 3,150,685 $ 14,464,023 $ 0.15 (1) Declared distributions are paid monthly in arrears.
The following table shows the distributions we have paid in cash and through our distribution reinvestment plan for the years ended December 31, 2023 and 2024 (amounts in thousands, except per share data): Quarter OP Unit Holders (1) Preferred Stockholder (2) Common Stockholders (1) Distributions Declared per Common Share 1st Quarter 2023 $ 2,006 $ 3,151 $ 14,685 $ 0.15 2nd Quarter 2023 $ 2,138 $ 3,082 $ 14,746 $ 0.15 3rd Quarter 2023 $ 2,107 $ 3,116 $ 14,340 $ 0.15 4th Quarter 2023 $ 2,022 $ 3,151 $ 14,464 $ 0.15 1st Quarter 2024 $ 2,304 $ 3,151 $ 14,501 $ 0.15 2nd Quarter 2024 $ 2,107 $ 3,108 $ 14,609 $ 0.15 3rd Quarter 2024 $ 2,110 $ 3,108 $ 14,553 $ 0.15 4th Quarter 2024 $ 2,085 $ 3,142 $ 14,381 $ 0.15 (1) Declared distributions are paid monthly in arrears.
All other redemptions remain suspended at this time. See Note 12 – Commitments and Contingencies of the Notes to the Consolidated Financial Statements contained in this report for additional information. Unless and until our shares are listed for trading on a national securities exchange, it is not expected that a public market for our shares will develop.
Unless and until our shares are listed for trading on a national securities exchange, it is not expected that a public market for our shares will develop.
Removed
On March 16, 2023, the distribution reinvestment plan was fully reinstated and the share redemption program was partially reinstated to allow for redemptions solely sought in connection with a stockholder's death, "qualifying disability" (as that term is defined in the share redemption program), confinement to a long-term care facility, or other exigent circumstances.
Added
See Note 12 – Commitments and Contingencies of the Notes to the Consolidated Financial Statements contained in this report for additional information.
Removed
These amounts include investments in and advances to our managed REITs.
Added
On February 11, 2025, our board of directors reinstated the DRP Offering, such that distributions for the month of January 2025 as well as any distributions declared by our board of directors for any future months will be invested in shares of our common stock for those stockholders that previously elected into our distribution reinvestment plan in such states where our distribution reinvestment plan is able to be offered.
Removed
As of December 31, 2023, approximately $71.3 million of common stock was available for redemption and an additional approximately $3.9 million was included in accrued expenses and other liabilities as of December 31, 2023.
Added
The table below sets forth the calculation of our Estimated Per Share NAV as of June 30, 2024 and our previous estimated value per share as of September 30, 2023 (amounts in thousands, except share and per share data).
Added
The Estimated Per Share NAV is based on the estimated value of our assets less the estimated value of our liabilities divided by the number of shares outstanding on an adjusted fully diluted basis, calculated as of June 30, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

101 edited+47 added−31 removed76 unchanged
Biggest changeFFO and FFO, as adjusted, should be reviewed in conjunction with other measurements as an indication of our performance. 57 The following is a reconciliation of net income (loss) (attributable to common stockholders), which is the most directly comparable GAAP financial measure, to FFO and FFO, as adjusted (attributable to common stockholders), and FFO and FFO, as adjusted (attributable to common stockholders and OP unit holders) for each of the periods presented below: Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Net income (loss) (attributable to common stockholders) $ (2,745,698 ) $ 6,321,880 $ (29,401,595 ) Add: Depreciation of real estate 52,619,881 48,400,073 40,158,233 Amortization of real estate related intangible assets 6,301,682 14,628,068 11,030,316 Depreciation and amortization of real estate and intangible assets from unconsolidated entities 2,374,675 1,535,416 754,831 Deduct: Gain on deconsolidation — — (169,533 ) Gain on sale of real estate — — (178,631 ) Gain on equity interests upon acquisition (1) — (16,101,237 ) — Adjustment for noncontrolling interests (2) (7,164,542 ) (5,279,214 ) (5,727,520 ) FFO (attributable to common stockholders) 51,385,998 49,504,986 16,466,101 Other Adjustments: Intangible amortization expense - contracts (3) 292,171 572,786 1,391,889 Acquisition expenses (4) 192,358 888,009 934,838 Acquisition expenses and foreign currency (gains) losses, net from unconsolidated entities 69,095 149,094 210,377 Casualty loss due to hurricane (5) — 661,326 — Contingent earnout adjustment (6) — 1,514,447 12,619,744 Write-off of equity interest and preexisting relationships upon acquisition of control — 2,049,682 8,389,573 Accretion of fair market value of secured debt 12,920 (35,738 ) (110,942 ) Net loss on extinguishment of debt (7) — 2,393,475 2,444,788 Foreign currency and interest rate derivative (gains) losses, net (8) (177,811 ) 75,030 366,849 Offering related expenses (9) 791,918 1,802,945 — Adjustment of deferred tax assets and liabilities (3) (3,300,688 ) (1,073,317 ) (2,025,869 ) Sponsor funding reduction (10) 33,643 — — Adjustment for noncontrolling interests in our Operating Partnership 245,470 (1,017,068 ) (2,720,691 ) FFO, as adjusted (attributable to common stockholders) $ 49,545,074 $ 57,485,657 $ 37,966,657 FFO (attributable to common stockholders) $ 51,385,998 $ 49,504,986 $ 16,466,101 Net income (loss) attributable to the noncontrolling interests in our Operating Partnership 1,313,566 2,536,297 (2,663,123 ) Adjustment for noncontrolling interests in our Operating Partnership (2) 7,164,542 5,279,214 5,727,520 FFO (attributable to common stockholders and OP unit holders) $ 59,864,106 $ 57,320,497 $ 19,530,498 FFO, as adjusted (attributable to common stockholders) $ 49,545,074 $ 57,485,657 $ 37,966,657 Net income (loss) attributable to the noncontrolling interests in our Operating Partnership 1,313,566 2,536,297 (2,663,123 ) Adjustment for noncontrolling interests in our Operating Partnership (2) 6,919,072 6,296,282 8,448,211 FFO, as adjusted (attributable to common stockholders and OP unit holders) $ 57,777,712 $ 66,318,236 $ 43,751,745 58 (1) This gain relates to the mark up in fair value of our preexisting equity interests in SSGT II as a result of our acquisition of control in the SSGT II Merger.
Biggest changeThe following is a reconciliation of net income (loss) (attributable to common stockholders), which is the most directly comparable GAAP financial measure, to FFO and FFO, as adjusted (attributable to common stockholders), and FFO and 57 FFO, as adjusted (attributable to common stockholders and OP unit holders) for each of the periods presented below (in thousands): Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022 Net income (loss) (attributable to common stockholders) $ (18,379 ) $ (2,746 ) $ 6,322 Add: Depreciation of real estate 53,975 52,620 48,400 Amortization of real estate related intangible assets 715 6,302 14,628 Depreciation and amortization of real estate and intangible assets from unconsolidated entities 2,615 2,375 1,535 Deduct: Gain on equity interests upon acquisition (1) — — (16,101 ) Adjustment for noncontrolling interests (2) (6,892 ) (7,165 ) (5,279 ) FFO (attributable to common stockholders) 32,034 51,386 49,505 Other Adjustments: Intangible amortization expense - contracts (3) 220 292 573 Acquisition expenses (4) 413 193 888 Acquisition expenses and foreign currency (gains) losses, net from unconsolidated entities 222 69 149 Casualty loss due to hurricane (5) 500 — 661 Contingent earnout adjustment (6) — — 1,514 Write-off of equity interest and preexisting relationships upon acquisition of control — — 2,050 Accretion of fair market value of secured debt 120 13 (36 ) Net loss on extinguishment of debt (7) 471 — 2,393 Foreign currency and interest rate derivative (gains) losses, net (8) 577 (178 ) 75 Offering related expenses (9) 330 792 1,803 Adjustment of deferred tax assets and liabilities (3) 845 (3,301 ) (1,073 ) Sponsor funding reduction (10) 844 34 — Amortization of debt issuance costs (3) 4,115 2,728 2,594 Adjustment for noncontrolling interests in our Operating Partnership (1,042 ) (73 ) (1,306 ) FFO, as adjusted (attributable to common stockholders) (11) $ 39,649 $ 51,955 $ 59,790 FFO (attributable to common stockholders) $ 32,034 $ 51,386 $ 49,505 Net income (loss) attributable to the noncontrolling interests in our Operating Partnership (773 ) 1,314 2,536 Adjustment for noncontrolling interests in our Operating Partnership (2) 6,892 7,165 5,279 FFO (attributable to common stockholders and OP unit holders) $ 38,153 $ 59,865 $ 57,320 FFO, as adjusted (attributable to common stockholders) $ 39,649 $ 51,955 $ 59,790 Net income (loss) attributable to the noncontrolling interests in our Operating Partnership (773 ) 1,314 2,536 Adjustment for noncontrolling interests in our Operating Partnership (2) 7,934 7,238 6,585 FFO, as adjusted (attributable to common stockholders and OP unit holders) (11) $ 46,810 $ 60,507 $ 68,911 (1) This gain relates to the mark up in fair value of our preexisting equity interests in SSGT II as a result of our acquisition of control in the SSGT II Merger.
We believe that overhead costs and maintenance capital expenditures are considerably lower in the self storage industry as compared to other real estate sectors, and as a result of that strong operating leverage, self storage companies are able to achieve comparatively higher operating and cash flow margins.
We believe that overhead costs and maintenance capital expenditures are considerably lower in the self storage industry as compared to other real estate sectors, and as a result of strong operating leverage, self storage companies are able to achieve comparatively higher operating and cash flow margins.
Such expenses consist of costs incurred by us as we provide property management and advisory services to the Managed REITs, which are reimbursed by our Managed REITs, pursuant to our related contracts with the Managed REITs. The increase in reimbursable costs from Managed REITs is primarily related to the growth in the Managed REITs' assets under management.
Such expenses consist of costs incurred by us as we provide property management and advisory services to the Managed REITs, which are reimbursed by the Managed REITs, pursuant to our related contracts with the Managed REITs. The increase in reimbursable costs from Managed REITs is primarily related to the growth in the Managed REITs' assets under management.
Alternatively, we may issue additional secured or unsecured financing from banks or other lenders, or we may enter into various other forms of financing. In April 2022, we received our initial investment grade credit rating of BBB- from Kroll Bond Rating Agency, Inc.
Alternatively, we may issue additional secured or unsecured financing from banks or other lenders, or we may enter into various other forms of financing. In April 2022, we received our initial investment grade credit rating of BBB- from Kroll Bond Rating Agency, Inc ("Kroll").
In determining FFO, as adjusted, we make further adjustments to the NAREIT computation of FFO to exclude the effects of non-real estate related asset impairments and intangible amortization, acquisition related costs, other write-offs incurred in connection with acquisitions, contingent earnout expenses, accretion of fair value of debt adjustments, gains or losses from extinguishment of debt, adjustments of deferred tax assets and liabilities, realized and unrealized gains/losses on foreign exchange transactions, gains/losses on foreign exchange and interest rate derivatives not designated for hedge accounting, and other select non-recurring income or expense items which we believe are not indicative of our overall long-term operating performance.
In determining FFO, as adjusted, we make further adjustments to the NAREIT computation of FFO to exclude the effects of non-real estate related asset impairments and intangible amortization, acquisition related costs, other write-offs incurred in connection with acquisitions, contingent earnout expenses, accretion of fair value of debt adjustments, amortization of debt issuance costs, gains or losses from extinguishment of debt, adjustments of deferred tax assets and liabilities, realized and unrealized gains/losses on foreign exchange transactions, gains/losses on foreign exchange and interest rate derivatives not designated for hedge accounting, and other select non-recurring income or expense items which we believe are not indicative of our overall long-term operating performance.
Long-Term Liquidity and Capital Resources On a long-term basis, our principal demands for funds will be for our property operating expenses, general and administrative expenses, Managed REIT Platform expenses, debt service payments, capital expenditures, property acquisitions, investments in our Managed REITs, required payments pursuant to our Sponsor Funding Agreement, and distributions to our Series A Convertible Preferred stockholder, limited partners in our Operating Partnership, and our stockholders, as necessary to maintain our REIT qualification.
Long-Term Liquidity and Capital Resources On a long-term basis, our principal demands for funds will be for our property operating expenses, general and administrative expenses, Managed REIT Platform expenses, debt service payments, capital expenditures, property acquisitions, investments in our Managed REITs, required payments pursuant to the Sponsor Funding Agreement, and distributions to our Series A Convertible Preferred stockholder, limited partners in our Operating Partnership, and our stockholders, as necessary to maintain our REIT qualification.
These demand drivers produced a 36-month period in which self storage industry fundamentals were very strong 48 relative to historical operating levels, including all-time high occupancy and revenue growth. However, as COVID-related demand waned in 2023, many of the tenants that rented due to the COVID-19 pandemic vacated.
These demand drivers produced a 36-month period in which self storage industry fundamentals were very strong relative to historical operating levels, including all-time high occupancy and revenue growth. However, as COVID-related demand waned in 2023, many of the tenants that rented due to the COVID-19 pandemic vacated.
The White Paper defines FFO as net income (loss) computed in accordance with 56 GAAP, excluding gains or losses from sales of property and real estate related asset impairment write downs, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Additionally, gains and losses from change in control are excluded from the determination of FFO.
The White Paper defines FFO as net income (loss) computed in accordance with GAAP, excluding gains or losses from sales of property and real estate related asset impairment write downs, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Additionally, gains and losses from change in control are excluded from the determination of FFO.
The payment of distributions from sources other than cash flows from operations may reduce the amount of proceeds available for investment and operations or cause us to incur additional interest expense as a result of borrowed funds. Over the long-term, we expect that a greater percentage of our distributions will be paid from cash flows from operations.
The payment of distributions from sources other than cash flows from operations may reduce the amount of proceeds available for investment and operations or cause us to incur additional interest expense as a result of borrowed funds. 62 Over the long-term, we expect that a greater percentage of our distributions will be paid from cash flows from operations.
We currently have fixed or capped interest rates of varying durations for the majority of our loans, either directly or indirectly through our use of interest rate hedges. The rise in overall interest rates has caused an increase in our variable rate borrowing costs and 51 our overall cost of capital, resulting in an increase in net interest expense.
We currently have fixed or capped interest rates of varying durations for the majority of our loans, either directly or indirectly through our use of interest rate hedges. The rise in overall interest rates has caused an increase in our variable rate borrowing costs and our overall cost of capital, resulting in an increase in net interest expense.
We and SmartCentres each serve as a full recourse guarantor with respect to 50% of the secured obligations under the RBC JV Term Loan. We are also party to a master mortgage commitment agreement (the "SmartCentres Financing") with SmartCentres Storage Finance LP (the "SmartCentres Lender").
We and SmartCentres each serve as a full recourse guarantor with respect to 50% of the secured obligations under the RBC JV Term Loan and RBC JV Term Loan II. We are also party to a master mortgage commitment agreement (the "SmartCentres Financing") with SmartCentres Storage Finance LP (the "SmartCentres Lender").
Our evaluation of our VIE's under such accounting guidance could result in a materially different presentation of the financial statements or materially different amounts being reported in the financial statements, as the VIE's included in our consolidated financial statements may vary based on the estimates and assumptions we use.
Our evaluation of our VIE's under such 50 accounting guidance could result in a materially different presentation of the financial statements or materially different amounts being reported in the financial statements, as the VIE's included in our consolidated financial statements may vary based on the estimates and assumptions we use.
(4) This represents acquisition expenses associated with investments in real estate that were incurred prior to the acquisitions becoming probable and therefore not capitalized in accordance with our capitalization policy. (5) Such casualty losses relate to Hurricane Ian, which occurred in September 2022.
(4) This represents acquisition expenses associated with investments in real estate that were incurred prior to the acquisitions becoming probable and therefore were not capitalized in accordance with our capitalization policy. (5) Such casualty losses relate to Hurricane Ian, which occurred in September 2022, and Hurricane Helene, which occurred in September 2024.
If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year in which our qualification is denied.
If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year in which our qualification is denied.
Such expenses consist primarily of compensation-related costs, legal expenses, accounting expenses, transfer agent fees, directors and officers’ insurance expense and board of directors related costs.
Such expenses consist primarily of compensation related costs, marketing related costs, legal expenses, accounting expenses, transfer agent fees, directors and officers’ insurance expense and board of directors related costs.
Such revenues consist of costs incurred by us as we provide property management and advisory services to the Managed REITs, which are reimbursed by the Managed REITs, pursuant to our related contracts with the Managed REITs. The increase in reimbursable costs from Managed REITs is primarily related to the growth in the Managed REITs assets under management.
Such revenues consist of costs incurred by us as we provide property management and advisory services to the Managed REITs, which are reimbursed by the Managed REITs, pursuant to our related contracts with the Managed REITs. The increase in reimbursable costs from Managed REITs was primarily related to the growth in the Managed REITs assets under management.
By qualifying as a REIT for federal income tax purposes, we generally will not be subject to federal income tax on income that we distribute to our stockholders.
By qualifying as a REIT for federal income tax purposes, we generally will not be subject to U.S. federal income tax on income that we distribute to our stockholders.
(2) This represents the portion of the above stated adjustments in the calculations of FFO and FFO, as adjusted, that are attributable to our noncontrolling interests in our Operating Partnership. (3) These items represent the amortization, accretion, or adjustment of intangible assets or deferred tax assets and liabilities.
(2) This represents the portion of the above stated adjustments in the calculations of FFO and FFO, as adjusted, that are attributable to our noncontrolling interests in our Operating Partnership. 58 (3) These items represent the amortization, accretion, or adjustment of intangible assets, debt issuance costs, or deferred tax assets and liabilities.
Same-Store Facility Results – Years Ended December 31, 2023 and 2022 The following table sets forth operating data for our same-store facilities (stabilized and comparable properties that have been included in the consolidated results of operations since January 1, 2022, excluding two other properties) for the years ended December 31, 2023 and 2022.
Same-Store Facility Results – Years Ended December 31, 2024 and 2023 The following table sets forth operating data for our same-store facilities (stabilized and comparable properties that have been included in the consolidated results of operations since January 1, 2023, excluding five other properties) for the years ended December 31, 2024 and 2023.
Based on the Inside Self Storage Top-Operators List ranking for 2023, and after accounting for recent market transactions, we are the 10th largest owner and operator of self storage properties in the United States based on number of properties, units, and rentable square footage.
Based on the Inside Self Storage Top-Operators List ranking for 2024, and after accounting for recent market transactions, we are the 10th largest owner and operator of self storage properties in the United States based on rentable square footage.
Reimbursable Costs from Managed REITs Reimbursable costs from Managed REITs for the years ended December 31, 2023 and 2022 were approximately $5.8 million and $4.6 million, respectively.
Reimbursable Costs from Managed REITs Reimbursable costs from Managed REITs for the years ended December 31, 2024 and 2023 were approximately $6.6 million and $5.8 million, respectively.
We expect reimbursable costs from Managed REITs to fluctuate commensurate with our Managed REITs' increase in operations as we receive reimbursement for providing such services. General and Administrative Expenses General and administrative expenses for the years ended December 31, 2023 and 2022 were approximately $27.5 million and $28.3 million, respectively.
We expect reimbursable costs from the Managed REITs to fluctuate commensurate with our Managed REITs' increase in operations as we receive reimbursement for providing such services. General and Administrative Expenses General and administrative expenses for the years ended December 31, 2024 and 2023 were approximately $29.9 million and $27.5 million, respectively.
The increase in Managed REIT Platform Expenses is primarily related to the growth in the Managed REITs' operations. We expect Managed REIT Platform expenses to fluctuate in future periods commensurate with our level of activity related to the Managed REITs.
The increase in Managed REIT Platform Expenses is primarily related to growth in the Managed REITs' assets under management. We expect Managed REIT Platform expenses to fluctuate in future periods commensurate with our level of activity related to the Managed REITs.
Losses from our equity method investments in Managed REITs consists primarily of our allocation of earnings and losses from our investments in SST VI and SSGT III. Other, Net Other, net for the years ended December 31, 2023 and 2022 was approximately $3.1 million and $0.8 million of income, respectively.
Losses from our equity method investments in Managed REITs consists primarily of our allocation of earnings and losses from our investments in SST VI and SSGT III. Other, Net Other, net for the years ended December 31, 2024 and 2023 was approximately $1.3 million and $0.2 million of expense, respectively.
No impairment charges were recognized during the years ended December 31, 2023, 2022 or 2021. Trademarks Valuation Trademarks are based on the value of our brands.
No impairment charges to goodwill were recognized during the years ended December 31, 2024, 2023 or 2022. Trademarks Valuation Trademarks are based on the value of our brands.
Amortization expense consists of the amortization of our in place lease intangible assets resulting from our self storage acquisitions and amortization of certain intangible assets acquired in the Self Administration Transaction.
Amortization expense consists of the amortization of our in place lease intangible assets resulting from our self storage acquisitions and to a lesser extent, amortization of certain intangible assets acquired in the Self Administration Transaction.
Such expenses primarily consisted of expenses related to non-reimbursable costs associated with the operation of the Managed REIT Platform and the Administrative Services Agreement (as discussed in Note 10 – Related Party Transactions, of the notes to consolidated financial statements contained in this report).
Such expenses primarily consisted of expenses related to non-reimbursable costs associated with the operation of the Managed REIT Platform, some of which were incurred directly and indirectly through the Administrative Services Agreement (as discussed in Note 10 – Related Party Transactions, of the notes to consolidated financial statements contained in this report).
Equity in earnings (losses) from investments in Managed REITs Losses from our equity method investments in the Managed REITs for the years ended December 31, 2023 and 2022 were approximately $1.3 million and $0.9 million, respectively.
Equity in earnings (losses) from investments in Managed REITs Losses from our equity method investments in the Managed REITs for the years ended December 31, 2024 and 2023 were approximately $1.4 million and $1.3 million, respectively.
Property Operating Expenses Property operating expenses for the years ended December 31, 2023 and 2022 were approximately $65.4 million (or 30.4% of self storage revenue) and $58.4 million (or 29.2% of self storage revenue), respectively. Property operating expenses include the costs to operate our facilities including compensation related expenses, utilities, insurance, real estate taxes, and property related marketing.
Property Operating Expenses Property operating expenses for the years ended December 31, 2024 and 2023 were approximately $70.7 million (or 32% of self storage revenue) and $65.4 million (or 30% of self storage revenue), respectively. Property operating expenses include the costs to operate our facilities including compensation related expenses, utilities, insurance, real estate taxes, and property related marketing.
See Note 5 – Debt and Note 14 – Subsequent Events of the Notes to the Consolidated Financial Statements for more information about our indebtedness.
See Note 5 – Debt of the Notes to the Consolidated Financial Statements for more information about our indebtedness.
Other, net consists primarily of certain state tax expenses, foreign currency fluctuations, changes in value related to our foreign currency hedges not designated for hedge accounting, and interest income from loans issued to our Managed REITs, and other miscellaneous items.
Other, net consists primarily of certain state tax expenses, foreign currency fluctuations, changes in value related to our foreign currency and interest rate hedges not designated for hedge accounting, and other miscellaneous items.
Common Stock Distributions On January 26, 2024, our board of directors declared a distribution rate for the month of February 2024 of approximately $0.0475 per share on the outstanding shares of common stock payable to Class A and Class T stockholders of record of such shares as shown on our books at the close of business on February 29, 2024.
On February 26, 2025, our board of directors declared a distribution rate for the month of March 2025 of approximately $0.0510 per share on the outstanding shares of common stock payable to Class A and Class T stockholders of record of such shares as shown on our books at the close of business on March 31, 2025.
Additionally, we expect to see increases in self storage revenues from any future acquisitions. Managed REIT Platform Revenues Managed REIT Platform revenues for the years ended December 31, 2023 and 2022 was approximately $11.9 million and $7.8 million, respectively.
Additionally, we expect to see increases in self storage revenues from our recent and any future acquisitions. 52 Managed REIT Platform Revenues Managed REIT Platform revenues for the years ended December 31, 2024 and 2023 was approximately $11.4 million and $11.9 million, respectively.
Equity in earnings (losses) from investments in JV Properties Losses from our equity method investments in the JV Properties for the years ended December 31, 2023 and 2022 were approximately $1.6 million and $0.8 million, respectively. Losses from our equity method investments in the JV Properties consists of our allocation of earnings and losses from our joint ventures with SmartCentres.
Equity in earnings (losses) from investments in JV Properties Losses from our equity method investments in the JV Properties for the years ended December 31, 2024 and 2023 were approximately $1.4 million and $1.6 million, respectively. Losses from our equity method investments in the JV Properties consists of our allocation of earnings and losses from our unconsolidated joint ventures.
Comparison of the Years Ended December 31, 2023 and 2022 Total Self Storage Revenues Total self storage related revenues for the years ended December 31, 2023 and 2022 were approximately $215.3 million and $200.2 million, respectively.
Comparison of the Years Ended December 31, 2024 and 2023 Total Self Storage Revenues Total self storage related revenues for the years ended December 31, 2024 and 2023 were approximately $219.0 million and $215.3 million, respectively.
This new supply outpaced population growth by nearly five times during that period. We believe the broader shift of people working from home related to the COVID-19 pandemic, elevated migration patterns and strength in the housing market helped drive revenue growth in self storage demand and absorb this supply.
We believe the broader shift of people working from home related to the COVID-19 pandemic, elevated migration patterns and strength in the housing market helped drive revenue growth in self storage demand and absorb this supply.
As of December 31, 2023 and 2022, we wholly-owned 154 and 153 operating self storage facilities, respectively. Our operating results for the year ended December 31, 2023 included full year period results for 153 operating self storage facilities and partial period results for one operating self storage facility acquired during the year ended December 31, 2023.
As of December 31, 2024 and 2023, we wholly-owned 161 and 154 operating self storage facilities, respectively. Our operating results for the year ended December 31, 2024 included full year period results for 153 operating self storage facilities.
We expect self storage revenues to increase in future periods as our lease-up or newly acquired properties increase occupancy and/or rates, and to otherwise primarily fluctuate based on the performance of our same-store pool, which will be influenced by the overall economic environment and increases in self storage supply, amongst other things.
We expect self storage revenues to fluctuate in future periods primarily based on the performance of our same-store pool, which will be influenced by the overall economic environment and increases in self storage supply, amongst other things.
As a result, future distributions declared and paid may exceed cash flow from operations. 62 Indebtedness As of December 31, 2023, our net debt was approximately $1,087.4 million, which included approximately $523.1 million in fixed rate debt, and $568.7 million in variable rate debt, less approximately $0.1 million in debt discount, and approximately $4.3 million in net debt issuance costs.
As a result, future distributions declared and paid may exceed cash flow from operations. Indebtedness As of December 31, 2024, our net debt was approximately $1,317 million, which included approximately $556 million in fixed rate debt, and $766 million in variable rate debt, less approximately $3.4 million in net debt issuance costs and approximately $1.6 million in net debt discount.
(10) Pursuant to the Sponsor Funding Agreement, SmartStop funds certain costs of SST VI's share sales, and in return receives Series C Units in SST VI's OP.
(10) Pursuant to the Sponsor Funding Agreement, SmartStop funds certain costs of SST VI's share sales, and in return receives Series C Units in Strategic Storage Operating Partnership VI, L.P.
Additionally, during the years ended December 31, 2023 and 2022, we recorded expenses of approximately $0.8 million and $1.8 million, respectively, related to our filing of an S-11 registration statement (including subsequent amendments) and related costs in pursuit of a potential offering of our common stock.
During the years ended December 31, 2024 and 2023, we recorded expenses of approximately $0.3 million and $0.8 million, respectively, related to our filing of an amendment to our registration statement on Form S-11 and 53 related costs in pursuit of a potential offering of our common stock.
Our same-store revenue increased by approximately $7.3 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 due to higher annualized rent per occupied square foot, slightly offset by decreased occupancy.
Our same-store revenue increased by approximately $0.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 due to higher annualized rent per occupied square foot, partially offset by the impact of decreased occupancy.
Income Tax (Expense) Benefit Income tax for the years ended December 31, 2023 and 2022 was approximately $2.6 million and $0.6 million of benefit, respectively. Income tax consists primarily of adjustments to deferred tax liabilities, state, federal, and Canadian income tax.
Income Tax (Expense) Benefit Income tax for the years ended December 31, 2024 and 2023 was approximately $1.5 million of expense, and $2.6 million of benefit, respectively. Income tax consists primarily of state, federal, and Canadian income tax.
We have experienced a year-over-year decrease in gross margins as a result for 2023. In 2022, the Federal Reserve began increasing its targeted range for the federal funds rate, leading to increased interest rates. This approach to monetary policy was mirrored by other central banks across the world, to similar effect.
Beginning in 2022, the Federal Reserve began increasing its targeted range for the federal funds rate, leading to increased interest rates. This approach to monetary policy was mirrored by other central banks across the world, to similar effect.
The funds that are available for distribution may be affected by a number of factors, including the following: • our operating and interest expenses; • our ability to keep our properties occupied; • our ability to maintain or increase rental rates; • increases to our property operating expenses; • construction defects or capital improvements; • capital expenditures and reserves for such expenditures; • the issuance of additional shares; • financings and refinancings; and • dividends with respect to the outstanding shares of our Series A Convertible Preferred Stock. 61 The following shows our distributions paid and the sources of such distributions for the respective periods presented: Year Ended December 31, 2023 Year Ended December 31, 2022 Distributions paid in cash – common stockholders $ 40,597,803 $ 49,391,782 Distributions paid in cash – noncontrolling interests 8,860,426 7,301,215 Distributions paid in cash – preferred stockholders 12,500,000 12,500,000 Distributions reinvested 17,636,337 5,243,398 Total distributions $ 79,594,566 $ 74,436,395 Source of distributions Cash flows provided by operations $ 73,191,384 92.0 % $ 74,436,395 100.0 % Offering proceeds from distribution reinvestment plan 6,403,182 8.0 % - 0.0 % Total sources $ 79,594,566 100 % $ 74,436,395 100 % From our inception through December 31, 2023, we paid cumulative distributions of approximately $400.4 million, of which approximately $318.7 million were paid to common stockholders, as compared to cumulative FFO (attributable to common stockholders) of approximately $119.9 million.
The funds that are available for distribution may be affected by a number of factors, including the following: • our operating and interest expenses; • our ability to keep our properties occupied; • our ability to maintain or increase rental rates; • increases to our property operating expenses; • construction defects or capital improvements; • capital expenditures and reserves for such expenditures; • the issuance of additional shares; • financings and refinancings; and • dividends with respect to the outstanding shares of our Series A Convertible Preferred Stock. 61 The following shows our distributions paid and the sources of such distributions for the respective periods presented (in thousands): Year Ended December 31, 2024 Year Ended December 31, 2023 Distributions paid in cash – common stockholders $ 37,377 $ 40,598 Distributions paid in cash – noncontrolling interests 9,072 8,861 Distributions paid in cash – preferred stockholders 12,509 12,500 Distributions reinvested 20,667 17,636 Total distributions $ 79,625 $ 79,595 Source of distributions Cash flows provided by operations $ 64,027 80.4 % $ 73,191 92.0 % Offering proceeds from distribution reinvestment plan 15,598 19.6 % 6,404 8.0 % Total sources $ 79,625 100 % $ 79,595 100 % From our inception through December 31, 2024, we paid cumulative distributions of approximately $479.8 million, of which approximately $376.7 million were paid to common stockholders, as compared to cumulative FFO (attributable to common stockholders) of approximately $151.9 million.
Without a near term change in monetary policy and subsequent reduction in mortgage rates, we expect self storage demand to remain reduced relative to more recent COVID-19 era demand and more comparable to historical averages.
Without a near term change in monetary policy and subsequent reduction in mortgage rates, we expect self storage demand to remain reduced relative to more recent COVID-19 era demand and more comparable to historical averages. Additionally, the broader interest rate and inflationary environment has moderated since the beginning of 2024.
Intangible Assets Valuation In connection with the acquisition of the self storage advisory, asset management and property management businesses and certain joint venture interests of Strategic Asset Management I, LLC (f/k/a SmartStop Asset Management, LLC), our former sponsor (“SAM”), along with certain other assets of SAM (collectively, the “Self Administration Transaction”), we allocated a portion of the consideration to the contracts that we acquired related to the Managed REITs and the customer relationships related to our tenant insurance, tenant protection plans or similar programs (the “Tenant Protection Programs”).
Our evaluation of the impairment of real property assets could result in a materially different presentation of the financial statements or materially different amounts being reported in the financial statements, as the amount of impairment loss, if any, recognized may vary based on the estimates and assumptions we use. 49 Intangible Assets Valuation In connection with the acquisition of the self storage advisory, asset management and property management businesses and certain joint venture interests of Strategic Asset Management I, LLC (f/k/a SmartStop Asset Management, LLC), our former sponsor (“SAM”), along with certain other assets of SAM (collectively, the “Self Administration Transaction”), we allocated a portion of the consideration to the contracts that we acquired related to the Managed REITs and the customer relationships related to our tenant insurance, tenant protection plans or similar programs (the “Tenant Protection Programs”).
As of December 31, 2023, our wholly-owned portfolio consisted of 154 operating self storage properties diversified across 19 states and Canada comprising approximately 104,000 units and 11.9 million net rentable square feet.
As of December 31, 2024, our wholly-owned portfolio consisted of 161 operating self storage properties diversified across 19 states, the District of Columbia, and Canada comprising approximately 110,000 units and 12.6 million net rentable square feet.
(9) Such costs relate to our filing of an S-11 registration statement and our pursuit of a potential offering of our common stock. As this item is non-recurring and not a primary driver in our decision-making process, FFO is adjusted for its effect to arrive at FFO, as adjusted, as a means of determining a comparable sustainable operating performance metric.
As this item is non-recurring and not a primary driver in our decision-making process, FFO is adjusted for its effect to arrive at FFO, as adjusted, as a means of determining a comparable sustainable operating performance metric.
For the year ended December 31, 2022, we paid distributions of approximately $74.4 million, of which approximately $54.6 million was paid to common stockholders, as compared to FFO (attributable to common stockholders) of approximately $49.5 million.
For the year ended December 31, 2024, we paid distributions of approximately $79.6 million, of which approximately $58.0 million was paid to common stockholders, as compared to FFO (attributable to common stockholders) of approximately $32.0 million.
Acquisitions of portfolios of facilities are allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates which take into account the relative size, age, and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available. 49 Our allocations of purchase prices are based on certain significant estimates and assumptions, variations in such estimates and assumptions could result in a materially different presentation of the consolidated financial statements or materially different amounts being reported in the consolidated financial statements.
Acquisitions of portfolios of facilities are allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates which take into account the relative size, age, and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available.
Following is a discussion of the estimates and assumptions used in setting accounting policies that we consider critical in the presentation of our consolidated financial statements.
Preparing financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. Following is a discussion of the estimates and assumptions used in setting accounting policies that we consider critical in the presentation of our consolidated financial statements.
Further, through our Managed REIT Platform (as defined below), we serve as the sponsor of Strategic Storage Trust VI, Inc., a publicly-registered non-traded REIT ("SST VI"), and Strategic Storage Growth Trust III, Inc., a private REIT ("SSGT III" and together with SST VI, the "Managed REITs"), and manage one additional self storage property, all of which pay us fees to manage these programs and manage their 32 operating self storage properties (as of December 31, 2023).
Further, through our Managed REIT Platform (as defined below), we served as the sponsor of Strategic Storage Trust VI, Inc., a publicly-registered non-traded REIT ("SST VI"), and Strategic Storage Growth Trust III, Inc., a private REIT ("SSGT III" and together with SST VI, the "Managed REITs"); additionally, we manage one other self storage property for an affiliated entity, which pays us fees, as applicable, to manage such property.
We consider the following data to be meaningful as this allows for the comparison of results without the effects of acquisition, lease up, or development activity.
We consider the following data to be meaningful as this allows for the comparison of results without the effects of acquisitions, dispositions, development activity, properties impacted by casualty events or lease up properties (in thousands unless otherwise noted).
Cash flows used in financing activities for the year ended December 31, 2023 was approximately $66.1 million, and cash flows provided by financing activities for the year ended December 31, 2022 was approximately $120.1 million, a change of approximately $186.2 million.
Cash flows provided by financing activities for the year ended December 31, 2024 were approximately $94.8 million, whereas cash flows used in financing activities for the year ended December 31, 2023 were approximately $66.1 million, a change of approximately $160.9 million.
Acquisition Expenses Acquisition expenses for the years ended December 31, 2023 and 2022 were approximately $0.2 million and $0.9 million, respectively. These acquisition expenses were incurred prior to acquisitions becoming probable in accordance with our capitalization policy. The decrease in acquisition expenses of approximately $0.7 million is related to reduced acquisition activity.
These acquisition expenses were incurred prior to acquisitions becoming probable in accordance with our capitalization policy. The increase in acquisition expenses of approximately $0.2 million is related to increased acquisition activity.
Our evaluation of the impairment of real property assets could result in a materially different presentation of the financial statements or materially different amounts being reported in the financial statements, as the amount of impairment loss, if any, recognized may vary based on the estimates and assumptions we use.
Our determinations of the useful lives of the assets could result in a materially different presentation of the consolidated financial statements or materially different amounts being reported in the financial statements, as such determinations, and the corresponding amount of depreciation expense, may vary dramatically based on the estimates and assumptions we use.
The proceeds of the SmartCentres Financing have been and will be used to finance the development and construction of the SmartCentres joint venture properties.
The proceeds of the SmartCentres Financing have been and will be used to finance the development and construction of the SmartCentres joint venture properties. We serve as a full recourse guarantor with respect to 50% of the SmartCentres Financings.
Additionally, we owned a 50% equity interest in eleven unconsolidated real estate ventures located in Canada, which consisted of eight operating self storage properties, two parcels of land currently under development into self storage facilities, and one single tenant industrial building, which we plan to convert into a self storage property over the long term.
Additionally, we owned a 50% equity interest in eleven unconsolidated real estate ventures located in Canada, which consisted of ten operating self storage properties, and one other property, which we plan to convert into a self storage property.
Prior to March 17, 2021 and June 1, 2022, SST IV and SSGT II, respectively, were also included in the “Managed REITs.” We operate the properties owned by the Managed REITs, which together with one other self storage property we manage, as of December 31, 2023, represented 32 operating properties and approximately 25,400 units and approximately 2.8 million rentable square feet.
Prior to June 1, 2022, SSGT II was also included in the “Managed REITs” for purposes of this Annual Report. We operate the properties owned by the Managed REITs, which together with one other self storage property we manage consist of, as of December 31, 2024, 37 operating properties and approximately 29,000 units and approximately 3.2 million rentable square feet.
Our primary business model is focused on owning and operating high quality self storage properties in high growth markets in the United States and Canada. We finance our portfolio through a diverse capital strategy which includes cash generated from operations, borrowings under our syndicated revolving line of credit, secured debt financing, equity offerings and joint ventures.
We finance our portfolio through a diverse capital strategy which includes cash generated from operations, borrowings under our syndicated revolving line of credit, secured debt financing, equity offerings and joint ventures.
We expect general and administrative expenses to decrease as a percentage of total revenues over time. Depreciation and Amortization Expenses Depreciation and amortization expenses for the years ended December 31, 2023 and 2022 were approximately $60.2 million and $64.6 million, respectively. Depreciation expense consists primarily of depreciation on the buildings and site improvements at our properties.
Depreciation and Amortization Expenses Depreciation and amortization expenses for the years ended December 31, 2024 and 2023 were approximately $56.1 million and $60.2 million, respectively. Depreciation expense consists primarily of depreciation on the buildings and site improvements at our properties.
Cash flows provided by investing activities for the year ended December 31, 2023 was approximately $0.3 million and cash flows used for investing activities for the year ended December 31, 2022 was approximately $205.2 million, a reduction in the use of cash of approximately $205.4 million.
Cash flows used in investing activities for the year ended December 31, 2024 were approximately $180.9 million, whereas cash flows provided by investing activities for the year ended December 31, 2023 were approximately $0.3 million, an increase in the use of cash of approximately $181.2 million.
As of December 31, 2023, approximately $70.0 million CAD or approximately $52.8 million in USD, was outstanding on the RBC JV term Loan, and approximately $57.3 million Canadian Dollars ("CAD") or approximately $43.3 million in USD was outstanding on the SmartCentres Financing.
As of December 31, 2024, approximately $70.0 million CAD or approximately $48.7 million in USD, was outstanding on the RBC JV Term Loan, approximately $46.0 million CAD or approximately $32.0 million in USD, was outstanding on the RBC JV Term Loan II, and approximately $18.7 million CAD or approximately $13.0 million in USD was outstanding on the SmartCentres Financing.
The decrease in cash provided by our operating activities is primarily the result of a decrease in net income of approximately $10.0 million largely due to higher interest expense, offset by approximately $1.1 million of cash used related to changes in working capital.
The decrease in cash provided by our operating activities is primarily the result of a decrease of approximately $11.3 million in net income when excluding the impact of non-cash items, largely due to increased interest expense in the current year, net of favorable changes in working capital of approximately $2.2 million.
Operating results in future periods will depend on the results of operations of these properties and of the real estate properties that we acquire in the future. As discussed below, the results of operations presented herein cover a period of time prior to the SSGT II Merger.
Operating results in future periods will depend on the results of operations of these properties and of the real estate properties that we acquire in the future.
We expect Managed REIT Platform Revenue to fluctuate commensurate with our Managed REITs' increase in operations and assets under management, as well as reductions to such revenue in connection with the Sponsor Funding Agreement as SST VI continues to sell shares in its public offering. 52 Reimbursable Costs from Managed REITs Reimbursable costs from Managed REITs for the years ended December 31, 2023 and 2022 were approximately $5.8 million and $4.6 million, respectively.
We expect Managed REIT Platform Revenue to fluctuate commensurate with our Managed REITs' increase in operations and assets under management, offset by additional reductions recorded to such revenue in connection with the Sponsor Funding Agreement as SST VI continues to sell shares in its public offering and such reductions increase commensurately.
(4) Determined by dividing the sum of the month-end occupied square feet for the applicable group of facilities for each applicable period by the sum of their month-end rentable square feet for the period. (5) Determined by dividing the aggregate realized rental income for each applicable period by the aggregate of the month-end occupied square feet for the period.
(5) Determined by dividing the aggregate realized rental income for each applicable period by the aggregate of the month-end occupied square feet for the period. Properties are included in the respective calculations in their first full month of operations, as appropriate.
The increase in losses from our equity method investments in JV Properties is due to the additional operational JV properties, which are in their respective lease up phase compared to the prior year.
The decrease in losses from our equity method investments in JV Properties is due to improved operational results at the JV properties, as compared to the prior year.
Although property taxes were moderated through assessment challenges over the past two years, we expect elevated property tax increases in our sector in the coming years. We expect same-store expense growth resulting from increases in employee costs, property insurance and property taxes in 2024, to be partially offset by operating efficiencies gained from leveraging technology and solar initiatives.
As a result, we have experienced a year-over-year decrease in gross margins for the year ended December 31, 2024. We expect same-store expense growth resulting from increases in employee costs, property insurance and property taxes in 2025, to be partially offset by operating efficiencies gained from leveraging our technology and solar initiatives.
Our determinations of the useful lives of the assets could result in a materially different presentation of the consolidated financial statements or materially different amounts being reported in the financial statements, as such determinations, and the corresponding amount of depreciation expense, may vary dramatically based on the estimates and assumptions we use. 50 Consolidation Considerations Current accounting guidance provides a framework for identifying a variable interest entity (“VIE”) and determining when a company should include the assets, liabilities, noncontrolling interests, and results of activities of a VIE in its consolidated financial statements.
Consolidation Considerations Current accounting guidance provides a framework for identifying a variable interest entity (“VIE”) and determining when a company should include the assets, liabilities, noncontrolling interests, and results of activities of a VIE in its consolidated financial statements.
Interest Expense Interest expense for the years ended December 31, 2023 and 2022 was approximately $61.8 million and $41.5 million, respectively. Interest expense includes interest expense on our debt, accretion of fair market value adjustments of our debt, amortization of debt issuance costs, and the impact of our interest rate hedging derivatives.
Interest expense includes interest expense on our debt, accretion of fair market value adjustments of our debt, amortization of debt issuance costs, and the impact of our interest rate derivatives designated for hedge accounting.
We also served as the sponsor of Strategic Storage Trust IV, Inc., a public non-traded REIT (“SST IV”) through March 17, 2021, and Strategic Storage Growth Trust II, Inc., a private REIT (“SSGT II”) through June 1, 2022.
As discussed herein, we, through our subsidiaries, currently serve as the sponsor of SST VI, SSGT III, and Strategic Storage Trust X, a private REIT ("SST X"). We also served as the sponsor of Strategic Storage Growth Trust II, Inc., a private REIT (“SSGT II”) through June 1, 2022.
Such distributions payable to each stockholder of record will be paid the following month. 60 On February 28, 2024, our board of directors declared a distribution rate for the month of March 2024 of approximately $0.0508 per share on the outstanding shares of common stock payable to Class A and Class T stockholders of record of such shares as shown on our books at the close of business on March 31, 2024.
As such, the dividend rate will continue to increase at an additional 0.75% per annum each year thereafter to a maximum of 9.0% per annum until the tenth anniversary of the Initial Closing, at which time the dividend rate shall increase 0.75% per annum each year thereafter until the Series A Convertible Preferred Stock is either converted or repurchased in full. 60 Common Stock Distributions On January 31, 2025, our board of directors declared a distribution rate for the month of February 2025 of approximately $0.0460 per share on the outstanding shares of common stock payable to Class A and Class T stockholders of record of such shares as shown on our books at the close of business on February 28, 2025.
Further, the broader economy has been experiencing elevated levels of inflation, higher interest rates, tightening monetary and fiscal policies and a slowdown in home sales. This could result in less discretionary spending, weakening consumer balance sheets and reduced demand for self storage.
More recently, the broader economy has been experiencing elevated levels of inflation, higher interest rates (including higher mortgage rates), tightening monetary and fiscal policies and a slowdown in home sales and population mobility.
In addition, we have the internal capability to originate, structure and manage additional self storage investment programs (the “Managed REIT Platform”) which would be sponsored by SRA, our indirect subsidiary. We generate asset management fees, property management fees, acquisition fees, and other fees and also receive substantially all of the tenant protection program revenue earned by our Managed REITs.
We generate asset management fees, property management fees, acquisition fees, and other fees and also receive substantially all of the tenant protection program revenue earned by our Managed REITs.
Managed REIT Platform Expenses Managed REIT Platform expenses for the years ended December 31, 2023 and 2022 were approximately $3.4 million and $2.5 million, respectively.
We expect property operating expenses to fluctuate commensurate with inflationary pressures and any future acquisitions. Managed REIT Platform Expenses Managed REIT Platform expenses for the years ended December 31, 2024 and 2023 were approximately $4.0 million and $3.4 million, respectively.
Properties are included in the respective calculations in their first full month of 55 operations, as appropriate. We have excluded the realized rental revenue and occupied square feet related to parking herein for the purpose of calculating annualized rent per occupied square foot.
In the event a property is disposed of, or becomes completely inoperable during the period, such property is excluded from the respective calculation in the first full month of non-operation. We have excluded the realized rental revenue and occupied square feet related to parking herein for the purpose of calculating annualized rent per occupied square foot. Amount not in thousands.
Dividends payable on each share of Series A Convertible Preferred Stock will initially be equal to a rate of 6.25% per annum, which accrues daily but is payable quarterly in arrears.
Dividends payable on each share of Series A Convertible Preferred Stock accrue daily but are payable quarterly in arrears. Since the initial closing, such dividends accrued at a rate equal to 6.25% per annum until October 29, 2024, and accrued at a rate of 7.0% per annum thereafter.
Cash Flows A comparison of cash flows for operating, investing and financing activities for the years ended December 31, 2023 and 2022 are as follows: Year Ended December 31, 2023 Year Ended December 31, 2022 Change Net cash flow provided by (used in): Operating activities $ 73,191,384 $ 87,909,977 $ (14,718,593 ) Investing activities $ 261,312 $ (205,151,158 ) $ 205,412,470 Financing activities $ (66,098,584 ) $ 120,067,251 $ (186,165,835 ) Cash flows provided by operating activities for the years ended December 31, 2023 and 2022 were approximately $73.2 million and $87.9 million, respectively, a decrease of approximately $14.7 million.
Cash Flows A comparison of cash flows for operating, investing and financing activities for the years ended December 31, 2024 and 2023 are as follows (in thousands): Year Ended December 31, 2024 Year Ended December 31, 2023 Change Net cash flow provided by (used in): Operating activities $ 64,027 $ 73,191 $ (9,164 ) Investing activities $ (180,938 ) $ 262 $ (181,200 ) Financing activities $ 94,816 $ (66,099 ) $ 160,915 Cash flows provided by operating activities for the years ended December 31, 2024 and 2023 were approximately $64.0 million and $73.2 million, respectively, a decrease of approximately $9.2 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−1 removed9 unchanged
Biggest changeDebt denominated in foreign currency has been converted based on the rate in effect as of December 31, 2023. (2) On February 22, 2024, we entered into an amended and restated revolving credit facility with KeyBank. The 2024 Credit Facility replaces the Credit Facility we entered into on March 17, 2021, and has a maturity date of February 22, 2027.
Biggest changeDebt denominated in a foreign currency has been converted based on the rate in effect as of December 31, 2024.
If the underlying rate of the related index on our variable rate debt were to increase by 100 basis points, the increase in interest, net of our interest rate derivatives, would decrease future earnings and cash flows by approximately $2.2 million annually. Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our financial instruments.
If the underlying rate of the related index on our variable rate debt were to increase by 100 basis points, the increase in interest, net of our interest rate derivatives, would decrease future earnings and cash flows by approximately $5.1 million annually. Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our financial instruments.
Our existing foreign currency hedges mitigate most of our foreign currency exposure of our net CAD denominated investments; however, we generate all of our revenues and expend essentially all of our operating expenses and third party CAD-denominated debt service costs related to our Canadian Properties in CAD.
Our existing foreign currency hedges serve to mitigate some of our foreign currency exposure of our net CAD denominated investments; however, we generate all of our revenues and expend essentially all of our operating expenses and third party CAD-denominated debt service costs related to our Canadian Properties in CAD.
We may also enter into derivative financial instruments such as interest rate swaps and caps in order to mitigate our interest rate risk on a related financial instrument.
We may also enter into derivative financial instruments such as interest rate swaps and caps in order to mitigate our interest rate risk on a related financial instrument. We may also enter into derivative financial instruments such as foreign currency forward derivatives in order to mitigate foreign currency risks.
We will not enter into derivative or interest rate transactions for speculative purposes. 64 As of December 31, 2023, our net debt was approximately $1,087.4 million, which included approximately $523.1 million in fixed rate debt, and $568.7 million in variable rate debt, less approximately $0.1 million in debt discount, and approximately $4.3 million in net debt issuance costs.
We will not enter into derivative or interest rate transactions for speculative purposes. 64 As of December 31, 2024, our net debt was approximately $1,317 million, which included approximately $556 million in fixed rate debt, and $766 million in variable rate debt, less approximately $3.4 million in net debt issuance costs and approximately $1.6 million in net debt discount.
As of December 31, 2022, our net debt was approximately $1,068.4 million, which included approximately $442.8 million in fixed rate debt, and $630.2 million in variable rate debt, less approximately $0.1 million in debt discount, and approximately $4.5 million in net debt issuance costs. Our debt instruments were entered into for other than trading purposes.
As of December 31, 2023, our net debt was approximately $1,087 million, which included approximately $523 million in fixed rate debt, and $569 million in variable rate debt, less approximately $0.1 million in debt discount, and approximately $4.3 million in net debt issuance costs. Our debt instruments were entered into for other than trading purposes.
The following table summarizes annual debt maturities and average interest rates on our outstanding debt as of December 31, 2023: Year Ending December 31, 2024 2025 2026 2027 2028 Thereafter Total Fixed rate debt $ 2,734,900 $ 2,987,627 $ 93,312,927 $ 49,594,599 $ 79,968,686 $ 294,500,000 $ 523,098,739 Average interest rate (1) 4.96 % 4.97 % 5.05 % 5.24 % 5.31 % 5.14 % Variable rate debt (2) $ 318,688,429 $ — $ 250,000,000 $ — $ — $ — $ 568,688,429 Average interest rate (1) 7.09 % 7.08 % 7.08 % N/A N/A N/A (1) Interest expense for fixed rate debt was calculated based upon the contractual rate and the interest expense on variable rate debt was calculated based on the rate in effect on December 31, 2023, excluding the impact of interest rate derivatives.
The following table summarizes annual debt maturities and average interest rates on our outstanding debt as of December 31, 2024 (in thousands): Year Ending December 31, 2025 2026 2027 2028 2029 Thereafter Total Fixed rate debt (1)(2) $ 2,979 $ 93,205 $ 91,479 $ 73,756 $ 104,000 $ 190,500 $ 555,919 Average interest rate (1)(2) 4.95 % 5.03 % 5.20 % 5.22 % 4.92 % 5.26 % Variable rate debt (1)(2) $ 101,105 $ 984 $ 664,366 $ — $ — $ — $ 766,455 Average interest rate (1)(2) 6.50 % 6.39 % 6.38 % N/A N/A N/A (1) The interest rates for fixed rate debt was calculated based upon the contractual rate and the interest rates on variable rate debt was calculated based on the rate in effect on December 31, 2024, excluding the impact of interest rate derivatives.
Removed
Additionally, on March 7, 2024, we entered into a $75 million CAD term loan with National Bank of Canada (the "2027 NBC Loan"), which has a maturity date of March 7, 2027. See Note 5 – Debt, and Note 14 – Subsequent Events of the Notes to the Consolidated Financial Statements, for more information.
Added
(2) Subsequent to December 31, 2024, on February 4, 2025 we completed a series of transactions and borrowed approximately $51.0 million on our variable rate Credit Facility, which matures in 2027 in order to defease a fixed rate loan which would otherwise have matured in 2027, with a balance of approximately $49.9 million as of December 31, 2024.

Other SMA 10-K year-over-year comparisons