SmartStop Launches Public Offering of 7 Million Shares

SmartStop Self Storage REIT Inc. has commenced an underwritten public offering of 7 million shares of common stock as part of a financing strategy intended to support pending investments, acquisitions and debt repayment.

The Ladera Ranch, Calif.-based self-storage real estate investment trust (REIT), which trades on the New York Stock Exchange under the ticker SMA, announced the offering Nov. 9. The company expects to enter into forward sale agreements with affiliates of J.P. Morgan and Wells Fargo Securities covering the 7 million shares.

The underwriters are expected to receive a 30-day option to purchase up to an additional 1.05 million shares. If exercised in full, the offering would total 8.05 million shares.

Under the forward sale agreements, the forward purchasers or their affiliates are expected to borrow shares from third parties and sell them to the underwriters. SmartStop will issue shares to the forward purchasers in exchange for cash proceeds when the agreements are physically settled.

The company expects to settle the agreements on one or more dates of its choosing no later than Sept. 30, 2028. The initial forward sale price will be based on the public offering price, less underwriting discounts and commissions, subject to adjustments outlined in the agreements.

SmartStop will not receive proceeds from the initial sale of shares by the forward purchasers. Instead, it expects to receive the funds upon settlement of the forward sale agreements. The company also may elect cash or net share settlement, subject to certain conditions.

SmartStop intends to use proceeds from the offering, along with funds from the settlement of forward sale agreements associated with its at-the-market stock program, to finance pending investments, including an investment in a Canadian joint venture fund and planned acquisitions. Additional proceeds will be used to repay its revolving credit facility and Canadian term loan, as well as for general corporate purposes and potential investments.

J.P. Morgan, Wells Fargo Securities, KeyBanc Capital Markets, BMO Capital Markets and Truist Securities are serving as joint book-running managers for the offering.