SmartStop Self Storage REIT Inc. has priced an upsized public offering of 8.15 million shares of common stock at $37 per share, generating approximately $301.6 million in gross proceeds upon settlement of related forward sale agreements.
The Ladera Ranch, Calif.-based self-storage real estate investment trust (REIT), which trades on the New York Stock Exchange under the ticker SMA, increased the offering from its previously announced size of 7 million shares. The offering is expected to close Nov. 12, subject to customary closing conditions.
SmartStop entered into forward sale agreements with affiliates of J.P. Morgan and Wells Fargo Securities covering all 8.15 million shares. Under the arrangement, 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 and receive cash proceeds when the agreements are physically settled.
The underwriters also have a 30-day option to purchase up to an additional 1.22 million shares. If exercised in full, the total offering would increase to approximately 9.37 million shares.
SmartStop expects to settle the forward sale agreements on one or more dates selected by the company no later than Sept. 30, 2028. The initial forward sale price will equal the $37 public offering price, less underwriting discounts and commissions, with certain adjustments specified in the agreements.
The company will not receive proceeds from the initial sale of shares by the forward purchasers. Instead, it expects to receive the proceeds when the forward sale agreements are settled.
SmartStop plans to use the proceeds, along with funds from the physical 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 pending acquisitions. Additional proceeds may be used to repay the company's 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. Evercore ISI, National Bank of Canada Capital Markets, RBC Capital Markets, Scotiabank, Cantor, Baird and Raymond James are acting as bookrunners. M&T Securities, BTIG and Stifel are serving as co-managers.