10-K: Strategic Storage Trust VI Reports 2025 Financials

Strategic Storage Trust VI, Inc. reported a net loss of $36.6 million for 2025, driven by ongoing growth and lease-up activities, while maintaining a stable estimated net asset value of $10.00 per share.

Summary

• Strategic Storage Trust VI, Inc. (the Company) reported a net loss attributable to common stockholders of approximately $36.6 million for the fiscal year ended December 31, 2025, compared to $47.3 million in 2024.
• Total revenues increased by 9% to approximately $30.7 million in 2025 from $28.2 million in 2024, primarily due to lease-up of non-stabilized properties and increased rental rates.
• The Company's accumulated deficit was approximately $148.0 million as of December 31, 2025.
• As of December 31, 2025, the Company owned 24 operating self-storage properties across seven U.S. states and three Canadian provinces, and two development properties in Florida and Ontario.
• The Company also held 50% equity interests in five unconsolidated real estate ventures in two Canadian provinces, consisting of four operating properties in lease-up and one land parcel under development.
• The Primary Offering was terminated effective May 30, 2025, having sold approximately 2.9 million Class A shares ($30.3M), 4.8 million Class T shares ($48.1M), 0.7 million Class W shares ($6.3M), 5.2 million Class Y shares ($50.6M), and 0.6 million Class Z shares ($5.5M).
• A new Distribution Reinvestment Plan (DRP Offering) for up to an additional $75 million in shares for all classes was filed on July 18, 2025.
• The board of directors approved an Estimated Per Share NAV of $10.00 for all common stock classes as of September 30, 2025, based on an independent valuation.
• 100% of cash distributions to common stockholders from March 2021 through December 31, 2025, have been paid from the net proceeds of offerings, not cash flow from operations.
• Total distributions paid in cash and reinvested for 2025 were approximately $28.5 million, with 76.6% from offering proceeds and 23.4% from DRP proceeds.
• Total indebtedness as of December 31, 2025, was approximately $292.9 million, comprising $165.5 million variable rate debt and $129.3 million fixed rate debt.
• The leverage ratio as of December 31, 2025, was approximately 55%.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this filing as neutral. While revenue growth and a stable NAV are positive, the continued reliance on offering proceeds for distributions and the accumulated deficit indicate the company is still in a capital-intensive growth phase, balancing progress with ongoing financial needs.

Positives

• Total revenues increased by 9% year-over-year, reaching approximately $30.7 million in 2025, driven by lease-up of non-stabilized properties and increased rental rates.
• Net operating income (NOI) for same-store facilities increased by 8.6% for the year ended December 31, 2025, compared to 2024, primarily due to a 3.2% increase in annualized rent per occupied square foot.
• The estimated Net Asset Value (NAV) per share was approved at $10.00 as of September 30, 2025, which is above the approximate mid-range value of $9.74 indicated by the independent valuation firm.
• The Company successfully secured new debt financing, including a CAD $64.0 million National Bank of Canada Four Property Loan and a CAD $164.5 million QuadReal Seven Property Loan, to repay existing debt and fund acquisitions/development.
• The Etobicoke Property development was substantially completed and commenced operations in February 2026, indicating progress on growth initiatives.
• The Company maintains a strong affiliation with SmartStop, leveraging its expertise, acquisition execution, and technology-driven operations in the self-storage industry.

Negatives

• The Company incurred a net loss attributable to common stockholders of approximately $36.6 million for the fiscal year ended December 31, 2025, and has an accumulated deficit of approximately $148.0 million.
• 100% of cash distributions to common stockholders from March 2021 through December 31, 2025, have been paid from the net proceeds of offerings, indicating that operations are not yet self-sustaining for distributions.
• The share redemption program is currently suspended, except for specific hardship cases (death, long-term care, disability, bankruptcy), limiting liquidity for common stockholders.
• Cash flows used in operating activities increased significantly to approximately $19.8 million in 2025 from $5.5 million in 2024, primarily due to increased payments to affiliates.
• The Company's reliance on debt and equity offerings to fund operations and distributions poses a risk if these sources become unavailable or more expensive.
• The Series B Convertible Preferred Stock and Series D Preferred Units rank senior to common stock regarding distributions and liquidation preferences, potentially diluting common stockholder interests.

Risks

• Limited prior operating history and financing sources, with past performance of sponsored programs not indicative of future results.
• No public trading market for shares, making it difficult for stockholders to sell, and the charter does not require a liquidity transaction.
• Share redemption program is partially suspended and subject to significant restrictions, potentially preventing stockholders from recovering their investment.
• Distributions may be paid from financing activities (offering proceeds or borrowings), which could constitute a return of capital and reduce funds for property acquisition, thereby reducing overall stockholder return.
• Inability to pay or maintain cash distributions or increase them over time.
• Delays in locating suitable investments could adversely affect distribution ability and investment value.
• Reliance on the Advisor and Property Manager for day-to-day operations and property management, with potential for operating results to suffer if they are inefficient.
• Conflicts of interest faced by the Advisor, Property Manager, and key personnel due to competing demands on their time and involvement with other affiliated real estate programs.
• Conflicts of interest relating to the incentive fee structure under the operating partnership agreement, potentially leading to actions not in the long-term best interests of common stockholders.
• SmartStop Storage Advisors, LLC (SSA) may receive economic benefits as a special limited partner without bearing investment risk.
• Board of directors may change investment objectives without stockholder consent.
• Payment of substantial fees to the Advisor and its affiliates reduces cash available for investment and distribution, with potential for fee increases without stockholder approval.
• Growth portion of property acquisition strategy involves higher risk of loss than more conservative strategies.
• Focus on the self-storage industry makes rental revenues highly susceptible to demand fluctuations in that sector.
• Risks associated with joint venture partners, including inconsistent interests, potential for litigation, and inadequate funding from partners.
• Additional risks from Canadian joint venture interests and properties, including foreign currency risks (CAD/USD exchange rate fluctuations) and unique Canadian laws/business practices.
• Broad authority to incur debt, with high debt levels potentially hindering distributions and decreasing investment value.
• Indebtedness secured by properties may result in foreclosure if defaults occur.
• Failure to qualify as a REIT would adversely affect operations and distribution ability due to additional tax liabilities.
• Series B Convertible Preferred Stock and Series E Preferred Stock rank senior to common stock, granting superior rights and potentially discouraging takeovers.
• Series D Preferred Units rank senior to common units, granting superior rights and potentially discouraging takeovers.
• Dilution of stockholder interests as additional shares are issued.
• Uncertainty of future debt or equity funding sources, potentially impairing capital improvements or business expansion.
• Legal claims related to moisture infiltration and mold could increase operating costs or expose the Company to uninsured liabilities.
• Operating results may be affected by regulatory changes (e.g., zoning, permitting) impacting specific facilities.
• Inability to sell properties when desired could adversely impact cash distributions.
• Potential for property taxes to increase, reducing net operating income and cash available for distributions.
• Risks related to an epidemic, pandemic, or other health crisis (e.g., COVID-19) impacting demand, bad debts, and personnel availability.
• Increased liability due to changing regulations and laws regarding cybersecurity, potentially leading to fines, reputational damage, and increased costs.

Future Outlook

The Company expects total revenues to increase in the future commensurate with acquisition activity and the lease-up of non-stabilized properties. Property operating expenses are also expected to increase but decrease as a percentage of total revenues. Equity in loss of unconsolidated real estate ventures is expected to decrease as these properties lease-up. The Company intends to continue paying regular distributions, but acknowledges that a greater percentage of distributions are expected to be paid from cash flows from operations over the long-term, rather than offering proceeds. The Series E Preferred Offering is expected to terminate on September 30, 2026, unless extended. The SmartCentres Financing maturity was extended to May 11, 2027, and the Etobicoke Property commenced operations in February 2026.

Management Comments

• "Our operations may not be profitable in 2026, given that we are still in our fundraising, acquisition and lease up stage."
• "We expect total revenues to increase in the future commensurate with our future acquisition activity and the lease-up of our non-stabilized properties."
• "We expect property operating expenses to increase in the future as our operational activity increases but decrease as a percentage of total revenues as we lease-up our non-stabilized properties."
• "Over the long-term, we expect that a greater percentage of our distributions will be paid from cash flows from operations."
• "Our board of directors may increase, decrease or eliminate the distribution rate that is being paid at any time."

Industry Context

StockSavvy.ai notes that the self-storage industry remains highly fragmented in both the U.S. and Canada, presenting significant opportunities for acquisition and value creation through professional management, digitalization, and expansion. Strategic Storage Trust VI, Inc. is actively pursuing this strategy by acquiring and developing properties, leveraging its affiliation with SmartStop, one of North America's largest self-storage companies. The Company's focus on technology-driven operations and in-house sales centers aligns with broader industry trends towards efficiency and customer experience, aiming to increase profitability in under-managed facilities post-acquisition. The continued development and lease-up phase of its portfolio reflects the capital-intensive nature of expanding in this competitive market.

Comparison to Industry Standards

• The self-storage industry is highly fragmented, with approximately 65,143 primary facilities in the U.S. and 70% of Canadian stores owned by individuals with one or two properties. Strategic Storage Trust VI, Inc. is part of a larger institutional trend, leveraging its Sponsor's (SmartStop) scale (over 460 operating properties) to gain a competitive advantage in acquisitions and management.
• The Company's average physical occupancy of 88.4% across its total portfolio as of December 31, 2025, and 90.3% for same-store facilities, indicates a healthy utilization rate, comparable to well-managed properties in the sector, though specific industry benchmarks for non-listed REITs are not provided for direct comparison.
• The Company's stated medium-to-high leverage target of 50% to 60% (based on loan to purchase price ratio) and current leverage ratio of approximately 55% as of December 31, 2025, is within the typical range for real estate investment trusts, balancing growth with financial risk.
• The use of an independent third-party valuation firm (Robert A. Stanger & Co, Inc.) for NAV determination, following IPA Valuation Guidelines, aligns with best practices for publicly registered non-listed REITs, providing transparency to investors.
• The Company's strategy of acquiring both income-producing and growth properties, including those in lease-up or needing repositioning, is a common approach for REITs seeking to enhance value, similar to strategies employed by larger publicly traded REITs like Public Storage or Extra Space Storage Inc. in expanding their portfolios.

Corporate Governance

Legal Proceedings

• The Company is party to legal, regulatory, and other proceedings that arise in the ordinary course of business, but is not aware of any whose outcome is reasonably likely to have a material adverse effect on results of operations or financial condition.

Related Party Transactions

• The Sponsor (SmartStop REIT Advisors, LLC) is an indirect subsidiary of SmartStop Self Storage REIT, Inc. and owns 100% of the Advisor and Property Manager.
• A majority of the Company's officers are also officers of the Advisor, Sponsor, and SmartStop.
• The Advisor receives various fees and expenses under the Advisory Agreement, including acquisition fees (1.0% of contract purchase price), monthly asset management fees (0.0625% of aggregate asset value), and disposition fees (lesser of 1% of sales price or 50% of competitive commission rate).
• The Sponsor Funding Agreement, terminated May 30, 2025, obligated the Sponsor to fund upfront sales commissions, dealer manager fees, and organization/offering expenses for Class Y and Z shares, and to reimburse for stock dividend dilution, in exchange for Series C Subordinated Convertible Units.
• The Operating Partnership issued Series C Subordinated Convertible Units to the Sponsor, which convert to Class A Units upon achieving certain NAV thresholds.
• Each self-storage property is managed by the Property Manager under separate agreements, with fees generally equal to the greater of $3,000 or 6% of gross revenues, plus reimbursement of costs.
• The Property Manager or an affiliate has the exclusive right to offer tenant insurance/protection plans and is entitled to substantially all net revenues from these programs (99.9% to PM Affiliate, 0.1% to TRS subsidiary).
• The Sponsor owns a minority interest in an online auction company (the Auction Company) that serves as a web portal for self-storage auctions; the Company paid approximately $9,000 in fees to the Auction Company in 2025.
• The Series D Cumulative Redeemable Preferred Units were purchased by an affiliate of SmartStop (the Preferred Investor) for $35.0 million, with an investment fee of $350,000 paid to the Preferred Investor.
• The SmartCentres Financing for joint venture properties is with SmartCentres Storage Finance LP, an affiliate of SmartCentres, with the Company serving as a full recourse guarantor for 50% of the financing.

Stakeholder Impact

• **Shareholders (Common Stockholders):** Experience dilution from new share issuances and preferred stock/units. Distributions are currently funded from offering proceeds, not operations, which may reduce capital available for investment. Liquidity is limited due to the suspended share redemption program. The senior ranking of preferred stock/units impacts their rights to distributions and liquidation proceeds.
• **Preferred Stockholders/Unitholders:** Holders of Series B Convertible Preferred Stock and Series D Preferred Units have senior rights to distributions and liquidation preferences, providing a more secure investment position compared to common stockholders.
• **Employees:** The Company has no direct employees, relying on the Advisor and its affiliates for management and operational services. Therefore, direct employee impact is minimal.
• **Customers:** Benefit from technology-driven operations and a focus on customer service, as well as a consistent brand experience. The month-to-month lease structure offers flexibility.
• **Lenders/Creditors:** Debt levels are medium-to-high, with various secured loans. Covenants and guarantees are in place to protect lenders. Increases in interest rates could impact the Company's ability to service debt.
• **Advisor/Property Manager/Sponsor:** Receive substantial fees and reimbursements for services, and the Sponsor benefits from Series C Units convertible into equity, aligning their interests with company growth but also creating potential conflicts of interest.

Next Steps

• Continue to offer Class P, Class A, Class T, Class W, Class Y, and Class Z shares pursuant to the distribution reinvestment plan.
• The DRP Offering may be terminated at any time upon 10 days prior written notice to stockholders.
• The Series E Preferred Offering will terminate on September 30, 2026, unless extended by the board.
• The board of directors will continue to approve an estimated share value at least annually.
• The Etobicoke Property, substantially completed in February 2026, will continue its lease-up phase.
• Development of the Montreal Property (joint venture) is expected to be completed in the first half of 2026.
• The acquisition of the Scarborough Property is expected to commence construction following closing, funded by potential future debt financing.
• The SmartCentres Financing maturity was extended to May 11, 2027, for the JV Properties.

Key Dates

Recommendation

The Company is in a critical growth and lease-up phase, showing revenue increases but still incurring significant net losses and relying on capital raises to fund distributions. The stable NAV is a positive, but the illiquidity of common shares due to the suspended redemption program and the senior claims of preferred equity/units present considerable risks. A 'hold' recommendation is appropriate for existing investors to monitor the transition to operational profitability and self-sustaining distributions, while new investors should approach with caution given the current financial structure and illiquidity.

Keywords

Self Storage REIT, Real Estate Investment Trust, SEC 10-K, Financial Performance, Property Acquisitions, Capital Raising, Net Asset Value, Distributions, Debt Financing, Canadian Real Estate, Corporate Governance, Risk Factors, SmartStop, Preferred Stock, Operating Partnership