Exhibit 99.1
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April 18, 2016
Dear Stockholder:
Thank you for your investment in Strategic Storage Growth Trust, Inc. (“SSGT”). I wanted to take this opportunity to update you on the calculation of our estimated value per share and changes to our offering share prices and distribution reinvestment plan share prices.
Calculation of Estimated Net Asset Value Per Share
On April 8, 2016, the board of directors of SSGT (the “Board”) approved an estimated value per share for our Class A shares and Class T shares of $10.05 based on the estimated value of our assets less the estimated value of our liabilities, or net asset value, divided by the number of shares outstanding on an adjusted fully diluted basis, calculated as of December 31, 2015. We are providing this estimated value per share to assist broker-dealers in connection with their obligations under applicable Financial Industry Regulatory Authority (“FINRA”) rules with respect to customer account statements and to assist fiduciaries in discharging their obligations under Employee Retirement Income Security Act (“ERISA”) reporting requirements. This valuation was performed in accordance with the provisions of Practice Guideline 2013-01,Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association (“IPA”) in April 2013 (the “IPA Guidelines”).
Below is a summary of certain information relating to our estimated value per share:
| • | | The Nominating and Corporate Governance Committee (the “Committee”), comprised of our two independent directors, was responsible for the oversight of the valuation process, including the review and approval of the valuation process and methodology used to determine the estimated value per share, the consistency of the valuation methodology with real estate standards and practices and the reasonableness of the assumptions used in the valuations and appraisals. |
| • | | The Committee approved the engagement of Duff & Phelps, LLC (“Duff & Phelps”), an independent third party real estate valuation and advisory firm, to provide appraisals for each of our properties and a calculation of a range of the estimated value per share of our Class A shares and Class T shares as of December 31, 2015. |
| • | | After considering all information provided, and based on the Committee’s extensive knowledge of our assets and liabilities, the Committee concluded that the range in estimated value per share of $9.02 to $11.15, with an approximate mid-range value per share of $10.05, as indicated in the valuation report provided by Duff & Phelps was reasonable and recommended to the Board that it adopt $10.05 as the estimated value per share for our Class A shares and Class T shares. The Board unanimously agreed upon the estimated value per share of $10.05(1) recommended by the Committee, which determination is ultimately and solely the responsibility of the Board. |
| • | | The current valuation of $10.05 was based upon an appraisal by Duff & Phelps of our 12 self storage properties owned, as of December 31, 2015,on an individual property basis and was otherwise conducted in accordance with the IPA Guidelines. |
| • | | From inception through December 31, 2015, we had acquired the 12 self storage properties for an aggregate purchase price of approximately $62.2 million, exclusive of acquisition fees and expenses. As of December 31, 2015, the total appraised value of the individual real estate assets as provided by Duff & Phelps was approximately $75.5 million. This represents an approximate 21.3% increase in the total value of the real estate assets over the aggregate purchase price. |
Determination of New Share Offering Price
In connection with the determination of the estimated value per share, the Board also determined new per share offering prices of our two classes of common stock. The new Class A share offering price is $11.17 per share and the new Class T share offering price is $10.58 per share, each of which took effect on April 14, 2016. The Board determined the new per share offering price of each class of stock by taking the $10.05 estimated value per share and adding the per share up-front sales commissions and dealer manager fees to be paid with respect to the Class A shares and Class T shares, respectively, such that after the payment of such commissions and dealer manager fees, the net proceeds to SSGT will be the same for both Class A shares and Class T shares.
Distribution Reinvestment Plan
In accordance with our distribution reinvestment plan, as amended (the “Plan”), the Board may change the share price for purchases of shares under the Plan at any time in its discretion. In connection with the estimated value per share described herein, the Board approved a share price for the purchase of shares under the Plan equal to the estimated value per share of $10.05 for both Class A shares and Class T shares, to be effective April 21, 2016.
Please see the Current Report on Form 8-K filed with the Securities and Exchange Commission on April 11, 2016 for a detailed description of the methodology and key assumptions used to determine the estimated value per share and the limitations of the estimated value per share. If you’d like us to send you a copy, please contact us via the information below. You may also obtain a copy via our website atwww.strategicreit.com.
111 Corporate Drive | Suite 120 | Ladera Ranch | California | 92694 | 877.32REIT5 | www.strategicstoragetrust.com
Thank you for the opportunity to update you on the recent developments here at SSGT. We look forward to continuing to execute on our investment objective of acquiring opportunistic self storage properties (such as development, re-development, lease-up, and expansion opportunities).
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Sincerely, |
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STRATEGIC STORAGE GROWTH TRUST, INC. |
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By: | |  |
| | H. Michael Schwartz |
| | President and Chief Executive Officer |
(1) | With respect to the estimated value per share, we can give no assurance that: you would be able to resell your shares at this estimated value; you would ultimately realize distributions per share equal to our estimated value per share upon liquidation of our assets and settlement of our liabilities or a sale of our company; our shares of common stock would trade at the estimated value per share on a national securities exchange; another independent third-party appraiser or other third-party valuation firm would agree with our estimated value per share; or the methodology used to estimate our value per share will be in compliance with any future regulatory rules or ERISA reporting requirements. |
111 Corporate Drive | Suite 120 | Ladera Ranch | California | 92694 | 877.32REIT5 | www.strategicstoragetrust.com