Strategic Storage Trust VI (SGST) records Q1 2026 loss with high leverage
Strategic Storage Trust VI, Inc. reports a net loss for the quarter ended March 31, 2026 as the company continues building its self storage portfolio in the U.S. and Canada. Total revenues were $7,824,813, mainly from self storage rental income of $7,779,946, compared with $7,349,358 a year earlier.
Operating expenses of $9,646,264 and total other expenses, including interest and foreign currency adjustments, led to a net loss of $8,635,592, versus $7,240,686 in 2025. Net loss attributable to common stockholders was $12,076,380, or $0.45 per share for each common class. The company held total assets of $523,995,690 and debt of $290,190,706, with multiple preferred equity layers ahead of common stock.
Positive
- None.
Negative
- None.
Key Figures
Key Terms
Real Estate Investment Trust (REIT) financial
Series B Convertible Preferred Stock financial
distribution reinvestment plan financial
variable interest entity financial
noncontrolling interests financial
fair value hierarchy financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
(Address of principal executive offices)
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(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered |
None |
None |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of May 8, 2026, there were
FORM 10-Q
STRATEGIC STORAGE TRUST VI, INC.
TABLE OF CONTENTS
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Page |
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Cautionary Note Regarding Forward-Looking Statements |
2 |
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PART I. FINANCIAL INFORMATION |
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Item 1. |
Consolidated Financial Statements (unaudited) |
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Consolidated Balance Sheets as of March 31, 2026 (unaudited) and December 31, 2025 |
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Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025 (unaudited) |
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Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2026 and 2025 (unaudited) |
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Consolidated Statement of Equity and Temporary Equity for the Three Months Ended March 31, 2025 (unaudited) |
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Consolidated Statement of Equity and Temporary Equity for the Three Months Ended March 31, 2026 (unaudited) |
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Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (unaudited) |
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Notes to Consolidated Financial Statements (unaudited) |
12 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
49 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
62 |
Item 4. |
Controls and Procedures |
62 |
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PART II. OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
63 |
Item 1A. |
Risk Factors |
63 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
64 |
Item 3. |
Defaults Upon Senior Securities |
64 |
Item 4. |
Mine Safety Disclosures |
64 |
Item 5. |
Other Information |
65 |
Item 6. |
Exhibits |
65 |
1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Form 10-Q of Strategic Storage Trust VI, Inc., other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “seek,” “continue,” or other similar words.
Any such forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate, and beliefs of, and assumptions made by, our management and involve uncertainties that could significantly affect our financial results. Such statements include, but are not limited to: (i) statements about our plans, strategies, initiatives, and prospects; and (ii) statements about our future results of operations, capital expenditures, and liquidity. Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation:
2
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the U.S. Securities and Exchange Commission (the "SEC") and are not intended to be a guarantee of our performance in future periods. We cannot guarantee the accuracy of any such forward-looking statements contained in this Form 10-Q, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
For further information regarding risks and uncertainties associated with our business, and important factors that could cause our actual results to vary materially from those expressed or implied in such forward-looking statements, please refer to the factors listed and described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Risk Factors” sections of the documents we file from time to time with the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC, as supplemented by the risk factors included in Part II, Item 1A of this Form 10-Q.
3
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The information included in the accompanying unaudited consolidated balance sheets and related consolidated statements of operations, comprehensive loss, equity and temporary equity and cash flows reflects all adjustments (consisting of normal and recurring adjustments) that are, in management’s opinion, necessary for a fair and consistent presentation of the aforementioned consolidated financial statements.
The accompanying consolidated financial statements should be read in conjunction with the notes to our consolidated financial statements included in this report on Form 10-Q. The accompanying consolidated financial statements should also be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. Our results of operations for the three months ended March 31, 2026 are not necessarily indicative of the operating results expected for the full year.
4
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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March 31, |
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December 31, |
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ASSETS |
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Real estate facilities: |
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Land |
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$ |
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$ |
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Buildings |
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Site improvements |
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Accumulated depreciation |
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( |
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( |
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Construction in process |
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Real estate facilities, net |
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Cash and cash equivalents |
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Restricted cash |
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Investments in unconsolidated real estate ventures (Note 4) |
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Other assets, net |
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Total assets |
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$ |
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$ |
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LIABILITIES, TEMPORARY EQUITY AND EQUITY |
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Debt, net |
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$ |
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$ |
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Accounts payable and accrued liabilities |
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Distributions payable |
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Due to affiliates |
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Total liabilities |
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Commitments and contingencies (Note 10) |
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Redeemable common stock |
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Series B Convertible Preferred Stock, net $ |
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Series D Preferred units in our Operating Partnership, net $ |
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Series E Redeemable |
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Equity: |
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Strategic Storage Trust VI, Inc.: |
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Preferred Stock, $ |
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— |
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— |
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Class P Common stock, $ |
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Class A Common stock, $ |
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Class T Common stock, $ |
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Class W Common stock, $ |
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Class Y Common stock, $ |
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Class Z Common stock, $ |
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Additional paid-in capital |
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Distributions |
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( |
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( |
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Accumulated deficit |
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( |
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Accumulated other comprehensive loss |
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( |
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Total Strategic Storage Trust VI, Inc. equity |
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Noncontrolling interests in our Operating Partnership |
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( |
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Noncontrolling Series C Subordinated Units in our Operating Partnership |
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Total noncontrolling interest |
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Total equity |
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Total liabilities, temporary equity and equity |
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$ |
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$ |
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See notes to consolidated financial statements.
5
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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Three Months Ended March 31, |
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2026 |
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2025 |
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Revenues: |
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Self storage rental revenue |
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$ |
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$ |
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Ancillary operating revenue |
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Total revenues |
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Operating expenses: |
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Property operating expenses |
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Property operating expenses – affiliates |
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General and administrative |
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Depreciation |
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Acquisition expense – affiliates |
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Other property acquisition expenses |
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Total operating expenses |
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Operating loss |
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( |
) |
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( |
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Other income (expense): |
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Interest expense |
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( |
) |
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( |
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Interest expense – debt issuance costs |
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( |
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( |
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Derivative fair value adjustment |
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( |
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Other income, net |
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Equity in loss of unconsolidated real estate ventures |
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( |
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( |
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Foreign currency adjustment |
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( |
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( |
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Net loss |
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( |
) |
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( |
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Less: Distributions to preferred unitholders in our Operating Partnership |
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( |
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Less: Distributions to preferred stockholders |
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( |
) |
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( |
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Net loss attributable to the noncontrolling interests in our Operating Partnership |
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Net loss attributable to Strategic Storage Trust VI, Inc. common stockholders |
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$ |
( |
) |
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$ |
( |
) |
Net loss per Class P share—basic and diluted |
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$ |
( |
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$ |
( |
) |
Net loss per Class A share—basic and diluted |
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$ |
( |
) |
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$ |
( |
) |
Net loss per Class T share—basic and diluted |
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$ |
( |
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$ |
( |
) |
Net loss per Class W share—basic and diluted |
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$ |
( |
) |
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$ |
( |
) |
Net loss per Class Y share—basic and diluted |
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$ |
( |
) |
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$ |
( |
) |
Net loss per Class Z share—basic and diluted |
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$ |
( |
) |
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$ |
( |
) |
Weighted average Class P shares outstanding—basic and diluted |
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Weighted average Class A shares outstanding—basic and diluted |
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Weighted average Class T shares outstanding—basic and diluted |
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Weighted average Class W shares outstanding—basic and diluted |
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Weighted average Class Y shares outstanding—basic and diluted |
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Weighted average Class Z shares outstanding—basic and diluted |
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See notes to consolidated financial statements.
6
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
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Three Months Ended March 31, |
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2026 |
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2025 |
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Net loss |
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$ |
( |
) |
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$ |
( |
) |
Other comprehensive income (loss): |
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Foreign currency translation adjustment |
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( |
) |
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Foreign currency hedge contract |
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— |
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( |
) |
Interest rate hedge contract |
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( |
) |
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Other comprehensive income (loss) |
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( |
) |
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Comprehensive loss |
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( |
) |
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( |
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Comprehensive loss attributable to noncontrolling |
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Comprehensive loss attributable to the noncontrolling |
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Comprehensive loss attributable to Strategic Storage Trust |
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$ |
( |
) |
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$ |
( |
) |
See notes to consolidated financial statements.
7
Strategic Storage Trust VI, Inc. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY AND TEMPORARY EQUITY
(UNAUDITED)
|
Common Stock |
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Noncontrolling Interest |
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||||||||||||
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Class P |
Class A |
Class T |
Class W |
Class Y |
Class Z |
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in our Operating Partnership |
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|||||||
|
Number |
Common |
Number |
Common |
Number |
Common |
Number |
Common |
Number |
Common |
Number |
Common |
Additional |
Distributions |
Accumulated |
Accumulated |
Total |
Noncontrolling |
Series C Subordinated Units |
Total |
Redeemable |
Series B Convertible Preferred Stock |
Balance as of December 31, 2024 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$( |
$( |
$( |
$ |
$ |
$ |
$ |
$ |
$ |
||||||
Gross proceeds from issuance of common stock |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||
Offering costs |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
— |
— |
— |
( |
— |
— |
( |
— |
— |
Changes to redeemable common stock |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
— |
— |
— |
( |
— |
— |
( |
— |
|
Redemption of common stock |
( |
( |
( |
( |
( |
( |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
— |
— |
( |
( |
— |
Distributions ($ |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
— |
— |
( |
— |
— |
( |
— |
— |
Distributions to noncontrolling interests |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
— |
( |
— |
— |
Distributions to preferred stockholders |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
Issuance of shares for distribution reinvestment plan (DRP) |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||
Stock based compensation expense |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||
Issuance of Series C Subordinated Units |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||
Net loss attributable to Strategic Storage Trust VI, Inc. |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
— |
( |
— |
— |
( |
— |
|
Net loss attributable to the noncontrolling interests in our Operating Partnership |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
— |
( |
— |
— |
Interest rate hedge contracts |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
( |
( |
— |
( |
— |
— |
Foreign currency translation adjustment |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||
Foreign currency hedge contract |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
( |
( |
— |
( |
— |
— |
Balance as of March 31, 2025 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$( |
$( |
$( |
$ |
$( |
$ |
$ |
$ |
$ |
||||||
See notes to consolidated financial statements.
8
Strategic Storage Trust VI, Inc. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY AND TEMPORARY EQUITY (CONTINUED)
(UNAUDITED)
|
Common Stock |
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|
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|
Noncontrolling Interest |
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||||||||||||
|
Class P |
Class A |
Class T |
Class W |
Class Y |
Class Z |
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in our Operating Partnership |
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|||||||
|
Number |
Common |
Number |
Common |
Number |
Common |
Number |
Common |
Number |
Common |
Number |
Common |
Additional |
Distributions |
Accumulated |
Accumulated |
Total |
Noncontrolling |
Series C Subordinated Units |
Total |
Redeemable |
Series B Convertible Preferred Stock |
Series D Preferred Units in our Operating Partnership |
Balance as of December 31, 2025 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$( |
$( |
$( |
$ |
$( |
$ |
$ |
$ |
$ |
$ |
||||||
Changes to redeemable common stock |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
— |
— |
— |
( |
— |
— |
( |
— |
— |
|
Redemption of common stock |
( |
( |
— |
— |
— |
— |
— |
— |
( |
( |
— |
— |
— |
— |
— |
— |
( |
— |
— |
( |
( |
— |
— |
Distributions ($ |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
— |
— |
( |
— |
— |
( |
— |
— |
— |
Distributions to noncontrolling interests |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
— |
( |
— |
— |
— |
Distributions to preferred stockholders |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
— |
Distributions to Series D preferred unitholders |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
Issuance of shares for distribution reinvestment plan (DRP) |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||
Stock based compensation expense |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||
Net loss attributable to Strategic Storage Trust VI, Inc. |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
— |
( |
— |
— |
( |
— |
||
Net loss attributable to the noncontrolling interests in our Operating Partnership |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
— |
( |
— |
— |
— |
Interest rate hedge contracts |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||
Foreign currency translation adjustment |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
( |
( |
— |
( |
— |
— |
— |
Balance as of March 31, 2026 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$( |
$( |
$( |
$ |
$( |
$ |
$ |
$ |
$ |
$ |
||||||
See notes to consolidated financial statements.
9
STrategic Storage Trust VI, Inc. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to cash provided by (used in) operating activities: |
|
|
|
|
|
|
||
Depreciation |
|
|
|
|
|
|
||
Amortization of debt issuance costs |
|
|
|
|
|
|
||
Stock based compensation expense related to issuance of restricted stock |
|
|
|
|
|
|
||
Equity in loss of unconsolidated real estate ventures |
|
|
|
|
|
|
||
Unrealized derivative gain |
|
|
|
|
|
|
||
Derivative fair value adjustment |
|
|
— |
|
|
|
|
|
Unrealized foreign currency adjustment |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Other assets, net |
|
|
( |
) |
|
|
( |
) |
Settlement of interest rate derivative |
|
|
— |
|
|
|
( |
) |
Accounts payable and accrued liabilities |
|
|
|
|
|
|
||
Due to affiliates |
|
|
|
|
|
|
||
Net cash provided by (used in) operating activities |
|
|
|
|
|
( |
) |
|
Cash flows from investing activities: |
|
|
|
|
|
|
||
Additions to real estate facilities |
|
|
( |
) |
|
|
( |
) |
Investments in unconsolidated real estate ventures |
|
|
( |
) |
|
|
( |
) |
Return of capital on investments in unconsolidated real estate ventures |
|
|
|
|
|
— |
|
|
Net cash provided by (used in) investing activities |
|
|
|
|
|
( |
) |
|
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from issuance of secured debt |
|
|
|
|
|
|
||
Repayment of secured debt |
|
|
— |
|
|
|
( |
) |
Scheduled principal payments of secured debt |
|
|
( |
) |
|
|
( |
) |
Debt issuance costs |
|
|
— |
|
|
|
( |
) |
Gross proceeds from issuance of common stock |
|
|
— |
|
|
|
|
|
Offering costs |
|
|
( |
) |
|
|
( |
) |
Proceeds from issuance of Series C units |
|
|
— |
|
|
|
|
|
Redemption of common stock |
|
|
( |
) |
|
|
( |
) |
Distributions paid to common stockholders |
|
|
( |
) |
|
|
( |
) |
Distributions paid to noncontrolling interest in our Operating Partnership |
|
|
( |
) |
|
|
( |
) |
Distributions paid to preferred stockholders |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) financing activities |
|
|
( |
) |
|
|
|
|
Impact of foreign exchange rate changes on cash and restricted cash |
|
|
( |
) |
|
|
|
|
Net change in cash, cash equivalents and restricted cash |
|
|
( |
) |
|
|
( |
) |
Cash, cash equivalents and restricted cash, beginning of year |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, end of year |
|
$ |
|
|
$ |
|
||
See notes to consolidated financial statements.
10
STrategic Storage Trust VI, Inc. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
Supplemental disclosures and non-cash transactions: |
|
|
|
|
|
|
||
Cash paid for interest, net of amounts capitalized |
|
$ |
|
|
$ |
|
||
Offering costs included in accounts payable and accrued liabilities |
|
$ |
|
|
$ |
|
||
Other assets in due to affiliates |
|
$ |
|
|
$ |
— |
|
|
Interest rate swap contract in other assets |
|
$ |
|
|
$ |
|
||
Interest rate swap contracts in accounts payable and accrued liabilities |
|
$ |
|
|
$ |
|
||
Foreign currency hedge contract in other assets |
|
$ |
— |
|
|
$ |
|
|
Foreign currency translation adjustment |
|
$ |
( |
) |
|
$ |
|
|
Issuance of shares pursuant to distribution reinvestment plan |
|
$ |
|
|
$ |
|
||
Distributions payable to common and preferred stockholders |
|
$ |
|
|
$ |
|
||
Distributions payable to noncontrolling interests in our Operating Partnership |
|
$ |
|
|
$ |
|
||
Real estate and construction in process in accounts payable and accrued liabilities |
|
$ |
|
|
$ |
|
||
Redemption of common stock in accounts payable and accrued liabilities |
|
$ |
|
|
$ |
|
||
Purchase of interest rate derivative in accounts payable and accrued liabilities |
|
$ |
|
|
$ |
— |
|
|
See notes to consolidated financial statements.
11
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
Note 1. Organization
Strategic Storage Trust VI, Inc., a Maryland corporation (the “Company”), was formed on
SmartStop REIT Advisors, LLC is our sponsor (our “Sponsor”). Our Sponsor is an indirect subsidiary of SmartStop Self Storage REIT, Inc. (“SmartStop”) (NYSE: SMA). Our Sponsor is a company focused on providing self storage advisory, asset management, and property management services. Our Sponsor owns
We have
On January 15, 2021, our Advisor purchased approximately
In connection with the Public Offering, defined below, we authorized
On October 4, 2023, we filed a Post-Effective Amendment to our Registration Statement to register two new classes of common stock (Class Y shares and Class Z shares) with the SEC. On November 1, 2023, the Post-Effective Amendment to our Registration Statement became effective with the SEC. Also, on November 1, 2023, we filed articles supplementary to our Charter which reclassified
On May 20, 2025, our board of directors approved the termination of the Primary Offering, effective as of May 30, 2025. We sold approximately
12
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
manager agreement (the “Dealer Manager Agreement”). On June 18, 2025, in connection with the termination of the Primary Offering, the Dealer Manager Agreement was terminated.
We continue to offer Class P, Class A, Class T, Class W, Class Y, and Class Z shares pursuant to our distribution reinvestment plan. On July 18, 2025, we filed a Registration Statement on Form S-3, which registered up to an additional $
As of March 31, 2026, we have issued approximately
Pursuant to a Sponsor Funding Agreement (as defined in Note 2 - Summary of Significant Accounting Policies), our Sponsor agreed to fund the payment of (i) the upfront
On November 1, 2023, the Company’s board of directors declared to holders of record of Class A shares, Class T shares and Class W shares, respectively, as of November 15, 2023 (a) a one-time stock dividend of
On March 20, 2026, our board of directors, upon recommendation of our nominating and corporate governance committee, approved an estimated value per share ("Estimated Per Share NAV") of $
We have invested the net proceeds from our offerings primarily in self storage facilities consisting of both income-producing and growth properties located in the United States and Canada. As of March 31, 2026, we owned
13
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
storage properties located in seven states (Arizona, Delaware, Florida, Nevada, Oregon, Pennsylvania and Washington) and three Canadian provinces (Alberta, British Columbia and Ontario) and one development property in Florida. For more information, see Note 3 - Real Estate Facilities.
As of March 31, 2026, we owned
Our Operating Partnership was formed on October 15, 2020. On January 15, 2021, SmartStop Storage Advisors, LLC (“SSA”), an affiliate of our Advisor, purchased a limited partnership interest in our Operating Partnership for $
On March 10, 2021, SmartStop OP, L.P. (“SmartStop OP”), an affiliate of our Sponsor and the operating partnership of SmartStop, contributed $
On May 1, 2023 (the “Commitment Date”), we entered into a preferred stock purchase agreement (the “Series B Purchase Agreement”) with Extra Space Storage LP (the “Investor”), a subsidiary of Extra Space Storage Inc. (NYSE: EXR), pursuant to which the Investor committed to purchase $
On September 4, 2025, we, our Operating Partnership, and the Preferred Investor, an affiliate of our Sponsor, entered into a Series D Cumulative Redeemable Preferred Unit Purchase Agreement (the “Series D Preferred Unit Purchase Agreement”) pursuant to which our Operating Partnership issued and sold to the Preferred Investor. In September 2025, the Preferred Investor purchased
On September 30, 2025, we commenced an offering of up to $
On September 30, 2025, in connection with the commencement of the Series E Preferred Offering, we entered into a managing dealer agreement (the “Managing Dealer Agreement”) with Orchard Securities, LLC, a Utah limited liability company (“Orchard”), pursuant to which Orchard has agreed to act as our managing dealer in connection with the Series E Preferred Offering. Pursuant to the Managing Dealer Agreement, Orchard will receive sales commissions up to
14
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
gross offering proceeds from the Series E Preferred Offering and managing dealer fees up to
Our Operating Partnership will own, directly or indirectly through one or more special purpose entities, all of the self storage properties that we acquire. We will conduct certain activities through our taxable REIT subsidiary, Strategic Storage TRS VI, Inc., a Delaware corporation (the “TRS”) which was formed on October 16, 2020 and is a wholly owned subsidiary of our Operating Partnership.
Our Property Manager, a Delaware limited liability company, was formed on October 7, 2020 to manage our properties. Our Property Manager will derive substantially all of its income from the property management services it performs for us. Our Property Manager may enter into sub-property management agreements with third party management companies and pay part of its management fee to such sub-property manager. See Note 9 – Related Party Transactions – Property Management Agreement.
As we accept subscriptions for shares of our common and preferred stock, we transfer all of the net offering proceeds to our Operating Partnership as capital contributions in exchange for additional units of interest in our Operating Partnership. However, we will be deemed to have made capital contributions in the amount of gross proceeds received from investors, and our Operating Partnership will be deemed to have simultaneously paid the sales commissions and other costs associated with these offerings. In addition, our Operating Partnership is structured to make distributions with respect to limited partnership units that are equivalent to the distributions made to holders of common stock. Finally, a limited partner in our Operating Partnership may later exchange his or her limited partnership units in our Operating Partnership for shares of our common stock at any time after one year following the date of issuance of their limited partnership units, subject to certain restrictions outlined in the limited partnership agreement of our Operating Partnership, in connection with the Public Offering, the Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, as further amended (the “Operating Partnership Agreement”). SSA and SmartStop OP are prohibited from exchanging or otherwise transferring units representing $
Note 2. Summary of Significant Accounting Policies
Basis of Presentation
Principles of Consolidation
Our financial statements, and the financial statements of our Operating Partnership, including its wholly-owned subsidiaries, are consolidated in the accompanying consolidated financial statements. The portion of these entities not wholly-owned by us is presented as noncontrolling interests. All intercompany accounts and transactions have been eliminated in consolidation. Please see consolidation considerations section below.
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. In general, a VIE is an entity or other legal structure used to conduct activities or hold assets that either (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its
15
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
operations. Generally, a VIE should be consolidated if a party with an ownership, contractual, or other financial interest in the VIE (a variable interest holder) has the power to direct the VIE’s most significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. A variable interest holder that consolidates the VIE is called the primary beneficiary. Upon consolidation, the primary beneficiary generally must initially record all of the VIE’s assets, liabilities, and noncontrolling interest at fair value and subsequently account for the VIE as if it were consolidated based on majority voting interest.
Our Operating Partnership is deemed to be a VIE and is consolidated by the Company as the primary beneficiary. Our sole significant asset is our investment in our Operating Partnership; as a result, substantially all of our assets and liabilities represent those assets and liabilities of our Operating Partnership and its wholly-owned subsidiaries.
As of March 31, 2026, we had
Equity Investments
Under the equity method, our investments are stated at cost and adjusted for our share of net earnings or losses and reduced by distributions. Equity in earnings will generally be recognized based on our ownership interest in the earnings of each of the unconsolidated investments.
Noncontrolling Interest in Consolidated Entities
Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. Management will adjust such estimates when facts and circumstances dictate. Actual results could materially differ from those estimates. The most significant estimates made include the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed at relative fair value, the evaluation of potential impairment of long-lived assets, and the estimated useful lives of real estate assets and intangibles.
Cash and Cash Equivalents
We consider all short-term, highly liquid investments that are readily convertible to cash with a maturity of three months or less at the time of purchase to be cash equivalents.
Restricted Cash
Real Estate Purchase Price Allocation
We account for asset acquisitions in accordance with GAAP which requires that we allocate the purchase price of a property to the tangible and intangible assets acquired and the liabilities assumed based on their relative fair values. This
16
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
guidance requires us to make significant estimates and assumptions, including fair value estimates, which requires the use of significant unobservable inputs, as of the acquisition date.
The value of the tangible assets, consisting of land and buildings, is determined as if vacant. Substantially all of the leases in place at acquired properties are at market rates, as the majority of the leases are month-to-month contracts. We also consider whether in-place, market leases represent an intangible asset. There were
Allocation of purchase price to acquisitions of facilities are allocated to the individual facilities based upon an income approach or a discounted 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.
Acquisitions that do not meet the definition of a business, as defined under current GAAP, are accounted for as asset acquisitions. During the three months ended March 31, 2026 and 2025 there were
During the three months ended March 31, 2026 and 2025, we expensed approximately $
Evaluation of Possible Impairment of Long-Lived Assets
Advertising Costs
Advertising costs are included in property operating expenses and general and administrative expenses, depending on the nature of the expense, in the accompanying consolidated statements of operations. These costs are expensed in the period in which the cost is incurred. The Company incurred advertising costs of approximately $
Revenue Recognition
Sponsor Funding Agreement
On November 1, 2023, the Company entered into a sponsor funding agreement (the “Sponsor Funding Agreement”) by and among the Company, our Operating Partnership and our Sponsor pursuant to which the Sponsor agreed to fund the payment of (i) the upfront
17
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
such funding amounts, and the final issuance of the Series C Units for such funding amounts, as contemplated by the terms of the Sponsor Funding Agreement.
In consideration for the Sponsor providing the funding for the front-end sales load described above and the cash to cover the dilution from the stock dividend, the Operating Partnership was obligated to issue a number of Series C Units to the Sponsor equal to the dollar amount of such funding divided by the then-current offering price (initially $
The amount by which the funding received exceeds the fair value of the Series C Units is accounted for as a consideration received from a vendor and is therefore recorded as a reduction to the price of the services provided. Each payment is initially included in the Accounts payable and accrued liabilities in the accompanying consolidated balance sheets and subsequently recorded as a reduction of Property operating expenses - affiliates ratably over the remaining estimated life of our management contracts with SmartStop.
Balance at December 31, 2025 |
|
$ |
|
|
Reduction of Property operating expense - affiliates |
|
|
( |
) |
Balance at March 31, 2026 |
|
$ |
|
Allowance for Doubtful Accounts
Tenant accounts receivable is reported net of an allowance for doubtful accounts. Management records a general reserve estimate based upon a review of the current status of tenant accounts receivable. It is reasonably possible that management’s estimate of the allowance will change in the future. As of March 31, 2026 and December 31, 2025, approximately $
Real Estate Facilities
Depreciation of Real Property Assets
Our management is required to make subjective assessments as to the useful lives of our depreciable assets. We consider the period of future benefit of the asset to determine the appropriate useful lives.
Depreciation of our real property assets is charged to expense on a straight-line basis over the estimated useful lives
as follows:
Description |
|
Standard Depreciable |
Land |
|
Not Depreciated |
Buildings |
|
|
Site Improvements |
|
18
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
Depreciation of Personal Property Assets
Personal property assets consist primarily of furniture, fixtures and equipment and are depreciated on a straight-line basis over the estimated useful lives generally ranging from
Foreign Currency Translation
For non-U.S. functional currency operations, assets and liabilities are translated to U.S. dollars at current exchange rates as of the reporting date. Revenues and expenses are translated at the average rate for the period. All adjustments related to amounts classified as long term net investments are recorded in accumulated other comprehensive income (loss) as a separate component of equity. Transactions denominated in a currency other than the functional currency of the related operations are recorded at rates of exchange in effect at the date of the translation. Changes in investments not classified as long term are recorded in foreign currency adjustment in the accompanying Statements of Operations.
Intangible Assets
We have allocated a portion of our real estate purchase price to in-place leases. We amortize in-place leases on a straight-line basis over
Debt Issuance Costs
The net carrying value of costs incurred in connection with obtaining non revolving debt are presented on the consolidated balance sheets as a reduction of the related debt. Debt issuance costs are amortized on a straight-line basis over the term of the related loan, which is not materially different than the effective interest method. As of March 31, 2026 and December 31, 2025, accumulated amortization of debt issuance costs related to non revolving debt totaled approximately $
Organizational and Offering Costs
Our Advisor may fund organization and offering costs on our behalf. We are required to reimburse our Advisor for such organization and offering costs; provided, however, our Advisor funded, and was not reimbursed for,
In connection with our Private Offering, our Former Dealer Manager received a sales commission of up to
In connection with our Primary Offering, our Former Dealer Manager received a sales commission of up to
19
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
monthly and
Our Former Dealer Manager entered into participating dealer agreements with certain other broker-dealers which authorized them to sell our shares. Upon sale of our shares by such broker-dealers, our Former Dealer Manager re-allowed all of the sales commissions and, subject to certain limitations, the stockholder servicing fees paid in connection with sales made by these broker-dealers. Our Former Dealer Manager was also permitted to re-allow to these broker-dealers a portion of their dealer manager fee as marketing fees, reimbursement of certain costs and expenses of attending training and education meetings sponsored by our Former Dealer Manager, payment of attendance fees required for employees of our Former Dealer Manager or other affiliates to attend retail seminars and public seminars sponsored by these broker-dealers, or to defray other distribution-related expenses. Our Former Dealer Manager also received reimbursement of bona fide due diligence expenses; however, to the extent these due diligence expenses could not be justified, any excess over actual due diligence expenses would have been considered underwriting compensation subject to a
Our Advisor may fund organization and offering costs on our behalf in connection with the Series E Preferred Offering. We are required to reimburse our Advisor for such organization and offering costs.
Redeemable Common Stock
We adopted a share redemption program that will enable stockholders to sell their shares to us in limited circumstances.
We record amounts that are redeemable under the share redemption program as redeemable common stock in the accompanying consolidated balance sheets since the shares are redeemable at the option of the holder and therefore their redemption is outside our control. The maximum amount redeemable under our share redemption program will be limited to the number of shares we could repurchase with the amount of the net proceeds from the sale of shares under the distribution reinvestment plan. However, accounting guidance states that determinable amounts that can become redeemable but that are
20
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
contingent on an event that is likely to occur (e.g., the passage of time) should be presented as redeemable when such amount is known. Therefore, the net proceeds from the distribution reinvestment plan are considered to be temporary equity and are presented as redeemable common stock in our consolidated balance sheets.
In addition, current accounting guidance requires, among other things, that financial instruments that represent a mandatory obligation of us to repurchase shares be classified as liabilities and reported at settlement value.
In order to maintain operating flexibility, on August 6, 2025, our board of directors approved the suspension of our share redemption program effective as of September 6, 2025, except with respect to redemption requests made in connection with the death, commitment to a long-term care facility, qualifying disability or bankruptcy of a stockholder. The share redemption program shall remain suspended as discussed above until such time, if any, as our board of directors may approve the resumption of the share redemption program.
For the three months ended March 31, 2026, we received redemption requests totaling approximately $
Series B Preferred Equity
We classify our Series B Convertible Preferred Stock (as defined in Note 7 – Preferred Equity) on our consolidated balance sheets using the guidance in ASC 480-10-S99. The Series B Convertible Preferred Stock can be redeemed at our option on or after the third anniversary of its issuance. Additionally, the holder can elect to redeem if any of the following events outside our control occur: (i) change of control; (ii) a breach of protective provisions; (iii) upon the occurrence of monetary and other material defaults under secured property debt; and (iv) if we do not maintain our REIT status. As the shares are contingently redeemable, and under certain circumstances not solely within our control, we have classified our Series B Convertible Preferred Stock as temporary equity.
We have analyzed whether the conversion features in our Series B Convertible Preferred Stock should be bifurcated under the guidance in ASC 815-10 and have determined that bifurcation is not necessary.
Series D Preferred Equity in our Operating Partnership
We classified our Series D Preferred Units on our consolidated balance sheets using the guidance in ASC 480-10-S99. The Series D Preferred Units are redeemable by our Operating Partnership, in whole or in part, at the option of our Operating Partnership on or after the second anniversary of its issuance. Additionally, the holder can elect to redeem if any of the following events outside our control occur: (i) change of control; (ii) a breach of protective provisions; (iii) upon the occurrence of monetary and other material defaults under secured property debt; and (iv) if we do not maintain our REIT status. As the units are contingently redeemable, and under certain circumstances not solely within our control, we have classified our Series D Preferred Units as temporary equity.
Fair Value Measurements
The accounting standard for fair value measurements and disclosures defines fair value, establishes a framework for measuring fair value, and provides for expanded disclosure about fair value measurements. Fair value is defined by the accounting standard for fair value measurements and disclosures as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels. The following summarizes the three levels of inputs and hierarchy of fair value we will use when measuring fair value:
21
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the fair value measurement will fall within the lowest level that is significant to the fair value measurement in its entirety.
The accounting guidance for fair value measurements and disclosures provides a framework for measuring fair value and establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. In determining fair value, we will utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value. Considerable judgment will be necessary to interpret Level 2 and 3 inputs in determining fair value of our financial and non- financial assets and liabilities. Accordingly, there can be no assurance that the fair values we will present will be indicative of amounts that may ultimately be realized upon sale or other disposition of these assets.
Financial and non-financial assets and liabilities measured at fair value on a non-recurring basis in our consolidated financial statements consist of real estate and related liabilities assumed related to our acquisition. The fair value of these assets and liabilities were determined as of the acquisition date using widely accepted valuation techniques, including (i) discounted cash flow analysis, which considers, among other things, leasing assumptions, growth rates, discount rates and terminal capitalization rates, (ii) income capitalization approach, which considers prevailing market capitalization rates, and (iii) comparable sales activity. In general, we consider multiple valuation techniques when measuring fair values. However, in certain circumstances, a single valuation technique may be appropriate. All of the fair values of the assets and liabilities as of the acquisition dates or assumed at the consolidation of the Operating Partnership were derived using Level 3 inputs.
The Series C Units (categorized within Level 3 of the fair value hierarchy) issued in connection with the Sponsor Funding Agreement are measured at fair value when issued. The fair value of these units were determined using a valuation model which considered the following key assumptions: our projected distribution rate, implied share price volatility, risk free interest rate, estimated net asset value and the estimated effective life of the Series C Units.
The carrying amounts of cash and cash equivalents, restricted cash, other assets, variable-rate debt, accounts payable and accrued liabilities, distributions payable and amounts due to affiliates approximate fair value.
The table below summarizes our fixed rate notes payable at March 31, 2026 and December 31, 2025. The estimated fair value of financial instruments is subjective in nature and are dependent on a number of important assumptions, including discount rates and relevant comparable market information associated with each financial instrument. The fair value of our fixed and variable rate notes payable were estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. These assumptions are considered level 2 inputs within the fair value hierarchy. The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. As of March 31, 2026 and December 31, 2025, we believe the fair value of our variable rate debt are reasonably estimated at their notional amounts as there have been minimal changes to the fixed spread portion of interest rates for similar loans observed in the market, and as the variable portion of our interest rates fluctuate with the associated market indices.
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||||||||||
|
|
Fair |
|
|
Carrying |
|
|
Fair |
|
|
Carrying |
|
||||
Fixed Rate Secured Debt |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
During the three months ended March 31, 2026 and 2025, we held interest rate cash flow hedges and foreign currency net investment hedges to hedge our interest rate and foreign currency exposure (See Notes 5 – Debt and 6 – Derivative Instruments). The valuation of these instruments were determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. The analyses reflect the contractual terms of the derivatives, including the period to maturity, and used observable market-based inputs, including interest rate curves, foreign exchange rates and implied volatilities as applicable. The fair value of the interest rate swaps and cap agreements were determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash payments. Our fair values of our net investment hedges are based primarily on the change in the spot rate at the end of the period as compared with the strike price at inception.
To comply with GAAP, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the
22
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
fair value of derivative contracts for the effect of non-performance risk, we consider the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.
Although we had determined that the majority of the inputs used to value our hedges were within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our hedges utilized Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparties. However, through March 31, 2026, we had assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our hedge positions and determined that the credit valuation adjustment was not significant to the overall valuation of our hedge. As a result, we determined that our hedge valuation in its entirety was classified in Level 2 of the fair value hierarchy.
The table below presents the Company's assets and liabilities measured at fair value on a recurring basis as of March 31, 2026, aggregated by the level in the fair value hierarchy within which those measurements fall:
|
|
Fair Value Measurements at Reporting Date Using |
|
|||||||||
Description |
|
Quoted Prices in Active |
|
|
Significant Other |
|
|
Significant Unobservable |
|
|||
Other assets - interest rate hedges |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
Accounts payable and accrued liabilities - interest rate hedges |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
Derivative Instruments and Hedging Activities
We record all derivatives on our balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. We may enter into derivative contracts that are intended to economically hedge certain of our risks, even though hedge accounting does not apply or we elect not to apply hedge accounting.
For derivatives designated as hedges, the effective portion of changes in the fair value of the derivatives are reported in accumulated other comprehensive income (loss). The ineffective portion of the change in fair value of the derivatives is recognized directly in Derivative fair value adjustment, within our consolidated statements of operations. Amounts are reclassified out of other comprehensive (loss) income into earnings (loss) when the hedged net investment is either sold or substantially liquidated.
Interest rate derivatives not designated as hedges for GAAP are not speculative and are used to manage our exposure to interest rate movements and other identified risks but we have elected not to apply hedge accounting. Changes in the fair value of interest rate derivatives not designated in hedging relationships are recorded in derivative fair value adjustment, net of cash settlements, within our consolidated statements of operations.
Income Taxes
We made an election to be taxed as a Real Estate Investment Trust (“REIT”), under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31, 2021. To qualify as a REIT, we must continue to meet certain organizational and operational requirements, including a requirement to distribute at least
23
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT and intend to operate in the foreseeable future in such a manner that we will remain qualified as a REIT for federal income tax purposes.
Even if we continue to qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and federal income and excise taxes on our undistributed income.
We filed an election to treat our TRS as a taxable REIT subsidiary. In general, the TRS performs additional services for our customers and generally engages in any real estate or non-real estate related business. The TRS is subject to corporate federal and state income tax. We account for deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes a change in our judgment about expected future tax consequences of events, is included in the tax provision when such changes occur. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes a change in our judgment about the realizability of the related deferred tax asset, is included in the tax provision when such changes occur.
As of both March 31, 2026, and December 31, 2025, the Company had
|
|
March 31, |
|
|
December 31, |
|
||
Deferred tax asset: |
|
|
|
|
|
|
||
Canadian interest expense limitation |
|
$ |
|
|
$ |
|
||
Canadian carryforward capital losses |
|
|
|
|
|
|
||
Canadian real estate |
|
|
|
|
|
|
||
Total deferred tax asset |
|
|
|
|
|
|
||
Deferred tax liabilities: |
|
|
|
|
|
|
||
Canadian real estate |
|
|
( |
) |
|
|
( |
) |
Total deferred tax liabilities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Valuation allowance |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Net deferred tax liabilities |
|
$ |
— |
|
|
$ |
— |
|
Uncertain tax positions may arise where tax laws may allow for alternative interpretations or where the timing of recognition of income is subject to judgment. Under ASC Topic 740, tax positions are evaluated for recognition using a more–likely–than–not threshold, and those tax positions requiring recognition are measured at the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Interest and penalties relating to uncertain tax positions will be recognized in income tax expense when incurred. As of March 31, 2026 and December 31, 2025, the Company had
Recent Tax Legislation
24
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
years beginning after December 31, 2025, and (iv) increases the base on which the 30% interest deduction limit under Section 163(j) of the Code applies by excluding depreciation, amortization and depletion from the definition of “adjusted taxable income” for taxable years beginning after December 31, 2024. The provisions of OBBBA did not have a material impact to our Consolidated Financial Statements.
Concentration
Segment Reporting
Our business is composed of
Per Share Data
Basic earnings per share attributable to our common stockholders for all periods presented are computed by dividing net loss attributable to our common stockholders by the weighted average number of common shares outstanding during the period, excluding unvested restricted stock. Diluted earnings per share is computed by including the dilutive effect of the conversion of all potential common stock equivalents (which includes unvested restricted stock awards and Series B Convertible Preferred Stock) utilizing the treasury stock or if-converted method, as applicable. The dilutive effect of unvested restricted stock and Series B Convertible Preferred Stock was not included in the dilutive weighted average shares as such shares were antidilutive.
The following table presents the unconverted Series B Convertible Preferred Stock and unvested restricted stock awards, that were excluded from the computation of diluted earnings per share above as their effect would have been antidilutive for the respective periods, and was calculated using the treasury stock or if-converted method, as applicable:
|
|
For the three months ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
|
|
Equivalent Shares |
|
|
Equivalent Shares |
|
||
Series B Convertible Preferred Stock |
|
|
|
|
|
|
||
Unvested restricted stock awards |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Recently Issued Accounting Guidance
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses (Topic 220).” The guidance in ASU 2024-03 was issued to provide investors with more disaggregated information about an entity’s expenses. In January 2025, the FASB issued ASU 2025-01 for the sole purpose of clarifying the effective date of ASU 2024-03. The amendment becomes effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. We are currently evaluating the impact upon adoption of the new standard on our consolidated financial statements and related disclosures.
Note 3. Real Estate Facilities
The following summarizes the activity in real estate facilities during the three months ended March 31, 2026:
25
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
Real estate facilities |
|
|
|
|
Balance at December 31, 2025 |
|
|
|
|
Improvements and additions |
|
|
|
|
Impact of foreign exchange rate changes |
|
|
( |
) |
Balance at March 31, 2026 |
|
$ |
|
|
Accumulated depreciation |
|
|
|
|
Balance at December 31, 2025 |
|
|
( |
) |
Depreciation expense |
|
|
( |
) |
Impact of foreign exchange rate changes |
|
|
|
|
Balance at March 31, 2026 |
|
$ |
( |
) |
There were
Note 4. Investments in Unconsolidated Real Estate Ventures
We have entered into various agreements with a subsidiary of SmartCentres, an unaffiliated third party, to acquire tracts of land, develop and operate self storage facilities. Our unconsolidated real estate ventures consist of four operating self storage facilities in the lease-up phase and one parcel of land that is being developed into a self storage facility.
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. Equity in earnings (loss) will generally be recognized based on our ownership interest in the earnings (loss) of each of the unconsolidated investments.
For the three months ended March 31, 2026 and 2025, we recorded net aggregate loss of approximately $
The Company's investments in unconsolidated real estate ventures are summarized as follows:
|
|
|
|
|
|
|
|
|
|
Carrying Value of |
|
|||||
|
|
Location |
|
Date Real Estate |
|
Date Real Estate Venture |
|
Equity |
|
March 31, |
|
|
December 31, |
|
||
Toronto (1) |
|
Toronto, Ontario |
|
|
|
|
$ |
|
|
$ |
|
|||||
Toronto II (1) |
|
Toronto, Ontario |
|
|
|
|
|
|
|
|
|
|||||
Dorval (1) |
|
Dorval, Quebec |
|
|
|
|
|
|
|
|
|
|||||
Hamilton (1) |
|
Hamilton, Ontario |
|
|
|
|
|
|
|
|
|
|||||
Montreal (1) |
|
Montreal, Quebec |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||
SmartCentres Financing
On August 30, 2024, we and SmartCentres, through the Toronto, Toronto II, Dorval and Hamilton joint venture partnerships (the “JV Properties”), entered into a master mortgage commitment agreement (the “MMCA”) with SmartCentres Storage Finance LP (the “SmartCentres Lender”) (collectively, the “SmartCentres Financing”). The SmartCentres Lender is an affiliate of SmartCentres. The initial maximum amount available under the loan is CAD $
On February 19, 2026, the JV Properties amended the SmartCentres Financing to: (i) extend the maturity date by one-year until
26
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
approximately CAD $
As of March 31, 2026, approximately CAD $
The SmartCentres Financing is secured by first mortgages on each of the JV Properties. Interest on the SmartCentres Financing is a variable annual rate equal to the aggregate of:
The SmartCentres Financing matures on May 11, 2027, and may be extended annually as set forth in the MMCA. Monthly interest payments are initially capitalized on the outstanding principal balance. Upon a JV Property generating sufficient Net Cash Flow (as defined in the MMCA), the SmartCentres Financing provides for the commencement of quarterly payments of interest. The borrowings advanced pursuant to the SmartCentres Financing may be prepaid without penalty, subject to certain conditions set forth in the MMCA.
The SmartCentres Financing contains customary affirmative and negative covenants, agreements, representations, warranties and borrowing conditions (including a loan to value ratio of no greater than
Note 5. Debt
The Company’s secured debt is summarized as follows:
Debt |
|
March 31, |
|
|
December 31, |
|
|
Interest |
|
|
Maturity |
|||
Huntington Credit Facility(1) |
|
$ |
|
|
$ |
|
|
|
% |
|
||||
National Bank of Canada - Four Property Loan(2) |
|
|
|
|
|
|
|
|
% |
|
||||
Skymar - Vancouver |
|
|
|
|
|
|
|
|
% |
|
||||
Meridian Loan(3) |
|
|
|
|
|
|
|
|
% |
|
||||
QuadReal - Seven Property Loan(4) |
|
|
|
|
|
|
|
|
% |
|
||||
Skymar - Bradenton |
|
|
|
|
|
|
|
|
% |
|
||||
SmartStop Bridge Loan |
|
|
|
|
|
|
|
|
% |
|
||||
Debt issuance costs, net |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
Total Debt |
|
$ |
|
|
$ |
|
|
|
|
|
|
|||
The weighted average interest rate on our consolidated debt, excluding the impact of our interest rate hedging activities, as of March 31, 2026 was approximately
27
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
Huntington Credit Facility
On November 30, 2021, we, through
Under the terms of the Credit Agreement, the Initial Borrower had an initial maximum borrowing capacity of $
On May 17, 2022, we entered into an amendment and joinder to amend the Huntington Credit Facility (the “Second Amendment”). Under the terms of the Second Amendment, we increased our borrowing capacity by $
On April 13, 2023, we entered into an amendment and joinder to the Huntington Credit Facility to: (i) increase the borrowing capacity up to approximately $
On April 13, 2023, in conjunction with the amendment to the Huntington Credit Facility, we entered into two interest rate swap agreements with a notional amount of $
On November 15, 2024, we amended the Huntington Credit Facility to: (i) extend the maturity date by two-years until November 30, 2027, (ii) add one additional special purpose entity as a borrower under the loan (the “Further Additional Borrower”), and (iii) modify certain other covenants (the “Huntington Amendment”). In connection with the Huntington Amendment: (i) we increased our recourse guaranty in favor of Huntington under the Huntington Credit Facility from
28
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
entered into a new interest rate swap agreement with a notional amount of approximately $
On March 4, 2025, in connection with entering into the Skymar — Vancouver Loan, we paid down the Huntington Credit Facility by approximately $
On March 18, 2025, in connection with entering into the Skymar — Bradenton Loan, we paid down the Huntington Credit Facility by approximately $
The Huntington Credit Facility is a term loan that has a maturity date of
On December 23, 2025, we terminated the SOFR Huntington Credit Facility swap entered on November 15, 2024 and entered into a new interest rate swap agreement with a notional amount of approximately $
The amounts outstanding under the Huntington Credit Facility bear interest at a variable rate equal to the
The Credit Agreement contains certain customary representations and warranties, affirmative, negative and financial covenants, borrowing conditions, and events of default. We serve as a limited recourse guarantor with respect to the Huntington Credit Facility. In particular, the financial covenants include a minimum debt service coverage ratio and minimum net worth and liquid assets requirements applicable to us and our Operating Partnership as guarantors. As of March 31, 2026, we were in compliance with all such covenants.
SmartStop Bridge Loan
On June 15, 2023, in connection with the acquisition of the Ontario Portfolio, we, through a wholly-owned subsidiary of our Operating Partnership (the “Bridge Loan Borrower”), entered into a bridge loan agreement (the “SmartStop Bridge Loan Agreement”) with SmartStop OP for $
Pursuant to the SmartStop Bridge Loan Agreement, the amounts outstanding under the SmartStop Bridge Loan bear a floating rate equal to
On June 28, 2024, we amended the SmartStop Bridge Loan (the “SmartStop Bridge Loan Amendment”) to (i) increase the maximum borrowing capacity of the loan from $
29
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
As of March 31, 2026, the interest rate on the SmartStop Bridge Loan was
The SmartStop Bridge Loan contains customary affirmative and negative covenants, agreements, representations, warranties and borrowing conditions, and events of default. As of March 31, 2026, we were in compliance with all such covenants.
National Bank of Canada - Burlington Loan
On September 20, 2022, in connection with the acquisition of the property in Burlington, Ontario (the “Burlington Property”), we, through a special purpose entity formed to acquire and hold the Burlington Property, entered into a term loan with National Bank of Canada (the “National Bank of Canada - Burlington Loan”) for CAD $
On May 22, 2024, we amended the National Bank of Canada - Burlington Loan to reflect a transition from CDOR to CORRA. On June 27, 2024, the loan and the interest rate swap converted to CORRA. Borrowings under the National Bank of Canada - Burlington Loan were subject to interest at the CORRA rate, plus a CORRA adjustment of approximately
On January 8, 2025, in connection with entering into the National Bank of Canada — Four Property Loan, the National Bank of Canada — Burlington Loan was repaid in full and terminated without fees or penalties. On January 8, 2025, we settled the CORRA interest rate swap agreement.
National Bank of Canada - Cambridge Loan
On December 20, 2022, in connection with the acquisition of the property in Cambridge, Ontario (the “Cambridge Property”), we, through a special purpose entity formed to acquire and hold the Cambridge Property, entered into a term loan with National Bank of Canada (the “National Bank of Canada - Cambridge Loan”) for CAD $
On May 22, 2024, we amended the National Bank of Canada - Cambridge Loan to reflect a transition from CDOR to CORRA. On May 31, 2024, the loan and the interest rate swap converted to CORRA. Borrowings under the National Bank of Canada - Cambridge Loan were subject to interest at the CORRA rate, plus a CORRA adjustment of approximately
On January 8, 2025, in connection with entering into the National Bank of Canada — Four Property Loan, the National Bank of Canada — Cambridge Loan was repaid in full and terminated without fees or penalties. On January 8, 2025, we settled the CORRA interest rate swap agreement.
National Bank of Canada – North York Loan
On January 31, 2023, in connection with the acquisition of the property in North York, Ontario (the “North York Property”), we, through a special purpose entity formed to acquire and hold the North York Property, entered into a term loan
30
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
with National Bank of Canada (the “National Bank of Canada - North York Loan”) for CAD $
On May 22, 2024, we amended the National Bank of Canada - North York Loan to reflect a transition from CDOR to CORRA. On June 3, 2024, the loan and the interest rate swap converted to CORRA. Borrowings under the National Bank of Canada - North York Loan were subject to interest at the CORRA rate, plus a CORRA adjustment of approximately
On January 8, 2025, in connection with entering into the National Bank of Canada — Four Property Loan, the National Bank of Canada — North York Loan was repaid in full and terminated without fees or penalties. On January 8, 2025, we settled the CORRA interest rate swap agreement.
Bank of Montreal Loan
On May 4, 2023, in connection with the acquisition of the Vancouver, BC Property, we, through a special purpose entity formed to acquire and hold the Vancouver, BC Property, entered into a term loan with Bank of Montreal (the “Bank of Montreal Loan”) for approximately CAD $
On May 24, 2024, we amended the Bank of Montreal Loan to reflect a transition from CDOR to CORRA. On July 4, 2024, the loan and the interest rate swap converted to CORRA. Borrowings under the Bank of Montreal Loan were subject to interest at the CORRA rate, plus a CORRA adjustment of approximately
On March 7, 2025, in connection with entering into the QuadReal — Seven Property Loan, the Bank of Montreal Loan was repaid in full and terminated without fees or penalties. On March 10, 2025, we settled the CORRA interest rate swap agreement.
First National Loan
On May 19, 2023, we, through a wholly-owned subsidiary of our Operating Partnership, entered into a term loan with First National Financial LP (the “First National Loan”) for approximately CAD $
Pursuant to the terms of the loan agreement for the First National Loan (the “First National Loan Agreement”), the amounts outstanding under the First National Loan bore a floating rate equal to the Royal Bank of Canada Prime Rate, plus
The loan may be prepaid in whole, but not in part, at any time, subject to certain conditions as set forth in the First National Loan Agreement. Pursuant to the terms of the limited recourse guaranty, we served as a full recourse guarantor with respect to the First National Loan.
On January 8, 2025, in connection with entering into the National Bank of Canada — Four Property Loan, the First National Loan was repaid in full and terminated without fees or penalties.
31
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
National Bank of Canada – Ontario Loan
On June 15, 2023, in connection with the acquisition of the Ontario Portfolio (the “Ontario Portfolio”), we, through certain wholly-owned subsidiaries of our Operating Partnership, entered into a CAD $
Pursuant to the loan agreement (the “National Bank of Canada Ontario Loan Agreement”) the interest rate was equal to the
On May 31, 2024, we amended the National Bank of Canada - Ontario Loan to reflect a transition from CDOR to CORRA. On June 28, 2024, the loan and the interest rate swap converted to CORRA. Borrowings under the National Bank of Canada - Ontario Loan were subject to interest at the CORRA rate, plus a CORRA adjustment of approximately
On March 7, 2025, in connection with entering into the QuadReal — Seven Property Loan, the National Bank of Canada — Ontario Loan was repaid in full and terminated without fees or penalties. On March 7, 2025, we settled the CORRA interest rate swap agreement.
National Bank of Canada — Four Property Loan
On January 8, 2025, we, through certain wholly-owned subsidiaries of our operating partnership, entered into a CAD $
Pursuant to the loan agreement for the National Bank of Canada — Four Property Loan (the “Four Property Loan Agreement”), amounts outstanding under the National Bank of Canada — Four Property Loan bear an interest rate equal to CORRA, plus a CORRA adjustment of approximately
The Four Property Loan Agreement contains a modified debt service coverage ratio and customary affirmative, negative, and financial covenants, an interest reserve requirement, agreements, representations, warranties and borrowing conditions, and events of default, all as set forth in the Four Property Loan Agreement. We serve as a full recourse guarantor with respect to the National Bank of Canada — Four Property Loan. As of March 31, 2026, we were in compliance with all such covenants.
Skymar — Vancouver Loan
On March 4, 2025, we, through an indirect, wholly-owned special purpose entity, entered into a $
32
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
Pursuant to the loan agreement for the Skymar - Vancouver Loan (the “Skymar Vancouver Loan Agreement”), amount outstanding under the Skymar - Vancouver Loan bears interest at an annual fixed rate equal to
Meridian Financing
On March 6, 2025, we, through an indirect, wholly-owned special purpose entity, entered into a credit agreement with Meridian Credit Union Limited (the “Meridian Credit Agreement”) with a maximum borrowing capacity of approximately CAD $
Pursuant to the Meridian Credit Agreement, amounts outstanding under the Meridian Loan bear interest at an annual rate equal to the Canada Prime Rate plus
On August 19, 2025, we modified the Meridian Credit Agreement and reduced the all-in floor rate to
The Meridian Credit Agreement contains customary affirmative, negative, and financial covenants, agreements, representations, warranties and borrowing conditions, and events of default. We serve as a full recourse guarantor with respect to the Meridian Loan. As of March 31, 2026, we were in compliance with all such covenants.
QuadReal — Seven Property Loan
On March 7, 2025, we, through certain indirect, wholly-owned subsidiaries of our operating partnership, entered into a CAD $
The QuadReal — Seven Property Loan is secured by a first mortgage on six of our properties in the Greater Toronto Area of Ontario, Canada and one property in Vancouver, British Columbia, Canada. The aggregate amount of the QuadReal - Seven Property Loan is separated out by advances, whereby we may draw up to CAD $
The interest rate on the Initial Advance bears interest at an annual fixed rate equal to
33
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
The QuadReal - Seven Property Loan Agreement also contains customary affirmative, negative, and financial covenants, agreements, representations, warranties and borrowing conditions, and events of default, all as set forth in the QuadReal - Seven Property Loan Agreement. We serve as a non-recourse guarantor with respect to the QuadReal — Seven Property Loan. In addition, we provided the lenders with a debt service guarantee. However, the debt service guarantee may be terminated early based on achieving two consecutive fiscal quarters at a specific
Skymar — Bradenton Loan
On March 18, 2025, we, through an indirect, wholly-owned special purpose entity, entered into an approximately $
Pursuant to the loan agreement for the Skymar Bradenton Loan (the "Skymar Bradenton Loan Agreement"), amounts outstanding under the Skymar - Bradenton Loan bear interest at an annual fixed rate equal to
The following table presents the future principal payment requirements on our outstanding secured debt as of March 31, 2026:
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Total payments |
|
|
|
|
Debt issuance costs, net |
|
|
( |
) |
Total |
|
$ |
|
Note 6. Derivative Instruments
Interest Rate Derivatives
Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we use interest rate swaps and caps as part of our interest rate risk management strategy. The effective portion of the change in the fair value of the derivative that qualifies as a cash flow hedge is recorded in accumulated other comprehensive income (loss) (“AOCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. In addition, we classify cash flows from qualifying cash flow hedging relationships in the same category as the cash flows from the hedged items in our consolidated statements of cash flows. We do not use interest rate derivatives for trading or speculative purposes.
Interest rate derivatives not designated as hedges for GAAP are not speculative and are used to manage our exposure to interest rate movements and other identified risks but we have elected not to apply hedge accounting. Changes in the fair value of interest rate derivatives not designated in hedging relationships are recorded in derivative fair value adjustment within our consolidated statements of operations.
34
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
Foreign Currency Hedge
Our objectives in using foreign currency derivatives are to add stability to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar and to manage our exposure to exchange rate movements. To accomplish this objective, we have used foreign currency options as part of our exchange rate risk management strategy. A foreign currency option contract is a commitment by the seller of the option to deliver, solely at the option of the buyer, a certain amount of currency at a certain price on a specific date.
For derivatives designated as net investment hedges for GAAP purposes, the changes in the fair value of the derivatives are reported in accumulated other comprehensive income. Amounts are reclassified out of accumulated other comprehensive income (loss) into earnings when the hedged net investment is either sold or substantially liquidated. The change in the value of the designated portion of our settled and unsettled foreign currency hedges is recorded net in foreign currency hedge contract in our consolidated statements of comprehensive loss in the related period.
The change in the value of the portion of our settled and unsettled foreign currency hedge that is not designated for hedge accounting for GAAP is recorded in Foreign currency adjustment within our consolidated statements of operations and represented a gain of approximately
|
|
Notional |
|
|
Strike |
|
|
Effective |
|
Maturity |
||
Interest Rate Derivatives: |
|
|
|
|
|
|
|
|
|
|
||
CORRA Swap - Four Property Loan(1) |
|
$ |
|
|
|
% |
|
|
||||
SOFR Swap - Huntington Credit Facility(2) |
|
$ |
|
|
|
% |
|
|
||||
The following table summarizes the terms of our derivative financial instruments as of December 31, 2025:
|
|
Notional |
|
|
Strike |
|
|
Effective |
|
Maturity |
||
Interest Rate Derivatives: |
|
|
|
|
|
|
|
|
|
|
||
CORRA Swap - Four Property Loan(1) |
|
$ |
|
|
|
% |
|
|
||||
SOFR Swap - Huntington Credit Facility(2) |
|
$ |
|
|
|
% |
|
|
||||
The following table presents a gross presentation of the fair value of our derivatives financial instruments as well as their classification on our consolidated balance sheets as of March 31, 2026 and December 31, 2025:
|
|
Asset/Liability Derivatives |
|
|||||
|
|
March 31, |
|
|
December 31, |
|
||
Interest Rate Hedges: |
|
|
|
|
|
|
||
Other assets |
|
$ |
|
|
$ |
|
||
Accounts payable and accrued liabilities |
|
$ |
|
|
$ |
|
||
The following table presents the effects of our derivative financial instruments on our consolidated statements of operations for the periods presented:
35
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
|
|
Gain (loss) recognized in OCI for |
|
|
Location of |
|
Gain (loss) reclassified from OCI for the three months ended March 31, |
|
Location of Gain or (Loss) Recognized in Income on Derivative |
|
Amount of Gain or (Loss) Recognized in Income on Derivative for the three months ended March 31, |
|
|||||||||||||||
Type |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
2026 |
|
|
2025 |
|
||||||
Interest Rate Swaps |
|
$ |
|
|
$ |
( |
) |
|
Interest Expense |
|
$ |
( |
) |
|
$ |
|
Interest Expense |
|
$ |
— |
|
|
$ |
( |
) |
||
Interest Rate Caps |
|
|
— |
|
|
|
— |
|
|
Interest Expense |
|
|
— |
|
|
|
|
Interest Expense |
|
|
— |
|
|
|
|
||
Foreign Currency Put |
|
|
— |
|
|
|
( |
) |
|
N/A |
|
|
— |
|
|
|
— |
|
N/A |
|
|
— |
|
|
|
— |
|
|
|
$ |
|
|
$ |
( |
) |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
— |
|
|
$ |
( |
) |
||
Based upon the forward rates in effect as of March 31, 2026, we estimate that approximately $
Note 7. Preferred Equity
Issuance of Series B Preferred Stock of Our Company
On May 1, 2023, we issued $
The Series B Purchase Agreement provides that the purchase price for the Preferred Shares shall be equal to $
In connection with the issuance of the Series B Convertible Preferred Stock, and in certain other limited circumstances, we permitted the Investor, or any entity that beneficially owns or constructively owns shares of our stock as a result of the Investor’s ownership of Series B Convertible Preferred Stock, to beneficially own and constructively own the Series B Convertible Preferred Stock issued to the Investor pursuant to the Series B Purchase Agreement and any Class A Common Stock issued upon conversion of the Series B Convertible Preferred Stock.
We primarily used the net proceeds from the issuance of the Preferred Shares to repay the SmartStop Delayed Draw Mezzanine Loan, to redeem the Series A Preferred Units of our Operating Partnership, and to finance the acquisitions of the Vancouver Property and Ontario Portfolio.
Articles Supplementary
On May 1, 2023, in connection with the issuance of the Series B Convertible Preferred Stock, we filed the Series B Articles Supplementary with the State Department of Assessments and Taxation of Maryland, to classify and designate
As set forth in the Series B Articles Supplementary, the Series B Convertible Preferred Stock ranks senior to all other classes of our capital stock, including the Class A common stock (“Class A Common Stock”), Class P common stock, Class T common stock, Class W common stock, Class Y common stock and Class Z common stock (collectively, the “Common Stock”), with respect to rights to receive dividends and to participate in distributions or payments upon any voluntary or involuntary liquidation, dissolution or winding up. Dividends payable on each share of Series B Convertible Preferred Stock will initially be equal to a rate of
36
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
dividend rate will increase an additional
Upon any voluntary or involuntary liquidation, dissolution or winding up, the holders of Series B Convertible Preferred Stock will be entitled to receive a payment equal to the greater of (i) the aggregate Purchase Price of all outstanding Preferred Shares (the “Series B Preferred Stock Liquidation Amount”), plus an amount equal to any accrued and unpaid dividends and other distributions (whether or not accumulated or authorized and declared) to the date of payment and (ii) the amount that that would have been payable had the Preferred Shares been converted into Common Stock pursuant to the terms of the Series B Articles Supplementary immediately prior to such liquidation.
Subject to certain additional redemption rights, as described herein, we have the right to redeem the Series B Convertible Preferred Stock for cash at any time following the third anniversary of the issuance of the Preferred Shares pursuant to the Series B Purchase Agreement. The amount of such redemption will be equal to the aggregate Purchase Price of all outstanding Preferred Shares, plus applicable redemption premium as set forth in the Series B Articles Supplementary (together, the “Redemption Price”) and an amount equal to any accrued and unpaid dividends and distributions on the Series B Convertible Preferred Stock (whether or not accumulated or authorized and declared) up to the redemption date. Upon the listing of Common Stock on a national securities exchange (the “Listing”), we have the right to redeem any or all outstanding Series B Convertible Preferred Stock at an amount equal to the greater of (i) the amount that the holders of such Preferred Shares would have received had such Preferred Shares been converted into Common Stock pursuant to the terms of the Series B Articles Supplementary immediately prior to the initial Listing, and then all of such Preferred Shares had been sold in the initial Listing, up to the Conversion Value Limitation (as described herein), or (ii) the Redemption Price, in each case, plus an amount equal to any accrued and unpaid dividends and distributions on the Series B Convertible Preferred Stock (whether or not accumulated or authorized and declared) up to the date of initial Listing. The Conversion Value Limitation is an amount per share determined using an as-converted value limitation equal to a premium of $
At any time after the earlier to occur of (i) the third anniversary of the issuance of the Preferred Shares is issued pursuant to the Series B Purchase Agreement or (ii) 180 days after an initial Listing, the holders of Series B Convertible Preferred Stock have the right to convert any or all of the Series B Convertible Preferred Stock held by such holders into Class A Common Stock at a rate per share equal to the quotient obtained by dividing the Series B Convertible Preferred Stock Liquidation Amount, plus an amount equal to any accrued and unpaid dividends or other distributions (whether or not accumulated or authorized and declared), by the conversion price. The conversion price is initially $
The holders of Series B Convertible Preferred Stock are not entitled to vote on any matter submitted to a vote of our stockholders, except that in the event that the dividend for the Series B Convertible Preferred Stock has not been paid for at least four quarterly dividend periods (whether or not consecutive), the holders of Series B Convertible Preferred Stock have the right to vote together with the holders of Common Stock as a single class on any matter submitted to a vote of our stockholders. The number of votes applicable to a share of Series B Convertible Preferred Stock will be equal to the number of shares of Class A Common Stock into which a share of Series B Convertible Preferred Stock could have been converted as of the record date set for purposes of such stockholder vote. This foregoing limited voting right shall cease when all past dividend periods have been paid in full.
37
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
revenues for our last fiscal year and (v) permitting any individual other than H. Michael Schwartz to (A) serve as our Chairman or any similar role or (B) otherwise perform any of the duties typically performed by Mr. Schwartz in his capacity as Chairman as of the date of the Series B Purchase Agreement.
Investor's Right Agreement
On May 1, 2023, concurrent with our entry into the Series B Purchase Agreement, we and the Investor entered into an investors’ rights agreement (the “Investors’ Rights Agreement”). Pursuant to the Investors’ Rights Agreement, the Investor has the right to request us to register for resale under the Securities Act of 1933, as amended, shares of the Class A Common Stock issued to the Investor upon conversion of the Preferred Shares acquired pursuant to the Series B Purchase Agreement, subject to certain limitations. After the first anniversary of the issuance of the Preferred Shares, the Investor may request up to four demand registrations for an amount of shares equal to at least $
Amendment to Our Operating Partnership Agreement for Series B Convertible Preferred Units
On May 1, 2023, concurrent with our entry into the Series B Purchase Agreement, we and the Operating Partnership entered into Amendment No. 2 to the Operating Partnership Agreement, to create Series B Convertible Preferred Units having economic terms and designations, powers, preferences, rights and restrictions that are substantially similar to the Series B Preferred Stock and are summarized below:
Distribution Rate: Outstanding Series B Convertible Preferred Units will receive current distributions at a rate of
Liquidation Rights: Upon any voluntary or involuntary liquidation, dissolution or winding up of the Operating Partnership, the holders of Series B Convertible Preferred Units will be entitled to receive a payment equal to the greater of (i) the liquidation amount of such Series B Convertible Preferred Units, plus an amount equal to any accrued and unpaid distributions (whether or not accumulated or authorized and declared) to the date of payment and (ii) the amount that that would have been payable had such Series B Convertible Preferred Units been converted into common units of our Operating Partnership immediately prior to such liquidation.
Redemptions; Repurchases: In connection with any redemption of shares of Series B Convertible Preferred Stock, our Operating Partnership shall redeem, on the date of such redemption, an equal number Series B Convertible Preferred Units in exchange for an amount of cash equal to the amount of cash, if any, paid to redeem the shares of Series B Convertible Preferred Stock.
Conversion Rights: In the event that any share of Series B Convertible Preferred Stock is converted into shares of any class of our common stock, our Operating Partnership shall convert, on the date of such conversion, an equal number of Series B Convertible Preferred Units into common units of our Operating Partnership at the same conversion rate at which such shares of Series B Convertible Preferred Stock are convertible into such class of common stock.
As of March 31, 2026, there were
Issuance of Series D Cumulative Redeemable Preferred Partnership Units
On September 4, 2025, the Preferred Investor, an affiliate of SmartStop, agreed to purchase up to
The terms of the Series D Preferred Units include certain rights, preferences, powers, privileges and restrictions, qualifications and limitations as are set forth in Amendment No. 5 to the Second Amended and Restated Limited Partnership Agreement of our Operating Partnership (“Amendment No. 5 to the LPA”), including the following characteristics:
38
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
As of March 31, 2026, there were
Series E Preferred Offering
On September 30, 2025, we commenced the Series E Preferred Offering of up to $
The terms of the Series E Preferred Stock are set forth in the articles supplementary for the Series E Preferred Stock (the “Series E Articles Supplementary”) and are described in more detail below:
39
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
As of March 31, 2026, there were
Amendment to Our Operating Partnership Agreement for Series E Preferred Units
On September 30, 2025, concurrent with our commencement of the Series E Preferred Offering, we and the Operating Partnership entered into Amendment No. 6 to the Operating Partnership Agreement, to create Series E Preferred Units having economic terms and designations, powers, preferences, rights and restrictions that are substantially similar to the Series B Preferred Stock and are summarized below:
Ranking: The Series E Preferred Units will, with respect to distribution rights and rights upon liquidation, dissolution, or winding up of our Operating Partnership, rank: (a) senior to the Common Units, and to all equity securities issued by our Operating Partnership the terms of which provide that such equity securities shall rank junior to such Series E Preferred Units; (b) on a parity with all equity securities issued by the operating partnership other than those referred to in clauses (a) and (c); and (c) junior to all equity securities issued by the operating partnership the terms of which provide that such equity
40
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
securities shall rank senior to the Series E Preferred Units, including the Series B Convertible Preferred Units and the Series D Preferred Units. The term “equity securities” shall not include convertible debt securities.
Distribution Rights: Subject to the preferential rights of the holders of Senior Units, the holders of Series E Preferred Units are entitled to receive, when, as and if authorized by us or our Operating Partnership and declared by us out of legally available funds, cumulative cash distributions on each unit of Series E Preferred Units at an annual rate of
Liquidation Rights: Upon any voluntary or involuntary liquidation, dissolution or winding up of our Operating Partnership, before any distribution or payment to holders of common units or any Junior Units and after any distribution to Senior Units, the holders of Series E Preferred Units will be entitled to receive a payment equal to $
Redemptions; Repurchases: In connection with any redemption of shares of Series E Preferred Stock, our Operating Partnership shall redeem, on the date of such redemption, an equal number Series E Preferred Units in exchange for an amount of cash equal to the amount of cash, if any, paid to redeem the shares of Series E Preferred Stock.
Note 8. Segment Disclosures
Our business is composed of
The Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer. Our CODM and other management regularly evaluate performance based upon consolidated net income (loss).
The following tables summarize information for the reportable segments for the three months ended March 31, 2026 and 2025:
41
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Revenues: |
|
|
|
|
|
|
||
Self storage rental revenue |
|
$ |
|
|
$ |
|
||
Ancillary operating revenue |
|
|
|
|
|
|
||
Total revenues |
|
|
|
|
|
|
||
Operating expenses: |
|
|
|
|
|
|
||
Property operating expenses |
|
|
|
|
|
|
||
Property taxes |
|
|
|
|
|
|
||
Payroll |
|
|
|
|
|
|
||
Advertising |
|
|
|
|
|
|
||
Repairs & maintenance |
|
|
|
|
|
|
||
Utilities |
|
|
|
|
|
|
||
Property insurance |
|
|
|
|
|
|
||
Administrative and professional |
|
|
|
|
|
|
||
Total property operating expenses |
|
|
|
|
|
|
||
Other operating expenses: |
|
|
|
|
|
|
||
Property operating expenses – affiliates |
|
|
|
|
|
|
||
General and administrative |
|
|
|
|
|
|
||
Depreciation |
|
|
|
|
|
|
||
Acquisition expenses |
|
|
|
|
|
|
||
Total other operating expenses |
|
|
|
|
|
|
||
Operating loss: |
|
|
( |
) |
|
|
( |
) |
Other income (expense): |
|
|
|
|
|
|
||
Interest expense |
|
|
( |
) |
|
|
( |
) |
Interest expense – debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Derivative fair value adjustment |
|
|
|
|
|
( |
) |
|
Other income (expense) |
|
|
|
|
|
|
||
Equity in loss of unconsolidated real estate ventures |
|
|
( |
) |
|
|
( |
) |
Foreign currency adjustment |
|
|
( |
) |
|
|
( |
) |
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Note 9. Related Party Transactions
Fees to Affiliates
Our Advisory Agreement and our Private Offering Managing Dealer Agreement entitle our Advisor and Orchard to specified fees upon the provision of certain services with regard to the Private Offering and investment of funds in real estate properties, among other services, as well as reimbursement for organization and offering costs incurred by our Advisor on our behalf and reimbursement of certain costs and expenses incurred by our Advisor in providing services to us.
In addition, our Advisory Agreement with our Advisor entitles our Advisor and our Dealer Manager Agreement with our Former Dealer Manager entitled our Former Dealer Manager to specified fees upon the provision of certain services with regard to the Public Offering and investment of funds in real estate properties, among other services, as well as reimbursement for organization and offering costs incurred by our Advisor on our behalf and reimbursement of certain costs and expenses incurred by our Advisor in providing services to us.
Organization and Offering Costs
Organization and offering costs of the Private Offering paid by our Advisor on our behalf will be reimbursed to our Advisor. In addition, organization and offering costs of the Public Offering have been paid and will continue to be paid by our Advisor on our behalf and will be reimbursed to our Advisor; provided, however, that our Advisor funded, and was not
42
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
reimbursed for,
Advisory Agreements
We do
Our Advisor receives acquisition fees equal to
SSA may also be entitled to various subordinated distributions under our Operating Partnership agreement if we (1) list our shares of common stock on a national exchange, (2) terminate or do not renew the Advisory Agreement, (3) liquidate our portfolio, or (4) effect a merger or other corporate reorganization.
Our Advisory Agreement provides for reimbursement of our Advisor’s direct and indirect costs of providing administrative and management services to us. Beginning four fiscal quarters after commencement of the Public Offering, pursuant to our Advisory Agreement, our Advisor is required to pay or reimburse us the amount by which our aggregate annual operating expenses, as defined, exceed the greater of
The Sponsor Funding Agreement
Beginning November 1, 2023, our Sponsor agreed to fund the payment of (i) the upfront
43
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
Agreement and entitled to receive Series C Units until the final payment of such funding amounts, and the final issuance of the Series C Units for such funding amounts, as contemplated by the terms of the Sponsor Funding Agreement.
In consideration for our Sponsor providing the funding for the front-end sales load and the cash to cover the dilution from the stock dividends described above and in Note 1 - Organization, our Operating Partnership was obligated to issue a number of Series C Units of limited partnership interest in our Operating Partnership to our Sponsor equal to the dollar amount of such funding divided by the then-current offering price (initially $
No Distribution Rights, Liquidation Rights, or Profits Allocation: The Series C Subordinated Convertible Units are not entitled to cash distributions, distributions upon liquidation, or the allocation of any profit or loss of our Operating Partnership unless and until the Series C Subordinated Convertible Units are converted into Class A Units of the Operating Partnership.
No Voting Rights: The Series C Units shall have no voting or consent rights. Notwithstanding the foregoing, the approval of the holders of Series C Units shall be required for any amendment to the rights and obligations of the Series C Subordinated Convertible Units.
Conversion Into Class A Units: The Series C Units shall automatically convert into Class A Units on a one-to-one basis upon our disclosure of an estimated net asset value per share equal to at least $
Special Allocation: Notwithstanding the allocation provisions of the Operating Partnership Agreement, liquidating gain first shall be allocated to our Sponsor with respect to its converted Series C Units to the extent attributable to the appreciation in the value of our Operating Partnership’s assets after the first date of issuance of the Series C Units. As a result of the special allocation, the Section 704(b) capital account attributable to the converted Series C Units shall be equal to the Section 704(b) capital account for each Class A Unit issued and outstanding as of the date of the conversion on a pro rata basis.
Rights upon Liquidation: Notwithstanding the provisions of the Operating Partnership Agreement governing distributions upon liquidation, if, after the conversion of any Series C Units into a Class A Unit, the liquidating gain from a sale, exchange, merger, liquidation or other transaction is insufficient to cause the holder of the converted Series C Units to receive an amount of cash or property (at minimum) equal to the liquidation right for the holders of Class A Units on a unit by unit basis, each such unit holder shall nevertheless receive an amount equal to the liquidation right for the holders of Class A Units on a unit by unit basis, for each converted Series C Unit (the “Series C Unit Liquidation Preference”). Upon the actual liquidation of our Operating Partnership, the cash payment of the Series C Unit Liquidation Preference shall be treated
44
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
as (1) a liquidation distribution from our Operating Partnership to the extent of the section 704(b) capital account attributable to the converted Series C Units and (2) a guaranteed payment for U.S. federal income tax purposes for the excess of the Series C Unit Liquidation Preference in cash over the section 704(b) capital account balance of the holder of the Series C Unit for each such converted Series C Unit. For avoidance of doubt, the Series C Units are subject to all of the terms and conditions set forth in Amendment No. 3 prior to conversion and are not entitled to any liquidation right until conversion.
Transfer Rights: The Series C Units may be transferred to any affiliate without our consent.
Property Management Agreement
Each of our self storage properties is managed by our Property Manager under separate property management agreements. Under each agreement, our Property Manager receives a fee for its services in managing our properties, generally equal to the greater of $
All of our properties are operated under the “SmartStop® Self Storage” brand. An affiliate of our Sponsor owns the rights to the “SmartStop® Self Storage” brand.
Pursuant to the terms of the agreements described above, the following table summarizes related party costs incurred and paid by us for the year ended December 31, 2025 and the three months ended March 31, 2026, as well as any related amounts payable as of December 31, 2025 and March 31, 2026:
|
|
Year Ended December 31, 2025 |
|
|
Three Months Ended March 31, 2026 |
|
||||||||||||||||||
|
|
Incurred |
|
|
Paid |
|
|
Payable |
|
|
Incurred |
|
|
Paid |
|
|
Payable |
|
||||||
Expensed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating expenses |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Asset management fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Property management fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acquisition expenses (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||
Preferred Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Offering Costs |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Tenant Programs
We may offer Tenant Programs to customers at our properties pursuant to which our Property Manager or an affiliate is entitled to substantially all of the net revenue attributable to the sale of Tenant Programs at our properties.
In order to protect the interest of the Property Manager in receiving these revenues in light of the fact that we control the properties and, hence, the ability of the Property Manager to receive such revenues, we and an affiliate of our Property Manager agreed to transfer our respective rights in such revenue to a joint venture entity owned
45
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
(ii) purchase all of the Triggering Member’s interest in the joint venture at
Storage Auction Program
Our Sponsor owns a minority interest in a company that owns
Note 10. Commitments and Contingencies
Distribution Reinvestment Plan
We adopted a distribution reinvestment plan that will allow our stockholders to have distributions otherwise distributable to them invested in additional shares of our common stock at a price equal to the then-current offering price for each class of share.
On October 2, 2023, the Company’s board of directors approved the Second Amended and Restated Distribution Reinvestment Plan (the “Second Amended and Restated DRP”) of the Company to include, as eligible participants, stockholders holding Class Y shares and stockholders holding Class Z shares. The Second Amended and Restated DRP replaced the prior distribution reinvestment plan. The distribution reinvestment plan was also amended and restated to state that the purchase price for shares pursuant to the Second Amended and Restated DRP shall be $
As of March 31, 2026, we have sold approximately
Share Redemption Program
We adopted a share redemption program for stockholders purchasing Class P shares in the Private Offering and a separate share redemption program for stockholders purchasing Class A shares, Class T shares, Class W shares, Class Y shares and Class Z shares in the Public Offering, each of which enables stockholders to sell their shares to us in limited circumstances. As long as our common stock is not listed on a national securities exchange or over-the-counter market, our stockholders who have held their stock for at least
On October 2, 2023, the Company’s board of directors approved an amendment to the Company’s share redemption program. Pursuant to the share redemption program, as amended, for Class A shares, Class T shares, Class W shares, Class Y shares, and Class Z shares, the redemption price per share will be equal to
The redemption price per for Class P shares purchased in the Private Offering will depend on the length of time such stockholders have held such shares as follows (in each case, as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock):
46
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
At any time we are engaged in an offering of Class P shares, the Redemption Amount for Class P shares purchased under the share redemption program will always be equal to or lower than the applicable per share offering price for such Class P shares. As long as we are engaged in an offering of Class P shares, the Redemption Amount shall be the lesser of the amount such stockholders paid for their Shares or the price per share in the offering. If we are no longer engaged in an offering of Class P shares, the per Share Redemption Amount will be determined by our board of directors.
Our board of directors may amend, suspend or terminate the share redemption program with
There are several limitations on our ability to redeem shares under the share redemption program, including, but not limited to:
In order to maintain operating flexibility, on August 6, 2025, our board of directors approved the suspension of our share redemption program effective as of September 6, 2025, except with respect to redemption requests made in connection with the death, commitment to a long-term care facility, qualifying disability or bankruptcy of a stockholder. The share redemption program shall remain suspended as discussed above until such time, if any, as our board of directors may approve the resumption of the share redemption program.
For the three months ended March 31, 2026 we received redemption requests totaling approximately $
Operating Partnership Redemption Rights
The limited partners of our Operating Partnership have the right to cause our Operating Partnership to redeem their limited partnership units for cash equal to the value of an equivalent number of our shares, or, at our option, we may purchase their limited partnership units by issuing
47
STRATEGIC STORAGE TRUST VI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
Other Contingencies
Note 11. Declaration of Distributions
Cash Distribution Declaration
Note 12. Potential Acquisitions
Potential Acquisition of Scarborough Property
On
Note 13. Subsequent Events
Series E Offering Status
As of May 12, 2026, in connection with our Series E Preferred Offering we have issued approximately
48
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto contained elsewhere in this report. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should also be read in conjunction with our consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025. See also “Cautionary Note Regarding Forward Looking Statements” preceding Part I.
Overview
Strategic Storage Trust VI, Inc., a Maryland corporation (the “Company”), was formed on October 14, 2020 under the Maryland General Corporation Law for the purpose of engaging in the business of investing in self storage facilities and commenced formal operations on March 10, 2021. We made an election to be treated as a REIT under the Internal Revenue Code for federal income tax purposes beginning with our taxable year ended December 31, 2021.
On February 26, 2021, pursuant to a confidential private placement memorandum, we commenced a private offering (the “Private Offering”) of up to $200,000,000 in shares of our common stock and $20,000,000 shares of common stock pursuant to our distribution reinvestment plan. Please see Note 1 of the Notes to the Consolidated Financial Statements contained elsewhere in this report for additional information. The primary portion of the Private Offering was terminated on March 17, 2022. We received approximately $100.7 million in offering proceeds from the sale of our common stock pursuant to the Private Offering. Through our distribution reinvestment plan, we have issued approximately 1.2 million Class P shares for gross proceeds of approximately $11.7 million.
In connection with the Public Offering, defined below, we filed articles of amendment to our Charter (the “Articles of Amendment”) and articles supplementary to our Charter (the “Articles Supplementary”). Following the filing of the Articles of Amendment and the Articles Supplementary, we authorized 30,000,000 shares of common stock designated as Class P shares, 300,000,000 shares of common stock designated as Class A shares, 300,000,000 shares of common stock designated as Class T shares, and 70,000,000 shares of common stock designated as Class W shares. Any common stock sold in the Private Offering were redesignated as Class P common stock upon the filing of the Articles of Amendment. On May 28, 2021, we filed a Registration Statement on Form S-11 (the “Registration Statement”), which was subsequently amended, with the U.S. Securities and Exchange Commission (“SEC”) to register a maximum of $1,000,000,000 in shares of Class A, Class T, and Class W common stock for sale to the public (the “Primary Offering”) and $95,000,000 in shares of Class A, Class T, and Class W common stock for sale pursuant to our distribution reinvestment plan. On March 17, 2022, the SEC declared our registration statement effective. On October 4, 2023, we filed a Post-Effective Amendment to our Registration Statement to register two new classes of common stock (Class Y shares and Class Z shares) with the SEC. On November 1, 2023, the Post-Effective Amendment to our Registration Statement became effective with the SEC. Also, on November 1, 2023, we filed articles supplementary to our Charter which reclassified 200,000,000 Class T shares as Class Y shares and 70,000,000 Class A shares as Class Z shares. Effective November 1, 2023, we began offering Class Y shares and Class Z shares in our Primary Offering for $9.30 per share and Class A shares, Class P shares, Class T shares, Class W shares, Class Y shares and Class Z shares pursuant to our distribution reinvestment plan for $9.30 per share (collectively, the “Public Offering”). We are no longer offering Class A shares, Class T shares or Class W shares in our Primary Offering.
On May 20, 2025, our board of directors approved the termination of the Primary Offering, effective as of May 30,2025, based upon various factors, including the costs of maintaining a public registration of our common stock, the robust size of our portfolio of properties, and our shift in focus to continued portfolio stabilization and performance. The termination of the Primary Offering occurred on May 30, 2025. We sold approximately 2.9 million Class A shares for gross offering proceeds of approximately $30.3 million, approximately 4.8 million Class T shares for gross offering proceeds of approximately $48.1 million, approximately 0.7 million Class W shares for gross offering proceeds of approximately $6.3 million, approximately 5.2 million Class Y shares for gross offering proceeds of approximately $50.6 million, and approximately 0.6 million Class Z shares for gross offering proceeds of approximately $5.5 million in the Primary Offering.
We continue to offer Class P, Class A, Class T, Class W, Class Y, and Class Z shares pursuant to our distribution reinvestment plan. On July 18, 2025, we filed with the SEC a Registration Statement on Form S-3, which registered up to an additional $75.0 million in shares under our distribution reinvestment plan for all share classes (our “DRP Offering”). The DRP Offering may be terminated at any time upon 10 days’ prior written notice to stockholders.
As of March 31, 2026, we have issued approximately 1.2 million Class P shares, approximately 0.3 million Class A shares, approximately 0.4 million Class T shares, approximately 62,000 Class W shares, approximately 0.3 million Class Y shares and approximately 14,000 Class Z shares for gross proceeds of approximately $21.3 million through our distribution reinvestment plan.
49
We have invested the net proceeds from our Private Offering and Public Offering primarily in self storage facilities consisting of both income-producing and growth properties located in the United States and Canada. As of March 31, 2026, we owned 25 operating self storage properties located in seven states (Arizona, Delaware, Florida, Nevada, Oregon, Pennsylvania and Washington) and three Canadian provinces (Alberta, British Columbia and Ontario), 50% equity interests in five unconsolidated real estate ventures located in two Canadian provinces (Ontario and Quebec). Our unconsolidated real estate ventures consist of four operating self storage properties in the lease-up phase and one parcel of land that is being developed into a self storage facility, with subsidiaries of SmartCentres owning the other 50% of such entity and one development property in Florida.
As of March 31, 2026, our operating self storage portfolio was comprised as follows:
State |
|
No. of |
|
|
Units(1) |
|
|
Sq. Ft. |
|
|
% of Total |
|
|
Physical |
|
|
Rental |
|
||||||
Alberta |
|
|
1 |
|
|
|
495 |
|
|
|
48,800 |
|
|
|
2 |
% |
|
|
89 |
% |
|
|
3 |
% |
Arizona |
|
|
4 |
|
|
|
2,850 |
|
|
|
378,720 |
|
|
|
17 |
% |
|
|
91 |
% |
|
|
15 |
% |
British Columbia |
|
|
1 |
|
|
|
925 |
|
|
|
59,180 |
|
|
|
3 |
% |
|
|
89 |
% |
|
|
4 |
% |
Delaware |
|
|
1 |
|
|
|
820 |
|
|
|
80,545 |
|
|
|
4 |
% |
|
|
88 |
% |
|
|
3 |
% |
Florida |
|
|
4 |
|
|
|
2,585 |
|
|
|
334,615 |
|
|
|
15 |
% |
|
|
91 |
% |
|
|
11 |
% |
Nevada |
|
|
1 |
|
|
|
335 |
|
|
|
51,900 |
|
|
|
2 |
% |
|
|
91 |
% |
|
|
3 |
% |
Ontario(5) |
|
|
10 |
|
|
|
9,765 |
|
|
|
1,050,035 |
|
|
|
47 |
% |
|
|
79 |
% |
|
|
49 |
% |
Oregon |
|
|
1 |
|
|
|
520 |
|
|
|
55,830 |
|
|
|
2 |
% |
|
|
93 |
% |
|
|
3 |
% |
Pennsylvania |
|
|
1 |
|
|
|
810 |
|
|
|
78,040 |
|
|
|
3 |
% |
|
|
91 |
% |
|
|
4 |
% |
Washington |
|
|
1 |
|
|
|
1,095 |
|
|
|
99,745 |
|
|
|
5 |
% |
|
|
94 |
% |
|
|
5 |
% |
|
|
|
25 |
|
|
|
20,200 |
|
|
|
2,237,410 |
|
|
|
100 |
% |
|
|
85 |
% |
|
|
100 |
% |
Development Properties
Bradenton Land
On February 16, 2023, we, through an indirect, wholly-owned subsidiary of our Operating Partnership, acquired a parcel of land adjacent to our property in Bradenton, Florida (the “Bradenton Land”) from an unaffiliated third party. The purchase price for the Bradenton Land was approximately $1.4 million, plus closing costs and an acquisition fee to our advisor. We are in the process of expanding our current self storage property on the Bradenton Land. As of March 31, 2026, estimated development cost to complete the expansion are approximately $1.4 million, which we expect to fund with a combination of net proceeds from our Series E Preferred Offering and/or potential future debt financing.
Etobicoke Land
On March 27, 2023, we, through an indirect, wholly-owned subsidiary of our operating partnership, acquired a parcel of land to be developed into a self storage facility located in Etobicoke, in the city of Toronto, Ontario (the “Etobicoke Land”) from an unaffiliated third party. The purchase price for the Etobicoke Land was approximately CAD $2.2 million, plus closing costs and an acquisition fee to our advisor. On February 25, 2026, we substantially completed development and commenced operations at the Etobicoke Property. As of March 31, 2026, our cost to complete development is approximately CAD $4.7 million, which we expect to fund with a combination of net proceeds from our Primary offering and/or the Meridian financing, as described below.
On March 6, 2025, we through wholly-owned subsidiary of our operating partnership, entered into a credit agreement with Meridian Credit Union Limited ("Meridian") with a maximum borrowing capacity of CAD $16.0 million. As of March 31, 2026, we had drawn approximately CAD $10.9 million and have CAD $5.1 million available. Please see Note 5 - Debt of the Notes to the Consolidated Financial Statements contained elsewhere in this report for additional information.
50
Investments in Unconsolidated Real Estate Ventures
We have entered into joint venture agreements with a subsidiary of SmartCentres, an unaffiliated third party, to acquire tracts of land, develop and operate self storage facilities. We account for these investments using the equity method of accounting and they will be stated at cost and adjusted for our share of net earnings or losses and reduced by distributions. Equity in earnings (loss) will generally be recognized based on our ownership interest in the earnings of each of the unconsolidated investments.
The following table summarizes our 50% ownership interests in unconsolidated real estate ventures as of March 31, 2026:
|
|
Location |
|
Date Real Estate |
|
Real Estate |
|
Completion Date or estimated completion |
|
Units |
|
Net Rentable Sq. Ft. |
Toronto (1) |
|
Toronto, Ontario |
|
April 2021 |
|
Operational |
|
June 2025 |
|
1,420 |
|
101,855 |
Toronto II (1) |
|
Toronto, Ontario |
|
December 2021 |
|
Operational |
|
April 2025 |
|
1,580 |
|
114,535 |
Dorval (1) |
|
Dorval, Quebec |
|
February 2023 |
|
Operational |
|
June 2025 |
|
1,290 |
|
112,280 |
Hamilton (1) |
|
Hamilton, Ontario |
|
November 2023 |
|
Operational |
|
October 2024 |
|
950 |
|
97,095 |
Montreal (1)(2) |
|
Montreal, Quebec |
|
January 2024 |
|
Under Development |
|
First half of 2026 |
|
1,450 |
|
124,000 |
|
|
|
|
|
|
|
|
|
|
6,690 |
|
549,765 |
As of March 31, 2026, our 50% share of development costs are currently expected to be approximately CAD $3.7 million for the Montreal Property, which we expect to be funded with a combination of net proceeds from our Series E Preferred Offering and/or the SmartCentres Financing.
On August 30, 2024, we and SmartCentres, through the Toronto, Toronto II, Dorval and Hamilton joint venture partnerships (the “JV Properties”), entered into a master mortgage commitment agreement (the “MMCA”) with SmartCentres Storage Finance LP (the “SmartCentres Lender”) (collectively, the “SmartCentres Financing”). The SmartCentres Lender is an affiliate of SmartCentres. The initial maximum amount available under the loan is CAD $95.5 million and contains an accordion feature such that borrowings may be increased to CAD $120.0 million, subject to certain conditions set forth in the MMCA. The proceeds of the SmartCentres Financing will be used to finance the development and construction of self storage facilities on the JV Properties. On September 3, 2024, the JV Properties drew approximately CAD $46.3 million on the SmartCentres Financing and distributed approximately CAD $21.8 million to each partner.
On February 19, 2026, the JV Properties amended the SmartCentres Financing to: (i) extend the maturity date by one-year until May 11, 2027; (ii) add the Montreal Property as a borrower under the SmartCentres Financing, and (iii) draw approximately CAD $17.5 million. Subsequent to the draw, the JV Properties distributed approximately CAD $8.7 million to each partner. As of March 31, 2026, approximately CAD $112.9 million was outstanding on the SmartCentres Financing.
The SmartCentres Financing is secured by first mortgages on each of the JV Properties. Interest on the SmartCentres Financing is a variable annual rate equal to the aggregate of: (i) the Adjusted Daily Compounded Canadian Overnight Repo Rate Average (“CORRA”), plus: (ii) an adjusted Daily Compounded CORRA adjustment of approximately 0.30%, plus (iii) a margin based on the External Credit Rating, plus (iv) a margin under the Senior Credit Facility, each as defined and described further in the MMCA. As of March 31, 2026, the total interest rate was approximately 5.26%.
The SmartCentres Financing matures on May 11, 2027, and may be extended annually as set forth in the MMCA. Monthly interest payments are initially capitalized on the outstanding principal balance. Upon a JV Property generating sufficient Net Cash Flow (as defined in the MMCA), the SmartCentres Financing provides for the commencement of quarterly payments of interest. The borrowings advanced pursuant to the SmartCentres Financing may be prepaid without penalty, subject to certain conditions set forth in the MMCA.
The SmartCentres Financing contains customary affirmative and negative covenants, agreements, representations, warranties and borrowing conditions (including a loan to value ratio of no greater than 70% with respect to each JV Property) and events of default, all as set forth in the MMCA. We serve as a full recourse guarantor with respect to 50% of the SmartCentres Financing.
51
Critical Accounting Policies and Estimates
We have established accounting policies which conform to generally accepted accounting principles (“GAAP”) in the U.S. 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 financial statements. Many estimates and assumptions involved in the application of GAAP may have a material impact on our financial condition or operating performance, or on the comparability of such information to amounts reported for other periods, because of the subjectivity and judgment required to account for highly uncertain items or the susceptibility of such items to change. These estimates and assumptions affect our reported amounts of assets and liabilities, our disclosure of contingent assets and liabilities at the dates of the financial statements and our reported amounts of revenue and expenses during the period covered by this report. If management’s judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied or different amounts of assets, liabilities, revenues and expenses would have been recorded, thus resulting in a materially different presentation of the financial statements or materially different amounts being reported in the financial statements. Additionally, other companies may use different estimates and assumptions that may impact the comparability of our financial condition and results of operations to those companies.
We believe that our critical accounting policies and estimates include the following: real estate purchase price allocations; the evaluation of whether any of our long-lived assets have been impaired; and the evaluation of the consolidation of our interests in joint ventures. The following discussion of these policies supplements, but does not supplant the description of our significant accounting policies, as contained in Note 2 of the Notes to the Consolidated Financial Statements contained in this report, and is intended to present our analysis of the uncertainties involved in arriving upon and applying each policy.
Real Estate Acquisition Valuation
We account for asset acquisitions in accordance with GAAP which requires that we allocate the purchase price of a property to the tangible and intangible assets acquired and the liabilities assumed based on their relative fair values. This guidance requires us to make significant estimates and assumptions, including fair value estimates, which requires the use of significant unobservable inputs as of the acquisition date.
The value of the tangible assets, consisting of land and buildings, is determined as if vacant. Because we believe that substantially all of the leases in place at properties we will acquire will be at market rates, as the majority of the leases are month-to-month contracts, we do not expect to allocate any portion of the purchase prices to above or below market leases. We also consider whether in-place, market leases represent an intangible asset. 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.
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.
Impairment of Long-Lived Assets
The majority of our assets, other than cash and cash equivalents, consist of long-lived real estate assets, including those held through joint ventures, as well as intangible assets related to our acquisitions. We evaluate such assets for impairment based on events and changes in circumstances that may arise in the future and that may impact the carrying amounts of our long-lived assets, including those held through joint ventures. When indicators of potential impairment are present, we will assess the recoverability of the particular asset by determining whether the carrying value of the asset will be recovered, through an evaluation of the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. This evaluation is based on a number of estimates and assumptions. Based on this evaluation, if the expected undiscounted future cash flows do not exceed the carrying value, we will adjust the value of the long-lived asset and recognize an impairment loss. Our evaluation of the impairment of long-lived 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 recognized, if any, may vary based on the estimates and assumptions we use.
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
52
consolidated financial statements. In general, a VIE is an entity or other legal structure used to conduct activities or hold assets that either (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations. Generally, a VIE should be consolidated if a party with an ownership, contractual, or other financial interest in the VIE (a variable interest holder) has the power to direct the VIE’s most significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. A variable interest holder that consolidates the VIE is called the primary beneficiary. Upon consolidation, the primary beneficiary generally must initially record all of the VIE’s assets, liabilities, and noncontrolling interest at fair value and subsequently account for the VIE as if it were consolidated based on majority voting interest.
We evaluate the consolidation of our investments in VIE's in accordance with relevant accounting guidance. This evaluation requires us to determine whether we have a controlling interest in a VIE through a means other than voting rights, and, if so, such VIE may be required to be consolidated in our financial statements. 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.
REIT Qualification
We made an election under Section 856(c) of the Internal Revenue Code of 1986 (the “Code”) to be taxed as a REIT under the Code, commencing with the taxable year ended December 31, 2021. 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. 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. Such an event could materially and adversely affect our net income and could have a material adverse impact on our financial condition and results of operations. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT and intend to operate in the foreseeable future in such a manner that we will remain qualified as a REIT for federal income tax purposes.
Recent Tax Legislation
Effective July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. Certain provisions of OBBBA modified U.S. tax law and impact us and our stockholders. Among other changes, this legislation (i) permanently extended the 20% deduction for “qualified REIT dividends” for individuals and other non-corporate taxpayers under Section 199A of the Code, (ii) permanently reinstated 100% bonus depreciation for certain property acquired after January 19, 2025, (iii) increased the percentage limit under the REIT asset test applicable to taxable REIT subsidiaries from 20% to 25% for taxable years beginning after December 31, 2025, and (iv) increased the base on which the 30% interest deduction limit under Section 163(j) of the Code applies by excluding depreciation, amortization and depletion from the definition of “adjusted taxable income” for taxable years beginning after December 31, 2024. The provisions of OBBBA did not have a material impact to our Consolidated Financial Statements.
Results of Operations
Overview
We derive revenues principally from: (i) rents received from tenants who rent storage units under month-to-month leases at each of our self storage facilities; and (ii) sales of packing- and storage-related supplies at our storage facilities. Therefore, our operating results depend significantly on our ability to retain our existing tenants and lease our available self storage units to new tenants, while maintaining and, where possible, increasing the prices for our self storage units. Additionally, our operating results depend on our tenants making their required rental payments to us.
Competition in the market areas in which we operate is significant and affects the occupancy levels, rental rates, rental revenues and operating expenses of our facilities. Development of any new self storage facilities would intensify competition of self storage operators in markets in which we operate.
On March 10, 2021, we commenced formal operations and we acquired our first six self storage properties during 2021. During 2022 and 2023, we acquired 18 self storage properties primarily in the lease up phase. As of March 31, 2026 and 2025, we owned 25 and 24 operating self storage facilities, respectively. Our operating results for the three months ended March 31, 2026 include full period results for 24 properties and partial period results for one self storage facility we
53
commenced operations during the first quarter of 2026. Our operating results for the three months ended March 31, 2025 include full period results for 24 properties. Operating results in future periods will depend on the results of operations of these properties and the real estate properties that we acquire in the future.
Comparison of the three months ended March 31, 2026 and 2025
Total Revenues
Total revenues for the three months ended March 31, 2026 and 2025 were approximately $7.8 million and approximately $7.3 million, respectively. The increase in total revenue of approximately $0.5 million, or 6%, is attributable to an increase in non same-store revenue of approximately $0.3 million due to the lease-up of our non-stabilized properties and an increase in same-store revenues of approximately $0.2 million primarily due to increased rates. We expect total revenues to increase in the future commensurate with our future acquisition activity and lease-up of our non-stabilized properties.
Property Operating Expenses
Property operating expenses for the three months ended March 31, 2026 and 2025 were approximately $3.2 million and approximately $2.9 million, respectively. Property operating expenses include the costs to operate our facilities including payroll, utilities, insurance, real estate taxes, and marketing. The increase in property operating expenses is primarily attributable to an increase in real estate taxes and payroll. We expect property operating expenses to increase in the future as our operational activity increases but decrease as a percentage of total revenues as we lease-up our non-stabilized properties.
Property Operating Expenses – Affiliates
Property operating expenses – affiliates for the three months ended March 31, 2026 and 2025 were approximately $1.4 million and approximately $1.2 million, respectively. Property operating expenses – affiliates includes property management fees, asset management fees and advisory contract amortization. We expect property operating expenses – affiliates to increase in the future as our operational activity increases.
General and Administrative Expenses
General and administrative expenses for the three months ended March 31, 2026 and 2025 were approximately $1.5 million and approximately $1.7 million, respectively. General and administrative expenses consist primarily of legal expenses, directors’ and officers’ insurance, transfer agent fees, an allocation of a portion of our Advisor’s payroll related costs, professional and accounting expenses and board of directors related costs. The decrease in general and administrative expenses of approximately $0.2 million is primarily attributable to lower marketing related costs. We expect general and administrative expenses to increase in the future as our operational activity increases, but decrease as a percentage of total revenue.
Depreciation Expenses
Depreciation expense for the three months ended March 31, 2026 and 2025 were approximately $3.3 million and approximately $3.1 million, respectively. Depreciation expense consists primarily of depreciation on the buildings and site improvements at our properties. The increase in depreciation of approximately $0.2 million is primarily attributable to depreciation related to fixed assets placed into service after March 31, 2025. We expect depreciation expense to increase in future periods commensurate with our future acquisition activity.
Acquisition Expenses – Affiliates
Acquisition expenses – affiliates for each of the three months ended March 31, 2026 and 2025 were approximately $0.1 million. Acquisition expenses primarily relate to the costs associated with our potential acquisitions prior to the acquisitions becoming probable in accordance with our capitalization policy. We expect acquisition expenses- affiliates to fluctuate in the future commensurate with our acquisition activity.
54
Other Property Acquisition Expenses
Other property acquisition expenses of the three months ended March 31, 2026 and 2025 were approximately $0.1 million and $14,000, respectively. Acquisition expenses primarily relate to the costs associated with our potential acquisitions prior to the acquisitions becoming probable in accordance with our capitalization policy. We expect other property acquisition expenses to fluctuate in the future commensurate with our acquisition activity.
Interest Expense
Interest expense for each of the three months ended March 31, 2026 and 2025 was approximately $4.1 million. Interest expense includes interest expense on our debt and the impact of our interest rate derivatives designated for hedge accounting. We expect interest expense to fluctuate in the future commensurate with our future debt level and interest rates.
Interest Expense – Debt Issuance Costs
Interest expense – debt issuance costs for the three months ended March 31, 2026 and 2025 were approximately $0.2 million and approximately $0.5 million, respectively. The decrease is primarily related to the write off of approximately $0.3 million in debt issue cost related to the first quarter of 2025 refinances in accordance with GAAP. Interest expense – debt issuance costs reflects the amortization of fees incurred in connection with obtaining financing. We expect interest expense – debt issuance costs to increase commensurate with our future financing activity.
Derivative fair value adjustment
Derivative fair value adjustment for the three months ended March 31, 2026 and 2025 was none and $0.5 million, respectively. Derivative fair value adjustment consists of fair market value adjustment of our interest rate derivatives we elected not to apply hedge accounting. We expect the derivative fair value adjustment to change in the future based upon changes in interest rates.
Equity in loss of unconsolidated real estate ventures
Losses from our equity method investments in the JV Properties for the three months ended March 31, 2026 and 2025 were approximately $0.8 million and $0.2 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. The increase in equity in loss of unconsolidated real estate ventures relates to the completion of construction and start of property lease up of four JV properties during 2025. We expect Equity in loss of unconsolidated real estate ventures to decrease in the future as their operational activity increases and the properties lease up.
Foreign currency adjustment
Foreign currency loss for the three months ended March 31, 2026 and 2025 was approximately $1.7 million and approximately $0.2 million, respectively. Foreign currency adjustment consists of changes in foreign currency related to our net investments in unconsolidated real estate ventures not classified as long term in accordance with GAAP. We expect foreign currency adjustment to change in the future based upon changes in exchange rates, as well as future net investments in real estate in currencies other than United States dollars.
Same-Store Facility Results - three months ended March 31, 2026 and 2025
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, 2025) for the three months ended March 31, 2026 and 2025. 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.
55
|
|
Same-Store Facilities |
|
Non Same-Store Facilities |
|
Total |
||||||||||||
|
|
2026 |
|
2025 |
|
% Change |
|
2026 |
|
2025 |
|
% Change |
|
2026 |
|
2025 |
|
% Change |
Revenues(1) |
|
$5,304,671 |
|
$5,090,438 |
|
4.2% |
|
$2,520,142 |
|
$2,258,920 |
|
N/M |
|
$7,824,813 |
|
$7,349,358 |
|
6.5% |
Property operating expenses(2) |
|
2,214,683 |
|
2,061,446 |
|
7.4% |
|
1,500,285 |
|
1,323,066 |
|
N/M |
|
3,714,968 |
|
3,384,512 |
|
9.8% |
Net operating income |
|
$3,089,988 |
|
$3,028,992 |
|
2.0% |
|
$1,019,857 |
|
$935,854 |
|
N/M |
|
$4,109,845 |
|
$3,964,846 |
|
3.7% |
Number of Facilities |
|
16 |
|
16 |
|
|
|
9 |
|
8 |
|
|
|
25 |
|
24 |
|
|
Rentable square feet(3) |
|
1,361,225 |
|
1,361,225 |
|
|
|
876,185 |
|
785,885 |
|
|
|
2,237,410 |
|
2,147,110 |
|
|
Average physical occupancy(4) |
|
90.3% |
|
91.8% |
|
-1.5% |
|
77.6% |
|
84.2% |
|
N/M |
|
85.4% |
|
89.0% |
|
-3.6% |
Annualized rent per occupied square foot(5) |
|
$17.81 |
|
$16.83 |
|
5.8% |
|
N/M |
|
N/M |
|
N/M |
|
$17.30 |
|
$16.29 |
|
|
N/M Not meaningful
Our increase in same-store revenue of approximately $0.2 million was primarily the result of an increase in revenue per occupied square foot of approximately 5.8% for the three months ended March 31, 2026 over the three months ended March 31, 2025 offset by a decrease in average physical occupancy of approximately 1.5%.
Our same-store property operating expenses increased by approximately $0.2 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily related to an increase in real estate taxes and payroll.
Net operating income, or NOI, is a non-GAAP measure that we define as net income (loss), computed in accordance with GAAP, generated from properties before corporate general and administrative expenses, asset management fees, interest expense, depreciation, amortization, acquisition expenses, tenant protection economics, and other non-property related income and expense. We believe that NOI is useful for investors as it provides a measure of the operating performance of our operating assets because NOI excludes certain items that are not associated with the ongoing operation of the properties. Additionally, we believe that NOI (sometimes referred to as property operating income) is a widely accepted measure of comparative operating performance in the real estate community. However, our use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount. In addition, NOI is not a substitute for net income (loss), cash flows from operations, or other related financial measures, in evaluating our operating performance.
The following table presents a reconciliation of net loss as presented on our consolidated statements of operations to net operating income, as stated above, for the periods indicated:
56
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|
March 31, |
|
||
Net Loss |
|
$ |
(8,635,592 |
) |
|
$ |
(7,240,686 |
) |
Adjusted to exclude: |
|
|
|
|
|
|
||
Asset management fees(1)(2) |
|
|
884,679 |
|
|
|
794,835 |
|
General and administrative |
|
|
1,514,750 |
|
|
|
1,703,808 |
|
Depreciation |
|
|
3,292,788 |
|
|
|
3,118,402 |
|
Acquisition expenses—affiliates |
|
|
128,280 |
|
|
|
107,876 |
|
Other property acquisition expenses |
|
|
110,799 |
|
|
|
14,020 |
|
Interest expense |
|
|
4,132,099 |
|
|
|
4,107,295 |
|
Interest expense—debt issuance costs |
|
|
159,852 |
|
|
|
488,397 |
|
Derivative fair value adjustment |
|
|
— |
|
|
|
531,449 |
|
Other income, net |
|
|
(21,913 |
) |
|
|
(79,014 |
) |
Equity in loss of unconsolidated real estate ventures |
|
|
813,829 |
|
|
|
222,528 |
|
Foreign currency adjustment |
|
|
1,730,274 |
|
|
|
195,936 |
|
Total property net operating income |
|
$ |
4,109,845 |
|
|
$ |
3,964,846 |
|
Liquidity and Capital Resources
Cash Flows
A comparison of cash flows for operating, investing and financing activities for the three months ended March 31, 2026 and 2025 is as follows:
|
|
Three Months Ended |
|
|
|
|
||||||
|
|
March 31, |
|
|
March 31, |
|
|
Change |
|
|||
Net cash flow provided by (used in): |
|
|
|
|
|
|
|
|
|
|||
Operating activities |
|
$ |
1,258,932 |
|
|
$ |
(1,293,662 |
) |
|
$ |
2,552,594 |
|
Investing activities |
|
|
4,511,941 |
|
|
|
(4,010,269 |
) |
|
|
8,522,210 |
|
Financing activities |
|
|
(6,114,601 |
) |
|
|
4,588,296 |
|
|
|
(10,702,897 |
) |
Cash flows provided by (used in) operating activities for the three months ended March 31, 2026 and 2025 were approximately $1.3 million and approximately $(1.3) million, respectively, a change of approximately $2.6 million. The increase in cash provided by our operating activities is primarily the result of change in operating assets and liabilities.
Cash flows provided by (used in) investing activities for the three months ended March 31, 2026 and 2025 were approximately $4.5 million and approximately $(4.0) million, respectively, a change of approximately $8.5 million. The increase in cash provided by our investing activities is primarily the result of $6.4 million return of capital on investments in unconsolidated real estate ventures.
Cash flows provided by (used in) financing activities for the three months ended March 31, 2026 and 2025 were approximately $(6.1) million and approximately $4.6 million, respectively, a change of approximately $10.7 million. The decrease in cash provided by our financing activities is primarily the result of a decrease in net debt proceeds totaling $3.9 million and a decrease in gross proceeds from the issuance of common stock by $6.6 million.
Short-Term Liquidity and Capital Resources
Our liquidity needs consist primarily of our property operating expenses, general and administrative expenses, debt service payments, capital expenditures, property acquisitions, development costs for joint venture and wholly owned investments and distributions to our stockholders, preferred stockholders and limited partners in our Operating Partnership, as necessary to maintain our REIT qualification. We generally expect that we will meet our short-term liquidity requirements
57
from the combination of cash on hand, proceeds from our issuance of equity instruments, proceeds from secured and unsecured financing from banks or other lenders, and net cash provided from property operations.
Volatility in the debt and equity markets and continued and/or further impact of rising interest rates, inflation and other economic events will depend on future developments, which are highly uncertain. While we do not expect such events to have a material impact upon our liquidity in the short-term, continued uncertainty or deterioration in the debt and equity markets over an extended period of time could potentially impact our liquidity over the long-term.
Distribution Policy and Distributions
Preferred Stock and Preferred Units
Series B Convertible Preferred Stock Dividends
The shares of Series B Convertible Preferred Stock rank senior to all other shares of our capital stock, including our common stock, with respect to rights to receive dividends and to participate in distributions or payments upon any voluntary or involuntary liquidation, dissolution or winding up of the Company. Dividends payable on each share of Series B Convertible Preferred Stock will initially be equal to a rate of 8.35% per annum, which accrues daily but is payable quarterly in arrears. If the Series B Convertible Preferred Stock has not been redeemed on or prior to the fifth anniversary date of the Initial Closing, the dividend rate will increase an additional 0.75% per annum each year thereafter to a maximum of 11.0% 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 B Convertible Preferred Stock is either converted or repurchased in full.
Series D Preferred Units Distributions
The shares of Series D Preferred Units rank senior to all other common shares of our capital stock, including our common stock, with respect to rights to receive dividends and to participate in distributions or payments upon any voluntary or involuntary liquidation, dissolution or winding up of the Company. Distributions payable on each unit of Series D Preferred Units will initially be equal to a rate of 6.0% per annum until the second anniversary after the date of issuance, 7% per annum commencing the day following the second anniversary after the date of issuance, 8% per annum commencing the day following the third anniversary until the 4th anniversary after the date of issuance, and 9% per annum thereafter. The Series D Preferred Units accrue distributions daily but is payable monthly in arrears.
Series E Preferred Stock Dividends
The shares of Series E Preferred Stock rank senior to all classes of the Company's common stock, (b) on parity with all other preferred equity securities issued by us from time to time, the terms of which provide that such securities rank on parity with the Series E Preferred Stock; and (c) junior to the preferred equity securities issued by us from time to time, the terms of which expressly provide that it will rank senior to the Series E Preferred Stock (the “Senior Stock”), including the Series B Convertible Preferred Stock, and subject to payment of or provision for our corporate debts and other liabilities. Dividends payable on each share of Series E Preferred Stock will initially be equal to a rate of 8.0% per annum. Dividends payable on the Series E Preferred Stock will accrue and be paid on the basis of a 360-day year consisting of twelve 30-day months and will accrue whether or not (i) we have earnings, (ii) there are funds legally available for the payment of such dividends, and (iii) such dividends are authorized by our board or declared.
Common Stock
We commenced paying distributions to our stockholders in March 2021 and intend to continue to pay regular distributions to our stockholders. If we are not generating operating cash flow sufficient to fund distributions to our stockholders, we may decide to make stock distributions or to make distributions using a combination of stock and cash, or to fund some or all of our distributions from the proceeds of our offerings or from borrowings in anticipation of future cash flow, which may reduce the amount of capital we ultimately invest in properties. Because substantially all of our operations will be performed indirectly through our Operating Partnership, our ability to pay distributions depends in large part on our Operating Partnership’s ability to pay distributions to its partners, including to us. In the event we do not have enough cash from operations to fund cash distributions, we may borrow, issue additional securities or sell assets in order to fund the distributions or make the distributions out of net proceeds from an offering. Therefore, it is likely that some or all of the distributions that we make could represent a return of capital to stockholders. Though we have no present intention to make in-kind distributions, we are authorized by our charter to make in-kind distributions of readily marketable securities, distributions of beneficial interests in a liquidating trust established for our dissolution and the liquidation of our assets in accordance with the terms of the charter or distributions that meet all of the following conditions: (a) our board of directors advises each stockholder of the risks associated with direct ownership of the property; (b) our board of directors offers each stockholder the election of receiving such in-kind distributions; and (c) in-kind distributions are only made to those stockholders who accept such offer.
Distributions will be paid to our stockholders as of the record date selected by our board of directors. We pay distributions monthly based on daily declaration and record dates so that investors may be entitled to distributions
58
immediately upon purchasing our shares. We expect to continue to regularly pay distributions unless our results of operations, our general financial condition, general economic conditions, or other factors inhibit us from doing so. Distributions will be authorized at the discretion of our board of directors, which will be directed, in substantial part, by its obligation to cause us to comply with the REIT requirements of the Code. Our board of directors may increase, decrease or eliminate the distribution rate that is being paid at any time. Distributions will be made on all classes of our common stock at the same time. The per share amount of distributions on different classes of shares will likely differ because of different allocations of class-specific expenses. Specifically, distributions on Class T shares, Class W shares, Class Y shares and Class Z shares will likely be lower than distributions on Class A shares and Class P shares because Class T shares and Class Y shares are subject to ongoing stockholder servicing fees and Class W shares and Class Z shares are subject to ongoing dealer manager servicing fees. The funds we receive from operations that are available for distribution may be affected by a number of factors, including the following:
We must distribute to our stockholders at least 90% of our taxable income each year in order to meet the requirements for being treated as a REIT under the Code. Our directors may authorize distributions in excess of this percentage as they deem appropriate. Because we may receive income from interest or rents at various times during our fiscal year, distributions may not reflect our income earned in that particular distribution period, but may be made in anticipation of cash flow that we expect to receive during a later period and may be made in advance of actual receipt of funds in an attempt to make distributions relatively uniform. To allow for such differences in timing between the receipt of income and the payment of expenses, and the effect of required debt payments, among other things, we could be required to borrow funds from third parties on a short-term basis, issue new securities, or sell assets to meet the distribution requirements that are necessary to achieve the tax benefits associated with qualifying as a REIT. We are not prohibited from undertaking such activities by our charter, bylaws or investment policies, and we may use an unlimited amount from any source to pay our distributions. These methods of obtaining funding could affect future distributions by increasing operating costs and decreasing available cash, which could reduce the value of our stockholders' investments in our shares. In addition, such distributions may constitute a return of investors’ capital.
We have not been able to and may not be able to pay distributions from our cash flows from operations, in which case distributions may be paid in part from debt financing or from proceeds from the issuance of common stock in our offerings. 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. However, our operating performance cannot be accurately predicted and may deteriorate in the future due to numerous factors, including our ability to raise and invest capital at favorable yields, the financial performance of our investments in the current real estate and financial environment and the types and mix of investments in our portfolio. As a result, future distributions declared and paid may exceed cash flow from operations.
59
The following shows our cash distributions and the sources of such cash distributions for the respective periods presented:
|
|
Three Months Ended March 31, 2026 |
|
|
|
|
|
Three Months Ended March 31, 2025 |
|
|
|
|
||||
Distributions paid in cash — common stockholders |
|
$ |
2,196,856 |
|
|
|
|
|
$ |
2,047,641 |
|
|
|
|
||
Distributions paid in cash — preferred stockholders |
|
|
3,156,986 |
|
|
|
|
|
|
3,148,361 |
|
|
|
|
||
Distributions paid in cash — Operating Partnership unitholders |
|
|
84,089 |
|
|
|
|
|
|
83,930 |
|
|
|
|
||
Distributions reinvested |
|
|
1,653,126 |
|
|
|
|
|
|
1,600,498 |
|
|
|
|
||
Total distributions |
|
$ |
7,091,057 |
|
|
|
|
|
$ |
6,880,430 |
|
|
|
|
||
Source of distributions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash flows provided by operations |
|
$ |
1,258,932 |
|
|
|
17.8 |
% |
|
$ |
— |
|
|
|
0.0 |
% |
Cash flows provided by investing |
|
|
4,178,999 |
|
|
|
58.9 |
% |
|
|
— |
|
|
|
0.0 |
% |
Proceeds from offerings |
|
|
— |
|
|
|
0.0 |
% |
|
|
5,279,932 |
|
|
|
76.7 |
% |
Offering proceeds from distribution |
|
|
1,653,126 |
|
|
|
23.3 |
% |
|
|
1,600,498 |
|
|
|
23.3 |
% |
Total sources |
|
$ |
7,091,057 |
|
|
|
100.0 |
% |
|
$ |
6,880,430 |
|
|
|
100.0 |
% |
From our inception through March 31, 2026, we have paid cumulative distributions of approximately $85.7 million, as compared to cumulative net loss attributable to our common stockholders of approximately $160.0 million, cumulative net loss attributable to our common stockholders reflects non-cash depreciation and amortization of approximately $54.4 million, and acquisition related expenses of approximately $6.1 million.
For the three months ended March 31, 2026, we paid distributions of approximately $7.1 million, as compared to a net loss attributable to our common stockholders of approximately $12.1 million. Net loss attributable to our common stockholders for the three months ended March 31, 2026, reflects non-cash depreciation of approximately $3.3 million and acquisition related expenses of approximately $0.2 million.
For the three months ended March 31, 2025, we paid distributions of approximately $6.9 million, as compared to a net loss attributable to our common stockholders of approximately $10.2 million. Net loss attributable to our common stockholders for the three months ended March 31, 2025, reflects non-cash depreciation of approximately $3.1 million and acquisition related expenses of approximately $0.1 million.
Indebtedness
As of March 31, 2026, our total indebtedness was approximately $290.2 million which included approximately $164.4 million of variable rate debt and approximately $127.6 million of fixed rate debt, less approximately $1.8 million in net debt issuance costs. See Note 5 – Debt, of the Notes to the Consolidated Financial Statements contained in this report for more information about our indebtedness.
Long-Term Liquidity and Capital Resources
On a long-term basis, our principal demands for funds will be for property acquisitions, either directly or through entity interests, for the payment of operating expenses and distributions, and for the payment of principal and interest on our outstanding indebtedness.
Our material cash requirements from known contractual and other obligations primarily relate to the following, for which information on both a short-term and long-term basis is provided in the indicated notes to the consolidated financial statements:
60
Long-term potential future sources of capital include proceeds from secured or unsecured financings from banks or other lenders, issuance of equity instruments and undistributed funds from operations. To the extent we are not able to secure requisite financing in the form of a credit facility or other debt, we will be dependent upon proceeds from the issuance of equity securities and cash flows from operating activities in order to meet our long-term liquidity requirements and to fund our distributions.
The following table presents the future principal payments required on outstanding debt as of March 31, 2026:
2026 |
|
1,939,714 |
2027 |
|
111,411,086 |
2028 |
|
51,474,737 |
2029 |
|
326,349 |
2030 |
|
126,811,219 |
Total payments |
|
291,963,105 |
Debt issuance costs, net |
|
(1,772,399) |
Total |
|
$290,190,706 |
Off Balance Sheet Arrangements
We have joint ventures with SmartCentres, which are accounted for using the equity method of accounting (Refer to Note 4 of the Notes to the Consolidated Financial Statements). Other than the foregoing, we do not currently have any relationships with unconsolidated entities or financial partnerships. Such entities are often referred to as structured finance or special purpose entities, which typically are established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Subsequent Events
Please see Note 13 of the Notes to the Consolidated Financial Statements contained in this report.
Seasonality
We believe that we will experience minor seasonal fluctuations in the occupancy levels of our facilities which we believe will be slightly higher over the summer months due to increased moving activity.
61
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business plan, we expect that the primary market risk to which we will be exposed is interest rate risk and to a lesser extent, foreign currency risk. We may be exposed to the effects of interest rate changes primarily as a result of borrowings used to maintain liquidity and fund acquisition, expansion, and financing of our real estate investment portfolio and operations. Our interest rate risk management objectives will be to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve our objectives, we may borrow at fixed rates or variable rates. 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 will not enter into derivative or interest rate transactions for speculative purposes.
As of March 31, 2026, our total indebtedness was approximately $290.2 million, which included approximately $164.4 million in variable rate debt and approximately $127.6 million in fixed rate debt, less approximately $1.8 million in net debt issuance costs. A change in interest rates on variable debt could impact the interest incurred and cash flows and its fair value. 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 $0.3 million annually.
Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our financial instruments. These analyses do not consider the effect of any change in overall economic activity that could occur. Further, in the event of a change of that magnitude, we may take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our financial structure.
The following table summarizes future debt maturities and average interest rates on our outstanding debt as of March 31, 2026:
|
|
Payments due during the years ended December 31, |
|
|||||||||||||||||||||||||
|
|
2026 |
|
|
2027 |
|
|
2028 |
|
|
2029 |
|
|
2030 |
|
|
Thereafter |
|
|
Total |
|
|||||||
Variable rate debt |
|
$ |
1,939,714 |
|
|
$ |
111,224,697 |
|
|
$ |
51,176,794 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
164,341,205 |
|
Average interest rate(1) |
|
|
6.06 |
% |
|
|
6.06 |
% |
|
|
5.39 |
% |
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
|
|
||||
Fixed rate debt |
|
$ |
— |
|
|
$ |
186,389 |
|
|
$ |
297,943 |
|
|
$ |
326,349 |
|
|
$ |
126,811,219 |
|
|
$ |
— |
|
|
$ |
127,621,900 |
|
Average interest rate |
|
|
6.88 |
% |
|
|
6.88 |
% |
|
|
6.88 |
% |
|
|
6.88 |
% |
|
|
6.88 |
% |
|
N/A |
|
|
|
|
||
Currently, our only foreign exchange rate risk comes from our Canadian properties, investments in our Canadian joint ventures and the Canadian Dollar (“CAD”). We generate all of our revenues and expend essentially all of our operating expenses and third party CAD-denominated debt service cost related to our Canadian properties in CAD. As a result of fluctuations in currency exchange, our cash flows and results of operations could be affected.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this report, management, including our Chief Executive Officer (our Principal Executive Officer) and our Chief Financial Officer (our Principal Financial Officer), evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including our
62
Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
The following should be read in conjunction with the risk factors set forth in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2025.
We have incurred a net loss to date, have an accumulated deficit and our operations may not be profitable in 2026.
We incurred a net loss attributable to common stockholders of approximately $12.1 million for the three months ended March 31, 2026. Our accumulated deficit was approximately $160.0 million as of March 31, 2026. Given that we are still early in our fundraising and acquisition stage, our operations may not be profitable in 2026.
63
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the three months ended March 31, 2026, through our distribution reinvestment plan, we have issued approximately 66,200 Class P shares to investors who originally purchased shares in our Private Offering, for gross proceeds of approximately $0.7 million. No sales commissions or dealer manager fees are paid in connection with the sale of shares pursuant to our distribution reinvestment plan. Each of the purchasers of our shares of common stock under our Private Offering has represented that he or she is an accredited investor. Based upon these representations, we believe that the foregoing issuances of our shares of Class P common stock were exempt from the registration requirements pursuant to Rule 506 and Section 4(a)(2) of the Act and Regulation D promulgated thereunder.
|
|
Total Number of |
|
Average Price |
|
Total Number of |
|
Maximum Number |
January 31, 2026 |
|
20,327 |
|
$9.54 |
|
— |
|
1,301,601 |
February 28, 2026 |
|
— |
|
— |
|
— |
|
1,301,601 |
March 31, 2026 |
|
— |
|
— |
|
— |
|
1,301,601 |
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS
The exhibits required to be filed with this report are set forth on the Exhibit Index hereto and incorporated by
reference herein.
65
EXHIBIT INDEX
The following exhibits are included in this report on Form 10-Q for the period ended March 31, 2026 (and are numbered in accordance with Item 601 of Regulation S-K).
Exhibit No. |
|
Description |
|
|
|
3.1 |
|
First Articles of Amendment and Restatement of Strategic Storage Trust VI, Inc., incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-11, filed on May 28, 2021, Commission File No. 333-256598 |
|
|
|
3.2 |
|
Amended and Restated Bylaws of Strategic Storage Trust VI, Inc., incorporated by reference to Exhibit 3.2 to Pre-Effective Amendment No. 6 to the Company’s Registration Statement on Form S-11, filed on March 15, 2022, Commission File No. 333-256598 |
|
|
|
3.3 |
|
Articles of Amendment of Strategic Storage Trust VI, Inc., incorporated by reference to Exhibit 3.3 to Pre-Effective Amendment No. 6 to the Company’s Registration Statement on Form S-11, filed on March 15, 2022, Commission File No. 333-256598 |
|
|
|
3.4 |
|
Articles Supplementary of Strategic Storage Trust VI, Inc., incorporated by reference to Exhibit 3.4 to Pre-Effective Amendment No. 6 to the Company’s Registration Statement on Form S-11, filed on March 15, 2022, Commission File No. 333-256598 |
|
|
|
3.5 |
|
Second Articles of Amendment of Strategic Storage Trust VI, Inc., incorporated by reference to Exhibit 3.5 to Pre-Effective Amendment No. 6 to the Company’s Registration Statement on Form S-11, filed on March 15, 2022, Commission File No. 333-256598 |
|
|
|
3.6 |
|
Articles Supplementary for Series B Convertible Preferred Stock, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on May 3, 2023, Commission File No. 000-56545 |
|
|
|
3.7 |
|
Articles Supplementary of Strategic Storage Trust VI, Inc., incorporated by reference to Exhibit 3.1 to Post-Effective Amendment No. 4 to the Company’s Registration Statement on Form S-11, filed on November 1, 2023, Commission File No. 333-256598 |
|
|
|
3.8 |
|
Certificate of Correction to the Articles Supplementary, incorporated by reference to Exhibit 3.7 to the Company's Quarterly Report on Form 10-Q, filed on November 14, 2023, Commission File No. 000-56545 |
|
|
|
4.1 |
|
Form of Subscription Agreement and Subscription Agreement Signature Page, incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-11, filed on January 24, 2025, Commission File No. 333-284487 |
|
|
|
31.1* |
|
Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
31.2* |
|
Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.1* |
|
Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.2* |
|
Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
101* |
|
The following Strategic Storage Trust VI, Inc. financial information for the three months ended March 31, 2026, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Loss, (iv) Consolidated Statements of Equity and Temporary Equity, (v) Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
|
|
|
104* |
|
The cover page from the Strategic Storage Trust VI, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, has been formatted in Inline XBRL. |
* Filed herewith.
66
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
STRATEGIC STORAGE TRUST VI, INC. (Registrant) |
|
Dated: May 12, 2026 |
|
By: |
/s/ Matt F. Lopez |
|
|
|
Matt F. Lopez Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) |
67