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Written by 6:32 am Blog, Current Investigations

SmartStop REIT Tender Offer as SRP Remains Suspended

SmartStop Self Storage REIT Tender Offer Price Suggests Losses for Investors, featured by top securities fraud attorneys, The White Law Group

SmartStop Self Storage REIT Inc. – Investigating Potential Claims  

The White Law Group continues to investigate potential securities claims involving broker dealers who may have improperly recommended SmartStop Self Storage REIT Inc. to investors.   

SmartStop, formerly known as Strategic Storage Trust II, is a self-managed REIT, which also sponsors other self-storage programs, including Strategic Storage Trust IV, Inc., a public non-traded REIT, and other private programs, according to its website.   

Third Party Tender Offers -SmartStop Self Storage 

According to a letter to stockholders on September 8, 2023, Comrit Investments 1 LP and its affiliates launched an unsolicited tender offer to purchase shares of SmartStop Self Storage REIT for $10.01 per share. SmartStop’s current net asset value per share is estimated at $15.21 for its Class A and Class T shares, as of June 30, 2022, indicating that the tender offer price of 30 percent less the current NAV.   

The company reportedly instructed shareholders to reject the tender offer, claiming that it is “an attempt to capitalize on the suspension of our share redemption program.”    

The company claims in the letter that while the Company’s share redemption program (the “SRP”) is currently partially suspended, stockholders currently do have the ability to redeem their shares with the Company in certain cases “such as death, disability, confinement to a long-term care facility”.  

The Risks of Complex Investments: Non-traded REITs 

Non-traded REItsCompared to traditional investments, such as stocks, bonds and mutual funds, non-traded REITS, like SmartStop Self Storage REIT, are considerably more complex and involve a high degree of risk. Unfortunately, many investors were not made adequately aware of the risks and liquidity problems associated with REITs.    

First, liquidity risk is a significant concern. Unlike publicly traded REITs, non-traded REITs are not listed on stock exchanges, making it challenging to sell or redeem shares easily. Investors may find themselves locked into their investments for several years, potentially limiting access to their capital when needed. 

Secondly, valuation risk is prevalent in non-traded REITs. These investments often lack transparent pricing mechanisms, making it difficult to ascertain the true value of shares. Investors may face uncertainty about the accuracy of reported net asset values (NAVs), which can impact their understanding of the investment’s performance and potential returns.  

Moreover, non-traded REITs frequently charge substantial fees and commissions, which can erode returns over time. Investors should carefully weigh these risks and consider their investment horizon, objectives, and risk tolerance before investing in non-traded REITs. 

Filing a Complaint against your Brokerage Firm    

Brokerage firms that do not perform adequate due diligence on an investment or demonstrate a breach of fiduciary duty can be held accountable for losses incurred through FINRA arbitration.    

FINRA, the regulator who oversees brokers and brokerage firms, provides FINRA Dispute Resolution as an arbitration venue for investors with claims against their brokerage firm or financial professional.  It provides investors with an opportunity to attempt to recoup their investment losses and is an alternative to filing such claims in court.

If you have suffered losses investing in SmartStop Self Storage REIT Inc. the securities attorneys of The White Law Group may be able to help you. Please call the offices at 888-637-5510 for a free consultation.    

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.    

For more information on The White Law Group, visit https://whitesecuritieslaw.com    

To learn more about the firm’s investigation, please see:
 Strategic Storage Trust IV Merges into SmartStop Self Storage REIT    



Tags: , , Last modified: September 11, 2023