Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

v3.19.3
Subsequent Events
9 Months Ended
Sep. 30, 2019
Subsequent Events [Abstract]  
Subsequent Events

13. SUBSEQUENT EVENTS

 

West Henrietta Property Acquisition

 

On October 4, 2019, we, through a wholly owned subsidiary, entered into a purchase agreement with Erie Station Storage, LLC, to acquire a self storage property located in West Henrietta, New York, or the West Henrietta Property, for the sum of approximately $6.2 million.  Below is a summary of key information regarding the West Henrietta Property:

 

Property

 

Address

 

Year Store Opened

 

Number of Units

 

 

Net Leaseable Square Feet

 

 

September 30, 2019 Square Foot Occupancy %

 

West Henrietta Property

 

75 Erie Station Road, West Henrietta, New York 14586

 

2016

 

 

458

 

 

 

46,850 (1)

 

 

 

74.4

 

(1)Does not include a potential expansion of the property of up to approximately 7,300 net leasable square feet that we may undertake if the acquisition of the property is completed.

 

While we expect to close on the acquisition of the West Henrietta Property by the end of the fourth quarter of 2019, the acquisition of the West Henrietta Property is subject to due diligence and the satisfaction of customary closing conditions, and there can be no assurances that these conditions will be satisfied or that the West Henrietta Property will close on the terms described in the purchase agreement, or at all.

 

Edmond Property Third-Party Management

 

On October 23, 2019, we signed our first self storage client under our new third-party management platform.  The 134,318-leasable square foot property, which will be rebranded as “Global Self Storage,” is comprised of 618 climate-controlled and non-climate-controlled units located in Edmond, Oklahoma.

 

We believe that our third-party management platform will provide an additional revenue stream through management fees and tenant insurance premiums and will help expand our brand awareness, and may also allow us to build a captive acquisition pipeline.  We are actively marketing our third-party management platform to developers, single-property self storage operators, and small-portfolio self storage operators, and we believe these discussions may lead to the addition of new properties to our owned and/or third-party management portfolios.

 

Rights Offering

 

On October 25, 2019, we announced that we intend to conduct a rights offering (the “rights offering”) to our eligible stockholders for the purchase of up to approximately $11.6 million of newly issued shares of our common stock. A record date of November 18, 2019 has been set for the planned rights offering.  We intend to use the net proceeds from the rights offering to fund a portion of the purchase price of the West Henrietta Property and related expenses and/or to repay borrowings under our revolving credit facility.  We intend to use any remaining proceeds to fund acquisitions of other self storage properties, to fund expansions of our existing self storage properties, and for working capital and general corporate purposes.  

 

Upon commencement of the planned rights offering, we will distribute non-transferable subscription rights to purchase shares of our common stock to each eligible holder of common stock as of the close of business on November 18, 2019. An effective registration statement on Form S-3 (File No. 333-227879) relating to these securities has been filed by us with the Securities and Exchange Commission (the “SEC”).  The rights offering will only be made by means of a prospectus.  A preliminary prospectus supplement relating to and describing the proposed terms of the rights offering has been filed with the SEC as a part of the registration statement and is available on the SEC’s web site. No rights will be distributed until the final terms of the rights offering, including the subscription price and the expiration date for the rights, have been set forth in a final prospectus supplement that has been filed with the SEC and distributed to our stockholder of our common stock as of the record date.