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Strategic Storage IV Goes Effective With No Acquisition Fees

The registration statement for Strategic Storage Trust IV Inc., a publicly registered non-traded real estate investment trust sponsored by SmartStop Asset Management, was declared effective by the Securities and Exchange Commission on Friday. The company intends to invest in a portfolio of self-storage properties and seeks to raise up to $1.1 billion from the sale of common stock shares and distribution reinvestment plan shares.

Strategic Storage Trust IV intends to primarily invest in a portfolio of self-storage properties consisting of both income-producing and growth properties located in the United States and Canada. The company will offer up to $1 billion in shares of common stock in its primary offering, consisting of three share classes.

Class A shares are priced at $25.00 per share and include a 6 percent selling commission ($1.50 per share) and a 3 percent dealer manager fee ($0.75 per share).

Class T shares are priced at $24.21 each and include a 3 percent selling commission ($0.73 per share), a 3 percent dealer manager fee ($0.73 per share), and an annual 1 percent stockholder servicing fee that will accrue until total underwriting compensation exceeds 10 percent of the purchase price for Class T shares. The company estimates this trailing fee will be paid for three to five years with investors paying a total of between $0.73 and $1.21 per share during that time.

Class W shares are priced at $22.75 per share and have no front end sales commissions or dealer manager fees, but include a 0.5 percent dealer annual manager servicing fee which equals approximately $0.11 per share per year.

All investors may choose to purchase Class A or Class T shares in the offering, while Class W shares are only available to investors purchasing through certain fee-based programs or registered investment advisors.

Strategic Storage Trust IV is also offering up to $95 million in shares of its common stock pursuant to its distribution reinvestment plan at $23.75 per share for Class A shares, $23.00 per share for Class T shares and $22.75 per share for Class W shares.

According to the prospectus, the REIT does not intend to pay its advisor, Strategic Storage Advisor IV, any acquisition fees in connection with making investments. However, the company will reimburse its advisor for acquisition expenses incurred in the process of buying properties, which it expects to be approximately 1 percent of the purchase price of each property.

Other organization and offering expenses are estimated to be 1.15 percent of gross offering proceeds from the primary offering in the event the company raises the maximum offering. The advisor will fund 1.15 percent of gross offering proceeds from the sale of Class W shares only towards the payment of organization and offering expenses. The advisor will not seek reimbursement for the payment.

Due to a prior sale of $7.5 million in Class A shares through a private offering transaction, there is no minimum offering escrow, therefor Strategic Storage Trust IV has commenced operations and there is no minimum number of shares the REIT must sell before accepting subscriptions in its offering.

Residents of Washington and Pennsylvania will not be admitted until total subscriptions exceed $10 million and $50 million, respectively, in gross offering proceeds. The proceeds from initial subscriptions are now available to the REIT for the acquisition of real estate assets and other purposes.

For more Strategic Storage Trust IV news, please visit their directory page here.