Strategic Storage Trust IV Shareholders may have Claims
The White Law Group is currently investigating potential claims against brokerage firms who may have unsuitably recommended Strategic Storage Trust IV to investors.
Strategic Storage Trust IV, Inc., a public non-traded REIT that invests in self storage properties, is going forward with a proposed merger with affiliated REIT, SmartStop Self Storage REIT Inc., in an all-stock transaction valued at $370 million. The merger is expected to close around March 17, 2021, according to an 8K filing.
Last April we reported that the REIT suspended its primary offering and suspended its share repurchase program due to uncertainty relating to the Covid-19 global pandemic.
According to the merger agreement, SmartStop will acquire all of the real estate owned by Strategic Storage Trust IV, consisting of 24 wholly-owned self-storage facilities located across nine states, and five joint venture properties in the Greater Toronto Area.
The newly former subsidiary of SmartStop will reportedly consist of a portfolio of 136 properties and a combined gross book value of approximately $1.5 billion of self-storage assets.
Strategic Storage Trust IV stockholders will reportedly receive 2.1875 shares of SmartStop common stock for each share of common stock they own. Strategic Storage Trust IV’s most recent NAV per share is $22.65, calculated as of March 31, 2020. Shares were originally priced at $25.00. SmartStop’s current Net Asset Value is $10.40 per share.
AFter completion of the merger, Strategic Storage Trust IV stockholders will own approximately 25 percent of the new company, SmartStop stockholders will own approximately 64 percent, and management will own approximately 11 percent.
How Does a Merger Affect Shareholders?
Companies often merge as part of a strategic effort to boost shareholder value, often by creating new business lines and/or gaining greater market share. However, the economic environment at the time of the merger, size of the companies and management of the merger process all play a part in future returns for shareholders.
Shareholders may experience a significant loss of voting power, and while the spike in trading volume tends to inflate share prices, if economic conditions are not favorable at the time of the merger, shareholders may see significant losses.
Filing a Complaint against your Brokerage Firm
The trouble with non-traded REITs is that they are complex and inherently risky products.
Broker dealers are required to inform clients of the risks associated with investment recommendations and to ensure that those recommendations are suitable for the investor in light of the investor’s age, risk tolerance, net worth, and investment experience. Firms that fail to do so, may be held responsible for any losses.
Lack of liquidity is often problematic for many investors. Investors looking to sell often have difficulty finding a buyer, and can suffer significant losses on the sale.
If you are concerned about your investment losses in Strategic Storage Trust IV (SST IV), please call the securities attorneys of The White Law Group 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 Franklin, Tennessee.
For more information on The White Law Group, visit https://www.whitesecuritieslaw.com.